LexThe Kerala State Co-operative Agricultural Development Banks Act, 1984 (Act 20 of 1984)
Kerala · state statute
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'l'liE KERALA STATE CO-OPERATIVE AGRICULTURAL
DEVELOPMENT BANKS ACT, 1984
Preamble
Seclwns
(Act 20 of 1984)
CONTENTS
1. Short t1tle, extent and 't!ommencement.
2. Defimtwns.
3. Issue of debentures by Board
4. Power to borrow money by 1ssue of bonds or by way of
loans.
5. Appomtment and powers and functwns of Trustee.
6. Guarantee by Government on prmcipal of and mterest on
debentures, bonds and loans.
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I. Power of Board to make regulatwns for purposes of this
Chapter. ·
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8. Power of Agricultural Development banks to advance loans.
9. S~cunty for loans.
10. Charge on movable or munov'able property of borrower for
amounts borrowed.
11. Apphcant for lQan from pnmary bank to furmsh declaration.
12. Pnority of Gehan, mortgage and hypothecation. ·
13. Transfer and vesting gehan, mortgage and hypothecation
w1th Agricultural Development Bank.
14. Money borrowed for development of land.
15. Loans to persons having restncted r1ghts of transfer.
16. Distramt .when to be made.
17.
18.
19.
20.
21.
Distramt how to be effected.
Sale of property d1strained.
Power oi sale of property charged without mtervcntwn \..
of court. .e-.
Applicat11.m for sale and manner of sale.
Apphcatwn to set as1de sale on deposit and confirmation
of sale m default or on dismissal of such application.
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22. Distribution of sale proceeds.
~3. Certificate to purchaser .
.t1. Delivery of property to purchaser.
25. R1ght of Agncultural Dev~lopment Bank or Primary Bank
to purchase _property at sale.
26. Appointment of receiver and his powers
27. Title of purchaser not to be 1mpeached on the ground of
irregularity etc.
28. Appomtment of sale officer
29. Powers' of AgriCultural DevelopmE"nt Bank m case security
property 1s insufficient. •
30 Power of Board or Trustee to dirt.ct distraint and sale of
produce and sale .of mortgaged property etc ·
31. Banks nght to Improvements effected after Geban or
mortgage or hypothecation.
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33.
34.
35.
36.
Peduction from sale proceeds of ·agricultural produce m
certain cases.
Gehan or mortgage or hypothecatlon not to be questioned
in insolvency proceedings. • ·
Right of Agnculttiral Development Bank to pay pr10r debts. .
Power to summon witnesses and requisition of documents.
Registration of documents executed on behalf of the Agn
cultural Development Bank or Primary Bank.
37. Power of Primary Bank to receive money and grant valid
discharges.
38. Proof of documents or entnes m documents.
39. Chapters IV and V to apply to loans advanced by primary
banks from funds not borrowed trom Agricultural Develop·
ment Bank.
- 40. Service of notiCes und~r the Act.
-11. - . Sections 102, 103 and rules under section 104 of the Transfer
of P~operty Act, 1882 to apply to notices under the Act.
42. Officers of bank not to bid at sales.
43. Delegation of powers by Board .
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4. 4 Startmg of branch banks. •
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45. Power of Board to admit members.
46. Primary agricultural credit societies to be admitted as
members of Primary banks in certain cases.
4 7. Transfer of assets and habihties of the Kerala Co-operative
Central Land Mortgage Bank and Primary Land Mortgage
Banks.
48. Power of Board to make regulations.
49. Cognisance of offences.
50. Power to make rules.
51. Power to make rules.
Mortgage Bank to contmue in that Bank.
52. Repeal and Savmgs.
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THE KERALA STATE CO-OPERATIVE AGRICULTURAL
DEVELOPMENT BANKS ACT, 1984•
(Act 20 of 1984)
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An Act to factlitate the more efficwnt working of Co-operatwe
Agricultural Development Banks in the State of Kerala
Preamble.-WHEREAS 1t is expedient to facilitate the more
efficient working of the Co-operative Agricultural . Development
Banks m the State of Kerala;
' BE it enacted in the Thirty-fifth Year of the Republic of India
as follows:-
• CHAPTER I
PRELIMINARY
L Short title, extent and commence·ment.-(1) This Act may
. be called the Kerala State Co-operative Agricultural Development
»~ Hanks Act, 1984.
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(2~ It extends to the whole of the State of Kerala.
(3) It shall come into force at once.
