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TaxTMI 
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2016 (1) TMI 1043
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..... Petitioner No.2 also took a portion of the building on lease and running a clinic on a monthly rent of Rs. 25,000/- for the last two and half years. Petitioner No.3 also took a portion on lease for his real estate office on a monthly rent of Rs. 22,000/- about six months prior to filing the instant writ petition. Petitioner No.4 took his portion on lease to run e-commerce business in the name and style of Movierainbow.com on a monthly rent of Rs. 32,000/- per month for the last eight months. Petitioner No.5 being a limited company doing infrastructure business, took a portion on lease on a monthly rent of Rs. 45,000/-. According to the petitioners, owner of the subject building viz., M. Venkatesh, obtained a loan of Rs. 2.09 crores from respondent No.2 i.e., Adarsh Nagar Branch of respondent No.1 bank, by mortgaging the subject building and since he defaulted in discharging the debt, the Bank resorted to the measures under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the Act) and obtained symbolic possession under Section 13(4) of the Act. 3. Respondent No.1, while resorting to the measures, filed Criminal M.P No....
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....as Non-Performance Account (NPA) and the Bank initiated proceedings under the Act and issued notices under Section 13(2) of the Act. Since petitioner No.5 and the principal borrower, M. Venkatesh, failed to repay the debt, it was constrained to issue notice under Section 13(4) of the Act. It is also stated that the Bank has already initiated proceedings for recovery of amount due by filing O.A. before the DRT, Hyderabad against petitioner No.5 and principal borrower M. Venkatesh. The Bank has stated that no notice is required to be issued to the petitioners by the learned CMM before appointing Advocate-Commissioners in the proceedings under Section 14 of the Act. Thus, stating that right of appeal also lies against the action initiated under Section 14 of the Act, sought to dismiss the writ petition. 6. Heard Sri Raja Reddy Koneti, learned counsel for the petitioners, and Sri Subrahmanyam Kurella, learned counsel for the respondents - Bank, and perused the material on record. 7. Learned counsel for the petitioners would submit that no opportunity of being heard was afforded to the petitioners by issuing notice in the Criminal M.Ps. despite the fact that they are tenants under lea....
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.... placing reliance on the decision of the Honble Supreme Court in Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd. [2014] 125 SCL 378, rejected the request. 11. The learned counsel has also placed reliance on the decision in Harshad Govardhan Sondagar's case (supra) contending that the lease deeds since were unregistered, cannot be construed as valid leases in favour of the petitioners, and, therefore, they have no right to challenge the impugned orders passed by the CMM. 12. We have perused the rental agreements filed by the petitioners. The first rental agreement was said to have executed by the principal borrower on 12-08-2010 in favour of petitioner No.5 for a period of four (4) years. Second rental agreement said to have executed on 15-05-2009 in favour of the principal borrower, M. Venaktesh by M/s. Trendset Infratech (India) Pvt. Limited, by its Managing Director Smt. M. Anuradha, who is no other than the wife of the principal borrower, for a period of eleven (11) months. Third rental agreement said to have executed on 14-03-2014 by M. Venkatesh in favour of M/s. ITCS International Private Limited for a period of two (2) years. Fourth rental ag....
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....er before creation of a mortgage or after creation of the mortgage satisfying the requirements of Section 65-A of the TP Act or that even though there was a valid lease, the lease stands determined in accordance with Section 111 of TP Act, an order can be passed for delivering possession of the secured asset to the secured creditor. It would be profitable to extract the observations of the Honble Supreme Court contained in paragraph Nos.27, 28 and 29, thus: "27. We may now deal with the remedies available to the lessee where he is threatened to be dispossessed by any action taken by the secured creditor under Section 13 of the SARFAESI Act. Sub-rules (1) and (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 provide for a possession notice where the secured asset is an immovable property. Sub-rules (1), (2) and (3) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 as well as Appendix IV of the said Rules, which is the form of such possession notice, are extracted hereunder: 8. Sale of immovable secured assets.-(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possessi....
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.... with clause (f) of Section 111 of the Transfer of Property Act, but if he resists the attempt of the secured creditor to take possession, the authorised officer cannot evict the lessee by force but has to file an application before the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act and state in the affidavit accompanying the application, the name and address of the person claiming to be the lessee. When such an application is filed, the Chief Metropolitan Magistrate or the District Magistrate will have to give a notice and give an opportunity of hearing to the person claiming to be the lessee as well as to the secured creditor, consistent with the principles of natural justice, and then take a decision. If the Chief Metropolitan Magistrate or District Magistrate is satisfied that there is a valid lease created before the mortgage or there is a valid lease created after the mortgage in accordance with the requirements of Section 65A of the Transfer of Property Act and that the lease has not been determined in accordance with the provisions of Section 111 of the Transfer of Property Act, he cannot pass an order for delivering possession....