Maharashtra Tenancy And Agricultural Act, 1948: A Comprehensive Study

Key Takeaways

• After India gained independence, government policy was influenced by the colonial experience, which Indian leaders saw as largely exploitative. Therefore, post-independence domestic policy tended towards protectionism.
• Thus, the Maharashtra government introduced the Bombay Tenancy and Agricultural Lands Act 1948 for the accomplishment of this purpose.
• The main objective of the Maharashtra Tenancy and Agricultural Lands Act, 1948 was to make land reforms and provide relief to the tenants of agricultural land.
• Through the provision of this act the state assumed the management of landowners' estates in order to improve the economic and social conditions of farmers and ensure the full and efficient use of agricultural land.

Introduction

Kul Kayda Act, which is also known as the Maharashtra Tenancy and Agricultural Act, 1948 was implemented to protect the rights of the tenant and to reform existing agricultural land law. Under section-43 of this Act any land acquired by a tenant shall not be entitled to sell, transfer the said land without the prior approval of the Collector.

In India, the problem of tenancy arises when the landowner or zamindar lets out the land to other person, who then becomes the tenant on terms defined by contract or by custom. The was that the zamindar or the owner of the land did not cultivate the land themselves, hence, the problem of tenancy gained importance. In this system the tenants were at the mercy of the landlords who were characterized by illicit extractions and eviction of tenants without any reason. There were several laws implemented in India after independence as there was a desperate need for land reforms.

Background

Before we discuss the provisions of this act it is important to understand the socio-economic conditions which led to implementation of this act. During the British rule, the government had introduced various land revenue systems such as The Zamindari system, Raiyatwari system and Mahalwari system which were introduced in order to maximize the collection of land revenue. In doing so, certain intermediaries such as the ‘zamindars’ were given powers to collect land revenue from farmers.

However, due to factors beyond farmers' control eg, floods, irregular rainfall and droughts, they were often unable to pay the required land revenue. With no reprieve available to the farmers, they were forced to mortgage their lands at exorbitant rates in order to pay land revenues and subsequently failed to redeem the mortgaged lands. The landowners in turn let farmers continue to work these lands in return for either the produce they cultivated or money. Over time, the exploitative revenue policies led to a few accumulating significant wealth and land, while the farmers were reduced to mere tenants.

The abolition of most intermediary tenures brought the whole of India under a uniform tenurial system (albeit with some local variation) within the first decade after Independence. However, the efforts to abolish the interest of the intermediaries did not extinguish tenancy.

Laws provided virtually no protection or even legal recognition of the most vulnerable tenants, including sharecroppers and the tenants working on ex-intermediaries’ home farms. The situation was begging for legislative intervention.

Important provisions

• Section 32 of this actprovided that on or after Tillers Day (April 1st 1957), the tenants cultivating the land would become the owners of the land on by making payment of a nominal purchase pricein reasonable instalments. The provision successfully:

1. granted rights to the otherwise impoverished farmers;
2. incentivised farmers to use the land fully and efficiently; and
3. reduced neglect of the land due to disputes with landowners or lack of interest.

• Section 43 of this act required the collector's prior permission in order to transfer land which had been purchased by a tenant under Section 32. The collector would approve applications only if they adhered to the conditions as prescribed by the state government.

Under this section several restrictions were imposed on the transfer of land in order to:

1. prevent tenants from taking undue advantage and selling the land for profit, as landlords were forced to sell their lands to tenants at concessional rates under the act, with the intention that tenants would use the land to earn a living; and
2. safeguard tenants' interests and prevent any third party from taking undue advantage of them in order to purchase the lands at a discounted rate.

Therefore, Section 43prescribed the circumstances under which collectors would authorize a sale which was typically subjected to continued agricultural activities.

• Section 63 of this act barred the transfer of any Agricultural lands to non-Agriculturist without the prior permission of the Collector or any Officer authorized by the State Government.
• Section 63-1A of this act 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. This section was first added in the Maharashtra Act in 1994. It initially provided that the lands were to be put to industrial use within a period of five years from the date of purchase. Later this period was extended to fifteen years. The amendment also provided that if on the date of the amendment, the land was not put to industrial use, the same could be put to such use within a period of fifteen years from the date of purchase.

