ESHWAR PURUSHOTHAMAN Vs. AUTHORISED OFFICER

JUDGEMENT

(1.) This writ petition at the instance of the borrower, challenges the recovery proceedings initiated by invoking the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act") principally on the ground that the secured asset is an agricultural land and as such, the Bank was not legally correct to invoke the provisions of SARFAESI Act.

(2.) Since the petitioner was not in a position to pay the entire loan amount within the time granted by the Bank, application was given for one-time settlement. However, the proposal was not considered by the Bank. Subsequently, the Bank initiated proceedings under Section 13(2) of the SARFAESI Act. The notice under Section 13(2) was issued on 26th April, 2011. The petitioner submitted a reply on 23rd June, 2011 wherein, it was stated that the secured property is an agricultural land and as such, the SARFAESI Act has no application. The Bank overruled the objections as per letter dated 24th June, 2011. Subsequently, the Bank issued possession notice on 16th August, 2011. The notice under Section 13(4) is challenged by the petitioner mainly on the ground that the loan in question was sanctioned for agricultural purposes and the security was created in their agricultural land and as such, it is not open to the Bank to invoke the provisions of SARFAESI Act.

(3.) The Chief Manager of Indian Bank, Zonal Office, Coimbatore filed a detailed counter disputing the claim made by the petitioner. According to the Bank, credit facilities were not sanctioned for agricultural purposes. The property is also not used for agricultural purposes. The petitioner has offered their land at Bhavani as security wherein the activities pertaining to commercial/cash crops viz., Coconut, Sugarcane, Turmeric, Mango, Coco, etc., are carried out. Moreover, buildings like farm house, servant quarters, vermiculture sheds, cattle sheds etc., were constructed in the said property and as such, it cannot be said that the property is still an agricultural property. The Bank challenged the very maintainability of the writ petition on the ground of alternative remedy.