2. Defimtwn.-In this Act, unless the context otherwise
requires,-
( a) "Agricultural Development Bank" means the Kerala
Co-operative Ce.ntral Land Mortgage Bank Limited, registered under
sectwn 10 of the Travancore-Cochin Co-operative Societies Act, 1951
(X 0f 1952), which shall her~after be kiwwn as the "Kerala State
Co-operative Agricultural Development Bank Limited";
(b) "Board" means the board of directors of the Kerala
State Co-operative Agricultural Development Bank Limited;
(c) "Committee" in relation to a primary bank, means the
board of directors or board of management or the committee of
management or the governing body to which the management of its
I affairs is entrusted;
~Received the nssent of the President on the 30th day of July, 1984 and
published In the Kcrala Gazette Extraordinary ~o. 764 dated the 29th August,
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{d) ''co-operative society", means a co-operative society
registered or deemed to be registered under the Kerala Co-operative
Societies Act, 1969 (21 of 1969) ; ·
(e) "Gehan" means a special charge on movable or im
movable property, 111 favour of the Agricultural Development Bank
or a primary bai•k by a mere declaration in writing by the borrowers
tor ::;ecurmg the payment of money advanced or to be advanced by
way of loan, wh1ch. will have all the characteristics of a valid
mortgage; ·
(f) ·"prescribed" mean::; pre1cnbed. ·by rules made under
this Act;·
(g) "primary agricultural credit society" means a co
operative society, majority of the members of which are agriculturists
and the principal obJect of which ts the 1a1sing of funds for lending
to its members primarily for agncultur~ :md alhed purposes,
(h) "primary bank" means a co-operative society registered
under lhe Kcrala Co-operative Societies Acl, 1969 (21 of 1969), as
a Primary Co-operative Agricultural Development Bank Limited and ·
admitled as a member of the Agncultural Development Bank and
mcludes a co-operative society regtstered or deemed to be registered
under the said Act as a Primary Co-op2rat1ve Land Mortgage Bank
Limited and admitted ·as a member of the Kerala Co-operative
Central Land Mortgage Bank Limited which shall hereafter be
ltnown as ::J. Primary Co-operative Agricultural Development Bank
Limited;
(i) ''Registrar" means the Reg1strar of Co-operative Socir- ..
tles appointed un,der sub-section (1) of section 3 of the Kerala
Co-operative Societies Act, 1969 (21 of 1969);
(j) ''State" means the State of _Kerala,
(k) "Trustee" mean., the Trustee referred to in sectiOn 5.
CHAPTER U
DEBENTURES
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. i Issue of debenturea by Boa.r<J.-(1) With the previous
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sancL1 m of the Trustee, the Board may issue debentures of one or \__
more denominations f.Or such period as It may deem expedient on J--_
the security of Gehan or mortgage 01· hypothecatfon held or
mortgages, charges or hypothecation partly held and partly to be
acquire~ or other assets taken by, the Agricultural Development
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Bank and its other assets and Gehan or mortgages or hypothecation
transferred or deemed under the provisionR of sect1on 13 to have
been transferred by the pnmary banks to the Agricultural Develop
ment Bank.
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(2) Notwithstanding anything contained in sub-section (1).
m respect of loans guaranteed by the Government and granted to
any person or to any body of persons, whether incorporated or not,
and whether or not established by or under any law for the time .
belllf; m force, 1f such a body is approved by the Government, the
.Hoard may, w1th the previous permission of the Trustee, issue
debentures, . on the strength of such Government guarantee and
wtthout the security of Gehan or mortgages or hypothecation and
other assets, of one or more denommations, for such periods as it
may deem expedient and subject to such conditions as the Govern
ment may think fit to impose.
(3) The debentures 1ssued under sub-section (2) may contain
a term fixing a period not exceedmg thmty years from the date of
tssue during which' they shall be irredeemable or reserving to the
Hoard the right to call in; at any time, any of the debentures m.
advance of the date fixed for redemption after gwmg the debenture
holder concerned not less than three months' notice in Writmg. ,
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( 4) The total amount due on the debentures issued by the
Hoa.rd and outstanding at any time, shall not exceed the aggregate
ot the amounts clue on the Gehan or mortgages or hypothecation
and other assets and Government guarantee referred to m sub
section (2) and ihe.amounts paid thereunder and remaming m the
11ands of the Board or of the Trustee at suc.h time.
4. Power to borrow money by i.ssue of bo~ or by way of
loans.-(1) Notwithstanding anything contained in the Kerala Co
operative Societies Act, 1969 (21 of 1969), the Board may, witb the •
prwr approval of the Government and subject to the regulations
made under this Act, borrow money by issue of bonds:
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Provided that the issue of the bonds shall be in conformity with
such directions or instructions as may' b~ issued by the Reserve
Bank of India or the' National Bank for Agricultural and Rural
IJcvelopment from time to time.
(2) The bonds shall be in the form of promissory notes and
shall be repayable on the expiry of such period or periods from the
date of issue thereof as may be approved by the Reserve Bank of
lnd1a or the Nati0nal Bank for Agricultural and Rural Development:
Provided that the Board may repay the amount due under the
bonds at any time before ~he period or periods so fixed, after issuing
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a notice in such manner as the Board may direct in that behalf to
the holders of the bonds.
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(3) Notwithstanding anything contained m the Kerala Co- -)",..
operative Societies Act, 1969 (21 of 1969), the Board may borrow '
money by way of loans from the Government, the National Bank
tor Agricultural and Rural Development, the Reserve Bank of India
or l;;UCh o1 her financial institutions as may be approved by the
Trustee.
5. Appointment and powers and functions of Trustee.-tl) The
Registrar or where the Government appoint any other pe~:son in this
behalf, such person, shall be the Trustee tor the purpose of fulfilling
the obligatiOns of the Agricultural Development Bank to the holders
ot debentures issued by the Board and for the purposes of seclion 13.
(2) The Gehan created and mortgages and hypothecation
executed in favour of the Agricultural Development Bank and other
Gchan, mortgages, hypothecation and asset& transferred or deemed
to have been transferred under the provisions of section 13 to the
Agricultural Development Bank shall vest in the Trustee from the
date of such C'reatwn, execution or transfer.
