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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • TRANSFER OF PROPERTY ACT 1882
  • ARTICLE 226 CONSTITUTION OF INDIA
  • RAJASTHAN RENT CONTROL ACT 2001
  • Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act) and provisions of Rajasthan Rent Control Act, 2001
  • subsection (3) of Section 17 of the SARFAESI Act
  • sub-section (4A) vide Act no. 44 of 2016 w.e.f 01.09.2016 and sub-section(i) of Section 17(4A) of the SARFAESI Act
  • Section 30 of the Debt Recovery Tribunal Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • TRANSFER OF PROPERTY ACT 1882
  • ARTICLE 226 CONSTITUTION OF INDIA
  • RAJASTHAN RENT CONTROL ACT 2001
  • Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act) and provisions of Rajasthan Rent Control Act, 2001
  • subsection (3) of Section 17 of the SARFAESI Act
  • sub-section (4A) vide Act no. 44 of 2016 w.e.f 01.09.2016 and sub-section(i) of Section 17(4A) of the SARFAESI Act
  • Section 30 of the Debt Recovery Tribunal Act
Smart Summary

Judicial Opinion — Structured Summary

Factual and Procedural Background

The petitioner, M/s Alpha Beta Shiksha Samiti (a registered society), operates Alpha Beta School at A-64, Shanti Path, Tilak Nagar, Jaipur. The society alleges it took the premises on rent from Late Shri P.C. Sogani in 1986 and has paid rent continuously to him and his legal heirs. The petitioner also runs another school (Vimukti Girls School) at the same premises.

The owner had hypothecated the land for loans taken by Unicorp Indus Limited. Respondent No. 2 (a secured creditor / Phoenix) filed an application under Section 14 of the SARFAESI Act; the District Collector, Jaipur issued an order dated 17.07.2012 directing Respondent No. 2 to take possession. A possession notice was placed on the school premises on 23.07.2016 and Respondent No. 2 later put lock and seal on the premises.

The petitioner filed an application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal (initially in Delhi, later transferred to Jaipur), which was dismissed on the ground that an application by a tenant was not maintainable. The Recovery Officer / DRT recorded dismissal of objections (RC No. 03/2014) on 12.12.2014; a receiver was appointed on 24.06.2016. The petitioner had earlier challenged certain proceedings before the Delhi High Court (Writ Petition No. 6171/2015) — that petition was dismissed as not pressed but with liberty to seek remedies under Section 30 of the DRT Act; DRT (Delhi) continued interim protection on 02.07.2015 and proceedings before it remain pending.

The petitioner filed the present writ petition in this Court challenging the lock/seal and dispossession notice dated 23.07.2016. This Court issued notice and, by order dated 02.08.2016, stayed the dispossession notice. The present opinion disposes the writ petition while addressing interlocutory and jurisdictional questions raised by subsequent amendments to Section 17 of the SARFAESI Act.

Legal Issues Presented

  1. Whether the petitioner can maintain a writ petition in this Court to challenge the dispossession and lock/seal placed on the school premises when a remedy under Section 17 of the SARFAESI Act exists (and was amended after the petition was filed) to deal specifically with tenancy claims?
  2. Whether the amendment introducing Section 17(4A) to the SARFAESI Act (effective 01.09.2016), which grants the Debt Recovery Tribunal jurisdiction to examine tenancy or leasehold claims, can be availed by the petitioner though the dispossession notice was issued prior to the amendment and the writ petition was filed before the amendment came into force?
  3. Whether the writ Court should enter into the merits of the tenancy claim or direct the petitioner to approach the Debt Recovery Tribunal in view of the statutory amendment?

Arguments of the Parties

Petitioner's Arguments

  • The petitioner (through learned Senior Counsel Mr. Ashok Gaur) asserted long-standing tenancy since 1986, continuous payment of rent, and operation of two schools (Alpha Beta and Vimukti Girls School) on the premises.
  • It was argued that despite an interim order continuing before the DRT (Delhi) dated 02.07.2015, Respondent No. 2 illegally issued the dispossession notice dated 23.07.2016 and took action without giving notice under Section 13(2) of the SARFAESI Act or affording a hearing.
  • Reliance was placed on the Supreme Court decision in Vishal N. Kalsaria v. Bank of India ((2016) 3 SCC 762) to submit that SARFAESI cannot be used to dispossess a tenant and that non-registration of a tenancy deed is immaterial where continuous payment of rent establishes the tenancy relationship.
  • It was contended that Section 17(4A), inserted by amendment dated 16.08.2016 (effective 01.09.2016), is prospective and cannot grant the petitioner a statutory remedy for a dispossession notice issued on 23.07.2016; therefore the petitioner's earlier application under Section 17 was dismissed as not maintainable and the DRT cannot decide tenancy rights retrospectively under the new provision.

