SARFAESI ACT attachment of agricultural property
KAMARAJ BHARATHY G
(Querist) 02 February 2010
This query is : Resolved
a land is actually used as residential or industrial land, which is agricultural land as per revenue record. But, there is no cultivation in the land and the land is used purely residencial or industrial with building pland approval from local body not from town planning department.
In this circumstance, the owner of the property gets loan from bank and he mortgaged the same property as security to the loan. Subsequently the loan become NPA. In this circumstance the bank can attach the property under SARFAESI, even though property is classified as agricultural land, there is no cultivation and there is building and factory. If any bank favorable judgement of Madras High Court or Supreme Court, kindly give me.
YOURS
KAMARAJ BHARATHY
Raj Kumar Makkad
(Expert) 02 February 2010
Yes. Bank can attach such property because it is mortgaged with the bank and loan has become NPA.
Parveen Kr. Aggarwal
(Expert) 02 February 2010
Section 31(i)of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 provides that the provisions of the Act shall not apply to any security interest created in agricultural land. It is to be seen from all the attending circumstances whether the land mortgaged is agricultural land or not. This is a question of fact and can be acertained by a number of factors. Inter alia, while executing the loan documents (mortgage documents) how the land has been described is one of the main factors.
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