Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Sources ["2024 0 Supreme(MP) 72"], ["2025 0 Supreme(Ker) 2381"], ["2023 0 Supreme(Del) 361"], ["2023 0 Supreme(Del) 3021"], ["2024 0 Supreme(Chh) 631"], ["2024 0 Supreme(Bom) 718"], [" Saraswat Co-operative Bank Ltd. VS Purnanadu Shekharmal Jain, deceased Through LRs. - Anupama P. Jain - Bombay
Legal Proceedings and Property Status: Several cases highlight that properties, including those belonging to borrowers or specific communities, can be subject to SARFAESI proceedings if they serve as collateral for loans. For instance, properties mortgaged prior to attachment or legal action are covered, and the Act's provisions are generally applicable to secured assets, regardless of ownership origin, unless specifically exempted by law.
References: ["2024 0 Supreme(Bom) 718"], [" Saraswat Co-operative Bank Ltd. VS Purnanadu Shekharmal Jain, deceased Through LRs. - Anupama P. Jain - Bombay
Special Provisions and Exemptions: There is no direct mention of exemptions for Adivasi or tribal lands under the SARFAESI Act in the provided sources. The Act is described as a comprehensive law for the enforcement of security interests, with courts emphasizing its primacy over other laws like the MPID Act when applicable.
References: ["2024 0 Supreme(Bom) 718"], [" Saraswat Co-operative Bank Ltd. VS Purnanadu Shekharmal Jain, deceased Through LRs. - Anupama P. Jain - Bombay
Legal Jurisdiction and Remedies: Several cases mention that persons aggrieved by SARFAESI proceedings can approach the Debts Recovery Tribunal under Section 17, indicating that the Act provides a complete legal remedy framework applicable to secured assets, potentially including properties of Adivasis if they are collateral.
Based on the provided sources, Adivasi property does not appear to be explicitly exempt from the SARFAESI Act, 2002. The Act applies to secured assets, including properties mortgaged or used as collateral for loans, regardless of whether they belong to Adivasi communities. The legal framework emphasizes the enforcement of security interests and provides remedies for secured creditors and borrowers alike, with courts generally upholding the applicability of SARFAESI over other laws unless specific exemptions are provided by law.
However, the actual applicability to Adivasi or tribal lands may depend on specific legal protections, land laws, and constitutional provisions related to tribal rights, which are not addressed in these sources. For definitive clarification, consultation of laws related to tribal land protections and specific judicial rulings on Adivasi land rights under SARFAESI would be necessary.
References:
Saraswat Co-operative Bank Ltd. VS Purnanadu Shekharmal Jain, deceased Through LRs. - Anupama P. Jain - Bombay
"]
Imagine securing a bank loan using your ancestral Adivasi land as collateral, only to face default and sudden notices from the bank invoking the SARFAESI Act. Many borrowers in India, particularly from tribal communities, wonder: Is Adivasi property comes under SARFAESI Act 2002? This question arises frequently amid rising non-performing assets (NPAs) and aggressive recovery actions by financial institutions.
In this post, we break down the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), its applicability to Adivasi properties, key exemptions, relevant case laws, and practical remedies. While this provides general insights, consult a legal expert for case-specific advice.
The SARFAESI Act empowers banks and financial institutions to recover dues from defaulting borrowers without court intervention. Key provisions include:- Issuance of notice under Section 13(2).- Taking possession under Section 13(4).- Sale of secured assets via auction.
This streamlined process benefits lenders but raises concerns for borrowers, especially when properties like Adivasi lands—often tied to cultural and livelihood rights—are involved. However, the Act has built-in exemptions that may shield certain properties. 2014 0 Supreme(Mad) 3862
Adivasi properties, frequently classified as agricultural land due to their rural and traditional use, may not fall under SARFAESI enforcement. Here's why:
The SARFAESI Act explicitly exempts agricultural land from its provisions via Section 31(i). Courts have consistently ruled that if the property qualifies as agricultural, banks cannot invoke SARFAESI for recovery. For instance:
The SARFAESI Act, 2002 explicitly exempts agricultural land from its provisions under Section 31(i). This means that if the property in question is classified as agricultural land, it would not fall under the purview of the SARFAESI Act. 2014 0 Supreme(Mad) 3862 2017 0 Supreme(Mad) 1871
In cases involving Adivasi lands used for farming or allied activities, this exemption typically applies, protecting borrowers from possession or auction. 2017 0 Supreme(Mad) 1871
Adivasi lands are often revenue-classified as agricultural, granting them protection. Courts examine:- Land revenue records (e.g., khatauni or jamabandi).- Actual usage (cultivation, not mere classification).
