Rashid V.K V. Young Men's Christian Association and United Bank of India and Three Line Properties

RP/31/2020

AI Insights

The case involves a series of review petitions filed against the judgment dated 11/2/2016 in Writ Appeal No. 135 of 2016 and connected cases, which confirmed the dismissal of writ petitions challenging an order passed by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act. The original dispute centered on the validity of long-term leases executed on a property that was mortgaged to a bank. The bank sought possession of the property, which was contested by the tenants based on their lease agreements. The review petitions argued that the sale of the property was conducted under a private treaty that acknowledged the tenants' rights, but the court found no legal basis to support this claim.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 816093 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 22-06-2020
• Assessment Year: misc
• Other Referred Cases: Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited and Others, Mathew Varghese v. M.Amrithakumar and Others, ITC Limited v. Blue Coast Hotels Limited and Others, Devi v. Mangalal R. Atharana and others, Saurabh Jain (Dr) and Others v. State of Kerala and Others, Mathew v. Ayyappankutty
• Laws Referred To: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Transfer of Property Act, 1882
• Result in Favour of: Respondent
• Court: HIGH COURT
• Department Lawyers: S EASWARAN; M NAVAZ; O D SIVADAS
• Assessee Lawyers: A SUDHI VASUDEVAN; JOSE JONES JOSEPH
• Keywords: Lease; Mortgage; Private Treaty; SARFAESI Act; Secured asset
• Section: 14; 65A(2); 58(f)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 22ND DAY OF JUNE 2020 / 1ST ASHADHA, 1942 RP.No.31 OF 2020 IN WA. 158/2016 AGAINST THE JUDGMENT IN WA 158/2016 OF HIGH COURT OF KERALA DATED 11/2/2016 REVIEW PETITIONER/APPELLANT IN WA: RASHID V.K AGED 39 YEARS, YMCA INTERNATIONAL CULTURAL COMPLED, YMCA CROSS ROAD, CALICUT-1, REPRESENTED BY THE POWER OF ATTORNEY HOLDER MOHAMMAD ALI, VADAKKE KANDIYIL HOUSE, P.O.PULIYAVU, VATAKARA TALUK, KOZHIKODE. BY ADVS. SRI.A.SUDHI VASUDEVAN (SR.) SRI.JOSE JONES JOSEPH RESPONDENTS/RESPONDENTS IN WA: 1 YOUNG MEN'S CHRISTIAN ASSOCIATION REPRESENTED BY ITS SECRETARY, YMCA CROSS ROAD, CALICUT, KALATHINKUNNU AMSOM DESOM, KOZHIKODE- 673 001 2 UNITED BANK OF INDIA, KOZHIKODE BRANCH, C/940,SAIKEN CHAMBERS, KANNUR ROAD, KOZHIKODE-673 001, REPRESENTED BY ITS AUTHORISED OFFICER AND CHIEF MANAGER (RECOVERY) SRI. V.P.ARUNIGIRI, RP No.31/2020 in WA No.158/16 & conn.cases -:2:- S/O. PADMANABHAN, UNITED BANK OF INDIA SOUTH REGIONAL OFFICE, MADAVELI, CHENNAI 600028 3 M/S. THREE LINE PROPERTIES, REP BY ITS MANAGING PARTNER, AHAMMED KOYA, DOOR NO.OP 7/813,OMASSERY PANCHAYATH, KOZHIKODE-673 572. ADDL. R4 AHAMMED KOYA, S/O.P.KHADER,AVATHOTTIL HOUSE, PATHIMANGALAM,KUNNAMANGALAM, KOZHIKODE-673 570. ADDL.R4 AS ABOVE IS IMPLEADED AS PER ORDER DATED 28.02.2020 IN I.A.2/2020. R3 BY ADV. SRI.S.EASWARAN R2 BY SRI.M.MOHAMMED NAVAZ ADDL.R4 BY SRI. O.D.SIVADAS THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 27- 05-2020, ALONG WITH RP.51/2020, RP.85/2020, THE COURT ON 22-06-2020 PASSED THE FOLLOWING: RP No.31/2020 in WA No.158/16 & conn.cases -:3:- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 22ND DAY OF JUNE 2020 / 1ST ASHADHA, 1942 RP.No.51 OF 2020 IN WA. 135/2016 AGAINST THE JUDGMENT IN WA 135/2016 OF HIGH COURT OF KERALA DATED 11/2/2016 REVIEW PETITIONERS/APPELLANTS IN WA: 1 P.M.KELUKUTTY 6/875 G, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 2 M/S.P.M.KELUKUTTY AND BROTHERS REP BY MANAGING PARTNER P.M.KELUKUTTY,6/875 N, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 3 ABOOBACKER HAJI.E.P. 6/875 A1, B, C , YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 4 SHAHINA.P 6/875 A1, B AND C, INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 5 ABDULLA N.P. 6/875 A1, B,C, D AND E, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 RP No.31/2020 in WA No.158/16 & conn.cases -:4:- 6 V.K.ABDULLA HAJI 6/875 C, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 7 V.K.MOHAMMED ALI 6/875 A1 AND B,YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 8 AMMED HAJI.P 6/875 D AND E, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 9 GOPALAKRISHNAN @ UNNI 6/875 F, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-1 BY ADVS. SRI.A.SUDHI VASUDEVAN (SR.) SRI.JOSE JONES JOSEPH RESPONDENTS/RESPONDENTS IN WA: 1 YOUNG MEN'S CHRISTIAN ASSOCIATION REPRESENTED BY ITS SECRETARY, YMCA CROSS ROAD, CALICUT, KALATHINKUNNU AMSOM DESOM, KOZHIKODE-673001 2 UNITED BANK OF INDIA KOZHIKODE BRANCH, C/940, SAIKEN CHAMBERS, KANNUR ROAD, KOZHIKODE-673001 KASABA VILLAGE AND KALATHINKUNNU DESOM KOZHIKODE TALUK, REPRESENTED BY ITS AUTHORIZED OFFICER AND CHIEF MANAGER (RECOVERY) SRI.V.P.ARUNIGIRI S/O.PADMANABHAN, UNITED BANK OF INDIA, SOUTH REGIONAL OFFICE, MADAVELI, CHENNAI, TAMILNADU-600028 3 M/S.THREE LINE PROPERTIES REP BY ITS MANAGING PARTNER AHAMMED KOYA DOOR NO.OP.7/813, OMASSERY PANCHAYATH KOZHIKOE-673572 RP No.31/2020 in WA No.158/16 & conn.cases -:5:- 4 V.K.SREERAM MADHAVAN 6/875 J. YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-673001 5 V.K.MANORAMA MADHAVAN 6/875, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-673001 6 RASHID .V.K 6/875 D AND E, YMCA INTERNATIONAL CULTURAL COMPLEX, YMCA CROSS ROAD, CALICUT-673001 7 NATIONAL COUNCIL OF YMCAS OF INDIA REPRESENTED BY ITS NATIONAL GENERAL SECRETARY, BHARATH YUVAK BHAVAN, JAI SINGH ROAD, POST BOX NO.14, NEW DELHI-1110001. ADDL.8AHAMMED KOYA, S/O.P.KHADER,AVATHOTTIL HOUSE,PATHIMANGALAM, KUNNAMANGALAM,KOZHIKODE-673570. IS IMPLEADED AS ADDITIONAL 8TH RESPONDENT AS PER THE ORDER DATED 28/02/2020 IN I.A.NO.4/2020 IN R.P.NO.51/2020 IN W.A.NO.135/2016. R2 BY ADV. SRI.MUHAMMED NAVAZ(B/O) R3 BY ADV. SRI.S.EASWARAN ADDL.R8 BY ADV. SRI.O.D.SIVADAS THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 27- 05-2020, ALONG WITH RP.31/2020, RP.85/2020, THE COURT ON 22-06-2020 PASSED THE FOLLOWING: RP No.31/2020 in WA No.158/16 & conn.cases -:6:- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 22ND DAY OF JUNE 2020 / 1ST ASHADHA, 1942 RP.No.85 OF 2020 IN WA. 156/2016 AGAINST THE JUDGMENT IN WA 156/2016 OF HIGH COURT OF KERALA DATED 11/2/2016 REVIEW PETITIONER/APPELLANT IN WA: V.KUNHABDULLA AGED 50 YEARS VANIYANTAVIDA HOUSE, NADAPURAM P.O., VATAKARA, KOZHIKODE-673504. BY ADVS. SRI.A.SUDHI VASUDEVAN (SR.) SRI.JOSE JONES JOSEPH RESPONDENTS/RESPONDENTS IN WA: 1 YOUNG MEN'S CHRISTIAN ASSOCIATION REPRESENTED BY ITS SECRETARY, YMCA CROSS ROAD, CALICUT, KALATHINKUNNU AMSOM DESOM, KOZHIKODE. 2 UNITED BANK OF INDIA, KOZHIKODE BRANCH, C/940, SAIKEN CHAMBERS, KANNUR ROAD, KOZHIKODE-673001, KASABA VILLAGE AND KALATHINKUNNU DESAM, KOZHIKODE TALUK, REPRESENTED BY ITS AUTHORIZED OFFICER AND CHIEF MANAGER (RECOVERY), SRI.V.P.ARUNIGIRI, S/O.PADMANABHAN, UNITED BANK OF INDIA SOUTH REGIONAL OFFICE, MADAVELI, CHENNAI, TAMILNADU-600028. RP No.31/2020 in WA No.158/16 & conn.cases -:7:- 3 M/S.THREE LINE PROPERTIES, REP. BY ITS MANAGING PARTNER, AHAMMED KOYA, DOOR NO.OP 7/813, OMASSERY PANCHAYATH, KOZHIKODE 673572. ADDL. R4 AHAMMED KOYA, S/O.P.KHADER,AVATHOTTIL HOUSE, PATHIMANGALAM,KUNNAMANGALAM, KOZHIKODE-673 570. ADDL.R4 AS ABOVE IS IMPLEADED AS PER ORDER DATED 28.02.2020 IN I.A.2/2020. R2 BY ADV.SRI.MOHAMMED NAVAZ R3 BY ADV. SRI.S.EASWARAN ADDL R4 BY SRI.O.D.SIVADAS THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 27- 05-2020, ALONG WITH RP.31/2020, RP.51/2020, THE COURT ON 22-06-2020 PASSED THE FOLLOWING: RP No.31/2020 in WA No.158/16 & conn.cases -:8:- O R D E R RP Nos.31/2020 in WA No.158/2016, 51/2020 in WA No.135/2016 & 85/2020 in WA No.156/2016 Dated this the 22nd day of June, 2020 Shaffique, J. These review petitions had been filed seeking to review the judgment dated 11/2/2016 in Writ Appeal No. 135 of 2016 and connected cases. By the impugned judgment, this Court had confirmed the judgment in W.P .( C )No.30016/2015 and connected cases. The Writ petitions were filed challenging an order passed by the Chief Judicial Magistrate exercising power under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred as SARFAESI Act). The application under Section 14 was filed by the Secured Creditor/Bank to enable them to take possession of the secured asset, which was in the possession of tenants. One of the contentions urged on behalf of the appellants was that some of the tenants had entered into long- term leases ranging from 51 to 99 years and registered RP No.31/2020 in WA No.158/16 & conn.cases -:9:- instruments were executed between the landlord and the tenants. In order to recover the amount due to the secured creditor, the secured asset was sold by way of private sale in favour of one Ahammed Koya, acting as Managing Partner of M/s. Three Line Properties. Though the sale was challenged by the tenants by filing an application before the Debts Recovery Tribunal, the same came to be rejected and finally the Bank issued Certificate of sale in favour of M/s. Three Line Properties and the same was registered on 10/9/2013. Application under Section 14 of the SARFAESI Act was filed by the Bank before the Chief Judicial Magistrate on 11/9/2013, to enable them to take possession of the property, which was the subject matter of leases. Though initially the tenants were not made parties to the said application, by virtue of directions issued by this Court, they were also heard. The Chief Judicial Magistrate was directed to consider their claims relating to tenancy rights, creation of mortgage and whether the leases satisfy the requirements of Section 65A(2) of the Transfer of Property Act, 1882 (hereinafter referred as the T.P . Act). The Chief Judicial Magistrate by order RP No.31/2020 in WA No.158/16 & conn.cases -:10:- dated 18/8/2015 found that since the leases were created in violation of Section 65A(2) of the T.P . Act, they have no right to remain in possession and accordingly it was found that the tenants should surrender possession of the secured asset. An Advocate Commissioner was deputed to take possession of the property. It is the aforesaid order of the Chief Judicial Magistrate that came to be challenged in separate writ petitions, which were dismissed by the learned Single Judge, against which the appeals