(3) The holders of the debentures shall have a floating charge
on aU such Gehan, mortgages, hypothecation and assets, on the
amounts paid under such .Gehan, mortgages, hypothecation and
remai.ning in the hands of the Board or of the TrustE<> and on the
other properties of the Agricultural Development Bank.
( 4) The powers and functions of the Trustee shall be governed
by !.he instrument of trust executed by the Agricultural Development
Bank and the Trustee, as modified from time to time by mutual
agreement between the Board and the Trustee.
(5) The Trustee shall be a corporation sole by the name of the
Trustee for the debentures and as such shall have perpetual succes
sion and a common seal and in his corporate name shall sue and be . ' sued.
6. Guarantee by Government on principal of and mterest on
df::hent1tres, bonds and loans.-The principal of, and the interest on.
th(· debentures Issued under section 3 or bonds issued or loans raised
vr,der section 4, to such maximum amount as may be fixed by the
Government from time to time and subject to such conditions as
trf'y n •ay deem fit to impose, shall carry the guarantee of the
Governntent .
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. 7. Power of Board to make r:egulations for purposes of thi3
Chapter.-The Board may, subject to the approval of the Trustee,
makt> regulations not inconsistent with the provisions of this
Chapter--
( a) for fixmg the period of debentures and the rate of
mterest payable thereof;
(b) for calling in debentures after g1vmg notice to debenture
holuers;
(c) for the issue of new debentures in place of debentures
damaged c •r destroyed;
(d) for converting one class of debentures into another class
ot debentt1res bearing a different rate of interest; and .
(e) generally for carrying out, the provisiOns of this Chapter.
CHAPTER III
LOANS
· ~.. 8. Pov;ers of agricultural development banks to advance
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toum;.-Subject to the provisions of this Act and the rules made
thereunder, It shall be competent for the Agricultural Development
Bank and the primary banks to advance loans for the following
purposes, namely:- •
(a) land improvement and productive purposes;
Explanation.-Land Improvement and productive purposes,
mean any work, construction or activity which adds to the pro
ductivity of the land and, in particular, includes the followmg,
that 1s to say,-
(i) construction and repair of wells (surface wells, dug-cum
bore wen;, tube wells and filter pomts J, tanks and other works
for the exploitation of surface and ground water and a:;torage,
supply or distrdbution of water for the purposes of agriculture, or
for the use of cattle employed in agriculture ,and all types of
1rrigation;
(ii) renewal or reconstruction of any of the foregoing works,
or alterations therein, or additions thereto;
(iii) preparation of land for irrigation;
(iv) drainage, reclamation from rivers or other waters, or
protection fl'Om floods or from erosion or other damage by water,
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of land used for agricultural purposes or waste land whxch is
cultivable;
( v) bundmg, levelling, terracing and similar improvements;
(vi) reclamation, clearance and enclosure or permanent im-
provement of land for agricultural purpose; • .
(vii) horticulture and plantations including forest plantations; •
(viii) purchase of ml engines, pumping sets and electric
motors for any of the purposes mentioned herein;
(ix) purchase of tractors and uther agricultural machmery,
(x) purchase of draught animals and bullock carts and
other carts;
(xi) increase of the productive capacity of land by addition
to it of special variety of soil;
(xii) constructiOn or repair of permanent farm houses,
cattle sheds and sheds for processmg ot agr1cultural produce at
any stage; •
(xiii) construction of stone-fence, barbed wiring fence or
any other kind of fence for production of land including eastern
wall;
' lXlV) purchase of land for consohdation of holdmgs;
(xv) such other purposes as the Government may spec1fy,
from time to time, as land improvement and product1ve purposes
for the purposes of this Chapter, by a special or general order;
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(b) development of dairy, poultry, .piggery, sheep, goat and
other livestock and inland and marine fisher1es;
(c) procurement of fishery requisites like fishing boats,
mechanised or n'on-mechanised, fishing nets, twine, ropes and
marine paint;
(d) production of animal 'and poultry feed;
(e) procurement and installation of eqUlpments and machi
nery for processing, marketing and transportation of all agricul
tural products including products of animal origin hke milk, meat,
fish, eggs and manure and construction of buildings for any such
purpose;
(f). installation of go bar gas plants;
(g) redemption of prior debts;
(h) payment of purchase price by tenants for purchase of
the right, title and interest of landlords under the Kerala Land
Reforms Act, 1963 (1 of 1964), or compensation or other amount .
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payab1e for the purchase of rights of landlords under any law for
the tlme bemg m force;
(i) any other purposes conducive to agricultural develop
ment as decided by tne Board with the approval of the Reg1strar
from time to time
9. Secnnt?J for loa?><;.-(1) Sub1ect to the prov1sions of this
Act the Agrkultural Developmrnt B;_:~nk ~nd the pnmary banks
may advance loans to individuals a.1d mslltulions on the security
of lands aPd other,: fixed assets or of assets acquired by the loans
borrowed which have been hypothecated to the Agricultural Deve
lopm~nt Bai!k or the pnmary bank, as the case may be, on the
basis of pnnciples of valuat;on approved by the Registrar:
Provided that the Agncultural Development Bank .and the
pnmary banks may, for such purposes and for such penods as
may be specified by the Government by special or general order,
advance lmms without such secunty of land but on the specific
gt:arantee of the Government for the repayment of the prmc1pal
and payment of mterest thereon: ·
Prov!dcd further that "the Agncultural Development Bank and
the pnmary banks may, with the prevwus approval of the Regis
trae and sub5ect to such restrJctwns and limitations as may be
prescribed, advance loans for such purposes· and for such periods
as may be determmed by the Board.
