TaxTMI 
TaxTMI 
2021 (1) TMI 1265
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....he Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) ('SARFAESI Act' for the sake of convenience). Hence, these appeals. 3. Since common questions of law and facts arise in these appeals, they have been connected together, heard and disposed of by this common judgment. 4. The quintessential question that arises for consideration in these appeals is, whether, coffee plantation is agricultural land within the meaning of Section 31(i) of the SARFAESI Act and therefore, the said Act does not apply to coffee plantation. Brief facts of the case in Writ Appeal No. 538 of 2020: 5. In this case, petitioner No. 1 is the partner in petitioner Nos. 2 and 3 partnership firms. Petitioner No. 1 is the co-owner of Watekhan Estate. The petitioners are owners of 371 acres of coffee plantation/estate in Hirekolale, Yelagudige and Aldur villages of Chikkamagalur Taluk. Respondent/Bank (formerly, Corporation Bank) extended various credit facilities to the writ petitioners in the nature of agricultural cash credit loans, agricultural term loans and mortgage loans in relation to the coffee plantation. 6. There are thre....
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.... of the Coffee plantation and also to pay off the share of the retiring partner of the firm engaged in cultivation of coffee. It is evident that the schedule lands were being used for coffee cultivation on the date of the sanction of the respective loans. 8. Since, the writ petitioners did not repay the debt, demand notice dated 28.05.2019 was issued under Section 13(2) of the SARFAESI Act calling upon petitioner No. 1 to pay a sum of Rs. 18,81,45,558/-. A reply or representation was made in response to the said notice on 06.07.2019 to which the Bank gave its reply on the same day. Another representation was made on behalf of the petitioners on 23.08.2019 stating that no action under SARFAESI Act can lie in respect of the schedule lands. But, the Bank, replied on 26.09.2019 brushing aside the objection of the petitioners. The Bank proceeded to issue possession notice dated 27.09.2019 under Section 13(4) of the SARFAESI Act, read with Section 9 of the Security Interest (Enforcement) Rules, 2002 ("2002 Rules" for short) and it took symbolic possession of the schedule land. 9. Plaintiff No. 1 approached the Debts Recovery Tribunal-I, Bengaluru, ('DRT' for short) in S.A. ....
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....ents were entered into in respect of schedule item Nos. 1 and 2 of the immovable properties. Two apartments which form part of item No. 1 of the Schedule property were auctioned under the SARFAESI Act, but when it came to dealing with item No. 2, it was contended by the appellants herein that the said land being coffee plantation and agricultural land, could not be proceeded against, under the provisions of the SARFAESI Act having regard to Section 31(i) of the said Act. 12. The petitioners in this case assailed notices dated 14.08.2012 (Annexures 'A' & 'B') in respect of item Nos. 1 and 2 of the schedule property and assailed letter dated 31.03.2015 (Annexure 'C') rejecting the representation dated 18.03.2015 made by the petitioners in respect of item No. 2 of the schedule property, which is a coffee plantation and to quash the measures taken by the Bank under the SARFAESI Act in respect of item No. 2 of the Schedule property, which is a coffee plantation comprised in 200 acres with building and structures at Ashirwad Estate, Kolagave village, Jagar Hobli Post, Chikamagalur Taluk and District. 13. The learned Single Judge by his order dated 14.10.2020....
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.... learned senior counsel for the appellants relied upon certain judgments to contend that coffee plantation is just like any other plantation and the Madras High Court and Kerala High Court have held that the lands on which cardamom, coca, turmeric, cinnamon and rubber are grown, are plantation crops. The lands on which the said crops are grown are agricultural lands and therefore, on the basis of the said interpretation, in the instant case, the schedule lands on which coffee is grown must be declared to be agricultural land, in which event, the provisions of the SARFAESI Act would not apply in respect of the said lands. 17. Learned senior counsel contended that in order to seek such a determination, which touches upon the question of jurisdiction or the power of the respondent/Banks to initiate any action or take any measure under the provisions of the Act, for the purpose of recovery of outstanding dues, is a question which ought to have been considered by the learned Single Judges and ought not to have relegated the parties to file an appeal under Section 17 of the SARFAESI Act. In this context, the judgments relied upon are as follows: (i) Mohammed Basheer K.P. vs. ....
