Legal Question in Banking Law in India

difference between creation of charge on Agri land by way of declaration under maharashtra provision of facilities for Agri Credit by bank act, 1974 and mortgage of agri land to secue bank finance in Maharashtra state.


Asked on 5/09/15, 1:04 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

09.05.2015

Dear Sir / Madam,

Please refer the following link :

http://bombayhighcourt.nic.in/libweb/rules/R1975.01.pdf

The former case of declaration and creation of charge as per the Act is indirect and implies that in the event of default by the borrower, the crops and moveable assets are first taken into custody by the Bank and sold to recover dues. Only in the event of a shortfall in recovery or there be no crops or moveable assets, only then the land is confiscated by the Bank and sold. In the latter case of mortgage of agricultural land is direct, and implies that in the event of default, the Bank has recourse to the custody and sale of the agricultural land, pledged and mortgaged by the borrower with the Bank.

Regards,

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Answered on 5/09/15, 1:23 am


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