Decided on February 22,2006



K.J.Paratwar, - (1.) BEING aggrieved by taking symbolic possession of Flat No. 4, 3rd Floor (with two open car parking space) in Samudra Gaurav Apartments Private Limited, Worli Sea Face, Mumbai-400025, the tenant (applicant in S.A. No. 16) and landlord/mortgagor (applicant No. 1 in S.A. No. 17) have filed these applications/appeals under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SRFAESI Act').
(2.) The respondent Bank took possession on 8.2.2005 of the flat on the principal debtor's (respondent No. 3 in S.A. No. 16 and respondent No. 2 in S.A. No. 17) failure to pay outstandings to the tune of Rs. 4.56 crores as demanded by notice dated 11.11.2004 under Section 13(2) of SRFAESI Act. The notice also pertained to other property being plot No. B-57, Industrial Area, Panchpakhadi, Thane. During the pendency of the applications/appeals, however, said property is sold resulting into recovery of about 1.50 crores. The Bank's outstandings therefore are reduced to the extent of about Rs. 3,06 crores + interest. The applicant's case in S.A. No. 16 is that she is in exclusive possession of the flat as tenant on the basis of registered deed of lease dated 14.8.2000. In Small Causes Court at Mumbai, she filed R.A.D. Suit No. 162 of 2004 against respondent No. 2 landlord inter alia for injunction which order is passed in her favour by the Court. Subsequently, the applicant took out notice for amendment making the Bank as the respondent No. 2 and for injunction against the Bank also. The same was allowed by order dated 25.2.2004. During the pendency of the appeal the order is confirmed by Hon'ble High Court of Judicature at Bombay by order dated 20.7.2005 in Writ Petition No. 4493 of 2005. The Bank's action of dispossessing the applicant would thus frustrate her tenancy right which is not permissible in law. The second ground of application/appeal is that in view of Section 31(g) of SRFAESI Act read with Section 60(1)(kc) of Code of Civil Procedure (CPC), which prohibits attachment and sale of the lease of residential building, the impugned action is unsustainable. In view of the above, the S.A. is sought to be allowed.
(3.) THE grounds in S.A. No. 17 over and above the contentions in S.A. No. 16 are inter alia is based on the definition of the Borrower in Clause (f) of Section 2 of SRFAESI Act which includes the mortgagor. THE contention is that Section 13(2) of the SRFAESI Act requires classification of the account as Non Performing Asset (NPA). Such classification was not done in respect of applicant No. 1 and in fact could not be done since there is no account maintained by the Bank in its name, being mortgagor and not the principal debtor. THE other ground is that the classification of account of the applicant No. 2 as NPA as on 30.11.2003 was illegal. THE action under SRFAESI Act is said to be bad for aforesaid reasons and is sought to be struck down.;

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