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2015 Supreme(Mad) 3480

IN THE HIGH COURT OF MADRAS
SATISH K. AGNIHOTRI , P. DEVADASS, JJ.
V. Juvalamukhi
vs
The District Magistrate-cum-District Collector, Coimbatore & others
W. P. No. 27802 of 2015
Decided On 17.11.2015

Headnote:

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2) - Transfer of Property Act, 1882 - Section 111 - Demand notice - Recovery of premises - Writ petitions are that petitioners entered into lease agreements July and June respectively with respondents 3 and 4 in respect of a portion situated in ground floor of building bearing Door Road (West) R.S. Coimbatore for a period of eleven months on a monthly rent of per month - Respondents 3 and 4 stood guarantee for loan availed by one Alloys Private Ltd from second respondent-Canara Bank on mortgage of properties in question belonging to fourth respondent - Held, Appellants have not produced any document to prove that they are bona fide lessees of secured assets – Court find that in cases before us appellants have relied on written instruments or rent receipts issued by the landlord to the tenant. Section 107 of the Transfer of Property Act provides that a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent can be made only by a registered instrument and all other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession - Hence if any of appellants claim that they are entitled to possession of a secured asset for any term exceeding one year from date of lease made in his favor he has to produce proof of execution of a registered instrument in his favor by lessor - Writ Petitions dismissed

JUDGMENT :

SATISH K. AGNIHOTRI, J.

1. Since both the writ petitions emanate from one and the same order, they are considered and decided by this common order.

2. The facts in a nutshell, leading to the filing of the instant writ petitions are that the petitioners entered into lease agreements dated 26 July, 2010 and 07 June, 2010 respectively, with the respondents 3 and 4 in respect of a portion situated in the ground floor of the building bearing Door No.147, Thiruvenkatasamy Road (West), R.S. Puram, Coimbatore 641 002, for a period of eleven months on a monthly rent of Rs.30,000/- per month. The respondents 3 and 4 stood guarantee for the loan availed by one Vignesh Alloys Private Ltd. from the second respondent-Canara Bank on mortgage of the properties in question belonging to the fourth respondent. Upon the secured asset having been classified as NPA, a demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act) was issued to the borrower, viz., Vignesh Alloys Private Ltd., on 08 October, 2012, calling upon the said company to pay a sum of Rs.26,20,84,716.87. Notices were issued to all the guarantors, including respondents 3 and 4, calling upon them to pay the above amounts. Owing to default in making payment of the aforesaid amount, a possession notice taking symbolic possession under Section 13(4) of the SARFAESI Act was issued on 12 December, 2012. Eventually, the property in question was sold to one R.Asokan for a sum of Rs.4,23,00,000/- and a certificate to that effect was also issued. The respondent bank, being unable to recover possession of the premises in question, made an application before the first respondent under Section 14 of the SARFAESI Act for recovery of the premises.

3. As stated by the learned counsel for the petitioners, the petitioners had received a notice dated 19 May, 2015 from the Court of the first respondent dealing with the instant application filed under Section 14 of the SARFAESI Act by the second respondent bank. The petitioners have, thereafter, addressed their replies raising objections on 22 May, 2015. Subsequent thereto, the petitioners had no notice of the hearing. The first respondent, without affording an opportunity of hearing to the petitioners, allowed the application filed by the second respondent bank, directing the Thasildar, Coimbatore-South, for taking over possession of the property in question and handing over the same to the secured creditor, i.e., the second respondent bank.

4. The sole contention of the petitioners is that they were not afforded an opportunity of hearing before the impugned order came to be passed. Thus, the impugned order deserves to be set aside with a direction to the first respondent to consider the matter, after affording an opportunity of hearing to the petitioners, afresh.

5. The first respondent has filed a counter affidavit stating clearly that all the tenants, including the instant petitioners were served with a notice, calling upon them to appear before the first respondent on 29 May, 2015 at 4.00 p.m. for an enquiry. Except one Madan Kumar, the other tenants, including the petitioners, did not choose to appear for enquiry and as such, the matter proceeded on the basis of documents filed by the parties.

6. According to the learned Special Government Pleader appearing for the first respondent, the petitioners were inducted into the premises on the basis of un-registered lease deeds. Relying on the decision of the Supreme Court in Harshad Govardhan Sondagar v. International Assets Reconstruction Company Ltd. and others, (2014) 6 SCC 1, it is contended that since the lease deeds were not duly registered, the lease cannot be held as valid, entitling the petitioners to have protection on the basis of unregistered documents to the effect that the same cannot be terminated without taking recourse to the provisions of Section 111 of the Transfer o














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