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Sanjana Sinha Roy

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Agricultural Lands ActBy Dominic Braganza,

Partner at Abhay Nevagi and Associates, Advocates

Section 63 of the Maharashtra Tenancy and Agricultural Lands Act (for short “MTAL” or “the Act”) barred transfer of Agricultural lands to Non-Agriculturist without the permission of the Collector or Officer authorized by the State Government.

By Maharashtra Act No.1 of 2016 w.e.f. 01/01/2016 Section 63 of the MTAL Act was amended to include a sub section and proviso. By the said amendment the bar for transfer of Agricultural land shall not apply to land situated within the limits of a Municipal Corporation or Municipal Council or within jurisdiction of Special Planning Authority or New Town Development Authority constituted under Maharashtra Regional and Town Planning Act, 1966 (for short “MRTP”) and land allocated to residential, commercial, industrial or any other Non-Agricultural use in the draft of final Regional Plan or Town Planning Scheme.

By this amendment, the bar contained for transfer of agricultural lands was removed in the above cases.

Though the bar for transfer of agricultural lands came to be removed in the above cases, proviso’s are added putting conditions on such transfers. The first proviso provides that the land so transferred for Non-Agricultural use such as residential, commercial and industrial shall be put to such Non-Agricultural use within a period of five years from the date of transfer and necessary entry to that effect shall be made in the Record of Rights.

The second proviso provides that land transferred for any Non-Agricultural use permissible in the draft or final Development Plan or Regional Plan or Town Planning Scheme, if not put to Non-Agricultural use within the period of five years from the date of transfer, the Collector on payment of non-utilization charges @ of 2% of the market value calculated as per the Ready Reckoner [Annual Statement of Rates published under the Maharashtra Stamp (Determination of True Market Value of Property) Rules, 1995] grant a further extension of five years.

The third proviso provides that if the land is not to Non-Agricultural use as per the first and the second proviso, the Collector shall resume the land after giving one month notice to defaulting transferee. The land so resumed shall vest with the Government free from all encumbrances and shall first be offered to the original land holder by way of grant on the same tenure on which it was held by him before its transfer and at the same price at which it had been transferred by the original land owner.

The fourth proviso provides that if the original land owner fails to accept the offer to purchase the said land within the period of ninety days or having accepted the offer fails to deposit the purchase price within a further period of ninety days, the Collector shall auction the land.

This proviso also provides that the defaulting transferee shall in case the original holder purchases the land or the land is sold in auction, the defaulting transferee shall be entitled to compensation equal to the price at which he had purchased the land.

The fifth proviso provides that if the transferee fails to utilize the said land fully or partly for Non-Agricultural use permissible in the draft or final Development Plan or Regional Plan or Town Planning Scheme and wants to sale the same before the expiry of ten years, he can do the same, with the permission of the Collector, for the remaining period of ten years, on payment of deposit transfer charges @ 25% of the market value of such land as per Ready Reckoner.

Section 63-1A provided for transfer of Agricultural land to Non-Agriculturist for bonafide industrial use and for special township projects, notwithstanding the bar u/s 63 of the Act. Section 63-1A was first inserted by Maharashtra Act No. 28 of 1994 w.e.f. 03/02/1994. It initially provided that the lands to be put to industrial use within a period of five years from the date of purchase. Later by Maharashtra Act No.25 of 2005, w.e.f. 17/05/2004, this period was extended to fifteen years. The said amendment also provided that if on the date of the amendment, the land was not put to bonafide industrial use, the same could be put to such use within the remaining period of fifteen years from the date of purchase.

Section 63-1A is now further amended by Maharashtra Act No.1 of 2016 w.e.f. 01/01/2016. By the said amendment ‘Special Township Project’ is substituted by ‘Integrated Township Project’. The following table would give a comparative study of the provisions of Section 63-1A as it stood prior to 01/01/2016 and after the amending Act MAH 1 of 2016.

