Revenue record not final in Sarfaesi

Though agricultural land is exempt from the rigours of the Securitisation (Sarfaesi) Act, it must be proved that the land is used for agriculture by evidence. Mere classification of a place of land in the revenue records is not conclusive proof that it is agricultural land, the Supreme Court has stated in the judgment, Indian Bank vs K Pappireddiyar. The claim for exemption must be tested on the nature of the land, the use to which it is put on the date of creation of the security interest and the purpose for which it was set apart.

Stating so, the Supreme Court set aside the decision of the Madras High Court which granted relief to a person who failed to return the loan to the bank. Earlier, the debt recovery tribunal and its appellate forum had differed on the law. The Supreme Court stared that the high court judgment did not contain any discussion on the claim of the borrower that his was agricultural land and the bank’s denial.