Mumbai High Court: Premium charges amounting to fifty percent of the ‘unearned income’ shall be levied on converting agricultural land to non agricultural land

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The Mumbai High Court in a significant ruling held that, an individual is liable to make premium charges amounting to fifty per cent of the ‘unearned income’ for converting agricultural land to non agricultural in accordance with the government resolution.In the present case the land was allocated to the petitioner’s father in the year 1949 by the state government. The petitioner filed an application to the Collector, Nashik for the conversion of the land. The Collector permitted the conversion on the payment of a sum of fifty nine lakhs and fifty thousand Indian rupees as a charge for conversion.

The petitioner filed a writ petition challenging the Collector, Nashik’s order, which allowed the conversion under the conditions stipulated under the Government Resolution of 8th September. The first condition was that conversion of land from agriculture to non agriculture would be made on a premium charge of 50% of the ‘unearned’ income which was payable to the state and secondly the converted land would remain in the ‘Occupancy Class’

The court ruled “The transfer and conversion of agricultural lands allotted by the state governments on the basis of Occupancy Class II is regulated by Government Resolution dated September 8, 1983.The said GR postulates the terms and conditions under which conversion and transfer can be granted. One of the conditions is that the transferee would continue to occupy the land as Occupancy Class II. Despite this the Secy & OSD has directed  the conversion of land from Occupancy Class II to Occupancy Class I which is in violation of the said GR. The order passed by the Secy and OSD is illegal and without jurisdiction.” The high court dismissed the petition of the petitioner. 

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