were filed. This Court having considered the contentions urged on behalf of the appellants formulated the following questions in paragraph 10, which reads as under:- i) Whether the agreement dated 27.12.2004, Ext.P3, which is an unregistered document can be treated to be a mortgage deed or an integral part of the mortgage coupled with memorandum dated 31.12.2004 by which mortgage was created by deposit of title deeds and the agreement dated 27.12.2004 being unregistered can be relied for any purpose? ii) Whether the leases executed in favour of the petitioners by the 1 st respondent which are leases subsequent to the RP No.31/2020 in WA No.158/16 & conn.cases -:11:- execution of the mortgage can be held to be lease agreements with permission of the mortgagee, i.e., the 2 nd respondent? iii) Whether the lease granted by the mortgagor after execution of the mortgage has to be in accordance with the provisions of Section 65A(2) of the Transfer of Property Act unless any contrary intention is not expressed in the mortgage deed? iv) Whether consent of the mortgagee for execution of the lease after mortgage, if presumed, can the consent be treated to be a consent for execution of lease in disregard to the conditions as enumerated in Section 65A(2)? v) Whether in the facts of the case, petitioners could not have been dispossessed in a proceeding under Section 14 of the 2002 Act or for the dispossession of the petitioners, it was incumbent upon respondents 1 and 2 to institute proceedings for eviction under the Kerala Rent Laws? vi) Whether the application filed by the 2nd respondent under Section 14 of the 2002 Act was barred by limitation? vii) Whether on principle of estoppel, the respondents were estopped from dispossessing the petitioners from the premises RP No.31/2020 in WA No.158/16 & conn.cases -:12:- they having taken advance from the petitioners for repayment of the loan? viii) T o what relief, if any, the appellants are entitled?” 2. This Court found that security interest was created in favour of the Bank by deposit of title deeds in order to create a mortgage as contemplated under Section 58(f) of the T.P . Act, and that all the leases were executed subsequent to the creation of the mortgage. The contention urged by the appellants was that the leases created even after the mortgage were valid and such lessees cannot be dispossessed, pursuant to orders passed by the Chief Judicial Magistrate. This Court found that the leases executed in favour of the appellants were after creation of the mortgage and not in accordance with Section 65A(2) of the T.P . Act. After having referred to the judgment in Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited and Others [(2014) 6 SCC 1], it was held that the lease in favour of the appellants were executed contrary to Section 65A(2) of the T.P . Act and therefore the appellants were not entitled for any relief. Accordingly, issue RP No.31/2020 in WA No.158/16 & conn.cases -:13:- numbers 1 to 5 were decided at paragraph 21, which reads as under: i) Agreement dated 27.12.2004, Ext.P3 is neither a mortgage deed nor an integral part of mortgage created by memorandum dated 31.12.2004 depositing title deeds. Exhibit P3 however, can be relied for finding out consent by mortgagee for execution of lease deed after creation of the mortgage. ii) Leases executed in favour of the appellants are leases who have been executed with the permission of the mortgagee which is evident by Annexure III to the Schedule A of agreement dated 27.12.2004, Ext.P3. iii) Leases granted after execution of the mortgage has to conform the provisions of Section 65A(2) of the 1882 Act. No contrary intention modifying any of the conditions in Section 65A(2) are present in the facts of the present case. iv) Consent of the mortgagee for execution of the lease deed cannot be treated as consent for execution of a lease contrary to the conditions as enumerated in Section 65A(2) of the 1882 Act. RP No.31/2020 in WA No.158/16 & conn.cases -:14:- v) Lease in favour of the appellants not being in accordance with Section 65A(2) of the 1882 Act, appellants are not entitled to for protection from dispossession under Section 14 of the 2002 Act. 3. The appellants challenged the judgment in the Writ Appeals by filing Special Leave Petitions before the Apex Court. They also produced three additional documents as well. When the matter came up for hearing before the Apex Court, petitioners were permitted to file review petition before this Court as those documents were not considered by this Court, while deciding the Writ Appeals. It is pursuant to the aforesaid direction that the above review petitions were filed. 4. Following are the documents produced by the petitioners: i) Counter affidavit filed by Ahammed Koya in I.A. No. 3089/2016 in O.S.No.410/2016. ii) Agreement dated 6/11/2009 executed between Young Men Christian Association of Calicut, as first party and Sri. Ahammed Koya as second party. RP No.31/2020 in WA No.158/16 & conn.cases -:15:- iii) Letter dated 6/11/2009 sent by Ahammed Koya to the Secretary, YMCA, Kozhikode. 