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TMI Blog2021 (1) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) ('SARFAESI Act' for the sake of convenience). Hence, these appeals. 3. Since common questions of law and facts arise in these appeals, they have been connected together, heard and disposed of by this common judgment. 4. The quintessential question that arises for consideration in these appeals is, whether, coffee plantation is agricultural land within the meaning of Section 31(i) of the SARFAESI Act and therefore, the said Act does not apply to coffee plantation. Brief facts of the case in Writ Appeal No. 538 of 2020: 5. In this case, petitioner No. 1 is the partner in petitioner Nos. 2 and 3 partnership firms. Petitioner No. 1 is the co-owner of Watekhan Estate. The petitioners are owners of 371 acres of coffee plantation/estate in Hirekolale, Yelagudige and Aldur villages of Chikkamagalur Taluk. Respondent/Bank (formerly, Corporation Bank) extended various credit facilities to the writ petitioners in the nature of agricultural cash credit loans, agricultural term loans and mortgage loans in relation to the coffee plantation. 6. There are three schedules, viz., Schedule 'A', Schedule ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the retiring partner of the firm engaged in cultivation of coffee. It is evident that the schedule lands were being used for coffee cultivation on the date of the sanction of the respective loans. 8. Since, the writ petitioners did not repay the debt, demand notice dated 28.05.2019 was issued under Section 13(2) of the SARFAESI Act calling upon petitioner No. 1 to pay a sum of Rs. 18,81,45,558/-. A reply or representation was made in response to the said notice on 06.07.2019 to which the Bank gave its reply on the same day. Another representation was made on behalf of the petitioners on 23.08.2019 stating that no action under SARFAESI Act can lie in respect of the schedule lands. But, the Bank, replied on 26.09.2019 brushing aside the objection of the petitioners. The Bank proceeded to issue possession notice dated 27.09.2019 under Section 13(4) of the SARFAESI Act, read with Section 9 of the Security Interest (Enforcement) Rules, 2002 ("2002 Rules" for short) and it took symbolic possession of the schedule land. 9. Plaintiff No. 1 approached the Debts Recovery Tribunal-I, Bengaluru, ('DRT' for short) in S.A. No. 542/2019 and also filed an application for stay of furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the immovable properties. Two apartments which form part of item No. 1 of the Schedule property were auctioned under the SARFAESI Act, but when it came to dealing with item No. 2, it was contended by the appellants herein that the said land being coffee plantation and agricultural land, could not be proceeded against, under the provisions of the SARFAESI Act having regard to Section 31(i) of the said Act. 12. The petitioners in this case assailed notices dated 14.08.2012 (Annexures 'A' & 'B') in respect of item Nos. 1 and 2 of the schedule property and assailed letter dated 31.03.2015 (Annexure 'C') rejecting the representation dated 18.03.2015 made by the petitioners in respect of item No. 2 of the schedule property, which is a coffee plantation and to quash the measures taken by the Bank under the SARFAESI Act in respect of item No. 2 of the Schedule property, which is a coffee plantation comprised in 200 acres with building and structures at Ashirwad Estate, Kolagave village, Jagar Hobli Post, Chikamagalur Taluk and District. 13. The learned Single Judge by his order dated 14.10.2020 observed that since there is an alternative statutory remedy, the wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntend that coffee plantation is just like any other plantation and the Madras High Court and Kerala High Court have held that the lands on which cardamom, coca, turmeric, cinnamon and rubber are grown, are plantation crops. The lands on which the said crops are grown are agricultural lands and therefore, on the basis of the said interpretation, in the instant case, the schedule lands on which coffee is grown must be declared to be agricultural land, in which event, the provisions of the SARFAESI Act would not apply in respect of the said lands. 17. Learned senior counsel contended that in order to seek such a determination, which touches upon the question of jurisdiction or the power of the respondent/Banks to initiate any action or take any measure under the provisions of the Act, for the purpose of recovery of outstanding dues, is a question which ought to have been considered by the learned Single Judges and ought not to have relegated the parties to file an appeal under Section 17 of the SARFAESI Act. In this context, the judgments relied upon are as follows: (i) Mohammed Basheer K.P. vs. Deputy General Manager and others, [2010 (2) KLJ 225], (Mohammed Basheer K.P.); (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SI Act, it was necessary that the writ petitions were considered on merits. 22. In the above context, learned senior counsel drew our attention to the dictionary meaning of the expression 'agricultural land', the definition of 'agriculture' under the Karnataka Land Reforms Act, 1961 (Land Reforms Act, 1961); Karnataka Land Revenue Act, 1961 (Land Revenue Act, 1964) and other enactments where the expression 'agricultural land' or 'agriculture' are defined or used, which shall be alluded to later. 