1. The SA is laid seeking to call for all records leading upto Annexure – A3 demand notice dated 28.08.2014 and Annexure – A7 possession notice dated 20.07.2015 and to set aside the same pursuant to declaring that they are issued in clear violation of various provisions of SARFAESI Act and the Security Interest (Enforcement) Rules and for other incidental reliefs.
2.1 The admitted factual matrix of the above case is the applicant’s availment of three term loans of Rs. 36.50 lakhs, Rs. 16.50 lakhs and Rs. 14.41 lakhs respectively besides the CDCC limit of Rs. 5 lakhs from the defendant bank, against the collateral security of 42.50 cents (i.e. 17.20 Ares) in Sy.No.209/4 and 6.9638 out of 30 cents (i.e. 12.40 Ares) along with building comprised in Sy.No.209/7 of Pandikkad Village, Ernad Taluk, Malappuram District offered by Mr. Moideen, Managing Partner of the applicant by depositing Annexure – A1 sale deed No. 4776 of 2004 dated 20.12.2004 of Malappuram Sub-Registry. According to the applicant the property offered as security to the defendant bank is a ‘Thottam’(Garden) property with tissue culture unit building comprised in Sy.Nos.209/4 and 209/7 of Pandikkad Village and the aforesaid agricultural loans came to be contracted by them for catering to the working capital needs of its ‘Tissue Culture Unit’ and allied activities.
2.2 It is the further case of the applicant that due to the draught and natural calamity that hit the entire agriculture sector as also its ‘Tissue Culture Unit’ and activities, the loan amounts could not be regularly repaid to the defendant bank leading to applicant’s issuance of Annexure – A2 letter dated 20.08.2014 seeking for reschedulement of loans. Annexure – A3 is the copy of S.13(2) demand notice dated 28.08.2014 issued by the defendant to the applicant and the co-borrowers on receipt of which the applicant through its managing partner Mr. Moideen had submitted Annexure - A4 letter dated 13.02.2015 requesting the Chief Regional Manager of the applicant bank for extending the term of repayment of agricultural loans, upon promising therein to clear the dues by June 2015.
2.3 The applicant contended that as the defendant neither replied to Annexure – A4 request letter nor extended the term of repayment despite the existence of moratorium and other factors affecting the agriculture sector and rather threatened of taking possession of the ‘Thottam’ property having agricultural operations like tissue culture activities in negation of S.31(i) of SARFAESI Act, W.P.(C) No. 6651 of 2015 came to be filed inviting Annexure – A5 judgement dated 23.03.2015 as follows:
(a) The petitioner, who had availed a loan from the respondent bank, defaulted in repayment of the same. Consequently, the respondent bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter referred to as the ‘SARFAESI Act’, to recover the loan amounts. Ext.P3 is the notice issued to the petitioner under Section 13(2) of the SARFAESI Act. In the writ petition, the petitioner impugns the steps initiated by the respondent bank for recovery of the loan amounts.
(b) I have heard the Ld. Counsel appearing on behalf of the petitioner as also the Ld. Standing Counsel appearing on behalf of the respondents.
(c) On a consideration of the facts and circumstances of the case and the submissions made across the bar, I note that the sole prayer of the petitioner is to permit him to remit the balance amounts outstanding to the bank in easy instalments. Taking into account the plea of financial hardship raised by the petitioner, I dispose the writ petition with the following directions:-
(i) The total overdue amount in respect of the loan availed by the petitioner is stated to be Rs. 19,11,752/- together with accrued interest. Accordingly, if the petitioner remits the said amount of Rs. 19,11,752/- on or before 30.06.2015, and continues to keep up the regular instalments as per the original loan schedule, then the recovery steps initiated against him by the respondent bank shall be kept in abeyance.
(ii) It is made clear that if the petitioner commits defaults in the aforesaid condition, then he will lose the benefit of this judgement and the respondent bank will be free to continue the recovery proceedings against him from the stage at which they presently stand.
2.4 Aggrieved by the aforestated judgement, the defendant bank had filed an appeal in W.A. No. 963 of 2015 before Hon’ble High Court of Kerala and invited Annexure – A6 judgement dated 22.05.15 as follows:
2. This Writ Petition has been filed against the judgement dated 23.03.2015 in W.P.(C) No.6651 of 2015 filed by the respondent. The respondent availed a loan from the appellant Bank and they having committed default, the Bank proceeded under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The amount demanded in the notice dated 28.8.2014 is 89,76,917/-. The learned Single Judge, by the impugned judgement, permitted to deposit the overdue amount on or before 30.6.2015. Learned counsel for the appellant submits that the amount mentioned in direction No.(i) is not a correct amount. He submits that the correct amount is 34,71,537/- and the total outstanding amount is Rs. 90,11,752/-.
3. Be that as it may, it is open for the appellant to seek appropriate correction in the judgement by making application before the learned Single Judge. We need not interfere with the said issue in this Writ Appeal.
4. The learned Single Judge has directed to deposit the amount on or before 30.6.2015with a further direction to continue to keep up the regular instalments as per the original loan schedule. We are of the view that in the event of the respondent does not deposit the amount on or before 30.6.2015 or commits any default in making payment of future regular instalment, the Bank will be free to proceed under Section 13(20 of the SARFAESI Act, 2002. We do not find any good ground to interfere with the judgment except giving liberty to the appellant to make an application for correction of the amount shown in the judgement.
2.5 The applicant would plead its inability to pay the amount as directed by the Hon’ble High Court as it is yet to receive orders from the agricultural department of State Government contrary to its expectation then with regard to the orders of supply of tissue plants to start receiving monies thereof from September 2015 onwards. The defendant bank on 20.07.2015 took possession of the aforesaid immovable properties by affixing and delivering Annexure – A7 possession notice in terms of R.8(1) of Security Interest (Enforcement) Rules. The present SA came to be filed on 22.07.2015 impugning the defendant’s assuming of symbolic possession of the aforesaid immovable properties against the provisions of S.31(i) of SARFAESI Act, which clearly excludes agricultural properties. Annexure – A8 certificate dated 07.03.2015 issued by Agricultural Officer of Krishi Bhavan, Pandikkad is relied by the applicant to show that the entire property is used for the purpose of tissue culture and its activities. That apart, the applicant would seek the Tribunal to hold Annexure-A7 possession notice dated 20.07.2015 to be illegal since item No. 1 property in the said notice divulges about a Doc. No. 1849/1999 of Malappuram SRO which has not been deposited by Mr. Moideen in creation of any valid mortgage as claimed by the defendant.
2.6 The case and contention of the defendant bank in its written statement would be the creation of equitable mortgage by Mr. Moideen over his 42.50 cents of land in Sy.No.209/4 and 30 cents of land with residential and commercial building in Sy.No.209/7 of Pandikkad Village, the classification of the applicant’s account as NPA on 31.12.2013 on account of its default in repayment of amounts, service of Annexure – R1(a) demand notice dated 28.08.2014 on Mr. Moideen as well demanding the aforestated four credit facilities of applicant firm as also his personal liabilities contracted with the defendant bank in the form of housing loan and two other loans based on aforesaid security, the applicant’s filing of Annexure – R1(b) writ petition in W.P.(C) No. 6651 of 2015 raising the very same contentions regarding the validity of SARFAESI action and S.13(2) notice, the applicant’s inviting of Annexure – A5 judgement only praying permission to remit the outstanding balance amount by giving up all other contentions, the granting of permission by the Hon’ble High Court to the defendant bank to proceed under SARFAESI Act in the event of applicant’s default in payment of instalments, the defendant’s affixture of possession notice dated 20.07.2015 on the properties vide Annexure – R1(c) photographs consequent to the applicant’s failure to make payment pursuant to the judgements of Hon’ble High Court, publishing of possession notices in ‘Mathrubhumi’ and ‘The Hindu’ Newspapers on 26.07.2015 vide Annexure – R1(d) and R1(e), service of such possession notice on the borrowers vide R1(f) and the defendant’s issuance of R1(g) reply dated 27.02.2015. The SA is sought to be dismissed contending it to be hit by the principle of res judicata for the reason of raising the very same contentions and ground in this SA which were already taken and given up by the applicant in the writ proceedings. That apart, the defendant bank would contend that the applicant could not point out any glaring illegality in the SARFAESI measures proceeded with by it upto the stage of Annexure – A7 possession notice. The property proceeded against being residential cum commercial property, the SA is sought to be dismissed with costs.
3.1 Sans the other irrelevant facts and contentions raised in the SA as also the written argument notes filed before DRT-2, from and out of the oral arguments that came to be advanced by Ld. Counsels appearing on either side and on a conspectus of the pleadings and evidence of both sides, the Tribunal proceeds to determine whether or not the applicant is entitled to the relief sought for in this SA upon considering the following:
(i) Whether the present SA is hit by ‘res judicata’ as alleged by the defendant?
(ii) Whether Annexure-A7 possession notice 20.07.2015 is illegal as alleged by the applicant?
(iii) Whether the property proceeded against by the defendant is an ‘agricultural land’ excluded from the ambit of SARFAESI Act in terms of S.31(i)?
3.2 Point No. (i) for consideration : Whether the present SA is hit by ‘ res judicata’ as alleged by the defendant?
(i) Mr. Sunil Shankar, Ld. Counsel for the defendant bank emphatically contended that on account of default committed by the applicant in repayment of the amounts borrowed by it, the loan accounts were classified as Non Performing Asset (NPA) in accordance with the guidelines of RBI resulting in issuance of Annexure-R1(a) demand notice under Sec. 13 (2) of SARFAESI Act. The said demand notice though was admittedly served on the applicant firm as also its Managing Partner/owner of the property Mr. Moideen, they have not filed any objections or reply to the said notice. Instead, the applicant had vide its Annexure-A4 letter dated 13.02.2015 only admitted the loans availed from the defendant bank to be overdue and promised to clear the dues by June, 2015. Ld. Counsel for the bank would point out that in Annexure-A4 letter the applicant has raised no dispute as regards the SARFAESIA action or the amounts demanded in the demand notice.
