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PNB Housing Finance Limited v. Manoj Saha

Civil Appeal · 2025 INSC 847Decided 15 Jul 2025
C.A. No.-009492-009492 of 2025 (Arising out of SLP (C) No.7288 of 2024)
Justice Pamidighantam Sri Narasimha · Justice Joymalya Bagchi

Background

PNB Housing Finance Limited took possession of a mortgaged commercial property in Kolkata under the SARFAESI Act after the borrower defaulted on loans exceeding Rs. 3 crore. A man occupying the premises claimed he was a long-standing tenant and challenged the bank's possession before the Calcutta High Court, which ordered the property restored to him. The bank appealed to the Supreme Court, arguing the High Court should not have entertained the matter at all given the statutory appeal remedy available under the SARFAESI Act.

Decision Breakdown

The Supreme Court held that the High Court erred in exercising writ jurisdiction when an appellate remedy before the Debt Recovery Tribunal/Appellate Tribunal already existed under Section 18 of SARFAESI, particularly after the 2016 amendment gave tenants a specific statutory route to challenge possession. On merits, the Court found the occupant had produced no rent receipts, tax receipts, or electricity bills predating the bank's demand notice to prove a genuine pre-existing tenancy, only rent deposits made after the notice was issued. The Court also noted the occupant's own delay in asserting his claim despite repeated public notices. The appeal was allowed, the High Court's order was set aside, and status quo was directed pending disposal of the tenant's application before the DRT within two months.

Lesson Learnt

Anyone claiming tenancy rights in a property that has been mortgaged to a bank must keep independent, contemporaneous proof (rent receipts, tax bills, utility payments) to resist a bank's SARFAESI recovery action: an unregistered or undocumented claim raised only after possession is taken will not succeed. Disputes of this kind must go through the Debt Recovery Tribunal's statutory process, not a writ petition.

Official source (sci.gov.in)View Judgment (PDF)

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