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Durgesh Jaiswal (Sole Proprietor)     25 August 2013

Sarfaesi act 2002

Respected Sir,

             I have purchased a property(land)through Bank e-auction. i have paid full amount to the bank as mentioned and has recieved the sale certificate from the bank. But i didn't get the physical possession of the property as the borrower has settled an authorised tenant in the plot after taking the loan from bank.

i have given a request letter to bank for the physical possession u/s 14 of sarfaesi act 2002.

but bank said that after selling the property "We cannot ask the DM for physical possession".They said me that I should give request to the DM for physical possession and alongwith my request bank will give a letter to DM that my request is truthful and verified by bank and consider my petition for physical possession for further proceedings.

My question is

 1." Is it true that after selling the property bank cannot ask for possession to DM directly against the purchaser of land(Me)"?

2.If it possible for the bank to ask physical possession after selling then under which section of sarfaesi act it can be done?

3.What would you suggest me regarding my case?

kindly give some solution regarding my issue.


 7 Replies

Advocate Ravinder (Advocate/Attorney)     25 August 2013

I have already explained the answers in your other thread of the same subject, anyway I am  reiterating the same. 
You said that you have paid the total consideration amount to the Banker, so it is the duty of the banker to evict the borrower and hand the vacant possession to you. You should have checked up whether the borrower had actually vacated the possession or not before paying the entire consideration.  You can do two thinks No.1) you can evict the borrower by yourself with the help of bankers No.2) you can file a case against the Banker and borrower in the consumer court for recovery of possession along with damages for mental tension and suffering, as there is deficiency of service.  Chose either one. Definitely you will get the possession, but it is matter of time, since you have done a mistake by paying total consideration without checking whether the possession is vacant or not. 

A.SUMATHY 9380902017 (LAWYER)     25 August 2013

If authorised tenant is possessed. File eviction petition under the Rent control act and also follow the procedure as per rent control act before filing eviction petition.

Refer Rent control act. It was state act it will differ every state.

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases.     25 August 2013

This is happening all over country for purchase of distressed properties.


Because it is available cheap so buyer do not do due verification and actual verification.


The sale order is faulty since it is short of possession.



Yes only alternative now as suggested above to rent control act but it will not ensure possession.






Shiva Kant Dixit (Advicate)     25 August 2013

Dear All,

at the outset may clear u, that bank can move for physical possession, even after issuance of sale certificate. There is no bar regarding the same. for your help i am also providing case law detail- 


Writ Petition Nos. 9043, 9044 and 10228 of 2009 and M.P. Nos. 1 and 2 of 2009

Decided On: 30.07.2009

Appellants: Kathikkal Tea Plantations rep. by its Managing Director, N. Thiruneelakandan
Respondent: State Bank of India rep. by its Chief Manager, V.M. Palaniswamy and P. Srinivasa Varma. 

So it wrong to say that after issuance of Sale certificate, the Bank can not go for physical possession. It also not practically suggestive, to file a eviction suit by u.  

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases.     25 August 2013

This citation can not help.


Only the bank can seek possession.  



Ajit Singh Cheema (practising Advocate)     25 August 2013

Tenants can not be , thrown away, evicted forcibly

Generally under the power of the Sarfaesi Act, without bothering for who is in possession of the property mortgaged, anyone/everyone is thrown away from the property under attack. Under the imminent threat of dispossession, both the owner as well as the tenant runs up to the  DRT and the High Court for protecting their  prized possessions. Under the present head the discussion shall revolve around tenants.

The Tenants in respect of the building/property sought to be sold under Sarfaesi Act, cannot be forcibly evicted or thrown  away, merely on account of action under this Act. Even if the sale is successfully conducted, tenancy has to be adorned in favour of the highest bidder on conclusion of sale. For all practical purposes, the purchaser steps into the shoes of the  original owner. The rights of a tenant or any other person in possession of the property , would in no way  be defeated on account of action under Sarfaesi Act. It is ultimately for the purchaser of the property to choose whether or not to continue the tenant. In case he decides to evict the tenant, he has to take recourse to law.

To avoid multiplicity of litigations, the Authorized  Officer should personally visit the premises sought to be taken under possession  to see for himself who is in possession and under what capacity. The ground realities must be checked/verified before taking proper action under the Act. It the property appears to be or is actually under the possession of the tenants, the lease deeds may be checked particularly for the date of creation of lease deed. The position of the tenants and theirs rights shall be got effected if the tenancy is created after the date of mortgage of the property, without the consent of the mortgagee. It is well settled that third party interests are created overnight and in many cases those third parties take up the defence of being a bonafide tenant/purchaser for value without notice.  Another angle worth consideration is that   if the tenant is summarily dispossessed under the Act, he may sue the borrowers/lessor for no fault on the parts of borrowers/ lessor.


No protection to tenants entering after creation of mortgage

An important decision given by a Division Bench of Punjab and Haryana  of M/S Delhi Punjab Goods Carrier Pvt.Ltd versus Bank of Baroda,2008 AIR   (Punjab & Haryana ) 107 is worth mentioning here.

In this case reliance has been placed on the decisions of Supreme Court in the cases  Mahbir Gope versus Harbans Narain Singh,  Air 1952 SC 205 ; Mathuralal V/s Kehsar Bai, AIR 1971 SC 310 and Nirmal Chandra v/s Vimal chand,2000(5)  SCC 51.

The Petitioner has claimed that he is a tenant in the property in dispute since 2006 and the notices have been issued to the borrowers after recalling the huge outstanding amount of loan with interest. It is evident from the perusal of the notices that charge on the property was created much earlier to the commencement of tenancy.  The court while relying upon decisions of Apex Court and dismissing the petition held as under:-

It is evident that tenancy has to be proved by a document or otherwise  prior to the date of creation of charge of equitable mortgage. It is well settled that a mortgagee or mortgagor cannot induct a tenant without mutual agreement and confer upon a tenant any right to the prejudice of either of the parties. In the instant case the relationship of the petitioner as a tenant with the borrower as a land lord admitted came into existence after the creation of charge by the borrower on the property which is under the tenancy of the petitioner and therefore no protection in law would be available to such a tenant and above principles laid down by Hon’ble the Supreme Court would fully apply to the facts of the instant case and it has to be held that the petitioner in his capacity as tenant does not enjoy any right qua the charge holder respondent bank. The writ petition is wholly misconceived and is thus liable to be dismissed.


LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases.     25 August 2013

So in the instant case it has to be found out when tenancy was created.


And still any legal action for taking possession has to be initiated  by the bank.

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