23. Per contra, learned senior counsel, Sri. Dhyan Chinnappa, appearing for the learned counsel for Union Bank of India, contended that the learned Single Judge in W.P. No. 12461/2020 had rightly dismissed the writ petition on the ground of maintainability in view of the availability of an alternative remedy under Section 17 of the SARFAESI Act. He submitted that the DRT has the jurisdiction to consider the issue of the applicability of the Act to coffee plantations, which are the subject matter in these cases. The question, whether, a coffee estate is agricultural land could have been considered by the DRT in an appeal filed under Section 17 of the SARFAES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge outstanding dues payable to the respondent-Bank and instead of taking steps to repay the loan amount as well as the interest thereon by the writ petitioners/debtors to the Bank, appellants herein, are only procrastinating the matter by filing the writ petitions before this Court. That the learned Single Judge was right in dismissing the writ petitions on the premise that there was an alternative remedy available for the petitioners and therefore the orders of the learned Single Judges would not call for any interference in the appeals filed against the said order. 28. Learned senior counsel placed reliance on the following judgments and sought for dismissal of the appeals: (i) United Bank of India vs. Satyawati Tandon and others, [(2010) 8 SCC 110], (Satyawati Tandon); (ii) ICICI Bank Limited and others vs. Umakantha Mohapatra and others, [(2019) 13 SCC 497], (Umakantha Mohapatra); (iii) Authorised Officer, State Bank of India vs. Allwyn Alloys Pvt. Ltd. And others, [(2018) 8 SCC 120], (Allwyn Alloys). (iv) Green Valley Farms vs. Syndicate Bank, (Green Valley Farms); 29. Learned Senior Counsel, Sri Shashikiran Shetty, appearing for the impleading applicant/the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on' and contended that the coffee plantation does not come within the scope and ambit of "agricultural land" under Section 31(i) of the Act. He submitted that even if the land in question is a coffee plantation, action was rightly initiated against the same under Section 13(4) of the SARFAESI Act and symbolic possession has been taken on 01.04.2015. 33. Learned counsel for the respondent/Bank submitted that O.A. No. 636/2013 has been filed by the respondent/Bank against the petitioners only on 09.12.2015. There is an order of attachment before judgment but the said proceeding has not progressed on account of the pendency of the matter before this Court. 34. Learned counsel for the respondent/Bank specifically drew our attention to the provisions of Section 104 of the Land Reforms Act to contend that on a reading of the same, it becomes clear that the coffee plantation is not an agricultural land as it is exempted from certain provisions of that Act and such land could be dealt with in any manner known to law and hence, the appeal may be dismissed. Points for Consideration: 35. Having heard learned counsel for the respective parties, the following points would arise for our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction disclosed on the face of petition that is, when it clearly appears the authority had no jurisdiction with the subject-matter or of the parties, then writ may issue notwithstanding the availability of alternative remedy and as already noted, existence of alternative remedy to be a bar must be adequate. 39. On the general principles that ought to regulate the exercise of judicial discretion when alternative remedies are available, there are a few settled propositions. One of them is, if any applicant claims to be aggrieved by a decision made without jurisdiction or in breach of the rules of natural justice, the fact that he has not taken advantage of a statutory right of appeal should normally be regarded as irrelevant. Conversely, if an applicant seeks an order of certiorari after having appealed unsuccessfully, certiorari may be refused where he has failed to raise objections to jurisdiction or to complain of breach of natural justice at an earlier stage when in full possession of the facts, but if he has raised these questions in an appeal and then raised again in his application for certiorari, recent practice clearly indicates that where the proceedings impugned were a nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative remedy must be effective. An appeal in all cases cannot be said to have provided in all situations, where an appeal would be ineffective and writ petition in such a case is maintainable, vide Ram and Shyam Company vs. State of Haryana [AIR 1985 SC 1147]. (f) Where an authority has acted without jurisdiction, High Court should not refuse to exercise its jurisdiction under Article 226 on the ground of existence of alternative remedy vide Dr. Smt. Kuntesh Gupta vs. Management H.K. Mahavidyaya [AIR 1987 SC 2186]. Thus, an alternative remedy is not an absolute bar to the maintainability of a writ petition. 