The petitioner (Sosamma Abraham) who had availed of a loan of Rs. 15 lakhs from the Kottayam main branch of the State Bank of Travancore for starting a small scale industrial unit in her residential property for the manufacture of cables, seeks to quash Annexure A6 order dated 3-3-2008 passed by the Chief Judicial Magistrate, Kottayam under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act for short).

2. Heard Adv. Sri. Kuruvila Jacob, the learned counsel appearing for the petitioner and Adv. Sri. Satish Nainan, the learned counsel appearing for the Bank.

3. Assailing the impugned order Adv. Sri. Kuruvila Jacob, the learned counsel appearing for the petitioner made the following submissions:-

It is true that the petitioner had availed of a loan from the bank for starting a small-scale industrial unit in her residential property. But after starting the said business the petitioner forced to close down the industrial unit due to the repeated wrongful acts of harassment committed by Sri. K.C. Chacko, the former manager of the bank. The unit is completely closed down for the past 3 = years. There is a serious dispute between the petitioner and the bank regarding the actual arrears due. The property, which has been secured, is an agricultural land as evidenced by Annexure A1 certificate dated 31-03-2008 issued by the Agricultural Officer, Krishi Bhavan, Nattakom. By virtue of Sec. 31 (i), the provisions of the Act have no application in respect of any security interest created in agricultural land. As a matter of fact, it was realizing the fact that the petitioner has a serious dispute regarding the actual arrears due that the bank has filed O.A. 6 of 2006 before the Debts Recovery Tribunal, Ernakulam. When such a proceedings are pending, securitisation proceedings under the provisions of the Act cannot be resorted to. The Chief Judicial Magistrate should have issued notice to the petitioner ought to have given the petitioner an opportunity of being heard. The order passed by the learned Magistrate is opposed to the principles of natural justice. That apart, when there is a dispute relating to non-payment of any amount including interest. Sec. 11 of the Act enjoins that such dispute shall be settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996. The bank was, therefore, not entitled to move the Chief Judicial Magistrate under Sec. 14 of the Act. The petitioner is sought to be dispossessed illegally and in fragrant violation of the violation of the principles of natural justice.

4. I am afraid that I cannot agree with the above submissions. The petitioner who is the borrower is admittedly a defaulter. The secured asset in the case is 16 cents of land comprised in Sy. No. 193/3 in Nattakom Village consisting of one residential building and another building housing the industrial unit in question. It is situated by the side of M.C. road at Kottayam. It was long after the commencement of the securitisation proceedings that the petitioner secured from the agricultural officer, Krishi Bhavan, Nattakom Annexure A1 certificate dated 31-08-2006 to the effect that the said property is used as an agricultural land. Ext.A1 states that there are 4 coconut trees, 3 Anjili trees, 15 banana plants and a few agricultural plants such as elephant foot yam, koloccasia, tapioca and a few flowering plants, the flowers which are intended for sale. The existence of the two buildings in the property is very conveniently suppressed in Annexure A1 certificate. I fail to see as to how such a property could be called an agricultural land. The agricultural officer was obliging the petitioner by giving a vague certificate evidently with a view to extricate the petitioner from the operational sweep of the provisions of the Act.

5. Out of the loan of Rs. 15 lakhs availed of by the petitioner no pye has been pa