BALKRISHNA RAMA TARLE DEAD THR LRS Vs. PHOENIX ARC PRIVATE LIMITED

JUDGEMENT

(1.) Feeling aggrieved and dissatisfied with the impugned judgment and order dtd. 3/8/2022 passed by the High Court of Judicature at Bombay in Writ Petition No. 9749/2021, by which the Division Bench of the High Court has allowed the said writ petition preferred by the respondent No. 1 herein - secured creditor and has set aside order dtd. 27/8/2021 passed by the designated authority under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act, 2002) and directed the designated authority under Sec. 14 of the SARFAESI Act to dispose of the application under Sec. 14 of the SARFAESI Act afresh, legal heirs of original respondent No. 2 claiming to be the tenant of the mortgaged property, have preferred the present Special Leave Petition.

(2.) The Religare Finvest Ltd. (hereinafter referred to as the Religare) sanctioned a loan of Rs.6.00 crores in favour of the borrowers. The said loan was secured by a registered mortgage created by borrowers in favour of Religare in respect of the property - secured assets. The borrowers committed defaults in repayment of the said loan which led to Religare classifying borrowers' account as a Non-Performing Asset (NPA). The Religare thereafter, issued a notice dtd. 13/4/2018 under Sec. 13(2) of the SARFAESI Act calling upon borrowers to pay the amount then outstanding under the said facility. That thereafter, by a Deed of Assignment dtd. 29/9/2018, Religare assigned all its right, title, interest, and benefit under the said loan agreement to respondent No. 1 herein - original petitioner No. 1 before the High Court. Thus, respondent No. 1 - original petitioner No. 1 stepped into the shoes of Religare and became the secured creditor and in that capacity issued a notice dtd. 21/5/2019 under Sec. 13(2) of the SARFAESI Act to borrowers calling upon borrowers to make payment of a sum of Rs.5,83,22,866.00. That thereafter, the secured creditor took symbolic possession of the secured assets under Sec. 13(4) of the SARFAESI Act. On 21/9/2019, the same was intimated to the borrowers vide their letter dtd. 21/9/2019. A public notice was also issued by the secured creditor in two newspapers in compliance with the provisions of the Security Interest (Enforcement) Rules, 2002. That thereafter, the secured creditor filed an application under Sec. 14 of the SARFAESI Act seeking assistance of designated authority - respondent No. 3 herein - District Magistrate, Nashik, for taking physical possession of the secured assets. The petitioner herein - original respondent No. 2 claiming to be a tenant in respect of the ground floor plus first floor showroom along with service station on a part of the secured assets bearing Nos. 465 and 463 sought to intervene in the said proceedings filed under Sec. 14 of the SARFAESI Act. The petitioner placed reliance upon an order dtd. 20/4/2018 passed in Regular Civil Suit No. 58/2018 filed by him against one of the borrowers, whereby one of the borrowers was restrained from dis-possessing him from the said premises. At this stage, it is required to be noted that neither the borrower(s) nor the petitioner(s) instituted any proceedings before the Debt Recovery Tribunal (DRT) under Sec. 17 of the SARFAESI Act against the steps taken under Sec. 13 of the SARFAESI Act. That thereafter, the designated authority passed the following order dtd. 27/8/2021 and declined to assist the secured creditor in taking possession of the secured assets and kept the said application pending by observing that after termination of the tenancy rights of the petitioner by the Finance Company by following due procedure of law the further orders regarding possession of the mortgage property will be decided. The order dtd. 27/8/2021 is as under: -

(3.) Shri Vinay Navare, learned Senior Advocate, appearing on behalf of the petitioners has vehemently submitted that in the facts and circumstances of the case and when the petitioners claimed to be the tenant of the original landlord with respect to some of the secured assets of which the possession was sought and when the original writ petitioner stepped into the shoes of the original landlord as rightly observed by the designated authority - Additional District Magistrate unless the secured creditor who stepped into the shoes of the original landlord initiates the legal proceedings for eviction of the tenant cannot get the possession in an application under Sec. 14 of the SARFAESI Act. 3.1 It is vehemently submitted by Shri Navare, learned Senior Advocate, appearing on behalf of the petitioners that the High Court ought to have appreciated that the tenancy was subsisting and continuing since prior to the mortgage of the property and therefore, their rights are to be protected and unless and until the proceedings are initiated for eviction of the tenant, the secured creditor who will be in the shoes of the original landlord, cannot get the possession in an application under Sec. 14 of the SARFAESI Act. Reliance is placed upon the decisions of this Court in the cases of Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Limited and Ors.; (2014) 6 SCC 1 and Vishal N. Kalsaria Vs. Bank of India and Ors.; (2016) 3 SCC 762.