• Can agricultural land be taken as mortgage to sanction loan for an non agricultural business

I purchased a land which is agricultural land .The original owner of the land was a guarantor to a loan for non agricultural business (printing press). During due diligence he showed his commercial plot to the bank officials but when he gave the land papers to bank he submitted the land papers of the agricultural land which he sold it to me after few years. The loan got disbursed and became NPA .Now bank is going for sale of the land that belon to me and which a agricultural land.How do I stop the sale of my land. This is a fraud done by the land owner and in collusion with the bank or the bank have overlooked while taking the papers.Please advice a way out.regards
Asked 5 years ago in Property Law
Religion: Hindu

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12 Answers

1. The loan becomes NPA only because you defaulted paying the EMI.

2. If that is so then clear the EMI first and regualrise the loan account.

3. If the loan account is regualrised once again the SARFAESI proceeding will stop.

4. If on your proposal to make the payment the bank refuses to accept the proposal then file an application under section 17 of the SARFAESI Act seeking injunction on sale.

Devajyoti Barman
Advocate, Kolkata
22526 Answers
436 Consultations

5.0 on 5.0

Dear Client,

Legal term Caveat Emptor - Buyer Beware, the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.

It was your responsibility to check if property was under any encumbrance before purchase.

If u have purchased the land before loan than same legal principal will apply to bank and cannot proceed against u and if u have purchased the mortgage property than file FIR against seller.

Yogendra Singh Rajawat
Advocate, Jaipur
21769 Answers
31 Consultations

4.4 on 5.0

1) you have to sue the seller to recover loss suffered by you in case bank seeks to auction your loan

2) if land was mortgaged to bank seller had no business to sell you said land

3) file police complaint under section 406, 420 of IPc against seller for criminal breach of trust and cheating

Ajay Sethi
Advocate, Mumbai
91274 Answers
6807 Consultations

5.0 on 5.0

You will have to file a SARFAESI application at DRT, Guwahati relating to any grievance regarding bank/financial loans. Proper advice can only be given after perusing loan documents.


Talukdar Foxwheel Law.

Talukdar Foxwheel
Advocate, Guwahati
16 Answers
1 Consultation

4.9 on 5.0

Hello sir,it is advisable to file a civil suit for permanent injuction and obtain a stay order from court to restrain bank from taking over the property...it is also advisable to register a FIR under section 420 for cheating against the owner

Hemant Chaudhary
Advocate, Gurgaon
4629 Answers
67 Consultations

4.9 on 5.0


You will have to file a suit in DRT thereupon challenging the sale proceed.

Also, you will have to file a case against the seller for cheating you and for playing fraud on you.

Get in touch with a local lawyer at the earliest.


Anilesh Tewari
Advocate, New Delhi
18043 Answers
377 Consultations

5.0 on 5.0

In my respectful view since under SARFESI act agricultural land cannot be attached under section 31 as an security as land is not mortgages the seller is only security so the said land cannot be attached auctioned soled.

Secondly the only thing for contesting is whether the land is agricultural or not.

Thirdly the buyer has done a fraud so in worst case if it is attached by the bank and order attain finality then you can claim damages from the seller and can register a criminal case of fraud against him

Since they are process of auction you have not challanged possession notice of bank under section 13 and physical possession under 14 sarfesi act before DRT file a writ petition before high court seek relief. The high court can grant you some relief in the matter.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

Yes, please straight away without wasting any time go to the High Court and file Writ of Mandamus to stop the bank from doing that as it was the bank fault who didn’t look into ate fact or by the owner.

There is no fault of yours as you got it with all legal papers in your favour.

Surely, would get relief.

Good Luck.

Sanjay Baniwal
Advocate, South Delhi
5468 Answers
13 Consultations

5.0 on 5.0

The best options left for you:

1. At this belated stage approach the High Court and get a stay order on the sale of the agricultural land that belongs to you;

2. Say that the money taken by the land owner, must be given to the bank by the land owner;

3. Also, file an FIR against the builder and the bank employees who you suspect are cheating you;

4. Yo can file FIR under sections 34, 120B, 403, 405, 406, 415, 418, 420, and 425 of the Indian Penal Code, 1860.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

The fraud has been done not only by the land owner but also the bank.

The bank cannot accept the property documents without obtaining legal opinion from its panel lawyer for granting loan.

Therefore it appears to be a scam in collusion by the land owner with bank staff and the legal adviser of the bank.

You can fight it out on merits only.

In fact it is your fault to buy a property without obtaining a proper legal opinion about the property proposed to be bought from a local advocate.

Now whatever you have to say, you may have to express before court where the case has been filed or obtain an injunction against recovery through the mortgaged landed property by the bank on merits and documentary evidences in your side.

T Kalaiselvan
Advocate, Vellore
81456 Answers
1826 Consultations

5.0 on 5.0

Dear Sir,

You have a good case based upon technical points. You will win the case certainly. Similar frauds being played by the bankers in collusion with owners/borrowers. You must heir a Senior Level Experienced Advocate to present your case so that the contention of bankers and your vendor can be rejected. You may also initiate criminal action against both of them.

Kishan Dutt Kalaskar
Advocate, Bangalore
6128 Answers
432 Consultations

4.8 on 5.0


You may file case in DRT against the bank and land seller to prevent any action against that land and its sale.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

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