LEGALITY OF EX-POST FACTO PERMISSIONS FOR PURCHASE OF AGRICULTURAL LAND BY NON-AGRICULTURIST

In Maharashtra, there is statutory restriction on transfer of agricultural land in favour of non-agriculturists. Such transfers shall be invalid unless permission from the Collector is obtained as provided under section 63 of the Maharashtra Tenancy and Agricultural Lands Act, 1948 (“MTAL Act”) . There have been infamous instances where parties either out of ignorance or intentionally overlooked the requirement under section 63 and applied for ex-post facto permission after the transfer was completed. In this article we shall test upon the legality of such ex-post facto permissions sought under section 63 of MTAL Act.

Let us first look into the relevant portion of section 63 of Maharashtra Tenancy and Agricultural Lands Act, 1948 Act which is hereby reproduced:

“63 (1) Save as provided in this Act-

(a) no sale (including sales 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 a 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 Holdings) 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.”

Transactions being sale, gift, exchange, lease or mortgage with possession in favour of non-agriculturist are prohibited under section 63(1) to which an exception is carved out under the proviso which renders validity to such transfers if permission of the Collector is obtained. Further section 63-1A effective from 3^rd February, 1994 (under Mah. Act 28 of 1994) and section 63 (1C) effective from 1^st January, 2016 (under Mah. Act 1 of 2016) exempt applicability of Section 63 where land is acquired for bonafide industrial use and in certain areas as specified therein respectively.

Number of controversies have emerged while interpreting the phrase “may grant permission” where one view holds that absence of specific requirement regarding permission to be secured prior to transfer suggests that even ex-post facto permission will be legally valid. To buttress this contention, one can compare use of the term “permission” under section 58 of MTAL Act which uses phrase “previous permission of the Collector” being indicative that legislature intends to allow post facto permissions under section 63 by not specifying “previous permission” as mentioned under section 58.

Whereas other view holds that object and spirit of the MTAL Act is to restrict occupation and use of agricultural lands by non-agriculturists and thus allowing ex-post facto permissions would dilute the very object of the Act. Also that term “permission” in itself connotes implied antecedence and does not need to be further qualified. To buttress this contention simple example of student wanting to use washroom can be considered. The student would first seek permission and then go to the washroom and not first go to washroom and seek permission after coming back. The term “permission” even in general usage is pre-the-act in nature and qualifying it with “previous” can only be out of abundant caution.

The above question of interpretation was initially considered by the Bombay High Court in Nariman Sorabji Parekh v/s. Ramchandra Janu Mhatre & Ors. 1991MhLj401 wherein under paragraph No. 12 it was stated that:

“The terms of section 63 speak of sale being invalid and permission being granted by the Collector. Though it does not say in so many terms that permission in case of a non-agriculturist and a person not an agricultural labourer must be sought before the sale is effected, the propriety and object of the section is clear. The permission therefore must be secured by a non-agriculturist and a person not an agricultural labourer before the sale takes place.”

Although, thereafter in Shobhechi Daru Utpadan Kharedi Vikri Sangh v/s. The State of Maharashtra and Ors. 1997(3)MhLj215 the stance taken was contrary to decision in Nariman Sorabji Parekh (supra). Here Justice V.R. Datar of Bombay High Court in paragraph No. 6 noted that:

“Where prior sanction is necessary, the Legislature has clearly provided so, while absence of such words in section 63 would go to show that prior permission was not intended under this section.”

On thorough reading of the above judgement it can be observed that the dispute was not primarily regarding ex-post facto permission under section 63. Rather the above observation appears to be a passing remark (obiter dicta). The above case is distinguishable as petitioner therein being a co-operative society filed an application for permission under section 63 with the Collector prior to the sale whereas the permission was actually received after completion of the sale. The permission was held to be effective from date of filing of the application as per doctrine of relation back.

The object of section 63 can be gathered from Judgement of Bombay High Court in Bombay Environmental Action Group and Ors. v/s. State of Maharashtra and Ors. 1999(2)MhLj747 where under paragraph No. 37 it was observed that:

“On a conjoint and harmonious reading of section 63 and the definitions, it would appear that the purpose of the Act is an agrarian reform restricting holding of the land by an agriculturist who cultivates the land in the manner defined under the Act.”

Amidst the fuss created by remarks made in Judgement of Shobhechi Daru Utpadan Kharedi Vikri Sangh it was around two decades later when question of validity of ex-post facto permission under section 63 was afresh raised in Vinayak Ratnagiri Gosavi and Ors. Vs. The State of Maharashtra 2011(2)MhLj740 where Bombay High Court observed that:

“By the provisions of 63 of the said Act, the transfer of any land in favour of non-agriculturist is prohibited and the transferee is required to obtain prior permission for such purchase from the Collector or the competent officer in that behalf.”

On plain reading of section 63. one may also wonder whether the prior permission of the collector will have to be secured even in case of Agreement for Sale as it is not on same footing as Sale. This very query was put to rest by the Bombay High Court in Ambadas Khanderao Hagvane and Ors. v/s. Razaq Shaikh Yakub and Ors. 2009(1)BomCR194 wherein it was stated that:

“The sale does not take place unless the sale deed is executed. Agreement of the sale and the sale cannot be equated. The agreement clearly states that the sale transaction was to be completed only after obtaining necessary permission under Section 63. Therefore, the agreement could not be invalid.”

To conclude spirit of the law has prevailed over its word. The MTAL Act is not uniformly worded and terms such as “permission”, “previous permission”, “sanction” and “previous sanction” have been used loosely and interchangeably. The judges realized this lacuna and harmoniously construed the provisions under section 63 giving due regards to object of the law. They ensured that the sanctity of legislation doesn’t get blurred by erred draftsmanship. While parting one can only say that there is dire need to amend the provisions of the MTAL Act and uniformly align them to eradicate ambiguity.