Respondents' Arguments

  • Respondent No. 2 (through learned Senior Counsel Mr. A.K. Shamra) and the State (Respondent No. 1) set out the secured-creditor history: credit facilities were granted in the 1990s, equitable mortgages were created by Shri P.C. Sogani (including the premises in dispute), loans defaulted, and recovery/recovery certificate proceedings followed. The secured creditor (Phoenix) issued notice under Section 13(2) and applied under Section 14 for physical possession; the District Magistrate gave directions on 17.07.2012.
  • It was argued that the petitioner (Ms. Manisha Gautam, a signatory for the petitioner) had previously prosecuted a securitisation application under Section 17, and that various objections and the securitisation application were adjudicated against the petitioner (including an order dated 23.03.2015 dismissing Securitisation Application No. 75/2013 by DRT, Jaipur, and dismissal of objections in RC No. 3/2014 on 12.12.2014).
  • The respondents accused the petitioner of concealing material facts (including that Ms. Gautam is herself a certificate debtor) and of prosecuting dilatory litigation. They contended that no school was found in occupation of the building at the time Phoenix took physical possession and that the property had been vacated earlier.
  • Respondents relied upon precedents (including United Bank of India v. Satyawati Tondon and Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited) to support their position concerning the scope of remedies available prior to the amendment and limitations on DRT relief to non-borrowers before Section 17(4A) was enacted.
  • Respondents submitted that the statutory amendment (Section 17(4A)) provides a remedy to persons claiming tenancy and that petitioner should first invoke the DRT jurisdiction under the amended provision rather than pursue extraordinary writ relief in this Court.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vishal N. Kalsaria v. Bank of India, (2016) 3 SCC 762 The opinion records that this Supreme Court judgment was relied upon by the petitioner for the proposition that the SARFAESI Act cannot be used to dispossess a tenant and that non-registration of a tenancy deed is immaterial where tenancy can otherwise be established (e.g., by regular payment of rent). The Court recorded the petitioner's reliance on this decision but did not decide tenancy on merits; it instead directed the petitioner to approach the Debt Recovery Tribunal under the statutory remedy now available.
United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 The provided opinion notes this decision was relied upon by respondents but does not summarize a specific rule or principle from this case within the opinion text. The Court records that respondents relied upon this precedent among others; the opinion does not explicitly state how this specific case affected the Court's disposition beyond being cited in support of the respondents' position.
Harshad Govardhan Sondagar v. International Assets Reconstruction Company Ltd., (2014) 6 SCC 1 The opinion records that this Supreme Court decision held that, under the pre-amendment text of Section 17, a person other than the borrower aggrieved by dispossession could not be restored to possession by the DRT; Section 17(3) then did not permit restoration to non-borrowers. The Court relied on the principle identified in this case to explain the purpose of the amendment to Section 17 (i.e., to remove the DRT's prior jurisdictional limitation and to allow aggrieved non-borrowers to seek relief), and used that context to justify directing the petitioner to approach the DRT under the amended provision.
Samtel Color Ltd. v. State Bank of India (S.B. Civil Writ Petition No. 11302/2016, decided 17.10.2016) This Court's co-ordinate-bench decision is cited and quoted at length in the opinion. The quoted passage explains that the amendment to Section 17 effective 01.09.2016 corrected the misnomer of a "right to appeal", expanded the DRT's jurisdiction to restore possession to any "aggrieved person", and that the amendment is curative in nature to remove a jurisdictional lacuna. The Court adopted the reasoning in Samtel to reject the petitioner's contention that the amendment could not be invoked in the present circumstances. The Court treated the amendment as a statutory remedy now available to the petitioner and directed that the petitioner must first approach the DRT under Section 17 as amended.

Court's Reasoning and Analysis

The Court declined to decide the dispute on merits. Instead, it focused on the post-filing statutory amendment to Section 17 of the SARFAESI Act (insertion of subsection (4A) by Act No. 44 of 2016, effective 01.09.2016) and on whether the petitioner should be directed to avail the statutory remedy created by that amendment.

