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narendra.s.p (Chief Manager(Law))     15 August 2012

Section 14 of sarfaesi act



There are about 11 Chief Metropolitan Magistrates at Bangalore.

Where an immoveable property secured to the Bank is occupied by the Borrower or is let out by him, the Bank approaches the Jurisdictional CMM under section 14 of SARFAESI Act.The Authorized Officer prefers an application / request to the Jurisdictional CMM. The jurisdiction of the CMM is determined on the basis of the Jurisdictional Police Station where the immoveable property is situated.

The registry of the court (CMM) numbers the request / application as  C.Misc No……of……..

One date is fixed for the Authorised Officer to appear Before the CMM with originals of:

a)      Title deed establishing the Borrower’s title to the immoveable Property

b)      Upto date Encumbrance Certificate of the immoveable property

c)      Possession Notice, Paper Publication and service by Registered Post & evidence of affixing the notice on the conspicuous portion of the property.

After being satisfied that the Bank has followed the prescribed procedure, the CMM will issue a direction to the Jurisdictional Police Station to assist the Bank-secured Creditor to obtain Physical/actual possession. The CMM order also authorizes breaking open of the Lock if necessary.

With this order (certified copy) in hand a letter is addressed to the Jurisdictional Police station informing the SHO about the date on which the Authorised Officer will proceed to take Physical Possession. [Copy of the CMM order is enclosed for reference of the Police]. On that day with the help of Police Officials the Physical possession is obtained. 

Physical Possession is obtained and a Mahazar is drawn up. 

The above procedure does not provide for issuance of notice to Respondents or occupants of the property. Hence, no notice of the proceedings before CMM is served either on the mortgagor or any person in occupation of the immoveable property. Section 14 is only a step-in-aid for Authorised Officer to take physical possession.

QUESTIONS: 1.Whether section 14 is a due process of Law or merely a procedure established by Law?

2. Can a Tenant/occupant be evicted under section 14 without prefering suit/proceedings for eviction in a civil court?

3. As the Bank does not step into  the shoe of the Landlord / mortgagor, can it maintain a suit for eviction against the tenant? if not, is the Bank driven to sell the propety on "As is where is Basis" so that the Purchaser steps into the shoe of the Landlord to maintain eviction case.

4. Against the order of CMM [under section 14]: What is the remedy for the Tenant? Can he invoke the Writ jurisdiction or approach DRT or Civil court for stay?


 24 Replies

andz (clerk)     15 August 2012

1-it is a due process of law and at each stage the time and fixed format is there and after following all that as you have mentioned the notice/demandnotice/paper publication and all the financial institute will approach the concerned CMM and to obtain possession notice along with which they can ask for appontment of advocate commissioner/police protection if they wish to and they do notify the principal borrower 'bout the possession notice and time's mentioned by when they want the buildiing to be vacant.

2-yes tenant can be vacated without any further proceedings for eviction in a civil court, courts do not have jurisdiction to entertain cases under SARFEASI

3-forget 'bout the shoe part . . . if the tenant wants to file a suit under tenancy then it can be done against the owner. . . . and after auction it is upto the new owner how he want's (with tenant or not)

4-the tenant can try civil suit but i seriously doubt that and only remedy is to get into some kinda agreement/understanding with the present owner and then  approach the DRT and by depositing part suit amount get stay or check for the options that they seek . . .

narendra.s.p (Chief Manager(Law))     16 August 2012

Please find attached a judgment of division bench of Karnataka High Court holding that the Tenant cannot be evicted on the basis of CMM order and has directed the Bank to evict the Tenant under due process of Law. Now the question is What is Due process of Law available to the Bank to take actual/Physical possession if not under section 14.

Attached File : 549988887 wa5990-11-02-07-2012.pdf downloaded: 811 times

andz (clerk)     16 August 2012

yes sir , gone through the judgement and i have made my observation's as under and plz correct me if 'am wrong . . -

1-the bank had gained symbolic possession-which could mean they might have not had any advocate commissioner appointed / might not have applied or sought police protection / might not have notified the tenant's about the case or stick any bills to the property to be possessed-- and might have gone ahead with the possession notice and then paper publication and then simply conduct the auction and sell the property . . . these are good enough grounds  for the tenant's / owner's.

2- the respondent's in the said judgement were succesfull enough to prove that there's a tenant(what kind of tenancy is immaterial as observed by the Hon'ble high court) at the time of possession and could be not aware of the proceedings .

