Real Estate

Relief in TN land ceiling, a boost for industry

TE Raja Simhan Chennai | Updated on November 03, 2020

RE projects get a fillip   -  THE HINDU

Tamil Nadu Land Reforms (Fixation of Ceiling of Land) Act, 1961 limited the area of land that any one can hold with the surplus to be distributed by the government among landless farmers. This land reform was, however, never implemented uniformly and in various parts of the State, land owners were left with large parcels of land which, as per the Act, included the ‘excess’ land.

Surplus land

As Tamil Nadu industrialised, many industries acquired land from owners and often times it included the ‘excess’ land that the seller should have never owned. Such companies applied to the government seeking permission under 37-A of the Tamil Nadu Land Reforms (Fixation of Ceiling of Land) Act, 1961 to regularise this ‘excess’ land so that they can be put to industrial use but regularisation never happened. The companies were left with parcels of land that they could not use. Many industries, especially those in renewable energy space, kept away from Tamil Nadu for this reason.

A few days ago, through a Government Order (GO) Tamil Nadu has allowed companies to hold large parcels of land even if the seller had violated the provisions of the Act.

Through the GO, permission will now be given for such ‘excess’ land if the required investment is brought. The case will be placed before the Industrial Exemption Committee (IEC) to assess if the company is bringing investment or just holding additional land.

So far, the IEC has not been recommending grant of permission in case of ‘excess’ lands. The industry department felt that Section 20 of the Land Reforms Act should not be enforced on the industrial units, when the seller from whom the company bought the land held excess land beyond the ceiling limit but no declaration has been made by the authorised officer of the said land, a senior government official explained.

In the present economic scenario such regularisation of transfer of lands covered under Section 37-A without any loss to government is imperative, the GO said. The GO enables a company to hold up to 120 acres of dry land without permission. The State government can still reject applications made under Section 37-A of the Act. But now, there is a chance for applying for removal of the ‘seller attracted issue, which was not possible earlier, he said.

K Vaitheeswaran, an advocate and tax consultant, said that land acquired by industrial units for industrial purposes may have the character of excess land, if such land was excess land in the hands of the previous owner who had not sought adequate permission to hold such excess land, which is referred to as the ‘seller attracted issue’. In such situations the industrial units which are the current owners of the land were unable to seek permission to hold such land under Section 37-A of the Act.

However, the GO enables such industrial units in the situation of the ‘seller attracted issue’ to also seek permission under Section 37-A to hold the excess land. The authorised officer under the land ceiling Act action can declare such land as excess land only after denial of permission sought under Section 37-A.

I Krishna Pillai, Managing Director, Cape Infrastructure, who has been in the renewable energy sector for over two decades termed the GO a boost for industries. Hari Thiagarajan, Chairman, CII Tamil Nadu has also welcomed this order calling it a big positive step which will pave the way for further improvement in Tamil Nadu’s ranking under Ease of Doing Business index.

Published on November 03, 2020

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