Vivek Sehgal vs Uco Bank on 4 September, 2018
On the issue of whether the agricultural lands, offered as security,
could be included in the notice for recovery of the secured loan, the
Supreme Court relied on Kunjukutty Saheb v. State of Kerala8, and
observed that the security interest was created in respect of several
parcels of land, which were meant to be a part of a single unit i.e., the
five start hotel in Goa; some parcels of land, now claimed as agricultural
8
1972 2 SCC 364
9 RR,J & KVL,J
WP.Nos.16494, 18108 & 28301 of 2018
land, were apparently purchased by the debtor from agriculturists, and
were entered as agricultural lands in the revenue records; the debtor had
applied to the revenue authorities for conversion of these lands to non-
agricultural lands, which was still pending; these lands were mortgaged
in favour of the creditors under a deed dated 26.02.2010; since no
security interest could be created in respect of agricultural lands, and yet
it was so created, showed that the parties did not treat the land as
agricultural land or that the debtor had offered the land as security on
this basis; while the total land, on which the Hotel was located, was of
an extent of 1,82,225 sq. mtrs, an extent of 2335 sq. mtrs were used for
growing vegetables, fruits, shrubs and trees for captive consumption of
the hotel; there was no substantial evidence about the growing of
vegetables, but what seemed to be on the land were some trees bearing
curry leaves and coconut, and this amounted to 12.8% of the total area.