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2019 (9) TMI 1734 - HC - Indian LawsPossession of secured asset i.e. agricultural land/holding - Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT - It is true that there is a remedy available to the petitioners to approach the Debt Recovery Tribunal but the order passed by the District Magistrate is void abnitio in the light of Section 31(i) of SARFAESI Act, 2002 which categorically provides that the provisions of Act of 2002 are not applicable in respect of any security interest created in agricultural land and therefore, once the Act of 2002 was not applicable in respect of the agricultural land, the order passed by the District Magistrate is a nullity and there appears to be no justification in forcing the petitioners to file an appeal. The Apex Court has dealt with Section 31(i) of the SARFAESI Act, 2002 and in view of ITC Limited Vs. Blue Coast Hotels Limited 2018 (3) TMI 932 - SUPREME COURT this Court is of the opinion that the impugned order passed by the learned District Magistrate deserves to be set aside and is accordingly set aside. However, it is made clear that the respondent no.2-Bank shall be free to take recourse to other remedies available under the law for realization of debts. The writ petition stands allowed.
Issues Involved:
1. Applicability of SARFAESI Act, 2002 to agricultural land. 2. Validity of the order passed by the District Magistrate under Section 14 of the SARFAESI Act, 2002. 3. Availability and relevance of alternative remedies under Section 17 of the SARFAESI Act, 2002. Issue-wise Detailed Analysis: 1. Applicability of SARFAESI Act, 2002 to Agricultural Land: The primary issue in this case was whether the provisions of the SARFAESI Act, 2002 apply to agricultural land. According to Section 31(i) of the SARFAESI Act, the Act's provisions do not apply to any security interest created in agricultural land. The judgment emphasized that the Act is intended to protect agricultural land from being subject to the enforcement of security interests without court intervention. This provision aims to shield agriculturists from losing their livelihood due to the Act's stringent measures. The court cited the Supreme Court's decision in ITC Limited Vs. Blue Coast Hotels Limited, which clarified that agricultural land is exempt from the Act, reinforcing that security interests cannot be enforced on agricultural land under the SARFAESI Act. 2. Validity of the Order Passed by the District Magistrate: The petitioners challenged the order dated 20.11.2018 by the District Magistrate, which was issued under Section 14 of the SARFAESI Act, 2002, directing the possession of agricultural land. The court found that since the SARFAESI Act does not apply to agricultural land, the District Magistrate's order was void ab initio. The court held that the order was a nullity, as the Act's provisions could not be invoked for agricultural land. This conclusion was based on the clear exemption provided under Section 31(i) of the SARFAESI Act, rendering the District Magistrate's order invalid. 3. Availability and Relevance of Alternative Remedies under Section 17: The respondents argued that the petitioners had an alternative remedy under Section 17 of the SARFAESI Act, which allows for an appeal to the Debt Recovery Tribunal (DRT). However, the court noted that since the District Magistrate's order was void due to the inapplicability of the SARFAESI Act to agricultural land, there was no justification for forcing the petitioners to pursue an appeal. The judgment highlighted that the existence of an alternative remedy does not preclude the court from setting aside an order that is fundamentally void. Conclusion: The court concluded that the impugned order passed by the District Magistrate was invalid and set it aside. It reaffirmed that the SARFAESI Act does not apply to agricultural land, and any order under the Act concerning such land is a nullity. The judgment allowed the writ petition, while clarifying that the respondent bank could pursue other legal remedies to recover its debts.
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