TRANSFER OF LAND UNDER SECTION 43 AND 63 OF THE BOMBAY TENANCY AND AGRICULTURAL LANDS ACT, 1948

Introduction

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There is a mass migration of the rural population into the urban cities in search of better employment opportunities, this has led to a large loss in the agricultural lands in the villages which then gets acquired by people from non-agricultural backgrounds leading to the urbanization of the villages. This puts the agriculture community at threat.

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Section 43

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Primarily?Section 43[1]?applies restrictions on the transfer of land purchased or sold under the?Bombay Tenancy Act and Agricultural Lands Act, 1948.?The section gives that no land purchased or sold to any person, shall be transferred by sale, gift, exchange, mortgage, lease, or assignment or partitioned without taking the permission of the Collector. The main purpose of Section 43[2] is that it ensures the protection of the persons belonging to the disadvantaged agricultural groups and gives them the right of purchase upon them.

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Section 63

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Section 63[3]?of the Bombay Tenancy Act and Agricultural Lands Act, deals with the restrictions of transfers of agricultural lands.

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Section 63[4] of the Act gives that the transfer of property by sale, gift, exchange, or lease of any land or interest therein is not valid if that person is not an agriculturist or who is not an agricultural labourer. In addition to being an agriculturist or an agricultural labourer, their landholdings should not exceed two-thirds of the ceiling area determined.

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If the Collector or an officer grants permission by the State Government, then he or she may grant permission for such transactions in accordance with the conditions prescribed.

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The principal reason for the conferral of ownership rights only upon a cultivating tenant was to ensure that the cultivators be protected, conferring the right of purchase upon the cultivators and to ensure that there is a direct relationship between the cultivators and the land. Section 63[5] protects the farmlands and the rights of the cultivators. The law acts as an antidote against “absentee landlordism”. It protects naive and gullible persons from disadvantaged categories from “gifting” cultivable land to non-agriculturists, through a Will to be used for other purposes.

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By the Maharashtra Act No,1 of 2016, Section 63[6] was amended to include a subsection 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. It will also not apply if the land is within the jurisdiction of the Special Planning Authority or New Town Development Authority and if the land is allocated to residential, commercial, industrial, or any other non-Agricultural use in the draft of the final Regional Plan or Town Planning Scheme.

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Although the bar was for the transfer of agricultural lands was removed, yet there are proviso which puts conditions of such transfers, they are as such:

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1.????????????? The first proviso provides that the land which is transferred for non-agricultural purposes like residential, commercial, and industrial, shall be put to such use within the period of five years from the date of transfer.

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2.????????????? The second proviso provides that if the land is not put to use for non-agricultural purposes for five years from the date of transfer, then the Collector on the non-payment of non-utilization charges @ 2% of the market value can grant a further extension of five years.

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3.????????????? If the land is not put to non-agricultural use within the time period, then the Collector shall resume the land after giving one month’s notice to the defaulting transferee. The land resumed shall be vesting with the Government.

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4.????????????? If the original owner of the land fails to accept the offer to purchase the land within ninety days or, having accepted the offer, fails to deposit the purchase price, then the Collector shall auction the land.

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5.????????????? If the transferee is unable to utilize the land fully or partly for non-agricultural use permissible in the draft or final Development Plan or Town Planning Scheme and plans to sell the land before the expiry of ten years, he is authorized to do it, but with the prior permission of the Collector, for the remaining period of 10 years, on payment of deposit transfer charges @ 25% of the market value of such land as per Ready Reckoner.

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Bequeathing land under the Bombay Tenancy and the Agricultural Lands Act

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Bequeath is to give or leave by will, especially used in the case of personal property. Under the Bombay Tenancy and Agricultural Lands Act, an agriculturist cannot part with his cultivable or agricultural property or land to an agriculturist through a will. This is given in the Sections 43[7] and 63[8] of the Bombay Tenancy and Agricultural Lands Act, 1948.

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In Section 63[9] it is explicitly mentioned that there should be no transfer of property in the form of gifts to a non-agriculturist party. Transfer of land as a gift implies bequeathing. Therefore, bequeathing agricultural land to a non-agriculturist will not be permitted. Such a transaction will not be considered valid.

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Section 43[10] debars the transfer of property through sale, lease, mortgage, and gift to another party without the prior permission of the Collector. The Collector cannot grant permission as the transfer of property belonging to an agriculturist cannot be transferred to a non-cultivator despite the transaction being through a gift deed.

