Tenants cannot claim protection under SARFAESI Act based on unregistered leases, lacking effective legal standing.

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 S.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 S.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 S.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 S.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 unregistered lease deeds. Relying on the decision of the Supreme Court in Harshad Govardhan Sondagar v. International Assets Reconstruction Company Ltd. and