3- as erlier mentioned the case was entertained in H.C , and it would be again redirected to the bank/DRT safeguarding the tenant and the due process of law is nothing but notifying and bringing to the notice of the tenant / possessor who's in the scheduled property that there's mortgage and giving them notice period to vacate the suit property and giving them opportunity as to appeal before the concerned bank/DRT if they have any claims and the best thing is to allway's mention the fact of tenancy and take protection along with advocate commission and give notice period to the tenants.

looking forward for inputs and corrections from seniors to correct me.



andz (clerk)     16 August 2012

and sir, you are the best in the field and you should enlighten me with the possibilites/relief's in such a situation .plz.



1 Like

narendra.s.p (Chief Manager(Law))     16 August 2012


Most cited case by a tenant is

ILR 2007 KAR 4362 : HUTCHISON ESSAR SOUTH LIMITED  Vs.  UNION BANK OF INDIA, REPRESENTED BY ITS AUTHORISED OFFICER AND ANOTHER (in WP No. 26752 /2005 decision dt. 11-09-2007 of Justice Ashok B. Hinchigere) [AIR 2008 KARNATAKA 14 :  Hutchison Essar South Ltd.  Vs. Union Bank of India & Another]

Tenant eviction: Non-Regiatration of Lease agreement : Secured premises in possession of Bonafide Tenant : tenant cannot be thrown out by secured creditor / Bank. it can only take symbolic possession.

relevant para 6(C)-page 179: Section 13 contains non-obstante clause only in so far as section 69 and 69A of the TP Act is concerned. It does not take away the Mortgagor's power to lease guaranteed by section 65A of TP Act.

Non Registration of lease deed (required by law to be compulsorily registered) does not come in the way of existence of jural relationship of a lessor and a lessee. It is open to the mortgagee bank to sell the assets with tenancy in tact.

So, in case of "tenant" covered under Rent Act, the Landlord can seek ejectment only on grounds of eviction available to him under Rent Act. Bank does not step in the shoe of the landlord. It cannot therefore approach Rent Court for eviction. Nor it can claim to be paid rents. There is no jural relationship between the Tenant and the Bank. 

Under the circumstance: How the Bank should obtain physical possession , if not under section 14?

Some more Citations on section 14 attached





Attached File : 550031149 citataions.doc downloaded: 443 times

narendra.s.p (Chief Manager(Law))     17 August 2012


Security interest in occupation by a person as a Tenant under Rent Act, Lessee, Licensee, a Tenant Holding over or an HUF property where coparceners are residing in the property; create certain unresolved issues as discussed herein below.

To obtain actual physical possession the Authorised officer needs to evict the aforementioned persons in occupation of the property.

Orders of CMM under section 14 cannot be considered as “due process of Law” as it does not envisage issuance of notice to the adverse party. The adverse party is also not given an opportunity of being heard. So it is merely a procedure established by Law. Therefore an order of CMM is subject to judicial review.

 What is the forum available to a tenant to seek Judicial Review of CMM order?

  1. DRT only considers whether the Secured Creditor has followed all the prescribed procedure as per the SARFAESI Act and Rules framed thereunder. If it grants a declaration under Section 17(4) of SARFAESI Act, the remedy of the Tenant is foreclosed.
  2. Civil Court may not entertain any suit which has the effect of staying the proceedings initiated under SARFAESI Act.
  3. Hence only a Writ Petition seeking review of CMM order is maintainable by the Tenant to protect his possession

RAJU O.F., (Advocate)     18 August 2012

Statutory tenant can approach DRT u/S 17 of the Act as an aggrieved person, and seek orders from physical possession during the pendency of the lease period.  Bank can auction the property by taking symbolic possession and if the purchaser is willing to get the property subject to tenancy.

narendra.s.p (Chief Manager(Law))     19 August 2012

Fine, what will be his relief: Not to enforce section 14 against him?

If the DRT grants a declaration under section 17(4)  that all the measures initiated by the Bank is in accordance with the Act and rules, then where will he go.

Now, why should the bank be compelled to sell  the property on "as is where is basis" subject to Tenancy?

