Allowed

The Tamil Nadu Industrial Investment Corporation (Tiic) Ltd. v. mahan textile process india Pvt. Ltd.

DRAT19 Nov 2025REGULAR APPEAL/61/2022

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed appeals by an auction purchaser and a bank, dismissing a borrower's appeal. The Tribunal overturned a lower court order that had set aside a property auction, holding that the mortgaged lands were not agricultural lands exempt under Section 31(i) of the SARFAESI Act due to lack of proof of continuous cultivation and agricultural intention.

What did the court decide?

Section 31(i) of SARFAESI Act exemption claim rejected; sale confirmed in favor of auction purchaser; impugned order set aside; borrower's appeal dismissed.

The Tamil Nadu Industrial Investment Corporation (Tiic) Ltd… — Banking and Recovery | DRAT (2025)

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 19^th day of November, 2025

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PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN CHAIRPERSON

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RA (SA) 30/2022, RA(SA) 61/2022

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RA (SA) 91/2025

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(Arising out of SA 73/2020 on the file of DRT, Coimbatore)

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I. RA(SA) 30/2022

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Between

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R. Nagaraj, S/o Rangasamy, 241/2, E.B. Colony, Gandhi Nagar, Tirupur 641 603.

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…..Appellant

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And

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1. M/s Mahan Textile Process Karuvampalayam Extension, India (P) Ltd., 2^nd Street, Represented by its Director Tirupur 641 604. Mr. A. Mahalingam, 4(1), 4, Kangayam Main Road, 4. The Authorised Officer, Tirupur 641 604. The Tamilnadu Industrial

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Road, 4. The Authorised Officer, Tirupur 641 604. The Tamilnadu Industrial Investment corporation

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2. A. Mahalingam, Limited (TIIC), S/o Appusamy, Tirupur Branch, Managing Director of Kumaran Shopping Complex, M/s Mahan Textile Process II Floor, India (P) Ltd., Near Railway Station, Door No.7, Karuvampalayam Kumaran Road, Extension, Tirupur 641 601. 2^nd Street, Tirupur 641 604.

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3. M. Kalaiselvi, W/o A. Mahalingam, Door No.7,

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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5. M/s Small Industries Development Bank of India,
Represented by its Branch	6. The Authorised Officer
Manager,	&Chief Manager,
1^stFloor, K.S.N. Complex,	India SME Asset
No.74, J.G. Nagar, 60 Feet	Reconstruction Company Ltd.
Road,	(ISARC),
Tirupur 641 602.	1004, 10^thFloor, Nariman
	Centre,
	Plot No.C-31, “G” Block, Bandra Kurla Complex,
	Bandra E , Mumbai 400 051.

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…..Respondents

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Counsel for the Appellant	: Ld. Sr. Counsel Shri Om Prakash for Advocate Shri Balaji Thirumoorthy
Counsel for the R1 to R3	: Ld. Sr. Counsel Shri Srinath Sridevan for
	Advocate Ms. V. Rajeswari
Counsel for R4	: Ld. Sr. Counsel Shri Jeyesh Dolia
Counsel for R5	: None
Counsel for R6	: Shri A. Ramaswamy

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II. RA(SA) 61/2022

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Between

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The Authorised Officer, The Tamilnadu Industrial Investment Corporation Limited (TIIC), Tirupur Branch, Kumaran Shopping Complex, II Floor, Near Railway Station, Kumaran Road, Tirupur 641 601.

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…Appellant

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And

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1. M/s Mahan Textile Process 2. A. Mahalingam, India (P) Ltd., S/o Appusamy, Represented by its Director Managing Director of Mr. A. Mahalingam, M/s Mahan Textile Process 4(1), 4, Kangayam Main Road, India (P). Ltd., Tirupur 641 604.

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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Door No.7, Karuvampalayam Extension, 2^nd Street, Tirupur 641 604.

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Extension, 5. The Authorised Officer 2^nd Street, Tirupur 641 604. &Chief Manager, India SME Asset

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3. M. Kalaiselvi, Reconstruction Company Ltd. W/o A. Mahalingam, (ISARC), Door No.7, Karuvampalayam 1004, 10^th Floor, Nariman Extension, Centre, 2^nd Street, Tirupur 641 604. Plot No.C-31, “G” Block, Bandra Kurla Complex, Bandra E, Mumbai 400 051.

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4. M/s Small Industries Development Bank of India, 6. R. Nagaraj, Represented by its Branch S/o Rangasamy, Manager, 241/2, E.B. Colony, 1^st Floor, K.S.N. Complex, Gandhi Nagar, No.74, J.G. Nagar, 60 Feet Tirupur 641 603. Road, Tirupur 641 602.

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…Respondents

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Counsel for the appellant : Ld. Senior Counsel Shri Jeyesh Dolia Counsel for the R1 to R3 : Ld. Sr. Counsel Shri Srinath Sridevan for Advocate Ms. V. Rajeswari Counsel for R4 : None Counsel for R5 : Shri A. Ramaswamy Counsel for R6 : Ld. Sr. Counsel Shri Om Prakash for Advocate Shri Balaji Thirumoorthy

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III RA(SA) 91/2025

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1. M/s Mahan Textile Process M/s Mahan Textile Process India (P) Ltd., India (P) Ltd., Represented by its Director Door No.7, Karuvampalayam Mr. A. Mahalingam, Extension, 4(1), 4, Kangayam Main Road, 2^nd Street, Tirupur 641 604. Tirupur 641 604.

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	3. M. Kalaiselvi, W/o A. Mahalingam,
2. A. Mahalingam,	Door No.7, Karuvampalayam
S/o Appusamy,	Extension,
Managing Director of	2^ndStreet, Tirupur 641 604.

…Appellants

And

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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1. The Authorised Officer, The Tamilnadu Industrial Investment Corporation Limited (TIIC), Now shifted to: Tirupur Branch, Kumaran Shopping Complex, 1^st floor, K.S.N. Complex, II Floor, No.74, J.G. Nagar, 60 Ft Road, Near Railway Station, Tirupur 641 602. Kumaran Road, Tirupur 641 601. 3 The Authorised Officer &Chief Manager, Now shifted to: India SME Asset Reconstruction Company Ltd. TIIC Building, Kumar Nagar, (ISARC), Near Fire Servie, Avinashi 1004, 10^th Floor, Nariman Road, Centre, Tirupur 641 603. Plot No.C-31, “G” Block, Bandra Kurla Complex, 2 Small Industries Development Bandra E, Mumbai 400 051.

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2 Small Industries Development Bandra E, Mumbai 400 051. Bank of India, Represented by its Branch 4 R. Nagaraj, Manager, S/o Rangasamy, 1^st Floor, K.S.N. Complex, 241/2, E.B. Colony, No.74, J.G. Nagar, 60 Feet Gandhi Nagar, Road, Tirupur 641 603. Tirupur 641 602.

