The judgment establishes that loans taken for non-agricultural purposes do not fall under the U. P. Agricultural Credit Act, 1973, and the court cannot intervene to reschedule loan repayment agreed upon by the parties.

Heard learned counsel for the parties.

2. This petition is preferred for quashing the impugned notice dated 16.7.2009 issued by the State Bank of India, Branch-Bikapur, District-Faizabad to the petitioner under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter referred to as "SARFAESI ACT, 2002".

3. It appears that the petitioner had applied for term loan of Rs.15 lacs and credit card limit for Rs.10 lacs from time to time under the scheme of Central Government known as Self Employment Scheme for establishing a factory for carrying on business of repairs and manufacture of machinery. During the period 2007-09 he deposited certain amounts of loan and on 16.7.2009 the Respondent-Bank issued impugned notice under Section 13 (2) of the Act.

4. It also appears that the petitioner on 2.1.2009 had moved an application to the Respondent-Bank for re-financing the factory and also moved an application on 17.12.2009 for compromise.

5. The contention of learned counsel for the petitioner is that since the loan was taken by the petitioner for establishment of industry in connection with the agriculture, hence the recovery proceedings initiated against him is governed under Section 11 (A) of the U. P. Agricultural Credit Act, 1973 and not under Section 13 (2) of SARFAESI Act, 2002, hence impugned notice issued against the petitioner is illegal and without jurisdiction.

6. In rebuttal learned counsel for the Respondent-Bank has submitted that since there has been a default in repayment of loan by the petitioner, impugned notice was issued to the petitioner for recovery of Rs. 15,94,429/- under Section 13 (2) of the Act as the petitioner is governed by the provision of Section 13 (2) of the SARFAESI Act, 2002 and not under Section 11 (A) of the U. P. Agricultural Credit Act, 1973.

7. In this regard, learned counsel for the petitioner has relied upon a judgment passed in F. A. F. O. No.2008 of 1988 : Atma Ram Misra v. Bank of India decided on 23.10.1989 in which the Court has considered the definition of agriculture, agricultural purpose and agriculturist as given in sub-sections (a) and (b) of Section 2 of the Act which reads as under :-

2. Definition- In this Act, unless the context otherwise requires-

(a) agriculture and agricultural purpose includes making land fit for cultivation, cultivation of land, improvement of land (including development of sources of irrigation), raising and harvesting of crops, horticulture, forestry, cattle breeding, animal husbandry, dairy farming, piggery, poultry farming, seed farming, pisciculture, apiculture, sericulture and such other activities as are generally carried on by persons engaged in any of the aforementioned activities and also includes :-

(I) marketing of agricultural products, their storage and transport;

(II) the acquisition of implements and machinery in connection with any such activity;

(III) the acquisition of gobar-gas plant; and

(IV) the establishment and maintenance of agro-service centres:"

Explanation :- For the purpose of this clause, the expression agro service centre means a place or a shop where the entrepreneurs, trained by the U.P. State Agro-Industrial Corporation Limited, carry on the sale of seeds, fertilizers, insecticides, pesticides, or other goods of agricultural use or agricultural operations in respect of land held by other by tractors other mechanised process on hire or repair of the agricultural implements

(b) agriculturist means a person who is engaged in agriculture;

8. In the case of Atma Ram Misra (supra) the loan was taken by the petitioner from the Bank for extension of his cold-storage and the Bank had started the recovery proceeding under the U.P. Agricultural Credit Act, 1973. The petitioner has alleged that he had taken a loan as Small Scale Industrial Unit and not as an agriculturist, hence it was prayed before the lower court that the loan taken was not recoverable under the said