If proven agricultural, SARFAESI actions are deemed illegal. 2014 0 Supreme(Mad) 3862
Not all cases are straightforward. If Adivasi land is used for commercial purposes—like industrial setups or non-agricultural businesses—it loses exemption, even if revenue records say otherwise. Courts have held:
properties used for commercial exploitation, even if they are classified as agricultural for revenue purposes, can be subject to the SARFAESI Act.
Whirlpool of India Ltd. VS Krishna Electronics - Dishonour Of Cheque (2017)
Thus, the dominant use determines applicability. Borrowers must provide evidence of agricultural nature to challenge bank actions.
Indian courts have clarified SARFAESI's scope through landmark rulings, often upholding agricultural exemptions while scrutinizing procedural compliance.
Upholding Agricultural Exemption: In multiple cases, courts quashed SARFAESI proceedings where properties were agricultural. Actions like possession notices were ruled illegal if exemption applied. 2017 0 Supreme(Mad) 1871 2014 0 Supreme(Mad) 3862
Section 31(e) and Historical Exemptions: Earlier, Section 31(e) exempted certain properties, but it was omitted w.e.f. 01.09.2016. Borrowers taking loans before this date argued for its applicability:
Petitioner had made a representation against notice under Section 13 (2) of the SARFAESI Act, 2002 contending that in view of provision contained in Section 31 (e) of the SARFAESI Act, 2002, the property in question is exempted... although Section 31 (e) was omitted w.e.f. 01.09.2016, however on the date when petitioner no.1 took the loan, the said provision was there in statute book. 2021 0 Supreme(UK) 191
However, writ petitions challenging notices were often dismissed as premature if no prejudice was shown. 2021 0 Supreme(UK) 191
Procedural Compliance in Auctions: Banks must follow strict rules, including notices under Sections 13(2) and 13(4). In one case, petitioners challenged jurisdiction under Section 14(1), but courts upheld bank actions due to compliance and borrower awareness:
The court found that the respondent bank had followed the procedures under the SARFAESI Act, and the petitioners' contentions were dismissed. 2019 0 Supreme(Mad) 361
Post-Sale Liabilities: Purchasers in SARFAESI auctions aren't liable for pre-sale property taxes, but banks must disclose encumbrances:
a purchaser of an immovable property under the provisions of the SARFAESI Act, 2002 is not liable to pay property tax for the period prior to the date of the sale. 2019 0 Supreme(Cal) 196
The secured creditor acts as a trustee, obligated to check liabilities. 2019 0 Supreme(Cal) 196
plaintiff not aggrieved by any measures taken by Bank under section 13(4) -- question of availing remedy of appeal under section 17 does not arise. 2017 0 Supreme(MP) 580
If aggrieved by SARFAESI actions:1. Appeal to Debt Recovery Tribunal (DRT) under Section 17—exclusive remedy for challenging possession or sale. 2023 0 Supreme(Del) 361 2019 0 Supreme(UK) 4532. Writ Petition: Possible if fundamental rights violated, but often deemed premature without prejudice. 2021 0 Supreme(UK) 1913. One-Time Settlement (OTS): Banks may consider, though rejection isn't judicially reviewable. No pre-decisional hearing required for credit limit reductions. 2017 0 Supreme(Cal) 562
Whirlpool of India Ltd. VS Krishna Electronics - Dishonour Of Cheque (2017)
In conclusion, while SARFAESI streamlines recovery, exemptions protect vulnerable lands like Adivasi agricultural properties. Disputes hinge on facts—land use, records, and timelines. This is general information; seek professional legal advice for your situation, as outcomes vary by case.
Last updated: Current as of available case laws. Laws may evolve.
#SARFAESIAct #AdivasiProperty #LoanRecovery
Respondent No.2 without complying with the provisions of 13 of SARFAESI Act has moved before the respondent no.1 by filing an application u/S 14 of the SARFAESI Act. ... The respondent No.1/Bank initiated proceedings against the petitioners under section 13(1) of the SARFAESI Act and thereafter filed application before the respondent No.1 u/S 14 of the SARFAESI #HL_STAR....
referred to as ‘SARFAESI Act’ for short). ... Secondly the property in question and its possession has already been taken over. Therefore, at the most, the appellant could have approached the Debts Recovery Tribunal, under Section 17 of the SARFAESI Act. ... Mathew K.C., (2018) 3 SCC 85 : (2018) 2 SCC (Civ) 41] ,the High Courts continue to entertain matters which arise under the Securitisation and Recons....
