Authors: Krutika Jain, Senior Associate and Chirag Patil, Associate
Introduction
The Maharashtra Land Revenue Code, 1966 (“MLRC”) has traditionally been the primary law governing land classification, its use, revenue matters, and especially the conversion of agricultural land to non-agricultural (NA) use in Maharashtra. Under the MLRC, agricultural land could not be used for non-agricultural purposes without prior permission from the District Collector. This created a system where the government had strong control over how land use could be changed.
At the same time, the Maharashtra Regional and Town Planning Act, 1966 (“MRTP Act”) governs planning permissions, zoning, and development. Because both laws were applicable, landowners and developers had to take two separate approvals: one for development under the MRTP Act and another for NA conversion under the MLRC, along with payment of charges.
This resulted in a dual approval system, which often caused delays and added complexity. The two laws treated land classification and development permission as separate, even though they were closely connected. The 2025 amendments to the MLRC aim to address these issues of overlap, delay, and administrative control that have long made the approval process difficult.
The Statutory Shift – Substitution of Section 42 and the Deemed Conversion Framework:
The 2025 amendments to the MLRC bring a major change in how non-agricultural (NA) conversion works. Earlier, landowners had to take separate permission from the District Collector to use agricultural land for non-agricultural purposes. Now, if a planning authority has already given development permission under the MRTP Act or any other planning law, this separate permission is no longer required.
In simple terms, once you get planning approval, the land is automatically treated as converted to non-agricultural use. This change is important because it introduces the idea of “deemed conversion.” This means that if the land is allowed to be used for a non-agricultural purpose under a valid plan or approval, it is legally considered converted without needing a separate process or order from the Collector. So, conversion is no longer a separate step with its own application and approval. It now happens automatically as a result of planning permission.
This is not just a procedural change, it changes the way the law works. Earlier, conversion required approval. Now, it is simply a result of complying with planning laws. Because of this, the role of the District Collector in granting conversion permission becomes much more limited.
Harmonization with Planning Law:
One of the most notable outcomes of the amendment is how it reorders the relationship between the MRTP Act and the MLRC, placing planning approvals in a determinative position. While the two statutes continue to coexist, the amended framework effectively subordinates revenue control to planning regulation and the planning permission effectively decides the issue.
In practical terms, once the planning authority grants development permission it does two things simultaneously, i.e., it authorizes construction or development under the MRTP Act and simultaneously triggers the conversion of land use under the MLRC1. The earlier dual step requirement to first comply with the planning requirement and then obtain NA permission form the revenue authorities, no longer exists.
This change addresses long-standing worries about having multiple authorities in charge. However, it also gives much greater decision-making power to planning bodies, thereby elevating their role from regulators of development to determiners of land use status. The legal character of land, once altered through a distinct statutory process under the MLRC 1966, is now contingent upon planning approvals under the MRTP Act.
Fiscal Reconfiguration: From NA Assessment to One-Time Premium
The amendments also bring an important financial change. Under the pre-existing regime, conversion to NA use attracted an annual NA assessment, levied as a recurring charge under the MLRC 1966. This system has now been replaced with a one-time premium payable at the stage of granting development permission2.
This shift restructures state revenue collection i.e. the State now collects its revenue upfront instead of over time. The abolition of annual assessment simplifies compliance and also removes the anomaly of overlapping levies, particularly in urban areas where property tax is already imposed by local bodies.
1. Section 44 and Section 45, Maharashtra Regional and Town Planning Act, 1966.
2. Section 47, Maharashtra Land Revenue Code (Second Amendment) Act, 2025.
Regulatory Gaps and Prospective Concerns:
The amended framework, while streamlined, leaves certain regulatory ambiguities unaddressed. One such concern is environmental approvals. Just because you get planning permission and the land is treated as converted does not mean you can skip environmental clearances. But in practice, people may assume that everything is approved, which could lead to mistakes.
Another issue is the one-time premium. It applies the same way everywhere, but land values are very different in rural, semi-urban, and urban areas. This may not always be fair. Also, since the government now collects money upfront instead of over time, it could affect future revenue. From a transaction and legal perspective, this change is quite important. Earlier, a clear NA permission from the Collector confirmed that the land was legally converted. Now, there is no separate document like that. Instead, you have to rely on planning approvals to confirm the land’s status.
This means lawyers and buyers will have to look more carefully at documents like development permissions, plans, zoning details, and approvals. It also creates some uncertainty, especially if permissions have conditions or can change later. In large scale transactions or redevelopment projects, this can make title checks more complicated, since there is no single document confirming conversion. Instead, the legal status of the land has to be understood by reviewing multiple records together.
Conclusion:
The 2025 amendments to the MLRC bring an important change in land regulation. By removing the need for separate non-agricultural permission and allowing automatic (deemed) conversion, the process has become simpler and faster.
This change shifts the system to rely more on planning authorities, which fits with modern development needs. However, it also raises questions about proper oversight, accountability, and how much control the government should have over land use. The reduced role of the District Collector shows a bigger change in how the state manages land.
Lastly, the success of this framework will depend on how effectively planning authorities exercise their expanded powers. At present, the 2025 amendments to the MLRC stands as an inflection point, one that signals the gradual evolution of land law from a regime of control to one of coordination.
Krutika Jain, Senior Associate and Chirag Patil, Associate, Solomon & Co.
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