Decided on April 26,2012



- (1.) THE petitioner had taken several loans from the South Indian Bank/respondent No. 1. THE said loan has been taken by the petitioner for establishing Dairy Farm business under the name and style of `M/s Kanhaiya Dairy'. THE break-up of these loans are as under:- 1. Rs. 3,00,000/- against CCOL (Continuance)
(2.) RS. 2,75,000/- against FSL ? Term Loan (Priority Sector) Rs. 20,00,000/- against FSL (O) 2. These loans have not been repaid by the petitioners to the Bank, therefore, the Bank (South Indian Bank) initiated proceeding against the petitioners under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as `SARFAESI Act'). In this regard, a notice was given to the petitioners on 6th August, 2011. Reply to this notice was given by the petitioners under Section 13(3) of the SARFAESI Act and consequently, on certain technicalities, the Bank had withdrawn the said notice vide letter dated 11th October, 2011. Though, it was specifically stated in the notice that the notice dated 06.08.2011 be treated as cancelled and the Bank will issue fresh notice to the petitioners for the reasons that the property, which was secured in the account of M/s Kanhaiya Diary was common security to the Housing Loan in the name of Mr. Sanjeev Lal (owner of the diary). Therefore, another notice under Section 13(2) of the SARFAESI Act was given to the petitioners on 16th November, 2011 wherein one more Housing Loan of Rs. 15,00,000/- included along with other loans, as mentioned in the prior notice. This notice has been challenged by the petitioners on the ground that the land which is mortgaged by the respondent/Bank is an agricultural land, therefore, under Section 31(i) of the SARFAESI Act, it will not attract the provision of this SARFAESI Act and in fact, no coercive measures under Section 13(2) of the SARFAESI Act or under any other provisions can be invoked against the petitioners, under the said security interest which is in the form of agricultural land. Apart from this, the petitioners also alleged that first notice was withdrawn by the Bank, therefore, the Bank does not have any power to issue another notice on the same ground. The second submission advanced by learned counsel for the petitioners though does not have any force. As far as the first argument is concerned and considering the fact that prima facie that the security interest is credited in the agricultural land and Section 31(i) of the SARFAESI Act clearly states that this Act shall not apply to any security interest credited in the agricultural land. 3. In view of the above, further proceedings initiated by the Bank under the SARFAESI Act is stayed till the next date of listing, provided the petitioners shall deposit a sum of Rs. 10,00,000/- (Rupees Ten Lacs only) with the Bank within a period of 15 (fifteen) days from today. It is made clear that the interim relief granted by this Court to the petitioners will automatically stands vacated, in case, the amount of Rs. 10 lacs is not deposited by the petitioners with the Bank within the stipulated period, as granted by this Court.
(3.) ISSUE notices to the respondents returnable at an early date. Apart from normal mode of service, the petitioners shall also take steps for service upon respondents through Dasti. Steps be taken within three days. List after three weeks.;

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