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Converion of Agricultural Land to Non-Agricultural Purpose

Article on procedure of conversion of agricultural land to non-agricultural purposes in the state of Andhra Pradesh.

If you want to purchase a plot on the outskirts of the Hyderabad city? First, seek a land conversion certificate from developers/Owners as it is mandatory to get permission for construction of a house or a commercial space in the state of Andhra Pradesh. As per reports, as many as 341 layouts in Hyderabad have sprung up on agricultural land. Developers/Owners had illegally converted farm land for non-agricultural purposes, particularly housing plots, without informing revenue authorities.

With skyrocketing land prices, especially on the outskirts of the city, farm land was being converted into layouts and sold to people by dividing them into plots with out obtaining permission from the Government. As per the Andhra Pradesh Agriculture Land (Conversion for Non-agriculture
Purpose) Act, 2006, any Owner converting agricultural land for non-agricultural purposes should pay 10 per cent of the basic value towards conversion fee. If the land has already been converted for non-agricultural purposes illegally before January, 2006, they would have to pay fifty per cent fee penal amount apart from the conversion fee. The fee can be paid to the revenue divisional officer of the concerned revenue division. The Director of Town and Country Planning (DTCP) and Hyderabad Urban Development Authority (Huda) shall not to issue permissions for layout without the mandatory land conversion certificate. Now let us see the provisions of the Act.

The Government of Andhra Pradesh has passed The Andhra Pradesh Agricultural Land (conversion for non-agricultural purposes) Act,2006 (the Act) for regulating the conversion of agricultural land in the state of Andhra Pradesh to non-agricultural purposes and for matters connected therewith or incidental there to and to repeal the Andhra Pradesh Non-Agricultural Land Assessment Act,1963 and the same was received the assent of the Governor on December 30,2005 and the said assent was published in the Gazette of Andhra Pradesh Government on January 2,2006(effective date).

