CASE NAME: PNB HOUSING FINANCE LIMITED VS. SH. MANOJ SAHA & ANR.
CASE NUMBER: SLP © NO. 7288 OF 2024
DATE OF JUDGMENT: JULY 15, 2025
JUDGES: HON’BLE JUSTICE PAMIDIGHANTAM SRI NARASIMHA AND JOYMALYA BAGCHI
Introduction
This issue is of a dispute regarding a commercial property at 1 Allenby Road, Kolkata. Appellant PNB Housing Finance Ltd. took over the property under the SARFAESI Act which the borrower had failed to pay for. First respondent Manoj Saha put forth that he has tenancy rights in the property and challenged the possession. High Court ordered for return of the property to the respondent which in turn was appealed to the Supreme Court.
Issues for Determination
- Whether the issue of the High Court’s jurisdiction under Article 227 in this case which has statutory remedies available via SARFAESI.
- Whether there was in place a valid tenancy before the mortgage was created.
- Was it legal to restore possession to the respondent.
Legal Provisions Involved
SARFAESI Act, 2002: Sections 13.2, 13.4, 14, 17.4A, and 18.
Transfer of Property Act, 1882: Article 65A.
West Bengal Premises Tenancy Act, 1997: Article 6.
Constitution of India: Article 207.
Petitioner’s Arguments
The High Court went out of its jurisdiction to hear what was brought to it under Article 227 when we had at hand statutory remedies via SARFAESI. The respondent’s case on tenancy was founded on an unregistered lease which did not stand to tooth. The respondent did not put forth his case with alacrity or produce proof of tenancy before the mortgage was done or the demand notice issued. The High Court’s reference to Harshad Govardhan Sondagar was a misstep as that is based on pre amendment law.
Respondent’s Arguments
He was a tenant from 1987 under a non registered lease and also for a while a month to month tenant. His tenancy was protected by the West Bengal Premises Tenancy Act and out of that which he could only exit via due process. He depended on a letter of attornment and rent deposits made with the Rent Controller in 2022. The eviction was without due process which in turn violated his constitutional right to property.
Court’s Analysis
The Supreme Court ruled out the High Court’s intervention which it said was unnecessary given the remedies which came into play post-2016 under the SARFAESI act. The defendant did not present any rent receipts, tax papers, or utility bills which would prove tenancy before the issue of the demand notice. The evidence put forth was post issue and did not make out a strong case for pre existing tenancy.
The Court reported that the respondent’s behavior was neglectful of notice he did not react to public notices or approach the DRT until after physical possession was taken. Also put forth was the issue of a possible collusive ejectment suit between the borrower and the respondent.
Judgment
The Supreme Court has allowed the appeal, set aside the High Court’s order and has directed that the present status of the secured asset be maintained until the resolution of the outstanding securitisation issue before the DRT. Also the Tribunal was told to dispose of the application within two months without unnecessary adjournments.
Conclusion
This judgment upholds the preeminence of statutory remedies as provided by SARFAESI and reports that we have a very clear precedent which is that tenancy claims must be supported by what we may term as solid, pre-mortgage documentation. Also it reports that there is a great value in timely action and in attention to procedure when putting forth tenancy rights against asset recovery actions.
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WRITTEN BY AYUSHI TRIVEDI