(ii) Advertence was made by the defendant bank to Annexure-R1(b) writ petition filed by the applicant before the Hon'ble High Court of Kerala in WP (C) No. 6651 of 2015 challenging the said demand notice, which according to it is filed by the applicant raising the very same contentions that are taken in this SA as regards the secured asset being an agricultural property (Thottam) besides disputing the validity of the demand notices, description of the property etc. It was vociferously argued on the side of the defendant that the applicant/borrower gave up all the contentions raised in the writ petition, and had in effect upon admitting the validity of the SARFAESI actions only sought time to remit the amounts in easy instalments.
(iii) Ld. Counsel for the defendant definitively contended that the Hon’ble High Court had upon recording the applicant’s submission in para 3 of the said judgment as also its undertaking in Annexure-A4 letter to the effect that the amounts overdue would be cleared by June 2015, granted time to clear the overdue amount on or before 30.06.2015 besides imposing conditions therein for the applicant’s continuance to pay the regular instalments as per the original loan schedule. The judgment further provided that if default is committed by the borrower/applicant the bank can proceed with the recovery steps, it was succinctly pointed out so by the Ld. Counsel for the defendant bank. It was submitted further that the Writ Appeal filed by the defendant in W.A. No. 963 of 2015 was disposed off by the Division Bench confirming the judgment of the Hon'ble Single Judge by reiterating therein that the bank can proceed with its recovery action in the event of any default in repayment of loan or future regular instalments.
(iv) On the side of the defendant the Tribunal was urged to note that even before the Hon'ble Division Bench, the applicant/borrower was only requesting for time to make payment of amounts due and was not challenging the validity of the demand notices/SARFAESI action. As the applicant/borrower committed default in payment of instalments and did not clear the liability by June, 2015 as undertook by it, the defendant bank proceeded to take possession by delivering, affixing and publishing of Annexure-A7 possession notice dated 20.07.2015, impugning which the present SA has come to be filed. The contention raised in the SA as to the alleged agricultural nature and user of the land being the self same contention raised in W.P.C. No. 6651 of 2015, is sought to be brushed aside invoking the principles of res judicata.
(v) Mr. P. Shrihari, Ld. Counsel for the applicant emphatically contended that it is not correct to state that the applicant had given up its contentions otherwise raised before the Hon’ble High Court of Kerala as regards the secured asset being a ‘Thottam’ (garden land) having agricultural operations thereon. It was pointed out that the challenge before the Hon’ble High Court in the aforesaid Writ Petition (C). No. 6651 of 2015(F) was in respect of Section 13(2) notice which is not a measure contemplated under the SARFAESI Act, as the borrower/guarantor have no remedy before the Tribunal till any measure or action is taken in terms of S.13(4) of the Act. Adverting to Annexure-A5 judgment invited by the applicant, Ld. Counsel for the applicant would submit that none of the contentions raised before the Hon’ble High Court in the said writ petition could be stated to have been given up or withdrawn by the applicant. The Tribunal was urged to appreciate that the principle of resjudicata pressed into service by the defendant is in no way applicable to the instant case as the possession notice impugned by way of this SA which alone is a measure under S.13(4) of the Act was not the one which came to be challenged then before the Hon’ble High Court. The said plea of resjudicata raised by the defendant bank was therefore sought to be discarded by pointing out that the ‘possession notice’ being a fresh cause of action is definitely open to challenge by the applicant under S.17(1) of the SARFAESI Act.
(vi) On a conspectus of Annexure-R1(b) copy of writ petition as also Annexure-A5 judgment dated 23.03.2015 delivered by the Hon'ble High Court of Kerala in the said writ proceedings, it is of course discernible that the contention as regards the secured asset being a ‘Thottam’ property having agricultural operations like tissue culture has been taken by the applicant to seek exemption of said land under S.31(i), among other grounds found raised in the said writ petition. Annexure-A5 judgment of the Hon'ble High Court is to the effect of permitting the petitioner therein to remit the balance amounts outstanding to the bank taking note of the sole prayer on those lines which came to be made by the petitioner then, with further observations therein to the effect that the respondent bank will be free to continue the recovery proceedings if the petitioner commits default in complying with the conditions of payment imposed in the said judgment.
(vii) While it is no doubt true that the said writ petition came to be disposed of as aforesaid, the Tribunal is at the same time afraid to hold the said judgment to be indicative of the writ petitioner giving up his legal contentions or the statutory right and remedy that would otherwise accrue to him under S.17(1) of SARFAESI Act only consequent upon the defendant’s taking of any measures or actions against the secured asset in terms of S.13(4) of the Act. Annexure- R1(b) writ petition culminating in Annexure-A5 judgement cannot be held to have been disposed of by the Hon’ble High Court on the writ petitioner’s withdrawal of the writ petition or the contentions raised by him therein nor it could be held to be one which has been heard and finally adjudicated upon on the merits of contentions otherwise raised therein. The finality of judgment envisaged in S. 11 of CPC refers to one where a lis or matter in issue is heard and finally decided by a Court of law in a prior proceedings inter se the same parties operating as a bar or estoppel in the subsequent suit or proceedings and not to the case as contended by the defendant bank. The Three Judges Bench of the Hon’ble Supreme Court in the case titled Kewal Singh v. Smt.Lajwanti reported in MANU/SC/0491/1979: AIR 1980 SC 161: 1980 (1) SCC 290 held as follows:
8. Secondly, as regards the question of constructive res judicata it has no application whatsoever in the instant case. It is well settled that one of the essential conditions of res judicata is that there must be a formal adjudication between the parties after full hearing. In other words, the matter must be finally decided between the parties.
(viii) On a conspectus reading of the judgment dated 23.03.2015 in W. P. (C) No. 6651/2015 as also judgment dated 22.05.2015 in W.A. No. 963/2015, it is discernible that the earlier judgment is to the effect of directing the applicant to pay off the overdue amounts on or before 30.06.2015 failing which the respondent bank was free to continue proceedings as initiated then. The later judgment dated 22.05.2015 delivered in the Writ Appeal only signifies the dismissal of said Writ Appeal filed by the defendant bank expressing its view that the bank will be free to proceed as directed by the Hon’ble Single Judge on the respondent’s failure to deposit the amount or make payment of future instalments . Both the judgments would be of no avail for the defendant bank to contend that the applicant could not pursue the statutory remedy available to it under S. 17(1) of the SARFAESI Act on it being aggrieved by any of the measures or actions taken by the bank under S.13(4) of the Act. The Tribunal is of the respectful view that the said judgments could not be stated to be the ones which culminated in formal adjudication of the issues raised by the parties on merits. In Pandurang Ramchandra Mandlik (since deceased) by his LRs & another v. Shantibai Ramchandra Ghatge & others (MANU/SC/0406/1989), the Hon'ble Apex Court had expounded in unequivocal terms that the principle of res judicata enunciated in S.11 of CPC would and should apply only to cases where the Court has heard and finally decided the issues before it by exercising its judicial mind. The relevant portion of said judgment is extracted out below:
'20. The expression 'heard and finally decided' in Section 11 means a matter on which the court has exercised its judicial mind and has after argument and consideration come to a decision on a contested matter. It is essential that it should have been heard and finally decided. What operates as res judicata is the ratio of what is fundamental to the decision but it cannot be ramified or expanded by logical extension.'
(ix) The principle of res judicata is authoritatively elucidated by the Division Bench of the Hon’ble High Court of Kerala in the case titled E.P. Sajithkumar v. The Assistant Educational Officer, Kannur District and Ors. reported in MANU/KE/1100/2016 : 2016 (4) KHC 353 : 2016 (3) KLJ 770 on the following lines :
'20. Res judicata is a common law principle of preclusion, devised to deter endless cycles of litigation; it is animated by a public policy against repetitious recourse to judicial remedies. Also of not less importance is the economy of judicial time, which can be spent on worthier causes. Three maxims can be cited as forming the foundation for this rule aimed at efficiency and finality: (a) Nemo debet bis vexari pro eadem causa (no man should be vexed twice for the same cause); (b) Interest republicae ut sit finis litium (it is in the interest of the state that there should be an end to a litigation); and (c) Res judicata pro veritate accipitur (a judicial decision must be accepted as correct).
21. The four elements of res judicata a black letter law are as follows: (a) the parties are identical or in privity; (b) the judgment in the prior action was rendered by a court of competent jurisdiction; (c) the prior action was concluded by a final judgment on the merits; and (4) the same claim or cause of action was involved in both actions.
22. Though Section 11 of the Code of Civil Procedure consecrates this common law principle as a statutory mandate, it incontrovertibly applies to public law remedies, too, apart from civil disputes. The Courts have held that even the public interest litigation falls within its mischief and its enforcement demands vigil.
23. In Sheoparsan Singh v. Ramnandan Prasad Singh MANU/PR/0068/1916 : (1916) 3 LW 544 the Privy Council has observed that res judicata is an ancient doctrine of universal application and permeates every civilized system of jurisprudence. This doctrine encapsulates the basic principle in all judicial systems which provide that an earlier adjudication is conclusive on the same subject-matter between the same parties. Recently, quoting Sheoparsan Singh with approval, the Supreme Court in Sri Gangai Vinayagar Temple v. Meenakshi Ammal MANU/SC/0926/2014 : (2015) 3 SCC 624, at page 648 has observed that the raison d'etre and public policy on which res judicata is predicated is that the party who has raised any aspect in a litigation and has had an issue cast thereon, has lead evidence in that regard, and has argued on the point, remains bound by the curial conclusions once they attain finality. No party must be vexed twice for the same cause; it is in the interest of the State that there should be an end to litigation; a judicial decision must be accepted as correct absent a challenge.'