Provision Before MAH 1 of 2016 After MAH 1 of 2016
63-1A(1)(i) The industrial zone of a draft or final regional plan or draft interim or final development plan or draft or final town planning scheme, as the case may be prepared under the Maharashtra Regional and Town Planning Act, 1966 or any other law for the time being in force, or the agricultural zone of any of such plans or schemes and the development control regulations or rules framed under such Act or any of such laws permit industrial use of land; or The agricultural zone of a draft or final Regional Plan or draft or final Town Planning Scheme, as the case may be, prepared under the Maharashtra Regional and Town Planning Act, 1966 or any other law for the time being in force, and plans or schemes and the development control regulations or rules framed under such Act or any of such laws for the time being in force permit industrial use of land; or
First & Second proviso to Sub Section 1 Provided that, where the total extent of such land proposed to be purchased by a person exceeds ten hectares, he shall obtain prior permission of the Development Commissioner (Industries) or any other officer authorized by the State Government in this behalf, who, while granting such permission shall consider the justification or reasonableness of the requirement of the land proposed to be purchased with reference to the nature of the proposed bona fide industrial use of such land.

Provided further that, such purchase of land shall be subject to the condition that it shall be put to industrial use within the specified total period of [fifteen] years from the date of purchase, failing which the person from whom the land was purchased shall have the right to repurchase such land at the price for which it was originally sold by him.

Provided that, where such purchase of land is for bona fide industrial use, it shall be subject to the condition that such land shall be put to bona fide industrial use within a period of five years from the date of purchase.

 

Provided further that, after the expiry of the aforesaid period of five years, an extension of time not exceeding further five years may be granted by the Collector on payment of non-utilization charges at the rate of two percent of the market value of such land per annum, where such market value is calculated as per the Annual Statement of Rates published under the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable on the date of grant of such extension of time:

 

Provided also that,  if the purchaser fails to put the land to bona fide industrial use within a period of five years or, where non-utilization charges as aforesaid have been paid, within a total period of ten years, then the Collector shall resume such land after giving one month’s notice to the said defaulting purchaser, and the land so resumed by the Collector shall vest in the Government, free from all encumbrances, and shall first be offered to the original land holder by way of grant, on the same tenure on which it was initially held by such land holder before its sale for such bona fide industrial use and at the same price at which it had been sold by the original land holder for such bona fide industrial use:

 

Provided also that, if the original land holder fails to accept the offer to purchase the said land within a period of ninety days from the date of receipt of such offer from the Collector or having accepted such offer, fails to deposit with the Collector the required amount within a further period of ninety days, such land shall be auctioned for any use consistent with and permissible under the Development plan or Regional plan or Town Planning Scheme, as the case may be, if any, sanctioned under the Maharashtra Regional and Town Planning Act, 1966 or any other law for the time being in force; and in both the cases, the defaulting purchaser shall only be entitled to compensation equal to the price at which such land had been purchased by him, and the Collector shall remit such compensation to the defaulting purchaser within a period of ninety days from the date of receipt of payment under the said auction:

 

Section 63-1A (2) provided that, if the land purchased is held by Occupant Class-II, the purchaser shall in lieu of any Nazrana or other charges which may be payable, pay an amount equal to 2% of purchase price in case of land purchased for bona fide industrial use and 50% of the purchase price if land is purchased for Integrated Township Project within one month of execution of the Sale Deed. By MAH 1 of 2016 a proviso is added that if the purchaser fails to pay such amount within one month then he shall pay an amount equal to 75% of the purchase price or the market value as per Ready Reckoner, whichever is higher.

Sub Section 5 is added which provides in case when land is purchased for bona fide industrial use and is not utilized fully or partly for such bona fide industrial use within the total specified period of ten years, the said land may be sold with the permission of the Collector subject to the condition that:

  1. a) Where the said land is to be sold for bona fide industrial use, the transferor shall deposit transfer charges @ 25% of the market value of the said land as per Ready Reckoner;
  2. b) Where the said land is to be sold for any other Non-Agricultural purpose other than bona fide industrial use, the transferor shall deposit conversion charges equal to 50% of the market value of the said land as per Ready Reckoner and in case of Occupant Class-II land, an additional amount equal to 48% of the price at which the said land was originally purchased.

Thus, with the amending Act MAH 1 of 2016, prior permission for purchase of Agricultural land for Non-Agricultural use in case of purchase of total land exceed 10 Hectares, the prior permission of Development Commissioner is done away with. The total period for putting the land to Non-Agricultural use is reduced from 15 to 5 years with an extension of an additional 5 years subject to payment of non-utilization charges. The amendment has also paved a way for sale of the land purchased for bona fide industrial use if not utilized for such use within the specified period of 10 years, subject however, to payment of transfer charges/conversion charges.


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