AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2007 (11) TMI 422
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....r suitable order or Orders in the circumstances of the case. 3. It is Stated that the petitioner is a tenant of a residential building bearing No.46-18-25 Situated at Danavaipet, Rajahmundry, which consists of eight portions and is a double floor structure, and that an agreement was entered into between him and the second respondent on 27.03.2003, whereunder he took the said premises on lease for a monthly rent of Rs.6,500/- and even he was permitted to sub-lease, and an amount of Rs. 2,00,000/- was given as advance to the second respondent. It appears that the said premises was given as security by the second respondent towards a loan to Punjab National Bank and upon default in repayment, a notice, dated 12.02.2005, under Section 13(2) of the Securitisation Act was issued to him. In spite of same, the second respondent appears to have not paid the amount due to the Bank. Hence the notice, dated 16.05.2005, was issued, wherein the first respondent requested assistance of Superintendent of Police, Kakinada, for taking possession of schedule premises and also requested him to request Station House Officer, I-Town Police Station, Rajahmundry, to depute sufficient police personnel, wh....
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....y interest has been created; (f)........... (g)........... (h)........... (i)........... (j)..........." 7. It is therefore stated that in view of the above provision, it is clear that the Securitization Act shall not apply to a lease in which no security interest is created. Therefore, since in the lease entered into between petitioner and the second respondent, no security interest had been created in favour of the first respondent-bank, the Securitization Act is not applicable to the lease agreement of the petitioner, dated 27.03.2003. It is also stated that the petitioner is unable to approach the Debt Recovery Tribunal under Section 17 of the Act, as no notice under Section 13(4) was issued to him, and that though in the notice, dated 16.05.2005, the first respondent proposed to take possession of the premises on 01.06.2005, till date possession had not been taken from the petitioner and he is in possession of the premises as on today. Hence, the petitioner filed the present writ petition seeking the above relief. 8. This Court issued Rule nisi on 15.06.2005 and granted status quo in W.P. M.P. No. 16048 of 2005. 9. In the counter affidavit filed by the first respondent....
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.... of the petitioner with the second respondent is dated 27.03.2003 i.e., long after creation of equitable mortgage by the borrowers in favour of the Bank. The petitioner also did not specify in his affidavit under which portion of the building he is residing and what portion of the building was let out by him under the alleged sub-lease granted/permitted by the second respondent. It is stated that as admitted by the petitioner in paras-3 and 4 of the affidavit, he and the second respondent are aware of the notices issued under Section 13(2) of the Securitisation Act and also the failure on the part of the borrowers to effect repayment. 12. The contention of the petitioner in para-5 of the affidavit that Section 13(4) of the Securitisation Act is silent with regard to tenancy rights under the A.P. Rent Control Act or Transfer of Property Act and that there are no provisions in the Securitisation Act annulling the tenancy rights of tenants of secured assets and in the absence of such a provision, the tenancy rights shall remain unaffected and possession of tenant cannot be disturbed, is categorically denied. It is contended that the intention of the second respondent, as one of the J....
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....ntenable. It is stated that security interest is already in existence in the building by virtue of the equitable mortgage created over it on 17.11.2000, long prior to the alleged lease agreement, dated 27.03.2003. In view of the same, neither the petitioner nor the second respondent can be permitted to say that there is no security interest in the property. 15. It is therefore stated that the writ petition itself is misconceived arid is not maintainable in law and the petitioner has no locus standi to challenge the action of the first respondent, which has invoked the provisions of the Securitisation Act to protect its interest. The interim orders granted by this Court on 15.06.2005 deserve to be vacated in the interest of justice and the writ petition deserves to be dismissed. 16. The learned counsel representing the respective parties advanced elaborate submissions drawing the attention of this Court to different decisions on the Securitisation Act and also placed strong reliance on several decisions. Strong reliance was placed on the decision of the Supreme Court in Mardia Chemicals Ltd v Union of India. Submissions at length were made in relation to absence of material to est....
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.... 1951 SCR 292). In that case by enacting the Madras Agriculturist's Relief Act, relief was given to the debtors who were agriculturists as a class, by scaling down their debts. The validity of the Act was upheld though it affected the individual interest of creditors. In Dahya Lala v. Rasul Mohd. Abdul Rahim, (AIR 1964 SC 1320 : [1963] 3 SCR 1), the tenants under the provisions of the Bombay Tenancy Act, 1939 were given protection against eviction and they were granted the status of protected tenant, who had cultivated the land personally six years prior to the prescribed date. It was found that the legislation was with the object of improving the economic condition of the peasants and for ensuring full and efficient use of land for agricultural purpose. By a statutory provision special benefit was conferred upon the tenants in Madras City where they had put up a building for residential or non-residential purposes and were saved from eviction, it did though affect the existing rights of the landlords. [See also Swami Motor Transports (P.) Ltd v Sri Sankaraswamigal Mutt (AIR 1963 SC 864 : 1963 Supp (1) SCR 282), and Raval & Co v K.G. Ramachandran ([1974] 1 SCC 424)]. Similarly it i....
