Equitable mortgage
Madhur Singh
(Querist) 01 January 2012
This query is : Resolved
I have purchased some Agricultural land through Registered Sale Deed. Is this Registered Sale Deed can be accepted for an equitable Mortgage by the Bank? If not then why?
Advocate. Arunagiri
(Expert) 01 January 2012
No. But, you can get agricultural loan based on this lands.
Madhur Singh
(Querist) 01 January 2012
Sir, In which provision the same Sale Deed is not acceptable for equitable Mortgage?
Advocate. Arunagiri
(Expert) 01 January 2012
Banks can not take possession of the agricultural lands, that is why the banks are not accepting mortgage of the agricultural lands.
Advocate M.Bhadra
(Expert) 01 January 2012
Agricultural land may not be as secured assets of the bank and there are prohibition of taking possession of agriculture land and Bank would not be able to create equitable mortgage.But you can try for a loan for agriculture purpose without any mortgage.
Madhur Singh
(Querist) 01 January 2012
Sir, I want to know in which Act or provision ,Banks can not take possession of the Agricultural lands in case of Equitable mortgage.
malipeddi jaggarao
(Expert) 02 January 2012
There are administrative guidelines to the Banks not to accept agricultural land as security for any loans which are extended for non-agriculture purpose. Apart from that, only sale deed is not sufficient. The link documents for the last 30 years showing the passing of the title is also required. For some banks it is 13 years and for some banks it is 30 years. Even to extend agricltural loan, you may have to produce evidence from revenue records showing that the possession is with you.
prabhakar singh
(Expert) 03 January 2012
No mortgage would be acceptable in your case to banks.
J K Agrawal
(Expert) 03 January 2012
Dear MR Madhur
Please go through your states Tenancy Act. You will find a section in this regard that agriculture land can not be attached.
vertually you are not owner of Agricultural Land. The Owner of land is the State Only. Your are Tenant and have cultivation rights only. When you purchase or sell an agricultural land, You only purchase or sell cultivation rights thereon.
RAJU O.F.,
(Expert) 03 January 2012
Equitable mortgage can be created by banks on deposit of title documents (not only registered sale deed but all the parent/ subsidiary documetns) of the agricultural properties also. There is no law preventing banks from accepting agricultural properties as security of loans, although in some states, only agrl. loans caould be given. Execpt under the SARFAESI Act, agricultural property security can be attached and sold thorugh DRT/ civil courts. Under SARFAESI Act only security interest in agricultural property cannot be enforced.
