Drt surfasei act: is poultry farm a agri business

Priti (Querist) 11 September 2021 This query is : Resolved
Dear Experts
I purchased a poultry farm in an auction of bank done under SURFASEI ACT 5 years ago. But still has not got possession of property. Case is in DRT for final arguments and applicant lawyer is raising the issue that poultry farm is a agricultural business and propert cannt be sold by bank. Although auctioned property is fully constructed and within a boundary wall and no agricultural activity is being carried out on this. Pls give your advice or share any judgments in which poultry was not considered as agri business by DRT/DRAT. Thanks & Regards
Preeti

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This discussion explores whether a poultry farm qualifies as an agricultural business, particularly in the context of the SARFAESI Act and property auctions through DRT. While some legal interpretations and high court rulings include poultry farming under the broad definition of agriculture, its classification can be debated, especially when considering the specific intent and provisions of the SARFAESI Act versus other agricultural land acts. The key issue is whether the property, even if a poultry farm, is subject to sale by a bank under the SARFAESI Act, especially if it's fully constructed and not actively used for cultivation.

kavksatyanarayana (Expert) 11 September 2021
When a property is auctioned by DRT, after registration of a document in Registrar Office or a sale certificate issued by DRT, possession will be given generally. So after the auction is done, why there is a case. But you have to pursue the matter with DRT. I think DRAT is not related to your issue.

Priti (Querist) 11 September 2021
My question is... Is poultry farm covered under SURFASEI act or it is considered as a agricultural business.

kavksatyanarayana (Expert) 12 September 2021
The property which is pledged to the bank, that property comes under SARFASEI.

K Rajasekharan (Expert) 12 September 2021
In paragraph 4 and 9 of the judgement linked below, the Bombay High Court says," agriculture" has been defined as including Horticulture, the raising of crops grass or garden produce, dairy farming, poultry farming, stock breeding and grazing”.

Poultry is a subject taught in agricultural universities and therefore it can be considered as part of agriculture but it seems for income tax purpose income from poultry is not treated as part of the agricultural income.

Anyway, whether the Supreme Court has reached on a settled position in this matter is not known. Both sides have enough points to argue in this issue unless an authoritative SC judgement in regard to the in question is found out.
https://indiankanoon.org/doc/533479/

Priti (Querist) 12 September 2021
Thanks Rajashekharan ji

Dr J C Vashista (Expert) 13 September 2021
Poultry is part of agriculture, it is a well settled law.

P. Venu (Expert) 19 September 2021
Words can have different meanings depend upon the context. Supreme Court has held in another case that agriculture in the primary sense denotes cultivation (CIT v. Raja Benoy Kumar Sahas Roy 1957 AIR 768=1958 SCR 101).

The word agriculture has its origin from ager, agr- field and cultura – growing, cultivation (Concise Oxford Dictionary). In this context, it could be argued that poultry is not strictly an agricultural operation.

The decision of the Bombay High Court in the case of Nathubhai Gandabhai Desai vs The State Of Bombay had been based on the specific provisions under the Bombay Tenancy and Agricultural Lands Act, 1948. Section 2 of the Act defines "agriculture to be -

"(1) “agriculture” includes-
(a) the raising of annual or periodical crops and garden produce,
(b) horticulture,
(c) the planting and upkeep of orchards,
(d) the reserving or using of land for fodder, or thatching grass, and
(e) the use by an agriculturist of the land held by him or a part thereof
for grazing of his own cattle."

However, SARFAESI Act is not pari materia with with the Bombay Act . Hence the decision could be argued to be not relevant in the instant case esp. because of the provisions of Section 31 of the latter enactment -

"31. Provisions of this Act not to apply in certain cases.—The provisions of this Act shall not apply to—
(a) a lien on any goods, money or security given by or under the Indian Contract Act, 1872 (9 of 1872) or the Sale of Goods Act, 1930 (3 of 1930) or any other law for the time being in force;
(b) a pledge of movables within the meaning of section 172 of the Indian Contract Act, 1872 (9 of 1872);
(c) creation of any security in any aircraft as defined in clause (1) of section 2 of the Aircraft Act, 1934 (24 of 1934);
(d) creation of security interest in any vessel as defined in clause (55) of section 3 of the
Merchant Shipping Act, 1958 (44 of 1958);

* * * * *
(f) any rights of unpaid seller under section 47 of the Sale of Goods Act, 1930 (3 of 1930);
(g) [any properties not liable to attachment (excluding the properties specifically charged with the debt recoverable under this Act)]or sale under the first proviso to sub-section (1) of section 60 of the Code of Civil Procedure, 1908 (5 of 1908);
(h) any security interest for securing repayment of any financial asset not exceeding one lakh
rupees;
(i) any security interest created in agricultural land;
(j) any case in which the amount due is less than twenty per cent. of the principal amount and interest thereon"

Please note the term "agricultural land" at sub-section (i) above.

Priti (Querist) 20 September 2021
@ P. Venu. Thankyou so much for your Expert advice. I do agree with your comments

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