No Registered Instrument or Oral Agreement to Prove Statutory Tenancy: DRAT affirms Recovery of Property [Read Order]

The Debts Recovery Appellate Tribunal (DRAT), Allahabad, has dismissed the appeal filed by the appellant and affirmed the recovery of the property, holding that the tenants/ appellants have not produced any registered instrument or oral agreement to prove statutory tenancy.

The dispute arose from financial assistance extended by the Bank of Maharashtra to M/s Nav Bharat Press Pvt. Ltd. In 2004, one of its directors created an equitable mortgage over his property by depositing the original title deed with the bank.

On default, the bank filed an original application for recovery of ₹24.93 crore, which was decreed in 2011. A recovery certificate was issued.

In February 2024, the Recovery Officer directed the defendants to hand over possession of the property to the appointed receiver. The appellants, claiming to be tenants in the premises for over 35 years, challenged the order by filing an appeal along with an interim application. The Tribunal rejected their stay application, and the present appeal was filed before DRAT.

Counsel for the appellants contended that they had had the property for decades and were bona fide tenants. They argued that the Tribunal ignored earlier DRAT orders dated 29 November 2023 and 7 March 2024, which directed the status quo.

It was further alleged that the Recovery Officers and the bank acted in disregard of those appellate directions by proceeding with dispossession. The appellants sought protection of their tenancy rights and requested interim relief against eviction.

The bank’s counsel countered that the appellants were illegal occupants, not bona fide tenants. It was argued that no registered lease deed or tenancy agreement was produced to substantiate their claim. The rent receipts filed by the appellants, dated between 2009 and 2012, were inconsistent in format and signatures, and therefore unreliable.

The bank emphasised that recovery proceedings were based on a decree that had attained finality, and the Recovery Officer could not go beyond the decree. It was further submitted that the property had been attached in 2014 and 2015, and those orders were never challenged, thereby binding the appellants.

Justice R.D. Khare (Chairperson) observed that the appellants failed to produce any registered instrument or oral agreement establishing tenancy. The rent receipts submitted were inconsistent and could not prove a statutory tenancy.

It was noted that under law, possession of secured assets for a term exceeding one year requires proof of a registered lease deed.

The Tribunal noted that the appellants’ claim appeared to be a device set up by the borrower to frustrate recovery. The Tribunal upheld the rejection of interim relief, holding that the appellants were not entitled to protection as statutory tenants and had no legal basis to resist recovery.