Tenancy rights created after a mortgage are invalid if they violate statutory provisions, and tenants cannot claim protection under the Rent Control Act in such cases.

JUDGMENT :

Muralee Krishna, J.

1. The petitioner in W.P.(C)No.15236 of 2025 filed this writ appeal under Section 5(i) of the Kerala High Court Act 1958, against the judgment dated 25.06.2025 passed by the learned Single Judge, dismissing that writ petition filed by the appellant/petitioner challenging Ext.P7 order dated 28.03.2025 of the Debts Recovery Appellate Tribunal, Chennai, which confirmed Ext.P3 order dated 27.11.2024 in S.A. No.618 of 2024 of the Debts Recovery Tribunal-II, Ernakulam.

2. The appellant obtained the entire ground floor and two shop rooms on the southern side of the upstairs portion of a two- storey building bearing No. AMCW-33/803 situated in 10.09 Ares of property in resurvey No.28 (old survey No.598/8/A/16, 8/A/18) Block No.46 of Alappuzha West Village, from the 2^nd respondent for conducting a Scanning and Diagnostic Centre for a period of seven years, i.e., from 01.05.2023 to 30.04.2030, with a stipulation to pay a monthly rent of Rs.30,000/-, on the strength of Ext.P1 registered rent agreement bearing No.1648 of 2023 of SRO Alappuzha dated 29.04.2023. While the appellant was continuing as a tenant, she understood that the 1^st respondent Bank proceeded against the property, including the building, which was offered as security by the 2^nd respondent as a guarantor to the loan availed by M/s. Arafa Gold and Diamonds Private Ltd. from the 1^st respondent Bank. Pursuant to the proceedings initiated by the 1^st respondent under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ for short), the Chief Judicial Magistrate, Alappuzha, appointed an Advocate Commissioner in M.C.No.327 of 2024. The Advocate Commissioner intimated to the appellant to vacate the premises and to hand over the physical possession of the secured asset to the 1^st respondent Bank. Challenging the securitisation measures initiated by the 1^st respondent Bank, the appellant filed S.A. No.618 of 2024 before the Debts Recovery Tribunal, Ernakulam. By Ext.P3 order dated 27.11.2024, the Debts Recovery Tribunal dismissed the securitisation application filed by the appellant. Though the appellant preferred an appeal before the Debts Recovery Appellate Tribunal, Chennai, as AIR (SA) No.1923 of 2024, by Ext.P7 order dated 28.03.2025, the appeal was dismissed. Challenging Ext.P7, the appellant preferred the writ petition under Article 226 of the Constitution of India seeking the following reliefs;

“(i) To call for the entire records leading to the issuance of Exhibit P7 Order proceedings of the Debt Recovery Appellate Tribunal, Chennai in AIR (SA) No.1923/2024 and to set aside the same, in the interest of justice.

(ii) To call for the entire records leading to the issuance of Exhibit P7 and Exhibit P3 to declare as illegal and to reconsider the matter on merits, in the interest of justice.

(iii) To declare that the entire securitisation proceedings initiated by the first respondent as illegal, arbitrary and against law and to keep in abeyance all the securitisation proceedings, in the interest of justice.”

3. The 1st respondent Bank had filed a counter affidavit dated 20.06.2025 opposing the reliefs sought in the writ petition and producing therewith Exts.R1(A) to R1(E) documents. It is contended in the counter affidavit filed by the 1^st respondent that the 2^nd respondent stood as guarantor to the credit facilities availed by the partnership firm M/s. Arafa Gold and Diamonds Private Ltd., by a sanction letter dated 14.03.2014 and had created an equitable mortgage of the subject properties in favour of the 1^st respondent Bank. Subsequently, the very same borrower was sanctioned another cash credit facility to the limit of Rs.17/- Crores. The equitable mortgage already created by the 2^nd respondent was extended to the credit facilities sanctioned on 13.11.2019 in respect of the properties covered by the sale deed No.1729 of 2005 dated 29.03.2025 of SRO Alappuzha, and the rele