A non agriculturist can now buy agricultural land in Maharashtra

A non-agriculturist can now buy agricultural land

Previously in the State of Maharashtra, India, a non-agriculturist could not acquire agricultural land without the prior approval of the Collector. On 1 January 2016, an amendment was made to the existing law to allow a non-agriculturist to acquire agricultural land subject to certain conditions.
WHAT WAS THE LAW BEFORE THE AMENDMENT?
Section 63 of the Maharashtra Tenancy and Agricultural Land Act, 1948 (“MTAL”) barred a sale, gift, exchange, lease or mortgage (in which possession is delivered) of agricultural land to a non-agriculturist or to any other persons holding land in excess of two-third of the ceiling area as determined under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961, without the prior approval of the Collector.
Consequentially, it became very difficult for a non-agriculturist to acquire agricultural land as the permission of the Collector or any other officer authorised by the State Government was required in advance. There was no guarantee that every applicant would receive this permission and in addition, the permission so granted was conditional. If any of the conditions on which the permission was granted was contravened, then the land so acquired could be forfeited by the Collector. This situation led to the need for an amendment to the existing law.
WHAT IS THE AMENDMENT?
The amendment, which came into force from 1 January 2016, was made in the form of adding a sub-section to Section 63 of the MTAL, whereby the following lands would be excluded from the purview of Section 63 of the MTAL:
Land situated within the limits of a Municipal Corporation; or
Land situated within the limits of a Municipal Council; or
Land situated within the jurisdiction of Special Planning Authority; or
Land situated within the jurisdiction of New Town Development Authority; or
Any land allocated for residential, commercial, industrial or any other non-agricultural use as proposed in the draft/final Regional plan or Town Planning Scheme prepared under the Maharashtra Regional and Town Planning Act, 1966.
In short, a non-agriculturist can now acquire agricultural land for non-agricultural purpose (residential/commercial/industrial), if such land falls under any of the five exceptions to Section 63 of the MTAL as mentioned above.
Time frame for using the land for non-agricultural purpose: It is imperative for the person who acquires the agricultural land for residential/commercial/industrial or any other non-agricultural purpose to put the land to such use within a period of 5 years from the date on which the land was transferred to him. If the period of 5 years lapses, then the Collector may grant an extension of another 5 years after payment of non-utilization charges which will be determined at the rate of 2% of the market value of such land per annum.
Sale of land by the purchaser: If the purchaser or subsequent purchaser does not utilise the agricultural land for non-agricultural purposes and wants to sell the land prior to the expiry of the 10 year period, then the Collector may allow him to sell the land, provided the purchaser or subsequent purchaser pays the non-utilization charges to the Collector and the land so sold should be used for non-agricultural purposes only. The period for putting the land to non-agricultural use by the person purchasing the land will be the remaining period which is left unutilized by the person selling the land out of the specified period of 10 years. Additionally, the person selling the land will also have to deposit 25% of the market value of the land with the Collector.
Collector will resume the land: If the purchaser or any subsequent purchaser does not use the land for non-agricultural purposes within a period of 5 years or within the period of 10 years upon payment of non-utilization charges, then the Collector shall resume the land after issuing one month’s notice to the purchaser or subsequent purchaser as the case may be. The land so acquired by the Collector will vest with the Government free from all encumbrances.
Option to the original owner to buy the land: The land so resumed by the Collector will be offered to the original owner on the same terms and conditions as it was sold by him. The original owner will have the right of first refusal. This right will have to be exercised by the original owner within a period of 90 days from the date of receipt of the offer. If the land is accepted by the original owner, then he will have to deposit the amount within a further period of 90 days. If he fails to exercise the right within a period of 90 days or if he fails to deposit the amount within a period of 90 days, then the land will be auctioned by the Collector.
Auction of land: The land so auctioned shall be used for purposes mentioned in the draft/final Development plan or Regional plan or Town Planning scheme. The proceeds of the auction will be remitted to the purchaser or subsequent purchaser as the case may be, within a period of 90 days from the receipt of such auction proceeds. The amount paid to the purchaser or subsequent purchaser will be equal to the price at which he purchased the land.

CONCLUSION

Thus, the amendment has eased the law as far as purchase of agricultural land by a non-agriculturist is concerned. What is commendable is the manner in which the government has achieved such a change where on the one hand fertile agricultural lands will continue to be governed by Section 63 of the MTAL but on the other hand, certain lands have excepted from this Section in order to make room for development without involving the burdensome process of obtaining approval in advance from the Collector.