(x) Mr. P. Shrihari, Ld. Counsel for the applicant pointedly argued that the principles of res judicata is inapplicable to the instant case since the challenge in this SA is as against Annexure – A7 possession notice dated 20.07.2015 in as much the said S.13(4) measure/action has come to be taken against an ‘agricultural land’ unmindful of the statutory exclusion of such property provided in S.31(i) of the SARFAESI Act. Ld. Counsel also submitted that the writ petition came to be filed when S.13(2) notice was issued as the Tribunal then had no jurisdiction to entertain any challenge against it and the present SA is filed challenging the possession notice which is a different cause of action and a ‘measure’ taken in terms of S.13(4) of the Act entitling the applicant to invoke the jurisdiction of the Tribunal under S.17(1) of the Act. The Tribunal of course finds much force in the said submission of the applicant.
(xi) There is yet another reason for holding the defendant’s plea of res judicata to be unfounded and unsustainable. While the law remains settled on the point that even a mandatory provision can always be waived by a party (or parties) for whose benefit such provision has been made, going by S.31(i) it is but explicit, loud and clear that the provisions of SARFAESI Act shall not apply to any security interest created in an agricultural land. Even assuming for a moment that the applicant had not pursued their contention as regards the mortgaged property proceeded against being an agricultural land at the stage of issuance of S.13(2) demand notice in the aforestated writ proceedings, that by itself would not clothe or confer any right or privilege on the secured creditor bank to invoke the provisions of SARFAESI Act against any of the 10 exclusions contained in S.31 of SARFAESI Act. The aggrieved persons of the applicant sort also cannot be precluded from challenging the subsequent S.13(4) measures upon raising their contention as regards the inapplicability of the provisions of SARFAESI Act itself to their case and claim by invoking S.17(1) of the Act. The applicant wherefore cannot be estopped from challenging the defendant’s S.13(4) measures proceeded with by the bank which according to them is in negation of S.31(i) of the SARFAESI Act.
(xii) The Tribunal reiterates its view that since Annexure – A5 judgement dated 23.03.2015 of the Hon’ble High Court is not a judgement wherein the issue as regards the agricultural nature, character or otherwise of the ‘secured asset’ proceeded against has been finally adjudicated upon on merits, as the cause of action in respect of the said writ petition and that of the present SA are different and as the Tribunal is vested with jurisdiction to entertain the present application of the applicant under S.17(1) of the Act only consequent upon the defendant’s issuance of Annexure – A7 possession notice dated 20.07.2015, the plea as regards the applicability of the principle of res judicata put-forth in vain by the defendant bank is only to be negatived and discarded. It accordingly does it so here.
3.3 Point No. (ii) for consideration : Whether Annexure-A7 possession notice 20.07.2015 is illegal as alleged by the applicant?
(i). Mr. P. Shrihari, Ld. Counsel for the applicant upon adverting to Annexure-A7 possession notice dated 20.07.2015, pointedly argued that the property described as item No.1 in the said notice is not as per the Doc. No.1849/1999. It is also submitted that no such document by Number 1849/1999 of Malappuram SRO gives title to any property to Mr. Moideen. Hence, the defendant’s declaration in Annexure-A7 notice as regards Mr. Moideen’s creation of mortgage by deposit of title deed No.1849/1999 of Malappuram SRO is not correct. As no such document of Malappuram SRO was deposited by Mr. Moideen, there is no valid mortgage as claimed by the defendant. It was strenuously submitted on the side of the applicant that as Mr. Moideen had not deposited the title deed Doc. No. 1849/1999 of Malappuram SRO with respect to 6.9638 cents, Annexure-A3 demand notice dated 28.08.2014 and Annexure-A7 possession notice dated 20.07.2017 issued by the defendant are illegal and liable to be quashed on that score as well. Ld. Counsel appearing for the defendant bank would assertively submit that Annexure-A7 possession notice would not be rendered illegal merely for the reason of an incorrect description of a document number or typo, which is only negligible.
(ii) The applicant had in para V(13) and Ground ‘Q’ of their SA as also in their written argument notes admitted as true that an extent of 6.9638 cents and 42.50 cents of land were secured to the above said loan amounts, but however proceeded to submit that the said properties are covered only under Annexure-A1 Sale Deed No. 4776/2004 of Malappuram SRO. The applicant having conceded to the factum of creation of mortgage over the aforesaid extent of lands cannot be heard to contend otherwise in respect of item No. 1 property set out in Annexure-A7 notice merely for the reason of it making a mention about the Doc. No. 1849/1999. It is no doubt true that Annexure-A1 sale deed Doc. No. 4776/2004 standing in the name of Moideen is a title deed covering 42.50 cents of land in Sy. No. 209/4 as also 30 cents of land in Sy. No. 209/7 (of which excluding 23.0362 cents i.e. stated to have been leased out to IB Petroleum Company, remaining of 6.9638 cents alone is proceeded against vide Annexures-A3 & A7 notices). Even according to the Ld. Counsel for the applicant himself sale deed Doc. No. 1849/1999 stands in the name of Moideen and is found mentioned as well in the recitals of Annexure-A1 sale deed Doc. No. 4776/2004.
(iii) As the Ld. Counsel for the applicant would definitely contend the mentioning of sale deed No. 1849/1999 of SRO Malappuram to be a defective description of sale deed pertaining to item No. 1 property of Annexure-A7 possession notice, the Tribunal growing anxious to ascertain the truth and on it been informed by both sides as regards OA 170/2016 that is pending consideration before it called for and verified the documents appended to the said original application in exercise of its powers under S.22(2) of RDDBFI Act read with S.17(7) of SARFAESI Act. On verification of Doc. Nos. 4776/2004 & 1849/1999 which are Annexures-A14 & A15 respectively in OA 170/2016 it is discernible that both the documents stands in the name of Mr. Moideen (Managing Partner of the applicant herein) and are the ones related to SRO, Melattur of Malappuram Registration District. Annexure-A16 in the said OA is a letter of confirmation of deposit of title deeds dated 13.11.2009 executed by Mr. Moideen in respect of the mortgage by deposit of title deeds created by him on 12.11.2009 over 30 cents of land with building in Sy. No. 209/7 and 42.50 cents of land in Sy. No. 209/4 of Pandikkad Village by depositing Doc. No. 4776/2004 and Doc. No. 1849/1999 standing in favour of Mr. Moideen, mentioning it to be that of SRO Malappuram. Annexure-A17 in the said OA which is yet another confirmation letter for supplemental mortgage executed by Moideen also mentions Doc. No. 1849/1999 to be that of SRO Malappuram. What is discernible therefrom is that the said mistake in mentioning of the SRO name as Malappuram instead of Melattur has crept in by the act of parties including Moideen himself who had executed such letters. There being no dispute as regards the extent, Survey numbers and boundaries of the properties of Moideen set out in Annexure-A7 possession notice, merely for the reason of the mistake that has crept in while mentioning the SRO name, the applicant cannot be heard to contend as if no mortgage has come to be created over item No. 1 property set out therein.
(iv) The Tribunal though is of the definite view that a statutory notice would not be rendered illegal for the mere reason of a negligible, inadvertent misdescription of a document number, at the same time unhesitantly holds Annexure-A7 possession notice dated 20.07.2015 to be illegal in view of returning its finding in the affirmative to the point No. (iii) infra.
3.4 Point No. (iii) for consideration : Whether the property proceeded against by the defendant is an ‘agricultural land’ excluded from the ambit of SARFAESI Act in terms of S.31(i)?
(i) Concededly the lands measuring 42.50 cents in Sy. No. 209/4 and 6.9638 cents alongwith ‘tissue culture’ unit building in Sy. No. 209/7 of Pandikad had been mortgaged by Mr. Moideen, Managing Partner of the applicant firm by depositing Annexure-A1 sale deed No. 4776/2004 with the defendant bank securing repayment of the credit facilities viz. two agricultural term loans of Rs. 36.50 lakhs and Rs. 16.50 lakhs, funded interest term loan of Rs. 14.41 lakhs and a cash credit facility of Rs. 5 lakhs accommodated to the applicant firm for its tissue culture unit and its allied activities, besides securing repayment of their other individual loans as well.
(ii) Strenuous submissions came forth from the Ld. Counsel for the applicant as to the applicant immediately approaching the Branch Manager of Indian Overseas Bank, Manjeri Branch on its receipt of Annexure – A3 demand notice 28.08.2014 and apprising him then about the fact of existence of the Moratorium on Agricultural Loans in the State of Kerala declared by the Government in the month of June 2013 itself as also regards the fact that the entire secured asset against which the proceedings under the SARFAESI Act were initiated by the defendant is a ‘THOTTAM’ (GARDEN) property having Agricultural operations like Tissue Culture activities, which cannot be sought to be enforced in view of the statutory exclusion provided to such property under Section 31(i). According to applicant, the present SA is laid impugning Annexure – A3 demand notice and Annexure – A7 possession notice which are per se illegal for the reason of the defendant’s taking of measures/actions against the agricultural property under Section 13(4) in negation of Section 31(i) of the SARFAESI Act.
(iii) Annexure-A8 Certificate dated 07.03.2015 issued by the Agricultural Officer of Krishi Bhavan, Pandikkad, Malappuram District which is relied by the applicant to show that the entire property is used for the purpose of Tissue Culture and its allied agricultural activities and operations, reads as follows :
'Certified that Globel Agritech, Pandikkad, is a plant tissue culture lab, engaged in producing various Agricultural plants for cultivation and funded by NHM and approved and supervised by the Agricultural Department of Kerala. The land and building therein is essential for the production of various plants for supply to the farmers. This certificate is issued solely for the said purpose as per the request of Sri. Moideen Mampadam, Tarvur, Pandikkad'.