(2) Notw1thstandmg anythmg contamed m any other law
for lhe lime bemg 111 force, the Agncultural Development Bank
or n p1imary bank m"y, under any land development !>Cherne pre
pared and app1 oved u.'der the pl'OVI5lOI!S of the Kerala Land Deve
loplnent Act. 1964 (17 of 1964). grant or auvance loans to any
per::,on or .a group of persons 'V!th or without secunty of land for
carrymg out the work speclfied m the ~cheme, sub1ect to such
terms a'1ct conditiOns as are agreed upor1 between the Government
and the Agncultural Development Bank or the primary bank, as
the case may be
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(3) All loans and advances granted and all amounts payable
to or recoverable by, the Agncultural Development Bank or the
pnmary br;0.ks shall in case of default of payment,' in addition
to ether remedies available to the banks, be recoverable in the
same man11er as If they are arrears of public revenue due on land.
J 0. Charge on mot'fl.ble or tmmovable p1 operty of borrower for
amuunt l borrowed -(1) Notwithstandmg anything contamed in
the 1' r· •11.L Co-operative Societies Act, 1969 (21 of 1969), or in any
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othE>r law for the time being in force, but subject to any claim
ot the Government m respect of land n.venue or amounts reco
verable as land revenue, whether pnor m time or subsequent, any
person ownmg any land or having mterest 111 any land as tenant ,.,.
or occup1er or ownmg any other movable or Immovable property
who applies to a primary bank for a loan, shall make a declaration
m the prescnbed form creatmg a Gehan or mortgage or hypothe-
catiOn m fav~:mr of the pnmary ,bank on the land or other movab!e
or Immovable properly or mterest th~;rem or any movable property
or movable assets to be acqmred w1th the loan, specified m the
declaratiOn, £or the repayment of the loan or advance granted
or to be granted Lu htm by the primary hank, together with mterest
on such amount ·of the loan or advauce and expressly reservmg m
favour of the pr tmary bank a nght of sale wtthout interventiOn
of court, in case of detault. ~ -
(2) A declaratiOn under sub-section (1) may be varied or can
celled at any time by the member with the prior approval of the
prunary bank.
(3) No land or other movable or Immovable property or any
movable 1Jroperty or JnJvable assets to be acquired with the loan
or advance m respect of which a declaratiOn under sub-sectiOn (1)
has been made and no part thereot or of the mterests m such
land or movable or• tmmova,Ple property shall; without the consent
ot the pnmary bank, be sold or otherwise transferred until the
entire amount of the loan or advance taken by the member from
the pnmary bank, together with mterest thereon has been paid
to the bank, and any transactiOn made m contravent~on of. this
sub-sectiOn shall be null and void.
(4) Notwtthst:;~.ndmg anythmg contamed in the RegistratiOn
Act, 1908 (Central Act 16 of 1!:108), or any other law for the
time bemg in force, 1t shall not be necessary to register any Gehan
or mortgage or hypothecatiOn created or executed m favour of
the Agricultural Development Bank or a pnmary bank, provided
in the ·Agricultural Development Bank or the primary bank, as the
case may be, sends, w1thm such bme and m such manner as may
be prescnbed, a copy of the declarat10n or mstrument whereby the
Gehan or mortgage or hypothecatiOn has been created or executed
tor the purpose of securmg repayment of the loan, to the registering
ofhcer wtthm the local limits of whose jurisdictiOn the whole or any
part of the property to which the Gehan or mortgage or hypothe
catiOn relates Is situate.
t5) On receipt of the copy of the declaration or instrument
sent tmdcr su b-sectton ( 4), the retpstermg officer shall file a copy
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or .rupies thereof, as the case may be, in Book No. I, referred to in
section 51 of the Registration Act, 1908 (Central Act 16 of 1908),
and thereupon, such Gehan or mortgage or hypothecation shall be
deemed to create an interest m the property to which the declara·
twn or instrument relatec;; <:'.nd shall cor.stitute not1ce lo any one
deaJmg w\th the sa1d. properly.
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(6) Any person who makes any false statement in a declara
tion unde1· sub-section ( 1) shall be punishable with impnsonment
tor a term wh1ch may extend to six months, or with fine which
may extend to two thvusand rupees, or wtth both.
11. iipplicant for loan from primary bank to furnish declara
tion -(1) Every person who ttpphes for a loan from a primay bank
shall make a derlarat10n 111 the presfTlbed form before an officer
specified by the Registrar 111 this behalf that the lJl.OVable or immo
vable property on wh1ch the GPh.a'1 or mortgage ·or hypothecation
IS created as se:::t...rny for the loan 1s free from encumbrances, that
he is in actual po~sesswn thereof and that he has the r1ght to
create the Gehan m· mo<tgage or hyi)othecu.twn, c.s the case may be,
thereon in favour of t11e primary banlc
(2) Notwithstanding anythmg contamed in any law for the time
bemg in force, where a declaratwn undE-r sub-sectiOn (1) in respect
of ::>:ty movab!e or nnmovable property 1~ false or defective, the
primary bank shall, subject to the provisions of secf.ion 13, have
a first charge on all other movable and immovable properties of the
applicant, and all such propert1es shall be deemed" to have been
mcluded in the Gehan created or mortgage or hypothecation exe
cuted by the applicant as security for the loan granted to him by
the primary bank. ,
13) Any person, who makes a false declaration under sub
~::ec>tion (1) or make any statement which is false in any such
declaration shall be punishable with imprisonment for a term which
· · may extend to six m0nths, or w~tb fine which may extend to two
thom;and rupees, or with both.
