IMPORTANT POINT
The judgment established the importance of considering the actual use of land at the time of creating security interest, allowing for the presentation of evidence through local inspection to establish exemptions under the Securitisation Act.

JUDGMENT :

The petitioner, who is a farmer in possession of 123.52 Ares of agricultural land in Chittur Taluk of Palakkad District, is challenging Ext.P10 order passed by the Debts Recovery Tribunal-I, Ernakulam in I.A. No.1633/2023. The IA was one filed seeking appointment of Advocate Commissioner to inspect the secured asset covered by Exts.P2 Sale Notice and report the lie and nature of the property and to report the nature of cultivation carried out in the property.

2. The petitioner states that he applied for an agricultural loan from the 1st respondent Bank. The Bank sanctioned Rs.25,50,000/-. Unprecedented floods in 2018 caused heavy loss to agriculture and the EMIs were defaulted. The floods were followed with Covid-19 pandemic. The Bank filed Ext.P1 OA. No.200/2022 in the DRT seeking to realise Rs.34,63,312.49. Ext.P2 e-auction notice was published thereafter on 10.04.2023, for recovery of Rs.37,16,813/-.

3. The petitioner states that it is evident from Ext.P1 OA that the loan sanctioned to the petitioner was agricultural loan intended for benefiting the farmers. No proceedings can be initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 against an agricultural property. By Exts.P3 and P4, the Village Officer and the Agricultural Officer have certified that the secured asset is an agricultural land. Ext.P5 photographs would also establish this fact.

4. The petitioner therefore challenged Ext.P2 Sale Notice, filing SA No.242/2023 in the DRT. IA No.1633/2023 was filed praying for appointment of an Advocate Commissioner for local inspection of the secured asset. As the sale did not take place as notified, the Bank published Ext.P8 sale notice dated 17.07.2023. The petitioner challenged Ext.P8 sale notice amending the SA. The Tribunal considered Ext.P6 commission application and dismissed the IA, without appreciation of facts, contends the petitioner.

5. The counsel for the petitioner argued that it is evident from Ext.P1 OA filed by the Bank that the loans extended to the petitioner were agricultural loans. The loans were availed for improving agricultural activities in the land. The security created was mortgaging the agricultural land. By dismissing the IA for Advocate Commission, the Tribunal denied the petitioner to bring on record credible evidence regarding agricultural nature of the secured asset.

6. Relying on Order XXVI Rule 9 of the Code of Civil Procedure, 1908, the counsel for the petitioner argued that the purpose of appointing Commission for local inspection is for elucidating any matter in dispute. The matter in dispute here is the nature of the secured asset. It can be decided only by appointing an Advocate Commissioner. The Tribunal made a major error in making a rowing enquiry while deciding on the application for appointment of Commission.

7. The respondents entered appearance through Standing Counsel and resisted the OP(DRT). The respondents contended that the petitioner has not produced any evidence to show that the secured assets were an agricultural land at the time of creating the mortgage. There is no material placed on record to show that any agricultural operations were being done in the secured land at the time of creating the mortgage. Since the crucial aspect to be considered for claiming exemption under Section 31(1) of the Securitisation Application is whether the secured properties in question were actually put to use as agricultural land at the time when security interest was created. No agricultural operations were carried out and no agricultural income whatsoever was derived from the property at the time of creating the mortgage. No useful purpose would be served by deputing an Advocate Commissioner at this stage especially when the mortgage was created in the year 2015.

8. The Debts Recovery Tribunal has considered all the relevant inputs and the settled positions of law while passing Ext.P10 order. As on date, an amou