5. On the basis of these documents, the contention urged by the counsel for the review petitioners is that the sale was held pursuant to a private treaty between YMCA, the debtor and Ahammed Koya. The leases in question were made known to Ahammed Koya, and he had agreed to purchase the property along with the tenants. The argument is that the terms of agreement dated 6/11/2009 and the terms reflected in the letter dated 6/11/2009 are to be considered as a private treaty, especially in the light of the fact that sale was on ‘as is where is basis’. It is further argued that while effecting sale of the property based on a private treaty, the Bank had virtually agreed to waive the advantage or benefit of Section 68A of the T.P. Act. 6. The only question to be considered in these review petitions is whether the additional documents produced by the review petitioners are enough to take a different view from what has been decided by this Court as per judgment dated 11/2/2016. 7. We have heard the learned counsel appearing on either RP No.31/2020 in WA No.158/16 & conn.cases -:16:- side. Though Ahammed Koya was impleaded as an additional respondent at the instance of the review petitioners, he did not file any counter affidavit to the review petitions. 8. Let us first consider the effect of the additional documents produced in the case to the facts of the present case. First document is the counter affidavit of Sri.Ahammed Koya filed in IA No.3089/2016 in OS No.410/2016. The counter affidavit only refers to a private treaty dated 6/11/2009 executed between Sri.Ahammed Koya and Y .M.C.A. We also find from the counter affidavit that the issue in the interlocutory application related to the use of the terrace portion of the plaint A schedule property. The veracity of the said counter affidavit has to be adjudged in the said suit. Therefore, the said document has no relevance in deciding the factual issues relating to this case, except to the extent of reference to a private treaty. 9. The second document is an agreement dated 6/11/2009 which is entered into between Y .M.C.A. of Calicut as first party and Sri.A.Ahammed Koya as second party. By virtue of the agreement, Sri.Ahammed Koya has agreed to purchase the RP No.31/2020 in WA No.158/16 & conn.cases -:17:- property with the new shopping complex known by name YMCA International Cultural Complex situated in an extent of 56.44 cents for a total consideration of `9 crores. The encumbrances/liabilities which existed over the building as on the date was to be separately listed, but no such list is made available. The sale had to be confirmed in the name of the second party subject to orders if any to be passed by the High Court in any pending proceedings. The preamble to the agreement however refers to the fact that YMCA had availed a loan from United Bank of India, Calicut Branch for construction of a new shopping complex. On account of various factors and delay in construction, the proposed building space could not be completed as intended. The loan accumulated to a sum exceeding `4.50 crores and that was after deducting `200 lakhs remitted by the second party. It is further indicated that “even the long lease arrangements made by first party with tenants to raise funds and to settle the loan did not yield any results as the balance remittance enabling settlement thereafter also exceeded in crores.” It was further indicated that the Bank had initiated RP No.31/2020 in WA No.158/16 & conn.cases -:18:- proceedings under the SARFAESI Act and the property was proclaimed for sale at a reserve price of `6,80,00,000/-. YMCA approached the High Court by filing WP(C) No.21200/2009 seeking for a direction to sell only a portion of the mortgaged property in order to discharge the liability due to the Bank. Though several attempts were made to find out a prospective buyer to purchase the old block, there was no result for the same. In the meantime, Sri.Ahammed Koya approached YMCA and the Bank with an offer to purchase the new block and land for a price of `9 crores. He also filed an affidavit expressing his willingness to purchase the new block for `9 crores. Bank agreed to the proposal before the High Court pursuant to which direction has been given to confirm the sale in favour of Sri.Ahammed Koya. This agreement though refers to the long term leases for discharging the liability, it does not state anything regarding the lessees rights or the fact that Sri. Ahammed Koya has agreed to purchase the said property, acknowledging the rights of the long term lessees. The agreement only indicates that Ahammed Koya had agreed to purchase the aforesaid property from YMCA subject RP No.31/2020 in WA No.158/16 & conn.cases -:19:- to orders being passed by the Court for a consideration of `9 crores. 