Priority of charges and mortgages over certain claims

(1) Notwithstanding anything contained in any law for the time being in force, but subject always to the paramount charge in respect of arrears 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 State Government or a co-operative society shall have priority over a charge or mortgage created on such land or interest by an agriculturist in favour of a credit agency as security for financial assistance given to him by such agency after the commencement of this Act and prior to the creation of the charge or mortgage in favour of the State Government or the co-operative society; and (b) any charge or mortgage created on any land or interest therein in favour of a credit agency as security for financial assistance given to an agriculturist by that credit agency 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 State Government, a co-operative society or any other financial institution prior to the date on which the charge or mortgage was created in favour of the credit agency. (2) Where different charges or mortgages over the same land or any interest therein have been created or executed by an agriculturist in favour of,- (i) the State Government; or (ii) a co-operative society; or (iii) one or more credit agency, such charges or mortgage out of them as is created or executed as security for the financial assistance given as term loan for development purposes shall have priority over the other charges or mortgages: Provided that prior notice thereof had been given to, and concurrence had been obtained of the State Government or the co-operative society or the credit agency, as the case may be. (3) Where more than one charge or mortgage had been created or executed as security for the financial assistance given as term loan for development purposes, the charges or mortgages shall have priority in accordance with the dates of their creation or execution. Explanation.- For the purposes of this section, ''term loan for development purposes'' means 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. (4) Nothing in this section shall apply to borrowings from one or more co-operative societies only.