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2016 Supreme(Jhk) 1673

IN THE HIGH COURT OF JHARKHAND AT RANCHI
APARESH KUMAR SINGH, J.
PAWAN KUMAR PODDAR - Appellant
Versus
BANK OF INDIA, RANCHI MAIN BRANCH, RANCHI AND ANR - Respondent
W.P. (C) No. 4274 of 2012
Decided on : 15-03-2016

Advocates:
Advocate Appeared:
For the Appellant :Ayush Aditya, Advocate.
For the Respondent:A. R. Choudhary, Advocate.

The judgment emphasizes the protection of tenants' rights under the Rent Control Act and the limitations of the SARFAESI Act in evicting tenants, highlighting the importance of following due process of law in eviction matters.

Headnote:

Recovery of Debts - Auction Sale - Income Tax Act, 1961, Rule 60 of the Second Schedule - Rent Control Act - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - SARFAESI Act, 2002 - DRT Act - Securitisation Act - [Income Tax Act, 1961, Rule 60 of the Second Schedule, Rent Control Act, Recovery of Debts Due to Banks and Financial Institutions Act, 1993, SARFAESI Act, 2002, DRT Act, Securitisation Act]

Fact of the Case:

The petitioner, a tenant, sought to set aside the sale of immovable property under Rule 60 of the Second Schedule of the Income Tax Act, adopted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The petitioner faced an eviction suit and decree, and the auction sale was confirmed in favor of the respondent. The petitioner challenged the orders refusing to set aside the sale.

Finding of the Court:

The court considered the petitioner's interest in the eviction matter and the status of a tenant protected under the Rent Control Act in debt recovery proceedings. The court highlighted the recent Supreme Court judgment emphasizing the protection of tenants' rights under the Rent Control Act and the limitations of the SARFAESI Act in evicting tenants.

Issues: The court analyzed the survival of the petitioner's interest, the status of a tenant in debt recovery proceedings, and the applicability of the Rent Control Act and other relevant acts in the auction sale and eviction matter.

Ratio Decidendi: The court emphasized the protection of tenants' rights under the Rent Control Act and the limitations of the SARFAESI Act in evicting tenants, highlighting the importance of following due process of law in eviction matters.

Final Decision: The court postponed the consideration of the plea raised by the petitioner until the outcome of the eviction matter, clarifying that the rights of the auction purchaser and the original owner of the property would be subject to the tenant's rights.

ORDER :

APARESH KUMAR SINGH, J.

1. Proceedings initiated by the respondent-Bank of India for recovery of outstanding dues of M/s Ellen Breweries and Distilleries Pvt. Ltd. and Others in O. A. Case No. 125 of 2002 vide decree dated 28.02.2006 led to Recovery Proceeding No. 09 of 2006 before the learned Recovery Officer, DRT, Ranchi. The description of properties auctioned are as follows:-

M.S. Plot No. 1718, Holding No. 1396 (New) Ward No. 1 of the Ranchi Municipal Corporation Area, Court Road, Ranchi, Total area-3 Katha. Bounday : East- Portion of M.S. Plot No. 1718 belonging to Sh. A. K. Banerjee and Sh. J. Banerjee, West- Kutchery Road, South-Portion of M. S. Plot No. 1718, North M.S. Plot No. 1717.

2. Entire property described herein above on auction fetched total value of Rs. 66,75,000/-. Dues of the Bank was Rs. 34,10,219/-. It would not be out of place to mention here that auction was conducted on 28.03.2008 in the premises of DRT, Ranchi on "as is where is basis". Respondent no. 3, M/s Dilasha Commodities Pvt. Ltd. is the auction purchaser of the property described herein above.

3. In the background of all these facts, it is pertinent to mention that petitioner herein was a tenant of respondent no. 2, judgment debtor holding tenancy over 15 Katha of land of respondent no. 2 out of which 3 katha of land fall in the property auctioned as described herein above. As a tenant, he sought setting aside of the sale of immovable property in terms of Rule 60 of the Second Schedule of the Income Tax Act as adopted under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by making an offer of deposit. Petitioner, however, faced eviction suit in respect of tenanted premises and decree of eviction has been passed by learned Trial Court vide judgment and decree dated 10.03.2006 in Eviction Suit No. 06 of 1985 and upheld by the Appellate Court in Title Appeal No. 55 of 2006 vide judgment dated 20.12.2012. Petitioner has preferred Second Appeal bearing S. A. No. 20 of 2013 pending before this Court and has not yet been evicted of the tenant premises. Second Appeal has not yet been admitted. It is also brought to the notice of the Court that there are no stay over the eviction decree passed against the petitioner. Petitioner's request for setting aside of the sale of immovable property was negated not only by the Recovery Officer, but upheld by the DRT, Ranchi in Appeal No. 03 of 2009 dated 04.05.2011 and by the DRAT, Kolkata in Appeal No. 74 of 2011 dated 04.06.2012, Annexure-5 and 6 respectively. Therefore, petitioner is before this court challenging these impugned orders refusing to set aside the sale of immovable property sold in auction. Auction sale has also been confirmed in favour of the respondent no. 3 and certificate to that effect has also been issued.

4. Whether petitioner's interest would survive to prosecute the instant cause of action is dependent upon the outcome of the eviction matter and is an important factor to be taken into account when finally adjudicating the case. Other question involved is the status of tenant protected under the Rent Control Act in any such proceeding for realisation of Debts of Banks and other Financial Institutions under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or SARFAESI Act, 2002. In the recent judgment rendered by the Apex Court in the case of Vishal N. Kalsaria v. Bank of India and Ors. in Criminal Appeal No. 52 of 2016 Reported in JBCJ 2016 (1) P.G. 434 (S.C.)dated 20.01.2016, the Hon'ble Supreme Court had been pleased to held as follows:-

"38. 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. A non obstante clause (Section 35 of the SA














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