10. Yet another document relied upon is a letter dated 6/11/2009 sent by Ahammed Koya to Secretary, YMCA, which reads as under:- “Sir, Sub: Settlement of Terms of Private Treaty regarding sale of 56 cents land and 4 storey Building “YMCA, International Cultural Complex”, YMCA Cross Road, Kozhikode to me by you as per Sarfaesi Act based on Sale Notice dt: 2.7.2009 issued by authorized-Officer of United Bank of India, Chennai. I hereby give consent for settling finally the following terms of Private Treaty between me and YMCA, Kozhikode regarding the sale of the above property. (a) Sale of the above property is on “As is where is basis”. (b) All the leases created as per Registered Lease Deed. Doct no:2673/2004 dated 22-5-2004, Doct No.2674/2004 dated 16-6-2004 Doct No.1321/2005 dated 17-12-2005 Doct No:1340/2005 dated 27-1-2005, Doct No:1341/2005 dt:27-1- 2005, Doct No:398/2007 dt: 2-4-2007, Doct No:629/2006 dt:30- 6-2005, Doct No:1000/2007 dt:24-12-2005 Doct No:738/2008 dt: 11-2-2008, of Sub Registrar, Kozhikode executed between YMCA and the lessees mentioned therein and also the Lease mentioned in the Lease Agreement dt 1-11-2006 executed by YMCA in favour of Gopalakrishnan alias Unny, are binding on me and persons claiming under me.” The aforesaid letter had been issued on 6/11/2009 apparently RP No.31/2020 in WA No.158/16 & conn.cases -:20:- before execution of agreement on the same day. This letter indicates that the registered documents created between YMCA and the lessees as well as lease agreement dated 1/11/2006 executed by YMCA in favour of Gopalakrishnan @ Unny are binding on Sri.Ahammed Koya and persons claiming under him. The subject mentioned in this letter itself states that it is settlement of terms of private treaty. Therefore, once the agreement is executed, this letter may not have any relevance. The agreement did not take note of the contents of the aforesaid letter, nor does it acknowledge the rights of any of the lessees. 11. The sale had been confirmed in the name of a firm in which Ahammed Koya was the Managing Partner. The contention urged by the firm is that, if at all Ahammed Koya had given any letter to YMCA, the firm is not bound by the same. The firm was constituted pursuant to a deed of partnership dated 26/11/2009 between Ahammed Koya and Sri.Rafeeque long after issuance of letter dated 6/11/2009. The said firm was reconstituted on 3/10/2013 and later on 5/10/2013. Ahammed Koya had not disclosed to the firm with regard to any undertaking given by him RP No.31/2020 in WA No.158/16 & conn.cases -:21:- to acknowledge the right of lessees, and he had no legal authority to bind the firm based on any such undertaking. 12. Before proceeding further, it will be useful to refer to the manner in which the sale had been concluded by the Bank. An advertisement was published by the Bank for sale of the secured asset either by public auction or by private treaty. In a writ petition filed by YMCA as WP(C) No. 21200/2009 and WP(C) No. 34358/2009 filed by 13 tenants in occupation of the building, a learned Single Judge of this Court had by an earlier order dated 17/9/2009 permitted YMCA as well as one Kuniyil Ashraf to consider the possibility of effecting private sale of the property. On 3/11/2009, the Court was told that the private sale in favour of Kuniyil Ashraf did not materialise. A submission was made that Ahammed Koya will purchase the property situated in the new block for a sum of `9 crores. This arrangement was agreed by the Bank and they were willing to confirm the sale in favour of Sri.Ahammed Koya provided the building will be handed over 'as is where is condition'. Accordingly, Bank was permitted to proceed with further steps for confirmation of sale and for RP No.31/2020 in WA No.158/16 & conn.cases -:22:- issuance of the sale certificate in the usual terms under the regular rules. It was further observed that the sale conducted pursuant to that order will be treated as a sale in accordance with Ext.P1 notification. The tenants sought for a direction to prohibit the Bank as well as YMCA from interfering with their rights. Their request was to permit them to redeem the mortgage created by the borrower by remitting the amounts due to the Bank. Since the sale was materialised, WP(C) No. 21200/2009 was dismissed as infructuous and the Court permitted the petitioners to withdraw WP(C) No.34358/2009 with liberty to approach the appellate authority. However, the Court directed that respondents 1 and 2 may not issue sale certificate pursuant to the sale effected in favour of Ahammed Koya for a short period in order to facilitate them to approach the appellate authority. The tenants filed Securitisation Application before the Debts Recovery Tribunal, which were ultimately dismissed pursuant to which the sale certificate was issued in the name of Ahammed Koya, who represented as Managing Partner of M/s Three Line Properties. 