PNB HOUSING FINANCE LIMITED versus SH. MANOJ SAHA & ANR

Citation: [2025] 7 S.C.R. 1041 · Decided: 15-07-2025 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2025] 7 S.C.R. 1041 : 2025 INSC 847
PNB Housing Finance Limited 
v. 
Sh. Manoj Saha & Anr.
 (Civil Appeal No. 9492 of 2025)
15 July 2025
[Pamidighantam Sri Narasimha and  
Joymalya Bagchi,* JJ.]
Issue for Consideration
Whether the High Court erred in directing the appellant to hand 
back the possession of the secured asset to the 1st respondent; 
whether the 1st Respondent failed to establish pre-existing tenancy 
in his favour.
Headnotes†
Securitisation and Reconstruction of Financial Assets and 
Enforcement of Security Interest Act, 2002 – s.13(2), (4) – West 
Bengal Premises Tenancy Act, 1997 – 1st Respondent claimed 
to be a tenant of the secured asset since 1987, through an 
unregistered tenancy agreement – Tenancy expired in 1992, 
however, 1st Respondent alleged that he continued as a monthly 
tenant – Landlord sold the secured asset to 2nd Respondent-
borrower in 2007 who later took a loan from the Appellant in 
2017 against creation of security interest on the premises – 
Loan account not serviced, became a NPA – Demand notice 
issued u/s.13(2) in 2021 – Eventually, physical possession of 
the secured asset was taken by the Appellant – 1st Respondent 
sought back possession of the secured asset, High Court 
directed restoration of possession – Interference with:
Held: Onus lies on tenants claiming through an oral/unregistered 
agreement to produce rent receipts, property/water taxes receipts, 
electricity charges, etc., to establish the creation of a valid tenancy – 
Even then, such tenancies created through an oral/unregistered 
agreement would not continue beyond one year from issuance 
of notice u/s.13(2) and the tenant upon expiry of the said period 
shall be deemed to be a ‘tenant in sufferance’ – Although, 1st 
Respondent claimed he was a tenant in the secured asset from 
* Author
1042
[2025] 7 S.C.R.
Supreme Court Reports
1987, he was unable to place on record any rent receipt, tax 
receipt or electricity bill evidencing continued occupation of the 
premises prior to issuance of demand notice u/s.13(2) – He only 
relied on documents showing deposit of rent with Rent Controller 
from January 2022 to December 2022, that is, after demand notice 
was issued by the Appellant – Mere reference to some pre-existing 
tenancy in the sale deed or issuance of letter of attornment by 
2nd Respondent-borrower unsubstantiated by independent and 
convincing possessory evidence would not establish a compelling 
case of pre-existing tenancy in favour of 1st Respondent – Evidence 
adduced by 1st Respondent before the DRT with regard to prior 
tenancy not convincing – Further, institution of the ejectment suit by 
2nd Respondent may not be a determining factor as the possibility 
of setting up a sham and collusive suit to defeat the claim of the 
Appellant cannot be ruled out – Furthermore, 1st  Respondent 
had also failed to take prompt steps to protect his interest in the 
secured asset – Only after physical possession had been taken 
over by the Appellant, did he approach the DRT for restoration 
of possession – A mandatory order restoring status quo ante 
necessitates a compelling case which 1st Respondent failed to 
establish – His indifferent conduct and failure to produce rent 
receipts and/or other evidence regarding continued possession 
prior to issuance of demand notice u/s.13(2) does not justify a 
mandatory order – Impugned order set aside – Status quo to 
be maintained in respect of the secured asset till the disposal of 
securitization application – Security Interest (Enforcement) Rules, 
2002 – r.8(1), (2). [Paras 18, 23-26]
Securitisation and Reconstruction of Financial Assets and 
Enforcement of Security Interest Act, 2002 – s.18 – Physical 
possession of the secured asset was taken by the Appellant – 
1st Respondent claimed to be a tenant of the secured asset, 
filed a securitization application, inter alia, praying for handing 
back possession of the secured asset – An interim application 
seeking stay of notice u/s.13(4) and other reliefs was also 
filed – DRT held the claim of tenancy was based on an 
unregistered instrument and neither borrower nor the tenant 
had intimated the Appellant about the tenancy at the time of 
creation of mortgage – Interim relief rejected by DRT, matter 
fixed for final hearing – Order challenged by 1st Respondent 
before High Court u/Art.227 – High Court directed restoration 
of possession – Propriety:
[2025] 7 S.C.R. 
1043
PNB Housing Finance Limited v. Sh. Manoj S

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