Tenure "D" Lands Held in Perpetuity Are Freely Transferable Without Payment of Transfer Premium.

The Petitioner purchased two parcels of land (CTS Nos. 456/1 and 456/2) in Panvel from private individuals in 2013

The lands were originally granted in the pre-independence era as "perpetual leases" for tree plantation, classified as "Tenure D"

Between the original grant and the Petitioner’s purchase, the land was transferred five times without State objection

After the Petitioner developed the land into multi-storey buildings, Respondent No. 1 passed an order dated 11.11.2020 directing the Petitioner to pay a 75% market valuation as "transfer premium" for regularizing the conveyance and a 100% valuation for "regularization of change of user" to Non-Agricultural (NA) purpose

The Petitioner paid the total sum of ₹1,20,75,145/- under protest and challenged the levy

1. Whether the State is legally entitled to levy a 75% transfer premium on land classified as "Tenure D" (Occupancy Class-I) which historically permitted free alienability

2. Whether the levy of 100% Ready Reckoner valuation for the regularization of change of user from agricultural (tree plantation) to Non-Agricultural purpose is valid

Rule 43 of the Bombay Land Revenue Rules, 1921, which stipulates that lands granted in perpetuity under "Tenure D" are transferable without restriction

Section 29(2)(b) of the Maharashtra Land Revenue Code (MLRC), 1966, which classifies holders of land previously held without transfer restrictions as "Occupants - Class I"

Rule 35 of the MLR (Disposal of Government Land) Rules, 1971, applies to the grant of unoccupied lands and not to the regularization of Class-I occupancy transfers

MLR (Conversion of Occupancy Class II and Leasehold Lands into Occupancy Class I) Rules, 2019, regarding premium rates for conversion

Regarding the transfer premium, the court reasoned that since the land was classified as "Tenure D" and Rule 43 of the 1921 Rules permitted transfer in perpetuity, the land transitioned to "Occupancy Class I" under Section 29 of the MLRC, 1966

No prior permission or premium was required for sale, a fact even admitted by the State in its affidavit

The court found the State’s reliance on various Government Resolutions (1983, 2014, 2016) misplaced, as those applied only to "Class II" or specific leasehold lands, not "Class I" perpetual tenures

Since the Petitioner converted the land for residential development without prior NA permission, and subsequently admitted willingness to forfeit the 100% premium for this specific regularization in its rejoinder, the court found this levy justified

The Court upheld the 100% Ready Reckoner valuation levy for the regularization of the change of user to Non-Agricultural purpose and directed the State to refund the 75% transfer premium within two weeks