13. In terms of Rule 8(5) of the Security Interest RP No.31/2020 in WA No.158/16 & conn.cases -:23:- (Enforcement) Rules 2002, as it then existed, the authorized officer had to obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or part of such property by the methods specified under clauses (a) to (d), which reads as under:- “8. Sale of immovable secured assets xxxx (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:— (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty.” Therefore, sale of the property by private treaty is also permissible in terms of Rule 8(5)(d). Sub-rule (8) of Rule (8) as it then stood reads as under:- “Sale by any method other than public auction or public tender, shall be on such terms as may be settled between the parties in writing.” RP No.31/2020 in WA No.158/16 & conn.cases -:24:- Therefore, if the sale is not by public auction or public tender, the same shall be effected on such terms as may be settled between the parties in writing. Rule 9(6) and 9(10) reads as under:- “9.Time of sale, issues of sale certificate and delivery of possession, etc..xx (6) On confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising the power of sale shall issue a certificate of sale of the immovable property in favour of the purchaser in the form given in Appendix V to these rules.” “(10) The certificate of sale issued under sub-rule (6) shall specifically mention that whether the purchaser has purchased the immovable secured asset free from any encumbrances known to the secured creditor or not. “ 14. In the case on hand, going by the agreement dated 6/11/2009, it is Ahammed Koya who had offered to purchase the property from YMCA, the debtor. Neither the Bank nor the firm was a party to the said agreement. The agreement does not indicate that the purchaser had agreed to treat the petitioners as tenants of the shop rooms or to continue the tenancy. Therefore, the agreement does not render any assistance to the petitioners to review the judgment. 15. Existence of tenancy arrangement and the offer of RP No.31/2020 in WA No.158/16 & conn.cases -:25:- Ahammed Koya that he will be bound by such lease deeds is incorporated only in the letter dated 6/11/2009. M/s Three Line Properties pleads ignorance of the said letter. According to them, Ahammed Koya had not informed the firm about any such letter. Counsel for M/s Three Line Properties placed reliance on Section 22 of the Partnership Act to substantiate the contention that letter dated 6/11/2009 is not binding on the firm. Section 22 of the Partnership Act reads as under: “22. Mode of doing act to bind firm.—In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.” Reference is also made to the judgment of the Apex Court in Devi v. Mangalal R. Atharana and others (AIR 1965 SC 139), wherein it was held that in order to bind the firm under Section 22 of the Partnership Act, the act should be done or the instrument should be executed in the name of the firm. 16. Ahammed Koya, of course is not a stranger to the transaction by which the firm had purchased the property. The moot question is whether the arrangement he had with YMCA RP No.31/2020 in WA No.158/16 & conn.cases -:26:- would bind the firm. It is apparent that letter dated 6/11/2009 was issued by Ahammed Koya in his personal capacity and not as a partner of the firm. The offer to purchase property from the Bank was also made by Ahammed Koya in his personal capacity. The firm was constituted only on 26/11/2009. Bank had issued sale confirmation letter dated 2/12/2009 in the name of Ahammed Koya, representing as Managing Partner of the firm. Sale certificate was registered on 23/8/2013 in the name of the firm represented by its partners Ahammed Koya and Rafeeque. Facts therefore disclose that though Ahammed Koya in his personal capacity had dealt with the Bank and the debtor, in so far as the firm was not even in existence at the relevant time and was constituted only after the deal was struck, any promise given by Ahammed Koya in his personal capacity will not bind the firm. 17. Another aspect, which looms large is that, when an agreement is executed on 6/11/2009 between the debtor and Ahammed Koya, without in any way undertaking the obligation in relation to the tenancies, the very purpose of issuing such a letter dated 6/11/2009 on the same day is not known. None of RP No.31/2020 in WA No.158/16 & conn.cases -:27:- the parties to the said letter had come forward to explain under what circumstances the said letter had been issued. Even otherwise, assuming that Ahammed Koya had given a letter dated 6/11/2009 to YMCA, despite the fact that it does not form part of the agreement, still there is no material to indicate that Ahammed Koya had informed the said fact to the firm M/s Three Line Properties as Three Line Properties was constituted only on 26/11/2009 wherein Ahammed Koya was a partner along with one Rafeeque. 18. Still further, the certificate of sale was registered in favour of the firm on 23/8/2013 which also does not indicate that there was any encumbrance in the property. Therefore, we do not think that the documents produced by the review petitioners can have any bearing on the factual issues considered by this Court, warranting review of the judgment. 19. Learned counsel points out that when the property is sold as is where is basis, it takes in the right of the lessees as well. Perusal of the agreement dated 6/11/2009 between Ahammed Koya and YMCA would indicate that there was only the RP No.31/2020 in WA No.158/16 & conn.cases -:28:- liability towards the Bank and no other liability had been undertaken by Ahammed Koya. Of course, learned counsel for the review petitioners would submit that there is a list appended, which is not seen. It is for the petitioners to produce any such list, if at all it is available. In the absence of any such list, it cannot be presumed that Ahammed Koya had undertaken to treat the tenants as the tenants of the purchaser of the property. 