( 4) The amount of loan that may be sanctioned on the basis
of a declaration made u..H.ler sub-sectiOn (1) shall be subJect to
such hmit :1.s may be pre'3c.-ibed. _ _;
1~ Pnm itp of Gelutn, mortgaqe and h?!pothqcation.=-. ( 1) Any
amount payablf' under a GehP.n ~reated 0r mortgage o-r hypothecu
twn executed in favour of the Agricultural Development Bank or
pr1mary hank shall have prwnty ove1· any cTaim of the Government
arJsing from a loan under the Kerala Land Development Act, 1964
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(17 of 1964), Or the Kerala Agriculturists' Loans Act, 1961 (27 of
1961), granted after the creatiOn of the Gehan or the execution of
the mortgage or hypothecatwn. •
(2) Notwithstandmg anythmg contained in any law for the
time bemg m iorce, a ·Gehan created or mortgage or hypothecatiOn
executed m favour of the Agncultural Development Bank or a
pnmary bank shall take precedence over any attachment or equi
tablf: mortgage over the properties, where, after pubhcation of
a nolice in the prescnbed form, the claim or mterest under such
altachment or eqmtable mortgage has r:ot been notified to such
bank withm the tlme prescribed in the said notice. <
.. 13 Transfe?· and testmg gehan, mor~gage. and hypothecatwn
wzth Agricultural De1'elopment Bank -A Gehan created or mort
gage or hypo'thcc:ltwn executed or deemed to have teen created
C·i executed m favour of, a:-~d all other assets transferred or deemed
to have been t;:ansferred to, a pnmary l)ank, shall with effect from
E>UCh creatwn, e:~ecution or transfer or with effect from the date
ot ~uch deeming, ~s the case may be, be deemed to have been trans
terred by such pnmc.ry bank to the AgriCultural Development Bank.
14. Money borrowed for development of land.-Where a pri
mary bank has granted a loan for Improvement of any land situated
m any area o;: areas covered by any c..peclf,k programme of agri
cultural development, to a person appeurmg to the pnmary bank
to have title to lhe s::nd land or to be m l3wful possesswn thereof,
and the money has been either in whole or m part utilised for such
Improvement, any person acquirmg title to such land on ground
ct Pupenor title or on any other ground shall be hable to repay
to the pnmary. hank so much of the loan as has been utihsed for the
Improvem~nt of the land together with interest thereop..
· 15. Loans to persons having restncted rights of transfer.-(1)
!'lotwtthstanding anythmg· contained in any law, custom or usage,
where a pnmary bank makes a loan 0r an advance to a member
belonging to a Scheduled Caste or Scheduled Tr.ibe or to- any other
persun having restncted nghts of ahenatwn over Immovable pro
perty; it shall be competent to such. member or person to create
a Gehan or mortgage or hypothecation on such property in favour
ot such pnmary bank as secunty for such loan.
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. (2) The pnmary bank, shall, in the event of default by the /~
member or person and wtthout prejudice to any other remedy avai-
lablE: to it either under law or contract or otherwise, be entitled
to take possessiOn of such prorerty and lease the same to any
person belonging to the same caste or tribe as the member belongs
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m case tbe defaulter is a member of a Scheduled Caste or Scheduled
Tnbe and m any other case to any person and appropriate the
nE:t receipts from the lease m repay·ment of the moneys due to it;
and the member or p~r8on shall not bP entitled to r<:covcr pcssession
ot such property until the amount due to the primary bank has
oe~n repaid m full.
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CHAPTER IV
DISTRAINT AND SALE OF PRODUCE
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H.i. Distramt when to be made.-(1) If any mstalment payable
under a Gehan created or mortgage or hypothecatiOn executed in
1avour of the Agncultural Development Bank or a pnmary bank
ur any part of such mstalment has remamed unpaid for more than
one months from the }late on whtch It fell due, the Boatd or the
comm1ttee may, m additiOn to any other remedy avatlable to 1t,
nlJply to the Reg1sLrar or to any sale oftlcer appomted by the
H.t.•gtstrar under sectwn 28 for the recc very of such mstalment or
pa1;: thereof by distramt and sale of the woduce of the land to
which the Gchart or the mortgage or hypothecatwn relates, mclud
mg the standmg ct·ops thereon and other movable property of the
~efaulter.
(2) On receipt of an application under sub-section ll), the sale
officer may, notw1thstandmg anythmg contamed m the Kerala Co
operative Societies Act, 1969 (21 of 1969), take such actwn as i~
necessary to dtstram and sell the produce and other movabie property:
/
Provided that no dtstramt shall be made after the expiry of
thirty-six months from the date on which the instalment fell due.
