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2024 Supreme(AP) 839

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
SUBBA REDDY SATTI, VENKATA JYOTHIRMAI PRATAPA, JJ.
Tummala Ram Mohan Rao, S/o late Bhaskara Rao – Appellant
Versus
The Union Bank of India – Respondent
Writ Petition No.12069 of 2024
Decided on : 30-05-2024

Advocates:
Advocate Appeared:
For the Appellant : Sri Anand Seshu Popuri
For the Respondents: Smt.Dyumani

IMPORTANT POINT
A tenant's rights under an unregistered lease are limited, especially when the lease is created after mortgage notices, necessitating registration for longer terms to ensure legal protection.

Headnote:

Lease - Tenant Rights - Transfer of Property Act, 1882 (Section 65-A), SARFAESI Act, 2002 (Section 13(2)) - The court analyzed the rights of a tenant in relation to a mortgage and the implications of unregistered lease agreements, ultimately concluding that the tenant's rights were not sufficiently protected under the circumstances.

Fact of the Case:

The petitioner, a tenant of two flats, sought to prevent the bank from dispossessing him based on a notice issued after the mortgage of the property. The petitioner claimed his lease was valid and should be honored despite the bank's actions under the SARFAESI Act.

Finding of the Court:

The court found that the lease was unregistered and entered into after the mortgage notices were issued, which undermined the petitioner's claim. The court emphasized the need for registered leases for longer terms and the importance of pursuing objections in the criminal court.

Issues: Whether the petitioner, as a tenant, had a valid claim to possession of the leased property against the bank's actions under the SARFAESI Act, given the unregistered nature of the lease.

Ratio Decidendi: The court held that an unregistered lease does not confer the same rights as a registered one, particularly when the lease was created after the mortgage notices were issued, thus limiting the tenant's ability to contest dispossession.

Result: The Writ Petition is dismissed, allowing the petitioner to pursue his objections in the criminal court.

ORDER :

(Per Subba Reddy Satti, J)

The Writ Petition is filed seeking the following relief:

    “… … to issue an appropriate order or direction, more particularly, one in the nature of Writ of Mandamus, declaring that the action of the Respondents bank in high handedly threatening to dispossess and take physical possession of the petitioner’s leasehold property/rented premises namely Flat No.101 and Flat No.102 in Sree Ramji’s Arcade, situated at D.No.8-345, in R.S.No.192/2A, Bypass road, Valivarthipadu panchayati, Gudivada in pursuance of the notice of the advocate commissioner dated 25.04.2024 affixed on 16.05.2024 as per orders passed in Crl.M.P.No.82/2024 in C.F.122/2024 and Crl.M.P.No.83/2024 in C.F.123/2024 on the file of the Chief Judicial Magistrate, Machilipatnam granting 7 days time to vacate the property else threatened to lock and key the premises and dispossess by police force without considering the representation and Rental Agreement/lease deed and other evidence as a lessee submitted by the petitioner is arbitrary, illegal, unjust and whimsical and violative of Article 21, 19(1)(g), 300A of the Constitution of India besides in utter breach of principles of natural justice and fair play and consequently direct the respondents bank not to interfere and dispossess the petitioner with his possession … …”

2. Petitioner claiming to be a tenant of Flat Nos.101 and 102 in Sree Ramji’s Arcade, situated at D.No.8-345, in R.S.No.192/2A, Bypass road, Valivarthipadu Panchayat, Gudivada, filed the above writ petition.

3. Facts in the affidavit, in brief, are that notices dated 25.04.2024 were affixed at Flat Nos.101 and 102 on 16.05.2024 according to order in Crl.M.P.No.82/2024 in C.F.122/2024 and Crl.M.P.No.83/2024 in C.F.123/2024 on the file of the Chief Judicial Magistrate, Machilipatnam. Seven days were granted to vacate the premises. Respondents 4 and 5 are the owners of Flat Nos.101 and 102. Petitioner entered into a lease agreement dated 05.01.2023 on a monthly rent of Rs.4,500/- per each of flats for five years commencing from 05.01.2023. Petitioner also filed suit O.S.No.49 of 2024 on the file of Principal Junior Civil Judge, Gudivada, against respondents 4 and 5. I.A.No.158 of 2024 was filed for grant of interim injunction and the civil Court granted ad interim injunction on 06.03.2024.

b) Petitioner informed respondents 4 and 5 about affixing notices, who, in turn, informed the petitioner about their filing W.P.No.6477 of 2024 and also assured him to settle the matter. The petitioner filed objection petitions on 20.05.2024 before the Chief Judicial Magistrate, Machilipatnam, however, the same was returned with certain objections. The petitioner has been a tenant since 2015 and did not know of any transaction between respondents 4, 5 and the respondents 1 to 3. With these averments, the above writ petition is filed.

4. Heard Sri Anand Seshu Popuri, learned counsel for petitioner and Smt.Dyumani, learned standing counsel for respondents 1 to 3.

5. Learned counsel for the petitioner while reiterating the contentions as per the averments made in the affidavit, would submit that seven days granted would expire by 23.05.2024 and the petitioner will be dispossessed. He would also submit that lease in favour of the petitioner is subsisting and hence, the order passed by the learned Chief Judicial Magistrate, Machilipatnam is contrary to Section 65-A of the Transfer of Property Act, 1882 (for short “the Act”).

6. Learned standing counsel for respondents 1 to 3 would submit that notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”) was issued to respondents 4 and 5 on 01.08.2019 and 11.11.2019. She would also submit that since the alleged unregistered lease is after the issuance of notices, the petitioner cannot claim any right as a tenant. She would submit that the petitioner having filed objection petitions before the criminal

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