What changes in law have been cleared?
The Gujarat Agricultural Lands Ceiling Act and Gujarat Tenancy and Agricultural Lands Laws have been amended. The changes, once they become law, will validate land transactions that are currently illegal. The stated objective is to facilitate “rapid industrialisation and urbanisation”. The Gujarat Agricultural Lands Ceiling (Amendment) Bill, 2015 has been sent to the President; the Gujarat Tenancy and Agricultural Lands Laws (Amendment) Bill, 2015, has received the consent of the Governor, but is yet to be notified.
How industry-friendly are these amendments?
The intention has been clarified in the proposed change in the preamble of the Agricultural Lands Ceiling Act. The legislation was originally intended to pass surplus land to the landless poor. The amendment has proposed to add to the preamble, after the words, “for ensuring the full and efficient use thereof”, the words, “or for the allotment for industrial purpose or for the development thereof or for any public purpose”.
What is the provision on urban local bodies?
It has been proposed that any surplus government land under The Gujarat Agricultural Lands Ceiling Act can be allotted to an Urban Local Body (ULB), which can, in turn, allot the land to anyone for any “public purpose”. Public purpose has not been defined in the amendment Bill.
To be allotted land within an ULB, a person or group must make available an equivalent quantum of agricultural land in the vicinity of the ULB. The difference in the prices of land within an ULB and outside could be significant.
Will government revenues be impacted?
Surplus land under the Agricultural Lands Ceiling Act is considered ‘New Tenure’ land even after allotment, and can’t be sold or mortgaged without converting it to ‘Old Tenure’ by paying a premium to the Revenue Department. In the amended Bill, surplus land allotted to an ULB or private party will automatically become ‘Old Tenure’, without the need for payment of a premium to the Treasury.
By what modes can a purchaser pay?
It has been proposed in the amendments to The Gujarat Tenancy and Agricultural Lands Laws that if the owner of agricultural land sells to a company registered under the Companies Act, the company can offer its equity shares as part or full payment.
How soon must production begin?
Currently, after purchasing agriculture land for industrial purposes, an industrial house has to begin production or service within five years. Under the amended provisions of The Gujarat Tenancy and Agricultural Land Laws, the District Collector has been given powers to extend that permission up to 10 years. Such permission, after seven years, is on the condition of paying 50 per cent of the prevailing ‘jantri rate’ of the land.
What if they miss the deadline?
Based on certain conditions, industrial houses that fail to commence production within five years of the deal, will be allowed to transfer or sell the land. There is no provision in the amendment as to how many times such transfer or sale is allowed. There is also nothing on what a farmer who sold his land would get if industrial production failed to start.
Companies that propose to start an industrial park but fail to do so, have the option of selling the land to the government on compensation determined by it. The option of transfer or sale of the land to another party is also open.
Can invalid transactions be made valid?
One of the most controversial amendments to the Tenancy and Agricultural Land Laws is about validating illegal land transactions by paying 10% of the prevailing jantri rate of a disputed piece of land. According to the amendment, if land has been bought by a non-agriculturist in violation of law and then, following single or multiple transactions, it has resulted in the ownership of an agriculturist, the last owner can be declared the legal owner by the mamlatdar upon payment of 10% of the jantri rate. No present or prospective legal dispute can survive after this, it has been proposed. A similar provision has been proposed for registered trusts and companies registered under the Companies Act who buy such disputed land.
This provision will in effect legalise multiple illegal land transactions.