Definitions: -
(i) “Agriculture” means-
(a) the raising of any crop or garden produce ; or
(b) the raising of orchards ; or
(c) the raising of pasture ; or
(d) Hay- ricks ;
(ii) ‘Agriculture lands’ means lands used for agriculture ;
(iii) ‘Conversion’ means change to land use from agricultural to non-agricultural purposes ;
(iv) ‘Non-agricultural land’ means land other than Agricultural land;
(v) ‘Government’ means the State Government of Andhra Pradesh ;
(vi) ‘Collector’ means the District Collector in whose jurisdiction the agricultural land for which conversion is applied for is situated and also includes Joint Collector or any other not below the rank of the Joint Collector authorized by the Government to exercise the powers and perform the functions of the District Collector under this Act;
(vii) ‘Revenue Divisional Officer’ means, the Revenue Divisional Officer including Sub-Collector or Asst. Collector in whose jurisdiction the agricultural land or part thereof is situated and includes any officer not below the rank of a Revenue Divisional Officer empowered by the Government to exercise the powers and perform the functions of the Revenue Divisional Officer under this Act ;
(viii) ‘Mandal Revenue Officer’ means the Mandal Revenue Officer, in whose jurisdiction the agricultural land or a part thereof is situated, and includes any Officer not below the rank of a MRO empowered by the Mandal Revenue Officer under this Act ;
(ix) ‘Mandal Revenue Inspector’ means the Mandal Revenue Inspector in whose jurisdiction the agricultural land or a part thereof is situated and includes any officer empowered by the Revenue Divisional Officer to exercise the powers and perform the functions of a Mandal Revenue Inspector under this Act ;
(x) ‘Prescribed’ means prescribed by Rules made by the Government under this Act ;
(xi) ‘Notification’ means a notification published in the Andhra Pradesh Gazetta; and the word ‘Notified’ shall be construed accordingly ;
(xii) ‘Occupier’ includes:
(i) Any person for the time being paying or liable to pay to the owner rent, or any portion of the rent, for the land or, for the structure constructed ;
(ii) A rent- free occupant ;
(xiii) ‘Owner’ includes any person for the time being receiving or entitled to receive, whether on his awn account, or as agent, trustee, guardian, manager or receiver, for another person, or for any religious, educational or charitable purpose, rent or profits for the agricultural land or for the structure constructed on such land and includes in respect of the lands that have been leased out by the State Government or the Central Government ;
(i) a lessee, if the land has been leased out by the Government for any non-agricultural purpose ; and
(ii) a local authority, if land is vested in the local authority and used for any non-agricultural purpose deriving income there from.
Sections 3 to 8 of the Act provides for procedure to be followed for conversion of agricultural land for non-agricultural purpose, penalties and appeal provisions.
3. Land use Conversion: -
(1) No agricultural land the State shall be put to non-agricultural purposes, without the prior permission of the competent authority.
(2) An application for such conversion of the agricultural land for non-agricultural purposes shall be made before the competent authority in the form prescribed along with conversion fee as specified under Section 4.
(3) If the conversion fee so paid as per sub-section (2) is found to be less than the fee prescribed under Section 4, a notice shall be issued by the competent authority to the applicant within 30 days of the receipt of application intimating him the deficit amount.
(4) The applicant shall pay the deficit amount indicated in the notice issued under sub-section (3) within fifteen days of the receipt of such notice.
(5) In case no intimation is received by the applicant within 30 days about the deficit payment of conversion fees, it shall be deemed that the amount paid is sufficient for the purpose.
(6) In conversion permission request for shall either be issued, rejected in full or part by the competent authority within sixty days after such request is received on the officer of the competent authority or within thirty days after the receipt of the deficit amount as the case may be, provided that such request are rejected, the reasons for such rejection shall be recorded in writing and communicated to the applicant:
Provided that, if no order is passed on such request, within the time prescribed in sub-section (6), the required permission shall be deemed to have been given.
4. Power to levy and collect conversion fee:-
(1) With effect on and from the date of commencement of this Act, every owner or occupier of agricultural land shall have to pay a conversion fee for non-agricultural purposes, of the rate of 10% of the basic value of the land in areas as may be notified by the Government from time to time.
(2) For the purpose of this section, the basic value of the land shall be fixed in such manner as may be prescribed.
5. Authority competent to convert agricultural land for non-agricultural purpose:- The Revenue Divisional Officer or any officer to be notified by the Government in this behalf shall be competent to order, in respect of the lands situated within his territorial jurisdiction, conversion of land use from agricultural purpose to non-agricultural purpose.
6. Penalty:-
(1) If any agricultural land has been put to non-agricultural purpose without obtaining the permission as required under Section 3, the land shall be deemed to have been converted into non-agricultural purpose.
(2) Upon such deemed conversion, the competent authority shall impose a fine of 50% over and above the conversion fee for the said land specified under Section 4 in such manner as may be prescribed.
(3) The owner or occupier of the land shall pay the fine so imposed under Sub-Section (2) in such manner as may be prescribed.
(4) Any fee or penalty which remains unpaid after the date specified under sub-section (2) for payment, shell be recoverable as per the provisions of the Andhra Pradesh Revenue Recovery Act, 1864.
7. Act not to apply to certain lands:- Nothing in this Act shall apply to-
(a) Lands owned by the State Government ;
(b) Lands owned by a local authority and used for any communal purposes so long as the land is not used for commercial purposes ;
(c) Lands used for religious or charitable purposes ;
(d) Lands used by owner for household industries involving traditional occupation, not exceeding one acre ;
(e) Lands used for such other purposes as may be notified by the Government from time to time;
8. Appeal: - Any person aggrieved by an order of the Revenue Divisional Officer may file an appeal before the Collector within sixty days of receipt of such order by the applicant.
Other provisions are as follows :
9. Act to Override other Laws:- The provisions of this Act shall have effect notwithstanding anything in consistent therewith contained in any other law for the time being in force, or any custom or usage having the force of law or contract or judgment decree or order of a court or any other authority
10. Power to give directions: - For the purpose of giving effect to the provisions of this Act it shall be competent for the Government to issue such directions as they may deem fit to any officer, authority or persons subordinate to the Government.
11. Bar of Jurisdiction: - Save as otherwise expressly provided in the Act, no Court shall entertain any suit, or other proceeding to set-aside or modify, or question the validity of deficit fee under Section 3 or fine imposed under Section 6, or order or decision made or passed by any officer or authority under the Act or any rules made thereunder, or in respect of any other matter falling within its scope.
12. Protection of action taken in good faith: - No suit, prosecution or other legal proceedings shall be instituted against any person for anything which is in good faith done or intended to be done under this Act or under the rules made thereunder.
13. Power to remove difficulties: - If any difficulty arises in giving effect to the provisions of this Act, the Government may by order in the Andhra Pradesh Gazette make such provisions not inconsistent with the purposes or provisions of this Act as appear to them to be necessary or expedient for removing the difficulty.
14. Power to make rules: -
(1) The Government may by notification make rules for carrying out all or any of the purposes of this Act.
(2) Every Rules made under this Act shall immediately after it is made, be laid before the Legislative Assembly of the State, if it is in the session and if it is not in session, in the session immediately following, for a total period of fourteen days which may be comprised in one session, or in two successive sessions, and if before the expiration of the session in which it is so laid or the session immediately following the Legislative Assembly agrees in making any modification in the rule or in the annulment of the rule, the rule shall from the date on which the modification or annulment is notified have effect only in such modified form or shall stand annulled as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of any thing previously done under that rule.
15. Repeal of Act 14 of 1963:-
(1) The Andhra Pradesh Non-Agricultural Lands Assessment Act, 1963 is hereby repealed.
(2) Upon such repeal,–
(a) The provisions of Section 8 of the Andhra Pradesh General Clauses Act, 1891 shall apply;
(b) All the outstanding arrears from individuals/institutions under the Andhra Pradesh Non-Agricultural Lands Assessment Act, 1963 as on the date of commencement of this Act shall be recovered
under the provisions of the Andhra Pradesh Revenue Recovery Act, 1864.