The Court's analytical steps, as reflected in the opinion, were:

  1. Recognition that Section 17(4A) was introduced effective 01.09.2016 and that subsection (i) of Section 17(4A) confers on the Debt Recovery Tribunal jurisdiction to examine tenancy/lease claims for several specified purposes (including whether the tenancy has expired/determined; whether it is contrary to Section 65A of the Transfer of Property Act, 1882; whether it is contrary to terms of mortgage; or whether it was created after issuance of notice of default).
  2. Consideration of the petitioner's submission that the amendment is prospective and therefore inapplicable to a dispossession notice issued on 23.07.2016 (prior to the amendment). The Court rejected this contention, noting no warrant to limit the availability of the remedy created by the amendment as contended by the petitioner.
  3. Reliance on the reasoning of a coordinate-bench decision (Samtel Color Ltd.) which held that invoking writ jurisdiction under Article 226 cannot be equated with a statutory right of appeal and that the amendment to Section 17 corrects a lacuna and is curative in nature. The Samtel decision was quoted and used to support the proposition that the amendment expands DRT jurisdiction and confers a remedy rather than deprives a vested right.
  4. Conclusion that the petitioner, who claims tenancy rights, must first approach the Debt Recovery Tribunal under the amended Section 17(4A). Consequently, the Court refrained from entering into merits and left substantive adjudication on tenancy to the DRT, which is now vested with the jurisdiction to examine such claims.
  5. Practical directions were given: the writ petition was disposed of with liberty to the petitioner to approach the DRT within 15 days; the interim order passed by this Court (dated 02.08.2016) was continued for 15 days; the petitioner may also seek interim relief before the DRT and the DRT was directed to decide the main application within three months of filing. The Court expressly stated that nothing observed would prejudice either party and that no merits were decided.

Holding and Implications

Holding:

Writ petition disposed of with liberty to the petitioner to approach the Debt Recovery Tribunal within 15 days.

The Court ordered that the interim stay granted by this Court on 02.08.2016 shall continue for a period of 15 days from the date of this order; thereafter the DRT may validate, continue or otherwise pass interim orders in its discretion. The petitioner may file interim applications along with its main application before the DRT, and the DRT was directed to decide the main application within three months from filing.

Implications:

  • The petitioner must first invoke the statutory remedy under Section 17 of the SARFAESI Act as amended (specifically Section 17(4A)) to claim tenancy or leasehold rights over the secured asset; this Court will not adjudicate the tenancy claim on merits in these writ proceedings.
  • The Court rejected the petitioner's argument that the Section 17(4A) amendment is inapplicable to the present case because the dispossession notice was issued before the amendment; the Court treated the amendment as a remedy the petitioner must pursue.
  • The Court explicitly preserved the parties' substantive rights to contest issues before the DRT and stated that nothing observed in the opinion prejudices either party; no substantive merits determination or final adjudication of tenancy rights was made by this Court.
  • Stay application (ancillary to the writ petition) was disposed of by this Court in the same order.

Note: The Court emphasized that its disposal does not decide merits and that all issues remain open for adjudication before the Debt Recovery Tribunal.

    Alpha Beta Shiksha Samiti v. State Of Rajasthan

    Mohammad Rafiq, J.:— This writ petition has been filed by the M/s. Alpha Beta Shiksha Samiti inter alia with the prayer that action of the respondents in putting lock and key on the premises of petitioner's school; namely-Alpha Beta School at A-64, Shanti Path, Tilak Nagar, Jaipur be declared as bad in law with further declaration that the petitioner's school would not be entitled for being dispossessed on the basis of order passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) and provisions of Rajasthan Rent Control Act, 2001 will prevail and allow the petitioner to run the school peacefully and the tenancy of the premises be directed to be treated as having been transferred to the respondents from the erstwhile landlords and accordingly order dated 17.07.2012 passed by District Collector, Jaipur under Section 14 of the SARFAESI Act be accordingly modified.