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…Respondents

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Counsel for the Appellants : Ld. Sr. Counsel Shri Srinath Sridevan for Advocate Ms. V. Rajeswari Counsel for R1 : Ld. Senior Counsel Shri Jeyesh Dolia

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Counsel for R2 : None Counsel for R3 : Shri A. Ramaswamy Counsel for R4 : Ld. Sr. Counsel Shri Om Prakash for Advocate Shri Balaji Thirumoorthy

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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COMMON ORDER

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These Appeals are filed under Section 18 of the SARFAESI Act, challenging the

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order dated 29.6.2022 passed in SA 73/2020 by Learned Presiding Officer, DRT, Coimbatore, as detailed below:

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a) RA(SA) 30/2022 is filed by the auction purchaser Mr. R. Nagaraj.

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b) RA(SA) 61/2022 is filed by the Authorised Officer, The Tamilnadu Industrial Investment Corporation Ltd. Tiruppur Branch and

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c) RA(SA) 91/2025 is filed by borrowers M/s Mahan Textile Process India (P) Ltd. and two others.

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The borrower, M/s Mahan Textiles Process India (P)Limited represented by its Directors viz., A. Mahalingam, Managing Director and M. Kalaiselvi, Director filed this SA, challenging the sale notice dated 8.1.2020 and praying for the following relief:

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i) Set aside the SARFAESI measures against Item No.V of the schedule measuring 34.28 acres

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ii) Redeliver possession of the properties

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iii) Appointment of advocate commissioner with a qualified valuer to value the machinery and note down physical features of the properties

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iv) Appointment of mediator/arbitrator to solve the loan dispute under the OTS

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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v) To produce loan files with registered and re-registered agreement copies and for suitable orders.

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The case of the borrowers in SA, in brief, is that the first borrower M/s Mahan

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Textiles Process India (P) Ltd availed loan facility from defendants 1 and 2 before the DRT, viz. The Authorised Officer, The Tamilmadu Industrial Investment Corporation (TIIC) Ltd. and M/s Small Industries Development Bank of India. They failed to release machinery subsidy as capital and interest subsidy amount to the borrowers. Before starting commercial production, moratorium period was over and request for extension and rehabilitation was not considered. Defendants 1 and 2 initiated measures under SARFAESI Act. After classifying the account as NPA on 1.4.2012, first defendant issued demand notice dated 26.12.2012, claiming a sum of Rs.12,63,81,760/- and the second defendant issued a demand notice on 28.12.2012. On 22.01.2015, first defendant issued possession notice followed by E-Auction Sale Notice dated 8.1.2020. Borrower are not aware of the third defendant and that there is no privity of contract between the borrowers and the third defendant. There is no information with regard to assignment of loan in favour of 3^rd defendant, viz.

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The Authorised Officer & Chief Manager, India SME Asset Reconstruction Company Ltd (ISARC). Item No.V of the schedule mentioned properties are agricultural lands being cultivated by the borrowers. It measures 34.28 acres (6 acres + 6.89 acres + 5 acres + 4.29 acres + 12.10 acres = 34.28 acres). Agricultural lands are exempted from proceedings under SARFAESI Act under

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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Section 31(i) of the SARFAESI Act. Borrowers produced several documents to

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show that agricultural activities are carried out in the property. In this factual background, this SA was filed.

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Learned Presiding Officer, DRT, Coimbatore accepted the case of the borrowers and allowed the SA and set aside the sale held in favour of the auction purchaser viz. Mr. R. Nagaraj, who is the 4^th respondent in the SA and ordered repayment of sale consideration, registration and stamp duty charges to the auction purchaser with interest. There was a direction to appropriate a sum of Rs.2,95,25,000/- with accrued interest deposited by the borrowers to the loan dues and to release the amount to the 4^th respondent within four weeks from the date of the order. On making payment by the appellants to the 4^th respondent as ordered by the Tribunal, borrowers shall be eligible for repossession of the property. There are further directions issued. Aggrieved by this order, auction purchaser filed RA(SA) 30/2022, Tamil Nadu Industrial Investment Corporation Ltd (TIIC) filed RA(SA) 61/2022 and the borrowers viz. M/s Mahan Textile Process India (P) Ltd filed RA(SA) 91/2025.

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Learned Counsel appearing for TIIC submitted that in the valuation report, it is shown that land is situated in residential area and it is a dry barren land. There is reference to the fact that land is dry, rain fed land and can be developed for industrial or housing purpose. There is no indication that this land can be used for agricultural purpose. Loan was sanctioned in the year 2008 and it became a

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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NPA in the year, 2012. Therefore, SARFAESI measures were initiated. Demand

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notice, possession notice and sale notice were served, as required under the provisions of SARFAESI Act. Only in the 7^th attempt to sell the property in the auction sale, sale was held. When earlier six sale notices were issued, the plea of agricultural land was not taken. In fact, in the reply sent to Section 13(2) demand notice, there is no mention that lands mortgaged are agricultural lands and agricultural activities are going on, therefore, they are not exempted from the SARFAESI proceedings under Section 31(i) of the SARFAESI Act. Revenue records relied on by the borrowers could not show that agricultural operations are really being carried out. From the documents produced, advocate commissioner’s report and the photographs, it is evident that only some bushes and wild trees are available. There is no evidence to show that agricultural operations are being carried out regularly year after year. Mere production of revenue records like kist receipts, chitta, adangal and patta are not enough to conclusively decide that agricultural operations are being carried out at the time of creating mortgage and till now. When borrowers intended to create mortgage of these lands, it is admitted that they are not agricultural lands. Even in the worst case, assuming that some agricultural operations are being carried out, Loan was obtained for commercial purpose and not for agricultural purpose. Finding of the Learned Presiding Officer that lands can be used for agricultural purpose and therefore setting aside the SARFAESI Proceedings is not known to law. Even from the documents produced by the borrowers, it is

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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evident that lands are punja lands i.e., rain fed lands. There is no evidence produced to show what was the crop cultivated Fasli after Fasli, income generated, etc. to hold that lands are agricultural lands. Thus, he submitted that the finding of the Learned Presiding Officer that lands are agricultural lands, therefore, SARFAESI measures cannot be initiated and thus sale is set aside, is not in accordance with law. Thus, he prays to set aside the order of the Learned

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Presiding Officer and for allowing the appeal filed by the bank.

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In support of his submissions, he pressed into service the following decision rendered by Hon’ble Supreme Court of India in re SARIFABIBI Mohmed Ibrahim (Smt) and others Vs. Commissioner of Income Tax, Gujarat reported in 1993

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Supp(4) SCC 707 in support of his case.

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Learned Senior Counsel for the auction purchaser Shri Om Prakash submitted that one Mr. R. Nagaraj was the successful bidder in the 7^th sale attempt held on 10.2.2020 for a bid amount of Rs.2,95,25,000/-. Sale Certificate was issued on 5.3.2020 and he took possession of the property. In reply sent to Section 13(2) notice, the plea of agricultural land was not raised by the borrowers. Possession

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Notice and earlier sale notices were not challenged, claiming that property mentioned as Item No.V of schedule properties are agricultural lands. Advocate Commissioner’s report, plan and photographs clearly show that though there is a well in this land and electricity service connection is provided to the motor available, there is no water in the well, there is no power supply and no definite

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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water channels to carry water to the fields for the purpose of cultivation are available. Learned Presiding Officer, on the basis of presumptions and assumptions, without giving any valid reason for holding that the property is an agricultural land, allowed the SA. In addition to his submissions, he also adopted the submissions of Leaned Counsel for the TIIC and prayed for setting aside the order and allowing the appeal.

