Legal Question in Bankruptcy in India

SARFAESI Act.

Sir,

SARFAESI Act.

The property is mortgaged to A bank subject to a registered lease. Subsequent to the mortgage the mortgagor executed a tripartite agreement with B bank and lessee for securitizing the rent for a loan availed from B bank without the permission or knowledge of A bank.

A bank initiated SARFAESI proceedings against the property and took symbolic possession of the property. As the lease is valid till 2013 claimed rent from the property as a secured creditor.

Lessee approached DRT with an SA seeking a clarification as to whom they have to pay rent and for restraining A bank from evicting them. B bank a respondent in the SA is claiming rent as per the tripartite agreement (subsequent to mortgage) in its favour towards the repayment of loan availed from it.

The SA stands posted for final arguments.

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As the lease is prior to mortgage A bank put the property for auction subject to tenancy only. But it or the purchaser (If it could sell the property � Now auction stayed in SA) may take steps to evict the lessee trough due process of law.

As the tripartite agreement is subsequent to the mortgage A bank is claiming priority on the rental income from the security property.


Asked on 4/01/09, 11:27 am

2 Answers from Attorneys
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: SARFAESI Act.

A bank may be entitled to claim the rent as mortgage in favour of B may be a fraudulant transaction and hence void. A and B, both may jointly and/or severally register a criminal case of cheating against the mortgagor.

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Answered on 4/01/09, 5:55 pm
Homi Maratha N.N. Maratha & Co.-Advocates

Re: SARFAESI Act.

Already replied.

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Answered on 4/02/09, 2:03 am


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