The Government of Maharashtra, by its notification dated March 8, 2019, notified the Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold lands into Occupancy Class-I) Rules, 2019 (‘Conversion Rules’). The Conversion Rules apply to the lands granted or allowed (generally by the State Government through the Collector) to be used for agricultural, residential, commercial or industrial purpose on Occupancy Class II basis (i.e., lands which are not freely transferable and require prior permission of the competent authority for any transfers) or on a leasehold basis.
The Conversion Rules permit the conversion of the abovementioned lands to Occupant Class I (i.e., lands that are freely transferable and are not subjected to any permission of the competent authority) on an application to the District Collector and on the payment of the prescribed premium, provided that the violations or breaches (if any) of the terms or conditions of the grant of the land have been rectified. The premium prescribed under the Conversion Rules varies from 15% - 75% of the value of the land as per the applicable rate of assessment, depending on the category of holding. Further, the Conversion Rules provide for an increase in the premium, in the event the application for the conversion is made after the expiry of three years from the date of publication of the Conversion Rules. The Conversion Rules also provide relief to the extent that any amount that is already paid to the Government towards change of use or towards conversion of leasehold rights into Occupancy Class II as per the prevailing policy of the Government will be adjusted towards the amount payable for conversion to Occupant Class I.