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....date which answers the question, as to, whether, the coffee plantation is an agricultural land within the meaning of Section 31(i) of the SARFAESI Act, it was necessary that the writ petitions were considered on merits. 22. In the above context, learned senior counsel drew our attention to the dictionary meaning of the expression 'agricultural land', the definition of 'agriculture' under the Karnataka Land Reforms Act, 1961 (Land Reforms Act, 1961); Karnataka Land Revenue Act, 1961 (Land Revenue Act, 1964) and other enactments where the expression 'agricultural land' or 'agriculture' are defined or used, which shall be alluded to later. 23. Per contra, learned senior counsel, Sri. Dhyan Chinnappa, appearing for the learned counsel for Union Bank of India, contended that the learned Single Judge in W.P. No. 12461/2020 had rightly dismissed the writ petition on the ground of maintainability in view of the availability of an alternative remedy under Section 17 of the SARFAESI Act. He submitted that the DRT has the jurisdiction to consider the issue of the applicability of the Act to coffee plantations, which are the subject matter in these cases. ....
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....gical conclusion and it would have been so but for the writ petitions filed by the petitioners in the instant case. 27. Learned senior counsel contended that there are huge outstanding dues payable to the respondent-Bank and instead of taking steps to repay the loan amount as well as the interest thereon by the writ petitioners/debtors to the Bank, appellants herein, are only procrastinating the matter by filing the writ petitions before this Court. That the learned Single Judge was right in dismissing the writ petitions on the premise that there was an alternative remedy available for the petitioners and therefore the orders of the learned Single Judges would not call for any interference in the appeals filed against the said order. 28. Learned senior counsel placed reliance on the following judgments and sought for dismissal of the appeals: (i) United Bank of India vs. Satyawati Tandon and others, [(2010) 8 SCC 110], (Satyawati Tandon); (ii) ICICI Bank Limited and others vs. Umakantha Mohapatra and others, [(2019) 13 SCC 497], (Umakantha Mohapatra); (iii) Authorised Officer, State Bank of India vs. Allwyn Alloys Pvt. Ltd. And others, [(2018) 8 SCC....
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....e remedy urged on behalf of the Bank and relegating the writ petitioners to the DRT. In this regard, learned counsel for the Banks drew our attention to the various definitions of the expression 'plantation' and contended that the coffee plantation does not come within the scope and ambit of "agricultural land" under Section 31(i) of the Act. He submitted that even if the land in question is a coffee plantation, action was rightly initiated against the same under Section 13(4) of the SARFAESI Act and symbolic possession has been taken on 01.04.2015. 33. Learned counsel for the respondent/Bank submitted that O.A. No. 636/2013 has been filed by the respondent/Bank against the petitioners only on 09.12.2015. There is an order of attachment before judgment but the said proceeding has not progressed on account of the pendency of the matter before this Court. 34. Learned counsel for the respondent/Bank specifically drew our attention to the provisions of Section 104 of the Land Reforms Act to contend that on a reading of the same, it becomes clear that the coffee plantation is not an agricultural land as it is exempted from certain provisions of that Act and such land could....
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.... then certiorari may issue. When an appeal does lie, however, in order to quash a proceeding by certiorari, it is necessary that there be lack of jurisdiction appearing on the face of the record. 38. In a case where there is the want of jurisdiction disclosed on the face of petition that is, when it clearly appears the authority had no jurisdiction with the subject-matter or of the parties, then writ may issue notwithstanding the availability of alternative remedy and as already noted, existence of alternative remedy to be a bar must be adequate. 39. On the general principles that ought to regulate the exercise of judicial discretion when alternative remedies are available, there are a few settled propositions. One of them is, if any applicant claims to be aggrieved by a decision made without jurisdiction or in breach of the rules of natural justice, the fact that he has not taken advantage of a statutory right of appeal should normally be regarded as irrelevant. Conversely, if an applicant seeks an order of certiorari after having appealed unsuccessfully, certiorari may be refused where he has failed to raise objections to jurisdiction or to complain of breach of natural jus....