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Vinodchandra Sakarlal Kapadia v. State of Gujarat and ors[11] (2020)

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This case consisted of a 3-judge bench composed of UU Lalit, Indu Malhotra, and AS Bopanna. These appeals arose out of a common judgment that was passed by the Division Bench of the Gujarat High Court at Ahmedabad.

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Facts

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Mr. Samubhai Budhiabhai was a tenant and the cultivating land was in his possession. He was also the testator and later became the deemed purchaser of the said land as per the Bombay Tenancy and Agricultural Lands Act, 1948. The testator executed a registered will in favor of the appellant where the said agricultural land was being bequeathed to the appellant. After the testator’s death, the appellant’s name was updated on the records as the owner of the land. Soon, the revenue authorities found out that the appellant was not an agriculturist and therefore against him under proceedings?Section 84C[12]?of the Act. Despite furnishing a no-objection certificate from the legal heirs of the testator, it was held that the bequest was invalid and contrary to the provisions of Section 63[13] of the Act and hence declared that the said land vested in the State without any encumbrances.

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On an appeal, the Deputy Collector affirmed the decision of the Additional Mamlatdar, but later a revision application was then preferred before the Gujarat Revenue Tribunal which allowed the revision and quashed the orders by observing that disposal by way of a Will would not amount to transfer and would not be hit by Section 63[14] of the Act. The State, unsatisfied and aggrieved by the decision approached the Gujarat High Court where the matter was referred to the Division Bench and the Division Bench interpreted the scope and ambit of Section 43[15] and 63[16] of the Act and?held?that the bequest was invalid and not in accordance with the provisions of the Act. Later, the Appellant, unsatisfied by the order, approached the Supreme Court with an appeal.?

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Issues

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The issues dealt with by the Court, in this case, is as follows:

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·??????????? Whether Section 63[17] debars an agriculturist from parting with his agricultural land to a non-agriculturist through a “Will”.

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·??????????? Whether Section 43(1)[18] of the Tenancy Act restricts transfers of any land or interest purchased by the tenant or sold to any person through the execution of a Will by way of testamentary disposition.

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Arguments

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Relying on the case of?Mahadeo Ganpat Sawarkar v. Shakuntalabai Vishwasrao[19], it was contended that, since the word “assignment” does not occur in Section 63[20], agricultural land can be transferred to non-agriculturist without the need for temporary disposition. It is also contended that the words like ‘sale’, ‘gift’, ‘exchange’ and ‘mortgage’ in Section 43[21] and 63[22] suggest transfers by a living person and the expression ‘assignment’ under Section 43[23] must be interpreted with the previously used expressions appearing in that section. It is also contended that the expression ‘assignment’ does not even appear in Section 43[24], thus allowing the transfer without any restrictions.

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The State contended that the main motivation for granting ownership rights to only cultivating tenants was to ensure that the actual tillers and cultivators were protected and provided with ownership rights on payment of nominal charges. In addition to this, it was also contended that according to Section 63[25] of the Act transfer to a non-agriculturist is not permissible and further any agriculturist holding land beyond his or her ceiling limits is not allowed.

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Order

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The Supreme Court upheld the decision of the Division Bench of the High Court of Gujarat and also held that the testamentary dispositions come within the ambit of the word ‘assignment’ under Section 43[26] of the Bombay Tenancy and Agricultural Lands Act, 1948 and hence the appeal was dismissed.

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The Court observed that, after referring to the provisions given under Section 43[27] and other allied provisions, it can be concluded that the main intent of those provisions is to ensure that the legislative scheme grants protection to persons from disadvantaged groups and confer the right of purchase upon them at nominal costs. The Court cited the case of?Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawal[28],?which held that a tenancy governed by a statute prohibiting assignment could not be transferred to a total stranger by will. It also asserted that the expression ‘assignment’ includes testamentary disposition. If testamentary disposition is not covered under the ambit of Section 43[29], then a naive person can be made to execute a testament in favor of a person who may not have fulfilled the requirements and yet be eligible to be a transferee under the law. This would have distorted the purpose of the provision, which is to protect the interest of the cultivators.

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Contravening provisions of the Bombay Tenancy and the Agricultural Lands Act with Indian Succession Act

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The concept of succession falls under the?Indian Succession Act, 1925. Since it is a part of the Concurrent List, i.e. in the Union and the State list, if there is any prohibition in the State, in the absence of any assent of the President, then the state order would be void. It is further submitted that the State Legislature must be taken to be fully aware of this legal position and, therefore, while construing the term ‘assignment’ due regard to this aspect must also be given.

