Whether the civil court should reject the plaint if the SARFAESI Act bars the tenant's right to get back rented property?

 In the light of the above proposition, let us examine the

exclusionary provision in the Securitisation Act. Section 34 of the Act reads:

34. Civil Court not to have jurisdiction:- No civil court shall have

jurisdiction to entertain any suit or proceeding in respect of any

matter which a Debts Recovery Tribunal or the Appellate Tribunal is

empowered by or under this Act to determine and no injunction shall

be granted by any court or other authority in respect of any action

taken or to be taken in pursuance of any power conferred by or under

this Act or under the Recovery of Debts Due to Banks and Financial

Institutions Act, 1993 (51 of 1993).

36. In this context, on the tenant's rights, we may examine the

interplay between Section 17(4A) of the Securitisation Act and Section

65(A) of the Transfer of Property Act. Section 17(4A) of the

Securitisation Act reads:

Section 17(4A) Where-

(i) 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 lease or tenancy,-

(a) has expired or stood determined; or

(b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of

1882); or

(c) is contrary to terms of mortgage; or

(d) is created after the issuance of notice of default and demand by

the Bank under sub-section (2) of Section 13 of the Act; and

(ii) the Debt Recovery Tribunal is satisfied that tenancy right or

leasehold rights claimed in secured asset falls under the sub-clause (a)

or sub-clause (b) or sub-clause (c) or sub-clause (d) of clause (i), then

notwithstanding anything to the contrary contained in any other lawfor the time being in force, the Debt Recovery Tribunal may pass  such order as it deems fit in accordance with the provisions of this Act. (italics supplied)

58. Thus, even if we keep aside the contentions on the cause of

action, it is very evident that no tenant pleading oral tenancy could get the protection from the provisions of the Securitisation Act. Besides that, as we have noted, Section 34 is emphatic in its declaration that Civil Court shall have no jurisdiction over any matter which the Debts Recovery Tribunal or the Appellate Tribunal is empowered under this Act to determine. And, last, none of the reliefs the petitioner has sought is amenable to an ordinary civil court’s jurisdiction.

IN THE HIGH COURT OF BOMBAY AT GOA

FIRST APPEAL NO.15 OF 2019

Modinasab Indikar V/s Board of Directors of Indian

Overseas Bank

Coram:- DAMA SESHADRI NAIDU, J.

Date:- 14th February 2020

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Rights of tenant under SARFAESI amendment act 2016

141[17. Application against measures to recover secured debts].—(1) Any person (including borrower) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this chapter, 142[may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken:

143[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.]

144[Explanation.—For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.]

145[(1-A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction—

(a) the cause of action, wholly or in part, arises;

(b) where the secured asset is located; or

(c) the branch or any other office of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being.]

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