Tenants have a right to approach DRT under S. 17(4-A) of SARFAESI Act

Karnataka High Court: A Single Judge Bench comprising of Vineet Kothari, J., decided a writ petition filed under Articles 226 and 227 of the Constitution, wherein a stay was granted on the possession notice issued by the respondent Bank to the petitioner, directing the petitioners to approach the Debt Recovery Tribunal in proper proceedings.

The petitioners were tenants of Respondent 1 who was a debtor of Respondent 2 State Bank of India. Respondent 1 defaulted in re-payment of the loan and respondent 2-SBI issued notice to Respondent 1 to repay the loan within sixty days. Also, respondent 2 SBI issued notices to the petitioners-tenants, to evict the building within seven days which was a Secured Asset and would be taken over in the condition of non-payment of the loan, under the provisions of SARFAESI Act, 2002. Aggrieved by the said notices, the petitioners field the instant petition.

The Court perused the record and placing reliance on its earlier decisions held that the tenants too have a right to approach Debt Recovery Tribunal under Section 17(4-A) of SARFAESI Act. Holding that since the petitioners had an alternate and efficacious remedy available to them under the said Act, the Court declined to consider the petitions on merit. The petitioners were given liberty and directions to approach the DRT under proper proceedings within one month. Further, SBI was directed not to take any action for eviction of the petitioners for a period of four weeks. The petitions were accordingly disposed of. [Aravindamma v. K.S. Jayalakshmammanni,  2018 SCC OnLine Kar 530, order dated 5.3.2018]

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