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Learned senior counsel for the auction purchaser, relied on the following decisions in support of his case.

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1) Hon’ble Supreme Court of India in re, Commissioner of Wealth Tax, Andhra Pradesh Vs. Officer-in-charge (Court of wards), Paigah reported in 1976 3 SCC 864.

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2) Hon’ble Supreme Court of India in re , I.T.C. Limited Vs Blue Coast Hotels Ltd. & Others reported in 2018 5 S.C.R.516

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3) Hon’ble Supreme Court of India in re, Indian Bank and another Vs. V.K. Pappireddiyar and another reported in 2018 SCR 611

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4) Hon’be Supreme Court of India in re, K. Sreedhar Vs. M/s Raus Constructions Pvt. Ltd. and others reported in 2023 1 S.C.R. 579

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5) Maharajah Sri Rajah Velugoti Sri Raja G.K. Yachendra Bahadur Varu, K.C.I.E. Pancha Hazar Mansubdar Rajah of Venkatagiri Vs. J. Ayyapareddi and two others in Second Appeal No.1487/2011.

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6) Hon’ble Supreme Court of India in re Union Bank of India and another Vs. Major Bahadur Singh reported in (2006) 1 SCC 368

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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7) Hon’ble High Court of Himachal Pradesh in re Additional Excise and Taxation Commissioner and another Vs. Radiant Cement Company Pvt. Ltd.

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Learned Senior Counsel for the borrowers, Shri Srinath Sridevan, who are appellants in RA(SA) 91/2025, respondents in other two appeals viz. RA(SA) 30/2022 and RA(SA) 61/2022 submitted that loan was sanctioned on 25.1.2008, mortgage was created on 5.8.2008, Section 13(2) Demand Notice was issued on 26.12.2012 and the impugned sale notice was issued on 8,1.2020, sale held on 10.2.2020 and sale certificate was issued on 5.3.2020. On 9.3.2020, sale certificate was presented for registration and possession was handed over to the auction purchaser. Thereafter only, advocate commissioner visited the

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property on 28.3.2022 and filed his report. Total extent of 34.28 acres are

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situated in five survey numbers.

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There is no definition of the term ‘agricultural land’ in the SARFAESI Act. Section 215 of Tamil Nadu Public Trust Regulation of Agricultural land defines what is an agricultural land. This definition includes forests, pasture lands, etc. Borrowers produced adangal extract for 1403 Fasli to 1424 Fasli and other revenue records like patta, chitta, adangal, kist receipts, etc. These documents clearly show that there are coconut trees, palm trees available in the land, apart from crops like horse grams, green grams, etc. Borrowers have also filed income tax returns for the relevant periods to show that agricultural operations are continuously carried out. Certificate from electricity department and revenue department

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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are produced to show that there is existing electricity service connection number 420 and no kist is due. Availability of service connection is referred to in the advocate commissioner’s report. Soil test report filed shows that land is fit for cultivation. After possession was taken by the auction purchaser in the year 2020, advocate commissioner visited the property in the year 2022. From 2020 to 2022 there was no agricultural operations, therefore, no crop was seen at the time of inspection. There is well in the land and that well was used for irrigating crops. Auction Purchaser deliberately allowed the well to be disused and made the land uncultivable only to create an impression that agricultural operations were not carried out. When the borrowers used the land, definite water channels, bunds were available for taking water to the fields. Commissioner’s report shows that auction purchaser had destroyed the trace of agricultural operations. Still destruction is evident from commissioner’s report. Merely because there is no agricultural operations for a few years, the character of the land that it is an agricultural land is not lost. So also, mere failure to challenge the possession notice and previous sale notices and not taking the plea of agricultural land in the reply to the demand notice, does not prevent the borrowers from taking the plea of agricultural land in the present proceedings, because it is statutory remedy available under Section 31(i) of the SARFAESI Act. Sale certificate was registered against the Hon’ble High Court of Madras‘s status quo order. It means contempt of the order of the Hon’ble High Court of Madras. Act done in disobedience has to be undone. Thus, Learned

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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Counsel for the borrowers submitted that Learned Presiding Officer, on going through the voluminous evidence produced by the borrowers in support of the fact that lands are agricultural lands and agricultural operations were carried out, rightly allowed the SA. Thus, he prayed for confirming the order of the Learned Presiding Officer and dismiss other two appeals, filed by TIIC and the auction purchaser.

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In support of this submissions, Learned Senior Counsel pressed into service the following decisions in support of his case.

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Hon’ble High Court of Madras in re Eshwar Purushothaman Gardens Vs. Authorised Officer, Indian Bank Zonal Office reported in 2012 (5) CTC 257

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Hon’ble Supreme Court of India in re, Commissioner of Income Tax West Bengal, Calcutta Vs. Raja Benoy Kumar Sahas Roy reported in 1957 SCC Online SC 34.

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K.P. Mohammed Vs Deputy General Manager (Authorised Officer), Kannur District Co-op Bank Ltd. & Another in W.A.No.155/2010 decided on 11.2.2010 by the Hon’ble High Court of Kerala.

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Hon’ble High Court of Bombay in re Commissioner of Wealth Tax, Poona Vs. H. V. Mungale reported in 1982 SCC Online Bom 161.

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Hon’ble High Court of Madras in re Century Flour Mills Ltd. and others Vs. S. Suppiah and others reported in AIR 1975 Mad 270.

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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Learned Counsel for India SME Asset Reconstruction Company Ltd. submitted

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that it has pari passu charge of 60:40 and adopted the arguments advanced by Learned Counsel for TIIC and the auction purchaser.

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In reply to the submissions of Learned senior counsel Shri Srinath Sridevan for

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the borrowers, Learned Senior Counsel Shri Om Prakash for the auction purchaser submitted that income tax returns have not been filed before DRT but filed here for the first time. Some documents are filed without filing any application for receiving additional documents. A Memo was filed to show that documents were filed before the Tribunal, but, those documents were not considered by the Tribunal. Intention of the parties at the time of creation of mortgage is most relevant aspect to determine whether the property was considered as an agricultural property or not, at the time of creation of mortgage. No evidence is produced to show that agricultural operations were carried out at the time of creation of mortgage till possession was taken by the auction purchaser. Mortgage was created in the year 2008. But, income tax returns are filed from 2011-2012 to 2021-2022. No IT returns filed to show that agricultural activities were carried out and yielded income prior to 2013-2014. Revenue records will not establish that property is an agricultural land. Report of the advocate commissioner shows that there is no agricultural operations.

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Learned Presiding Officer only said that there is potential to use the land as an

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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agricultural land. Borrowers have created documents after availing loan and

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foreseeing that measures would be taken under the SARFAESI Act.

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I have considered the rival submissions and perused the records.

