Once secured property is put as a security by way of mortgage, the same will not be treated as agricultural land and burden is upon borrower to prove that secured properties are agricultural lands and actually being used as agricultural lands and/or agricultural activities are going on – K. Sreedhar Vs. M/s Raus Constructions Pvt. Ltd. & Ors. – Supreme Court
In this landmark judgment, Hon’ble Supreme Court held that 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 Hon’ble Court set aside impugned order of High Court holding that the High Court has shifted the burden upon the secured creditor to prove that the properties are non-agricultural lands. When it was the case on behalf of the borrowers that in view of Section 31(i) of the SARFAESI Act, the properties were agricultural lands, the same were being exempted from the provisions of the SARFAESI Act, the burden was upon the borrower to prove that the secured properties were agricultural lands and actually being used as agricultural lands and/or agricultural activities were going on.