41. On the issue of maintainability of the writ petition, learned counsel for the appellants relied upon the following decisions: (a) In Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others, [(1998) 8 SCC 1], (Whirlpool Corporation), at paragraph 15, it was observed that under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But, the High Court has imposed upon itself certain restrictions, one of which is, if an effective and efficacious remedy i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly without jurisdiction. In the said case, the Registrar of Trade Marks issued to the appellant therein a notice under Section 56(4) of the Trade and Merchandise Marks Act, 1958 to show cause against the proposed cancellation of appellants' Certificate of renewal. It was held that the issuance of such a notice by the Registrar was without authority and it was quashed by the High Court. (b) In State of H.P. and others vs. Gujarat Ambuja Cement Limited and Another, [(2005) 6 SCC 499], (Gujarat Ambuja Cement Limited), a detailed discussion on the plea regarding alternative remedy was made. It was held that the principle of alternative remedy is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy, it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of the fact that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate, efficacious, alternative remedy. If somebody approaches the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of mining lease, where there was a price for removal of minerals and thus, attracted liability to pay purchase tax. The Hon'ble Supreme Court in the said decision rejected the plea that the High Court should not have entertained the writ petition. Thereafter, the question relating to liability to pay purchase tax on royalty paid was taken up for consideration by discussing on the meaning of the words "royalty", "dead rent", "mining lease". It was observed that royalty paid by the holder of a mining lease under Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 was not the price for removal of minerals and hence, did not attract liability to pay purchase tax. (c) In Embassy Property Developments Private Limited vs. State of Karnataka, (Embassy Property), one of the preliminary questions that arose was whether the High Court ought to interfere under Article 226/227 of the Constitution, with an Order passed by the National Company Law Tribunal (NCLT) in a proceeding under the Insolvency and Bankruptcy Code, 2016 (IBC), ignoring the availability of a statutory remedy of appeal to the National Company Law Appellate Tribunal (NCLAT) and if so, under what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation) Act, 1957 (MMDR Act) and the Statutory Rules issued thereunder; or, there was mere wrongful exercise of a recognised jurisdiction, for instance, asking a wrong question or applying a wrong test or granting a wrong relief. On a detailed discussion, it was held that the NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute Supplemental Lease Deeds for the extension of the mining lease. Since, NCLT chose to exercise jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice. In the instant case, the State of Karnataka had invoked the jurisdiction of the High Court under Article 226 of the Constitution without taking recourse to the appellate remedy under NCLAT. It was held that the judicial review was permissible and the High Court was justified in entertaining the writ petition assailing the order of the NCLT, directing execution of a supplemental lease deed for the extension of the mining lease. (d) Learned Senior counsel appearing for the respondent in Writ Appeal No. 538 of 2020 placed reliance on Authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an order in total violation of principles of natural justice. (e) In United Bank of India vs. Satyawati Tondon and others, [(2010) 8 SCC 110], (Satyawati Tondon) it was observed that it is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective, alternative remedy by filing an application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. (f) Of course in ICICI Bank Limited vs. Umakanta Mohapatra and others, [(2019) 13 SCC 497], (Umakanta Mohapatra), it was held, the writ petition was not maintainable and therefore, allowed the appeals. (g) In Authorised Officer, State Bank of India vs. Allwyn Alloys Private Limited and others, [(2018) 8 SCC 120], the Hon'ble Supreme Court opined that Section 34 of the SARFAESI Act clearly bars filing of a civil suit. No civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deprived except by authority of law. Deprivation of property may take place in various ways, such as seizure of goods or immovable property from the possession of an individual, but in a manner known to law. Deprivation means, the rights constituting property rights taken away, also deprivation by authority of law means, by or under a law made the competent legislature. 