Can Decide on ? A Guide to SARFAESI Proceedings
Imagine you're a tenant in a property that's been to a bank, and now the lender is moving to enforce its under the due to . You claim protected , but the bank wants possession. Can the () decide on tenancy? This is a common question in , and the answer generally points to yes—under specific statutory provisions.
This blog post breaks down the 's jurisdiction over tenancy and on secured assets, drawing from key laws like the (), judicial precedents, and related cases. Note: This is general information, not legal advice. Consult a qualified lawyer for your specific situation.
Understanding and Its Role in SARFAESI
The () is a specialized forum established under the Recovery of Debts Due to and Act, 1993, to expedite debt recovery for and . Under the , handles challenges to actions like after a notice for default. 2021 4 Supreme 496
Tenancy claims often arise when borrowers or third parties assert over secured assets during enforcement. The core issue: Does have authority to adjudicate these, or do or rent tribunals hold sway?
's Statutory Authority on
Yes, the typically has jurisdiction to decide tenancy or claims raised in SARFAESI . This is bolstered by amendments, particularly inserted by Act 44 of 2016. 2021 4 Supreme 496 2023 0 Supreme(Mad) 270 2025 0 Supreme(Kar) 1284 2025 0 Supreme(Ker) 2344
Key Provision: of
explicitly empowers :
Where— (i) any person, in an application under sub-section (1), claims any tenancy or 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 , have the jurisdiction to examine whether lease or tenancy,— (a) has expired or stood determined; or (b) is contrary to ; (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... 2021 4 Supreme 496 2023 0 Supreme(Mad) 270 2025 0 Supreme(Kar) 1284 2025 0 Supreme(Ker) 2344
This allows to scrutinize if tenancies are valid, expired, (post-notice), or against mortgage terms or Section 65A of the Transfer of Property Act (restricting mortgagor's leasing powers). 2020 0 Supreme(Bom) 606
Judicial Confirmations of Jurisdiction
and affirm 's role. In , the noted:
the Tribunal under the Act is also the Tribunal under the ... the applicant bank or FI has to pay fees for filing such application to under the Act and, similarly, a borrower, aggrieved by an action under was entitled to prefer an Application to the under . 2021 4 Supreme 496
echo this. For instance, is competent to decide mortgage-related tenancy issues, even under specific laws like the , if not declared pre-mortgage.
In another ruling: Learned Counsel for the submitted that is the competent Tribunal to decide the issue of mortgage created in favour of the Secured Creditors.
Bar on Civil Court Jurisdiction
bars :
No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a or the is empowered by or under this Act to determine. 2021 4 Supreme 496 2023 0 Supreme(Mad) 270 2025 0 Supreme(Kar) 1284
must reject plaints if tenancy claims fall under . 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 ... The Civil Court had no jurisdiction over matters determined by the . 2020 0 Supreme(Bom) 606
The appellant was directed to approach . Similarly, where (landlord-tenant) is admitted post-auction sale, uphold 's primacy, but disputes may limit it if tenancy itself is denied upfront. 2019 0 Supreme(Kar) 1419
Tenancy: 's Deciding Role
examines tenancy authenticity under Section 17(4)/(4A). If not or (post- notice), eviction follows via order. But pre-existing, genuine tenancies require state rent law processes:
If tenancy is not and just created as a defence, such occupants can be evicted by an order under by the , but if the tenancy is long pre-existing before the issuance of notice under of the Act and is found to be , such tenants and lessees cannot be evicted, without adopting the for eviction under .
HDB Financial Services Limited VS Remo Software Pvt. Ltd.
HDB Financial Services Limited VS Remo Software Pvt. Ltd
Magistrates under 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 TO DECIDE ON TENANCY: special fora for that and only such fora can decide those matters.
Exceptions and Limitations
- Pre-Mortgage Tenancies: Protected if and pre-notice; checks but eviction may need rent court.
HDB Financial Services Limited VS Remo Software Pvt. Ltd.
- Disputed : If tenancy existence denied (no prior admission), may not decide initially. 2019 0 Supreme(Kar) 1419
- Larger Issues Beyond Section 17(4): for non-SARFAESI reliefs. 2020 0 Supreme(Bom) 606
- Jurisdiction ties to SARFAESI enforcement claims.
Practical Recommendations
- Tenants/lessees: File under Section 17(1) with , invoking 17(4A).
- : Expect scrutiny; document notice timelines.
- : Stay and refer to per Section 34.
- Auction purchasers: Step into landlord shoes post-sale, use for tenancies.
Key Takeaways and Conclusion
The generally holds authority to decide tenancy/ on secured assets in SARFAESI proceedings, clarified by and upheld by courts. are barred, ensuring speedy recovery while protecting genuine rights. Amendments and rulings like those reinforcing over special tenancy laws streamline processes. 2021 4 Supreme 496 2023 0 Supreme(Mad) 270 2025 0 Supreme(Kar) 1284 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 2021 4 Supreme 496, 2023 0 Supreme(Mad) 270, 2025 0 Supreme(Kar) 1284, 2025 0 Supreme(Ker) 2344, 2020 0 Supreme(Bom) 606, , and others cited inline.
