Hemraj Ratnakar Salian Vs HDFC Bank Limited & Ors
Forum-Supreme Court
Date-17th August 2021
Sub-When a tenant is protected from eviction under the SARFESI Act in case of default by the borrower and landlord?

The apex court in this case was dealing with the petition by the tenant who resisted eviction by HDFC Bank Limited on the basis of oral tenancy and contended that he was a protected tenant under the Maharashtra Rent Control Act 1999. The bank on other hand contended that the Rental agreement should have been prior to the creation of the mortgage and the present application was an after thought as the borrowers in their representation did not claim any tenancy on the premises and the tenant could not be protected. The Court noted that the protection of tenancy exceeding one year can be upheld only if it by way of a registered agreement in view of the decision of the Apex Court in Harshad Sondagar(2014) 6 SCC 1(SC). Also A Three­ Judge Bench of this Court in Bajarang Shyamsunder Agarwal v. Central Bank of India & Anr.(2019) 9 SCC 94(SC) after considering almost all decisions of this Court, in relation to the right of a tenant in possession of the secured asset, has held that if a valid tenancy under law is in existence even prior to the creation of the mortgage, such tenant’s possession cannot be disturbed by the secured creditor by taking possession of the property. However, in view of various deficiencies including absence of registered tenancy agreement, the court dismissed the appeal.

This judgement will be helpful and eye opener to those tenants who have taken on rent premises which are mortgaged.

Ramesh Patodia
22-08-2021