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It is seen from the submissions of Learned senior Counsel and Ld. Counsel

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appearing for parties and on perusal of records that second and third appellants in RA(SA) 91/2025 are the directors of the first appellant company. First appellant company availed loan facilities from first and second respondents viz. The Tamilnadu Industrial Investment Corporation (TIIC) Ltd. and M/s Small Industries Development Bank of India (SIDBI). First respondent is the lead institution. Term Loan-I for Rs.6,75,93,824/- and Term Loan-II of Rs.5,24,06,176/- were availed from the first respondent. For the loan availed from second respondent, a demand notice dated 28.12.2012 demanding a sum of Rs.4,82,35,644/- was issued. The outstanding due for the loan availed from first respondent as per the demand notice dated 26.12.2012 was Rs.12,63,81,760/-. Thereafter first respondent alone issued demand notice dated 24.2.2014 demanding a sum of Rs.14,82,29,153/- due as on 21.2.2014

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together with interest followed by possession notice dated 22.1.2015. Borrowal of the loan, execution of loan documents and offering properties mentioned in the schedule of the SARFAESI Application are not in dispute. Though the appellants raised several grounds in the SARFAESI application, the

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main ground of challenge focused was that Item No.V of the schedule of

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

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properties, mortgaged as secured asset for due payment of the loan are agricultural lands. Therefore, SARFAESI proceedings cannot be initiated against Item No.V of the schedule of properties from V(a) to V(e) as per Section 31(i) of the SARFAESI Act. This plea of the appellants/borrowers was accepted by the Learned Presiding Officer, DRT and he allowed SA 73/2020.

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Learned Counsel for parties have produced decisions, as to the factors required

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to be considered in determining whether a land is an agricultural land and if so, whether exempted from SARFAESI proceedings under Section 31(i) of the SARFAESI Act. It is imperative to consider the propositions laid down in some of these decisions referred supra, to determine whether the lands are agricultural lands described in item No.’V’ of the schedule of properties or not and whether exemption under Section 31(i) of SARFAESI Act is applicable.

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I. Decisions relied by the First Respondent Financial Instituion viz. TIIC:

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In re SARIFABIBI Mohmed Ibrahim (Smt) and others Vs. Commissioner of Income Tax, Gujarat reported in 1993 Supp(4) SCC 707 , Hon’ble Supreme Court

¶138

of India observed in paragraph 13 he expression ""agricultural land "" should be given the widest meaning. What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land by some possible owner or possessor, for an agricultural purpose. It is not the mere potentiality but its actual condition and intended user which has to be seen for purposes of exemption. The person claiming an exemption of any property of his from the scope of his

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶141

assets must satisfy the conditions of the exemption. The determination of the character of land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case. The fact that the land is assessed to the Land Revenue as agricultural land under the State Revenue Law is certainly a relevant fact but if is not conclusive.

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II. Decisions relied by the Auction Purchaser:

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1. In re Commissioner of Wealth Tax, Andhra Pradesh Vs. Officer-in-charge

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(Court of wards), Paigah reported in 1976 3 SCC 864 , it is reiterated What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of user of land, by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality, which will only affect its valuation as part of ""assets"", but its actual condition and intended user which has to be seen for purposes of exemption from wealth-tax. One of the objects of the exemption seemed to be to encourage cultivation or actual utilisation of land for agricultural purposes. If there is neither anything in its condition, nor anything in evidence to indicate the intention of its owners or possessors, so as to connect it with an agricultural purpose, the land could not be ""agricultural land"" for the purposes of earning an exemption under the Act. Entries in revenue records are, however, good prima facie evidence.

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1. In re I. T.C. Limited Vs Blue Coast Hotels Ltd. & Others reported in 2018 5

¶146

S.C.R.516 it is observed that security interest was created in respect of

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RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶149

several parcels of land, which were meant to be a part of single unit. There

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is Five STAR hotel in Goa. Of the total area of 182225 sq. metres, 2335

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sq.metres are used for growing vegetables, fruits, shrubs and trees for captive consumption of the hotel. This area amounts to 12.8% of the total area. At the time of creating mortgage, entire property was intended to be covered. Ultimately, it was found that having record to the character of the land and the purpose for which it is set apart, court is of the view that the land in question is not an agricultural land. It is reiterated that actual condition and intended user has to be seen for the purpose of exemption.

¶152

1. In re Indian Bank and another Vs. V.K. Pappireddiyar and another reported in 2018 SCR 611, it is observed that the classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was put on the date of the creation of the security interest and the purpose for which it was set apart. The question as to whether the land is agricultural has to be determined on the basis of the totality of the facts and circumstances including the nature and character of the land, the use to which it was put and the purpose and

¶153

intent of the parties on the date on which the security interest was created.

¶154

¶155

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶156

1. In re K. Sreedhar Vs. M/s Raus Constructions Pvt. Ltd. and others reported

¶157

in 2023 1 S.C.R. 57 , it was observed that only in a case where the secured property is actually put to use as agricultural land and solely on the basis of the revenue records / Pattadar and once the secured property is put as a security by way of mortgage etc. meaning thereby the same was not treated as agricultural land, such properties cannot be said to be exempted from the provisions of the SARFAESI Act under Section 31(i) of the SARFAESI Act. The burden is on the borrower to prove that the secured properties are agricultural lands and actually being used as agricultural lands and/or agricultural activities are going on.

¶158

1. In re , Maharajah Sri Rajah Velugoti Sri Raja G.K. Yachendra Bahadur Varu,

¶159

K.C.I.E. Pancha Hazar Mansubdar Rajah of Venkatagiri Vs. J. Ayyapareddi

¶160

and two others in Second Appeal No.1487/2011 is relied for the proposition that the ordinary meaning of the word ‘agriculture’ is the raising of annual or periodical grain crops through the operations of ploughing, sowing, etc. By a special definition to agriculture, ‘ horticulture’ is included as agriculture in the Estates Land Act. It has not been made to include ‘siiviculture’ and

¶161

pasturing within the meaning of the term ‘agriculture’.

¶162

1. In re , Union Bank of India and another Vs. Major Bahadur Singh reported

¶163

in (2006) 1 SCC 368 on the determination of character land as an

¶164

agricultural land .

¶165

¶166

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶167

1. In re , Additional Excise and Taxation Commissioner and another Vs.

¶168

Radiant Cement Company Pvt. Ltd . on the determination of character land as an agricultural land .

¶169

III. Decisions relied by Borrowers:

¶170

In re Eshwar Purushothaman Gardens Vs. Authorised Officer, Indian Bank

¶171

Zonal Office reported in 2012 (5) CTC 257, Hon’ble High Court of Madras after considering several decisions on the issue, observed that the term ‘agricultural land’ is not defined in the SARFARESI Act. The land in question is situated in the State of Tamil Nadu. The Tamil Nadu Patta Passbook Act, 1983 gives an inclusive definition to the term agriculture. SARFAESI Act is very clear that any security is created in the agricultural land is exempted from the purview of the SARFAESI Proceedings. Nature of land, its usage should be taken together to decide the issue as to whether the land in question is an agricultural land. In case the predominant purpose is agricultural in nature, the exemption provision would come into operation.

