The Karnataka land Reforms Act, 1961, (“the Act”) was enacted, inter alia, to address agrarian relations, tenancy, ownership and ceiling in ownership of agricultural land in Karnataka.

The Karnataka Land Reforms Amendment (Ordinance), 2020 (“the Ordinance”) was notified on July 13, 2020 by the Government of Karnataka (“the Government”) after having received the Governor of Karnataka’s assent. The Ordinance has been promulgated to allow non-agriculturists, companies, trusts, societies to purchase agricultural land. It also increases the ceiling limit of ownership of agricultural land. The stated intention of the Government is to, inter alia,

1. to enable non-agriculturists who are interested in agriculture to purchase agricultural land;
2. help youth garner interest in agriculture; and,
3. indirectly facilitate increase in price of agricultural land which will benefit the ones who are selling the land.

The significant amendments are as below:

1. Section 63 - The said Section deals with ceiling limit on the land which can be owned by a person or a family. The amended Section makes way for a family, or person who does not have a family, or is not a member of a family, to own an upper limit of twenty units which was 10 units prior to the ordinance. For families with more than five members the said ceiling shall be twenty units, which was 10 units prior to the ordinance with an additional extent of four units for every member exceeding five, the aggregate not extending forty units which was 20 units prior to the ordinance.

2. Section 79A, 79B, 79C - The Ordinance omits Sections 79A, 79B and 79C of the Act. The figures and letters ‘79A’ and ‘79B’ stand omitted from Sections 70, 72, 80, 104 and 109 of the Act to enable the omission of Sections 79A and 79B from the Act. The said three sections essentially dealt with:

a. 79A: prohibition of acquisition of agricultural land by certain persons. By virtue of this section a person (or family) that has an assured annual income of at least Rs. 25,00,000 (Rupees twenty five lacs) from a non-agricultural land could not acquire land as a land owner, landlord tenant or mortgagee with possession or otherwise or partly in one capacity and partly in another.

b. 79B: prohibition of holding of agricultural land by certain persons. The Section mandated that only a person cultivating land personally could hold agricultural land. By virtue of the said Section it was unlawful for educational, religious or charitable institution or society or trust, company, co-operative society, to hold agricultural land.

c. 79C: penalty for falsely claiming eligibility to hold agricultural land. The penalty for falsely claiming was the vesting away of the right title and interest in the land with the state government.

3. Section 80 – Section 80 has been amended to make way for transfer of land to non-agriculturists by modifying Sections 80(1)(b)(i) and 80(1)(b)(ii). The section also makes way for mortgage of agricultural land. The heading of Section 80 which read as “Transfer to non-agriculturists barred”, now reads as “Restrictions in transfer of certain land”. Clauses which stand deleted under the section are as below:

a. 80(1)(b): pertained to prohibition of mortgage of any land or interest therein (in which the possession of the mortgaged property was being delivered to the mortgagee) when it was in favour of a person who was not an agriculturist or not an agricultural labourer or who had land which exceeded the limits mentioned in Sections 63 and 64 or who was disentitled to hold as per Sections 79A or 79B of the Act.

b. 80(1)(a)(iii): pertained prohibition on transfer of agricultural land to a non-agricultural labourer

c. 80(1)(a)(iv): pertained to prohibition of land to ones disentailed to ownership of agricultural land by virtue of Sections 79A or 79B of the Act.

Sale, including sale in execution of a decree of a civil court or recovery of arrears of land revenue, gift or exchange or lease of any land or interest thereon, of agricultural land is now restricted to owners of certain classes of irrigated land who do not use the land for agriculture. Sale is also restricted to owners or tenants (or partly as owner and partly as tenant) who hold land exceeding the limits specified in Sections 63 and 64 of the Act. 

4. Section 81- Section 81 now places restrictions on mortgage of agricultural land in favour of any person except the institutions mentioned in clauses (a) and (b) of sub-section (1). Some of the institutions included Section 81(1)(a) are Karnataka Housing Board, Industrial Area Development Board, Karnataka Slum Clearance Board. Some of the institutions included under Section 81(1)(b) are ‘a cooperative society’ and ‘a financial institution’.
5. Section 80-A - The Ordinance inserts Section 80-A which states that conditions laid down in the Act shall not be relaxed in respect of lands granted during the period of prohibition (period of prohibition is imposed by the Government, which is typically 15 years, during which the land granted under Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of transfer of certain lands) Act, 1978, cannot be alienated without the permission of the Government) under the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of transfer of certain lands) Act, 1978. The said provision makes way for the Act to govern cases where land is being transferred during the period of prohibition with the permission of the Government.
6. Clause 13 - Clause 13 of the Ordinance prescribes that cases pending under Sections 79A, 79B and 79C and consequential proceedings stand abated and the cases disposed of previously shall not be affected.

This update has been contributed by Maneesha Kongovi (Partner) and Shivabhushan S. Hatti (Associate).