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2019 Supreme(P&H) 2278
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Rakesh Kumar Jain, Avneesh Jhingan, JJ.
Kotak Mahindra Bank Ltd. - Appellant
Versus
Deputy Commissioner-cum-district Magistrate And Others - Respondent
CWP No. 22914of 2018
Decided On : 24-07-2019
Mr. Nitin Ahluwalia, Advocate, for the Appellant; Mr. Amit Mehta, Sr. D.A.G., Punjab., Mr. J.S. Jaidka, Advocate, for the Respondent
The central legal point established is the exclusive jurisdiction of the Debt Recovery Tribunal over tenancy rights in secured assets, as provided in Section 17(4-A) of the Act.
Headnote:
Mandamus - Non-Performing Asset - The court directed the respondent to take possession of the mortgaged property in question, emphasizing the jurisdiction of the Debt Recovery Tribunal over tenancy rights in secured assets.
Fact of the Case:
The petitioner-bank sought a writ of mandamus to enforce an order for possession of a mortgaged property, which was not delivered due to a stay granted by the Civil Court.
Finding of the Court:
The court found that the Civil Court's jurisdiction over the issue of tenancy rights in the mortgaged property was void in light of Section 17(4-A) of the Act, and directed the respondent to take possession of the property through police assistance.
Issues: The key issue was the jurisdiction of the Civil Court in deciding tenancy rights over the mortgaged property, and the impact of the stay granted by the Civil Court on the enforcement of the possession order.
Ratio Decidendi: The court held that the Debt Recovery Tribunal has exclusive jurisdiction to decide tenancy rights in secured assets, as per Section 17(4-A) of the Act, rendering the Civil Court's stay and jurisdiction void in this matter.
Final Decision: The court directed the respondent to take possession of the mortgaged property through police assistance, dismissing the petition.
JUDGMENT
Rakesh Kumar Jain., J. (Oral) - The petitioner-Bank has prayed for the issuance of a writ in the nature of mandamus to direct respondents No.1 to 3 to comply with the order dated 30.04.2018 passed by respondent No.1.
2. In brief, respondents No.5 and 6 had obtained cash credit facility of Rs. 27,00,000/- from the petitioner by mortgaging the property in question. Respondent No.7 stood as a Guarantor who is also a Mortgagor. Since the amount of cash credit facility was overdue, it was declared as Non-Performing Asset (NPA) and proceedings under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 [for brevity 'the Act'] were carried out by the petitioner against the borrowers.
3. The petitioner-bank filed an application dated 30.01.2018 under Section 14(1) of the Act for taking help of the District Magistrate for taking possession of the mortgaged property. The said application was allowed on 30.04.2018. Since possession was not delivered, therefore, the present petition has been filed for implementation of order dated 30.04.2018 passed by respondent No.1.
4. Notice in the writ petition was issued. Upon notice, respondents have put in appearance and submitted that due to stay granted by the Civil Court, the possession could not be taken.
5. Learned counsel for the petitioner states that the Civil Suit is just a camouflage in order to escape from the order dated 30.04.2018.
6. After order was passed under Section 14(1) of the Act, a suit was filed by Neeraj Verma s/o Bal Mukand Verma on 07.03.2018 (respondent No.6 in the writ petition). The said suit was filed seeking permanent injunction on the ground that said Neeraj Verma is a Tenant over the mortgage property in question, since February, 2015 at the rate of Rs. 1,200/- per month. Although, it is submitted by the petitioner that the said suit has been dismissed for non-prosecution on 26.08.2018. On that date, following order was passed:-"Present: None for the plaintiff.
7. Sh. Abhay Ram Sharma, Adv. Counsel for Roshan Lal Verma File again taken up at 03:00 P.M. Neither the plaintiff nor his counsel came present before the Court. Accordingly, the present suit of the plaintiff is ordered to be dismissed in default for non appearance of plaintiff. File be consigned to the Judicial record room, Ludhiana after due compliance." Learned counsel for the private respondents has submitted that order dated 20.08.2018 has been recalled and suit has been restored. He has not produced any order to show that order dated 20.08.2018 of the Civil Court has been recalled and suit has been restored.
8. Even if it is presumed, for the sake of arguments, that the suit has been restored, yet in our considered opinion, the Civil Court does not have jurisdiction to decide the issue about tenancy over the mortgaged property after insertion of Sub-Section (4-A) in Section 17 of the Act w.e.f. 01.09.2016, wherein it is provided that 'for the purpose of declaring the tenancy rights, jurisdiction would vest with the Debts Recovery Tribunals only.'
9. Section 17 (4-A) of the Act is reproduced as under: -
(4-A) Where
(i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease ortenancy, -
(a) has expired or stood determined, or
(b) is contrary to section 65-A of the Transfer of Property Act, 1882 (4 of 1882); or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act; and
(ii) the Debt Recovery Tribunal is satisfied and tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause(b) or sub-