45. Thus, the question in this case is, whether coffee plantation could be interpreted to be agricultural land, within the meaning of Section 31(i) of the SARFAESI Act, in which case it is a bar for the applicability of the provisions of the Act. In our view, in order to examine a challenge to an action initiated under the provisions of the SARFAESI Act in respect of the agricultural land and as to, whether, the subject land is an agricultural land or not, the petitions filed under Article 226 of the Constitution of India were maintainable. In such a case, the High Court cannot adopt a pedantic approach but has to decide the matter keeping in view the fact that right to property continues to be an important constitutional right and in terms of Article 300A, no person can be deprived of his property except by auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural lands within the meaning of Section 31(i) of the SARFAESI Act. Before proceeding further, it would be necessary to understand the object of the SARFAESI Act and allude to the background of the said enactment. In this regard, it would be useful to refer to the judgment of the Hon'ble Supreme Court in Mardia Chemicals vs. Union of India, [(2004) 4 SCC 311]. (Mardia Chemicals), wherein reference was made to Narasimham Committee constituted in the year 1991 relating to the financial system prevailing in the country. In Chapter V of the Report under the heading 'Capital Adequacy, Accounting Policies and other Related Matters', it was opined that special Tribunals to deal with the recovery of dues of the advances made by the banks was necessary. Placing reliance on the Tiwari Committee, it was observed that setting up of special Tribunals could expedite the recovery process. The Narasimham Committee in its Second Report submitted in the year 1992, dealt with legal and legislative framework in Chapter VIII of the said Report. One of the measures recommended was to vest the financial institutions through special statutes, the power of sale of the asset without interven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any security interest created in agricultural land; (j) any case in which the amount due is less than twenty per cent of the principal amount and interest thereon." 51. Thus, the question to be determined is whether the provisions of SARFAESI Act would apply to any security interest created in "agricultural land", vide Section 31(i). The expression, agricultural land, is not defined under the Act and therefore, the meaning of the said expression would have to be discerned with reference to the plain and dictionary meaning as well as other legislations which deal with the agricultural land. 52. For an appreciation of the question under consideration, it would be useful to refer to the following judgments which arise in the context of applicability of the SARFAESI Act to plantation crops in the first instance: (a) In Mohammed Basheer K.P. vs. Deputy General Manager and others, [2010 (2) KLJ 225], (Mohammed Basheer K.P.) the issue raised in the writ appeal was whether the SARFAESI Act applied to lands on which rubber plant or trees are grown. In other words, whether, the rubber plantation was exempted as agricultural land from the application of the SARFAESI Act. In that case, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder-growths, tending, pruning, etc. have to be done. Thereafter, harvesting and running the produce for the market are operations which have to be carried out. The latter would all be agricultural operations when taken in conjunction with the basic operations above described and it would be futile to say that they are not agricultural operations at all. According to the Hon'ble Supreme Court, the mere performance of these subsequent operations on the products of the land, where such products have not been raised on the land by the performance of the basic operations which we have described above, would not be enough to characterise them as agricultural operations. In order to invest them with the character of agricultural operations, these subsequent operations must necessarily be in conjunction with and a continuation of the basic operations which are the effective cause of the products being raised from the land. It is only if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the products of the land and acquire the characteristic of agricultural operations. Thus, the cultivation of the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further observed that the distinction is not important in cases where the agriculturist performs these operations as a part of his integrated activity in cultivation of the land. Where, however, the products of the land are of spontaneous growth, unassisted by human skill and labour, and human skill and labour are spent merely in fostering the growth, preservation and regeneration of such products of land, the question falls to be considered, whether, these subsequent operations performed by the agriculturist are agricultural operations and enjoy the characteristic of agricultural operations. This is because the products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived therefrom is not agricultural income, as there is no process of agriculture involved in the raising of these products from the land. In the said case, it was held that the forest land therein was more than 150 years old and trees had completely fallen and the proprietors had planted fresh trees in those areas, and they had performed operations for the purpose of nursing the trees planted by them. