Swastik Coal Corporation Pvt. Ltd. vs District Magistrate & Competent Authority And Ors

P.K. Jaiswal, J

This writ petition under Article 226 of the Constitution of India has been filed by the petitioner, who is a tenant of the Secured Assets since 2005 and prayed for the following reliefs :-

(A) That, the Respondent No.1 be directed to accept the application filed by the petitioner as Tenant of the Secured Asset namely Swastik House, 2nd Floor, 21/3Ratlam Kothi, Disttict - Indore.

(B) Such other relief/reliefs this Court deems fit.

The respondent No. 3 is a borrower of the respondent No.2 and had mortgaged Secured Assets on 27/04/2011. As dues were not paid by the respondent No.3, therefore, his account was declared NPA and notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (in short ... "the SARFAESI Act, 2002") was issued on 12/10/2017. Thereafter, notice under Section 13(4) was issued on 9/01/29018 to the petitioner. After taking symbolic possession, a proceeding under Section 14 of the SARFAESI Act of 2002 has been initiated by the respondent No.2 Bank before the District Magistrate, Indore.

Learned counsel for the petitioner has submitted that the Bank has filed an incomplete application before the respondent No.1 without showing the factum of tenancy in the Secured Assets, much prior to taking of credit facility by the respondent No.3 in the year 2011. The petitioner is the tenant of the premises in question and, therefore, he filed an application for intervention vide Annexure-P/4 on 27/08/2018, but the respondent No.1 refused to receive the application and, therefore, the present writ petition has been filed on the ground that against the action of non-acceptance of petitioner's application for intervention is violative to Article 14, 19 and 21 of the Constitution of India. He has also drawn our attention to the decision of the Apex Court in the case of Vishal N. Kalsaria vs. Bank of India & Ors. reported in (2016) 3 SCC 762 and Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Limited & Ors., reported in (2014) (O) AIJEL SC 55360 and the Single Bench of Principal seat at Jabalpur in the case of Prafulla Kumar Maheshwari Vs. Authorized Officer & Chief Manager & Ors., passed in W.P. No.10649/2017 decided on 22/11/2017 wherein the learned writ court after considering the judgment of the Apex Court in the case of Vishal N. Kalsaria vs. Bank of India & Ors.(supra) came to the conclusion the secured creditor is required to disclose his tenancy before the District Magistrate and quashed the order passed by the District Magistrate.

After the judgment of Apex Court, Sub-section 4(A) of Section 17 of the SARFARSI Act, 2002 has been inserted by Act No.44 of 2016 on 1.9.2016 which reads as under :-

"[(4-A) Where-

(i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured assets, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,-

(a) has expired or stood determined ; or

(b) is contrary to section 65-A of the Transfer of Property Act, 1882 (4 of 1882) ; or

(c) is contrary to terms of mortgage ; or

(d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act ; and

(ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause

(d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in 6 of 8 accordance with the provisions of this Act.]"

In view of statutory remedy available to the petitioner-tenant, we dismiss this writ petition with liberty to assail the action of the District Magistrate by filing an application before the Debts Recovery Tribunal under Section 17(4A) of the SARFAESI Act.

With the aforesaid liberty, W.P. No.20509/2018, W.P. No.20510/2018 and W.P. No.20511/2018 are dismissed.