• Whether Bank can auction an agricultural land which is used for agriculture

I had taken a loan from Oriental bank for a Greenhouse project(Agricultural project) which got failed due to various natural reasons. Now the bank has moved to court to auction my land.

Can court give orders to auction my land and hoe can I avoid this situation.
Asked 4 years ago in Civil Law

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12 Answers

1. If you are defaulter in loan then you will have to pay the money.

2. However if you are not in a position to pay the whole money then you can send representation to the bank.

3. Now if the bank does not agree then you can file an application u/s 17 of the SARFAESI before the DRT seeking injunction against auction.

4. However do note that at the end you ill have to pay the money which you borrowed from bank.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

Agriculture land cannot be proceeded for recovery of loan.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

In case the agriculture land was mortgaged then only it can be auctioned otherwise the agriculture land cannot be auctioned by the bank. Further you can talk to bank and make an settlement agreement and can seek time for payment of the loan amount.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

There is no gainsaying that Section 31(i) of the SARFAESI Act makes the provisions of this Act inapplicable on any security or interest created in an agricultural land.

In your defence take plea that land is agricultural and agricultural activities are being carried on the said land

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

1. No SARFAESI action can be initiated against mortgaged agricultural land in case the loan account has become NPA.

2. However, the Bank can approach the Court for executing the mortgage and for selling the same to recover its dues.

3. Civil Court is within its jurisdiction to pass order for executing the mortgage and for selling the same to recover Bank dues standing in your name.

4. You have taken loan from the Bank dealing with public money which you shall have to repay as per law.

Krishna Kishore Ganguly
Advocate, Kolkata
26603 Answers
726 Consultations

5.0 on 5.0

there is no restriction under SARFAESI Act that an agricultural land which is mortgaged for availing a loan, cannot be auctioned in case of default, to recover the dues of the bank

the only option with you is to clear the bank's dues

you can request the bank for a one time settlement amount and waive interest and penalty accrued on arrears of EMI

Yusuf Rampurawala
Advocate, Mumbai
6882 Answers
79 Consultations

5.0 on 5.0

Yes engage a Civil Lawyer to fight before the Hon'ble court.

Koshal Kumar Vatsa
Advocate, Gurgaon
2283 Answers
3 Consultations

5.0 on 5.0

Defaulting farmers’ land won’t be auctioned.

in case of any recovery of the amount court can attach other properties of farmer.

Mohammed Mujeeb
Advocate, Hyderabad
19031 Answers
32 Consultations

4.5 on 5.0

Firslty, if you have taken loan on the surety of some land irrespective of its nature then you are liable to pay back to save that land.

Secondly, yes they can make an auction of the same to recover their amount, and they are also liable to pay back the rest after deducting their loan amount plus interest if any amount is left.

Thirdly, though you can make a request to wait for some time if you can arrange the money otherwise it is difficult for you to stop it.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

If the property has been given as collateral security then the bank may move court for bringing it to auction sale for recovery of the defaulted loan amount.

Normally, no agricultural land can be mortgaged for raising loan for other than agricultural activities. This is of course, state specific and you have to check if in your state this condition is applicable or not.

During the notice period, you can make your representation to the authorised officer and put forth your objections to the repossession notice. “The officer has to reply within seven days, giving valid reasons if he rejects the representation and objections raised by the borrower.

It depends on how you defend yourself in the court by providing any settled laws in this regard.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

Hi,

The bank have the right to take possession of the property for which loan is granted and you may move to DRT for having any order in your favor, but remember that you will have to deposit the loan amount.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Yes the bank can move for auction if the same has been mortgaged against the loan

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

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