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....diction. In appropriate cases, High Court may entertain a petition even if the aggrieved party has not exhausted the remedies available under a statute before the departmental authorities, vide State of West Bengal vs. North Adjai Cool Company [1971 (1) SCC 309]. (e) Further, alternative remedy must be effective. An appeal in all cases cannot be said to have provided in all situations, where an appeal would be ineffective and writ petition in such a case is maintainable, vide Ram and Shyam Company vs. State of Haryana [AIR 1985 SC 1147]. (f) Where an authority has acted without jurisdiction, High Court should not refuse to exercise its jurisdiction under Article 226 on the ground of existence of alternative remedy vide Dr. Smt. Kuntesh Gupta vs. Management H.K. Mahavidyaya [AIR 1987 SC 2186]. Thus, an alternative remedy is not an absolute bar to the maintainability of a writ petition. 41. On the issue of maintainability of the writ petition, learned counsel for the appellants relied upon the following decisions: (a) In Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others, [(1998) 8 SCC 1], (Whirlpool Corporation), at paragraph 15, it w....
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....tion or had purported to usurp jurisdiction without any legal foundation." In the said case (Whirlpool Corporation), it was also observed that the High Court was not justified in dismissing the writ petition at the initial stage without examining the contention that the show cause notice issued to the appellant was wholly without jurisdiction. In the said case, the Registrar of Trade Marks issued to the appellant therein a notice under Section 56(4) of the Trade and Merchandise Marks Act, 1958 to show cause against the proposed cancellation of appellants' Certificate of renewal. It was held that the issuance of such a notice by the Registrar was without authority and it was quashed by the High Court. (b) In State of H.P. and others vs. Gujarat Ambuja Cement Limited and Another, [(2005) 6 SCC 499], (Gujarat Ambuja Cement Limited), a detailed discussion on the plea regarding alternative remedy was made. It was held that the principle of alternative remedy is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy, it is within the jurisdiction of discretion of the High Court to gra....
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....justifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies, unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition. In the said case, the question was liability to pay purchase tax on the royalty paid by the respondents, i.e., the holder of mining lease, where there was a price for removal of minerals and thus, attracted liability to pay purchase tax. The Hon'ble Supreme Court in the said decision rejected the plea that the High Court should not have entertained the writ petition. Thereafter, the question relating to liability to pay purchase tax on royalty paid was taken up for consideration by discussing on the meaning of the words "royalty", "dead rent", "mining lease". It was observed that royalty paid by the holder of a mining lease under Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 was not the price for removal of minerals and hence, did not attract liability to pay purchase tax. (c) In Embassy Property Developments Private Limited vs. State of Karnataka, (Embassy Property), one of the preliminary question....
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....ction should certainly be taken into account by High Courts, when Article 226 of the Constitution is sought to be invoked bypassing a statutory, alternative remedy provided by a special statute. In the said case, the question was, as to, whether, the NCLT lacked the jurisdiction to issue a direction in relation to a matter covered by Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Statutory Rules issued thereunder; or, there was mere wrongful exercise of a recognised jurisdiction, for instance, asking a wrong question or applying a wrong test or granting a wrong relief. On a detailed discussion, it was held that the NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute Supplemental Lease Deeds for the extension of the mining lease. Since, NCLT chose to exercise jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice. In the instant case, the State of Karnataka had invoked the jurisdiction of the High Court under Article 226 of the Constitution without taking recourse to the ap....
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....tatute is not effective but only mere formality with no substantial relief; (ii) where statutory authority not acted in accordance with provisions of enactment in question, or; (iii) where statutory authority acted in defiance of fundamental principles of judicial procedure, or; (iv) where statutory authority resorted to invoke provisions which are repealed, or; (v) where statutory authority passed an order in total violation of principles of natural justice. (e) In United Bank of India vs. Satyawati Tondon and others, [(2010) 8 SCC 110], (Satyawati Tondon) it was observed that it is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective, alternative remedy by filing an application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. (f) Of course in ICICI Bank Limited vs. Umakanta Mohapatra and others, [(2....
