Tractors purchased on taking of loan under Section 85 of the A.P. Cooperative Societies Act, 1964 and mortgaged in favour of the bank are not implements of husbandry and can be seized and sold for realization of the dues.

ORDER :

B.N. Kirpal, J. - The sole question which arises for consideration in these appeals is whether on a correct interpretation of Section 103 of the A.P. Cooperative Societies Act, 1964, the appellant-Bank can seize and sell the tractor of the respondents for realisation of the amount of loan payable by them to the appellant.

2. Briefly stated, the facts in civil appeal arising from Writ Appeal No. 136 of 1982 are that two loans of about Rs. 40,000 and 35,000 were taken by the writ petitioners from the appellant-Bank. These loans were disbursed for the purpose of purchasing a tractor. Repayment of loan was to take place by payment in yearly installments. There was default in the payment of the same and demands were raised. When demands having been raised and the amount due to the appellant-Bank was not paid, the tractor in question was seized and distained. Thereupon a writ petition was filed before the High Court of Andhra Pradesh in which the writ petitioners had contended that the tractor was an agricultural implement and as such was exempt from attachment. The other writ petitions which were disposed of by the common judgment of the High Court also raised the same question.

3. The High Court by its impugned judgment came to the conclusion that on a correct interpretation of Section 103 read with Rule 52(5)(o) of the A.P. Cooperative Societies Rules, tractors were agricultural implements of husbandry and, therefore, they could not be seized or sold by the appellant for the purpose of realisation of the amount due to it.

4. On behalf of the appellant, it is submitted that in interpreting the relevant provisions of the Act, the High Court erred in coming to the conclusion that the tractors in question were exempt from sale for the purpose of realisation of the dues to the appellant.

5. According to Section 85 of the said Act, the provision of Chapter XIII applies to the appellant-Bank for advancing loans for the purposes enumerated under the said section. According to Sub-section (1), loan can be given for "purchase of tractors or other agricultural machinery". It is not in dispute that it was pursuant to the power so given under Section 85 that the loans in question were disbursed. It is the case of the appellant that on the loans being so advanced, the tractors in question were mortgaged in favour of the appellant- Bank and, therefore, it got the right to seize the mortgaged property in the event of there being default in the repayment of the loans.

6. Section 92 of the Act provides that the mortgage executed in favour of the bank shall have priority over any other claim of the government. Section 93 gives the bank the right to purchase the mortgaged property which can be sold under the Chapter. Section 100 provides that if any loan has been granted by the bank including the interest thereon shall, whenever it becomes due, be recoverable by the bank. If there is any arrears of recovery, on an application being made by the bank, the Registrar issues a certificate under Section 101 for the recovery of the amount due and under Section 103 the Registrar can take recourse to distrain and sale of property for the purpose of realisation of the loan. The said Section 103 including the first proviso, with which we are concerned in the present case, reads as follows :

103. Distraint and sale.- (1) If any installment payable under a mortgage executed in favour of (an agricultural development bank) or any part of such installment has remained unpaid for more than one month from the date on which it fell due, the committee, may in addition to any other remedy available to the bank apply to the Registrar or such other person on whom the power of the Registrar to recover any amount due by attachment and sale of property has been conferred by the Government under Section 3 for the recovery of such installment or part thereof by distraint and sale of the produce of the mortgaged land including the standing crops thereon and any other mo