Tenure 'D' Lands Granted In Perpetuity Are Freely Transferable; State Cannot Demand Transfer Premium Or Prior Permission: Bombay High Court

The Bombay High Court has held that lands classified as Tenure “D” under Rule 43 of the Bombay Land Revenue Rules, 1921, i.e., lands granted in perpetuity, are freely transferable and fall within the category of Class-I occupancies under the Maharashtra Land Revenue Code, 1966. Consequently, the State cannot levy a transfer premium or insist upon prior permission for its transfer.Justice Milind N. Jadhav was hearing a writ petition filed by M/s. M.P. Homes, challenging a State Government order directing it to pay 75% of the Ready Reckoner value as transfer premium and 100% of the Ready Reckoner value for regularisation of change of user to non-agricultural purposes in respect of two parcels of land at Panvel. The petitioner had deposited ₹1.20 crore under protest and sought a refund. The lands in question were originally classified as Tenure “D” during the pre-independence period and had changed hands multiple times before being purchased by the petitioner in 2013. The Court examined Rule 43 of the Bombay Land Revenue Rules, 1921 and noted that lands granted under that provision were granted in perpetuity and were expressly transferable. The Court observed that Rule 43 did not require government permission or payment of a premium for the transfer of such lands, nor did it impose restrictions on their alienation.Referring to Section 29(2)(b) of the Maharashtra Land Revenue Code, 1966, the Court held that persons who, immediately before the commencement of the Code, held land without restrictions on transfer under the then-existing land revenue laws would be Class-I occupants. Since Tenure “D” lands were freely transferable under Rule 43, they squarely fell within the ambit of Class-I occupancy. “… subject lands are classified as Tenure 'D', therefore Rule 43 of Bombay Rules 1921 squarely applies to subject lands and hence no premium nor permission from the State Government for transfer is required to be paid and or levied for transfer of subject lands,” the Court observed. The Court further noted that the subject lands had been transferred at least five times before the petitioner acquired them and that the revenue authorities had never objected to those transfers or demanded any premium. It also recorded that the State itself had admitted in its affidavit that Tenure “D” lands could be alienated without prior permission of the Collector. In these circumstances, the Court held that the levy of 75% transfer premium for the regularisation of conveyance was illegal and unjustified.Rejecting the State's reliance on Rule 35 of the Maharashtra Land Revenue (Disposal of Government Land) Rules, 1971, the Court held that the provision concerns the grant and renewal of leases of unoccupied government land and does not authorise the levy of 100% premium for the regularisation of tenure or change of user. The Court concluded that the lands were freely transferable Class-I occupancies and that neither the transfer premium nor the impugned levy for regularisation could be sustained. The writ petition was accordingly allowed.Case Title: M/s. M.P. Homes v. State of Maharashtra [Writ Petition No. 1561 of 2022]Citation: 2026 LiveLaw (Bom) 289Click Here To Read/Download Order

Tenure 'D' Lands Granted In Perpetuity Are Freely Transferable; State Cannot Demand Transfer Premium Or Prior Permission: Bombay High Court

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Tenure 'D' Lands Granted In Perpetuity Are Freely Transferable; State Cannot Demand Transfer Premium Or Prior Permission: Bombay High Court

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