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.... available not only to any person, including legal or juristic person, and is not confined only to a citizen. The expression "property" under Article 300A means only that which can by itself be acquired or disposed of or taken possession. It includes private property in all its forms, and understood, both movable and immovable, corporeal and incorporeal, such as, intellectual property rights. When a person has right or interest in property, the same cannot be deprived except by authority of law. Deprivation of property may take place in various ways, such as seizure of goods or immovable property from the possession of an individual, but in a manner known to law. Deprivation means, the rights constituting property rights taken away, also deprivation by authority of law means, by or under a law made the competent legislature. 45. Thus, the question in this case is, whether coffee plantation could be interpreted to be agricultural land, within the meaning of Section 31(i) of the SARFAESI Act, in which case it is a bar for the applicability of the provisions of the Act. In our view, in order to examine a challenge to an action initiated under the provisions of the SARFAESI Act in r....
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.... applicability of the SARFAESI Act and the jurisdiction on the respondent/bank to take measures under Section 13 of the said Act vis-à-vis the subject lands, which are coffee plantations. Hence, we answer point No. 1 in favour of the appellants. Re: Point No. 2: Whether coffee plantation is an agricultural land under Section 31(i) of the SARFAESI Act? 48. This would take us to the next point which is to decide, as to, whether, coffee plantations are agricultural lands within the meaning of Section 31(i) of the SARFAESI Act. Before proceeding further, it would be necessary to understand the object of the SARFAESI Act and allude to the background of the said enactment. In this regard, it would be useful to refer to the judgment of the Hon'ble Supreme Court in Mardia Chemicals vs. Union of India, [(2004) 4 SCC 311]. (Mardia Chemicals), wherein reference was made to Narasimham Committee constituted in the year 1991 relating to the financial system prevailing in the country. In Chapter V of the Report under the heading 'Capital Adequacy, Accounting Policies and other Related Matters', it was opined that special Tribunals to deal with the recovery of dues of t....
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....erchant Shipping Act, 1958 (44 of 1958); (e) * * * * * (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." 51. Thus, the question to be determined is whether the provisions of SARFAESI Act would apply to any security interest created in "agricultural land", vide Section 31(i). The expression, agricultural land, is not defined under the Act and therefore, the meaning of the said expression would have to be discerned with reference to the plain and dictionary meaning as well as other legislations which deal with the agricultural land. 52. For an appreciation of the question ....
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....y meaning of agriculture was referred to and also the meaning as given in Wharton's Law Lexicon. Ultimately, the Hon'ble Supreme Court observed that the primary sense in which the term 'agriculture' is understood as ager-a field and culture-cultivation i.e., cultivation of field which, in the strict field sense of the term means tilling of the land, sowing of the seeds, planting, or similar operations on the land. After the produce sprouts from the land, other operations, such as weeding, digging of the soil around the growth, removal of undesirable under-growths, tending, pruning, etc. have to be done. Thereafter, harvesting and running the produce for the market are operations which have to be carried out. The latter would all be agricultural operations when taken in conjunction with the basic operations above described and it would be futile to say that they are not agricultural operations at all. According to the Hon'ble Supreme Court, the mere performance of these subsequent operations on the products of the land, where such products have not been raised on the land by the performance of the basic operations which we have described above, would not be enoug....
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....ny operation performed on the land. If the basic operations are there, the rest of the operations which are consequent thereto, namely the subsequent operations, are also part of agriculture, but if the basic operations are wanting, the subsequent operations do not acquire the characteristic of agricultural operations. That, the human labour and skill spent in the performance of subsequent operations cannot be said to have been spent on the land itself, though it may have the effect of preserving, fostering and regenerating the products of the land. The Hon'ble Supreme Court further observed that the distinction is not important in cases where the agriculturist performs these operations as a part of his integrated activity in cultivation of the land. Where, however, the products of the land are of spontaneous growth, unassisted by human skill and labour, and human skill and labour are spent merely in fostering the growth, preservation and regeneration of such products of land, the question falls to be considered, whether, these subsequent operations performed by the agriculturist are agricultural operations and enjoy the characteristic of agricultural operations. This ....
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....agricultural in nature. The Supreme Court in the aforesaid case observed that the determination of the character of land according to the purpose for which it is meant or set apart and can be used is a matter which ought to be determined on the facts of each particular case. The Supreme Court opined, "what is really required to be shown is the connection with an agricultural purpose and user, and not the mere possibility of user of land by some possible future owner or possessor, for an agricultural purpose." It was also observed by the Madras High Court that when the available materials are sufficient to arrive at a clear finding that the secured asset is an agricultural property, there is no point in directing the borrower/guarantor to approach the DRT. When the very initiation of SARFAESI proceeding is under challenge on the ground of statutory bar, and the available materials are sufficient to decide the issue, it cannot be said that still the party should be directed to approach the DRT. It was further observed that the question regarding alternative remedy would lose its significance in that case in view of the voluminous documents produced by the petitioner to show ....