¶172

In re, Commissioner of Income Tax West Bengal, Calcutta Vs. Raja Benoy Kumar Sahas Roy reported in 1957 SCC Online SC 34, it is observed that the primary sense in which the term agriculture is understood is agar-field and cultra- cultivation, i.e., the cultivation of the field and if the term is understood only in that sense, agriculture would be restricted only to cultivation of the land

¶173

in the strict sense of the term meaning thereby, tilling of the land, sowing of the

¶174

¶175

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶176

seeds, planting and similar operations on the land. They would be the basic operations and would require the expenditure of human skill and labour upon the land itself. There are however other operations which have got to be resorted to by the agriculturist and which are absolutely necessary for the purpose of effectively raising the produce from the land. They are operations to be performed after the produce sprouts from the land, e.g., weeding, digging the soil around the growth, removal of undesirable under-growths and all operations which foster the growth and preserve 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. The latter would all be agricultural operations when taken in conjunction with the basic operations above described.These products may be grain or vegetables or fruits which are necessary for the sustenance of human beings including plantations and groves, or grass or pasture for consumption of beasts or articles of luxury such as, betel, coffee, tea, spices, tobacco etc., or commercial crops like, cotton, flax, jute, hemp, indigo etc. It must also be understood that it will also include forest products such as timber, sal and piyasal trees, casuarina plantations, tendu leaves, horranuts etc.

¶177

In re K.P. Mohammed Vs Deputy General Manager (Authorised Officer), Kannur District Co-op Bank Ltd. & Another in W.A.No.155/2010 decided on

¶178

11.2.2010 by the Hon’ble High Court of Kerala, it is observed that “Agricultural

¶179

¶180

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶181

Land’ is that species of land which could be said to be either used or ordinarily

¶182

used for agricultural purposes. It must have a connection with an agricultural user or purpose. It is the process by which human skill is expended upon the land. Human labour, with or without the aid of implements, tools and machines is employed utilizing the art of science of cultivating the ground, farming horticulture, forestry, etc. including the allied pursuits, preparation of 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. Rubber saplings are planted, watered and cared for and the said process is nothing but ‘agriculture’.

¶183

In re Commissioner of Wealth Tax, Poona Vs. H. V. Mungale reported in 1982

¶184

SCC Online Bom 161, it is observed by referring to the Division Bench decision of Hon’ble High Court of Mumbai The Commissioner of Wealth Tax, Bombay City I Vs. Podar Mills Ltd that if a land is once cultivated or put to agricultural use but it now fallow of barren, it would not merely by reason of such fact cease to be agricultural land. Conversely what is patently non-agricultural land may in extraordinary circumstances be used for a purpose to which agricultural land is usually put and may, therefore, yield agricultural income. However, merely by reason of the yield it cannot be designated as agricultural land.

¶185

¶186

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶187

In re , Century Flour Mills Ltd. and others Vs. S. Suppiah and others reported in

¶188

AIR 1975 Mad 270 is relied for the proposition as to the consequences of violation of stay order.

¶189

The following are the legal propositions that emerge from these decisions.

¶190

Agricultural land is expressly exempt from the SARFAESI Act under Section 31(i), so banks cannot use SARFAESI to recover dues against such land regardless of loan type .

¶191

Agricultural land exemption under sec 31(i) applies only if borrower proves the land is agricultural and source of livelihood .Actual use and intention on the date of mortgage are decisive and not future potential

¶192

Cultivation in agriculture involves process like, Preparation of land, planting of saplings, Use of human skill and labour, Continuous maintenance.

¶193

The term agriculture cannot be defined by the nature of the products cultivated. Plantations like tea, coffee and rubber are commercial, they still involve agriculture operations.

¶194

Rubber Plantations are agricultural Land under Section 31(i) of the SARFAESI Act, therefore SARFAESI Act does not apply to such land.

¶195

Revenue records, physical features (crops, coconut trees, bore well, farmhouse), prove agricultural use . Presence of small superstructures does not change their agricultural character.

¶196

For the purpose of exemption under sec 31(i) of SARFAESI act, The determination of the character of the land according to the purpose for which it is meant or set apart and can be used, is a matter to be determined on the facts of each particular case .

¶197

Agricultural land may or may not yield agricultural income. It there is land which was once cultivated or put to agricultural use but it now fallow of barren, it would not merely by reason of such fact cease to be agricultural land.

¶198

¶199

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶200

If the landowner performs agricultural operations—like planting trees, nurturing them, or replanting after some have fallen—then the income from those trees can be considered agricultural income.

¶201

The land which is recorded as agriculture land in the revenue papers cannot be used for non-agricultural purpose by the owner ,unless the land is allowed to be converted to non- agricultural purpose under the provision of the relevant Act.

¶202

where the land is being assessed as agricultural land, then, normally, although it is not being put to actual agricultural use, it may be presumed that it continues to be agricultural land , unless it can beshown that it has been in fact put to some non-agricultural use, or there is some relevant circumstance to indicate that it cannot be properly regarded as agricultural land.

¶203

What is really required to be shown is the connection with an agricultural purpose and user and the mere possibility of user of the land, by possible future owner or possessor, for an agricultural purpose

¶204

It is the purpose for which it is held that determines its character and the existence of a few coconut trees or a vegetable patch on the land cannot alter the fact that it is held for purposes of building and not for purposes of agriculture.

¶205

Whether a parcel of land is agriculturalmust be deduced as a matter of the fact from the nature of land, the use to which it is put to use on the date of creation of the security interest and the purpose for which it was set apart.

¶206

Revenue records alone cannot decide if land is agricultural; its real nature, use, and purpose must be examined.

¶207

Classification of Land in revenue records as agricultural or otherwise is not dispositive or conclusive , however , entries in revenue records are good prima facie evidence

¶208

Once the secured property is put as a security by way of mortgage the s ame is not treated as agricultural land , such properties cannot be said to be exempted from the provisions of the SARFAESI Act.

¶209

The burden is upon the borrower not the secured creditor to prove that the secured properties are agricultural lands and actually being used as agricultural lands and/or agricultural activities going on.

¶210

¶211

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶212

If plants or trees grow naturally (without human intervention), and the landowner only collects and sells the produce, this is not agricultural income. The term Agriculture is not merely the basic operation of growing plants .It is the combination of both basic as well as subsequent operations ( Pruning, Weeding, Felling, Clearing,. Etc.) In the process of process of agriculture and raising on the land of products which have some utility either consumption or for trade and commerce.

¶213

Agricultural character is judged by actual use and intention , not merely by entries in records. E.g. Urban location, non-cultivation, and sale for housing purposes outweighed revenue classification.

¶214

Exemption under Section 31(i) applies only if borrower proves land is agricultural and source of livelihood . Actual use & intention o n date of mortgage are decisive, not future potential

¶215

Pasturage is distinct from agriculture , both in definition and legal consequences. Agricultural use is tied to cultivation and permanent rights , whereas pasturage is temporary and non-cultivating . Pasture land is not permanently cultivable , temporary cultivation of crops is not considered as Agriculture.

¶216

If widest possible connotation is given, practically all land even that covered by buildings is agriculture land .Therefore It is imperative to give reasonable limits to the scope of the “Agricultural land”.

¶217

Learned Senior Counsel for auction purchaser relied on the following decisions

¶218

for the proposition as to how to apply judicial precedents in a given facts and circumstances of the case.

