Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
In some cases, courts have remanded tenancy issues back to the DRT for proper examination if the documents and claims were not adequately considered, but the core principle remains that DRT's jurisdiction is limited and specific. ["Jayashree Dwarkadas Divecha VS State Bank Of India - Bombay"], ["ISIBARS LTD vs COMMERZBANK AG and ANR - Bombay"].
Analysis and Conclusion:
References:- ["RAJKOT NAGARIK SAHAKARI BANK LIMITED VS JIGNESH JAYANTILAL RAMANUJ - Gujarat"]- ["Radharani Bose (Deceased) VS Bank of Baroda - Calcutta"]- ["Jayashree Dwarkadas Divecha VS State Bank Of India - Bombay"]- ["Dr. Jayashree Dwarkadas Divecha vs State Bank of India - Bombay"]- ["Indian Bank Circle Office, Cuddalore VS V. K. Balaji - Madras"]- ["Manonmani vs The Executive Engineer - Madras"]- ["PRIYADHARSINI ATHREYA vs THE AUTHORIZED OFFICER - Madras"]- ["INDIAN BANK CIRCLE OFFICE vs V.K.BALAJI - Madras"]- ["Capital First Limited VS State Of Haryana And Others - Punjab and Haryana"]- ["ISIBARS LTD vs COMMERZBANK AG and ANR - Bombay"]
Imagine you're a tenant in a property that's been mortgaged to a bank, and now the lender is moving to enforce its security interest under the SARFAESI Act due to loan default. You claim protected tenancy rights, but the bank wants possession. Can the Debts Recovery Tribunal (DRT) decide on tenancy? This is a common question in enforcement proceedings, and the answer generally points to yes—under specific statutory provisions.
This blog post breaks down the DRT's jurisdiction over tenancy and leasehold rights on secured assets, drawing from key laws like the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), judicial precedents, and related cases. Note: This is general information, not legal advice. Consult a qualified lawyer for your specific situation.
The Debts Recovery Tribunal (DRT) is a specialized forum established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, to expedite debt recovery for banks and financial institutions. Under the SARFAESI Act, DRT handles challenges to actions like asset takeover after a Section 13(2) notice for default. SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496
Tenancy claims often arise when borrowers or third parties assert leasehold rights over secured assets during enforcement. The core issue: Does DRT have authority to adjudicate these, or do civil courts or rent tribunals hold sway?
Yes, the DRT typically has jurisdiction to decide tenancy or leasehold rights claims raised in SARFAESI enforcement proceedings. This is bolstered by amendments, particularly Section 17(4A) inserted by Act 44 of 2016. SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496V. C. Kalaivanan VS Manager, Aditya Birla Housing Finance Ltd. - 2023 0 Supreme(Mad) 270State Bank of India, Bengaluru vs Swathi Agencies - 2025 Supreme(Online)(Kar) 22570G. Subhulakshmi W/o R. Manikkumar vs UCO Bank, Quilon Branch - 2025 0 Supreme(Ker) 2344
Section 17(4A) explicitly empowers DRT:
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 or tenancy,— (a) has expired or stood determined; or (b) is contrary to section 65A of the Transfer of Property Act, 1882; (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... SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496V. C. Kalaivanan VS Manager, Aditya Birla Housing Finance Ltd. - 2023 0 Supreme(Mad) 270State Bank of India, Bengaluru vs Swathi Agencies - 2025 Supreme(Online)(Kar) 22570G. Subhulakshmi W/o R. Manikkumar vs UCO Bank, Quilon Branch - 2025 0 Supreme(Ker) 2344
This allows DRT to scrutinize if tenancies are valid, expired, sham (post-notice), or against mortgage terms or Section 65A of the Transfer of Property Act (restricting mortgagor's leasing powers). Modinasab Indikar VS Board Of Directors Of Indian Overseas Bank - 2020 Supreme(Bom) 606
Supreme Court and High Courts affirm DRT's role. In Union Bank of India v. Satyawati Tondon, the Supreme Court noted:
the Tribunal under the DRT Act is also the Tribunal under the NPA Act... the applicant bank or FI has to pay fees for filing such application to DRT under the DRT Act and, similarly, a borrower, aggrieved by an action under Section 13(4) of NPA Act was entitled to prefer an Application to the DRT under Section 17 of NPA. SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496
High Courts echo this. For instance, DRT is competent to decide mortgage-related tenancy issues, even under specific laws like the Thika Tenancy Act, if not declared pre-mortgage. MANJU SARKAR AND ORS vs ALLAHABAD BANK
In another ruling: Learned Counsel for the Auction Purchaser submitted that DRT is the competent Tribunal to decide the issue of mortgage created in favour of the Secured Creditors. MANJU SARKAR AND ORS vs ALLAHABAD BANK
Section 34 of SARFAESI Act bars civil courts:
