Property Sold In Auction Cannot By Itself Be Ground To Evict Existing Tenants: Jharkhand High Court
The Jharkhand High Court has held that the sale of a property by the Bihar State Financial Corporation (BSFC) cannot, by itself, be a ground to evict tenants occupying the premises, observing that eviction can only be sought in accordance with the grounds prescribed under the Jharkhand Building (Lease, Rent and Eviction) Control Act.
A Single Judge Bench of Justice Ananda Sen was hearing a petition filed by tenants challenging a notice issued by BSFC directing them to vacate the premises on the ground that the property had already been sold.
The premises originally belonged to M/s Sahu Hotel, which had taken a loan from BSFC. Following default, BSFC auctioned the property. The tenants, who were running shops in the premises, had not participated in the auction. After the auction, BSFC issued a notice directing them to vacate.
The Court rejected the basis for the eviction notice, holding that the mere fact that the property had been sold could not justify eviction of the existing tenants. It observed:
“The fact that the property has been sold cannot be a ground to evict the tenants. The law of tenancy is governed by the Jharkhand Building (Lease, Rent and Eviction) Control Act. The grounds mentioned in the Act can only lead to eviction. Thus, the respondent-BSFC could not have issued the impugned letter directing eviction. It is for the landlord to evict the tenants in consonance with the Jharkhand Building (Lease, Rent and Eviction) Control Act.”
The Court further noted that BSFC had taken possession of the property and, for all practical purposes, was to be treated as the landlord until the property was transferred to a purchaser.
Accordingly, the Court directed the tenants to pay rent to BSFC. In case of any default in payment of rent, BSFC would be entitled to take appropriate steps for eviction in accordance with the Jharkhand Building (Lease, Rent and Eviction) Control Act.
The Court further clarified that if BSFC subsequently transferred the building to another person, the tenants would thereafter pay rent to the new owner, with BSFC informing the existing tenants of the transfer.
The writ petition was accordingly disposed of.
Case: Kanti Lal Jain and Ors v. State of Jharkhand and Ors.
Case No.: W.P.(C) No. 3104 of 2017
Appearance: For the Petitioners – Mr. Indrajit Sinha, Advocate and Mr. Ashwini Priya, Advocate and Ms. Sanjana Shrestha, Advocate. For the Respondents – Ms. Nirupama, AC to Sr. SC-II and Mr. Ashok Kumar Yadav, Advocate.