¶219

a) In re, Union Bank of India and another Vs. Major Bahadur Singh reported

¶220

in (2006) 1 SCC 368, it is observed that courts should not place reliance on decisions without discussing as to how the fact situation of the decision on which reliance is placed. Observations of the courts are neither to be read

¶221

as Euclid’s theorems nor as provisions of the statute and that too taken out

¶222

¶223

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶224

of their context. Circumstantial flexibility, one additional or different fact

¶225

may make a world of difference between conclusions of two cases. Disposal

¶226

of cases by blindly placing reliance o a decision is not proper.

¶227

b) The words of Lord Denning in the matter of applying precedents is extracted in the decision rendered in Additional Excise and Taxation Commissioner and another Vs. Radiant Cement Company Pvt. Ltd reported in 2025 SCC

¶228

Online HP 2548 as follows:

¶229

“Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.

¶230

Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches”

¶231

In the light of these legal propositions referred in the decisions supra, it is now required to consider the evidence made available by the parties with regard to the rival claim i.e., the claim of the borrowers that Item No.V of the schedule properties are agricultural lands and the claim of the first respondent institution

¶232

and the auction purchaser that they are not agricultural lands.

¶233

¶234

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶235

Appellants/borrowers produced five sale deeds dated 14.12.2005 for the purchase of Schedule V properties by Mr. A. Mahalingam, the second appellant. In these sale deeds, various extent of lands have been purchased. In the description of properties shown, it is mentioned that properties sold were Punja lands. Certificate No.M.M.10534/2006/B2 issued by the Tahsildar, Kangeyam to A. Mahalingam is produced to show that properties purchased under the aforesaid sale deeds measuring 34.28 acres are under personal enjoyment of said Mahalingam and thus certificate is issued for availing bank loan. Soil Health Test Card dated 3.2.2020 is produced to show that this land is suitable for all crops except mango and lemon and is suitable for pulses, vegetable and cereal. Sale certificate issued in favour of auction purchaser on 5.3.2020 issued by the TIIC, the first respondent financial institution shows that item No.V of the schedule of properties was sold for Rs.2,95,25,000/-.

¶236

20.1 The borrower viz. A. Mahalingam wrote a letter to the Deputy District Collector, Tharapuram, Tiruppur District dated 10.7.2020 stating that he availed loan by mortgaging lands and due to unavoidable reasons, Mahan Textiles could not be run. Thus, symbolic possession was taken in January 2015 and the property was put up for auction on 10.2.2020. He obtained status quo order from the Hon’ble High Court of Madras. After taking symbolic possession in the year 2015, VAO had not collected kist and that he has not registered the crops cultivated year after year. He cultivated cowpea, horse gram, moong and Nari

¶237

¶238

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶239

Payir in 2019 and 2020 and thus requested to direct the VAO to register the crops raised in 2019-2020 and give Adangal for the for cultivation of crops from 2015-2016 to 2020. The status of this petition was pending, when this document was filed in this Tribunal. Certificate dated 20.1.2021 issued by Assistant Accounts Officer TANGEDCO is produced to show that Agricultural Electricity Connection No.420 in Uthiyur Distribution, Uthiyur Division is in the name of Smt. Rathinambal and this connection is in possession of Mr. A. Mahalingam, as per Purchase Deed No.2868 dated 14.12.2005. He sent a letter on 12.2.2021 similar to the letter dated 10.7.2020 to register cultivation of crops in Adangal for the year 2021.

¶240

20.2 Letter dated 28.4.2021 given by Mr. B. Rameshkumar, the Deputy Director of

¶241

Town and Country Planning Department (P) to Mahalingam is produced to show that this land is situated in a non-planned area and not located in the notified hilly area and the Coastal Regulation Zone. This detail was given on the request made by the borrower for issuance of Land Use Certificate. It is made clear in this letter that this letter is given only for information purpose only. Copy of receipt issued by Uthiyur Police Station for the compliant given by the borrower, Mahalingam against TIIC is produced along with letter dated 20.9.2021 written

¶242

to the Inspector of Police, Uthiyur informing about the pendency of SA No.73/2020 on the file of DRT, Coimbatore. He produced land classification available in the online registration department to show that schedule V

¶243

¶244

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶245

properties are agricultural properties. Adangal Extracts from 1403^rd Fasli to

¶246

1424 Fasli are filed to show that there were coconut and palm trees and other crops cultivated and there are two wells in these lands. Some of these adangal extracts show that There were also cultivation of Horse gram, Corn, Finger millet and black gram. Crop details are given in Fasli 1403, 1410 to 1424. There is no crop details given in Fasli 1404 to 1409. ‘A’ Registrar details show the property as Ryotwari Punjai land. There is well in Survey No.252/2B and Survey No.255. Well in Survey No255 is “Durasthu Kinaru” i.e., clear well. Copies of patta are produced to show that these lands stand in the name of A. Mahalingam. Certain kist receipts are produced to show payment of kist. Encumbrance certificates are filed to show that properties are shown as agricultural lands.

¶247

Appellants/borrowers also produced income tax returns for the assessment year 2011-2012 to assessment year 2021-2022 to show that income generated by doing agricultural activities in schedule V mention properties are shown in the income tax returns. These documents are relied by the Learned Counsel for the borrowers to say that these documents clearly and categorically establish the fact that lands are Punja lands and cultivable lands. There are two wells in the land. There are trees like coconut and palm trees, crops like cowpea, horse gram, moong, green gram, black gram, Nari Payir, pulses had been cultivated.

¶248

¶249

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶250

There is electricity service connection, motor pump sets for drawing water from

¶251

well for the purpose of irrigation.

¶252

Learned Counsel for borrowers also relied on the report of the Advocate Commissioner to show the cultivation of land, traces of water channels, electricity service connection, motor pump sets, trees, etc. and to show that there was active agricultural activities going on prior to taking possession of the property by the Auction Purchaser. After the auction purchaser had taken possession of the property, he deliberately obliterated the traces of agricultural activities and allowed the land look like uncultivable and barren to create an impression that it is not an agricultural land.

¶253

Ld. Counsel for the bank and auction purchaser relied on the valuation report obtained at the time of sanction of land dated 13.3.2008 and 20.3.2008 to show that inspection was carried out by the valuer in the presence of borrower, Mr. Mahalingam. It is mentioned in the report that land is a dry land, there is no water sources, therefore, marketability is very limited. Property is located about 11 Kms away from Kangeyam on the Kangeyam – Dharapua main road and local enquiry reveals that the property is dry barren lands and marketability of these lands is very poor. Extract of the minutes of second meeting of the Board of Directors of TIIC held on 24.6.2008 is produced to show that valuer stated that the property is a dry rain fed land. Marketability of the land is good since the land is suitable for industrial activity. Land can be developed as an

¶254

¶255

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶256

industrial or housing layout and it is located on the highway, 4 kms from Utiyur

¶257

and 10 kms from Kangeyam and there was a housing layout coming up 3 kms from this property.