(3) The distraint shall not be excesstve and the value of the
property dtstramed shall be, as nearly as possible, equal to the
amount due and the expenses of the distraint and the cos1:s of the
sale. • ·
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17. Distraint how to be effected.---(1) Before or at the time·
when a dtstraint is made unaer section 16, the distrainer shall ~erve
or cause to be served upon the defaulter a written demand specifying
the amount for wh1ch the q1straint 1s made.
(2) The demand shall be dated aiid signed by the distrainc:>r
and shall be served upon the defaulter by delivering a copy to him
or to some adult male mem her of his family at his usuaJ; place of:
abode or'· to his authonsed agent, or when such servlCI;) cannot be·
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effected by affixing a copy of the demand on some consp1cuous part
of his abode and of the land to which the Gehan or mortgage or
hypothecation relates
18. Sale of property dtStraint.-(1) If, w1thin fifteen days from
the date of service of the demand referred to in section 17, the
defaulter does not pay the amount for · whieh the distraint was
effected, the distrainer may sell m auction the distramed property
or such part thereof as may, m his opinion, be necessary tr, satisfy
' the demand together with the expenses of the distraint and the
costs of the sale.
(2) From the proceeds of such sale, a deduction shall be
made at such rate as may be fixed by the Registrar from time to
tlme on account of the costs of the sale .
.
(3) From the balance shall be deducted the expenses mcurred
by the distrainer on account of the d1straint.
(4) The remainder, 1f any, shall be applied to the discharge
of the amount for which the distramt was made.
(5) The surplus, if any, shall be delivered to the person
whose property has been sold and he shall be given a receipt for the
amount discharged from the proceeds of the sale.
CHAPTER V
SALE OF PROPERTY WITHOUT INTERVENTION OF COURT
19. Power of sale of property charged without intervention of
court.-(1) Notwithstanding anything contained in the Kera:Ia Co
operative Societies Act, 1969 (21 of 1969), or the Transfer of
Property Act, 1882 (Central Act 4 of 1882), or in any other·Jaw
for the time being in force, where a Gehan or mortgage or hypothe
cation has been created or executed in movable or · immovable
property m accordance with the provisions of sub-section (1) of
section 10 in favour of the Agricultural Development Bank or a
primary Bank, the Board or comr.-:~ttee of such bank or any person
authorised by the Board or such committee shall, in case of def~ult
in the payment of sums due to the bank, have power, in addition
to any other remedy available to the primary bank to bring to
sale the property to which the Gehan or mortgage or hypothecation
relates w1thout intervention of the court.
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(2) No such power shall be exercised unless and unt:il-
(a) the Board or the committee has previously authorised
such sale m the exercise of the powc1· of sale confen ed on It by
sub-sect1on ( 1) ; ·
(b) regt.stered notice requmng payment of sums due to
the pnrnary bank, or any part thereof, has been serve(\ ~pon-
(i) th~ person creati11g or f:xecutmg the Ge11an or mort
gage or hypothecation;
~ .;
(Ii) any person who has any mterest or charge upon the
property to which the Gehan or mortgage or hypothec.:~.tlon relates
or any other right to redeem the same, 1
(iii) any surety for the payment of the sum!:> due to the
primary bank or any part thereof; and
(Iv) any creditor· of the person creating 01 executing
the Gehan or mortgage, who has, m a smt for the adnumstrat10n
of his estate, obtamed a decree tor sale of the property to Which
the Gehan or mortgage or hypothecatiOn relates; and . . (c) there has been default m payment of such sums due
to the prtmary bank for a penod of two months aiter serviCe of
the notice reterred to m clause (b) - .
Provided that the obhgatwn to gtve: such notice to the persons
mentioned m sub-clauses {11) and llv) shaJl be cohfined to cases
where the Board or the committee has notice of such ciaims.
20. Appltcatton for sale and ma?ener of sale.- (1) For exer
cismg the power of sale conferred by sub-sectiOn (1) o.t sectiOn 19,
the Board or the Oonumttee or any person duty authonsed by the
Board or the Committee, as the case may be, may apply to • the
sale officer appomted m that behalt under sectiOn 28 to sell the
property to which the Gehan or mortgage or hypothecation relates
or any part thereof, and such officer shall, after gn·mg not1ce as
reqmred by sectiOn 19, sell such property in the manner prescnbed.
· (2) The sale shall be by public aucbon and shall be held in
.the village where the property to which the Gehan or mortgage
or hypothecatiOn relates is situate or at the nearest puhilc place if
the sale officer lS of opimon that the property 1a llkely to sell to
be~ter advantage at such place.
21. Appltcation to set aside sale on deposit and wnfirmation
of sale in defa.ult or on dtSmtSsal of such applwatwn.-(1) When
a property has been sold unde'r this Chapter, any person having a
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~ight or interest therem affected by the sale may, at any time wi~hin
thirty da.ys from the date of the sale, apply to the sale officer
concerned to have tht: sale Stt aside on h1s depos1tmg vnth the sale
officer- -
1 (a) for payment to the Agricultural Development Bank
or the primary bank, as the 'case rna¥ be, the amount ~pecified m
the proclamatiOn ot sale together w1lh subsequent mtetest and the
costs, If aiJ.y, mcurred by the bank m brmgmg the property to
sale; and
(b) for payment to the purchaser a sum equal to five per
cent of the purchase money. . .
(2) If such depos1t is made, the sale officer· may make an
order settmg as1de the sale.