No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine. SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496V. C. Kalaivanan VS Manager, Aditya Birla Housing Finance Ltd. - 2023 0 Supreme(Mad) 270State Bank of India, Bengaluru vs Swathi Agencies - 2025 Supreme(Online)(Kar) 22570
Civil courts must reject plaints if tenancy claims fall under DRT. In one case, a tenant's suit against bank dispossession was dismissed: The court found that the appellant failed to establish that the plaint in his suit passed the judicial muster under Order 7, Rule 11 of CPC... The Civil Court had no jurisdiction over matters determined by the Debts Recovery Tribunal. Modinasab Indikar VS Board Of Directors Of Indian Overseas Bank - 2020 Supreme(Bom) 606
The appellant was directed to approach DRT. Similarly, where jural relationship (landlord-tenant) is admitted post-auction sale, civil courts uphold DRT's primacy, but disputes may limit it if tenancy itself is denied upfront. M. Shankar Son of Manoharan VS Switching Power Conversion Pvt. Ltd. - 2019 Supreme(Kar) 1419
DRT examines tenancy authenticity under Section 17(4)/(4A). If not bona fide or sham (post-Section 13(2) notice), eviction follows via DRT order. But pre-existing, genuine tenancies require state rent law processes:
If tenancy is not bona fide and just created as a sham defence, such occupants can be evicted by an order under Section 17(4) of the Act by the DRT, but if the tenancy is long pre-existing before the issuance of notice under Section 13(2) of the Act and is found to be bona fide, such tenants and lessees cannot be evicted, without adopting the due process of law for eviction under State Rent Control Law. HDB Financial Services Limited VS Remo Software Pvt. Ltd.HDB Financial Services Limited VS Remo Software Pvt. Ltd
Magistrates under Section 14 must hear lessees on validity before possession orders, but not always borrowers. HDB Financial Services Limited VS Remo Software Pvt. Ltd
One High Court clarified: IN RE THE POWER OF TRIBUNALS UNDER SARFAESI ACT TO DECIDE ON TENANCY: special fora for that and only such fora can decide those matters. INDIAN BANK CIRCLE OFFICE vs V.K.BALAJI
The DRT generally holds authority to decide tenancy/leasehold rights on secured assets in SARFAESI proceedings, clarified by Section 17(4A) and upheld by courts. Civil courts are barred, ensuring speedy recovery while protecting genuine rights. Amendments and rulings like those reinforcing DRT over special tenancy laws streamline processes. SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496V. C. Kalaivanan VS Manager, Aditya Birla Housing Finance Ltd. - 2023 0 Supreme(Mad) 270State Bank of India, Bengaluru vs Swathi Agencies - 2025 Supreme(Online)(Kar) 22570G. Subhulakshmi W/o R. Manikkumar vs UCO Bank, Quilon Branch - 2025 0 Supreme(Ker) 2344
Final Note: Laws evolve; recent judgments may nuance this. Always seek professional advice tailored to facts.
References include judgments like SESH NATH SINGH VS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. - 2021 4 Supreme 496, V. C. Kalaivanan VS Manager, Aditya Birla Housing Finance Ltd. - 2023 0 Supreme(Mad) 270, State Bank of India, Bengaluru vs Swathi Agencies - 2025 Supreme(Online)(Kar) 22570, G. Subhulakshmi W/o R. Manikkumar vs UCO Bank, Quilon Branch - 2025 0 Supreme(Ker) 2344, Modinasab Indikar VS Board Of Directors Of Indian Overseas Bank - 2020 Supreme(Bom) 606, MANJU SARKAR AND ORS vs ALLAHABAD BANK, and others cited inline.
#DRTTenancy #SARFAESI #DebtRecovery
The learned counsel for the petitioner has submitted, inter-alia, that the DRT has no jurisdiction to entertain and decide the issue concerning tenancy, much less the dispute regarding preexisting tenancy. ... disputes falling within its purview, the DRT would not be competent to step into the boundary of the Court under the Rent At and decide tenancy dispute. ... tenancy dispute and to entertain and decide tenancy....
The DRT Act facilitated establishment of two-tier system of Tribunals. ... While a yearly tenancy requires to be registered, oral tenancy can still be proved by showing that the tenant has been in occupation of the premises before the Magistrate under Section 14 of the SARFAESI Act. 22.3. ... On 27th January, 2000 Bank of Baroda, opposite party no. 1 filed an application under Section 19 of the DRT Act against opposite party no. 2 for recovery of a sum of Rs. 15,07,290.35/- only being O.A. 1456 of 1997. ... The petitione....
The DRT shall examine the claim of tenancy of the Petitioner after appreciating the documents on record. ... The DRT erroneously concluded that the Petitioner was a mere licencee. Even the DRAT has not examined any documents of the Petitioner in respect of her claim of tenancy. ... We are informed by the learned Counsel for the Petitioner that the Petitioner had submitted a compilation of documents before the DRT. We find that none of the documents have been considered by DRT in respec....