    2. The petitioner is a registered society under the Cooperative Societies Act and running a school namely Alpha Beta School at the premises situated at A-64, Shanti Path, Tilak Nagar, Jaipur. According to the petitioner, it took the said premise on rent from its owner Late Shri P.C Sogani in the year 1986 and since then the petitioner-society is running the aforesaid school and continuously paying rent to Late Shri P.C Sogani and after his death, to his legal heirs. School building on the aforesaid premises has also been constructed by the petitioner-society and another school-namely; Vimukti Girls School having strength of almost 600 girls belonging to poor background, is also being run in the disputed premises. It so happened that the land was hypothecated by the then owner Late Shri P.C Sogani for a loan taken by a company namely Unicorp Indus Limited, which is now under liquidation. On an application filed by Respondent No. 2 under Section 14 of the SARFAESI Act, District Collector, Jaipur vide order dated 17.07.2012 directed Respondent No. 2 to take possession of the premises. Thereafter, application under Section 17 of the SARFAESI Act was filed by the petitioner-society before the Debts Recovery Tribunal, New Delhi, which was transferred to Debts Recovery Tribunal, Jaipur. Said application was decided vide order dated 23.03.2012 whereby it was held that such application at the behest of a tenant is not maintainable and no remedy is available under Section 17 of the SARFAESI Act. Pursuant to order dated 17.07.2012, Respondent No. 2 put the possession notice on the wall of the school premises on 23.07.2016 In the meantime, the Recovery Officer, Debts Recovery Tribunal dismissed the objections (RC No. 03/2014) vide order dated 12.12.2014 Thereafter, vide order dated 24.06.2016 receiver was appointed for dispute premises. The petitioner filed Writ Petition No. 6171/2015 challenging the said order before the Delhi High Court. Said writ petition was dismissed as not pressed with liberty to the petitioner to seek appropriate remedy provided under Section 30 of the Debt Recovery Tribunal Act with direction that the receiver shall not take physical possession of the mortgage property for a period of one week. The petitioner then filed appeal before the Debts Recovery Tribunal, New Delhi, which vide order dated 02.07.2015 continued the interim protection granted by the Delhi High Court and the said appeal is still pending before the DRT, Delhi and interim order is continuing. However, in the meantime, the respondent No. 2 put its lock and sealed the disputed premises, therefore, the petitioner-society has approached this Court by filing present writ petition. This Court while issuing notices of the writ petition vide order dated 02.08.2016 stayed dispossession notice dated 23.7.2016

    3. Mr. Ashok Gaur, learned Senior Counsel appearing on behalf of the petitioner argued that the petitioner-society has taken the premises in question on rent from the original owner Late Shri P.C Sogani in the year 1986 and is continuously has been paying rent to Mr. P.C Sogani and after his death to his legal heirs. It has been running a school in the name of Alpha Beta English Medium School having around 250 students and another school by name of Vimukti Girls School is also being run in the disputed premises, which has strength of almost 600 girls belonging to poor background. It is argued that in spite of interim order passed by DRT, Delhi dated 02.07.2015, which is still continuing till date, Respondent No. 2 illegally issued dispossession notice dated 23.07.2016 Relying on the judgment of the Supreme court in Vishal N. Kalsaria v. Bank of India, (2016) 3 SCC 762, learned Senior Counsel argued that SARFAESI Act operates in a different field and it cannot be used to dispossess a tenant from the mortgaged property and the rights of such tenant can only be determined by competent tribunal under the Rajasthan Rent Control Act, 2001. It has been held by the Supreme Court that the factum of non-registration of the deed executed between the tenant and the landlord is immaterial as such factum could even otherwise be established by the relationship of landlord and tenant and the regular payment of rent is sufficient proof to establish a tenant and landlord relationship. Learned Senior Counsel further argued that Respondent No. 2 neither before moving application before the District Collector, Jaipur, nor prior to taking possession vide possession notice dated 23.07.2016, had given any notice under Section 13(2) of the Act to the petitioner, nor any prior information was given to the petitioner-society. Impugned order has been, therefore, passed without opportunity of hearing to the petitioner. It is submitted that writ petition filed before this Court is maintainable against the dispossession notice dated 23.07.2016, as it is purported to have been issued in compliance of order of District Collector, Jaipur dated 17.07.2012 Learned Senior Counsel argued that Section 17(4A) has been incorporated in the SARFAESI Act through amendment dated 16.08.2016, which is prospective in nature whereas in the present case possession notice dated 23.07.2016 had already been issued by the respondent before aforesaid amendment. Application filed by the petitioner under Section 17 of the SARFAESI Act has already been dismissed on the ground that application on behest of a tenant under Section 17 is not maintainable. Therefore, even if now Section 17(4A) has provided certain rights to the tenants, tenancy rights of the petitioner-society cannot be decide by Debts Recovery Tribunal, Jaipur.