13 Responses to “Converion of Agricultural Land to Non-Agricultural Purpose”

  1. Converion of Agricultural Land to Non-Agricultural Purpose Says:

    […] Read the rest of this great post here […]

  2. ravimohan Says:

    Dear Sir,

    The article is very elaborative and self explanatory. I want to know more on “Deemed conversion” with regard to penalty:

    1. Is there any date of deemed conversion is defined anywhere in the act,
    2. Is there is any mechanism under competent authority that would inspect, identify assess the amount of penalty to be paid by the occupier.
    3. After payment of such penalty will there be an governmental order issued, is there anything about governmental orders that the act is saying.

    regarding provision under 12 above that what is the scope of “protection of action taken under good faith”

    1. an agricultural land developed into plots for construction of residential houses or implementation of general housing schemes without actually converting land for non agricultural purposes. will it come under action under good faith.
    2. under the above said provision are there any chances of non levy of fine and are there any procedure to get exemption from payment of conversion fee.

    thanking you sir,
    Ravi Mohan

  3. admin Says:

    Dear Mr.Ravi Mohan,

    My Answers to your queries as follows:

    1. Is there any date of deemed conversion is defined anywhere in the act,

    Ans : Under Sub-section 6 of Section 3 of The A.P.Agricultural Land (conversion for Non-Agricultural Purposes) Act,2006, if the conversion permission requested is issue or rejected in full or part by competent authority within sixty days after such request is received in the office of the competent authority or within thirty days after the receipt of the deficit amount s the case may be, provided that such requests are rejected, the reasons for such rejection shall be recorded in writing and communicated to the applicant. If no order is passed on such request, within the n\time prescribed in Sub-section 6, then the required permission shall be deemed to have been given.

    2. Is there is any mechanism under competent authority that would inspect, identify assess the amount of penalty to be paid by the occupier.

    Ans : As per Section 6 of the said Act, the competent authority can levy the penalty. The Competent Authority can identify the property and levy penality.

    3. After payment of such penalty will there be an governmental order issued, is there anything about governmental orders that the act is saying.

    Ans : Will be issued, if the Property satisfy in all respects under the Act.

    regarding provision under 12 above that what is the scope of “protection of action taken under good faith”

    1. an agricultural land developed into plots for construction of residential houses or implementation of general housing schemes without actually converting land for non agricultural purposes. will it come under action under good faith.

    Ans : No. The protection is for the officer, who are acting under the Act.

    2. under the above said provision are there any chances of non levy of fine and are there any procedure to get exemption from payment of conversion fee.

    Ans : Yes. Govt. has power to exempt under the Act.

  4. ks9072 Says:

    Hi,

    a) if convert my agricultural land to non-agricultural(real estate) Still Govt can take or not.

    b) How about converting my agricultural land form house ?

    Best regards,
    Srini

  5. admin Says:

    Hi Srini,

    Even after conversion from agricultural to non-agricultural , the government can take over the property if required for public purpose under the Land Acquisition Act.

  6. tpavankumar Says:

    I wanted to know “How can we get the conversion of land certificate from the land located in the village of sarorrnagar mandal. As I need to give this to the bank for loan procedure.

  7. admin Says:

    you need to approach Thasildar of concerned Mandal to obtain the certificate.

  8. ramk Says:

    Hi,

    I have bought 2 acres of land in Medak district, Jagdevpur mandal. The Land here is purely agricultural land, I am planning to build farm houses on half acre and sell it.

    Can you please guide me with the details as to what all details, do I need to get and where can I get the permission from respective dept. and how much would be the cost involment?

    Thanks,
    Ram

  9. yelladt Says:

    A Farmer levelled his Ac 5.00cts agricultural land and left it vacant without any commercial activities.Does it attracts the A.P.Agricultural Land (conversion for Non-Agricultural Purposes) Act,2006?

  10. saisriram Says:

    I have a land in my hometown which was earlier used for agricultural purposes. All the surrounding lands were converted for commercial purposes and only my land is still under agricultural land. I would like to convert the same to commerical/ residential land.

    Can you please explain the procedure to get agricultural land converted ? If you can provide me contacts of qualified people who can provide services, it would be of great help.

    Thanks and regards,
    Sai Sriram Chittuluru

  11. angaraa Says:

    I have already obtained permission for conversion under AP Urban Area (development) Act,1975 in august 6, 2005. I also obatined Huda intial Permission to start the devlopment. Now do i have to again take permisssion under this new act.

  12. ani_rudh Says:

    dear mgr
    For deemed conversion, how the basic value is chosen? whether the value is present market land rate or land rate prevailing on date of purchase or present commercial yard rate prevailing ….what is the basic rate? pl clarify

    babu Mgr

  13. gr babu Says:

    Land is not being used for agricultural purposes as defined in andhra pradesh agricultural land (conversion for non agricultural purposes) Act, 2006 since decades.

    Constructions were made in the year 2000 and property was assessed to Tax by Municipal Corporation. Now the R.D.O. issued notice requiring to pay land conversion charges under andhra pradesh agricultural land (conversion for non agricultural purposes) Act, 2006.

    My quesion is:
    Even after obtaining approved plan from Municipal Corporation, and made constructions, and the property was assessed to tax, since 2000, how the provisions of andhra pradesh agricultural land (conversion for non agricultural purposes) Act, 2006 will apply.

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