(1) It shall be lawful for an agriculturist to 1[create, by way hypothecation or otherwise, a mortgage]1 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 1975: KAR. ACT 2] Agricultural Credit Operations and Miscellaneous Provisions 11 interest therein and appropriate the proceeds of such sale towards all moneys due to the credit agency from that agriculturist.