¶258

23.1 Demand Notices dated 26.12.2012 and 28.12.2012 issued by TIIC Financial Institution and SIDBI are produced. It is submitted by the Ld. Counsel for the bank and Ld. Senior Counsel for the auction purchaser that in the reply sent to the demand notice by the first appellant on 6.2.2013, there is no indication about the fact that Item No.V of the schedule of properties are agricultural lands, therefore, they are exempted from the SARFAESI proceedings under Section 31(i) of the Act. There was no challenge to the possession notice dated 22.1.2015 and six previous sale notices. After six previous sale attempts failed

¶259

and only in the 7^th sale attempt by issuing impugned sale notice dated 8.1.2020, the sale was held. Sale certificate was issued on 5.3.2020 and possession of the property was handed over to the auction purchaser on 5.3.2020. If Item No.V of the schedule property are really agricultural lands, borrowers should have challenged the possession notice and previous six sale notices and raised this plea in the reply to the demand notice. When no reply was given informing that lands are agricultural lands and therefore, SARFAESI proceedings cannot be

¶260

initiated and when there was no challenge made to the possession notice and previous six sale notices, it shows that lands are not really agricultural lands and

¶261

¶262

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶263

the plea that lands are agricultural lands is taken up now as an after thought

¶264

only to upset the sale process.

¶265

23.2 Order passed in Writ Petition No.4359/2020 is produced to show that Hon’ble High Court of Madras had not granted any relief to the borrower and directed the borrower to approach DRT, Coimbatore to dispose SA 73/2020 on priority. The report of the advocate commissioner shows that no agricultural activities had been carried out for a long time and in fact there are no trees or crops available, rather cultivated in the land. The report and the photographs filed by the Advocate Commissioner clearly show that lands are dry lands without water source, with no fruit bearing trees or consumable crops, etc.

¶266

One important submission of Learned Senior Counsel for the borrowers is that the advocate commissioner’s report was based on his visit on 26.3.2022. Physical possession of the land was taken by the Auction Purchaser on 5.3.2020. Thereafter, auction purchaser obliterated the traces of agricultural activities and deliberately allowed the land uncultivated and barren. Therefore, commissioner’s report will not aid in determining whether lands are agricultural lands or not. On the other hand, revenue records produced by the borrowers and other records would clearly establish the fact that lands are agricultural lands.

¶267

¶268

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶269

Reading of advocate commissioner’s report shows that red colour outlined area

¶270

is a rain fed dry land and dried left over of elephant grass like vegetation is seen. It has been cut long back. It looked like grass was used as cattle feed. Palm tree

¶271

and some other wild trees standing here and there are seen. Some freshly dug pits like spits, few in number are noticed, wherein some splintered portions of dry logs are lying. In some other spots, patches are seen as though splintered dry wooden logs are burnt recently. Palm tree bark to its full length except its top and bottom was lying and yet another one standing. Apart from these two, there were few other trees. In about 9 to 10 spots, dark patches were there as wooden logs have been burnt recently. Some partly burnt pieces of woods like

¶272

tree top vegetation like branches were lying. Except these notable features,

¶273

there was nothing available in the red colour outlined rough plan.

¶274

25.1 Brown outlined portion of the rough plan is one in which any agricultural activity being undertaken in the recent past, even though this portion looked

¶275

like rain fed land. In the south eastern corner of the land, rock beds are there in approximately half an acre of the land. Wild trees are also present sporadically. In two or three places, gatherings of tree top vegetation like branches and leaves were lying.

¶276

25.2 Green outlined portion of land is little bit different from the other two. Land

¶277

here seems to be little amenable for doing agricultural activity but there are no traces of agricultural activity being undertaken recently. 50 odd palm trees and

¶278

¶279

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶280

a few neem trees and some wild trees were seen. There was a ground level well

¶281

and the water was in a depth of about 40 feet. No details given as to the depot of the well. There was no electricity connection given to run a motor to bail out water for irrigation. In the north eastern corner, the soil was in untilled condition and some wild and neem trees were present. Two cows were tied to the trees. A flock of goats were seen flocking nearby. There were no shelter like structure seen in the land to accommodate the cattle. In fact, there are no structures in the entire land except some standing trees.

¶282

25.3 An EB wooden fuse box mounted on a stone pillar on the far north eastern corner of the well top was seen. It seems to be fitted to give electricity connection to a motor pump set. Motor pump is fitted to pump out water from the well. EB department iron box fitted with fuses with fuse carriers were in tact. But there was no electricity connection wiring available at the time of visit of the advocate commissioner from the post and fuse box, as there was no wiring seemed to be in tract or available for connection. No such motor pump was seen present in the well. An EB box was fitted in the EB post and it was written SC 420. It means service connection was meant for HP5 capacity motor pumps. There were three more EB posts with electric wire running through them. Some handful of big trees standing on the banks of two wells.

¶283

25.4 There were mild traces of water ways and bunds running through that portion

¶284

of the subject property outlined in green in the rough plan in between the

¶285

¶286

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶287

fields, for the convenience of agriculture. It shows that agriculture ought to have been undertaken before. All the three sides on the west, north and east are bordered by wild dry plants in the form of natural fence, in the green outlined rough plan. Entire property is lying devoid of any cultivation or standing crops whatsoever.

¶288

Though advocate commissioner’s report shows existence of well, electricity service connection and 50 and above palm trees, few neem trees, some big trees, wild trees, water ways, bunds, it could not be gathered from the commissioner’s report as to whether agricultural activities had been under taken in these lands, if so, whether agricultural activities had been undergoing from the date of creation of mortgage, prior thereto and after the creation of

¶289

mortgage till the auction purchaser took possession of the property.

¶290

From the look of the photographs filed by the advocate commissioner and his

¶291

report, it is seen that lands are complete dry lands with no agricultural activity. There are some palm trees, neem trees, wild trees and bushes alone present. Wild trees and bushes cannot be grown within the period of two years. They ought to have been in existence from long back, more particularly, prior to taking possession of the secured asset by the auction purchaser. Electric service connection, though stand in the name of Rathinambal, there is no active electricity service connection to draw water from the well. It is found that water is available below 40 feet depth. There is no information available as to

¶292

¶293

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶294

the depot of water available. Advocate Commissioner’s report shows only mild traces of water ways and bunds. Adangal extract shows there were coconut trees in the land. Not even one coconut tree was seen by the advocate commissioner. No other fruit bearing trees are seen and reported. Palm trees, neem trees, wild trees and bushes have grown on their own. They were not planted for agricultural purpose.

¶295

Therefore, this Tribunal finds that commissioner’s report will not help in determining as to whether agricultural operations were being carried out prior to mortgage, at the time of mortgage and subsequent to mortgage till possession was taken by the auction purchaser.

¶296

Of Course, adangal extracts and other documents produced by Learned Counsel for appellants/borrowers show that there are some crops cultivated. It is settled proposition of law that revenue records are prima facie evidence to show agricultural activities, but it is not a conclusive evidence. The report of the Senior Agricultural Officer, Mobile Soil Testing Centre, Palladam, Tiruppur District shows that except mango and lemon, land is suitable for other crops like cereal, vegetable and pulses. It is fairly suitable for crops like paddy, cotton, sugarcane, maize, corn, onion, tomato, brinjal, lady’s figner, banana, moringa with suitable soil, crop, irrigation and micronutrient management. Moderately suitable for high salt tolerant coconut, chillies, ragi,, pomegranate, tamarind, guava, sapota, amla, sunflower with suitable soil crop, macronutrient and

¶297

¶298

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶299

micronutrient management. Poorly suitable for high salt tolerant crops like

¶300

coconut, chilles, ragi, pomegranate, tamarind, guava, sapota, amla and sunflower.

