THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION NO.24770 OF 2009 18th November 2009 Between: P.Madhusudan Rao. …PETITIONER AND K.Prabhavathi and four others. …RESPONDENTS THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION NO.24770 OF 2009 ORDER: The petitioner is lessee, in respect of premises, bearing D.No.6- 8-130 to 133, Hanumakonda Chourasta, Warangal. Smt.K.Prabhavathi and K.Sridevi are the owners of the said premises. The petitioner is running Medical shop in the premises. A firm headed by Sri K.B.D.Prasad, the husband of Smt.K.Sreedevi, borrowed some amount from the fourth respondent- Bank. As a security for repayment of the loan, the premises, referred to above, were mortgaged, together with certain other properties. The loan remained unpaid and default was committed. Therefore, the fourth respondent initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 {“the Act” for brevity}. The physical possession of the premises was taken, and they were sealed and locked. The assistance of the District Collector was taken for this purpose under Section 14 of the Act. The petitioner feels aggrieved by the action of the fourth respondent. He contends that the fourth respondent does not have the power, or jurisdiction, to evict him, or to seal, the premises, disabling him from conducting the business. The fourth respondent filed a counter-affidavit, furnishing the details of the mortgage, vis-à-vis the property. It is stated that the sealing of the premises is very much within its competence, and that no exception can be taken to the same. It is also stated that the petitioner himself offered to vacate the premises, in case he do not emerge as highest bidder in the auction. Heard Sri N.Ravi Prasad, learned counsel for the petitioner, and Sri P.A.V.Bala Prasad, learned counsel for the fourth respondent. The premises, in respect of which the petitioner is tenant, were mortgaged to the fourth respondent. Admittedly, default was committed by the borrower, and the fourth respondent has exercised its powers, under the Act. The Act, no doubt, empowers the fourth respondent 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 fourth respondent 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 fourth respondent to seal the premises and thereby disabling the petitioner from undertaking business, cannot be sustained in law. The petitioner has stated in the affidavit that he would intend to participate in the auction and in case he do not emerge as the highest bidder, he 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. The fourth respondent has removed the seal and redelivered the possession of the premises to the petitioner, in pursuance of an interim order passed by this Court. For the foregoing reasons, the Writ Petition is allowed, and the action of the fourth respondent in sealing the premises is set aside. It is directed that the petitioner shall be entitled to participate in the auction, that may be conducted for sale of the property. If he do not emerge as the highest bidder and if the purchasers are not inclined to continue him as tenant, he 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 fourth respondent. There shall be no orders as to costs. _____________________ (L.NARASIMHA REDDY, J) 18th November 2009 RRB