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Testamentary succession or disposition of wills as per the Indian Succession Act refers to a case when the deceased leaves behind a will and the devolution of property take place as per his or her wishes as expressed in the will, but according to the Bombay Tenancy Act, the devolution of property cannot take place always as per the wishes of the testator. If the testator owns agricultural land, then the land cannot be devolved to non-agriculturist as per Section 63[30] of the Bombay Tenancy Act.?

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Conclusion

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To sum up, by understanding the case brief of Vinodchandra Sakarlal Kapadia?v. State of Gujarat[31] and Ors, one comes to understand the interpretation of Section 43[32] and Section 63[33] of the Bombay Tenancy Act. One understands the importance that the legislature gives to these laws to protect the interest of the cultivators and prevent the shift of agricultural lands to non-agricultural lands.

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[1] Restriction on transfer of land purchased or sold under this Act

(1)??????????? No land purchased by a tenant under section 32, 32F, 2 [32I, 32O, 3 [33C or 43-ID] ] or sold to any person under section 32P or 64 shall be transferred by sale, gift, exchange, mortgage, lease or assignment without the previous sanction of the Collector, Such sanction shall be given by the Collector in such circumstances, and subject to such conditions, as may be prescribed by the State Government :

Provided that, no such sanction shall be necessary where the land is to be mortgaged in favour of Government or a society registered or deemed to be registered under the Bombay Co-operative Societies Act, 1925, for raising a loan for effecting any improvement of such land] :

[Provided further that, no such previous sanction shall be necessary for the sale, gift, exchange, mortgage, lease or assignment of the land in respect of which ten years have elapsed from the date of purchase or sale of land under the sections mentioned in this sub-section, subject to the conditions that,––

(a)????????? before selling the land, the seller shall pay a nazarana equal to forty times the assessment of the land revenue to the Government;

(b)????????? the purchaser shall be an agriculturist;

(c)?????????? the purchaser shall not hold the land in excess of the ceiling area permissible under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961; and

(d)????????? the provisions of the Bombay Prevention of Fragmention and Consolidation of Holdings Act, 1947 shall not be violated].

(2)??????????? Any transfer of land in contravention of sub-section (1) shall be invalid.

[2] Supra N. 1

[3] Transfers to non-agriculturists barred.?–

(1)??? Save as provided in this Act-

(a)?????? no sale (including sale in execution of a decree of a Civil Court or for recovery of arrears of land revenue or for sums recoverable as arrears of land revenue), gift, exchange or lease of any land or interest therein, or

(b)?????? no mortgage of any land or interest therein, in which the possession of the mortgaged property is delivered to the mortgagee,

shall be valid in favour of person who is not an agriculturist?[or who being an agriculturist?[will after such sale, gift, exchange, lease or mortgage, hold land exceeding two-thirds of the ceiling area determined under the Maharashtra Agricultural Lands (Ceiling on Holding) Act, 1961]?or who is not an agricultural labourer] :

Provided that the Collector or an officer authorised by the?[State]?Government in this behalf may grant permission for such sale, gift, exchange, lease or mortgage, on such conditions as may be prescribed.?[Such permission shall not be granted, where land is being sold to a person who is not an agriculturist for agricultural purposes, if the annual income of such a person from other sources is Rs. 12,000 or more].

Explanation.?- For the purpose of this sub-section the expression 'agriculturist' includes any person who as a result of the acquisition of his land for any public purpose has been rendered landless, for a period not exceeding ten years from the date possession of his land is taken for such acquisition.]

(1A) Where any condition subject to which permission to transfer was granted is contravened, then the land in respect of which such permission was granted shall be liable to be forfeited in accordance with the provisions of section 84CC.

(1B) Where permission is granted to any transfer of land under sub-section (1) any subsequent transfer of such land shall also be subject to the provisions of subsection (1)].

(2)??????? Nothing in this section shall be deemed to prohibit the sale, gift, exchange or lease of a dwelling house or the site thereof or any land appurtenant to it in favour of an agricultural labourer or an artisan?[or a person carrying on any allied pursuit.

(3)??????? Nothing in this section shall apply or be deemed to have applied to a mortgage of any land or interest therein effected in favour of a co-operative society as security for the loan advanced by such society?[or any transfer declared to be a mortgage by a court under section 24 of the Bombay. Agricultural Debtors' Relief Act, 1947.]

(4)??????? Nothing in section 63A shall apply to any sale made under sub-section (1).]