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....ecision, the facts were that the Industrial Financial Corporation of India (IFCI), the secured creditor, in the capacity of a financial institution, had entered into a corporate loan agreement with Blue Coast Hotels (debtor) for a sum of Rs. 150 crores. The agreement included creation of a special mortgage to secure the corporate loan. The mortgaged property comprised of the whole of the debtor's hotel property including agricultural land on which the debtor was to develop villas. The debtor defaulted in repayment of the loan and the debtor's account became a Non-Performing Asset (NPA). Notice under Section 13(2) of the SARFAESI Act was sent by the creditor calling upon the debtor to pay the amount overdue within a period of sixty days. This was followed by a notice issued under Section 13(4) whereby the symbolic possession of the hotel was taken over by the creditor and subsequently, there was a sale by a public auction. A notice of sale by a public auction was issued in the newspaper. One of the questions that arose in the said case was, whether, the land mortgaged by the debtor as a security interest consisted of agricultural land to which the provisions of the SARFAESI ....
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....ate laws relating to 'agriculture' and thereby unravel the meaning of 'agricultural land' in Section 31(i) of the SARFAESI Act. Also, in these appeals, learned senior counsel for the appellants has placed reliance on Land Reforms Act, Land Revenue Act and the Dictionary meaning of the expression 'agricultural land' in Section 31(i) of the SARFAESI Act. It becomes necessary to consider the aforesaid enactments as SARFSESI Act does not define the said expression. The reason being, Parliament was conscious of the fact that, the subject 'agriculture' along with its connotations is a State subject (List II of Seventh Schedule of the Constitution) and therefore, did not define the expression 'agricultural land' under Section 31(i) of the SARFAESI Act. 56. Before proceeding further, it would be useful to refer to Articles 246 of the Constitution. Article 246 deals with subject matter of laws made by Parliament and by the Legislatures of States. (a) Clause (1) of Article 246 states that notwithstanding anything in clauses (2) and (3) Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I of the....
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....tory has to be determined by substance and not by degree. (e) In case of any conflict between entries, in List-I and List-II, the power of Parliament to legislate under List- I will supersede when, on an interpretation, the two powers cannot be reconciled. But if a legislation in pith and substance falls within any of the entries of List-II, the State Legislature's competence cannot be questioned on the ground that the field is covered by Union list or the Concurrent list, vide Prafulla Kumar vs. Bank of Commerce, Khulna, [AIR 1947 P.C. 60] (Prafulla Kumar). 57. The entries in List I and List II to which the laws are under consideration are as under: (a) Entry 45 of List-I of the VII Schedule deals with 'Banking'. SARFAESI Act, 2002 is also relatable to Banking. The object of the SARFAESI Act is to regulate Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest and for matters connected therewith or incidental thereto. Thus, the SARFAESI Act being an enactment traceable to Entry 45 of List-I of the VII Schedule, it has excluded the enforcement of the Act insofar as the security created in agricultural lands are co....
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....h is used or capable of being used for agricultural purposes or purposes subservient thereto and includes horticultural land, forest land, garden land, pasture land, plantation and tope but does not include house-site or land used exclusively for non-agricultural purposes; x x x (25) "Plantation crops" means cardamom, coffee, pepper, rubber and tea; x x x 79-A. Acquisition of land by certain persons prohibited.- (1) On and from the commencement of the Karnataka Land Reforms (Amendment) Act, 1995, no person who or a family or a joint family which has an assured annual income of not less than rupees twenty five lakhs from sources other than agricultural lands shall be entitled to acquire any land whether as land owner, landlord, tenant or mortgagee with possession or otherwise or partly in one capacity and partly in another. (2) For purposes of sub-section (1).- (i) the aggregate income of all the members of a family or a joint family from sources other than agricultural land shall be deemed to be income of the family or joint family, as the case may be, from such sources; (ii) a person or a family or a joint family shall....