20. There is no dispute about the fact that all these tenancies which are relied upon by the review petitioners were created after the mortgage. This Court had already considered the effect of such leases with reference to S.65A of the T.P . Act. The contention urged by the review petitioners is that in view of the private treaty between the parties, the provisions of S.65A of the T.P . Act has been waived by the 2nd respondent. Still further, learned counsel for the review petitioners would contend that by accepting the private treaty, the Bank had waived their right to question the lease deeds being in violation of S.65A of the T.P.Act. Learned counsel placed reliance on a Full Bench judgment of this Court in Saurabh Jain (Dr) and Others v. State of Kerala RP No.31/2020 in WA No.158/16 & conn.cases -:29:- and Others (2011 (1) KHC 680)) wherein this Court after referring to the seminal work of Spencer Bower and Turner on Estoppel, extracted the text on waiver, which reads as under:- “Where a statute requires something to be done by one of the parties to an instrument or transaction as a condition of its validity, which, therefore, is not made by the statute absolutely illegal and void in itself, but only contingently so, it may be contended with considerable force that there is no reason why the party entitled to insist on a fulfilment of the statutory condition should not be allowed to waive his right, either by express agreement or consent, or by acts of conduct having the effect of precluding him from asserting the illegality of the instrument or transaction- an effect which can be nothing less than a form of estoppel. The soundness of this contention in any particular case, whether of express contract or of estoppel (for the principles which govern the former obviously govern the later also), depends upon the question whether the right which is abnegated is the right of the party alone, or of the public also, in the sense that the general welfare of the community, or the interests of the class of persons whom it is the object of the law to protect, cannot be secured in the manner intended without prohibiting the waiver or estoppel..” Assuming that the principle of waiver applies to the fact situation, the secured creditor had at no point of time waived their right to enforce the mortgage in accordance with law. They have in clear RP No.31/2020 in WA No.158/16 & conn.cases -:30:- terms stated that the sale is free from encumbrances and they have taken up a contention before the Chief Judicial Magistrate that the lease deeds executed after the mortgage are invalid. Therefore, the contention that the Bank had waived their rights on account of the private treaty between the debtor and Ahammed Koya will not stand the scrutiny of law. That apart, no such contention was taken earlier. Even assuming that the principle of waiver would apply to the fact situation, there is nothing on record to suggest that the mortgagee had waived their right to sell the property, acknowledging the right of the tenants. 21. Referring to a Full Bench judgment of this Court in Mathew v. Ayyappankutty [1962 KLT 61], learned counsel for the review petitioners submitted that the lease deeds executed by the mortgagor after creation of the mortgage in favour of the review petitioners are not void documents and cannot be ignored. At best those lease deeds would be voidable at the option of the mortgagor. He also placed reliance on the Elements of Law by Sir William Markby-Sixth Edition, wherein, at paragraph 274, the RP No.31/2020 in WA No.158/16 & conn.cases -:31:- learned author had succinctly made a distinction between the word 'void' and 'voidable'. We don't think that such a question had arisen at this stage of the proceedings. The validity of the lease deeds had been considered by the Chief Judicial Magistrate and it was found that the leases were invalid as it was executed subsequent to the creation of the mortgage without complying with the provisions of the S.65A of the T.P .Act. The said view had already been upheld by this Court in the impugned judgment. 