Proposed Amendments to Section 109 of the Karnataka Land Reforms Act, 1961

One of the trickiest questions in Karnataka with regard to holding of agricultural lands (holding would include as owner, as landlord or a mortgagee and could be with possession or without.) would obviously be, “who can hold agricultural lands?” The provisions of the Karnataka Land Reforms Act, 1961 answer this question by clearly specifying who cannot hold agricultural lands. These provisions are as follows:

• Section 79-A being prohibition of acquisition of land by certain persons – (1) No person who or a family or a joint family which has an assured annual income of more than rupees two lakhs from sources other than agricultural lands shall be entitled to acquire any agricultural land.
• Section 79-B being prohibition on holding agricultural land by certain persons – (1) It shall not be lawful for any person (other than a person cultivating land personally), an educational/religious/charitable institution, a company, an association or other body of individuals not being a joint family, a co-operative society other than a co-operative farm, to hold agricultural land.
• Section 80 being the bar on transfers to non-agriculturists-No sale (including sales in execution of a decree of a civil court, gift, exchange or lease of any land or interest therein), or no mortgage of any land or interest therein, in which the possession of the mortgaged property is delivered to the mortgagee, shall be lawful if it is made to a person who is not an agriculturist; or who being an agriculturist holds land which exceeds the limits specified; or who is not an agricultural laborer; or who is disentitled under Section 79A or Section 79B to acquire or hold any land.

There are certain exceptions to the above provisions as well. According to Section 109 of the Karnataka Land Reforms Act 1961, The State Government may, by notification, exempt, any agricultural land in any area from the provisions of sections 63 (ceiling limit), 79A, 79B or 80 to be used for:

• Industrial development,
• Educational institutions recognized by the State or Central Government to be used for non-agricultural purposes,
• Places of worship to be specified by Government by notification which are established or constructed by a recognized or registered body for non-agricultural purposes,
• A housing project, approved by the State Government,
• The purpose of horticulture including floriculture and agro based industries

Apart from the State Government, the Deputy Commissioner may also exercise the powers of the State Government under this sub-section, in respect of half the extent of land that the State Government is authorized to exempt for the same purposes listed above.

However, notwithstanding anything contained above, the State Government may in public interest and for reasons to be recorded in writing, [by notification and subject to the provisions of the Karnataka Town and Country Planning Act, 1961 and such restrictions and conditions as may be specified by it], exempt any extent of land from the provisions of sections 63, 79A, 79B or 80 for any specific purpose. The Deputy Commissioner may also exercise this power of the State Government to an extent not exceeding half hectare of land.

Where any condition or restriction specified in the notification has been contravened, the State Government or as the case may be, the Deputy Commissioner, has power to cancel the exemption granted and such land will then be forfeited and vest in the State Government free from all encumbrances.

Proposed Amendment:

The Government proposes to make two new amendments to Section 109 of the Karnataka Land Reforms Act, 1961 for achieving practical and optimum utilization of the exempted lands.

1. To take back land from industrialists, educational institutions, places of worship and real estate developers if they have not utilized the land for the purpose for which it was exempted to them within a period of 10 years.

This is an effort to take back exempted lands held by them without adequately developing/utilizing the said lands and keeping them locked up for long periods of time. This practice is detrimental to the controlled development of land banks in the State. Hence the Government proposes the said amendment wherein all the unutilized lands are surrendered to the Government. If anyone fails to surrender such land to the Government’s land bank, the exemption stands cancelled and the same shall be forfeited to the Government without paying any compensation.

1. To amend Section 95 of the Karnataka Land Revenue Act, 1964 to provide that once permission/exemption under section 109 is taken, the permission under section 95 of the Act [conversion of land from agricultural purpose to non-agricultural purposes] is deemed to have been taken.

This step would make it easier for promoters of industries, floriculture, horticulture and agro industries or owners of educational institutions, housing projects and places of worship as they would no longer be involved in going through the same drill twice as the procedure for exemption and conversion under the two enactments are very similar. Upon the payment of the prescribed fees, the proposed amendment to the Act would simultaneously accord permission for diversion of agricultural land for industrial/other purposes as and when the exemption under section 109 of the Karnataka Land Reforms Act, 1961 is accorded.

(The Author, Soumya Ranganath is an Associate in the Real Estate Team, Jayanth Pattanshetti Associates, Bangalore)