Supreme Court Clarifies: Tenant’s SARFAESI Protection Depends On Establishing Pre-Mortgage Tenancy

The Supreme Court held that tenants cannot claim protection under the SARFAESI Act unless they prove their tenancy existed before the property was mortgaged.

The case involved PNB Housing Finance taking possession of a property after the borrower defaulted. A tenant who claimed to be living there since 1987 couldn’t produce proof showing the tenancy predated the 2017 mortgage.

The Court overturned a Calcutta High Court order that had restored possession to the tenant, holding that oral agreements or unregistered leases aren’t enforceable under the SARFAESI Act.

The court reaffirmed that tenants must present clear evidence, like rent receipts or tax bills, to resist eviction. (PNB Housing Finance Limited vs. Sh. Manoj Saha & Anr.)