    4. Mr. A.K Shamra, learned Senior Counsel appearing on behalf of Respondent No. 2 and Mr. Surya Prakash, learned counsel appearing on behalf of Respondent No. 1-State opposed the writ petition and argued that in 1996, various credit facilities were granted by the Secured Creditor/Dena Bank (Assignor Bank of Phoenix), as a part of State Bank of Bikaner and Jaipur Consortium, to Unicorp Industries Limited (a family controlled and managed company of Sogani's). the said credit facilities were enhanced in the year 1997. State Bank of Bikaner and Jaipur, State Bank of Patiala and State Bank of Indore (Assignor Banks of Kotak Mahindra Bank Limited) also granted credit facilities. To secure the said credit facilities, amongst others, Shri P.C Sogani and Mr. Arun Sogani created equitable mortgage over the properties (i) bearing No. A-64, Tilak Nagar, Jaipur and (ii) C-40, Lajpat Nagar, Jaipur by depositing the title deeds with the Lead Bank/State Bank of Bikaner and Jaipur for the benefit of inter-alia, Dena Bank also. On account of default, the loan was recalled in 1999 and thereafter on 24.12.1999, the Assignor Bank filed original application (No. 561/1999) for recovery of outstanding amounts. Similarly, other Banks also filed original applications for recovery of their dues from Sogani's. Mr. A.K Sharma, learned Senior Counsel argued that after Sogani's successfully dragged the recovery proceedings before the Debts Recovery Tribunal for more than 13 years by indulging into multiple litigations, Respondent No. 2, Phoenix for itself and also on behalf of Kotak Mahindra Bank Limited was left with no option except to issue a notice under Section 13(2) of the SARFAESI Act demanding a sum of Rs. 931,19,72,026.65. Secured creditor/Phoenix on 04.06.2012 filed an application under Section 14 of the SARFAESI Act before the District Magistrate, Jaipur for taking over the physical possession of the mortgaged property. Learned District Magistrate, Jaipur vide order dated 17.07.2012 allowed the application filed by the Secured Creditor directing for taking over the physical possession of the mortgaged property.

    5. Learned Senior Counsel argued that challenging the measures taken by Phoenix under SARFAESI Act, including order dated 17.07.2012 passed by the learned District Magistrate, Jaipur, Ms. Manisha Gautam (signatory of the petitioner before all forums including present petition) on 30.07.2012 prepared, signed and proceeded to prosecute a securitisation application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal, Delhi, which was later on transferred to Debts Recovery Tribunal, Jaipur. It is argued that for over 14 years, borrowers/Soganis lingered on the adjudication of original application filed by the secured creditor for recovery of outstanding dues by adopting various dilatory tactics. Finally, Presiding Officer, Debts Recovery Tribunal, Delhi on 06.01.2014 passed final order in the original application filed by the secured creditor, which remained unchallenged before any higher forum at the instance of borrowers/Soganis. Ms. Manisha Gautam is one of the Certificate Debtors in the proceedings before the Debts Recovery Tribunal, Delhi and this fact has also been suppressed by the petitioner from this Court. Recovery Certificate was drawn by the Debts Recovery Tribunal, Delhi in accordance with final order dated 06.01.2014 and recovery/execution proceedings were initiated against the borrowers including Ms. Manisha Gautam. Ms. Manisha Gautam filed objections before the Recovery Officer in Recovery Certificate No. 03/2014 on 03.11.2014 Objections filed by Ms. Manisha Gautam on behalf of the petitioner were duly adjudicated upon and dismissed by Debts Recovery Tribunal, Delhi vide order dated 12.12.2014, while holding that the petitioner has failed to make out any case in support of the alleged tenancy. It is further argued that Presiding Officer, Debts Recovery Tribunal, Jaipur vide order dated 23.03.2015 dismissed Securitisation Application No. 75/2013 filed by Alpha Beta Shiksha Samiti. Thereafter, Ms. Manisha Gautam filed an application for recall of order dated 17.07.2012 passed by the District Magistrate, Jaipur for taking over the physical possession of the mortgaged property by the secured creditor. However, Phoenix took over the physical possession of the vacant property with police assistance. No school was found to be running in the said building as the same had already been shifted elsewhere long back.

