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2016 (9) TMI 20 - HC - Indian LawsValidity of mortgage - Held that - In the present case the mortgage was created in favour of the predecessor-in-title of the second Respondent in 1992. That mortgage was declared as to be valid and binding by the Debt Recovery Tribunal-II Mumbai on 5th September 2005 in its order passed in the Original Application No.1025 of 2001. There is no written document of tenancy. There is absolutely no registered instrument on record either. In these circumstances a very vague submission as made by Mr. Purohit that there was a tenancy much prior to 1998 cannot be accepted. The relevant documents evidencing creation of such tenancy which is admittedly after the mortgage in favour of the predecessor-in-title of Respondent No.2 therefore should not be protected by this Court. Further Mr. Thakkar submits that Petitioner No.2-Dhaval Dilip Jhaveri is a Director and Promoter of Respondent No.3. That the Petitioner No.2 is the son of Dilip Jhaveri. Dilip Jhaveri is the part-owner of the property and nephew of other two co-owners. The Petitioners have sought to establish the tenancy by filing a collusive Suit. That Suit was filed so as to defeat the measures in relation to the mortgaged property in favour of the Bank. Therefore this Court should not accept the claim of the Petitioners.
Issues Involved:
1. Legitimacy of the Petitioners' tenancy claim. 2. Validity of the orders by the Chief Metropolitan Magistrate. 3. Applicability of the SARFAESI Act and related legal precedents. 4. Allegations of collusion and fraud in obtaining the tenancy decree. Issue-wise Detailed Analysis: 1. Legitimacy of the Petitioners' tenancy claim: The Petitioners claimed to be lawful tenants of the premises since 1998, supported by a decree from the Court of Small Causes, Mumbai. They argued that they had been paying rent and property taxes regularly. However, the Respondents contended that the tenancy claim was bogus, lacked documentary evidence, and was not registered. The court scrutinized the evidence, including the Consent Terms and the additional affidavits, and concluded that the tenancy claim was patently false and a product of collusion and fraud. 2. Validity of the orders by the Chief Metropolitan Magistrate: The Petitioners challenged the three orders dated 6th November 2015, 19th December 2015, and 29th December 2015, which facilitated the Respondents in taking possession of the premises under Section 14 of the SARFAESI Act. The court upheld these orders, stating that the Chief Metropolitan Magistrate correctly directed assistance to the Respondents for obtaining possession, as the Petitioners failed to substantiate their tenancy claim. 3. Applicability of the SARFAESI Act and related legal precedents: The Petitioners relied on the Supreme Court judgments in Harshad Govardhan Sondagar and Vishal N. Kalsaria to argue that their tenancy should be protected under the SARFAESI Act. However, the court distinguished these cases, noting that in the present case, the tenancy claim was dubious and lacked credible evidence. The court emphasized that the SARFAESI Act could not be used to protect false claims of tenancy. 4. Allegations of collusion and fraud in obtaining the tenancy decree: The court found that the decree from the Court of Small Causes, Mumbai, was obtained through collusion and fraud. The Consent Terms, signed by the Petitioners and their relatives, were inconsistent with the Petitioners' assertions in the additional affidavit. The court highlighted discrepancies in the payment records and the timing of the tenancy claim, concluding that the decree was a result of connivance and not a genuine tenancy. Conclusion: The court dismissed the Writ Petition, rejecting the Petitioners' tenancy claim as false and fraudulent. The court also refused to extend the ad-interim protection granted earlier, as the Petitioners failed to produce credible proof of tenancy. The orders by the Chief Metropolitan Magistrate were upheld, allowing the Respondents to take possession of the premises under the SARFAESI Act.
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