Case Note & Summary
The petitioner, Amit Mohan Bhatia, claiming to be a tenant of secured assets under an Agreement of Tenancy dated 30 March 2000, filed an intervention application (Exhibit-9) in proceedings before the Chief Metropolitan Magistrate, Mumbai, under the Maharashtra Co-operative Societies Rules, 1961. The application sought to prevent his dispossession from the property attached by Respondent No.1 Bank. The Trial Court rejected the application on 29 December 2017, holding that the tenancy issue must be decided by the Debt Recovery Tribunal (DRT) under the SARFAESI Act, and allowed the Bank's application for possession. The petitioner challenged this order in Writ Petition No.212 of 2018, which was allowed on 23 January 2018, remanding the matter for fresh hearing. However, the Trial Court again passed an order on 9 February 2018, rejecting the intervention application, leading to the present petition under Article 227 of the Constitution. The High Court noted that the Trial Court had failed to comply with the earlier remand order and had not considered the tenancy issue. The court held that the Magistrate has jurisdiction to decide the tenancy claim and cannot simply relegate the matter to the DRT. The impugned order was set aside, and the matter was remanded for fresh consideration of the intervention application on merits, with a direction to decide within four weeks.
Headnote
A) Tenancy Rights - Intervention in Recovery Proceedings - Jurisdiction of Magistrate - The Chief Metropolitan Magistrate has the jurisdiction to decide the issue of tenancy when an intervenor claims to be a tenant of secured assets, and the matter cannot be relegated to the Debt Recovery Tribunal without considering the tenancy claim. The court set aside the order rejecting the intervenor's application and remanded for fresh hearing on the tenancy issue. (Paras 1-5)
Issue of Consideration
Whether the Chief Metropolitan Magistrate can decide the issue of tenancy in proceedings under the Maharashtra Co-operative Societies Rules, 1961, or whether it must be decided by the Debt Recovery Tribunal under the SARFAESI Act.
Final Decision
The impugned order dated 9 February 2018 passed by the Chief Metropolitan Magistrate, Mumbai, is set aside. The matter is remanded back to the Trial Court for fresh consideration of the application at Exhibit-9 on its own merits, after giving an opportunity of hearing to both parties, and the Trial Court is directed to decide the same within four weeks from the date of the order.
Law Points
- Tenancy rights
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act
- 2002
- Section 17
- Maharashtra Co-operative Societies Rules
- 1961
- Rule 107(11)(vi)(a)
- Intervention
- Possession
Case Details
2018 LawText (BOM) (02) 49
Writ Petition No.2300 of 2018
Dr. Shalini Phansalkar-Joshi, J.
Mr. Vishal Kanade, a/w. Mr. Girish Thakur, for the Petitioner; Mr. Mahesh N. Devlekar for Respondent No.1; Mr. A.A. Alaspurkar, A.G.P., for Respondent No.5-State
Maratha Sahkari Bank Ltd. & Ors.
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Nature of Litigation
Writ Petition under Article 227 challenging order of Chief Metropolitan Magistrate rejecting intervention application of tenant in recovery proceedings.
Remedy Sought
Petitioner sought setting aside of order dated 9 February 2018 and direction to consider his tenancy claim.
Filing Reason
Petitioner claimed to be a tenant of secured assets and sought to prevent dispossession without due process.
Previous Decisions
Trial Court rejected intervention application on 29 December 2017; High Court set aside that order on 23 January 2018 and remanded for fresh hearing; Trial Court again rejected application on 9 February 2018.
Issues
Whether the Chief Metropolitan Magistrate has jurisdiction to decide the issue of tenancy in proceedings under the Maharashtra Co-operative Societies Rules, 1961?
Whether the Trial Court complied with the earlier remand order of the High Court?
Submissions/Arguments
Petitioner argued that he is a bonafide tenant and cannot be evicted without following due process, relying on Vishal N. Kalsaria v. Bank of India.
Respondent Bank argued that the tenancy issue must be decided by the Debt Recovery Tribunal under the SARFAESI Act.
Ratio Decidendi
The Chief Metropolitan Magistrate has the jurisdiction to decide the issue of tenancy when an intervenor claims to be a tenant of secured assets in proceedings under the Maharashtra Co-operative Societies Rules, 1961, and cannot relegate the matter to the Debt Recovery Tribunal without considering the tenancy claim on merits.
Judgment Excerpts
The Trial Court has, however, holding that the issue of tenancy has to be decided by the Debt Recovery Tribunal and he is not required to look into it, vide order dated 29th December 2017, rejected the said application and allowed the Application of Respondent No.1-Bank filed under Rule 107(11)(vi)(a) of the Maharashtra Co-operative Societies Rules, 1961.
This Court has, vide its order dated 23rd January 2018, set aside the said order, remanding the matter back to the Trial Court for fresh hearing on 'Exhibit-9', after giving an opportunity of hearing to both the parties on all the aspects, including the issue of tenancy.
Procedural History
The petitioner filed an intervention application (Exhibit-9) before the Chief Metropolitan Magistrate, Mumbai, in Case No.74/SA/2017. The Trial Court rejected it on 29 December 2017. The petitioner challenged this in Writ Petition No.212 of 2018, which was allowed on 23 January 2018, remanding for fresh hearing. The Trial Court again rejected the application on 9 February 2018, leading to the present Writ Petition No.2300 of 2018.
Acts & Sections
- Maharashtra Co-operative Societies Rules, 1961: Rule 107(11)(vi)(a)
- Constitution of India: Article 227
