1. Petitioners in both these writ petitions are tenants of rooms of a building leased out to them by one K.P. Shafeeq. The petitioners are aggrieved by the proceedings initiated by the 2nd respondent-Manager of South Indian Bank Limited to take over physical possession of their rooms.

2. The petitioners state that they have been possessing the rooms leased out to them as tenants by Sri. K.P. Shafeeq. The petitioners have been paying monthly rent promptly. They have invested huge amount for their business in the tenanted premises.

3. On 13.10.2023, the respondents along with an Advocate Commissioner affixed a notice dated 13.10.2023 stating that the secured assets will be taken into possession by the Advocate Commissioner from 21.10.2023 onwards. The Advocate Commissioner and others threatened that the petitioners will be evicted from the tenanted premises forcefully.

4. The petitioners state that the notice has been issued pursuant to an order passed by the Chief Judicial Magistrate's Court, Kozhikode in CMPs filed by the Bank under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The action of the respondents is opposed to natural justice. The petitioners and their families are depending upon the income derived from the business conducted in the tenanted premises.

5. The respondents have no right to evict the petitioners. The petitioners can only be evicted under the provisions of the Rent Control Act. The landlord is not taking any steps to protect the interest of the petitioners. He is colluding with the Bank. In the circumstances, this Court has to prohibit the respondents from taking physical possession of the rooms and from evicting the petitioners from the tenanted premises.

6. Relying on the judgment in Harshad Govardhan Sondagar and others v. International Assets Reconstruction Company Limited and others [2014 (3) KLT 357], the counsel for the petitioners argued that where the lawful possession of the secured asset is not with the borrower, but with the lessee under a valid lease, the secured creditor cannot take over possession of the secured asset until the lawful possession of the lessee gets determined.

7. The counsel for the petitioners also relied on the judgment of the Hon’ble Apex Court in Bajarang Shyamsunder Agarwal v. Central Bank of India and another [2019 (4) KLT 143] to urge that a secured creditor cannot take possession of the secured asset until the lawful possession of the lessee gets determined and the lease will not get determined if the secured creditor chooses to take any of the measures specified in Section 13 of the SARFAESI Act. The petitioners also relied on a Division Bench judgment of this Court in Mohan Sundaram v. Punjab National Bank [2023 KHC Online 3608] and contended that Bank cannot take recourse to Section 14 of the SARFAESI Act for taking over possession.

8. Standing Counsel representing the Bank resisted the writ petitions filing counter affidavits. The Standing Counsel submitted that the petitioners have an alternate and efficacious remedy under Section 17(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the writ petitions are therefore liable to be dismissed.

9. The respondents further submitted that the Bank is a private Bank and is not an authority under Article 12 of the Constitution of India amenable to the writ jurisdiction under Article 226 of the Constitution of India. The Hon’ble Apex Court has repeatedly held that writ petitions challenging the securitisation proceedings are not maintainable under Article 226 of the Constitution of India.

10. The respondents further urged that the petitioners are persons set up by the borrowers and these are collusive efforts to somehow or the other delay the recovery proceedings.

11. The Standing Counsel representing the respondents pointed out that as per the judgment of this Court in Roshan Narayanan C.S. v. Authorised Officer, Central Bank of India and another [2017 (4) KLT 1172], “measures” include any steps commencing with the issuance of any notice, stage of approaching Magistrate, obtaining an order from Magistrate, issuance of notice by Advocate Commissioner, and culminating with the taking of actual physical possession of the secured asset and that each of the said steps in the “measures” adopted would give rise to a cause of action for the borrower to approach the Debts Recovery Tribunal under Section 17 of the Act.

12. Placing reliance on the judgment of the Apex Court in Hemraj Ratnakar Salian v. HDFC Bank Limited and others [2021 (5) KLT 60], the Standing Counsel argued that the operation of the Rent Act cannot be extended to a “tenant-in-sufferance” vis-a-vis the SARFAESI Act, due to the operation of Section 13(2) read with Section 13(13) of the SARFAESI Act.

13. I have heard the learned counsel for the petitioners and the learned Standing Counsel representing the respondents.

14. The petitioners are tenants of a building which is being proceeded against under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 when the landlord committed default in repayment of financial advance. The Bank moved Chief Judicial Magistrate's Court under Section 14 of the Act, 2002 and the Advocate Commissioner has issued possession notice.

15. The petitioners would urge that they were not given any notice by the Chief Judicial Magistrate's Court. As they have been not issued with any notice, they cannot approach the Debts Recovery Tribunal invoking Section 17. The exercise of rights by the Bank under the Act, 2002 would violate the constitutional rights of the petitioners under Articles 19 and 300A of the Constitution of India.

16. This Court has considered the rights of the tenants of buildings which are subjected to coercive proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 in Shiju Mani v. CSB represented by its Authorised Officer [2024 (2) KHC 68]. This Court held that in cases where before the mortgage is created, borrower had already leased out the immovable property in favour of a lessee, then lessee will have the right to enjoy the leased property in accordance with the terms and conditions of the lease. This Court also held that where lawful possession of secured assets is not with the borrower but with the lessee under a valid lease, secured creditor cannot take over possession of secured assets until the lawful possession of lessee is terminated.

17. However, it is to be noted that the proceedings have been initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 which has been amended by Amendment Act 44 of 2016 providing a statutory remedy to the tenants against the securitisation proceedings. As the Advocate Commissioner and the Bank are acting pursuant to the orders passed under Section 14 of the Act, 2002, the petitioners have an efficacious alternate remedy to approach the Debts Recovery Tribunal for redressal of their grievances. A writ petition is therefore not maintainable.

18. The contention of the petitioners is that since the Bank has not served any notice to the petitioners, they are not in a position to move the Debts Recovery Tribunal. This Court has held in the judgment in Roshan Narayanan C.S. (supra) that the term “measures” include any steps commencing with the issuance of any notice, stage of approaching Magistrate, obtaining an order from Magistrate, issuance of notice by Advocate Commissioner and culminating with the taking of actual physical possession of the secured assets. Each of the said steps, in the measures adopted, would give rise to a cause of action for the borrower to approach the Debts Recovery Tribunal. Such right is also available to a tenant.

19. The writ petitions are therefore dismissed. It is made clear that if the petitioners approach the Debts Recovery Tribunal for redressal of their grievance raised in these writ petitions, then the Debts Recovery Tribunal shall, in the matter of condoning delay if any, consider exclusion of time during which these writ petitions were pending before this Court, for the purpose of computing the period of limitation.