(iv). Ld. Counsel for the applicant succinctly pointed out that the credit facilities extended by the defendant bank to the applicant firm are ‘Agricultural loans’ and even as per the title deed viz. Sale deed document No.4776/2004 of Malappuram SRO deposited with the bank, the secured asset against which the proceedings are initiated under the SARFAESI Act is a ‘Thottam’ (Garden) property. Since the defendant disputed the factum of the agricultural operations carried out on the property mortgaged, the applicant took steps to substantiate the same by moving an application for appointment of Advocate Commissioner in IA No. 2041/2015 seeking the following reliefs :
(a) To inspect and report the lie, nature and use of the 42.50 cents (17.20 Ares) in Pandikkad Village Sy. No.209/4 and 6.9638 out of 30 cents (12.40 Ares) in Pandikkad Village Sy.No.209/7 and the building therein covered by Sale Deed No.4776/2004 dated 20/12/2004 of Malappuram Sub Registry Office;
(b) To inspect and report the equipments and apparatus installed /stored in the building and the polyhouse and the activities carried out therein in 42.50 cents (17.20 Ares) in Pandikkad Village Sy.No.209/4 and 6.9638 out of 30 cents (12.40 Ares) in Pandikkad Village Sy.No.209/7 covered by Sale Deed No.4776/2004 dated 20/12/2004 of Malappuram Sub Registry Office; and
(c) Any other relevant matters to be requested to be noted at the time inspection.
(v) The Advocate Commissioner appointed for the said purpose had inspected the properties including the Tissue Culture Lab and filed his report dated 31/08/2015 appending therewith Annexures – C1 to C8, of which Annexure – C2 is the rough sketch of the property, Annexure – C3 is stated to be protocol setting out the objectives and activities of M/s. Global Agritech (applicant), Annexure – C4 is the list of equipments and apparatus, Annexure – C5 is the statement of stocks of the cultured plantlings, Annexures – C6 & C7 are the rough plan of the item No. 1 & 2 secured assets and Annexure – C8 are the photographs of the secured asset with building, equipments and apparatus as also the poly houses. In the said Report dated 31/08/2015, the Advocate Commissioner precisely reported that the secured assets are having agricultural operations like Tissue Culture from the mother plants which are reared in the secured asset on expending human skill and labour and so on. Hence, apparently agricultural operations are conducted on the secured asset exempting it from the purview of the SARFAESI Act in view of Section 31(i), it was strenuously submitted so by the Ld. Counsel for the applicant.
(vi) The defendant bank filed its objection to the Commissioner’s Report raising the following objections viz. (i). that the Advocate Commissioner has deliberately not included the photographs of the entire building, (ii) that the Commissioner has verbatim reproduced the material given by the petitioner, (iii). that the Commissioner had no mandate to report on the matters contained in Annexure-C3 to the report, (iv). that the said materials are given to the commissioner behind the back without producing it before the Tribunal, (v). that the reliance on the Annexure-C4 to the report is not proper as it is not verified by the Commissioner and so on.
(vii) According to the applicant, the entire facts are diligently detailed in the Report filed by the Advocate Commissioner, that there was no request by the defendant bank at the time of the inspection with the Advocate Commissioner to take photographs of the entire building and that as the Advocate Commissioner had received the materials produced as Annexures to the Report at the time of the inspection in the presence of the Bank officials, the objections now made to the Commissioner’s report on aforesaid lines are only to be brushed aside.
(viii) Ld. Counsel for the applicant urged the Tribunal to accept the additional documents produced by them along with IA No. 2354/2015, in appreciation of their case and contention as to the entire mortgaged property been used for agricultural activities. It is the case of applicant that the Kerala State Electricity Board (hereinafter referred to as ‘the KSEB’) had provided to it LT-5B electric connection which caters to the requirement of agricultural purposes such as Tissue Culture, floriculture, agricultural nurseries etc. The electricity Bill No.792599 dated 04/08/2015 issued by the KSEB which is evidential of the fact that the applicant had been provided with the aforestated LT-5B electric connection, is sought to be accepted in evidence as Annexure – A9. The computer printout taken from the website of the KSEB on 09/10/2015 which shows the details of Tariff: LT-V(B) is sought to be accepted in evidence as Annexure-A10. Annexure – A11 certificate dated 09/09/2015 of the Deputy Director of Agriculture, Malappuram is to the effect that the applicant’s Plant Tissue Culture Laboratory has been funded by the State Horticulture Mission, Kerala as per Order No. TB(1)1199/08 dated 10/10/2013 and comes under the ‘Agricultural Sector’. Finding the aforestated additional documents relied on the side of the applicant to be the ones emanating from the statutory body/authority viz. KSEB and Deputy Director of Agriculture, the Tribunal is inclined to receive the same in evidence consequent upon the allowing of IA 2354/2015 and accordingly Annexures-A9 to A11 additional documents are taken on file for consideration and appreciation of its relevancy to the point under discussion.
(ix) To buttress the applicant’s contention as to the mortgaged property with ‘tissue culture’ and allied agricultural activities/operations thereon to be one clearly falling within the definition of ‘agriculture’ or ‘agricultural land’, the Ld. Counsel for the applicant placed reliance on the following legal pronouncements rendered on the issue of ‘agriculture income’ derived from and out of the agriculture activities/operations conducted on an agricultural land, all of which came to be passed by taking note of the law laid down by the Hon’ble Supreme Court in the case of CIT v. Raja Benoy Kumar Sahas Roy (MANU/SC/0075/1957):
(a) The Hon’ble High Court of Madras in its decision rendered in case titled Commissioner of Income Tax v. Soundarya Nursery (MANU/TN/0765/1998) held as follows:
'7. Our attention was then invited by learned counsel to the decision of the Supreme Court in the case of CIT v. Raja Benoy Rumor Sahas Roy MANU/SC/0057/1957 : 32ITR466(SC) , which is the leading case of "agriculture". It was held therein that agriculture in its primary sense denotes the cultivation of the field and is restricted to cultivation of the land in the strict sense of the term, meaning thereby tilling of the land, sowing of the seeds, planting and similar operations on the land and these are basic operations, which require the expenditure of human skill and labour upon the land itself. The apex court further held that besides the basic operations, the subsequent operations would also be comprehended within the terms of agriculture, and such subsequent operations are illustrated as weeding, digging the soil around the growth, removal of undesirable undergrowth and all operations which foster the growth and preservation of the same not only from insects and pests, but also from depredation, from outside, tending, pruning, cutting, harvesting and rendering the produce fit for the market, which would all be agricultural operations, when taken in conjunction with the basic operations.
8. All the products of the land, which have some utility either for consumption or for trade or commerce, if they are based on land, would be agricultural products. Here, it is not the case of the Revenue that without performing the basic operations, only the subsequent operations, as described in the decision of the apex court have been performed by the assessee. If the plants sold by the assessee in pots were the result of the basic operations on the land on expending human skill and labour thereon and it is only after the performance of the basic operations on the land, the resultant product grown or such part thereof as was suitable for being nurtured in a pot, was separated and placed in a pot and nurtured with water and by placing them in the green house or in shade and after performing several operations, such as weeding, watering, manuring, etc., they are made ready for sale as plants all these questions would be agricultural operations as this involves human skill and effort. Thus, the plants sold by the assessee in pots were the result of primary as well as subsequent operations comprehended within the term "agriculture" and they are clearly the products of agriculture.
9. So far as the seeds are concerned, we are surprised that, that question should have been raised at all by the Revenue, as it is not possible for the seeds to exist without the mother plants, and the mother plant, it is nobody's case, was not grown on land.'
(b) The Hon’ble Income Tax Appellate Tribunal, Pune ‘A’ Bench in its decision rendered in the case titled ITO v. Kisan Biotech reported in MANU/IP/0377/2015 held as follows:-
'2. Facts of the case, in brief, are that the assessee is a partnership firm and is engaged in the business of production of nursery plants and banana plants, tissue culture activities etc. The income derived from the said activity was claimed exempt u/s. 10(1) of the IT. Act in the return of income filed for the Assessment Year under consideration, claiming the same to be agricultural income. However, the Assessing Officer was of the view that in view of the provisions of sec. 2(1A) of the I.T. Act, unless an assessee carries out the basis operations upon the land i.e. tilling of the land, sowing of seeds, planting etc., requiring exploitation of human skill and labour upon the land, it cannot be said that the income earned by the assessee was agricultural income. According to him, the subsequent operations to the above operations carried out would also be agricultural activities only if taken in conjunction with the basic operations but the subsequent operations by themselves cannot be considered as agricultural operations and therefore, any income derived from carrying on only such subsequent operations without carrying the basic operations could not be treated as agricultural income.
3. In appeal the Ld. CIT(A) decided the issue in favour of the assessee by observing as under:
5.1 The various stages that are involved in tissue culture carried out by the appellant are stated to be as under:--
a. First Step: After sowing the seeds of various plants, production of small mother plants, selecting appropriate plant and keeping them disease free.
b. Second Step: Isolation of biological parts of plant to enable these parts to have uncontaminated and disease free development.
c. Third Step: This step covers actual tissue culture where many plants can be obtained. This is called 'propagation phase'. It involves obtaining many micro segments through tissue culture from the mother plant and each of which is capable of developing into an independent plant.
f. Fourth Step: In this step the plants obtained in above mentioned steps are transferred back to soil and root formation is induced. Steps are taken to cut down unnecessary growth of plants through auxiliary shoot formation etc.
g. Fifth Step: This contains growth of the plant in the soil till it attains sustainability and capability to survive when transferred, to the main field.
5.2 A close analysis of the above sequences would reveal that these involve the basic operations such as readying the land for sowing, sowing of seeds, watering etc. to grow mother plants from which tissue culture is obtained, The plants grown from tissue culture are put in small soil-filled bags and transferred to green houses where they remain till growth is sustained. Thus, the primary source of the plant is the mother plant which is reared on earth involving the basic operations. Therefore, the conclusion drawn by the Assessing Officer while rejecting the claim of the appellant that the appellant is merely engaged in tissue culture without actually carrying out the basic operations are found to be contrary to the facts of the case.
