Court emphasized the necessity for lower courts to fully examine tenancy claims and that jurisdictional errors must be corrected by remitting cases for proper evaluation.

ORDER:

1 This Petition filed under Article 226 of the Constitution impugns the order dated 11 December 2018 passed by the DRAT dismissing the Appeal of the Petitioner thereby confirming the order dated 27 December 2017 of the DRT in the Securitisation Application No.325 of 2017 filed by the Petitioner seeking to set aside the order dated 22 May 2017 passed by the Chief Metropolitan Magistrate and restoration of the premises in question.

2 The Petitioner who is a senior citizen and a doctor by qualification, claims to be tenant in respect of premises bearing No.168 having a built up area of about 140 square feet, on the ground floor, Fanaswadi, S.No.1/329, CTS No.2030 of Bhuleshwar Division, Fanaswadi Lane of Thakurdwar Road, Girgaon, Mumbai 400 022 (hereinafter referred to as ‘the said premises’).

3 Respondent No.2 is a Company of which Respondent Nos.3 and 4 are Directors. Respondent No.1 Bank had advanced financial facilities to the tune of Rs.3.50 Crores to Respondent No.2. Respondent Nos.5 to 7 are the guarantors. Respondent No.7 is also the Petitioner's landlord and owner of the building in which the said premises are situate. Pursuant to the action taken by the Respondent No.1 Bank under the SARFAESI Act , Respondent No.1 Bank has taken physical possession of the said premises on 11 August 2017 after obtaining order dated 22 May 2017 from the Chief Metropolitan Magistrate, Mumbai ('CMM' for short). The Petitioner thereafter filed a Securitisation Application before DRT seeking to set aside the order dated 22 May 2017 passed by the CMM and sought restoration of the said premises. The Petitioner had relied upon documents including rent receipts, letter of attornment of tenancy, etc. It appears that in the said Securitisation Application, no reply was filed by the Respondent No.1 Bank. The DRT however came to the conclusion that the Petitioner is in occupation of the said premises as a licensee and legal protection cannot be given to the Petitioner and dismissed the said Securitisation Application. The Petitioner thereafter preferred an Appeal before DRAT. Against the refusal of DRAT to take up the matter for consideration for grant of ad-interim/interim relief, the Petitioner approached this Court by filing Writ Petition (L) No.343 of 2018. By order dated 6 February 2018 this Court disposed of the Petition in the following terms:

“3 Having heard the learned Counsel for the parties, prima facie, we find that there are documents on record which support the case of the Petitioner that she is a monthly tenant of the premises much prior to the creation of the mortgage. Inasmuch as the Appeal before the DRAT is still pending and the Petitioner has already been dispossessed from the premises, we pass the following order:

O R D E R

i) The DRAT shall hear and dispose of the Appeal of the Petitioner expeditiously and preferably by the end of June 2018;

ii) Since the Respondent Bank has already taken possession of the premises in question, it shall maintain status quo in respect of the premises of which the Petitioner claims to be in possession until the Appeal is heard and decided;

iii) DRAT shall decide the Appeal on its own merits without being influenced by the observations in this order.”

4 The matter was thereafter heard by DRAT and by the impugned order dated 11 December 2018, the Appeal of the Petitioner came to be dismissed. While dismissing the Appeal, the DRAT held that the Securitisation Application itself was not maintainable. The DRAT further held that under section 17 of the SARFAESI Act , there was no power vested in the Tribunal to set aside the order of the Chief Metropolitan Magistrate.

5 We heard learned Counsel for the Petitioner, learned Counsel for Respondent No.1 Bank and learned Counsel for Respondent No.7. Learned Counsel for the Petitioner has placed reliance on the following judgments:

i) REMO Software Pvt. Ltd. vs. HDB Financial Services Ltd. , 2017 SCC OnLine Kar 4522, (High Court of Karnataka);

ii) Dharmendra