Ratio(s) Decidend—Whether secured assets are agricultural land or not is a disputed question of fact.

Challenge is to the order dated 8-11-2005 passed by the respondent bank under Sec.13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act (in short SARFAESI Act), bringing the secured assets of the petitioner for sale under SARFAESI Act.

2. The facts, in brief, are: Petitioner is a partnership firm, carrying on business in farming activities. For establishing a poultry farm, petitioner approached the respondent bank for credit facility. Respondent bank sanctioned the petitioner Rs.45,00,000 as per the loan sanction order dated 12.4.1996. Petitioner mortgaged with the respondent bank certain lands as collateral security for the said loan. Petitioner committed default in repayment of the loan amount. Since the negotiations between the parties regarding the settlement of the outstanding loan amount did not fructify, the respondent bank initiated action under the provisions of Sec.13(2) of SARFAESI Act and issued the impugned notice. Aggrieved, the petitioner has filed the present writ petition.

3. Learned senior counsel for the petitioner submitted that the petitioner availed the credit facility for poultry rearing. Petitioner has offered certain lands, which are agricultural lands, as collateral security. Learned counsel submitted that purpose of availing the credit facility was for establishing a poultry farm, which is ancillary and supplementary to agricultural operations, and further the secured assets are agricultural lands, the nature of loan offered by the respondent bank was nothing but “agricultural loan”. Learned senior counsel, relying on Sec.31(i) of SARFAESI Act, submitted that since agricultural lands are exempted from the purview of the provisions of SARFAESI Act, the respondent bank was not justified in passing the impugned order.

4. On the other hand, learned counsel appearing for the respondent bank submitted that since the challenge is to the notice issued under Sec.13(2) of the SARFAESI Act, the writ petition is not maintainable; secondly, the writ petition is premature since the respondent bank has just issued notice under Sec.13(2) of the said Act and not initiated any action against the petitioner under Sec.13(4) of the SARFAESI Act; thirdly, the issue whether the secured asset in question is an “agricultural land” or not is undoubtedly a disputed question of fact, which cannot be gone into and decided in a writ petition under Art.226 of the Constitution. Learned counsel for the respondent bank therefore submitted that for all these reasons the writ petition is liable to be dismissed in limine.

5. Learned counsel for the respondent bank submitted on merits that the reliance placed by the learned senior counsel for the petitioner on the exemption granted under Sec.31(i) of the SARFAESI is incorrect as the said exemption applies only to the “agricultural land”. The secured asset is not an agricultural land, but only a barren land wherein no agricultural operations are being carried on by the petitioner and the said lands are assessed to property tax, etc. The petitioner availed the loan for establishing a poultry farm, construction of poultry shed, office, etc., which is undoubtedly a commercial activity and not an agricultural operation.

6. By way of rejoinder, learned senior counsel reiterated that poultry farming is incidental to agricultural operations and, therefore, secured asset in this case is eligible for exemption under Sec.31(i) of the SARFAESI Act. Learned senior counsel, by producing field-map, etc., submitted that the land on which the poultry farm is located is far away from the land offered as collateral security. By inviting the attention of the Court to Clause 21 of the sanction order, learned senior counsel submitted that by the said clause it is clear that the grant of the loan itself is under the head “Agricultural Advances”.

7. Heard the learned counsel for the parties and perused the records. It is not in dispute that the petitioner availed cre