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....icence from the Reserve Bank of India. Nevertheless keeping in view the law laid down by the Supreme Court, it cannot be treated as a "State" for the purpose of Article 12 of Constitution and mandamus cannot be issued to it as the same does not perform any public duty. The petitioner is given liberty to file appeal under Section 17 of the Act before the competent authority. As the writ petition is not maintainable, this writ petition is misconceived and is accordingly dismissed. No costs.' 19. In Neel Madhav Mining (P.) Ltd. v. Authorized Officer Union Bank of India, a Division Bench of this Court, at paras-15 and 16 held as under : 'Coming to the main question - whether the condition such as the one imposed by the impugned order is irrational one, we accept the submission made by the learned senior counsel for the petitioners. The principal question in the appeal before the Debt Recovery Tribunal, which incidentally is also relevant for the purpose of deciding the interlocutory application as to whether the action of the respondent-bank in invoking Section 13(4) of the Act and proposing to take possession of the land in dispute is legal and within the jurisdiction of the bank? ....
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.... in Branch Manager, State Bank of India, Commercial Branch, Ongole v. Chinigepalli Lathangi, at paras-22, 23, 26 and 27 held as under : "From a careful reading of the above provisions of the Act, the Scheme of the Act, broadly, appears to be that the Financial Institutions shall not be unnecessarily subjected to lengthy and arduous procedure for the recovery of monies lent by them to the borrowers. In fact, there are several other statutes, covering different financial Institutions (e.g., State Financial Corporation Act) for expeditious recovery of debts. The reasons, perhaps, are mainly two-fold-firstly, the borrowers may be trying to delay or evade repayment of the amounts borrowed from the Financial Institutions/Banks Monies of the Financial Institutions/Banks is the money of the public. Therefore, while dealing with public money, particularly for the purpose of recovering the monies lent by such financial institutions/banks, stringent measures have to be permitted and for that purpose statutory sanctions have been accorded to such institutions. Precisely that is the reason why the procedural law under the Civil Procedure Code, i.e., filing of a suit in a civil court was expres....
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....te that after the appellant - bank filed its objections, the matter was heard by the learned single Judge on the question of issue of an interim order. It is only thereafter, the interim order came to be issued. That being so, the impugned interim order passed by the learned single Judge should have reflected the contentions that were urged before him and the reasons which weighed with the learned single Judge to pass such art interim order. In the absence of all this, the impugned order made by the learned single Judge is nothing but a non-speaking order which on the face of it is not maintainable. It has been repeatedly held by the Hon'ble Supreme Court that a non-speaking order is improper. Therefore on this ground alone, the impugned interim order made by the learned single Judge is liable to be set aside. That apart, we find that in the instant case if at all the respondent - borrower was aggrieved by any of the measures taken by the appellant - bank under the provisions of the Securitisation Act, he ought to have challenged the same by filing an appeal under section-17 of the said Act. Be it noted that the Hon'ble Supreme Court in the above referred decision has clearly and c....
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....been to prefer an appeal under section 17 of the Securitisation Act. Admittedly, the respondent - borrower did not do this. Though he did not think of challenging the measures taken by the appellant - bank under the provisions of the Securitisation Act by preferring an appeal under section 17 of the said Act, but when he approached this Court by preferring a writ petition, the Wisdom dawned upon him to seek to challenge the proceedings initiated by the appellant - bank under the provisions of the Securitisation Act. It may be stated even at the cost of repetition that any person (including borrower) who is aggrieved by the measures taken by the secured creditor or his authorized officer under this chapter, may prefer an appeal to the Debts Recovery Tribunal having jurisdiction in the matter within a specified time. The respondent borrower does not dispute that such a remedy was open to him. But admittedly, he did not choose to avail the alternate and efficacious remedy that was available to him under the statute. Then in the circumstances, it is not free from doubt whether the respondent borrower could have maintained a writ petition. In this connection, a reference may be made to ....
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....ial loss may result to the party applying for stay of execution unless the order is made etc. The issue regarding the grant or otherwise of an interim stay is to be looked from the point of view as to whether on refusal of the interim prayer sought for by the petitioner, he would suffer irreparable loss and injury keeping in view the strength of the parties case. We have not been able to gather from the impugned interim order whether all these issues have been looked into by the learned single Judge while granting an interim order in favour of the respondent petitioner. By a non-reasoned order, the impugned interim order could not have been passed when both the parties had raised several contentions. On plainest consideration of justice, the learned single Judge ought to have set forth the reasons, howsoever brief in the impugned order, indicative of an application of his mind, all the more when the same is amenable to further avenue of challenge. The absence of reasons has rendered the impugned interim order passed by the learned single Judge not sustainable in law. The desirability of a speaking order while dealing with the interim prayer sought for by a party cannot be lightly i....