November 25, 2021

Introduction

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.

Section 43

Primarily Section 43 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 is that it ensures the protection of the persons belonging to the disadvantaged agricultural groups and gives them the right of purchase upon them.

Section 63

Section 63 present in Chapter V of the Bombay Tenancy Act and Agricultural Lands Act, deals with the restrictions of transfers of agricultural lands.

Section 63 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 laborer. In addition to being an agriculturist or an agricultural laborer, their landholdings should not exceed two-thirds of the ceiling area determined.

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.

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 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.

By the Maharashtra Act No,1 of 2016, Section 63 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.

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:

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.
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.
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.
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.
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.

Bequeathing land under the Bombay Tenancy and the Agricultural Lands Act

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 and 63 of the Bombay Tenancy and Agricultural Lands Act, 1948.

In Section 63 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.

Section 43 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.

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

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.

Facts

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 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 of the Act and hence declared that the said land vested in the State without any encumbrances.

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 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 and 63 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.

Issues

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

Whether Section 63 debars an agriculturist from parting with his agricultural land to a non-agriculturist through a “Will”.
Whether Section 43(1) 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.

Arguments

Relying on the case of Mahadeo Ganpat Sawarkar v. Shakuntalabai Vishwasrao, (2003) it was contended that, since the word “assignment” does not occur in Section 63, 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 and 63 suggest transfers by a living person and the expression ‘assignment’ under Section 43 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, thus allowing the transfer without any restrictions.

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 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.

Order

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 of the Bombay Tenancy and Agricultural Lands Act, 1948 and hence the appeal was dismissed.

The Court observed that, after referring to the provisions given under Section 43 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 (1986), 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, 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.

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

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.

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 of the Bombay Tenancy Act.

Conclusion

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

References

Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawal, (1986) 1 SCC 571.
Vinodchandra Sakarlal Kapadia v. State Of Gujarat And Ors, Civil Appeal No. 2573 of 2020
https://www.thehindu.com/news/national/aim-of-farmland-statutes-is-to-protect-disadvantaged-categories-sc/article31940872.ece
https://www.legallyindia.com/views/entry/amendment-to-section-63-and-63-1a-of-the-maharashtra-tenancy-and-agricultural-lands-act-mah-1-of-2016-a-comparative-study

Transfer of land under Section 43 and 63 of the Bombay Tenancy and Agricultural Lands Act, 1948