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....date of commencement of the Amendment Act, except as otherwise provided in this Act.- (a) no person other than a person cultivating land personally shall be entitled to hold land; and (b) it shall not be lawful for.- (i) an educational, religious or charitable institution or society or trust, other than an institution or society or trust referred to in sub-section (7) of Section 63, capable of holding property; (ii) a company; (iii) an association or other body of individuals not being a joint family, whether incorporated or not; or (iv) a co-operative society other than a cooperative farm, to hold any land. (2) Every such institution, society, trust, company, association, body or co-operative society.- (a) which holds lands on the date of commencement of the Amendment Act and which is disentitled to hold lands under sub-section (1), shall, within ninety days from the said date, furnish to the Tahsildar within whose jurisdiction the greater part of such land is situated a declaration containing the particulars of such land and such other particulars as may prescribed; and (b) which acquires such land after the ....
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....t in the State Government subject to payment to him of an amount equal to eight times the net annual income of the land or where the land has been purchased, the price paid for the land, if such price is less than eight times the net annual income of the land. (2) Nothing in sub-section (1) shall apply to lands granted under Section 77. 81. Sections 79-A, 79-B, and 80 not to apply in certain cases.- (1) Nothing in Section 79-A or Section 79-B or Section 80 shall apply to.- (a) the sale, gift or mortgage of any land or interest therein in favour of the Government: the Karnataka State Road Transport Corporation constituted under the Road Transport Corporation Act, 1950 (Central Act LXIV of 1950), the Karnataka Power Transmission Corporation Limited constituted under the Companies Act, 1956 the Karnataka Housing Board constituted under the Karnataka Housing Board Act, 1962 (Karnataka Act 10 of 1963), the Industrial Areas Development Board constituted under the Karnataka Industrial Areas Development Act, 1966 (Karnataka Act, 18 of 1966), the Karnataka Slum Clearance Board established under the Karnataka Slum Areas (Improvement and Clearance) Act, 1973, (Karna....
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....sale, within the prescribed period: Provided that pending such sale the land may be leased for a period not exceeding one year at a time and the lease shall stand determined when the land is sold or on the expiry of one year, whichever is earlier and notwithstanding anything to the contrary in this Act or in any other law for the time being in force the lessee shall not be entitled to any right other than as such lessee in the land. (3) Any sale by the institution under this section shall be subject to the other provisions of this Act. x x x 104. Plantations.--The provisions of Section 38, Section 63 other than sub-section (9) thereof, Sections 64, 79-A, 79-B and 80, shall not apply to plantations. Explanation.--In this section 'Plantation' means land used by a person principally for the cultivation of plantation crop and includes.-- (i) any land used by such person for any purpose ancillary to the cultivation of such crop or for preparation of the same for the market; and (ii) agricultural land interspersed within the boundaries of the area cultivated with such crop by such person. not exceeding such e....
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....sub-clause; (c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any process mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on: Provided that-- (i) the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by reason of his connection with the land, requires as a dwelling house, or as a storehouse, or other out-building, and (ii) the land is either assessed to land revenue in India or is subject to a local rate assessed and collected by officers of the Government as such or where the land is not so assessed to land revenue or subject to a local rate, it is not situated-- (A) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board and which has a ....
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.... any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him in respect of which no process has been performed other than a process of the nature described in paragraph (ii); (3) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any operation mentioned in paragraphs (ii), and (iii) of sub-clause (2) is carried on: Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent-in-kind by reason of his connection with the land requires as a dwelling house or as a store-house or other out-building; Explanation.--Income derived from any building means the receipts by way of rent from the building or portion thereof let out for rent." F. The relevant de....
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....land, plantation, but does not include house site or land used exclusively for non-agricultural purposes. Under Section 104 of the said Act, certain provisions of the said Act do not apply to plantations. The word 'plantation' is explained under Section 104 to mean land used by a person principally for the cultivation of plantation crops and includes any land used ancillary to the cultivation of such crop or for preparation of the same for the market and agricultural land within the area cultivated with such crop for the protection and efficient management of such cultivation. 60. Under the Land Revenue Act, the definition 'class of land' includes plantation land. Plantation land means land on which a plantation crop i.e., cardamom, coffee, pepper, rubber and tea can be grown. 61. Thus, under both the Land Reforms Act and Land Revenue Act, plantation crops and plantation land refer to only cardamom, coffee, pepper, rubber and tea. 62. Under 2013 Act, 'agricultural land' means land used for the purpose of raising or crops. Crops would include plantation crops referred to above. 63. Under Karnataka Agricultural Income Tax Act, 1957, 'Agricultur....
