Mortgage of Agricultural Land


Want to know, Is there any law which prohbits the mortgage of Agricultural Land in Kerala ?

If no, whether any permission is needed from the revenue / other authority ?

 
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Lawyer

Forum Moderator

 I dont think there can be any prohibition for creating a mortgage of agricultural lands. Nor any permission need to necessary.

 
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Service

agriculture land is state subject. there are some some state that prohibits mortgage over agriculture land.

Suresh

 

 
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Practically; many a time when approached to the bankers; they don't accept agricultural lands as security.

 
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Advocate

Practically; many a time when approached to the bankers; they don't accept agricultural lands as security."

Mr. Surendra, the reasons could be many. One could be that you cannot proceed against such properties under SARFAESI Act

 
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Banks never discourage Agriculture lands as security.  Though the same is excluded from the purview of SARFAESI Act for possession by the lender in case of default, there is statutory obligation on the part of nationalised banks to accept them as Prime as Collateral security to comply by the Priority Sector norms fixed.  No state can exclude Agricultural lands as security.

 
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Asst.Manager Legal

there are states like karnatak which prohibits mortgage of agri land for any other purposes other than agri purposes....

 
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Of course Agricultural lands are accepted as Security only for loans granted for Agricultural activities as per Priority Sector Advances norms.

 
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Can the banks sell the Agricultural Properties under SARFASI or any other means from a Borrower on his Account become NPA on 31.03.2011. What is the  procedure for recovery once the account become NPA

 

Regards

 

Satish

 
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Advocate

Banks/FI can not sell secured agricultural properties directly, under the SARFAESI Act.  But such properties can be sold by filing suits in civil courts or DRT

 
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