Office Location

Delhi:

E-5, 2nd Floor, Defence Colony
New Delhi - 110024
Tel : 011-24336744

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Mumbai:

Office No. 1410, 14th Floor, Maker Chamber V, Nariman Point, Mumbai
Tel : +91 22-22873499

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Gurgaon:

Level 18, One Horizon Center, Golf Course Road, DLF Phase 5, Sector 43, Gurgaon 122002, India
Tel : +91 124 668 8146 / +91 124 668 8147

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Mumbai (Entertainment and Media Practice)

Office No. 213, 2nd Floor, A-wing, Crystal Plaza, Andheri Link Road, Andheri (W), Mumbai.
Tel : 022-62360762

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Mumbai (Corporate and Transactional Practice)

909/A, Capital Building, Bandra Kurla Complex, East Mumbai- 400098

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Bangalore:

21/2, 1st Main Road,
Opp Indian overseas Bank,
Gandhinagar,
Bengaluru - 560009

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Kanpur:

77A, Cantt., Kanpur - 208004

SECTION 118 – HIMACHAL PRADESH TENANCY AND LAND REFORMS ACT, 1972

A non-agriculturist cannot buy land in Himachal Pradesh. Since the economy of the
state is agricultural/ horticultural driven, Himachal Pradesh has certain provisions
under which non-Himachal residents and non-Himachal agriculturists cannot buy land in
Himachal. This is through the enactment of Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 (hereinafter “Act”) which provides for restriction on transfer of land in favour of a person who is not an agriculturist of the State. Such a transfer can only be made by the Special permission of the State Government. The basic intention behind this section’s enactment of protecting the interests of local inhabitants while ensuring that the development of the State is not hampered.

The section provides transfer in the sense through way of sale, gift, will, exchange, lease, mortgage with possession, creation of a tenancy or in any other manner [Section 118(1)].  The explanation provided in the section also includes (i) Benami Transaction; and (ii) an authorization made by the owner by way of special or general power of attorney or by an agreement with the intention to put non-agriculturist in possession of the land and allow him to deal with the land in the like manner as if he is a real owner of that land. Non-Himachalis do not require any special permission to buy or lease constructed property, flat, etc. However, this is applicable only in land allocated as urban area, not in land allocated as rural or agricultural.

Transfers by way of inheritance, gift or will, benami transaction to an agriculturist, lease of land or building in a municipal area; have been specifically excluded. Further, sub-section 2 also allows transfer to-
(a) a landless labourer, or
(b) a landless person belonging to a scheduled caste or a scheduled tribe; or
(c) a village artisan; or
(d) a person who, on commencement of this Act worked and continues to work for gain in an estate situated in Himachal Pradesh; for the construction of a dwelling house, shop, or commercial establishment in a municipal area, subject to the condition that the land to be transferred does not exceed 500 square meters (300 squarre meters in case of shop or  commercial establishment)
(e) the State Government or Central Government, or a Government Company
(f) a person who has become non-agriculturist on account of - acquisition of his land for any public purpose under the Land Acquisition Act, 1894; or vestment of his land in the tenants under the Act; or ;
(g) a non-agriculturist who purchases or intends to purchase for the construction or purchase of house or shop, from the Himachal Pradesh State Housing and Urban Development Authority, established

Any other transfer not included above would need special permission from the State Government.

Only transfers made to an agriculturist are allowed (except those as provided above). The term ‘agriculturist’ has been defined in the Act as a person who cultivates land personally in an estate situated in Himachal Pradesh. It is to be noted that agriculturist or non-agriculturist does not mean Himachali or Non-Himachli. Even Himachalis who are non-agriculturists are prohibited under this section. The Himachal Pradesh had cleared this long standing confusion and held that Non-agriculturists in Himachal Pradesh seeking to buy property other than what is offered by the state housing board will still have to seek permission from the government (Civil Writ Petitions nos. 443 of 1995, 1068 of 1995, 1088 of 2003, 484 of 2006, 844 and 1500 of 2010; commonly delivered on October 1, 2013 by Chief Justice A.M Khanwilkar and Justice Kuldip Singh).

In order to transfer land in Himachal Pradesh to a non-agriculturist (except by way transfer as provided above); the State Government’s permission has to be taken. The procedure has been prescribed in Rule 38-A of the Himachal Pradesh Tenancy and Land Reforms Rules, 1975 (hereinafter “Rules”). The rule states that where a non-agriculturist intends to acquire land in his name by way of sale, gift, will, exchange, lease or mortgage with possession, he shall apply for permission to the Collector in whose jurisdiction the land is situated, along with necessary documents. The Application has to also state the intention of the use of such land. Further, land purchased with prior permission of the State Government, has to be used for the purpose for which the permission has been granted within two years (Notification No.Rev.B.F.(10)-7/2008-II issued by Government of Himachal Pradesh, Department of Revenue on March 15, 2012).

In case any violation of Section 118 of the Act, or Rules is found, the District Collector is competent to initiate proceedings against such person under Section 118(3A) read with rule 38-B of rules. These provisions basically provide that if a transfer is made to a non-agriculturist by way of way of sale, gift, will, exchange, lease, mortgage with possession, creation of a tenancy, Benami Transaction, Special Power of Attorney or General Power of Attorney or in any other manner; the transfer shall be deemed invalid (Maninder Veer Singh and Ors. Vs. State of Himachal Pradesh [2003 (3) ShimLC189] and the land/building pertaining to transfer would be vested back to the State Government free from all encumbrances (Rule 38B). The Collector of the District, after affording to the persons who are parties to the transfer, a reasonable opportunity of being heard and holding an enquiry, determine whether the transfer of land is or, is not in contravention within six months.

Rule 38A does provide that an application made for permission of transfer of land to non-agriculturist, the Collector shall recommend State Government in 30 days and the State Government shall issue a decision in 30 days thereof. However, practically speaking such permission involves prolonging delays and is often influenced by extraneous and political factors. The said section has also been challenged numerous times in the Hon’ble High Court of Himachal Pradesh. But the HP High Court has upheld it each time. In Sarmishta Gupta Vs. Krishan Kumar Aggarwal; it was held that “The Section 118 of the Act prohibits the transfer of the land in favour of a person who is not an agriculturist.

The thrust of Section 118 is that a person who is not an agriculturist is not entitled to acquire title of land by way of transfer under the Act. The public policy behind Section 118 is to check transfer of land in favour of a person who is not an agriculturist”
. Similarly, in Maninder Veer Singh and Ors. Vs. State of Himachal Pradesh [2003 (3) ShimLC189] the HP High Court again held that “The aforesaid section no doubt mandates that any transfer of land in Himachal Pradesh in favour of a non-agriculturist will be invalid and the Registrar/Sub-Registrar under the Indian Registration Act shall not register a document pertaining to be a transfer of land except where the case is covered under Sub-section (2).” It has also been held by the HP High Court that the section is not violative of Article 14, 19(e) or Article 31(B) of the Constitution of India (Civil Writ Petitions nos. 443 of 1995, 1068 of 1995, 1088 of 2003, 484 of 2006, 844 and 1500 of 2010; commonly delivered on October 1, 2013 by Chief Justice A.M Khanwilkar and Justice Kuldip Singh).