9. Merely because the Department has not accepted the above decision of the Tribunal and has preferred an appeal before the Hon'ble High Court, the same in our opinion cannot be a ground not to follow the order of the Tribunal until and unless the same is reversed by the Hon'ble High Court. Respectfully following the decision of the Coordinate Bench of the Tribunal and in view of the detailed reasoning given by the CIT(A) we do not find any infirmity in the order. Accordingly, the order of the CIT(A) is upheld and the grounds raised by the revenue are dismissed.'
(c) The Hon’ble Income Tax Appellate Tribunal, Pune ‘A’ Bench in its decision rendered in the case titled Income Tax Officer v. K.F. Bioplant Pvt. Ltd. reported in MANU/IP/0093/2012 held as follows:-
'1……..The facts in brief are as under. The assessee is primarily engaged in the business of plant floriculture/tissue culture. The assessee has claimed exemption of the income from the above activities u/s. 10(1) r.w.s. 2(1A)(b)(i) of the Act as agriculture income. The Assessing Officer declined to accept the claim of the assessee that income from the activities of the floriculture/tissue culture and horticulture is the agriculture income in spite of the fact that the said issue has been decided in favour of the assessee by the ITAT, "B" Bench in assessee's own appeal for the A.Y. 2004-05 being ITA No. 146/PN/08, order dated 26.3.2009. The Assessing Officer made the addition of Rs. 4,76,171/- by giving the reason that the decision of the ITAT, Pune in assessee's own case cannot be followed as the further appeal is filed before the Hon'ble Bombay High Court. The Ld CIT(A) following the decision of the ITAT Pune Bench in assessee's own case, allowed the claim of the assessee.
2. We find that the Tribunal has allowed the identical claim of the assessee on the identical set of facts in the A.Y. 2004-05. …….The operative part of the order of the Tribunal in ITA Nos. 1274 to 1278/PN/2010 dated 22nd February 2012 is as under :
7. We find that the Tribunal in the case of assessee for the A.Y. 2004-05 has discussed an identical issue in detail before deciding the same in favour of the assessee. The Tribunal while deciding the issue has taken strength from several decisions including decision of Hon'ble Supreme Court in the case of CIT Vs. Raja Benoy Kumar Sahas Roy (Supra), Hon'ble Madras High Court in the case of CIT Vs. Soundarya Nursery, MANU/TN/0765/1998 : 241 ITR 530 (Mad.) and of Hon'ble Allahabad High Court in the case of Jugal Kishore Arora Vs. DCIT, MANU/UP/0344/2004 : 269 ITR 133 (Allhad.).The relevant para Nos. 33 to 40 of the decision of the Tribunal in the case of the assessee for A.Y. 2004-05 (supra) are being reproduced hereunder for a ready reference :
37. When we apply the above tests to the facts of the present case, and we bear in mind our findings that basic operations are carried out in the present case, which require human skill and labour, and subsequent operations, no matter how sophisticated, if that be used against the assessee, are only to foster the growth and to protect the produce, we find that the income from these operations can only be said to be agricultural income. Their Lordships were also dealing with a situation in which operations were carried on in a greenhouse. Therefore, merely because a greenhouse in involved, the nature of operations would not change. Learned CIT(A) has distinguished this precedent on the ground that in assessee's case, basic operations have not been carried out on land. That premises itself, for the detailed reasons set out earlier in this order, rests on a unsustainable legal foundation. The basic operations have been, and can only be, carried out on the land. The fact that this land is in a greenhouse does not change the character of operations. The distinction was thus wrongly made out by the CIT(A), in our considered view, the principles laid down by the Hon'ble Madras High Court's judgment in the case of Soundaraya Nursery (supra) apply to the facts of the case before us as well.
38. We may also refer to Hon'ble Allahabad High Court judgment in the case of Jugal Kishore Arora Vs DCIT (MANU/UP/0344/2004 : 269 ITR 133). In this case, Their Lordships, after taking note of and analyzing the landmark Supreme Court judgment in the case of Raja Benoy Kumar Sahas Roy (supra), also observed that "the nature of produce raised has no relevance to the character of agricultural operation". It was noted that cultivation of flowers of artistic and decorative value would also be included in the scope of agricultural operations. This observation will also apply to the facts of the present case.
39. We may mention that our attention was also invited to Explanation (3) to Section 2(1A) of the Act which has been inserted by the Finance Act, 2008. This Explanation provides that any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income and, therefore, irrespective of whether the basic operations have been carried out on land, such income will be treated as agricultural income qualifying for exemption under section 10(1) of the Act.
3. As the issue is identical in this year, we find no reason to take different view. We, therefore, following the orders of the Tribunal in assessee's own case referred (Supra), confirm the order of the Ld CIT(A) and dismiss all the grounds taken by the Revenue. In the result, Revenue's appeal is dismissed.'
(x) Mr. P. Shrihari, Ld. Counsel for the applicant would strenuously submit that the applicant herein is developing the plants by micro propagation / tissue culture in laboratory from the sucker plants planted in the land and after developing the plant in the laboratory, they are shifted to the pots in the poly house under controlled atmosphere. According to him all the activities of tissue culture are related to land which definitely requires human skill as well. Ld. Counsel summed up his argument stating that as the proceedings initiated by the defendant is against Section 31(i) of the SARFASI Act, the entire SARFAESIA measures right from Annexure - A3 demand notice dated 28.08.2014 are liable to be quashed and it is apposite to order restoration of the possession. The SA is thus sought to be allowed with costs.
(xi) Mr. Sunil Shankar, Ld. Counsel for the defendant bank would submit that the credit facilities accommodated to the applicant firm were collaterally secured by the creation of mortgage by deposit of title deeds in respect of (a) 42.50 cents of land in Sy. No. 209/4 and (b) 30 cents of land with residential and commercial building in Sy.No. 209/7, both situated in Pandikkad Village, Ernad Taluk, Malappuram District in the name of Mr. Moideen. The contention of the applicant that the property is an agricultural land is sought to be discarded as unsustainable both on facts and in law. Annexure-A8 certificate does not certify the same as agricultural land, but instead only states that the same are essential for production of various plants for supply to farmers. The case of the applicant being that the building and the agricultural land upon which it is situated are used as the premises for their tissue culture business, Advocate Commissioner had been taken out to prove the same and his report dated 31.08.2015 has thus come to be filed.
(xii) The defendant bank had filed its objection to the said commission report contending that the Commissioner has been tutored and the report only verbatim reproduces the material given by the applicant/borrower. According to the defendant the commission report in fact attempts very hard to cover the facts that the activity carried on in the property is only tissue culture, involving potted plants or poly bag plants. It is the definite case and contention of the defendant bank that the activity of tissue culture and establishment of green houses, can be done in any premises, wherein the lab equipment, and other equipments to maintain humidity levels etc. are installed and the same by itself will not make the ‘land’ as ‘Agricultural Land’.
(xiii) The Ld. Counsel for defendant bank proceeded with his submission that as the term ‘agricultural land’ is not defined in the SARFAESI Act, 2002, the said term must be understood by the special connotation in law which it had acquired by now in view of the legal pronouncements available as regards the usage and meaning of the said term. Ld. Counsel strenuously submitted that the term/expression ‘agricultural land’ must therefore be understood in its legal sense and not by its dictionary or general meaning. To buttress his said contention, the Ld. counsel for defendant bank placed reliance on the judgment of the Hon’ble Supreme Court rendered in the case titled Thampanoor Ravi v. Charupara Ravi & Ors. reported in MANU/SC/0569/1999 which reads as follows:-
'23. In ascertaining the meaning of an expression used in a statute, certain norms are adopted. If the legislature has used an expression which has acquired a technical meaning and such expression is used ordinarily in the context of a particular branch of law, it must be assumed that because of its constant use the legislature must be deemed to have used such expression in a particular sense as is understood when used in the similar context. If an expression has acquired a special connotation in law, dictionary or general meaning ceases to be helpful in interpreting such a word. Such an expression must be given' its legal sense and no other.' (Emphasis supplied by defendant)
(xiv) Mr. Sunil Shankar, Ld. Counsel for the defendant cited reference to the term "agriculture" which came to be discussed very thoroughly by Apex Court in Commissioner of Income Tax, West Bengal, Calcutta v. Benoy Kumar Sahas Roy  32 ITR 466 (SC), wherein it reviewed and discussed various decisions of English and Indian courts, beginning with the decision of Lord Coleridge in R. v. Peters. (1886) 16 QBD 636 and the meanings given in various dictionaries of the English language, as well as in the law dictionaries. It then reached the conclusion thus:
'If the term 'agriculture' is thus understood as comprising within its scope the basic as well as subsequent operations in the process of agriculture and the raising on the land of products which have some utility either for consumption or for trade and commerce, it will be seen that the term 'agriculture' receives a wider interpretation both in regard to its operations as well as the results of the same. Nevertheless there is present all throughout the basic idea that there must at the bottom of it cultivation of land in the sense of tilling of the land, sowing of the seeds, planting, and similar work done on the land itself. This basic conception is the essential sine qua non of any operation performed on the land constituting agricultural operation. If the basic operations are there, the rest of the operations found themselves upon the same. But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations (Emphasis supplied)'
(xv) According to the defendant bank, the Hon'ble High Court of Kerala had affirmed the above view in The Gwalior Rayon Silk Mfg. (Wvg.) v. The State of Kerala AIR 1973 Ker 36:MANU/KE/0015/1973 on the following lines :
'7. ..................A safe test to go by seems to have been propounded by a Division Bench of this Court in the decision in the Kollengode case. viz. Venugopala Varma Raja v. The Controller of Estate Duty Kerala. Ernakulam. 1966 Ker LT 1149. The test is: Is the land one on which a prudent owner would undertake any of the processes of farming in its widest sense? More or less the same test was laid down in Rasiklal Chimanlal Nagri v. Commissioner of Wealth Tax, Gujarat AIR 1965 Guj. 259 and by a Division Bench of this Court in C. I. T. v. Ananthan Pillai 1972 Ker LT 160 = (1972 Tax LR 1078). We do not understand any contrary view to have been taken in the Full Bench decision in Officer-in-charge (Court of Wards) Paigah. Sir Vicar-ul-Umra. Hyderabad v. The Commissioner of Wealth Tax. Andh. Pradesh. Hvderabad. AIR 1969 Andh Pra 345 (FB). That Full Bench only cut down the rather wide observations claimed to have been made in a prior Division Bench ruling (reported in AIR 1967 Andh Pra 189) that the capability of the land for agricultural use is not a criterion for deciding the nature and character of the land, and ruled that it is one of the important factors to be taken into account.'
