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Mayur   21 June 2018

Can sarfaesi compliant agricultural land can be taken under possession by bank?

Can SARFAESI Compliant Agricultural land can be taken under possession by Bank in case the borrower defaults in payment of working capital loan... The agricultural land is having rubber plantations and it is located in Kerala state? Please guide and throw some light


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 2 Replies

Raghav Arora   21 June 2018

Hi! Thanks for the question!

The SARFAESI Act does not apply to any security interest created in an agricultural land. If it is used for residential purposes then it can be snipped under the ambit. However,

The Supreme Court in the decision in SARIF ABIBI MOHMED IBRAHIM'S CASE, referred above, held:

"Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case having regard to the facts and circumstances of that case. There may be factors both for and against a particular point of view. The Court has to answer the question on a consideration of all of them,thus it is a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts."

So, the facts and circumstances of the case will decide whether the land can be attached by bank or not. There is no rigid formula and the provision is subject to flexibility and changes according to the case.

I hope you have some clarity now! Good Luck!

Dipesh Sharma   22 June 2018

no SARFAESI ACT does not apply in case of agricultural land

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