A bench of Justices A A Sayed and Madhav Jamdar said SBI gave the tenants no notice and had made “false statements in their application before the recovery officer that the building was occupied by illegal occupants”. It noted that SBI was entitled to take over only 3,777 sq ft, not the entire ground-plus-five-storey building.
“We are unable to turn a blind eye and allow the illegality on the part of SBI to perpetuate,” said the court in its order on February 16, after hearing counsel R J Singh for SBI and M M Chunawala for the court receiver. It directed the Debt Recovery Tribunal (DRT) receiver to identify and seal only 3,777 sq ft in the building and restore possession of the remaining area to the tenants.
The landlord of Amar Chambers at Masjid Bunder Street had mortgaged the building as collateral while taking a loan of Rs 24 crore from SBI. When he defaulted, the bank initiated proceedings before DRT to recover over Rs 16 crore.
After the sealing, a recovery officer of the DRT on October 29 issued a public notice to e-auction the building. The tenants objected, but their plea to stay the auction was rejected in November and December.
Advocate Siddhesh Bhole, counsel for tenant Sanjay Shah and 14 others, sought quashing of an October order by the DRT recovery officer for appointment of a court receiver to forcibly evict residents and take possession of the building. The tenants also sought an order to restore physical possession of their rooms.
The HC said considering the “gross facts and fraud’’, its intervention was necessary in its writ jurisdiction. It set aside orders passed last November and December by the recovery officer and directed him to hear afresh applications filed by the tenants who questioned the mortgaging of the tenanted property.
The bench added: “We are of the view that the DRT ought to have realised the seriousness of the matter — that tenants who are protected under the law have been overnight thrown out of their respective units in such a high-handed manner by …SBI. The DRT has granted adjournments in the appeal without considering the urgency and injustice meted out and hardships being faced by the tenants for no fault of theirs.”