(xvi) Advertence was made by the defendant bank to the judgment of Hon'ble High Court of Andhra Pradesh rendered in the case titled Gajula Exim (P) Ltd. v. Authorised Officer, Andhra Bank (MANU/AP/0141/2008) to canvass for their proposition that a land on which tissue culture unit building and green houses are situated cannot be treated as an ‘agricultural land’. The relevant portion of the said judgment reads as follows:
'15. The learned Counsel tried to impress upon this Court that the entries in the revenue records would also lead to a presumption that the land is being used for agricultural purpose, but, in the light of the judgment of the Supreme Court in Commissioner of Wealth Tax, A.P., v. Officer-in-Charge (Court of Wards), Paigah, I do not find any force in the contentions. After going through the entire material, I am of the view that the land on which the factory is situated cannot be treated as an agricultural land. Therefore, it is not exempted under the Securitisation Act. I do not find any merits in the revision petition.'
(xvii) The defendant bank placed strong reliance on the Division Bench judgment of the Hon'ble High Court of Kerala rendered in the case titled as K. P. Muhammed Basheer v. Deputy General Manager, Kannur District Co-operative Bank Ltd. reported in AIR 2010 Ker 118: MANU/KE/0364/2010 wherein the scope of Section 31(i) stood elucidated upon analysing the various decisions touching the term ‘agriculture’ and ‘agricultural land’. The relevant portion of said judgment is extracted out below:
16. "Agricultural land" is that species of land which could be said to be either used or ordinarily used for agricultural purposes. "Agricultural land" must have a connection with an agricultural user or purpose. It is on the nature of user that the meanings of 'agricultural purpose' and 'agriculture' become relevant. Popular and authoritative Dictionaries say that "agriculture" is the art or science relating to the practices of cultivating the land. Agriculture is the process by which human skill is expended upon land. Human labour, with or without the aid of implements, tools and machines, is employed utilising the art or science of cultivating the ground. In its good sense, it means farming, horticulture, forestry etc., including the allied pursuits, preparation 0/land or fields in large quantities, preparation of soil, planting of seeds, raising and harvesting of crops etc. In certain shades, agriculture also includes management of livestock etc. But primarily, it is understood as the process of putting land to use in the growing of crops by employing human skill and labour upon land. As noted above from Raja Benoy Kumar Sahas Roy (supra), agriculture includes raising, on the land, of products which have some utility either for consumption or for trade and commerce. The term 'agriculture' cannot be defined or understood by the nature of the products cultivated. No such classification is conceivable unless specifically provided for, having regard to the specific need to make such classification. If such classification is to provide different consequences of a piece of statute law, including its applicability, we definitely think that such classification should be found explicit on the clear expressions in that particular statute.
(xviii) Mr. Sunil Shankar summed up his argument urging the Tribunal to appreciate the existence of a multi-storied building in the property which is only housing the tissue culture unit as also the building used as residence of Dr. Sayanar, with absolutely no ‘cultivation of any sort on the land’. In the light of the facts as revealed from the materials on record including Annexure-A8 certificate which does not divulge the land to be an agricultural land and the aforestated binding precedents, it is submitted that the premises wherein the tissue culture unit is working and /or the green houses associated with the unit are situated, will not come within the meaning of the term ‘Agricultural Land’. For the foregoing reasons the Ld. Counsel for the defendant bank would seek the SA to be dismissed with costs.
(xix) For arriving at a just and proper decision with regard to the point under consideration, the Tribunal took a close look at the relevant definitions and provisions contained in the SARFAESI Act as also the definitions contained in The Kerala Land Reforms Act, 1963 which is a comprehensive legislation enacted in respect of agricultural land holdings and other lands. Accordingly, they are extracted out below:-
* S.2(1)(zb) "security agreement" means an agreement, instrument or any other document or arrangement under which security interest is created in favour of the secured creditor including the creation of mortgage by deposit of title deeds with the secured creditor;
* S.2(1)(zc) "secured asset" means the property on which security interest is created;
* S.2(1)(zd) "secured creditor" means any bank or financial institution or any consortium or group of banks or financial institutions and includes-
(i) debenture trustee appointed by any bank or financial institution; or
(ii) securitisation company or reconstruction company, whether acting as such or managing a trust set up by such securitisation company or reconstruction company for the securitisation or reconstruction, as the case may be; or
(iii) any other trustee holding securities on behalf of a bank or financial institution, in whose favour security interest is created for due repayment by any borrower of any financial assistance;
* S.2(1)(ze) "secured debt" means a debt which is secured by any security interest;
* S.2(1)(zf) "security interest" means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31;
S.13. Enforcement of security interest
(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act.
(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).
(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:--
(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;
S.31. Provisions of this Act not to apply in certain cases
The provisions of this Act shall not apply to-
(i) any security interest created in agricultural land;
THE KERALA LAND REFORMS ACT
'*S.2(5) 'commercial site' means any land (not being a kudiyiruppu or kudikidappu or karaima) which is used principally for the purposes of any trade, commerce, industry, manufacture or business;
*S.2(11) 'dry land' means land which is not nilam , garden, palliyal land or plantation;
*S.2(15) 'garden' means land used principally for growing coconut trees, arecanut trees or pepper vines or any two or more of the same;
*S.2 (38) 'nilam' means land adapted for cultivation of paddy;
*S.2(44) 'plantation' means any land used by a person principally for the cultivation of tea, coffee, cocoa, rubber, cardamom, or cinnamon, (hereinafter in this clause referred to as ‘plantation crop’) and includes-
(a) land used by the said person for any purpose ancillary to the cultivation of plantation crops or for the preparation of the same for the market;
(c). agricultural land interspersed within the boundaries of the area cultivated by the said person with plantation crops, not exceeding such extent as may be determined by the Land Board (or the Taluk Land Board, as the case may be) as necessary for the protection and efficient management of such cultivation'.
(xx) The term ‘agricultural land’ is nowhere defined under the SARFAESI Act. S.31(i) of the Act is explicit that its provisions are not applicable to any ‘security interest’ created in agricultural land. Chapter III of the SARFAESI Act provides for Enforcement of Security Interest and S.13(1) entitles any secured creditor to enforce any security interest created in its favour without the intervention of Court or Tribunal. As per S.2(1) (zb) ‘security agreement’ means an agreement, instrument or arrangement under which the security interest is created including by way of creation of mortgage by deposit of title deeds with the secured creditor. S.2(1)(zf) defines ‘security interest’ to mean a right, title and interest of any kind whatsoever upon the property created in favour of any secured creditor and includes any mortgage other than those specified in S.31. The corollary of a conjoint reading of S.2(1)(zf) and S.31(i) is this – a security interest created in agricultural land is no security interest at all capable of enforcement under the aegis of SARFAESI Act, as none of its provisions could be made applicable as against such land. As the term ‘secured creditor’ under S.2(1)(zd) refers to a bank or financial institution in whose favour ‘security interest’ is created, the term ‘secured debt’ under S.2(1)(ze) is referable to a debt secured by any security interest and the term ‘secured asset’ under S.2(1)(zc) is referable to the property on which the security interest is created, if the property/asset mortgaged to a bank or financial institution to secure a debt happens to be an agricultural land falling within the exclusion provided in S.31(i), such mortgage not qualifying to be a security interest at all would be incapable of enforcement in terms of S.13(1), 13(2) and S.13(4) of the Act.
(xxi) Admittedly Annexure – A1 sale deed dated 20.12.2004 Document No. 4776/2004 (which is the document deposited with the defendant bank in creation of a mortgage by deposit of title deeds in terms of S.58(f) of the Transfer of Property Act) would in its internal page No.4 in the tabulated column setting out the description of property divulge the nature, type and character of land under the head ‘Tharam’ to be ‘Thottam’ (the words in italics herein are referable to Malayalam terminology). The term ‘Thottam’ is understandably a ‘garden land’ in English usage as came to be submitted by the members across the Bar or is stated to mean even a ‘plantation’ of rubber, banana etc., in colloquial, ordinary usage of a common man. The Ld. Counsel for applicant also adverted to the Malayalam word ‘kizha nilam’ from the word ‘kizha nilathil’ found mentioned in the description of property set out in the self same sale deed which as per the submissions that came forth across the Bar is referable to a ‘ploughing land’ or ‘cultivable land’. Ld. Counsel appearing for the defendant bank could not convey any other meaning or legal imputation to the said words ‘Thottam’ and ‘‘kizha nilathil’ other than what came to be stated supra.
(xxii) Going by the striking fact that Annexure – A1 sale deed Doc. No. 4776/2004 deposited with the defendant bank in creation of ‘security interest’ describes the land therein to be ‘Thottam’ and ‘kizha nilathil’, it is not open for the defendant bank to now turn around and contend that the title deed accepted by them as security does not relate to a ‘Thottam’ property or an agricultural land. Under the Kerala Land Reforms Act, S.2(15) defines ‘garden’ to mean a land primarily used for growing coconut trees, arecanut, pepper vines or any of the above; S.2(38) of said Act defines ‘nilam’ to be a land adapted for cultivation of paddy and S.2(44) defines ‘plantation’ to mean a land primarily used for cultivation of tea, coffee, rubber, cocoa, cardamom, cinnamon or any other plantation crop.
