A lease exceeding one year must be registered; oral agreements cannot create valid leases beyond that period, and civil courts lack jurisdiction in matters under the SARFAESI Act.

JUDGMENT :

1. The instant writ petition has been filed by the petitioner, M/s Trilokchand Fabrication Pvt. Ltd. praying for the issuance of a writ of certiorari quashing the order dated April 18, 2023 (hereinafter referred to as the ‘impugned order’) passed by The Additional District Magistrate, Finance and Revenue, Bulandshahr (hereinafter referred to as the ‘Respondent No. 3’) and/or a writ of or in the nature of Mandamus directing the Respondent No. 3 to allow the application filed under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’) without being affected by the temporary injunction order dated November 9, 2021 (hereinafter referred to as the ‘injunction order’).

Facts

2. Factual matrix of the instant case is delineated down below:

a. M/s JN Robotics Automation Pvt. Ltd. (hereinafter referred to as the ‘Respondent No. 5’), Shri Navneet Sharma, Director, Respondent No. 5 (hereinafter referred to as the ‘Respondent No. 6’) and, Shri Jyoti Sharma, Director, Respondent No. 5 (hereinafter referred to as the ‘Respondent No. 7’) had taken a loan from the Punjab National Bank, Circle Shastra Centre, Ghaziabad (hereinafter referred to as the ‘Respondent No. 4’). As a security for the said loan, they had mortgaged their immovable property being plot nos. N1 and N2, Industrial Area, Sikandrabad, District Bulandshahr admeasuring total area 2000 square meters (hereinafter referred to as the ‘immovable property’).

b. Respondents No. 5, 6, and 7 defaulted on the loan and after the classification of the loan as a ‘Non-Performing Asset’ under the provisions of the SARFAESI Act, the immovable property belonging to the Respondents No. 5, 6, and 7 was auctioned.

c. Respondent No. 4 preferred an application under Section 14 of the SARFAESI Act before the District Magistrate, Bulandshahr (hereinafter referred to as the ‘Respondent No. 2’) for taking possession of the immovable property. During the pendency of the proceedings under Section 14 of the SARFAESI Act, the Respondent No. 4 sold the property to the petitioner vide an auction on December 14, 2022.

d. During the pendency of the proceedings under Section 14 of the SARFAESI Act, a Civil Suit for Injunction, being Original Suit No. 198 of 2021 was preferred by one Sanjiv Kumar (hereinafter referred to as the ‘Respondent No. 8’) against the Respondent No. 5 praying for a decree of injunction against evicting him without following the due process of law on the ground that the Respondent No. 8 is the tenant of the Respondent No. 5 and has duly entered into a lease for a period of 12 years.

e. Vide order dated November 11, 2021, the Court of Civil Judge, Senior Division, Bulandshahar granted temporary injunction to the Respondent No. 8 over the immovable property against the Respondent No.5.

f. Application under Section 14 of the SARFAESI Act was later transferred to the Respondent No.3. Respondent No. 3, keeping in mind, the injunction order passed by the civil court, vide its order dated April 18, 2023, directed the application filed under Section 14 of the SARFAESI Act to be kept under abeyance till the disposal of Original Suit No. 198 of 2021. The instant writ petition has been preferred against the said order dated April 18, 2023.

Contentions by the Petitioner

3. Shri Rahul Sripat, learned Senior Advocate, has advanced the following arguments on the behalf of the petitioner:

a. The immovable property was leased by the U.P. State Industrial Development Corporation Ltd. (hereinafter referred to as ‘UPSIDC’) and hence as per the lease deed dated November 15, 2017, the same could not have been sub-let by the borrower.

b. There is no registered lease deed for the immovable property. Hence no lease beyond a period of 11 months is permissible without there being a registered lease deed in as much as the lease of the Respondent No. 5 from the UPSIDCS also prohibits sub-letting of the plot.

c.