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrive at a clear finding that the secured asset is an agricultural property, there is no point in directing the borrower/guarantor to approach the DRT. When the very initiation of SARFAESI proceeding is under challenge on the ground of statutory bar, and the available materials are sufficient to decide the issue, it cannot be said that still the party should be directed to approach the DRT. It was further observed that the question regarding alternative remedy would lose its significance in that case in view of the voluminous documents produced by the petitioner to show that the security was created in their agricultural land. It was further observed that, mere denial in the counter-affidavit unaccompanied by documents to prove such defence, would not result in raising a disputed question so as to direct the parties to approach the DRT. (e) The controversy in J. Malliga and others vs. Union Bank of India and others, [2010 (4) CTC 710], (J. Malliga) was with regard to cardamom plantation and the question, as to, whether, what activities that were done for Cardamom cultivation on the lands would be agricultural lands. It was held that the Cardamom cultivation did not comprise in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sent by the creditor calling upon the debtor to pay the amount overdue within a period of sixty days. This was followed by a notice issued under Section 13(4) whereby the symbolic possession of the hotel was taken over by the creditor and subsequently, there was a sale by a public auction. A notice of sale by a public auction was issued in the newspaper. One of the questions that arose in the said case was, whether, the land mortgaged by the debtor as a security interest consisted of agricultural land to which the provisions of the SARFAESI Act did not apply. The land, therefore, could not have been recovered. It was observed that the total land on which the Goa Hotel was located was 1,82,225 sq.m., of these 2,335 sq.m. was used for growing vegetables, fruits, shrubs and trees for captive consumption of the hotel, which was 12.8% of the total area. It was held that the land in question was not agricultural land and that the High Court had misdirected itself in holding that the land was an agricultural land, merely because it stood as such in the revenue entries even though the application made for such conversion was pending. Therefore, the test is not per se whether the land is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, did not define the expression 'agricultural land' under Section 31(i) of the SARFAESI Act. 56. Before proceeding further, it would be useful to refer to Articles 246 of the Constitution. Article 246 deals with subject matter of laws made by Parliament and by the Legislatures of States. (a) Clause (1) of Article 246 states that notwithstanding anything in clauses (2) and (3) Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I of the VII Schedule (Union List). (b) Clause (2) of Article 246 of the Constitution, states that notwithstanding anything in clause (3), the Parliament and the Legislature of any State also have the power to make laws with respect to any matters enumerated in List-III to the VII Schedule (Concurrent List). (c) Clause (3) thereof, states that the Legislature of any State has exclusive power to make laws for the State with respect to any matters enumerated in List-II of the VII Schedule (State List). However, clause (3) of Article 246, is subject to clauses (1) and (2) which begins with a non obstante clause. (d) The power to legislate which is dealt with Article 246 has to be read i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deals with 'Banking'. SARFAESI Act, 2002 is also relatable to Banking. The object of the SARFAESI Act is to regulate Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest and for matters connected therewith or incidental thereto. Thus, the SARFAESI Act being an enactment traceable to Entry 45 of List-I of the VII Schedule, it has excluded the enforcement of the Act insofar as the security created in agricultural lands are concerned without defining the said expression as the subject 'agricultural lands' is relatable to the respective entries under List-II and is a State subject. In the circumstances, we have to deduce the meaning of the expression 'agricultural land' found in Section 31(i) of the SARFAESI Act with reference to the relevant State enactments. (b) Entry 14 of List II (State List) deals with the subject 'agriculture' including 'agricultural education and research, protection against pests and prevention of plant diseases'. Entry 18 of the said list deals with land, that is to say, right in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For purposes of sub-section (1).- (i) the aggregate income of all the members of a family or a joint family from sources other than agricultural land shall be deemed to be income of the family or joint family, as the case may be, from such sources; (ii) a person or a family or a joint family shall be deemed to have an assured annual income of not less than rupees twenty five lakhs from sources other than agricultural land on any day if such person or family or joint family had an average annual income of not less than rupees twenty five lakhs from such sources during a period of five consecutive years preceding such day. Explanation.