(xxiii) The law remains settled by the Division Bench Judgements of the Hon’ble High Court of Kerala rendered in the cases titled Muhammed Basheer K. P. v. Kannur District Co-operative Bank Ltd. discussed elsewhere in this judgement and Karshaka Sanghatana Aykyavedi v. State Bank of Travancore (MANU/KE/0956/2010) on the point that the land on which there is a plantation of any kind including rubber would have to be necessarily held as an ‘agricultural land’. The Tribunal also respectfully reminisces a judgment rendered by the Hon'ble High Court of Kerala in the case titled Naryanan Nair v. Lokeshan Nair reported in MANU/KE/0616/2014 : AIR 2014 Ker 141, wherein growing of coconut, arecanut and the like have been held to be ‘cultivation’ and the land in which they are grown are held to be ‘agricultural lands’ irrespective of the existence of a residential building therein. The relevant portion of said judgment is extracted below :
'16. Agriculture is an activity in which the person involved therein cultivates the land.
Cultivation need not necessarily be paddy cultivation. Growing coconut trees, pepper vines, arecanut trees etc., also would be cultivation. If so, such lands also would be agricultural lands. There is no reason to hold that an agricultural land is only that land which is cultivated with paddy. An arecanut garden or a coconut garden would also come within the term "agricultural land" under sub-section (2) of S. 7 of the Court Fees Act. The mere presence of a residential house in such a land would not make it a non-agricultural land. The predominant purpose for which the land is used is to be taken into consideration to ascertain whether the land in question is an agricultural land.'
(xxiv) The Tribunal is also incidentally reminded of a judgment rendered by the Hon'ble High Court of Madras in Silicon Valley Auto Components Pvt. Ltd. v. Indian Bank (CDJ 2014 MHC 3967) wherein it is observed thus
'12.......It is settled law that mere description of the land as agricultural land would not suffice, but it must be an agricultural land, which is said to be either actually used or ordinarily used or meant to be used for agricultural purposes and that it must have a connection with an agricultural user or purpose'.
In the present case, Annexure-A1 sale deed Doc. No. 4776/2004 would divulge the land described therein to be a ‘Thottam’ and ‘kizha nilam’. The defendant bank which definitively contends the aforestated property not to be a ‘Thottam’ property, do not have any case or contention as regards the user of said land for non-agricultural use or any other purposes other than that of the tissue culture plant/laboratory and the green houses associated with said unit which are admitted to be in existence on the said land by the defendant bank itself in its written statement and argument notes.
(xxv) The commission report dated 31.08.2015, Annexure-C2 rough sketch of the secured asset and Annexure-C8 photographs (32 Nos.) cumulatively divulge and depict the Advocate Commissioner’s noticing of a tissue culture unit building constructed in 3 cents out of 6.9638 cents of land in Sy. No. 209/7, two poly houses installed with mist and fog equipments on the land measuring 42.50 cents of property in Sy. No. 209/4, a third poly house on western side of 42.50 cents taken on rental basis from one Siraj Mustafa, the presence of 5 arecanut trees and 8 coconut trees in 42.50 cents of land, considerable number of plantains on the eastern side of poly house as mother plants for taking/growing tissues therefrom, the presence of different crops like banana, G9 which is a hybrid variety, nenthran, ginger in addition to ornamental plants of which growing tissues are taken from mother plants. The Advocate Commissioner had reported therein about the presence of 1.5 lakh plants in 1st poly house and as to his noticing of the storing of around 40000 plants in the 2nd poly house which was divided into two compartments. The Advocate Commissioner had reported about the different phases of development of the tissue culture of plants as also his noticing of several rooms in the laboratory engaged in the tissue culture activity installed with various equipments and apparatus as listed in Annexure-C4. As pointedly argued by the Ld. Counsel for the defendant bank, the Ld. Advocate Commissioner could not have physically verified the numbers of the plantlings reportedly stored and kept in the poly houses during his visit, but for stating so based on the datas or information handed out to him then on the side of the applicant. However from Annexure-C8 photographs the Tribunal could of course take note of the factum of the presence of a considerable number of plantains, coconut and arecanut trees on the SA subject land as also the storing of innumerable plantlings in the two poly houses seen to have been fully spread over with plants on pots, poly bags, soil filled bags and plastic trays.
(xxvi) The Tribunal while proceeding to consider whether the SA subject land is or not an agricultural land for the reason of it housing a building wherein a tissue culture laboratory/unit is functioning with technologically advanced equipments and apparatus, it anxiously pondered as to whether the ‘tissue culture’ process which is a product of advanced scientific innovation would not fall within the definition of ‘agriculture’ or ‘agricultural operations’ as vociferously contended on the side of the defendant bank?
(xxvii) The Hon’ble High Court of Delhi in the case titled Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam and others reported in MANU/DE/3012/2011 made these observations as regards the significance and utility of ‘tissue culture’:-
'34……For a century the creation of a new and hybrid plant was accomplished by mechanically grafting limbs of plants together, or obtaining pollen from a plant and using it to fertilize another plant. Development of tissue culture changed the method and speed at which hybridization is accomplished. Tissue culture is a method of biological research in which fragments of tissue from an animal or plant are transferred to an artificial environment where they can continue to function. The cultured tissue may consist of a single cell, a population of cells or a whole part of a plant. Farmers and gardeners have been using hybridization techniques to achieve varieties of plants and seeds better than existing ones. A famous example of integration of such techniques is the Green Revolution, an initiative that involved the development of high yielding varieties of cereal grains, particularly wheat, which optimized its production and enabled farmers to achieve high yields.'
(xxviii) The Hon'ble High Court of Andhra Pradesh in the case titled Special Deputy Collector (L.A) Telugu Ganga Project v. Kallur Dasaratharamireddy and others reported in MANU/AP/1205/2003 recognized ‘tissue culture’ to be an innovative technology in agricultural science and horticulture observing thus:-
'7. With the ongoing research and innovative technology in Agricultural Science and related subjects, the country has made rapid strides in horticulture. Conventional system of germination through mother seeds was given a go-bye and latest techniques of hybrid graftings and tissue culture have emerged as a high source of income from fruit bearing trees with phenomenal increase in yield both quality and quantity-wise and also yielding period.'
(xxix) The Hon'ble High Court of Orissa in the case titled Basudev Mahakud v. National Seeds Corporation ltd. reported in MANU/OR/0501/2013 had held ‘tissue culture’ to be a modern scientific way of plant breeding falling within the ambit of ‘horticulture’ pursuant to it approving the order passed by GRF to the effect that the opposite party is indulged in agricultural activities. The relevant portion of said judgement is extracted below:
'15. Question No. (iii) is as to whether the term "Horticulture" as appearing in Clause 80(5)(ii) of the OERC Code, 2009 includes "Tissue Culture". Neither the Electricity Act nor any of the Rules and Regulations framed thereunder defines the term 'Horticulture'. Consequently, it is necessary to refer to the general meaning from different academic sources and encyclopedia. Opposite party has got the literature down loaded from the website of Wikipedia, the free encyclopedia of the World Wide Web net work. Perusal of the said literature reveals that Tissue Culture is a modern scientific way of plant breeding within the ambit and scope of Horticulture. The Tissue Culture is basically the horticultural activities. The GRF in its order observed that the terminology "Tissue Culture" is responsible for production of plant seedling which undergoes further cultivation by the farmers receiving the same at the subsidized rate. Besides, flower-plants are also raised in opposite party's Laboratory. Thus, the GRF held that opposite party is indulged in agricultural activities. Therefore, this Court is of the view that the term 'Horticulture' includes 'Tissue Culture' It may be relevant to refer to the certificate issued by the Scheme Officer functioning in the office of the Director of Horticulture, Odisha, Bhubaneswar, which reads as follows:
"TO WHOM IT MAY CONCERN
This is to certify that National Seeds Corporation Ltd. Bhubaneswar is producing tissue Culture Banana plantlets which are being utilized in the farmers' field of the State under National horticulture Mission Programme."
16. In its order, GRF observed that the certificate issued by the Government Officer is an authority on the subject and technically competent to form an opinion in the matter, which clearly suggests that 'Tissue Culture' is instrumental in the production of banana plantlets. The GRF held that there is no doubt that the Tissue Culture' has all the trappings of 'Horticulture' with identical activities and accordingly, it is held that the present dispute hardly attracts Section 181 of the Act requiring further definition of 'Horticulture' by the OERC so as to cover 'Tissue Culture' in the Regulation.
17. In view of the above, this Court is of the opinion that the 'Horticulture' includes 'Tissue Culture'.'
(xxx) The defendant bank though would vaguely contend the 6.9638 cents of land in Sy. No. 209/7 of Pandikad Village to have residential-cum-commercial building therein, could neither mention the exact extent/area of the building nor reason out as to how a building on a ‘Thottam’ land no matter whether it is two storied or three storied building could be construed to be a ‘commercial building’ when the predominant activity carried on the said land is the running of a tissue culture laboratory/unit which is engaged in an advanced agricultural activity of growing hybrid variety plants/plantlings therein. Merely because the tissue culture laboratory/plant of the applicant is eventually engaged in sale of plants to the farmers, the said activity cannot in any respects be branded to be a commercial activity divorcing it from that of the agricultural activities.
(xxxi) The tissue culture lab operating on a building in a small extent of the mortgaged land definitely has connection with the agricultural user of the land in so far as there is no denying the fact that the sucker mother plants from which tissue culture is obtained is found grown on the security land itself. The two poly houses or green houses that are erected on the lands measuring 42.50 cents in Sy. No. 209/4 abutting the tissue culture unit building in Sy. No. 209/7 are admittedly used for shifting of the plants grown in the tissue culture lab to the pots or soil filled bags kept therein and to separate, segregate and nurture the developed plants in a shady and atmosphere controlled environment. All these cumulatively are the primary and subsequent agricultural activities and operations carried on the said land itself involving human skill, effort and labour and it would only be apposite to hold the land in issue to be an ‘agricultural land’.
