2021 (1) TMI 1265 - HC - Indian Laws

Maintainability of petition - availability of an alternative remedy of appeal available under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 - scope of agricultural land - coffee plantation is agricultural land within the meaning of Section 31(i) of the SARFAESI Act - applicability of the act to coffee plantation. Whether the writ petitions were rightly dismissed on the ground of maintainability in view of the availability of an alternative remedy before the DRT under Section 17 of the SARFAESI Act? - HELD THAT - If the answer to the question whether coffee plantation/estate is an agricultural land within the meaning of Section 31(c) of the SARFAESI Act is in the affirmative then the provisions of the Act would not apply and the action initiated by the respondent/bank would be without jurisdiction. Any action of an authority without jurisdiction goes to the root of the matter and in such a case a writ petition would lie under Article 226 of the Constitution. In such circumstances it would not be sound exercise of discretion to relegate the parties to the remedy by way of an appeal. This is particularly so when a constitutional right such as Article 300A of the Constitution is involved and the applicability of the SARFAESI Act to coffee estate in the context of whether it is an agricultural land or not would be an important question which has to be decided in the first instance before deciding on the legality of the action otherwise. The writ petitions filed under Article 226 of the Constitution in the instant case were maintainable. This is particularly so having regard to the issue raised in these writ petitions as it involves interpretation of law. It also touches upon the applicability of the SARFAESI Act and the jurisdiction on the respondent/bank to take measures under Section 13 of the said Act vis- -vis the subject lands which are coffee plantations. Hence the question is answered in favour of the appellants. Whether coffee plantation is an agricultural land under Section 31(i) of the SARFAESI Act? - HELD THAT - Under the Land Reforms Act the definition of agriculture is an inclusive one which also includes the raising of crops grass or garden produce. The expression plantation crops is defined to mean cardamom coffee pepper rubber and tea etc. This implies that all other crops are non-plantation crops. The word land means agricultural land including garden land plantation but does not include house site or land used exclusively for non-agricultural purposes. Under Section 104 of the said Act certain provisions of the said Act do not apply to plantations - The word plantation is explained under Section 104 to mean land used by a person principally for the cultivation of plantation crops and includes any land used ancillary to the cultivation of such crop or for preparation of the same for the market and agricultural land within the area cultivated with such crop for the protection and efficient management of such cultivation. Under Karnataka Agricultural Income Tax Act 1957 Agricultural Income means any revenue derived from land situated within the State and used for growing plantation crops. On an analogy the expression plantation crops would include coffee. Under the APMC Act also under Schedule 8 coffee is included as a plantation crop. In all the aforesaid enactments coffee has been defined to be a plantation crop. The expression plantation crops is defined in Section 2(A)(25) of the Karnataka Land Reforms Act to mean cardamom coffee rubber pepper and tea. Thus in case of these plantation crops inter alia Sections 79-A 79-B and 80 of the said Act would not apply. Section 79-A states that the acquisition of land by certain persons is prohibited. Section 79-B prohibits the holding of agricultural land by certain persons. Section 80 states that transfer to non-agriculturists is barred. The said Section includes not only sale gift exchange lease of any land or interest therein but also states that mortgage of any land or interest therein in which the possession of the mortgaged property is delivered to the mortgagee shall not be lawful in favour of a person who is not an agriculturist or who is disentitled under Section 79-A or Section 79-B to acquire or hold any land unless the Deputy Commissioner having jurisdiction over the area permits such sale gift or exchange etc. - Section 81 is an exception to Section 79-A Section 79-B and Section 80. Therefore there could be a mortgage of any land or interest therein in favour of a bank or a financial institution and also sale of any land or interest therein mortgaged to any financial institution for enforcement of the security for any loan or other facility for agricultural purposes. The coffee being a plantation crop within the meaning of Section 2(A)(25) of the Land Reforms Act is exempted from the provisions of Sections 79-A 79-B and 80 as per Section 104 of the said Act. Also under Section 81 of the said Act the bar under Section 79-A 79-B and 80 of the said Act would not apply in the case of mortgage of any land or interest therein to any financial institution as security for any loan or other facilities given by such financial institution for agricultural purposes. Hence any land used for raising a plantation crop if mortgaged to a financial institution even if for non-agricultural purposes could also be sold for enforcement of the said security. Having regard to Section 104 and Section 81 of the Land Reforms Act lands on which the plantation crops are grown being exempt from the restrictions pertaining to agricultural land mentioned in Section 79-A 79-B and 80 in view of Section 104 and Section 81 of the said Act would not come within the scope and ambit of the agricultural land under Section 31(i) of the SARFAESI Act - on a contextual interpretation land on which plantation crops are grown is not agricultural land within the meaning of Section 31(i) of the SARFAESI Act. It emerges that the land on which plantation crops are raised (coffee in the instant case) if mortgaged or given by way of a security to a financial institution to obtain a credit facility whether for an agricultural purpose or for a non-agricultural purpose the said security could be enforced and Section 31(i) of SARFAESI Act does not apply to such land. That means the financial institution can enforce the security created on such lands. We make it clear that this judgment concerns the interpretation of lands on which plantation crops are grown being construed as agricultural lands within Section 31(i) of the SARFAESI Act only as the lands in these cases concern plantation crops. We have not ventured to consider the matter in the context of non-plantation crops. In the instant case the securities created in the coffee plantations can be enforced for the realization of the debts as coffee plantation would not come within the scope and ambit of agricultural land under Section 31(i) of the SARFAESI Act insofar as State of Karnataka is concerned. Thus it is concluded - (i) That in these cases the writ petitions were maintainable under Article 226 of the Constitution of India; (ii) That the expression agricultural land in Section 31(i) of the SARFAESI Act does not include land on which plantation crops are grown namely cardamom coffee pepper rubber and tea as defined in Section 2(A)(25) of the Land Reforms Act. Therefore the measures initiated by the respondent banks in relation to the coffee estates in these appeals are not hit by Section 31(i) of the SARFAESI Act as the said Act is applicable to land on which plantation crops are grown including coffee plantation in the instant cases. Appeal disposed off.

