Can company buy Agricultural Land?
By Accommodation Times News Service
Pvt. LTD. COMPANY CAN CERTAINLY BUY AGRICULTURAL LAND
1. A Pvt. Ltd. company CAN CERTAINLY BUY AGRICULTURAL LAND and develop and perform agricultural activities on it, BUT SUBJECT TO the approved provisions of articles and the Memorandum of the pvt.ltd and MUST be approved by the Registrar of Companies (ROC). There is no requirement of any director being an agriculturist. The Articles of the Pvt. Ltd. co. should clearly outline the agricultural activities the Pvt. Ltd. proposes to indulge in.
2. Self-use-Farm-house is within the definition of Agricultural activities, BUT subject to various conditions under the Act. A bungalow or a holiday-home built over agricultural land, is not a Farm-house, and would be illegal & unauthorized and subject to demolition by the area tehsildar / collectors office.
3. Agricultural land can be owned ONLY & ONLY by ancestral farmers and strictly not otherwise. Hence by this logic, the Farm-houses can be sold and purchased ONLY & ONLY by farmers / agriculturists and not otherwise, UNLESS AND UNTIL the agricultural land has been duly converted to non-agricultural and THEN a house has been built over it.
4. In Maharashtra state, an agriculturist / farmer has to hold a minimum of 100 gunthas (one hectare or say 2.5 acres) to get due permission to build self use-farm-house, but subject to only on one guntha (i.e. 1024 sq. feet). Anything else would be “illegal & unauthorized”.
This is applicable on agricultural land and not on Non-agricultural land.
The collectors’ terms and conditions of constructions on a N.A. Land are totally different.
1. Under the Companies Act, a regd. co. may perform those activities that are listed in the Objects, Articles and the memorandum. By virtue of its objects and articles, as regd. under the companies act, the Pvt. Ltd., (now non-person) can function and perform agricultural activities and need not be a agriculturist as in the case of an individual person.
2. The co. has an object of doing say. Raised Garden or say Horticulture or say Soybean cultivation. The co. after doing the above has to file the yearly land revenue fees, according to the usage of the land. i. e. land revenue is different for agricultural activities and for non-agricultural activities. False declarations and filing will lead to prosecution by the Revenue dept., which has a mandatory duty to periodically inspect and file reports with the district collector’s office.
3. In the future event, if the pvt.ltd. Co. folds-up or say closes down, then it cannot dispose of its agriculture land bank to non-farmers for non-agricultural purposes. The agricultural activities are limited to the existence of the Co. If there is no company, all the property etc… Can be attached by statutory authorities (I. Tax, S. Tax, Revenue Dept., Environment Dept, and Pollution Dept among others)
The directors of the Pvt. Ltd., DO NOT BECOME FARMERS / AGRICULTURISTS automatically just because their co. had earlier owned of agricultural land and neither the heir of such directors may ever claim right as Farmer or as an agriculturist.
There is no such thing as inheritance in a company or say to a non-individual-person. If the annual report / balance sheet / P&F of the company shows any profit / loss pertaining to any non-agricultural activities on the said agricultural land, THEN it will be clear violations of the objects & articles and the collector may attach / acquire the said land.
There are several parameters which have to be taken into account, when agri- land is owned by corporate and agri activities are performed by such co.
4. If the collectors inspects the activities of a particular agricultural land and finds that the agricultural land is being used for other purposes, then he has to attach/ acquire the said land from the owners. Example:
5. a) A regd. Pvt. Ltd. whose objects and articles comply with the companies act, identifies a agricultural land buys it. Registers it after paying necessary duties and taxes. Co. also submits undertaking to use land only for so and so purposes.
b) Submits documents to Tahsildar’s office for change in revenue records. Tahsildar inspects the co. registration and articles and the sale papers etc. and approves the ownership title change-over, BUT after taking permission from the collectors’ office.
c) In future Co. violates the undertaking and uses the land for other purposes. Tahsildar / Collector, after due notices may attach /acquire the land. Co loses title.
6. Literally more than 15% land in India is held in the name of corporate, holding companies, charitable trusts and other non-individuals. The most common name in Mumbai area is Godrej group, who holds vast tracts of agricultural and other waste land in the name of Godrej Holdings. There are several hundreds of companies who are doing plantation and Tea Gardens, Horticulture, Floriculture and Forestry plantations.
7. There is land belonging to Collector, the State Govt. the Central Govt. The defense forces, the airport authorities and other PSU. They are no restrictions to them.
8. BUT, the agricultural land transfer to non farmer and to non-agriculturist is RESTRICTED ONLY TO INDIVIDUALS and not otherwise.
9. Agriculture income is presently Tax-Free in the hands of Individuals.
10. Agriculture income in NOT TAX FREE for companies.
1. How to determine status of “Ancestral Farmer “ The talathi or lekh-pal (village land revenue records) has a register of land holdings as per the then survey and claims of people prior to 1950. This register is known as “village extract” or form no. “6A”. This document can be classified as “Conclusive proof”, under the Evidence Act.
The copies of the above are also nowadays (in Maharashtra) available in computerized format with the sub-district Tahsildar’s office or the Collectors office.
2. IF farmer Mr. ABC’s name is in this “Form- 6A”, since 1950, then he is classified as “Ancestral Farmer” and ALL (repeat) ALL his legal heir (inline) which includes his wife, daughter, son and on till date are “Ancestral Farmers” and all such agricultural income from such lands are exempted under the Income Tax.
3. Based & Armed with form no. 6A and the current holding of land (7×12 extract), and credential certificate issued by the “Gram Panchayat”, ALL SUCH LEGAL HEIR, can buy agricultural land and conduct all agricultural + forestry + horticulture + etc. activities AND further can claim all subsidies, benefits, exemptions, credits etc..that may be announced by the Central and the State Govt. and further claim Income-Tax exemptions.
4. There is no such thing as “non-farmer-son” if his father or fore-fathers have been ancestral farmers and have land holdings as classified under form no. 6A. A “non-active” farmer’s son, by default (as above) can purchase agricultural land, anywhere in India, and activate himself as farmer, during pre or post retirement days. No Restrictions.
5. Under the Caste + Reservation system in India, many categories of castes have been classified as “farmers”, “toddy-farmers”, “forest farmers”, and so on and these categories automatically derive their rights for ownership of agricultural or waste or forest lands.
6. If the land-holding under Form no. 6A, is “TOTALLY” liquidated by the Farmer (who-so ever inline-of-inheritance maybe), and the account or record remains empty for 12 years, it is deemed that the farmer has relinquished his statute rights of being a Farmer. This means that now after emptying his land holdings in entirely, his rights of being a farmer is now over. BUT AND HOWEVER, after 25 years, now the in-line-heir can still purchase agricultural land, based on the earlier ancestral-held Form no. 6A, BUT AFTER UNDERTAKINGS & DUE PROCEDURE &, payment of fine /penalty OF THE COLLECTORS OFFICE and the collector has the sole discretion to allow purchase of agricultural land by the said past one-time Farmer.
7. In Maharashtra the following few Acts are applicable in conjunction with each other
a) The Maharashtra Land Revenue Code Act, 1966
b) Maharashtra Land Revenue Code and Tenancy Laws (Amendment) Act, 1974
c) Maharashtra Restoration of Land to Scheduled Tribes Act,
d) Maharashtra Agricultural Lands Act
e) Maharashtra Private Forests (Acquisition) Act,
f) Eviction of Unauthorized Occupants Act