IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.09.2008 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI W.P. No.11662 of 2007 and M.P.No.2 of 2008 M/s.G.P.Asia Pvt. Ltd., rep.by its Authorised Signatory Mr.S.Ramasamy No.5, Kumarappa Chetty Street, Periamet, Chennai 600 034. .. Petitioner vs. 1. The District Collector and District Magistrate Thiruvallur District Thiruvallur. 2. M/s.Axis Bank Ltd., rep. By its Authorised Officer No.82, Dr.Radha Krishnan Salai Chennai 600 004. .. Respondents Prayer : Writ petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari to call for the records pertaining to the proceedings R.C.No.29942/2007/M2 dated 31.12.2007 on the files of 1st respondent and quash the same. For petitioner : Mr.Jayeesh Dolia for M/s.Aiyar & Dolia For respondents : Mr.P.Muthukumar Government Advocate for R.1 Mr.V.V.Sivakumar M/s.DUA Associates for R.2 ----- O R D E R By consent of parties, the writ petition is taken up for final disposal. 2. Heard the learned counsel for the petitioner and the learned counsel for the second respondent Bank, who has filed the counter affidavit. 3. The order impugned in this writ petition is the proceedings of the District Collector and District Magistrate, Thiruvallur District, Thiruvallur, who has passed the same under Section 14(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 (in short,"the Act"). https://hcservices.ecourts.gov.in/hcservices/ 4. The main attack on the impugned order is that the District Collector has a duty to find out, as to whether the property, which is the subject matter of the proceedings under Section 14(2) of the Act is a property, which is exemptable under Section 31 of the Act. 5. The learned counsel for the petitioner submits that the records, including the Adangal extracts of the property show that it is an agricultural land and therefore, by application of Section 31 of the Act, the impugned proceedings passed by the District Collector under Section 14(2) of the Act, has no legs to stand. Technically speaking, the District Magistrate while passing the impugned order, has stated that he has passed the order with the concurrence of the District Collector, and therefore, according to the learned counsel for the petitioner, there is total non-application of mind. 6. The learned counsel appearing for the second respondent Bank submits that against the proceedings under Sections 13(2) & 13(4) of the Act, there is an appeal provision under Section 17 of the Act and in fact the petitioner has availed such recourse. It is also his contention that, pending such appeal, the petitioner has also filed an application before the Debts Recovery Tribunal for the purpose of appointment of a Commissioner to find out the nature of the property and to submit a report. His further submission is that the impugned proceedings of the Collector dated 31.12.2007, is only consequential to the action taken under Sections 13(2) and 13(4) of the Act and whatever stated about the nature of the property is not legally binding, since the Debts Recovery Tribunal is seized of the application of the petitioner in respect of repayment and to take possession of the property, which has been given as security for the loan. To meet the contention of the learned counsel for the petitioner that the property was shown as agricultural land in the Adangal extracts, the learned counsel for the second respondent has also produced Adangal regarding recent faslies to show that there is no indication about the agricultural operation being carried out. He would also rely upon the judgment of the Supreme Court in Commissioner of Wealth-tax, Andhra Pradesh vs. Officer-in-charge (Court of Wards), Paigah (AIR 1977 SC 113) to substantiate his contention that the connection with the agricultural purpose and user must be shown and not the mere possibility of user of land by some possible future owner or possessor for an agricultural purpose and it is not the mere potentiality, which will affect its valuation as part of "assets", but its actual condition and intended user which has to be seen, and it all depends upon the facts and circumstances of the case. While dealing with the expression 'agricultural land' in the context of Wealth Tax Act, the Supreme Court has held as follows: " 24. For the reasons already given, we do not think that the term “agricultural land” had such a wide scope as the Full Bench appears to have given it for the purposes of the Act we have before us. We agree that 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. What is really required to be shewn is the connection with an agricultural purpose and user and not the mere possibility of user https://hcservices.ecourts.gov.in/hcservices/ 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. We do not think that all these considerations were kept in view by the taxing authorities in deciding the question of fact which was really for the assessing authorities to determine having regard to all the relevant evidence and the law laid down by this Court. The High Court should have sent back the case to the assessing authorities for deciding the question of fact after stating the law correctly. 6. In the context of the admitted facts that the petitioner has already approached the Debts Recovery Tribunal under Section 17 of the Act, I do not see any reason to interfere with the impugned order passed by the District Collector, first respondent, as District Magistrate. As it is stated earlier, the impugned order is only consequential to enable the second respondent Bank to take physical possession. The question whether the Bank is entitled to proceed with the property by taking possession under Section 13(4) of the Act is pending before the Tribunal. In my opinion, to meet the interest of justice, the petitioner should be permitted to raise all the points which he has raised in this writ petition before the Debts Recovery Tribunal in the appeal under Section 17 of the Act. In view of the same, the writ petition fails and the same is dismissed. No costs. However, the petitioner is permitted to raise all the points he has raised in this writ petition including the point as to whether under Section 31 of the Act the second respondent Bank is entitled to proceed under Sections 13(2) and 13(4) of the Act and the Debts Recovery Tribunal shall pass orders on merits and in accordance with law. While deciding the entire issue, the Tribunal shall also decide about the right of the second respondent Bank to take physical possession of the property based on the order of the impugned proceedings of the District Collector dated 31.12.2007. Connected miscellaneous petition is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. https://hcservices.ecourts.gov.in/hcservices/ kh To 1. The District Collector and District Magistrate Thiruvallur District Thiruvallur. 2. The Authorised Officer M/s.Axis Bank Ltd., No.82, Dr.Radha Krishnan Salai Chennai 600 004. + 1 CC To M/s. Aiyar & Dolia, Advocate SR NO.49648 + 1 CC To Mr.V.V.Sivakumar, Advocate SR NO.49460 + 1 CC to the Government Pleader SR NO 49567 W.P. No.11662 of 2008 PUR(CO) SRA(11/09/2008) https://hcservices.ecourts.gov.in/hcservices/