THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION NO.26565 OF 2009 Dated 4th December, 2009 Between : Vision Care Optical …Petitioner And Union Bank of India …Respondent The Court made the following ORDER: The petitioner is the lessee in respect of premises bearing LIG B-14, Ground Floor, Manikonda Plaza, Main Road, Dr A.S.Rao Nagar, Ranga Reddy District and Sri Kirit G.Shah is the owner of the said premises. The rent for the premises is Rs.11,000/- per month. The landlord took loan from the respondent Bank and as a security for repayment of the loan, the premises, referred to above, were mortgaged. The loan was not repaid and default was committed. Therefore, the respondent Bank initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the Act”). The physical possession of the premises was taken on 03.12.2009, and they were sealed and locked. The petitioner feels aggrieved by the action of the respondent Bank. He contended that the respondent Bank does not have the power, or jurisdiction, to evict it, or to seal, the premises, disabling it from conducting the business. Heard the learned counsel for the petitioner and the learned counsel for the respondent Bank. The learned counsel for the respondent Bank submits that the sealing of the premises is very much within its competence and that no exception can be taken to the same. The premises, in respect of which the petitioner is the tenant, were mortgaged to the respondent Bank. Admittedly default was committed by the borrower and the respondent had exercised its powers, under the Act. The Act, no doubt, empowers the respondent Bank to take possession of the premises, and put them to sale, to recover the amount. The manner, in which the possession of the premises of this nature must be taken, assumes significance. On exercise of powers under the Act, the respondent Bank assumes to itself the right to put the property to sale. This is, in a way, comparable to the power of an executing Court to enforce a decree. Any step taken, preceding the sale, can be equated to attachment. The attachment of an immovable property in the course of execution of a decree does not entail in dispossession of a person, who is otherwise entitled to remain in it. Attachment would clothe the Court, with the right to proceed with the sale and to prevent the transfer of that property in any other manner. To state precisely, in case there is a tenant in respect of a building, or agricultural land, which is sought to be sold, in the course of execution, the tenant cannot be evicted, or thrown away, on mere account of attachment. Even if the sale is successfully conducted, tenancy has to be adorned in favour of the highest bidder on conclusion of the sale. The rights of a tenant, or any other person in possession of the property, would in no way be defeated, on account of attachment. It is, ultimately, for the purchaser of the property to choose whether or not to continue the tenant. In case he decides to evict the tenant, he has to take recourse to law. For all practical purposes, the purchaser steps into the shoes of the original owner. He cannot do what the owner himself could not have done. The assumption of the property in exercise of the powers under the Act does not stand on a higher footing, than that of an attachment of property before sale. Therefore, steps taken by the respondent Bank to seal the premises and thereby disabling the petitioner from undertaking business, cannot be sustained in law. The petitioner can also participate in the auction and in case it does not emerge as the highest bidder, it would deliver the vacant possession of the premises in favour of the highest bidder, within a period of one month, if the purchaser does not intend to continue the tenancy. For the foregoing reasons, the writ petition is allowed, and the action of the respondent Bank in sealing the premises is set aside. It is directed that the respondent Bank shall remove the seals and redeliver the possession of the premises to the petitioner. It is also directed that the petitioner shall be entitled to participate in the auction, that may be conducted for sale of the property. If it does not emerge as the highest bidder and if the purchasers are not inclined to continue it as tenant, it shall be under obligation to vacate the premises, within one month from the date of confirmation of sale. Till such time, the rents of the premises shall be deposited with the respondent Bank. There shall be no order as to costs. _______________________ L.NARASIMHA REDDY, J Dated 4th December, 2009 Note: Issue CC in two days vrn