SC: Tenant In Sufferance Not Entitled To Any Protection Of Rent Act Against SARFAESI Proceedings

Factual Background

• The name of the case was Hemaraj Ratnakar Salian V. HDFC Bank Ltd.
• The tenant resided on the premises of the borrower on an oral agreement from 2012.
• He contended that he was entitled to protection under the provisions of the Maharashtra Rent Control Act, 1999.
• The tenant filed an intervention application in proceedings under the SARFAESI Act, 2002 that was initiated against the borrowers.

Court’s Observation

• The Court placed reliance on previous similar cases and stated that in case of a tenancy claim on term more than a year, it can be done only by a registered document.
• The Court observed that the Rent Act would not protect the tenant in sufferance, due to the provision of Section 13 (2) read with Section 13 (3).
• The intention of the tenant was in question as there was no sufficient evidence to establish the tenancy.

Principles laid by the Court

• A tenant in sufferance would not be entitled to protection against the SARFAESI proceedings under the Rent Act.
• A tenant in sufferance is a tenant who has not vacated even after the expiry of the term.
• When there is no registered instrument and the only reliance can be on an unregistered instrument or oral agreement, then the tenant cannot possess the asset for more than the prescribed period under the Transfer of Property Act.

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