Indian Bank vs Nippon Enterprises South

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2016 Supreme(SC) 187

SUPREME COURT OF INDIA
ROHINTON FALI NARIMAN, KURIAN JOSEPH, JJ.
Indian Bank – Appellant
Versus
M/s Nippon Enterprises South & Ors. – Respondents
Civil Appeal Nos. 5610-5611 of 2011
Decided on : 17-02-2016

Important Points

A tenant cannot be arbitrarily evicted using the provisions of the SARFAESI Act and can only be evicted following the due process of law as prescribed under the Rent Control Act.

Subject

Property Law - Tenancy Rights

Act Referred

RENT CONTROL ACT : .
SECNRITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT : .

Headnote

SARFAESI - Tenant Rights - The court held that a tenant cannot be arbitrarily evicted using the provisions of the SARFAESI Act and can only be evicted following the due process of law as prescribed under the Rent Control Act.

Fact of the Case:

The issue was whether the appellant, successful in SARFAESI proceedings against the owner of secured assets, could have the same say against the tenant in the premises.

Finding of the Court:

The court dismissed the appeals, emphasizing that a tenant cannot be arbitrarily evicted using SARFAESI provisions and can only be evicted following the due process of law as prescribed under the Rent Control Act.

Issues: The main issue was the rights of the appellant, successful in SARFAESI proceedings against the owner, in relation to the tenant in the premises.

Ratio Decidendi: The court relied on the settled position of law that a tenant can only be evicted following the due process of law as prescribed under the Rent Control Act and cannot be arbitrarily evicted using SARFAESI provisions.

Final Decision: The appeals were dismissed, with the court clarifying that the dismissal shall not stand in the way of the appellant-Bank taking recourse to any remedy under any law for evicting the first respondent.

JUDGMENT :

Kurian, J.

1. The short issue to be decided in these appeals is whether the appellant, who has been successful in the SARFAESI proceedings against the owner of the secured assets, automatically can have the same say as against the tenant in the premises.

2. That issue has been considered in the various Judgments of this Court and the latest one is in "Vishal N. Kalsaria Vs. Bank of India & Ors." in Crl. Appeal No. 52 of 2016 decided on 20.01.2016, reported in (2016) 1 SCALE 172 and at paragraph 30, this Court has observed as under :-

"It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act. A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant......."

3. In view of the above, these appeals are dismissed. However, we make it clear that the dismissal of these appeals shall not stand in the way of the appellant-Bank taking recourse to any remedy under any law for evicting the first respondent.

No costs.