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Rajnish Kumar   30 November 2021

sale of Agriculture land under SARFAESI Act

is there any way to sell mortgage agriculture land in favour of financial institutions through SARFAESI if not then what are other legal recourse to recover dues?


 3 Replies

Megha   10 January 2022

Is the land mortguaged in your favour?

Aryan Raj   11 January 2022

In response to your query, 

I think you need a verification document from the mortgagee like a certificate of no objection in order to proceed with the sale, that is if the land is mortgaged in your favor as mentioned by learned member @Megha. 


Aryan Raj 


Megha   11 January 2022


To proceed with your query, we will have to first refer to the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

Section 31(i) excludes application of the provisions of the Act on any security interest created in an agricultural land.  This brings us to the question of what constitutes an agricultural land.  The Hon'ble Supreme Court vide its judgment in the case of  Indian Bank v. K. Pappireddiyar held as follows: 

         "“The classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was being put on the date of the creation of the security interest and the purpose for which it was set apart.

Once the nature of land is established, the question of creation of security comes into play.  If the land is indeed agricultural, then the provision of SARFAESI Act will not apply.  However, if the land is non-agricultural (ex, residential house constructed on agri land) and registered, you may invoke the provisions of the Act.  

Best regards,

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