Natesan Pillai Vs. Sethumani Ammal - Court Judgment

Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. bellie, j.1. the only point raised in this appeal is as to the maintainability of the suit. the suit filed for declaration of plaintiffs title and for possession has been decreed and therefore the defendants have filed this appeal.2. the case of the plaintiff sethumani ammal is that she is the owner of the suit property. plaintiffs father rajanga nadar who was managing the property had let it out to the defendant on a rent of rs. 75 per mensem for one year. even after the period of the lease the defendant continued in possession. he paid rent till november, 1978 and thereafter he stopped payment. the plaintiff issued notice calling upon the defendant to surrender possession but he would not do so raising false contentions. the plaintiff along with her father filed r.c.o.p. no. 17 of 1981 on the file of the rent controller (district munsif), chidambaram. in that proceedings the defendant denied the tenancy and he claimed right to the property under an alleged agreement of sale. in view of this stand taken by the defendant she did not prosecute the eviction petition further and she withdrew the same so that she could file a suit for recovery of possession. the petition was dismissed as withdrawn on 5.9.1983. now the plaintiff has filed, this suit for declaration of title and recovery of possession. the defendant's possession is that of a trespasser and he has no legal right to be in possession. he is also liable to pay mesne profits from december, 1978, but the plaintiff restricts that claim for a period of three years prior to the suit. at the rate of rs. 150 per mensem the plaintiff has claimed past mesne profits of rs. 3,600 and she has also claimed future mesne profits.3. the defendant contested the suit contending that he was never a tenant. it is further contended that in or about 1970 the plaintiffs father who was a close friend of the defendant permitted him to be in the suit property. later in the year 1976 the defendant came to know that the plaintiff is the owner of the property. they said that the property was for sale. the defendant offered to purchase it. after negotiation the price was fixed at rs. 10,000 and a sum of rs. 5,000 was paid as advance on 21.8.1976and the balance amount of rs. 5,000 was agreed to be paid at the time of the execution of the sale deed and completion of the transaction. the defendant was always ready and willing to perform his part of the contract but the plaintiff and her father had been evading the execution of the sale under some pretext. therefore the suit for his eviction is not maintainable.4. the trial court rejected the case of the defendant that there was an agreement of sale. it also disbelieved the plaintiffs case that the defendant is a tenant. but finding that the plaintiff is the owner of the property and the possession of the defendant is illegal he decreed the suit for declaration and possession and also for past mesne profits of rs. 1,800 and he relegated the future profits to an enquiry under order 20, rule 12, c.p.c.5. now the only point that is argued in this appeal by mr. s. parthasarathy, learned counsel for the appellant-defendant is that the suit is not maintainable because when it is the case of the plaintiff that the defendant is a tenant her only remedy is to seek for his eviction under section 10 of the tamil nadu buildings (lease and rent control) act and not by way of a suit. this plea of course has not been taken in the trial courts but being a question of law relating to the jurisdiction of the court this point can be argued in the appeal.6. it is the definite case of the plaintiff that the defendant is a tenant. now, as per section 10(1) of the act a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of this section or sections 14 to 16. therefore it is imperative that the plaintiff has to initiate proceedings for eviction against the defendant in a rent control proceedings. to this section 10(1) an exception is provided under the second proviso according to which where the tenant denies the title of the landlord or claims right of permanent tenancy, the controller shall decide whether the denial of title is bona fide, and if he records a finding to that effect the landlord shall be entitled to sue for eviction in civil court and the court may pass a decree for eviction on any of the grounds mentioned in the said section notwithstanding that the court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded.7. in this case, in fact, the plaintiff has filed r.c.o.p. no. 17 of 1981, but however, stating that the defendant has denied the tenancy and claimed right to the property by virtue of an alleged agreement of sale, sought to withdraw the petition and the petition was accordingly dismissed as withdrawn. there was no finding of the rent controller as to whether there was denial of title by the defendant and that denial is bona fide. therefore at that stage the landlord need not have withdrawn the petition and ought to have pursued it. this being the case the present suit is not competent.8. mr. parthasarathy, in support of his contention has relied on a judgment of the supreme court east india corporation ltd. v. shree meenakshimills ltd. : [1991]2scr310 , wherein at paragraph 8 it is laid down as follows:what is stated in the second proviso to section 10(1) is the sole circumstance in which the civil court is invested with jurisdiction in matters of eviction. but this jurisdiction cannot be invoked otherwise than as stipulated in the second proviso. this means that the condition precedent to the exercise of jurisdiction by a civil court is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the controller should, on such denial or claim by the tenant, reach a decision whether such denial or claim is bona fide. upon such decision, the controller must . record a finding to that effect. in that event, the landlord is entitled to sue for eviction of the tenant in a civil court. where these conditions are satisfied, the civil court will have jurisdiction to pass a decree for eviction on any of the grounds mentioned in section 10 or sections 14 to 16 notwithstanding that the court has found that the tenant's denial of the landlord's title does not involve forfeiture of the lease, or, his claim of right of permanent tenancy is unfounded. except to this limited extent, the jurisdiction of the civil court in matters of eviction of a tenant is completely barred and the jurisdiction in such matters is vested in the tribunals set up under the statute. in paragraph 9, towards the end, it is again stated:what is significant is that the decision of the controller, duly recorded by him, as regards the bona fide denial or claim by the tenant is the condition precedent to the invocation of power of the civil court. any suit instituted by the landlord for eviction of a tenant from a building falling within the ambit of the act, otherwise than as stipulated by the section is, therefore, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect. 9. another thing that requires consideration is whether the defendant has really denied the title of the plaintiff. this is not clear from the plaint averments. in the written statement also in one place it is stated that the plaintiffs title is not denied, but in another place the defendant seems to claim title by adverse possession. the counter filed in the rent control petition has not been marked in the suit. but even if the defendant has not disputed title of the plaintiff and he has only disputed the tenancy, then it is all the more reason that the plaintiff will not have right to file the present suit, and he ought to have proceeded with the rent control petition.10. mr. k. srinivasan, learned counsel for the respondent-plaintiff raised a doubt as to how he can again go to the rent control court inasmuch as the civil court has now held that the defendant is not a tenant. but as seen above, according to the supreme court since the suit is incompetent the decree is null and void. therefore there is no need for this doubt. in this view of the matter the judgment and decree of the trial court cannot be sustained and hence the appeal is allowed and the suit is dismissed, but in the circumstances there will be no order as to costs.