¶301

The relevant portion is extracted hereunder:

¶302

i) Fairly Suitable:

¶303

Crops like paddy, cotton, sugarcane, maize, corn, onion, tomato, bringal, lady’s finger, banana, moringa can be used with suitable soil, crop, irrigation and micronutrient management.

¶304

Suitable soil, crop, irrigation, macro and micronutrient management can be applied occasionally for one or two irrigations only during sale tolerant and salt tolerant growth stages.

¶305

ii) Moderately Suitable:

¶306

Moderately high salt tolerant coconut, chillies, ragi, pomegranate, tamarind, guava, sapota, amla, sunflower can be used with suitable soil, crop, macronutrient and micronutrient management.

¶307

For slightly higher sale tolerant crops like paddy, cotton, sugarcane, maize, corn, onion, tomto, brinjal, lady’s finger, banana, moringa, etc. salt tolerant crops can be used only at suitable soil irrigation, macro and micronutrient management and occasionally for one or two irrigations.

¶308

iii) Poorly Suitable

¶309

For moderately high salt tolerant crops like coconut, chillies, ragi, pomegranate, tamarind, guava, sapota, amla and sunflower, salt tolerant crops can be used only for one or two irrigations with suitable soil, crop, irrigation macro and micronutrient management only at one or two irrigation stages.

¶310

iv) Very Poorly Suitable

¶311

Depending on the amout of salt, it can be used only for high salt tolerant crops like ilanthai. Depending on the need for irrigation, sale can be considered for other crops that can withstand salt.

¶312

29.1 From a perusal of adangal extracts filed for Fasli 1403 to Fasli 1424, it is seen

¶313

that Adangal for Fasli 1403 shows that coconut tree, palm tree, corn, finger

¶314

¶315

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶316

millet, blackgram had been under cultivation. Adangal for Fasli 1404 to Fasli

¶317

1409 did not refer about existence of any trees and cultivation of any plants, pulses or cereals. Adangal from Fasli 1410 largely shows that Horse Gram cultivation is done. Though Senior Agricultural officer’s report shows that land is fit for cultivation of trees except mango and lemon, except Horse gram, no other crops like vegetables, cereals, pulses, etc. are grown in the land. Coconut trees were shown to have been in existence in Fasli 1403 and not beyond that. It can be gathered from agriculture officer’s report that land can be used for agricultural operations if necessary irrigation facilities made with micro and macro nutrients management. There is no evidence to show that proper irrigation facility is made available in the land in dispute. There is no material produced to show that management of land with micro and macro nutrients. Only some palm trees and wild trees are available and no fruit bearing trees are available in the land.

¶318

Income tax returns filed by the borrowers show that returns do not specifically indicate that the income is generated from agricultural production. IT Returns show the income received from house property and provisional income from other sources. Income Tax Returns are filed in ITR-4. So far as agricultural income is concerned, ITR has to be filed in ITR-1 for agricultural income less than Rs.5000/- and above Rs.5000/- ITR-II has to be filed, distinctly showing the agricultural income. In ITR-II schedule E-1 is earmarked for details of exempt

¶319

¶320

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶321

income. It included agricultural income also. Several details are required to be given for claiming exemption under agricultural income like expenses incurred on agriculture, agricultural loan availed for previous assessment years, net agricultural income for the year, name of the district along with pin code, location of agricultural land, measurement of agricultural land in acres, whether the land is own or held in lease, whether it is irrigated or rain fed, etc. These details are not available in the IT returns filed by the borrowers in ITR 4. Therefore, IT returns filed are not useful in deciding that by agricultural operations, income had been generated and it was shown in the income tax returns.

¶322

Therefore, this Tribunal is of the view that entries shown in the revenue records

¶323

with regard to cultivation of crops are not corroborated by the Income Tax returns or any other documents to show that agricultural operations yielded income.

¶324

Admittedly, land purchased by Mr. A. Mahalingam are Punja lands. Punja lands mean dry land or un-irrigated land depending on rain rather than artificial irrigation. It is opposite to Nanjai lands which refers to wet land or irrigated land. An agricultural land should be of land used for farming or agriculture such as raising fruit bearing trees, crops, plants or raising live stocks. It should be used for production of food for human or animals. Except uncorroborated revenue documents with regard to cultivation of crops and trees, there is no

¶325

¶326

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶327

acceptable evidence produced by the borrowers to show that schedule V

¶328

properties are agricultural lands and that agricultural activities were being carried out prior to creation of mortgage, at the time of creation of mortgage and subsequent to creation of mortgage till the possession was taken by the auction purchaser. Therefore, Item No.V of schedule properties cannot be considered as agricultural lands entitling the appellants for protection under Section 31(i) of SARFAESI Act. The finding of the Learned Presiding Officer, DRT, Coimbatore that the land can be utilized or being utilized as an agricultural land, therefore, land is exempted under the purview of Section 31(i) of SARFAESI Act, is not correct. Therefore, the finding of the Learned Presiding Officer that Item V of the schedule properties are agricultural lands is set aside.

¶329

Lands in question are not agricultural lands and the respondents/borrowers

¶330

have never intended to treat the lands as agricultural lands at the time of creation of mortgage; there is no evidence of continuous agricultural operations carried out prior to creation of mortgage, at the time of creation of mortgage and subsequent to mortgage till the possession was handed over to the auction purchaser. Therefore, measures taken under the SARFAESI Act are just and legal and the sale was held in accordance with the provisions of SARFAESI Act and confirmed in favour of the Auction Purchaser. Validly held sale has to be protected.

¶331

¶332

RA(SA) 30/2022, RA(SA) 61/2022 & RA(SA) 91/2025

¶333

In this view of the matter, order of the Learned Presiding Officer, DRT, Coimbatore dated 29.6.2022 passed in SA No.73/2020 is set aside. Consequently, SA 73/2020 is dismissed.

¶334

In the result , RA (SA) 30/2022 filed by the auction purchaser and RA (SA) 61/2022 filed by first respondent financial institution viz., TIIC are allowed. RA (SA) 91/2025 filed by the borrowers is dismissed. Parties are directed to bear their own costs.

¶335

Pending IAs, if any, stand closed.

¶336

[Dictated to PS(SN), transcribed by him, corrected, signed and pronounced by me in open court, this 19^th November, 2025)

¶337

Sd/- (JUSTICE G. CHANDRASEKHARAN) CHAIRPERSON

¶338

The Tamil Nadu Industrial Investment Corporation (Tiic) Ltd. v. mahan textile process india Pvt. Ltd.

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The Tamil Nadu Industrial Investment Corporation (Tiic) Ltd. v. mahan textile process india Pvt. Ltd.

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