    6. Learned Senior Counsel argued that the petitioner has deliberately concealed various facts from this Court namely (i) present petition as well as (ii) objections filed in execution proceedings before the learned Debts Recovery Tribunal-II, Delhi; (iii) Securitisation Application No. 73/2013 filed by the petitioner and dismissed by learned Debts Recovery Tribunal, Jaipur vide order dated 23.03.2015 raising identical contentions, which have been prepared, signed and prosecuted by Ms. Manisha Gautam (who filed her affidavit in support of the present petition also). Ms. Manisha Gautam herself is judgment debtor/certificate debtor in R.C No. 3/2014 before the DRT, Delhi in respect of the final order passed by learned Debts Recovery Tribunal, Delhi in favour of Phoenix in execution of which also the mortgaged property in question is being sold for recovery of decreetal amount. Learned Senior Counsel argued that there exists an alternative efficacious remedy by way of a securitisation application under Section 17(4A) of the SARFAESI Act, which has been specifically introduced to deal with the contention of tenancy. In the present case, the petitioner filed present petition despite having exhausted the same remedy and failing to obtain any relief. After the securitisation application filed by the petitioner was dismissed by the Debts Recovery Tribunal, Jaipur vide order dated 23.03.2015, the petitioner did not file any appeal but waited for more than a year and then filed present petition before this Court, that too while concealing material facts and putting forward misguiding propositions. It is argued that conduct of Ms. Manisha Gautam (signatory of present petition), who also prepared, signed and proceeded to prosecute securitisation application before the Debts Recovery Tribunal, Jaipur, which was dismissed vide order dated 23.03.2015, is not appreciable and deserves to be condemned. Immediately after dismissal of said application, Ms. Manisha Gautam filed an application for recall of order dated 17.07.2012 passed by the District Magistrate, Jaipur. However, pending said application, Phoenix took physical possession of the property in question and the entire action was photographed and videographed. The disputed property was vacated much before 23.07.2016 Learned Senior Counsel appearing on behalf of the respondents relied upon the judgments in United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 and Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited, (2014) 6 SCC 1.

    7. Even though this Court has taken note of the arguments advanced by both the sides at extenso, but, this Court is not inclined to enter into the same and decide the case on merits, as it is of the opinion that specific remedy has been provided to a tenant by insertion of sub-section (4A) vide Act no. 44 of 2016 w.e.f 01.09.2016 and sub-section(i) of Section 17(4A) of the SARFAESI Act inter alia provides that 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 the lease or tenancy (a) has expired or stood determined; or (b) is contrary to Section 65A of the Transfer of Property Act, 1882; or (c) is contrary to terms of mortgage; or (d) is crated after the issuance of notice of default and demand by the Bank under sub-section (2) of Section 13 of the Act. Contention of learned Senior Counsel appearing on behalf of the petitioner that such remedy would not be available to the petitioner as aforesaid provision would apply prospectively only and pending cases would not be affected thereby is noted to be rejected. In the present case, dispossession notice has been issued on 23.07.2016 whereas amendment in Section 17 of the SARFAESI Act introducing Section 17(4A) came into force w.e.f 01.09.2016, but there is no warrant on any of the said provisions to take a view that remedy is provided to a person, who in an application under sub-section (1) claims any tenancy or leasehold rights upon the secured asset. In the present case, the petitioner is claiming tenancy rights and filed writ petition before this Court on 29.07.2016, at a time when the aforesaid remedy was not provided by the statute to the petitioner-tenant, but now when sub section (4A) has been inserted in Section 13 to specifically provide remedy to the persons, who claims any tenancy or leasehold rights upon the secured asset, the petitioner has to first approach the Debts Recovery Tribunal.