22. We have already held that the documents now produced are not enough to review the judgment for the reasons stated above. Rule 8(8) had underwent an amendment w.e.f. 4/11/2016 wherein specific mention had been made that sale by any method other than public auction or public tender shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing. Even before the amendment, Apex Court in Mathew Varghese v. M.Amrithakumar and Others [(2014) 5 SCC 610], held that “as far as sub-rule (8) is concerned, the parties referred to can only relate to the secured creditor and the borrower.” Therefore, the private treaty RP No.31/2020 in WA No.158/16 & conn.cases -:32:- mentioned under the unamended rules under normal circumstances ought to be between the secured creditor and the borrower and not between the borrower and the purchaser. However, after the amendment, the Statute itself had clarified the position and had made it clear that the private treaty should be between the secured creditor and the proposed purchaser. But in the cases on hand, the sale came to be effected when this Court interfered in the matter and all the parties had appeared before this Court and it is pursuant to orders passed by this Court that the sale was confirmed. Those orders had become final and the rights of the petitioners had already been adjudicated by this Court in express terms which does not require interference. Such a contention had been raised earlier as well and once it is held that the lessees do not have any right to prevent possession being taken, the same issue cannot be re-agitated on the grounds which were available even earlier. 23. It is also contended by the learned counsel for the review petitioners that the Bank cannot invoke S.14 of the SARFAESI Act after sale of the property. This issue however is RP No.31/2020 in WA No.158/16 & conn.cases -:33:- covered by the judgment of the Apex Court in ITC Limited v. Blue Coast Hotels Limited and Others [(2018) 15 SCC 99] and therefore, it does not call for any further adjudication. 24. In the light of the aforesaid findings, we do not find any valid grounds to review the judgment. Review petitions are, therefore, dismissed. Sd/- A.M.SHAFFIQUE JUDGE Sd/- GOPINATH P. Rp JUDGE RP No.31/2020 in WA No.158/16 & conn.cases -:34:- APPENDIX OF RP 51/2020 REVIEW PETITIONERS' EXHIBITS: ANNEXURE A1 A TRUE COPY OF IA NO.5/2016 DATED 24.08.2016 IN SLP(CIVIL) NO.4665/2016 FILED BY THE PETITIONERS IN THE HON'BLE SUPREME COURT OF INDIA ALONG WITH THE ACCOMPANYING AFFIDAIVT AND ANNEXURES AI, AII AND AIII ANNEXURE A2 A TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE ERD RESPONDENT IN IA NO.5/2016 DATED 27.08.2016 FILED IN SLP(CIVIL) NO.4665/2016 BEFORE THE HON'BLE SUPREME COURT OF INDIA WITHOUT THE ANNEXURE ANNEXURE A3 A TRUE COPY OF THE ORDER DATED 03.10.2019 PASSED BY THE HON'BLE SUPREME COURT OF INDIA IN SLP (CIVIL) NO.4665/2016 WITH SLP(CIVIL) NO.5109/2016 AND SLP (CIVIL) NO.5141/2016 ANNEXURE A4 A TRUE COPY OF THE COUNTER AFFIDAVIT DATED 16.08.2016 ACCOMPANIED BY A TRUE COPY OF THE AGREEMENT DATED 06.11.2009 BETWEEN THE 1ST RESPONDENT AND SRI.AHAMMED KOYA IN RESPECT OF THE PROPERTY IN QUESTION WITHOUT THE LIST AND A LETTER DATED 06.11.2009 GIVEN BY SRI.AHAMMED KOYA TO THE 1ST RESPONDENT CONTAINING FINAL SETTLEMENT OF THE TERMS OF THE PRIVATE TREATY/AGREEMENT DATED 06.11.2009 BETWEEN THE 1ST RESPONDENT AND SRI.AHAMMED KOYA IN RESPECT OF THE PROPERTY IN QUESTION FILED BY SRI.AHAMMED KOYA, 2ND RESPONDENT INIA 3089/2016 IN OS 410/2016 OF THE ADDL.MUNSIFF COURT, KOZHIKODE RP No.31/2020 in WA No.158/16 & conn.cases -:35:- ANNEXURE A5 A TRUE COPY OF AFFIDAVIT DATED 19.10.2016 FILED BY SRI.AHAMMED KOYA, THE SECOND DEFENDANT IN OS 410/2016 ON THE FILE OF THE MUNSIFF COURT KOZHIKODE(IA) ANNEXURE A6 A TRUE COPY OF THE AFFIDAVIT DATED 01.10.2016 FILED BY THE 1ST RESPONDENT IN IA 3315/2016 IN OS 410/2016 ON THE FILE OF THE MUNSIFF COURT KOZHIKODE-1A ACCOMPANIED BY THE LETTER DATED 06.11.2009 ISSUED BY SRI.AHAMMED KOYA TO THE 1ST RESPONDENT ANNEXURE A7 A TRUE COPY OF THE ORDER DATED 24.10.2017 PASSED BY THIS HON'BLE COURT IN OP(C03068/2017 ANNEXURE A8 A TRUE COPY OF THE JUDGMENT DATED 10.06.2013 PASSED BY THIS HON'BLE COURT IN OP(DRT) NO.1982/2013 ANNEXURE A9 A TRUE COPY OF IA 12256/2009 DATED 30.09.2009 IN WP(C)NO.21200/2016 OF THIS HON'BLE COURT AND THE ACCOMPANYING AFFIDAVIT FILED BY SRI.AHAMMED KOYA ANNEXURE A10 A TRUE COPY OF IA NO.127273/2017 DATED 24/11/2017 IN SLP (CIVIL) NO.4665/2016 FILED BY THE PETITIONERS IN THE HON'BLE SUPREME COURT OF INDIA. ANNEXURE A11 A TRUE COPY OF THE WRITTEN STATEMENT DATED 17/03/2010 FILED BY THE 1ST DEFENDANT IN SA 18/2010 ON THE FILE OF THE DEBT RECOVERY TRIBUNAL, ERNAKULAM. ANNEXURE A12 A TRUE COPY OF LETTER DATED 17/11/2009 ISSUED BY 2ND RESPONDENT TO SHRI AHMED KOYA. RP No.31/2020 in WA No.158/16 & conn.cases -:36:- ANNEXURE A13 A TRUE COPY OF WRITTEN STATEMENT DATED 04/01/2017 FILED BY THE 3RD RESPONDENT HEREIN IN OS NO.410/2016 ON THE FILE OF THE ADDITIONAL MUNSIFF COURT, KOZHIKODE. ANNEXURE A14 A TRUE COPY OF THE PARTNERSHIP DEED DATED 26/11/2009 EXECUTED BETWEEN THE 8TH RESPONDENT AND SRI. RAFEEQUE. RESPONDENT'S EXHIBITS: ANNEXURE R3(A) COPY OF THE LETTER OF CONFIRMATION OF SALE. ANNEXURE R3(B) COPY OF THE SALE CERTIFICATE DATED 23/08/2013. ANNEXURE R3(C) TRUE COPY OF THE LETTER DATED 14/10/2019 ISSUED BY THE 1ST RESPONDENT. ANNEXURE R3(D) TRUE COPY OF THE JUDGMENT DATED 23/12/2009 IN WP NO. 21200/2009. ANNEXURE R3(E) TRUE COPY OF THE REVIEW PETITION NO.659/2013 IN WP NO.18362/2013 FILED BY THE 3RD RESPONDENT. ANNEXURE R3(F) TRUE COPY OF THE JUDGMENT DATED 16/08/2013 IN RP NO.659/2013 IN WP 18362/2013. ANNEXURE R3(G) TRUE COPY OF THE STATEMENT OF ACCOUNT FROM 30/11/2009 TO 24/03/2010 OF THE 3RD RESPONDENT FIRM. ANNEXURE R3(H) TRUE COPY OF THE LETTER DATED 21/11/2013 ISSUED TO THE INCOME TAX OFFICER, WARD NO.2 OF KOZHIKODE BY THE 3RD RESPONDENT FIRM. "