(3) Where no applicatiOn with deposit is made under sub
section (1) or where such applicatiOn IS made and di:;allowed, the
sale officer may apply to the Registrar or any other officer empowered
by him in this regard to make an order confirmmg the sale anci, on
the Registrar or such officer confirmmg the sale, 1t <Jhall become
absolute and the property 5hall be' deemed to have vested m the
purchaser from the •t1me the property Is sold.
2~. Distnbution , f sale proceed..~.-(1) The pr<..eeds of ever)
sale undeJt this Chapter :;hall be applied by .the sale of.1cer first w
payment ot all cosL!", charges and expenses properly lllCurred by
hlm as dncidental to the sale or any 8-ttempted sale; secondly, m
payment of all interest due on account of the Gehan c.r mortgage
or hypothecatiOn m ccnsequence whereof the properly was sold;
thirdly, m payment of the prmc1pal money due on accoLmt of .the
Gehan or mortgage, or hypothecatiOn; and lastly, the: res1due, If
any, shall be pa1d to t!1e person provmg h1mself mterested m the
property sold or, .1f there are rpore such persons than OJ!e, then to
such persons, a~cordmg to the1r respective mte~est ther.~m or upon
their Jo.mt rece1pt.
• (2) Any person dissatisfied w1th the dec1s1on 'of the sale
officer in regard to the distribution of such residue may, withm
thirty days of the commumcatwn to h1m of such deCH>'<m, mstitute
a smt m a court to establish the right he claufls. •
. (3) The sale officer shall nol 'distribute such 1 c.:s1due until
thirtY' days have elapsed from the dat~ of commumca~ion of his
decisiOn to all the persons concerned, or, If a smt has bccu .mst1tuted
within the said periOd of thirty days by any such person and due
notice thereof IS given to hmi before the payment, unt" the smt is •
disposed of or otherwise than m acco_rdance with the decision of
the court thereon.
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(4) Any deficit occurring aiter the sale of the property may
also be recovered m the manner provided m th1s Chapter from any
other assets of the person who created the Gehan or executed the
mortgage or hypothecatw.n.
Explanatwn.-In th1s secuon, "court" means the C1y1l court
havmg Junsdictwn to entertam a smt to enforce tr.c Gehan or
mortgage "or hypothecatwn and w1thm the hmits of whose juris
diction the property sold 1s situate.
23. Certtficate to purchaser -Where a sale of pr•,1perty has
become absolute and the sale proceeds have been recen·ed m full
by the sale officer, he shall grant a certificate to the purchaser in
the prescribed form spec1fymg the property sold, the sal(: pnce, the
date of the sale, the name of the person who at the t1me of the
sale IS declared to be purchaser, and the date on. which the sale
became absolute, and upon the productiOn of such certificate the
Sub Registrar withm whose JUriSdiCtiOn the whole or ~ny part of
the property specified m the certificate 1s situate, shil.li enter the
contents of such certificate m his register relatmg to Immovable
property.
. 24. Dehvery of property fo pw·chaser.-(1) Where the pro
perty sold 1s m the occupancy of the person who created the Gehan
or executed the mortgage or hypothecatiOn, as the case may be or
of some person on h1s behalf or Df some person claimmg under a
title, other than a lease, created by the person who created the
Gehan or executed the mortgage or hypothecatiOn subsequent to
the Gehan or mortgage or hypothecatiOn m favour (Jf the Agri
cultural Development Bank or the primary bank, as Lhe case may
be, and a certificate in respect thereof has been gr,wted under
sectwn 23, the Registrar shall, on the apphcatwn of the purchaser,
order delivery to be made by puttmg such purchaser 01, any person
appomted by the purchaser to receive delivery on hJs behalf, in
possess10n of the property
(2) Where the property sold Is m the occupancy of a tenant
or other person entitled to occupy the same and a certificate m
respect thereof has "been granted under sectwn 23, the Registrar
shall, on the apphcat1~m of the purchaser and aiter givmg notice '
to such tenant or other person, order, dehvefy to be madf' by affixmg
a copy of the certificate of sale m some conspicuous vJace on the
property and procl,ummg to the occupant by beat of dmm or other
customary mode at some convement place that the mt.E:rest of the
person who created the Gehan or executed the mortgage ur hypothe
catwn has been transferred to the ,purchaser.
34!3258J85[MC
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146
(3) The prov1sion£> of rules 97 to 103 of Order AX! of the
First Schedule to the Code of Civil Procedure, 1908 (Central Act 5
of 1908), shall mutatts mutandis) apply to the cases dealt with m
sub-sections (1) and (2). •
25. Rtght of Agrtcultural Development Bank or Pnmary Bank
to purchase property at sale.-It shall be competent to the Agri
cultural Development Bank or a primary bank to purchase any
property s_old under this • Chapter, but the property 80 purchased
sha}l be disposed of by such bank by sale within such period as
may be fixed by the Trustee.
26. Appmntment of recetver and 1'!-ts powers.-(1) The Board
may, on Its own motwn or on the apphcatwn of any branch of the
Agricultural Development Bank or the committee of a primary
bank under circumstances m which the power of sale conferred
by sectwn 19 may be exercised, appomt m wntmg a receiver of
the produce and mcome of the property or any part thereof and
such receiver s~all be entitled either to take possession of the
property or collect Its prociuce and mcome, as the case may be, to
retain out of any money reahsed by him, his expense of manage
ment mcludmg h1s remuneratiOn, If any, as may be fixed by the
Board and to apply the balance m accordance with the provisions
of sub-sectwn (8) of sectwn 69A of the Transfer of Ptoperty Act,
1882 (Central Act 4 of 1882).
