ORDER :

Satyen Vaidya, J.

By way of instant petition, petitioner has assailed order dated 30.09.2020 passed by the District Magistrate, Sirmaur at Nahan, H.P. whereby the application of petitioner- Bank under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’) has been dismissed.

2. The loan account of proforma respondent Rajinder Singh was declared NPA on 06.06.2017. Demand made by petitioner-Bank in accordance with the provisions of the SARFAESI Act, proforma respondent failed to liquidate his liability. The outstanding dues as on 31.05.2019 against the account of proforma respondent was Rs.26,66,670/-. The loan was obtained by proforma respondent from petitioner- Bank for construction of house in the sum of Rs.24,00,000/-.

3. In order to secure the aforesaid loan, proforma respondent mortgaged immovable property comprised in Khata Khatauni No. 6/10 to 14, Khasra No. 87/1, measuring 0-2 bighas which form 2/565 share in total land measuring 28-5 bighas, situated at Mohal Gondapir, Tehsil Paonta Sahib, District Sirmaur, H.P.

4. The loan having remained unpaid, petitioner-Bank approached respondent No.1 District Magistrate, Sirmaur under Section 14 of the SARFAESI Act for assistance in taking possession of secured asset. The District Magistrate, Sirmaur dismissed the application of petitioner-Bank vide impugned order.

5. Heard.

6. The District Magistrate, Sirmaur has dismissed the application of petitioner-Bank under Section 14 of the SARFAESI Act on two grounds, first being that the mortgaged land was agricultural and was exempted under Section 31 (i) of the SARFAESI Act and secondly, that since the mortgaged land formed only a share in a joint holding, petitioner-Bank could not be handed over the possession thereof.

7. Section 14 of the SARFAESI Act mandates the Chief Metropolitan Magistrate or District Magistrate within whose jurisdiction the secured asset or other document relating thereto may be situated or found, to take possession thereof on the request of the secured creditor and forward such asset and document to such secured creditor provided the secured creditor complies with the conditions provided under such Section. Perusal of the conditions of Section 14 of the SARFAESI Act, does not contemplate any such inquiry as has been done by the District Magistrate in the instant case.

8. The application of secured creditor has been rejected by the District Magistrate on the ground that the secured asset was an agricultural land and as such was exempted under Section 31 (i) of the SARFAESI Act. It was not in dispute before the District Magistrate that proforma respondent had obtained a loan from petitioner-Bank for construction of a house on the secured asset and the house had in fact been constructed. This being so, there was no reason for the District Magistrate to have construed the secured asset to be an agricultural land. It was the case of none of the parties that the construction raised on secured asset was in the nature of being subservient to agriculture. The District Magistrate is also the Collector of the District and, as such, was aware that the nature of agricultural land if changed to non-agricultural purpose, would not remain the same notwithstanding the period taken for updation of revenue records. The District Magistrate, in the context of the object of SARFAESI Act, was not justified in denying the prayer of petitioner-Bank in light of the observations made hereinabove.

9. In ITC Limited vs. Blue Coast Hotels Limited and others (2018) 15 SCC 99, the Hon’ble Supreme Court while dealing with the fact situation involved in the instant case has held as under:

“Inclusion of agricultural land as security interest in the notice of recovery

35. One of the contentions raised on behalf of the debtor questioned the correctness of the finding of the High Court on the ground that the inclusion of agricultural land as security interest co