- A person who or a family or a joint family which has been assessed to income tax under the Income Tax Act, 1961 (Central Act 43 of 1961) on an yearly total income of not less than rupees twenty five lakhs for five consecutive years shall be deemed to have an average annual income of not less than rupees twenty five lakhs from sources other than agricultural lands. (3) Every acquisition of land otherwise than by way of inheritance or bequest in contravention of this section shall be null and void. (4) Where a person acquires land in contrave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he greater part of such land is situated a declaration containing the particulars of such land and such other particulars as may prescribed; and (b) which acquires such land after the said date shall also furnish a similar declaration within the prescribed period. (3) The Tahsildar shall, on receipt of the declaration under sub-section (2) and after such enquiry as may be prescribed, send a statement containing the prescribed particulars relating to such land to the Deputy Commissioner who shall, by notification, declare that such land shall vest in the State Government free from all encumbrances and take possession thereof in the prescribed manner. (4) In respect of the land vesting in the State Government under this section an amount as specified in Section 72 shall be paid. Explanation.- For purposes of this section it shall be presumed that a land is held by an institution, trust, company, association or body where it is held by an individual on its behalf. x x x 80. Transfers to non-agriculturists barred.- (1) (a) No sale (including sales in execution of a decree of a civil court or for recovery of arrears of land revenue or for sums recoverable as arrears of land re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Karnataka Slum Areas (Improvement and Clearance) Act, 1973, (Karnataka Act 33 of 1974) the Bangalore Development Authority constituted under the Bangalore Development Authority Act, 1976 (Karnataka Act 12 of 1976), a Nagarabhivruddhi Pradhikara constituted under the Karnataka Nagarabhivruddhi Pradhikaragala Adhiniyama, 1987 (Karnataka Act 34 of 1987); (b) the mortgage of any land or interest therein in favour of.- (i) a co-operative society; (ii) a financial institution; (iii) x x x x x; (iv) x x x x x; (v) x x x x x; (vi) any company as defined in Section 3 of the Companies Act, 1956 (Central Act 1 of 1956) in which not less than fifty-one per cent of the paid up share capital is held by the State Government or the Central Government or both; (vii) any corporation, not being a company as defined in Section 3 of the Companies Act, 1956 (Central Act 1 of 1956) established or constituted by the State Government or the Central Government or both; (viii) the Coffee Board constituted under the Coffee Act, 1942 (Central Act 7 of 1942), as security for any loan or other facility given by such society, bank, company, corporation or Board for agricultural purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and efficient management of such cultivation. B. The relevant provisions of the Land Revenue Act are as under: 2. Definitions.--In this Act, unless the context otherwise requires.-- x x x (8) 'Class of Land' means any of the following classes of land, namely, dry land, wet land, garden land or plantation land; Explanations.--For purposes of this Act.-- x x x (d) 'Plantation Land' means land in which a plantation crop, that is, cardamom, coffee, pepper, rubber or tea, can be grown. x x x (14) "Land" includes benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth, and also shares in, or charges on, the revenue or rent of villages or other defined areas; C. The relevant definition and provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 are as follows: "3. In this Act, unless the context otherwise requires.-- x x x d) "agricultural land" means land used for the purpose of-- (i) agriculture or horticulture; (ii) dairy farming, poultry farming, pisciculture, sericulture, seed farming breeding of liv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (A) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (A) and which has a population of more than ten lakh. Explanation 1.--For the removal of doubts, it is hereby declared that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of this section. Explanation 2.--For the removal of doubts, it is hereby declared that income derived from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose (including letting for residential purpose or for the purpose of any business or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not be agricultural income. Explanation 3.--For the purposes of this clause, any income derived from saplings or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) uncured coffee seeds" G. The relevant definition and provisions of the Karnataka Town and Country Planning Act, 1961 are as given below: "2. Definitions.--In this Act, unless the context otherwise requires,-- (1) 'Agriculture' includes horticulture, farming, growing of crops, fruits, vegetables, flowers, grass, fodder, trees or any kind of cultivation of soil, breeding and keeping of livestock including cattle, horses, donkeys, mules, pigs, fish, poultry and bees, the use of land which is ancillary to the farming of land or any purpose aforesaid, but shall not include the use of any land attached to a building for the purposes of garden to be used along with such building; and 'agricultural' shall be construed accordingly;" H. P. Ramanatha Aiyar's Advanced Law Lexicon (5th Edition, 2017, Lexis Nexis) gives the following meanings to the respective words, namely agriculture and plantation: "(1) Agriculture: The science or art of cultivating soil, harvesting crops and raising livestock. (2) Plantation: Large scale farming operation, carried on by hired labour. Ex: Rubber plantation. The ordinary significance of the term "plantation" is a far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural Land" in Section 31(i) of the SARFAESI Act, must be given a contextual interpretation and not an expansive one. (II) That the contextual interpretation depends upon the nature of crops grown on the land. Whether it refers to only non-commercial crops, i.e., excluding plantation or cash crops? Thus, whether agricultural land can take within its scope and ambit land on which plantation crops such as coffee, tea, rubber, cardamom and pepper are grown? (III) Generally speaking, while determining the nature of the land and as to whether it is agricultural land, the character of the land according to the purpose for which it is meant or set apart can be an important test. Thus, there must be a connection between the user of the land and the purpose, which is agricultural purpose. Also, agricultural activity does not mean only cultivation per se, but it is an integrated activity which would include not only the cultivation of crops but also its process for its future use. (IV) Use and nature of the land must be determined on the date of creation of the security interest and for the purpose for which it was set apart. (V) The purpose and intent on the date on which securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he protection and efficient management of such cultivation. 69. As already noted 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. 70. However, Section 81(1)(b)(i) & (ii) of the Karnataka Land Reforms Act states that, nothing in Section 79-A or Section 79- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial institution for a non-agricultural purposes, i.e., as security for any loan or other facility for non-agricultural purposes. In such a case, Section 104 states that the bar under Section 79-A, 79-B and Section 80 would not apply to plantations. This would mean that such plantations could be mortgaged even for non-agricultural purposes, in which event, the security of lands on which plantation crops are raised for the loan could be realized under the provisions of Land Reforms Act. Then, can such land be excluded from the scope and ambit of agricultural land under Section 31(i) of the SARFAESI Act is the question. 73. On a conjoint reading of Section 81 with Section 104 of Karnataka Land Reforms Act, what emerges insofar as land on which plantation crops, such as coffee are grown, such lands are exempted from the provisions of Sections 79-A, 79-B and 80 and they could be dealt with by way of sale, lease, gift, mortgage or exchange and the limitations mentioned in those sections do not apply to such land. 74. More particularly, Sections 79-A, 79-B and 80 do not apply to the mortgage of any land or interest therein in favour of a financial institution when as a security for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -B and 80 of the Land Reforms Act, do not apply as per Section 104 of the said Act to plantation lands or land on which plantation crops are grown. Such lands would not come within the purview of agricultural land under Section 31(i) of SARFAESI Act. 79. In this context, it would be useful to note that, the expression 'plantation crop' under sub-section (25) of Section 2(A) of the Land Reforms Act means cardamom, coffee, pepper, rubber and tea. Therefore, Section 104 which deals with plantation is placed in the Exemptions Chapter of the Land Reforms Act. Also, Section 81 which is an exception to Section 79-A and Section 79-B deal with restrictions on holding or a transfer of agricultural land have also to be borne in mind, while applying the same to the facts of the present case. 80. In this context, it would be useful to refer to the 'Principles of statutory interpretation" by Justice G.P. Singh", 14th Edition, wherein it has been observed that if a word has been defined in 'interpretation clause' or 'definition clause', prima facie, that definition governs wherever that word is used in the body of that statute. That means if, in an enactment, the Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers commit default in repayment of the loan. If that is the subject of the enactment and object of the Act, the term "agricultural land" cannot be given such a liberal and wide construction or interpretation. Further, when the loan is borrowed from a bank and there is a default in repayment and measures are initiated under the SARFAESI Act, after issuance of notice and receipt of reply, questions such as the loan being agricultural loan or the land being the agricultural land may not be raised, particularly when the credit facility is in the nature of agricultural loan on agricultural lands being given as secured assets. This reasoning is in line with what we have deduced above. The same is also in consonance with the provisions of Land Reforms Act and Karnataka Agricultural Income Tax Act, 1957, which apply only to plantations crops. 85. In Writ Appeal No. 538 of 2020, the loan was obtained for agricultural purposes and there being no bar for the mortgage of any land or interest therein in favour of the financial institution such as a bank, as security for agricultural purpose, the sale of such land or interest therein for the enforcement of the said security is permissible as pe ..... 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