Chapter III Charges and mortgages in favour of banks and priorities thereof

Notwithstanding anything to the contrary contained in the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), or any other law for the time being in force, and notwithstanding that any land (or any interest therein) stands already charged or mortgaged to a co-operative society, an agriculturist may create a charge on or mortgage such land (or interest therein) in favour of a bank as security for any financial assistance given to the agriculturist by that bank, provided that prior notice thereof is given by such agriculturist and by that bank to the co-operative Society concerned.

1. (1) Notwithstanding anything to the contrary contained in any law for the time being in force,-
   • (a) any charge created or mortgage given by an agriculturist in favour of or to a bank, as security for financial assistance given to him by the bank, shall, after the commencement of this Act, if prior in time, have priority over any subsequent charge or mortgage in favour of Government or a co-operative Society; and
   • (b) any charge created or mortgage given 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 in or over such land (or interest therein) in favour of any person other than Government or co-operative society or any other bank, notwithstanding that such charge or mortgage is prior in time to the charge or mortgage created in favour of the bank.
2. (2) Where different charges or mortgages on the same land (or interest therein), are created by an agriculturist in favour of Government, one or more co-operative societies or one or more banks, any such charges created or mortgages given as security for financial assistance given by Government, cooperative society or bank by way of term loan for development purposes, shall have priority over any other charges or mortgages created or given in favour of Government, co-operative societies or banks; provided a notice of such financial assistance by way of term loans for development purposes has been given to such Government, co-operative society or bank, and that Government, co-operative society or bank has consented to the financial assistance being given; and where more than one such charge or mortgage is created or given as security for financial assistance by way of term loan, the charges or mortgages by way of security for the term loan for development purposes shall rank in priority inter se in accordance with the dates of their creation. Explanation.— For the purposes of this section, "term loan for development purposes" means financial assistance which will generally result in improvement of agriculture or the building up of tangible assets in agriculture; but does not include financial assistance for working capital expenses, seasonal agricultural operations or marketing crops.
3. (3) Nothing in this section shall apply-
   • (i) to borrowings only from one or more co-operative societies, and
   • (ii) to the recovery of sums due to Government as arrears of land revenue.

Notwithstanding anything contained in the Registration Act, 1908 (XVI of 1908), it shall not be necessary to register a charge in respect of which a declaration has been made under sub-section (1) of section 5, 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, and such charge, variation or mortgage shall have effect from the date it is created or made, provided that the bank sends within such time and in such manner as may be prescribed, a copy of the instrument whereby the charge variation or mortgage is created or made to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the property charged or mortgaged is situated, and such Registering Officer shall file a copy or copies, as the case may be, in his Book No. 1 prescribed under section 51 of the Registration Act, 1908 (XVI of 1908).

Whenever a charge is created or mortgage is given on land (or interest therein), in favour of a bank in respect of financial assistance given to an agriculturist by that bank, the bank shall give intimation to the Talathi or such other revenue officer as may be designated in this behalf by the State Government, of the particulars of the charge or mortgage in its favour. The Talathi or the other revenue officer 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. The bank shall likewise give an intimation to the Talathi or the other revenue officer as soon as the financial assistance given by it to the agriculturist ceases to be outstanding and thereupon the Talathi or the other revenue officer shall make a suitable note in the Record of Rights about release of the land from the charge or mortgage, as the case may be.

1. (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, after he had availed of such assistance and so long as such assistance continues to be outstanding, lease that land (or interest therein) or create any tenancy rights thereon, or enter into an agreement of sale without prior permission in writing of the bank.
2. (2) Any lease granted or tenancy rights created in contravention of this section shall be void.