Under Section 31(i), banks are legally barred from using SARFAESI recovery measures on agricultural properties.
Parliament enacted Section 31(i) of the SARFAESI Act, 2002 to safeguard India's agricultural economy. The text strictly provides that the Act does not apply to any security interest created in agricultural land. Any Section 13(2) notice or Section 14 DM order against agricultural land is illegal and void.
In authoritative decisions available on Indian Kanoon and the Supreme Court Portal, courts have affirmed:
Section 31(i) explicitly provides that the provisions of the SARFAESI Act shall NOT apply to any security interest created in agricultural land.
Land is proved to be agricultural by producing official revenue records (Khasra/Girdawari, Jamabandi), proof of cultivation, soil tax receipts, and agricultural crop loans.
No. Any order passed by a District Magistrate under Section 14 regarding agricultural property is without statutory jurisdiction and void ab initio.
In ITC Limited v. Blue Coast Hotels Ltd. (2018) and Indian Bank v. K. Pappireddiyar (2018), the Supreme Court established that revenue classification and actual agricultural activity determine Section 31(i) applicability.
The borrower can immediately approach DRT under Section 17 SA or file a Writ Petition under Article 226 before the High Court to set aside the auction.
No. The mere act of creating a legal mortgage in favor of a bank does not alter the character of agricultural land under revenue laws.
Courts evaluate plantation lands based on specific state land revenue codes and actual agricultural operations.
While SARFAESI cannot be invoked on agricultural land due to Section 31(i), banks can still file civil suits or DRT Original Applications (OA) under the RDB Act 1993.
Procedural analysis of Section 13(2), 13(3A), 13(4), and Section 14 DM order stay petitions.
Read Full Sub-BlogConsult Adv. Shakti Kumar Jain's legal desk to draft emergency Section 31(i) objections and High Court stay petitions.
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