Act Info:
Notwithstanding anything contained in any law for the time being in force or any custom or usage having the force of law, it shall be lawful for an agriculturist to alienate the land or his interest therein whether or not a charge or mortgage is subsisting on such land or such interest, by creation of charge or mortgage of such land or interest therein in favour of a credit agency as security for the financial assistance given to him by such credit agency.
Section 4 - Vesting agriculturists not having alienable rights with rights of alienation
Notwithstanding anything contained in the Karnataka Bhoodan Yagna Act, 1963 (Karnataka Act 34 of 1963) the State Government may, by notification, vest Bhoodan tenants with rights of alienation, including the right to create a charge or mortgage in such land or interest in favour of a credit agency for the purpose of obtaining financial assistance from the credit agency subject to such restrictions as may be specified in such notification.
Section 5 - Charge on crops and other movable property
(1) It shall be lawful for an agriculturist to1[create, by way hypothecation or otherwise, a mortgage] of or a charge on,-
(a) movable property, owned by him; or
(b) crops standing or otherwise, raised by him on his own land or land held by him as a tenant including other produce raised by him on such land to the extent of his interest in such crops or produce, in favour of a credit agency as security for the financial assistance given to him.
(2) Notwithstanding anything contained in the Karnataka Co-operative Societies Act, 1959 or any other law for the time being in force, no charge in respect of financial assistance given by a co-operative society to an agriculturist shall have priority over charge on the crop raised by him, standing or otherwise, or any other movable property in respect of any financial assistance given to him by a credit agency:
Provided that the financial assistance given by the credit agency is prior in point of time to that of any loan advanced to him by the co-operative society.
(3) A credit agency may distrain and sell through an official designated in this behalf by the State Government the crops or other produce or other movables charged to that credit agency to the extent of the agriculturists interest therein and appropriate the proceeds of such sale towards all moneys due to the credit agency from that agriculturist.
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1. Substituted by Act 26 of 1984 w.e.f. 28.4.1984
Section 6 - Creation of charge on land or interest therein in favour of a credit agency by a declaration
Notwithstanding anything contained in any law for the time being in force,-
(i) any agriculturist given financial assistance by a credit agency may by a declaration in the prescribed form charge the land or any other immovable property owned by him or where he is a tenant of any land, his interest in such land, as security for the amount of such financial assistance and interest payable thereon. Such declaration shall be filed along with the application seeking financial assistance and shall state that the charge created thereunder shall be for the amount of financial assistance then sought for and also for all future financial assistance which the credit agency may give him,
(ii) a declaration made under clause (i) may, with the consent of the credit agency concerned, be varied by the agriculturist at any time.
Section 7 - Priority of charges and mortgages over certain claims
1[(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.
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1. Sub-Section (1) substituted by Act 34 of 1978 w.e.f. 29.12.1978.
Section 8 - Mortgage executed by managers of Joint Hindu Families
(1) Notwith-standing anything contained in any law, where a mortgage in respect of financial assistance given by a credit agency is executed by the agriculturist manager of a Joint Hindu Family, such mortgage shall, subject to the provision of sub-section (2) be binding on every member of such family.
(2) Whenever such mortgage is challenged on the ground that it was executed by the manager for a purpose not binding on the other members (whether such members have attained majority or not), the burden of proving the same shall be on party alleging it.
Section 9 - Registration of charges and mortgage in favour of a credit agency
(1) Notwithstanding anything contained in the Registration Act, 1908, a charge in respect of which a declaration has been made under clause (i) of section 6 or in respect of which variation has been made under clause (ii) of that section or a mortgage executed by an agriculturist in favour of a credit agency in respect of financial assistance given by that credit agency, 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 the credit agency sends to the registering officer within the local limits of whose jurisdiction the whole or any part of the property charged or mortgaged is situate within such time and in such manner as may be prescribed by the State Government for this purpose, by registered post acknowledgment due, a copy of the document creating such charge, variation or mortgage duly certified to be a true copy by an employee of a credit agency authorised to sign on its behalf.
(2) The registering authority receiving such document shall enter the same in Book-I.
Section 10 - Noting of charge or mortgage in the Record of Rights
Whenever a charge or a mortgage on land or interest therein is created or executed by an agriculturist in favour of a credit agency, the credit agency shall give intimation to the Tahsildar of the taluk in which the land is situated or to any officer authorised by him, of the particulars of the charge or mortgage in its favour. The Tahsildar or the officer authorised by him 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.
Section 10A - Registration of discharge certificates
1[10A. Registration of discharge certificates
Where any document creating a charge or mortgage has been registered in accordance with section 9 and the details thereof noted in the record of rights under section 10 and the liability under the financial assistance has been discharged, the credit agency shall issue a certificate to that effect and the provisions of the said sections shall,mutatis-mutandis,apply to the registration of such certificate and to the deletion of the entry made in the record of rights.]
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1. Inserted by Act 26 of 1984 w.e.f. 28.4.1984