Maha: Bill passed to provide legal protection for recovery of ‘mortgage fee’ on Class-2 lands of occupants

Nagpur, Dec 12 (IANS) Revenue Minister Chandrashekhar Bawankule on Friday presented in the Legislative Assembly a bill that would provide legal protection to the mortgage fee charged when Class-2 land is mortgaged to banks for non-agricultural purposes. 

The bill, titled the 'Maharashtra Land Revenue Code (Second Amendment and Legalisation) Bill, 2025', and with this, the fees collected since 2009 will now become legal. 

The state government had issued a government order on February 27, 2009, to levy a 'mortgage fee' on land held by Class-2 occupants for purposes other than agriculture if they mortgaged their land to banks or financial institutions. 

However, the Nagpur Bench of the Bombay High Court, while hearing a petition, had declared the relevant provision invalid, stating that levying such a fee merely through a government order in the absence of a provision in the law, said the minister.

“The government has brought this bill to remove the legal hurdle created by this court decision and to make the necessary amendments to the Land Revenue Code of 1966,” said the minister.

According to this bill, the implementation of the bill will be made with retrospective effect. The mortgage charges levied on Class-II lands from February 27, 2009, will be considered legal. 

For this, Section 36 of the 1966 Act has been amended. The mortgage fees collected by the government or revenue authorities from 2009 to date will be considered valid. No claim can be filed in court, or the fees paid can be claimed back, because the collection during this period was illegal. This fee will be applicable if the occupant class-2 mortgages his land with a cooperative society, State Bank of India, similar new banks or Maharashtra State Financial Corporation for non-agricultural reasons, said the bill.

The State Government will have the power to set the rates of mortgage charges, and they will be fixed by general or special order. 

Minister Bawankule clarified that this bill is being passed to provide legal protection to the amount already recovered and to ensure smooth further recovery, without putting any additional burden on the state exchequer.

--IANS

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