(2) A receiver appomted under sub-section (1) may, for
sufficient cause and on apphcatwn made by the person "'ho created
the Gehan or executed the mortgage or hypothecatiOn, a!:> the case
may be, be removed by the Board.
(3) A vacancy in the office of the receiver may be filled up
by the Board. . ,
( 4) No•thing m th1s section shall empower the Board to
appomt a receiver where the property to which the Genan or mort
gage or hypothecatiOn relates IS already in the posst>s~ion of a
receiver appomted by a civil court; but the Board or the committee,
as the case may be, may through the Managing Director in the
case of the Agricultural Development Bank or the Secrt>tary in the
case of a pnmary bank, petition to such court to direct the receiver
~appointed by such court to apply any part or the whole of the
surplus remammg m his hands after meetmg expenses of his manage
ment, to the discharge of the amount due under the Gehan or the
mortgage or hypothecatiOn or part thereof, as the case may be.
27. Tttle· of purchaser not. to be impeached on the ground of
irreaulanty etc.-When a sale. has been made m tne professed
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exercise of the power of sale under sectwn 19·and has beeu confirmed
under sub-s~ct10n (3) of sectiOn 21, the title of the purehaser shall
not be Impeachable on the ground that no cause haJ ansen to
authonse the sale or that due notice was not g1ven or that the
power was otherwise Improperly or 1rregulttly exercised, but any
person dammfied by an unauthonsed or Improper or irregular
exercise of the power shall have his remedy m damages against the
Agricul\ural Development Bank or the concerned pnmary bank,
as the case may be.
28. Appcnntment of sale officer.-The Registrar may appomt
sale officers for the purpose of conductmg sales under this Act.
CHAPTER VI
MISCELLANEOUS
29. Powers of Agncultural Development Bank 'tn case secunty
property is tnsufficient.-Where any property which IS subJect to
a Gehan or mortgage or hypothecatiOn m favour of the AgriCultural
Development Bank or a primary bank IS rendered insufficient and
the person who created the Gehan or executed the mortgage or
hypothecation, havmg been given a reasonable opportumty, by the
Board or the committee of the pnmary bank, of prov1dmg further
secunty enough to render the whole security sufficient or of repay
ing such portwn of the loan as may be determined by the Board
or the committee, has failed to provide such security or to repay
such portion of the loan, the whole of the loan shall be deemed to
fall due at once and the Board or the committee, as tlic case mav
be, shall be entitled to take action against the person who created
the Gehan or executed the mortgage or hypothecatiOn under
section 16 or section 19 for the recovery thereof.
Explanatwn.-A secunty IS msuffi.c1ent within the '1~eanmg of
this section if the value of the property falls below the amount for
the time being due to the Agricultural Development Bank or the
pnmary bank by such proportiOn as may be specified m the regula
tions of the Agricultural Development Bank or the bye· laws of the
primary bank, as the case ·may be.
30. Power of Board or Trustee to direct dtstratni and sale of
produce and sale of mortgaged property etc.-(1) The Board or
the Trustee may direct the committee of a primary bank to t~ke
action against a defaulter under sectiOn 16 or sectiOn UJ or sectiOn
29 and 1f the committee neglects or fails to do so the Board or the
Trustee may take such action.
-------
(2) Where action IS taken by the Board under sub-section
(1), the provisiOns of this Act and of any rules or regulatiOns made
thereunder shall apply 10 respect thereto as If all references to the
primary bank and to Its committee 10 the said prov1::.10ns were 'r
references to the Agricultural Development Bank and the Board _,.,
respectively. • '
(3) Where actwn IS taken by the Trustee unde1 sub-section
· (1), the provisiOns of this Act and of any rules or regulations made
• thereunder shall apply m respect thereto as If all references to the
pnmary bank or to its committee m the said provisions were
references to the Trustee.
...,_
31. Bank's nght to 1m.provements effected afler Gehan or
rrwrtgage or hypothecatwn -Notwithstandmg anythmg contained
in the Kerala Compensat1on for Tenants Improvements Act, 1958
(29 of 1958), the Improvements, if any, made subseuuent to the
date of the Gehan or mortgage or'hypothecation in favour of the
Agricultural Development Bank or a pnmary bank, by the lessee
of the property to which the Gehan or mortgage or hypothecation
relates, ,shall be treated as accessiOn to the property and shall be
available to such bank for -the realisatiOn of the amount under
the Gehan or mortgage or hypothecatiOn. ,.
• 32. Deduction from sale pror:eeds of aqncultural produae in
certain cases -(1) Notwithstanding anythmg contameJ m any law
for the time bemg in force, an applicant for a loan from a primary
bank may execute an agreement m favour of that bank prov1dmg
that it shall be lawful for ~he marketmg co-operative ~oc1eties or
the Commodity Boards through which the agricultural produce
belonging to the applicant IS marketed, to deduct such amount as
may be specified in the agreement from the sale procef'ds of such
agricultural produce marketed through such co-operative societies
or boards and to pay the amounts so dedExcerpt shown. Open the full act in Lexace.