[4] Supra N. 3

[5] Supra N. 3

[6] Supra N. 3

[7] Supra N. 1

[8] Supra N. 3

[9] Supra N. 3

[10] Supra N. 1

[11] Civil Appeal No. 2573 of 2020

[12] ?Disposal of land, transfer or acquisition of which is invalid.?–

(1)??????? Where in respect of the transfer or acquisition of any land made on or after the commencement of the Amending Act, 1955, the?Mamlatdar?suo mote?or on the application of any person interested in such land has reason to believe that such transfer or acquisition is or becomes invalid under any of the provisions of this Act, the?Mamlatdar?shall issue a notice and hold an inquiry as provided for in section 84B and decide whether the transfer or acquisition is or is not invalid.

(2)??????? If after holding such inquiry, the?Mamlatdar?comes to a conclusion, that the transfer or acquisition of land is invalid, he shall make an order declaring the transfer or acquisition to be invalid:

Provided that, where the transfer of land was made by the landlord to the tenant of the land and the area of the land so transferred together with the area of other land, if any, cultivated personally by the tenant did not exceed the ceiling area, the?Mamlatdar?shall not declare such transfer to be invalid-

(i)????????????? if the amount received by the landlord as the price of the land is equal to or less than the reasonable price determined under section 63A and the transferee pays to the State Government a penalty of one rupee within such period not exceeding three months as the?Mamlatdar?may fix.

(ii)??????????? if the amount received by the landlord as the price of the land is in excess of the reasonable price determined under section 53A and the transferor as well as the transferee pays to the State Government each a penalty equal to one-tenth of the reasonable price within such period as the?Mamlatdar?may fix.]

(3)??????? On the declaration made by the?Mamlatdar?under sub-section (2),-

(a)??????? the land shall be deemed to vest in the State Government, free from all encumbrances lawfully subsisting thereon on the date of such vesting, and shall be disposed of in the manner provided in sub-section (4); the encumbrances shall be paid out of the occupancy price in the manner provided in section 32Q for the payment of encumbrances out of the purchase price of the sale of and but the right of the holder of such encumbrances to proceed against the person liable, for the enforcement of his right in any other manner, shall not be affected;

(b)??????? the amount which was received by the transferor as the price of the land shall be deemed to have been forfeited to the State Government and it shall be recoverable as an area of land revenue; and

(c)??????? the?Mamlatdar?shall, in accordance with the provisions of section 63A determine the reasonable price of the land.

(4)??????? After determining the reasonable price, the?Mamlatdar?shall grant the land on new and impartible tenure and on payment of occupancy price equal to the reasonable price determined under sub-section (3) in the prescribed manner in the following order or priority :-

(i)???????? the tenant in actual possession of the land;

(ii)??????? the persons or bodies in the order given in the priority list:

Provided that, where the transfer of land was made by the landlord to the tenant of the land and the area of the land so transferred together with the area of the land, if any, cultivated personally by the tenant did not exceed the ceiling area then]-

(i)???????? [if the amount]?received by the transferor as the price of the land is equal to or less than the reasonable price, the amount forfeited under sub-section (3) shall be returned to the transferor and the land restored to the transferee on payment of a penalty of rupee one in each case; and

(ii)??????? [if the amount]?received by the transferor as the price of the land is in excess of the reasonable price, the?Mamlatdar?shall grant the land to the transferee on new and impartiable tenure and on payment of occupancy price equal to one-tenth of the reasonable price and out of the amount forfeited under sub-section (3), the transferor shall be paid back an amount equal to nine-tenths of the reasonable price].

(5)??????? The amount of the occupancy price realised under sub-section (4) shall, subject to the payment as aforesaid of any encumbrances subsisting on the land, be credited to the State Government:

Provided that where the acquisition of any excess land was on account of a gift or bequest, the amount of the occupancy price realised under sub-section (4) in respect of such land shall, subject to the payment of any encumbrances subsisting thereon, be paid to the donee or legatee in whose possession the land had passed on account of such acquisition.

Explanation.?- For the purpose of this section "new and impartible tenure" means the tenure of occupancy which is non-transferable and non-partible without the previous sanction of the Collector.

[13] Supra N. 3

[14] Supra N. 3

[15] Supra N. 1

[16] Supra N. 3

[17] Supra N. 3

[18] Supra N. 1

[19] (2017) 13 SCC 756

[20] Supra N. 3

[21] Supra N. 1

[22] Supra N. 3

[23] Supra N. 1

[24] Supra N. 1

[25] Supra N. 3

[26] Supra N. 1

[27] Supra N. 1

[28] (1986) 1 SCC 571

[29] Supra N. 1

[30] Supra N. 3

[31] Civil Appeal No. 2573 of 2020

[32] Supra N. 1

[33] Supra N. 3