Subsequent Amendments to this act

• Due to increasing industrialization and modernization, safeguards such as requiring collectors' prior approval in order to transfer tenant lands are now viewed as impediments, as this is a time-consuming and bureaucratic process. Because of this section 43 of this act was amended by the Maharashtra Government, with effect from February 7, 2014. The amended provision provided that if 10 years or more have elapsed since the land was transferred to the tenant, the collector's permission is no longer required to transfer the land, if the following conditions are fulfilled-

1. a fee equivalent to 40 times the land's revenue is paid to the government;
2. the purchaser is an agriculturist;
3. the purchaser does not hold land in excess of the cap set out in the Maharashtra Agricultural Lands (Ceilings on Holdings) Act 1961; and
4. the Bombay Prevention of Fragmentation and Consolidation of Holdings Act 1947 is not violated.

• Through this amendment the government has eliminated the need to obtain collectors' permission before selling agricultural lands, as long as the above-mentioned conditions are met. Thereafter, under Section 3 of the Maharashtra Land Revenue Code (Second Amendment) Act 2014 the purchaser may convert the lands for non-agricultural purposes and use them for any commercial purpose.

Several amendments were made to Section 63-1A which are discussed below-

• Before the amendment, one could buy an agricultural land exceeding 10 Hectares only after getting permission from the Development Commissioner. This condition now stands deleted. Any quantity of agricultural land located in an agricultural zone can now be bought as long as extant law permits its industrial use, or the agricultural land is located within the area purchased by a private developer for the development of an Integrated Township Project.
• Before the amendment, once bought, the aggregate period to put the agricultural land to non- agricultural land use was 15 years from the date of purchase. This aggregate period has now effectively reduced to 10 years for both the original or the subsequent transferee. The land must be put to the bona fide industrial use within five years of purchase. If that is not done, the Collector may grant an extension of further five years on annual payment of non-utilization charges of 2% of market value of the property.
• Earlier, failure to use the agricultural land for non- agricultural land purpose within 15 years would entitle the original seller to repurchase it from the defaulting purchaser at the original price. Now at the end of 10 years the Collector will resume control/possession of the land after giving a month’s notice to the defaulting purchaser. The land shall be vested with the Government, free from any encumbrances. It will then be offered to the original seller first by way of grant on the same tenure and at the same price as before. If for any reason the original seller does not accept this offer and make the payment the land will be auctioned for any use consistent with the extant development plan and the Collector will then remit to the defaulting purchaser the price at which it had purchased the land for non-agricultural use.
• Earlier, if the agricultural land being bought was Occupant Class – II land, proposed to be used for a township project, there was no penalty for delaying payment which was to be paid to the Government. After the amendment, any delay in paying the Collector 50% of the purchase price to buy Occupant Class – II agricultural land for use as Integrated Township Project within one month of executing the sale deed will result in 75% of the purchase price or market value, whichever is higher, becoming payable to the Government.
• A new sub-section (5) was introduced, which regulates sales/transfers of AL bought for NA use, before the expiry of 10 years and before utilizing it for bona fide industrial use. Under this provision, if an non-agricultural buyer of an agricultural land proposes to sell the land at any time within the 10 year period, it may do so ,after also paying a non-utilization charge if the proposed sale is in the five-year extension period on the following basis:

a) Such sale/transfer will require prior permission of the Collector;

b) The period of 10-years from the date of original purchase will also apply to the second transferee;

c) If the land is to be sold for bona fide industrial use, the transferor will deposit with the Collector, transfer charges @ 25% of the land market value;

d) If the land is to be sold for any non-agricultural purpose other than the bona fide industrial use (consistent with extant development plans), the transferor will have to deposit conversion charges equal to 50% of the land market value with the Collector. If such land is Occupant Class – II, a further amount equal to 48% of the original purchase price will also be deposited in lieu of nazarana.

• The definitions of bona fide industrial use and Integrated Township Project were also clarified or substituted pursuant to the amendment.

Conclusion

Thus, Maharashtra Tenancy and Agricultural Act 1948 was introduced by the government to provide much needed relief to the farmers who were made tenants of their own land which they cultivated due to the exploitative policies of the British Colonial Government. Through the provisions of this act the state government was able to implement much needed reforms in the use of agricultural land.