(1) Notwithstanding anything to the contrary contained in any law for the time being in force—
(a) any charge or mortgage created by an agriculturist on any land or interest therein, in favour of a bank, as security for financial assistance given to him by that 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 or mortgage created by an agriculturist on any land or interest therein in favour of a bank, as security for financial assistance given to him 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 other charge or mortgage is prior in time to the charge or mortgage created in favour of the bank as security; for financial assistance given to such agriculturist.
(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 cooperative societies or one or more banks, any such charges or mortgages created as security for financial assistance given by Government, co-operative society or bank by way of term loan for development purposes, shall have priority over any other charges or mortgages created in favour of Government co-operative societies or banks, provided a notice of such financial assistance by way of term loan 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 such financial assistance being given; and where more than one such charge or mortgage is created as security for financial assistance by way of term loan for development purposes, 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.
Creation of charge on land in favour of a bank by declaration Notice of creation of charge and mortgage in favour of bank to be given to cooperative society.
Priority of charges and mortgages in favour of a bank, Government and cooperative society The Gujarat Agricultural Credit (Provision of Facilities) Act, 1979.
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Explanation.—For the purposes of this section, the expression "term loan for development purposes" means financial assistance which generally results in improvement of agriculture or building up of tangible assets in agriculture; but does not include financial assistance for working capital expenses, seasonal agricultural operations or marketing crops.
(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.
8. Notwithstanding anything contained in the Registration Act, 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 subsection (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.
9. Whenever a charge or mortgage is created by an agriculturist on land or any interest therein in favour of a bank as security for financial assistance given to him by that bank, the bank shall give intimation to the village accountant 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 village accountant or such 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 village accountant or such other revenue officer as soon as the financial assistance given by it to the agriculturist ceases to be outstanding and thereupon the village accountant or such other revenue officer shall make a suitable note in the Record of Rights about release of the land from the charge or mortgage, as he case may be.