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Anirban Sarkar (Service)     17 June 2016

Leased land as security

We represent a Mega Food Park in a PPP model for set up of Food Processing industries by entrepreneurs. Here we are offering land on 33 years lease and this land can be mortgaged as per our Lease deed. However Bank says it cannot accept the leased land as Security when it comes to finance the project since it does not have realisable value. Q. If customer defaults in payment to Bank, can the land not act as a Security? Is it justifiable for the Bank not to accept it as Security? This is the standard structure for all Food Parks. Request a solution please


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 1 Replies

adv.bharat @ PUNE (Lawyer)     17 June 2016

NA land can be kept as security for payment of money. Since ur land is on long lease it can't be kept as security for payment of money.


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