Chapter III CHARGES AND MORTGAGES IN FAVOUR OF BANKS AND THEIR PRIORITIES

Notwithstanding anything to the contrary contained in the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969) or any other law for the time being in force and notwithstanding that any land or interest therein stands already charged or mortgaged to a co-operative society, it shall be lawful for an agriculturist to create a charge or mortgage on such land or interest therein in favour of a bank as security for any financial assistance given to the agriculturist by that bank.

(1) Notwithstanding anything to the contrary in any law for the time being in force but subject to any prior claim of the Government in respect of land revenue,- (a) no charge or mortgage created on any land or interest therein, after the commencement of this Act, in favour of the Government or a co-operative society shall have priority over a charge or mortgage on such land or interest created by an agriculturist in favour of a bank as security for financial assistance given to the agriculturist the bank after the commencement of this Act and prior to the charge or mortgage in favour of the Government or the co-operative society; and (b) any charge or mortgage created on any land or interest therein in favour of a bank in respect of financial assistance given to an agriculturist by that bank shall have priority over any other charge or mortgage that may have been created over such land or interest in favour of any person other than the Government, a co-operative society or any other bank, prior to the date on which the charge or mortgage was created in favour of the bank. (2) Where different charges or mortgages over the same land or interest therein have been created by an agriculturist in favour of the Government, a co-operative society or a bank or more than one bank, any such charge or mortgage created as security for financial assistance given by the Government, co-operative society or the bank or banks by way of term loan for development purposes shall have priority over the other charges or mortgages created in favour of the Government, co-operative society or any of the banks, provided prior notice of any such financial assistance by way of term loan for development purpose had been given to such Government, co-operative society or bank and such Government, co-operative society or bank has concurred in such financial assistance and where more than one such charge or mortgage is as security for financial assistance given by way of term loan, the charges or mortgages by way of security for term loan for development purposes will rank for priority in accordance with the dates of their creation. Explanation.-For the purposes of this section "term loan for development purposes" shall mean financial assistance which would generally lead to improvement of agriculture and/or building up of assets in agriculture but shall not include financial assistance for meeting working capital, expenses seasonal agricultural operations and marketing of crops. (3) Nothing in this section shall apply to barrowings only from one or more co-operative societies including land mortgage banks.

(1) Notwithstanding anything contained in the Indian Registration Act, 1908 (16 of 1908), a charge in respect of which a declaration has been made under sub-section (1) of section 6 or in respect of which a variation has been made under sub-section (2) of that section or a mortgage executed by an agriculturist in favour of a bank in respect of financial assistance given by that bank, shall be deemed to have been duly registered in accordance with the provisions of that Act with effect from the date of such charge, variation or mortgage, as the case may be, provided that the bank sends to the Sub-Registrar within the local limits of whose jurisdiction the whole or any part of the property charged or mortgaged is situate, within the time stipulated by the State Government for this purpose, by a registered post acknowledgement due, a copy of the document creating such charge, variation or mortgage duly certified to be a true copy by an employee of the bank authorised to sign on its behalf. (2) The Sub-Registrar receiving the declaration in respect of a charge or variation or a mortgage referred to in sub-section (1) shall, as immediately as practicable on receipt thereof, record in a register to be maintained in this behalf, the fact of the receipt of such declaration, variation or mortgage for registration.

Whenever a charge or a mortgage on land or interest therein is created in favour of a bank by an agriculturist, the bank may give intimation to the Tehsildar or such other revenue official as may be designated in this behalf by the State Government of the particulars of the charge or mortgage in its favour. The Tehsildar or the other revenue official shall make a note of the particulars of charge or mortgage in the record-of-rights relating to the land over which the charge or mortgage has been created.

(1) Notwithstanding anything contained in any law for the time being in force, an agriculturist who has availed himself of financial assistance from a bank by creating a charge or mortgage on land or interest therein, shall not, so long as the financial assistance continues to be outstanding, lease or create any tenancy rights on such land or interest therein without prior permission in writing of the bank if he has not already leased or created tenancy right thereon at the time of availing of the financial assistance from the bank. (2) Any lease granted or tenancy rights created in contravention of this section shall be void.

Nothing in any law shall prevent in any manner a bank from causing any land or any interest therein charged or mortgaged to it by an agriculturist to secure any financial assistance, to be attached and sold through a civil court and applying the proceeds of such sale towards all money due to it from that agriculturist including the costs and expenses as may be awarded by the court.

(1) an official of the State Government notified by the State Government as the prescribed authority for the purpose of this section may on the application of a bank, make an order on any agriculturist or his heir or legal representative, directing the payment of any sum due to the bank on account of financial assistance availed of by the agriculturist, by the sale of any land or any interest therein upon which the payment of such money is charged or mortgaged: Provided that no order shall be made by the prescribed authority under this section for the sale of any land or any interest therein or any other movable property upon which the payment of money is charged or mortgaged unless the agriculturist or the heir or legal representative of the agriculturist, as the case may be, has been served with a notice by the prescribed authority, calling upon him to pay the amounts due. (2) Every order passed by the prescribed authority in terms of sub-section (1) shall be deemed to be a decree of a civil court and shall be executed in the same manner as a decree of such court. (3) Nothing in this section shall debar a bank from seeking to enforce its rights in any other manner open to it under any other law for the time being in force.

(1) Notwithstanding anything contained in any law for the time being in force, a bank shall have power to itself acquire agricultural land or interest therein or any other immovable property which has been charged or mortgaged to it by an agriculturist in respect of any financial assistance availed of by him, provided the said land or interests therein or any other immovable property has been sought to be sold by public auction and no person has offered to purchase it for a price which is sufficient to pay to the bank the moneys due to it. (2) A bank which acquires land or interest therein or any other immovable property in exercise of the power vested in it under sub-section (1) shall dispose it of by sale, within a period to be specified by the State Government in this behalf. (3) If the bank has to lease out any land acquired by it under sub-section (1), pending sale thereof as indicated in sub-section (2), the period of lease shall not exceed one year at a time and the lessee shall not acquire any interest in that property notwithstanding any provisions to the contrary contained in any other law for the time being in force. (4) A sale by a bank of land or interest therein in terms of this section shall be subject to any provisions of any law in force which may place restrictions on purchase of land by non-agriculturists or ceiling for acquisition of land or by a person not belonging to a particular Tribe or Scheduled Caste or fragmentation of land.

Nothing in any law for the time being in force placing a ceiling or limit on the holding of land shall apply to a bank acquiring a land in terms of section 14 and holding such land till such time the bank is in a position to sell the land in the manner provided in section 14 or otherwise, at a price which is adequate to cover its dues.