A bare reading of Section 17 of the SARFAESI Act, 2002 clearly indicates that the remedy under Section 17 of the SARFAESI Act, 2002, is not restricted only to the borrower. ... The petitioner is essentially aggrieved by the measures taken under Section 13(4) of the SARFAESI Act, 2002, and therefore, any person who is aggrieved by any ....
the appropriate remedy would be under Section 17 of the SARFAESI Act, 2002. ... The material part of the Statement of Objects and Reasons for the SARFAESI Act reads as under: "THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (Act No. 54 of 2002) STATEMENT OF OBJECTS AND ... Accor....
Act, 2002 ('the Act, 2002'). ... The loan was not repaid by the borrowers, therefore, notices were issued to the borrowers under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the Act, 2002). ... 6) The bank issued a notice under Section 13(2) of t....
This mortgage was created long before any attachment was levied by the Special Court under the MPID Act. In fact, action under the SARFAESI Act, 2002 has also been initiated in relation to the attached property and an order under Section 14 of the SARFAESI Act, 2002 is also passed. ... Under the provisions of the SARFAESI Ac....
This mortgage was created long before any attachment was levied by the Special Court under the MPID Act. In fact, action under the SARFAESI Act, 2002 has also been initiated in relation to the attached property and an order under Section 14 of the SARFAESI Act, 2002 is also passed. ... Under the provisions of the SARFAESI Ac....
SARFAESI Act, 2002. ... in the SARFAESI Act? ... Act, 2002. ... Act, 2002. ... Local Fund Audit, 2020 (3) KLT 296, wherein taking into account Sections 26E of the SARFAESI Act, 2002 and 31B of the RDB Act, 1993 it was held that the provisions of Section 38 of KVAT....
) Act, 2002”. ... Recovery Tribunal, for the State of Bihar under Section 17 (1) of the SARFAESI Act, 2002 seeking relief to quash the entire SARFAESI proceeding initiated under Section 13 (4) of SARFAESI Act, 2002. ... Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act#H....
No. 02 under the provisions of the SARFAESI Act, 2002. ... We permit the Petitioner to proceed to take measures under the SARFAESI Act in respect of the property in question. ... of 1956 51 of 1956)the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993 and the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Inte....
Petitioner had made a representation against notice under Section 13 (2) of the SARFAESI Act, 2002 contending that in view of provision contained in Section 31 (e) of the SARFAESI Act, 2002, the property in question is exempted from application of provision of SARFAESI Act, 2002. He further submits that although Section 31 (e) was omitted w.e.f. 01.09.2016, however on the date when petitioner no.1 took the loan, the said provision was there in statute book. The aspect highlig....
Thereafter, by giving wide publicity and also duly following the rules of SARFAESI Act, 2002 the property was brought for public auction on 08.06.2009. On receipt of the sale consideration the respondent bank on 18.06.2009, issued registered sale certificate in favour of the said Mr.Vijaya kumar and four others. The petitioners have not complied with the order dated 09.03.2009 in I.A.No.251 of 2009 in O.A.(S) No.42 of 2005 passed by the DRT, Coimbatore. One Mr.E.Vijayakumar a....
Yashika Reality Pvt. Ltd. and Other (supra) is of the view that, a purchaser of an immovable property under the provisions of the SARFAESI Act, 2002 is not liable to pay property tax for the period prior to the date of the sale. In that case, Corporation demanded property tax from a purchaser of an immovable property. The purchaser purchased the property in a proceeding undertaken under the SARFAESI Act, 2002.
Therefore, he ought to have filed an appeal under section 17 of the SARFAESI Act, 2002 because he comes under the category of “any person” who is aggrieved by the measures referred to in sub-section (4) of section 13 of the SARFAESI Act, 2002. The Bank has sold the suit property to the defendant by taking measures under section 13(4) of the SARFAESI Act, 2002 and the plaintiff is aggrieved by the aforesaid sale in favour of the defendant.
State Bank of India has initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002). The account of the first petitioner has become a non performing asset. He refers to a writing dated February 18, 2017 and submits that, the proposal for one time settlement has been rejected by the State Bank of India and that such rejection has since been communicated to the first petitioner.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.