HARISH TANDON,J. - (1.) A point, which is apparently simple assumes complexity because of the State Legislation. To put it differently though Section 31(i) of the SARFAESI Act exempts the applicability of the provision contained therein to the security interest created in respect of the agricultural land yet the provision of the said Act has been invoked treating the said property to be used for other purposes than the agriculture purpose by the parties despite express embargo and a prohibition under the West Bengal Land Reforms Act, 1955. To begin with the points canvassed before this Court, it would be profitable and convenient to quote several provisions of the aforesaid two Acts, which in my opinion, has assumed significance. "2. (zb). " security agreement" means an agreement, instrument or any other document or arrangement under which security interest is created in favour of the secured creditor including the creation of mortgage by deposit of title deeds with the secured creditor." "31. Provisions of this Act not to apply in certain cases-The provision of this Act shall not apply to- (a).... (b).... (c).... (d).... (e).... (f).... (g).... (h).... (i) any security interest created in agricultural land; (j)...." Section 2A of Section 4 of West Bengal Land Reforms Act, 1955: 4. (2A). No raiyat shall- (a) quarry sand, or permit any person to quarry sand, from his (plot of land), or (b) dig or use, or permit any person to dig or use, earth or clay of his (plot of land) for the manufacture of bricks or titles, for any purpose, other than his own use, except with previous permission in writing of the State Government and in accordance with such terms and conditions and on payment of such fees as may be prescribed. (2B). If any raiyat commits a breach of the provisions of sub-section (2A), the prescribed authority may, after giving in the prescribed manner an opportunity to the raiyat to show cause against the action proposed to be taken, impose upon him a fine exceeding two thousand rupees, and where the breach is a continuing one, a further fine exceeding two hundred rupees for each day during which the breach continues. Such fine, if duly paid, shall be recoverable as a public demand. 4B. Maintenance and preservation of land. - Every raiyat holding any land shall maintain and preserve such land in such manner that its area is diminished or its character is changed or the land is converted for any purpose other than the purpose for which it was settled or previously held except with the previous order in writing of the Collector under Section 4C: Provided that any raiyat may plant and grow trees on any land held by him within the ceiling area applicable to him and to his family without any previous order under section 4C, if such land is cultivated by bargadar. 4C. Permission for change of area, character or use of land. -(1) A raiyat holding any land may apply to the Collector for change of area of character of such land or for conversion of the same for any purpose other than the purpose for which it was settled or was being previously used or for alteration in the mode of use of such land. (2) On receipt of such application, the Collector may, after making such inquiry as may be prescribed and after giving the applicant or the persons interested in such land or affected in any way an opportunity of being heard, by order in writing either reject the application or direct such change, conversion of alteration, as the case may be, on such terms and conditions as may be prescribed: (3) Every order under sub-section (2) directing change, conversion or alteration shall specify the date from which such change, conversion of alteration shall take effect. (4) A copy of the order passed by the Collector directing change, conversion or alteration, if any, under subsection (2), or in an appeal therefrom shall be forwarded to the Revenue Officer referred to in section 50 or section 51, as the case may be, and such Revenue Officer shall incorporate in the record-of-rights changes effected by such order and revise the record-of-rights in accordance with such order. Amended Section of 4C is set out hereinbelow: " Provided that notwithstanding anything contrary contained in sub-section (6), if the State Government is of the opinion that it is necessary to do so in the public interest, the State Government may, by order, regularise any change, conversion of alteration in the area, character or mode of use of the plot of land, other than any plot of land having water body of any description or size, in accordance with other provision of this Act, on payment of such fee depending on the different character or mode of use of the plot of land, and in such manner, as may be prescribed." 4D. Offence and penalties. -(1) Any change, conversion or alteration in the area, character or mode of use of any land, except in accordance with the provisions of Section 4C, or any violation of the order of the Collector under sub-section (5) of section 4C, Provided that no prosecution shall lie for an offence under this sub-section in a case where an action has already been taken by the prescribed authority under sub-section (4) of section. 4."
(2.) The definition clause engrafted under Section 2ZB of the SARFAESI Act manifests that for the purpose of a security interest, if any security interest is created in respect of items included under Section 31 of the said Act those would be treated as security interest created under the said Act.
(3.) At the first blush this Court finds that though there is no express bar in creating the security interest in respect of an agricultural land under any other than the SARFAESI Act yet the invocation of the stringent provision contained therein cannot be taken recourse to as such security interest is kept outside the purview of the said Act by virtue of Section 31 thereof. After noticing the unreported judgment of the Apex Court in case of ITC Limited v. Blue Coast Hotels Ltd. and Ors in Civil Appeal Nos. 2928-2930 of 2018 decided on March 19, 2018 wherein the Apex Court held that the definition of the security interest in Section 2(zf) of the SARFAESI Act engulfed within itself a deterrence to creation of security interest over the agricultural land and, therefore, the security interest cannot be created in respect of a property specified in Section 31. In view of the aforesaid findings in the said unreported judgment this Court held that the security interest cannot be created in respect of an agricultural land under Section 31 of the said Act.;