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....the date of creation of security interest and the purpose to which it was set apart are matters which have to be taken into consideration. Even in the case of Blue Coast Hotels, it was observed that, the question whether the land is agricultural or not had to be determined on the basis of totality of facts and circumstances and not whether the land was shown to be agricultural in nature in the revenue entries per se. 66. In the instant case, what has to be considered is, whether, land on which coffee is grown is agricultural land or not. The same has to be also in light of the relevant provisions of the State Acts which throw light as to how a coffee estate/plantation is construed. 67. Sub-Section (1) of Section 2(A) of the Karnataka Land Reforms Act defines 'agriculture' to include the raising of crops. The expression 'plantation crops' is defined to mean cardamom, coffee, rubber, pepper and tea as per sub-Section (25) of Section 2(A) of the said Act. This implies that all other crops are non-plantation crops. 68. Chapter VIII of the Karnataka Land Reforms Act deals with exemptions. Section 104 deals with plantations. The said section states that the provi....
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....arming, seed farming, pisciculture, apiculture, sericulture, piggery, poultry farming and such other activities as are generally carried on by agriculturists, dairy farmers, cattle breeders, poultry farmers and other categories of persons engaged in similar activities including marketing of agricultural products, their storage and transport and the acquisition of implements and machinery, in connection with any such activity. Section 81(1)(c) states that nothing in Section 79-A or Section 79-B or Section 80 would apply to the sale of any land or interest therein referred to in clause (b) in enforcement of the said security i.e., mortgage to a co-operative society or bank. 71. Thus, Section 81 is an exception to Section 79-A, Section 79-B and Section 80. Therefore, there could be a mortgage of any land or interest therein in favour of a bank or a financial institution and also sale of any land or interest therein mortgaged to any financial institution for enforcement of the security for any loan or other facility for agricultural purposes. This would imply that the land on which coffee plantation is raised is no doubt agricultural land on a plain interpretation, but, such land is....
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....ial institution and any such land mortgaged to a financial institution could be sold for the enforcement of the said security. 76. Thus, coffee, being a plantation crop within the meaning of Section 2(A)(25) of the Land Reforms Act, is exempted from the provisions of Sections 79-A, 79-B and 80 as per Section 104 of the said Act. Also, under Section 81 of the said Act, the bar under Section 79-A, 79-B and 80 of the said Act would not apply in the case of mortgage of any land or interest therein to any financial institution as security for any loan or other facilities given by such financial institution for agricultural purposes. Hence, any land used for raising a plantation crop, if mortgaged to a financial institution, even if for non-agricultural purposes, could also be sold for enforcement of the said security. 77. In Shankar Bhairu Bamane vs. Syndicate Bank and others, [ILR 1998 KAR 3028], (Shankar Bhairu Bamane), Sections 80 and 81 of the Land Reforms Act were considered and it was observed, a reading of Section 81 makes it clear that there is no bar for even financial institutions to acquire agricultural properties; a bank can also bid and purchase agricultural propertie....
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....subject or context' or 'unless the context otherwise requires". 81. Under the provisions of the Land Reforms Act, the land used for the purpose of growing plantation crop though an agricultural land for all other purposes, nevertheless, such plantation land is exempted from the provisions of Sections 79-A, 79-B and 80, which implies that it is not treated on par with the land on which non-plantation crops or other agricultural produce is grown. 82. Thus, insofar as the State of Karnataka is concerned, having regard to Section 104 and Section 81 of the Land Reforms Act, lands on which the plantation crops are grown, being exempt from the restrictions pertaining to agricultural land mentioned in Section 79-A, 79-B and 80, in view of Section 104 and Section 81 of the said Act, would not come within the scope and ambit of the 'agricultural land' under Section 31(i) of the SARFAESI Act. In this regard, we find much force in the argument of Sri. Katti appearing for respondent-Bank. 83. Thus, on a contextual interpretation, land on which plantation crops are grown is not agricultural land within the meaning of Section 31(i) of the SARFAESI Act. 84. In this cont....