SAHARA INDUSTRIES Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) By means of this writ petition, the petitioners have sought the following reliefs:-

(2.) Brief facts giving rise to the present writ petition, according to the petitioners, are that petitioner No. 1 is a partnership firm and is engaged in the business of processing of seeds and Mr. Vijay Singh son of Mr. Babu Singh is its partner. In the year 2010, petitioner No. 1 firm took a loan from the respondent Bank under Cash Credit Limit facility to the tune of Rs. 65 lacs and a term loan of Rs. 5 lacs, which were paid to the petitioners on 6.6.2010. On 9-11-2011, the respondent-Bank issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act, 2002) of sixty days informing that the accounts of the petitioner company have been classified as non-performing asset (NPA) in accordance with the directive/guidelines relating to asset classifications of the Reserve Bank of India as mentioned in paragraph No.4 of the writ petition and demanded the payment of the secured debt from the petitioners. The total outstanding amounts of the two loans have been mentioned to the tune of Rs. 69.52.680-00. The petitioner No.l filed objection/representation to the notice and also sent reply of the letter dated 9-11-2011 sent by the respondent Bank on 7-12-2011 mentioning therein that the respondent Bank has wrongly classified the account of the petitioner No. 1-firm as NPA and that too against the guidelines and directives of the RBI. The petitioner No.l in reply to the letter of the respondent Bank has mentioned that the land of Plot No. 312/5 area 0.444 hectare situated at village Meghavala Tehsil Jaspur, District Udham Singh Nagar recorded in the name of Smt. Ramesh Devi is an agricultural land and that the agricultural activities are going on over the said land. According to the petitioners the said land being agricultural land is beyond the purview of the SARFAESI Act. 2002 as per provision of Section 31 (i), which provides that the provisions of this Act shall not apply to any security interest created in agricultural land.

(3.) The main ground of challenge advanced by the petitioners is that the respondent-Bank has wrongly classified the accounts of the petitioners as NPA and against the guidelines and directives of the Reserve Bank of India and no proceeding of recovery can be initiated under the SARFAESI Act, 2002, since the land in question is an agricultural land.