RAJU O.F., (Advocate)     19 August 2012

if mortgage was created during the pendency of the lease or, if the lease was created with the permission of the bank, then the DRT can give relief to the tenent till the expiration of period of lease, from the vacating the property.

andz (clerk)     26 August 2012

Hello Narendra Sir,

can there be a relief against SERFEASI if it is proven that the mortgage/loan/advance issued against the property itself is not in accrodance with law . . . .

brief fact: B (banker) approached the property of C(possessor/co parcenor) with a possession notice u/SERFEASI, and the fact is A has morgaged the property paper's belonging to C with A, but for now C requires to get out of the Banker's tension and how to instigate charges against A/B and reclaim his right over the property . And how can it be brought to the notice of the banker/DRT/HC that certain cases can be entertained even though the approach is through SERFEASI and the banker's action could be wrong . . . .



narendra.s.p (Chief Manager(Law))     28 August 2012

If mortgage created in favour of the Bank is defective, then the owner of the property can file objections in DRT that security interst created in favour of the Bank is defective and cannot be enforced by the Bank. This can be done after Bank issues possession notice. However, if the mortgage was validly created and the mortgagor had authority as Kartha to mortgage the HUF property, then the co-parcerners are bound by  the mortgage [provided the loan was obtained for the benefit of the family]. 

If the Kartha mortgages the HUF property as a guarantor for a third party loan, then the co-parcerners can contend that the loan did not benifit the HUF family. Insuch  a situation, to bind the interest of the co-parcerners  , the Bank generally obtains a specific consent letter from all the coparcerners who have attained majority.

andz (clerk)     29 August 2012

Respected Narendra Sir,

thanks for the prompt reply and plz do accept my due apologies for the delayed reply and the reason being, i was down with fever.

-and coming to the above mentioned case-  i here by present the brief facts of the case and please enlighten me and advice/guide me on my next course of action plz.

1-A is blessed with 3 kids(B,C,D all are married) and he is having an ancestral property(a building) and X is B's husband and B and X (daughter/son-in-law) obtained signatures of the father A by fradulent means by promising construction of building in the said building plot without the knowledge or concent of the co-parcener's i.e-C,D and subsequently mortgaged the same with the Banker and also put A as gurantor to the same loan on default the banker after following the mandatory steps got issued the possession notice and A and C (father and son) are in actual possession with couple of tenants and as a result of this sudden and surprise act of the Banker/daughter+son-in-law , A father suffered heart stroke followed by paralytic attack and they are bankcrupt and do not know what are the remedies available.

and once again thanks to you that you strenghtened my idea that as it is without co - parceners signature without any interest towards the family.

and now my questions sir

1-the mortgage created in favour of the bank was or can be defective ?

2-how to know what are the action/charges framed against the principle debtor , we gave letter to the banker but he has not replied and he is pressing A and his son for repayment threatening otherwise to get evicted

3-is there any limitation or can the son approach DRT and if yes then can you please send sugest me the way out and a proforma or format if any

4-can the banker tried in consumer court's aswell , can the son sue the banker as a consumer (now that he has paid part of the loan amount)

5-i tried to explain the sam (that anyt gift or anything without co-parcenor's signature's is not valid) to police and when asked to register a complaint against the daughter and son in law the P.S was reluctant.

6-i got the complained referred through Cr.Court and FIR registered and now the SHO/CI threatens to compromise as otherwise he will close the case (seek remedy or guidance in here please)

thank you sir thanks for your kind co-operation and guidance in advance



narendra.s.p (Chief Manager(Law))     31 August 2012

It is necessary to obtain copies of documents executed by A and the exact nature of mortgage created by A. If theBank is a puiblic sector Bank, then an RTI Applciation can be filed by C as legal heir of A to obtain the information / documents. 

If there is a good case with adequate gorunds available to challenge the mortgage by  C & D ,  then the cheap way out is to file a Lok Adalat pre-Litigation suit against  Bank, B and X 

Objections under section 17 of DRT may be filed against the Possession Notice. If the tenants are coverd by the Rent Act, they may aproach the High Court seeking direction on the Bank not to eject/evit them otherwise than by "due process of Law".

andz (clerk)     31 August 2012


thanks for the reply and guidance and tha's exactly what i did , when asked for the documents by the party they shooed him away and when the same happened through RPAD then the senior manager replied by attaching only the possession notice and did not disclosed the kind of documents that are mortgaged or the kind of mortgage, so i have given RTI to the party and asked them to post the same with 10/- or to RPAD the same to the banker , and i have also prepared another RTI to be poseted/lodged with the police as to check what happened to the FIR, and DRT i have prepared the rough draft but was doubtfull as to the limitation and also pertaining to the person representing (as this would be by the son as the father is bedridden) and whether and how to challenge the mortgage rather than SARFEASI(as i do not see much of scope to fight against SARFEASI in this case) or can i file a fresh case with the DRT ?

and thank you once again sir,



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