Bank of Maharashtra Faces Backlash Over Illegal ₹2.71 Cr Agricultural Land Sale.

Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098

A major controversy has erupted after the Bank of Maharashtra illegally auctioned agricultural land under SARFAESI provisions, despite official records, valuations, and bank documents confirming its agricultural status. The sale, worth ₹2.71 crore, allegedly violates Section 31(i) of the SARFAESI Act, RBI guidelines, and government policies, raising demands for cancellation.

The Bank of Maharashtra is under scrutiny for allegedly violating the SARFAESI Act by auctioning agricultural land in Jalna district. According to documents reviewed by the Sprouts News Investigation Team (SIT), the bank admitted in its own notices and valuation reports that the property was agricultural, yet proceeded with a public auction in 2023. Legal experts believe this case highlights systemic misuse of statutory powers by financial institutions.

On 17 November 2015, the Bank of Maharashtra issued a notice under Section 13(2) of the SARFAESI Act to the borrower. Notably, at Point #8 of the notice, the bank itself declared the property as agricultural land, stating that SARFAESI was not applicable and that enforcement would require an appropriate forum.

The bank appointed Dr. H.G. Kapghate, a government-approved agricultural valuer, who classified the land as agricultural and assessed its fair market value at ₹791 lakhs, with a distressed value of ₹593 lakhs. A separate government valuation by the Deputy Registrar, Bhokardan, Jalna, pegged the property at ₹603 lakhs for stamp duty purposes.

Further evidence strengthens the borrower’s claim. Records confirm that the loan was sanctioned under Agricultural Finance, with Form No. F138, the prescribed application for such lending. Internal classifications by the Bank of Maharashtra consistently listed the loan as indirect agricultural finance.

Despite this, on 17 May 2023, the bank auctioned the land for just ₹2.71 crore, selling it to Smt. Pushpa Mhask. The sale certificate was formally issued on 19 December 2024 by the Deputy Zonal Manager and Branch Manager Dipak Keshav Garmade.

Legal experts and former regulators point out that the SARFAESI Act, 2002, Section 31(i), explicitly bars its application to agricultural land. RBI guidelines and Government of India circulars also reaffirm this position.

By acknowledging the agricultural status in its own notice and valuation reports, and later invoking SARFAESI to dispossess the borrower, the bank has allegedly acted ultra vires and in violation of statutory provisions. The Sprouts News Investigation Team (SIT) has learned that this case could trigger wider regulatory action if escalated to RBI or the Ministry of Finance.

• Violations and Reliefs Demanded

•Violation of Section 31(i) of SARFAESI Act, 2002

•Contravention of RBI Guidelines on Agricultural Advances

•Disregard for Government Circulars

•Breach of natural justice by proceeding despite prior acknowledgements

The borrower has demanded cancellation of the auction sale, restoration of the property, and disciplinary action against the concerned officials. Enclosures submitted include the SARFAESI notice, valuation reports, government valuations, and auction records.

This Jalna case has wider implications. If upheld, it could set a precedent restricting banks from misusing SARFAESI provisions to auction agricultural lands. Policymakers and industry stakeholders are closely watching, as the outcome may influence future banking and agricultural finance regulations in India.