• Nominee holder of agricultural land

In some parts of Maharashtra agricultural land cannot be held by a Company. The sub-Registrar however agree to register such agricultural land in the name of an authorised individual as the nominee of the Company. The understanding is that on conversion to non-agricultural the land is re-conveyance to the Company. Is this in order with the Transfer of Property Act? If yes should the authorised individual be a Director of the Company? What are the other legal requirements to be kept in mind when such transactions are made? What are the rights and liabilities of the nominee in such a situation?
Asked 3 years ago in Property Law from Greater Mumbai, Maharashtra
Religion: Christian
1) According to section 63 of The Bombay Tenancy & Agricultural Lands Act, 1948.

No sale of agricultural land is valid in favour of a person who is not an agriculturist. However Revenue officer authorised by Government in this behalf may grant permission for such sale under some conditions.*

2) "Agriculturist" means a person who cultivates land personally and "to cultivate personally" means to cultivate land on one's own account by one's own labour, or by the labour of any member of one's family, or under the personal supervision of oneself or any member of one's family by hired labour or by servants on wages payable in cash or kind but not in crop share.

3) company constituted as a juristic person under the Companies Act cannot be considered to be an "agriculturist".

4) land can be purchased by director in his individual capacity if he is farmer by profession . 

4) rights of individual are recorded not as nominee of company but as individual farmer
5) If you are purchasing agricultural land on behalf of company for agricultural use you are liable for action under section 84 C of of The Bombay Tenancy & Agricultural Lands Act, 1948. According to this section if it is observed that transfer of land is made against any provisions made in the act under the circumstances land shall vest in the State Government.
Ajay Sethi
Advocate, Mumbai
45617 Answers
2680 Consultations

5.0 on 5.0

Section 13 in The Transfer of Property Act, 1882 relates with transfer of property for the benefit of a person not in existence or unborn at the date of the transfer. for completion of transfer, firstly property is transferred to any nominee secondly such property will devolve to the unborn baby when he takes birth.  
Transfer of Property Act is applicable in transfer between two living being or between two companies. company is not unborn person so nominee. there is no such rule in TPA.    
Shivendra Pratap Singh
Advocate, Lucknow
5066 Answers
78 Consultations

4.9 on 5.0

1. The arrangement is perfectly in order,

2. The said individual need not necessarily be a director of the said Compamy,

3. He can be the nominee of the Company nominated by the Board by passing resolution in the meeting of Board of Directors.
Krishna Kishore Ganguly
Advocate, Kolkata
18511 Answers
448 Consultations

5.0 on 5.0

1. No this is illegal. If the law bars the registration of such land in favour of a company then it cannot be registered in the favour of any of the nominees of a company as well. The nominee represents the company. The reconversion of agricultural land is an unforeseen phenomenon. If the conveyance itself is impermissible then there is no question of reconveyance. 

2. Such a practice which is contrary to law and is adopted to circumvent the law can be challenged in the court. 
Ashish Davessar
Advocate, Jaipur
22977 Answers
634 Consultations

5.0 on 5.0

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