The DRT shall examine the claim of tenancy of the Petitioner after appreciating the documents on record. ... The DRT erroneously concluded that the Petitioner was a mere licencee. Even the DRAT has not examined any documents of the Petitioner in respect of her claim of tenancy. ... We are informed by the learned Counsel for the Petitioner that the Petitioner had submitted a compilation of documents before the DRT. We find that none of the documents have been considered by DRT in respec....
But, since due to the subsequent event, respondent 1 was robbed of its character as a bank, the DRT cannot decide the application. The words 'entertain and decide' are important. The DRT must not merely have jurisdiction to entertain the application but it must have jurisdiction to decide it. ... Counsel submitted that under Section 17 of the RDDB Act, the DRT has to entertain and decide the application. No doubt, when the application was filed by respondent 1, the #H....
Pending proceedings before DRT, one Muthuthevar who is the grandfather of the 2nd respondent has filed a petitioner before the DRT to decide his cultivating tenancy in respect of the property to an extent of southern portion of 30 cents which was purchased by the petitioner's husband vide petition in ... The said application was dismissed by DRT, Madurai as the right of cultivating tenancy cannot be decided by the DRT and issued a direction to approach the appropriat....
jurisdiction to decide it. ... The words 'entertain and decide' are important. ... had jurisdiction to entertain and decide the application.
had jurisdiction to decide on the tenancy issues. ... ... would unambiguously and unequivocally highlight the point that the authority under the SARFAESI Act cannot decide on the question of tenancy and the special enactment governing tenancy contemplates special fora for that and only such fora can decide those matters. ... A question, therefore, would arise as to whether the DRT, while deciding the application under Section 17(1) in exercise of its jurisdiction und....
Learned Counsel for the Auction Purchaser submitted that DRT is the competent Tribunal to decide the issue of mortgage created in favour of the Secured Creditors. ... Thika Tenancy Act, 1981 was effective from the year 1981, yet the Appellant did not obtain any declaration regarding his Thika Tenancy. ... Accordingly, after judgment and decree passed by the DRT in the year 1999 the provisions of Thika Tenancy Act are not applicable on the mortgage created by the Borrow....
had jurisdiction to decide on the tenancy issues. ... IN RE THE POWER OF TRIBUNALS UNDER SARFAESI ACT TO DECIDE ON TENANCY: special fora for that and only such fora can decide those matters. ... on the question of tenancy and the special enactment governing tenancy contemplates prior to the creation of mortgage and such tenancy is p style="position:absolute
10. Ms. Maria Nedumpara has submitted that Section 17 (4) of the Securitisation Act sets out the grounds of tenancy that could be considered by the DRT. Therefore, it is unexceptionable that the appellant has approached the Civil Court, which alone could grant the relief the appellant has sought. But here the tenant has raised larger issues which could not be decided by the Tribunal.
The DRT cannot decide the issue of tenancy since the defendants have denied the jural relationship between the plaintiff and defendant. The very contention that the plaintiff ought to have approached the DRT cannot be accepted. Hence, the judgment and decree not suffers from any legal infirmities. Since the tenancy is not in dispute, the tenants cannot dispute the title.
If tenancy is not bona fide and just “created” as a sham defence, such occupants can be evicted by an order under Section 17(4) of the Act by the DRT, but if the tenancy is long pre-existing before the issuance of notice under Section 13(2) of the Act and is found to be bona fide, such tenants and lessees cannot be evicted, without adopting the due process of law for eviction under State Rent Control Law, as held by Hon’ble Supreme Court in Vishal N. Kulsaria’s case (supra). Secondly, the tenanted premises cannot be directly vacated by such orders under Section 14 of the Act. It is....
Secondly, the tenanted premises cannot be directly vacated by such orders under Section 14 of the Act. It would for the auction purchaser to adopt such due process of law, once he steps in the shoes of landlord/borrower proceeded against under SARFAESI Act 2002. It is for DRT to decide about the bona fide of the tenancy or otherwise under Section 17(4A) of the Act. If tenancy is not bona fide and just “created” as a sham defence, such occupants can be evicted by an order under Section 17(4) of the Act by the DRT, but if the tenancy is long pre-existing before the issuance o....
In case the DRT finds that the tenancy falls in clauses (a) to (d) of sub clause (i) of Section 17(4A) of the Act then notwithstanding anything to the contrary in any other law, DRT is empowered to pass such order as it deems fit in accordance with the provisions of the Act. The DRT shall determine whether the tenancy has expired or stood determined; or is contrary to Section 65-A of the Transfer of Property Act; or is contrary to the term of mortgage; or is created after issuance of notice of default and demand by the bank under Section 13 (2) of the Act. According to this provisi....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