Summary

Issues Involved:
1. Maintainability of Writ Petitions under Article 226 of the Constitution.
2. Whether coffee plantations are considered agricultural land under Section 31(i) of the SARFAESI Act.

Issue-wise Detailed Analysis:

Re: Point No. 1: Maintainability of Writ Petitions under Article 226 of the Constitution
Maintainability of the Writ Petitions:

1. General Principles:
- Writ jurisdiction is generally not available where there is an adequate and specific legal remedy provided under the statute. However, writs may be issued where the authority had no jurisdiction or there is a breach of natural justice.

2. Supreme Court Judgments:
- Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai: High Courts have discretion to entertain writ petitions despite alternative remedies, especially where the order is without jurisdiction.
- State of H.P. vs. Gujarat Ambuja Cement Limited: High Courts may entertain writ petitions in cases of breach of natural justice or ultra vires actions.
- Embassy Property Developments Private Limited vs. State of Karnataka: High Courts can entertain writ petitions if the statutory authority acts without jurisdiction.

3. Application to the Present Case:
- The writ petitions were maintainable as they raised a question about the applicability of SARFAESI Act to coffee plantations, which involves interpretation of law and jurisdictional issues.
- The High Court cannot adopt a pedantic approach when constitutional rights, such as Article 300A (right to property), are involved.

Re: Point No. 2: Whether Coffee Plantations are Agricultural Land under Section 31(i) of the SARFAESI Act
Interpretation of Agricultural Land:

1. Legal Framework:
- SARFAESI Act: Section 31(i) excludes agricultural land from its purview but does not define "agricultural land."
- State Laws: Definitions and provisions from Karnataka Land Reforms Act, Land Revenue Act, and other relevant statutes were considered.

2. Relevant State Laws:
- Karnataka Land Reforms Act: Defines "plantation crops" to include coffee and exempts such lands from certain restrictions applicable to agricultural lands.
- Karnataka Land Revenue Act: Defines "plantation land" as land on which plantation crops like coffee can be grown.
- Other Relevant Statutes: Various laws recognize coffee as a plantation crop.

3. Judicial Precedents:
- Mohammed Basheer K.P. vs. Deputy General Manager: Rubber plantations were held to be agricultural lands.
- Raja Benoy Kumar Sahas Roy: Defined agriculture to include both basic and subsequent operations on the land.
- Eshwar Purushothaman Gardens vs. Indian Bank: Land used for commercial crops like coconut and turmeric was held to be agricultural land.
- K. Pappireddiyar: The nature of the land and its use at the time of creating the security interest are crucial in determining whether it is agricultural land.

4. Analysis and Conclusion:
- Contextual Interpretation: The term "agricultural land" should be given a contextual interpretation rather than an expansive one.
- State Law Exemptions: Under Karnataka Land Reforms Act, lands on which plantation crops are grown (including coffee) are exempt from certain restrictions, implying they are not treated on par with lands growing non-plantation crops.
- Implication for SARFAESI Act: Coffee plantations are not considered agricultural land under Section 31(i) of the SARFAESI Act.

Conclusion:
- The writ petitions were maintainable under Article 226 of the Constitution.
- The expression 'agricultural land' in Section 31(i) of the SARFAESI Act does not include land on which plantation crops like coffee are grown. Therefore, the measures initiated by the respondent banks in relation to the coffee estates are not barred by Section 31(i) of the SARFAESI Act.

Disposition:
- The writ appeals are disposed of in the aforesaid terms, with parties bearing their respective costs. Pending applications stand disposed of.