    8. Similar argument was raised before Co-ordinate Bench of this Court in Samtel Color Ltd. v. State Bank of India (S.B Civil Writ Petition No. 11302/2016 decided on 17.10.2016) wherein it was observed that Section 17 of the SARFAESI Act, which at the relevant time provided for a ‘right to appeal’ was amended on 01.09.2016 In its amended form, the misnomer of “Right to Appeal” under Section 17 of the SARFAESI ACT was corrected as that of a right to an application against measures to recover secured debts. Another amendment, to subsection (3) of Section 17 of the SARFAESI Act was also made empowering the Debt Recovery Tribunal to restore possession of secured assets also to any “aggrieved person”, aside of the borrower in the event of Debt Recovery Tribunal finding that the possession of the secured asset had been taken over by secured creditor illegally or in contravention of the legal rights of the borrower or one in possession with legal rights protected under other statutes. Section 17(4A) of the Act was also inserted effective 01.09.2016 inter alia providing that where 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 evidences produced by the parties in relation to such claim shall for the purpose of enforcement of security interest have the jurisdiction to examine subsistence of the lease or tenancy including the question as to whether the lease is contrary to Section 65A of the Transfer of Property Act, 1882. The aforesaid amendments to Section 17 of the SARFAESI Act became effective 01.09.2016, which means that aside of the borrower, any person aggrieved of the action under Section 13(4) of the SARFAESI Act can approach the Debt Recovery Tribunal, which, on finding contravention of the SARFAESI Act by the secured creditor can restore possession of the secured asset to such aggrieved person safeguarding its/his rights in law de-hors the rights of the secured creditor qua the mortgaged property in issue. In the aforesaid case, writ petition was filed earlier than the amendment aforesaid and an objection was raised by the petitioner therein that right to appeal provided to “any aggrieved person” by insertion of Section 17(4A) into SARFAESI Act w.e.f 01.09.2016 could not be retrospectively applied. Number of judgments of the Supreme Court were cited in that writ petition to contend that right to file statutory appeal is a substantive vested right, which cannot be retrospectively taken away and cannot similarly be retrospectively conferred. Repelling such argument, the Co-ordinate Bench of this Court in para 10 of the judgment held as under:

    “10. I am afraid, there is no force in the contention of Mr. Kamlakar Sharma. For one, resort to the jurisdiction of this court under its equitable extraordinary jurisdiction under Article 226 of the Constitution of India cannot be equated with a right to appeal. In the aforesaid context, the mere laying of writ petition against public notice dated 11-7-2016, does not entitle the petitioner to claim that 11 the subsequent amendment to Section 17 of the Act of 2002 effective 1-9-2016 if operated against it would entail denial of a vested legal right. In the instant case in the event the petitioner company is required to avail the alternative remedy now obtaining under Section 17 of the Act of 2002 against the public notice dated 11-7-2016 it would not thus entail denial of a vested right. The expansion of the jurisdiction of the Debt Recovery Tribunal jurisdiction by way of the amendments to Section 17 of the Act of 2002 effective 1-9-2016 does not create any disability for the petitioner company nor burdens it with a new duty in respect of a transaction completed. Contrarily it confers a right to avail a statutory remedy removing a lacunae. Under Section 17 of the Act of 2002 as existing prior to 1-9-2016 which even while the petitioner company aggrieved of the public notice dated 11-7-2016 could have taken proceedings under the then extant law as an aggrieved person, it could not have been granted the relief of being put back in possession even if the Dent Recovery Tribunal had theoretically found its rights unlawfully contravened by the secured creditors in dispossessing it from the land on sub lease with it. This was so held in the case of Harshad Goverdhan Sondagar v. International Assets Reconstruction Company Limited [(2014) 6 SCC 1] observing that a person other than a borrower if aggrieved of being dispossessed by the secured creditor under the Act of 2002 could not be put back in possession 12 by the Debt Recovery Tribunal in view of the limitation of the language of Section 17(3) of the Act of 2002 then obtaining. The amendment to Section 17 of the Act of 2002 effective 1-9-2016 sought to overcome the said jurisdictional limitation of the Debt Recovery Tribunal. It is thus plainly curative in nature as would appear from the background facts hereinbelow detailed.”

    9. In view of above, writ petition is disposed off with liberty to the petitioner to approach the Debts Recovery Tribunal within a period of 15 days, during which period interim order dated 02.08.2016 passed by this Court shall remain in force. It would be, thereafter, for the Debts Recovery Tribunal to validate, continue or otherwise pass interim order in its discretion. The petitioner may also file an application along with main application seeking appropriate interim relief. Debts Recovery Tribunal shall decide main application of the petitioner within a period of three months from the date of its filing. It is, however, made clear that anything observed by this Court hereinabove would not prejudice case of either of the parties and no arguments noted hereinabove has been decided on merits and all issues are kept open to be agitated before the Debts Recovery Tribunal.

    10. Stay application also stands disposed off.

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    Alpha Beta Shiksha Samiti v. State Of Rajasthan
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