Skip to main content

Court provides relief to old tenants paying paltry rent


The Delhi High Court has said that banks can’t evict a tenant using the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), a law that allows lending firms to auction properties when borrowers fail to repay loans.

The ruling is crucial at a time when cases are piling up in courts in Delhi where tenants allege that house owners are misusing the 2002 Act to circumvent the Delhi Rent Control Act, 1958 to evict old tenants who are occupying prime properties but pay paltry rent in areas such as Connaught Place, Gol Market, Daryaganj and Chandni Chowk. The Rent Control Act provides protection to tenants who are paying less than R3,500 from eviction.

“Right of a tenant protected by the Rent Act cannot be defeated and SARFAESI Act cannot be used for eviction,” a bench of justices Sanjay Kishan Kaul and Sanjeev Sachdeva said, giving relief to one Pradeep Chugh, a tenant evicted by State Bank of India. Chugh was paying R900 as rent for a house in Inderpuri.

The argument and objection raised by the tenants advocate was based on his allegation that SARFAESI is being increasingly used by property owners to get their old tenants evicted with the help of banks. Owners take a loan by mortgaging property documents and deliberately default on payment. The bank then takes over the mortgaged property and evicts the tenant using the SARFAESI Act. When the property is put on auction, the original owner itself buys the property by putting up a dummy.

Article referred to: http://www.hindustantimes.com/India-news/NewDelhi/Court-provides-relief-to-old-tenants-paying-paltry-rent/Article1-1062778.aspx

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Mere Agreement To Sell The Leased Property To Tenant Would Not Terminate Landlord-Tenant Relationship

In CIVIL APPEAL Nos. 1237­1238 OF 2019, Dr. H.K. Sharma vs Shri Ram Lal, the tenant had objected against the eviction suit filed by the landlord, claiming that the landlord-tenant relationship between them had ceased to exist by virtue of an agreement for sale entered between them and that he has already paid some money in advance based on the agreement. The tenant contented as the landlord-tenant relationship did not exist, the landlord cannot evict him. The matter went through various forums and finally landed before the Supreme Court in appeal. The Supreme Court referring to the judgment in Shah Mathuradas Maganlal & Co. vs. Nagappa Shankarappa Malage & Ors., held that in the instant case the lease agreement included no clauses on the fate of the tenancy. A fortiori, the parties did not intend to surrender the tenancy rights despite entering into an agreement of sale of the tenanted property. In other words, if the parties really intended to surrender their tenancy ...
2 comments
Read more

Valuation Report of Jewellery once made is effective for Four Assessment Years

The division Bench of the Delhi High Court in Pr.Commissioner of Wealth Tax vs. Raghu Hari Dalmia held that a valuation report made by a registered valuer once adopted shall be in effect for four assessment years unless an event has occurred whereby the value is increased or decreased. The High Court made it clear that the event of “search” under Section 132 of the Income Tax Act, 1961 cannot compel the assessee to undertake a fresh valuation.
2 comments
Read more