(xxxii) The plea of the defendant bank that the collateral security offered to it includes 42.50 cents of land in Sy. No. 209/4 and 30 cents of land with residential and commercial building in Sy. No.209/7 remains a mere allegation unsubstantiated by any evidence from their side. Merely for the reason of there being a two storied or three storied building with a tissue culture lab on near or about 3 cents of land out of 6 cents in Sy. No. 209/7 as came to be observed by the Advocate Commissioner in his report dated 31.08.2015, the property cannot be held to be a commercial/residential property when the loans advanced by the defendant bank are ‘agricultural loans’ for setting up of a tissue culture unit for growing of micro cultured plantlings. The bank’s definitive contention appears to be that the activity on the SA subject land is only tissue culture involving potted plants or poly bag plants with no basic/primary agricultural activity on land. Adverting to Annexure – A8 certificate of the Agricultural Officer the defendant bank though would pointedly argue as to the said certificate not describing the land to be an ‘agricultural land’, the defendant bank at the same time could not repel or rebuff the applicant’s contention as to the impossibility of tissue culture process without the growing or raising of sucker mother plant on the land itself.
(xxxiii) The Tribunal on a conspectus of Annexure-A8 certificate dated 07.03.2015 issued by the Agricultural Officer of Pandikkad, Annexure-A9 electricity bill dated 04.08.2015, Annexure-A10 computer printout dated 09.10.2015 with regard to LT-V(B) Agriculture tariff as also Annexure-A11 certificate dated 09.09.2015 issued by Deputy Director of Agriculture, Principal Agricultural Officer, Malappuram is convinced as to the tissue culture activity carried on the SA subject land to be an agricultural activity funded by State Horticulture Mission as per order dated 10.10.2013 falling under the agricultural sector. The provision of LT-V(B) agricultural service connection by KSEB to the applicant fortifies their submission that tissue culture is an agricultural operation eligible for concessional supply of electric power to foster the agricultural activities. Annexure-A8 certificate of the Agricultural Officer also vouches for the fact that the applicant firm is engaged in producing of various agricultural plants for cultivation and is funded by NHM besides having the approval of the Agriculture department of Kerala. The said certificate further asserts that land and building therein are essential for production of various plants. These documents definitely usher the applicant’s case and contention as regards the engagement and user of said land for ag
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ricultural activities and purposes. (xxxiv) Understandably the defendant bank had placed reliance on the judgement of the Hon’ble High Court of Andhra Pradesh rendered in the case titled Gajula Exim (P) Ltd. v. Authorised Officer, Andhra Bank to canvass for their proposition that a land otherwise shown as agricultural land even in the revenue record, cannot be held as such on the construction of a factory building thereon. In that case, the Hon’ble High Court having found the land in issue to be one on which the factory is situated and is being run with no material on record from the side of the petitioner therein to show as to their conducting of any agricultural activities or operations in any part of that land, definitely held the provisions of SARFAESI Act to be applicable to such a land irrespective of the fact that the petitioner was paying land revenue or the entries in the revenue records would lead to a presumption as to such land being used for agricultural purpose. The Hon’ble High Court further held therein that in view of the petitioner undertaking business in sea food which may be treated as an industry ancillary to pessy culture, the land measuring acre 7.81 with factory building, plant and machinery thereon cannot be treated to be a land used for agriculture. That however is not the case here. (xxxv) Unlike the construction of factory/industrial/commercial building on an agricultural land which can possibly alter or change the character, nature or physical feature of the said land, the setting up of green houses or poly houses on an agricultural land by itself cannot be held to be a conversion of land for non-agricultural use or stated to have resulted in change of its agricultural user or potentialities more so when the very purpose of putting such green houses are for fostering agricultural activities. The defendant bank neither has any case as to the SA subject land been converted or changed into a non-agricultural land by the presence of two green houses therein nor has any contention as to the said land ceasing to be an agricultural land on account of the running of a tissue culture lab in a building constructed over a small extent of said land. (xxxvi) The defendant bank which would rely on the Division Bench Judgement of our Hon’ble High Court rendered in the case titled Muhammed Basheer K. P. v. Kannur District Co-operative Bank Ltd. to usher their submissions as regards what is ‘agriculture’ or ‘agricultural land’ need not lose sight of the subsequent, successive paras of the very same judgement which appears more apposite for the purpose of the present discussion and decision. Be it noted, that the Hon'ble High Court of Kerala in the said judgment had made respectful reference to Commissioner of Income Tax, West Bengal v. Raja Benoy Kumar Sahas Roy case of the Hon'ble Apex Court and concluded its judgment thus : '20. When the Bill leading to the Act was introduced, to replace the predecessor Ordinance, the Statement of Objects and Reasons, in Clause 2(m), specifically referred to the intention to provide for the non-application of the proposed legislation to security interests in agricultural lands. The purpose of using the term "agricultural land" in the Act, to wit, in Section 31(i) thereof, is to provide that the Act shall not be applied to security interests created on such lands. Yet, the legislature thought it fit not to define the term "agricultural land" for the purpose of the Act. It expressed no intention to classify agricultural lands on any basis. Had it intended, nothing prevented such intention being expressed in the enactment itself. We look at the issue from this angle also because, in hand is a provision that makes an exemption from the application of a statute, which is pre-dominantly penal in nature, as regards securitisation and attendant proceedings involving the enforcement of rights of creditors against debtors. The inexcusable conclusion is obvious; that the clear legislative intention is that the term "agricultural land" in Section 31(i) of the Act would be applied without culling out any exemption from that term on the basis or nature of crop or the cultivation that is made on that land. All that is required is that it should be an agricultural land. 21. With the aforesaid, we also notice that in W. A. No. 1057/06, the Division Bench has held that when a loan was advanced on the security of rubber plantation, it does not cease to be an agricultural land merely because the rubber trees growing thereon have been cut down. It was held that the rubber plantation does not lose its character as an agricultural land by the felling of the old and unyielding trees since the next step is to replant the land with rubber siblings. It was held that even if the land is kept idle for some time, it does not cease to be agricultural land and if that were so, the provisions of the Act in question cannot apply in view of the embargo in Section 31(i) of the Act. …………………..However, unfortunately, that binding decision of the Division Bench was not brought to notice when the Writ Petition was argued. We are in complete agreement with that Bench decision.' (xxxvii) Going by the preceding factual narrative and the above mentioned authoritative legal pronouncements of the Hon’ble High Courts as also the judgements of the Hon’ble Income Tax Appellate Tribunal, Pune Bench rendered in the cases titled ITO v. Kisan Biotech and Income Tax Officer v. K.F. Bioplant Private Ltd. extracted supra, the Tribunal arrives at an inescapable conclusion that ‘tissue culture’ is definitely an advanced agricultural technique and innovation of plant breeding which cannot be held to be an activity other than agriculture or horticulture. In so far as there could be no divergent view on the point that ‘tissue culture’ could not be possible without the mother plant reared on the land itself, it would be farce and farfetched to be comprehend ‘tissue culture’ to be anything else but ‘agriculture’ or ‘agricultural activity’. (xxxviii) The defendant bank which had consciously and zealously extended agricultural term loans and cash credit facility for setting up of an agricultural laboratory engaged in tissue culture activity, cannot be permitted to feign ignorance of the fact that the requisite tissue culture for growing of plants by adopting advanced scientific means and methods could only be obtained from the mother plants/plantations otherwise primarily grown on the land itself using as much human skill and effort it may definitely require. At the cost of repetition, it is to be stated here that the definitive contention urged on the side of the defendant bank as to the mere presence of a tissue culture lab and two poly houses on a land would not suffice to hold the same as ‘agricultural land’ in the absence of a primary agricultural activity and operation on the land itself did not impress the Tribunal, since the growing and rearing of sucker mother plants and plantains on the SA subject land itself for the purpose of obtaining tissue culture therefrom cannot be lost sight of. The defendant bank has no case as to the applicant’s gathering of tissue cultures for their subsequent agricultural activity from mother plants reared or grown on some other land or property. If that was the fact situation, the otherwise weighty argument of the defendant bank would have been appreciable, persuading the Tribunal to possibly arrive at some other conclusion. (xxxix) The loans concededly extended by the defendant bank being agricultural loans for growing of micro cultured plantlings by adoption of the advanced tissue culture agricultural operations and the primary security/hypotheca as per the loaning documents relied by the defendant bank in its pending OA No. 170/2016 being the stock of micro cultured plantlings grown out of said agricultural activity, the land and building on which the said agricultural plants, produce and products are grown/developed/obtained cannot be stated to be any other land than the ‘agricultural land’. The defendant is definitely precluded from proceeding against the said land which enjoys statutory exemption in terms of S.31(i). The Tribunal wherefore returns its finding to this point in the affirmative. 3.5 CONCLUSION: In view of the forgoing discussions and reasoning, the Tribunal arrives at an inevitable conclusion that the property proceeded against by the defendant bank is an ‘agricultural land’ which is statutorily excluded from the ambit of SARFAESI Act in terms of S.31(i). The measures and actions taken by the defendant from the stage of issuance of Annexure – A3 demand notice dated 28.08.2014 till issuance of Annexure – A7 possession notice dated 20.07.2015 are wherefore set aside, restraining the defendant from invoking the provisions of SARFAESI Act as against the mortgaged property morefully set out in the aforestated impugned notices. The defendant bank is directed not to mulct the applicant/borrower with the costs and charges incurred for the entire SARFAESIA proceedings and if by now the costs and charges are so debited in the applicant’s loan account, it shall forthwith effectuate necessary reversals of such entries. The SA and connected IAs 1891/2015, 2041/2015 and 2354/2015 thus stands disposed of as aforesaid. The cost of Rs. 27,000/- incurred by the applicant for institution of the present SA shall be given due credit by the defendant bank while recovering its dues from the applicant/borrower by any other legal recourse or means except under the aegis of SARFAESI Act.