On July 20, 2018, the Hon’ble Supreme Court of India passed a judgment in the matter of Indian Bank v. K. Pappireddiyar (Civil Appeal No. 6641 of 2018 with Civil Appeal No. 6645 of 2018).
The Hon’ble Supreme Court referred to clause (i) of Section 31 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”), which states that the provisions of the SARFAESI Act will not be applicable to any security interest created in agricultural land.
The Hon’ble Supreme Court in its aforementioned order held that:
“The classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was being put on the date of the creation of the security interest and the purpose for which it was set apart.”
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