Amendments to the Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act, 1947: A Move Toward Regularisation and Simplified Land Administration

The Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act, 1947 (“Act”) was enacted with the primary purpose of preventing agricultural land from being divided into parcels so small that they could no longer sustain viable or productive cultivation. The legislative intent was to avoid the creation of sub-optimal plots, preserve the functional integrity of agricultural holdings, and promote consolidation wherever needed. To give effect to this objective, Section 9(3) of the original Act imposed a strict consequence: any transfer, partition, or arrangement made in breach of the Act was treated as void, and the Collector was empowered to summarily evict persons found in possession pursuant to such prohibited transactions.

This rigid regime was partially relaxed by the Maharashtra Amendment Act of 2017, which introduced a mechanism to regularise past transfers or partitions made in breach of the Act on payment of a fine of up to twenty-five per cent of the land’s market value as per the Annual Statement of Rates (ASR). The amendment was given retrospective effect, thereby permitting earlier irregular transactions to be regularised through this statutory route.

An important intervening development occurred with the Maharashtra Prevention of Fragmentation and Consolidation of Holdings (Amendment) Act, 2015 (Mah. Act II of 2016), which introduced Section 8B in the Act. This amendment substantially narrowed the operational sweep of the Act by carving out a broad exemption for lands situated within municipal corporations, municipal councils, and areas under special planning authorities or new town development authorities constituted under the Maharashtra Regional and Town Planning Act, 1966. The exclusion also extended to lands designated for residential, commercial, industrial, or any other non-agricultural use in draft or final regional plans. While the core restrictions on agricultural fragmentation continued to apply in rural regions, the amendment recognised that urban and planned development zones required greater flexibility in subdivision and land utilisation. At the same time, the proviso to Section 8B maintained an important safeguard: no transfer of a parcel smaller than the previously notified “standard area” would be permitted unless such parcel resulted from a subdivision or layout approved by the planning authority or the Collector. This ensured that even in exempted areas, land division proceeded in a regulated and planned manner.

A further and more far-reaching reform has been introduced through the Maharashtra Prevention of Fragmentation and Consolidation of Holdings Amendment Act, 2024 (Mah. Act V of 2025), which was promulgated in October 2024 and came into force on 1 January 2025. This amendment once again revises Section 9(3), with a more facilitative approach. The penalty for regularisation has now been standardised at a flat rate of five per cent of the market value of the land as per the ASR, applicable to all irregular transfers or partitions. By reducing both the ambiguity and the financial burden associated with regularisation, the State aims to encourage voluntary compliance, ensure that long pending irregularities can be resolved without excessive cost and streamline the administrative workload of revenue authorities.

Alongside these statutory amendments, the State Government has also undertaken significant policy level deliberations. As reported in recent coverage, the State Cabinet, in its meeting held on 7 October 2025, has proposed a major restructuring of the Act’s applicability. It has been recommended that the Act cease to apply to lands situated within the limits of municipal corporations, municipal councils, and nagar panchayats, as well as to areas governed by metropolitan region development authorities and special planning authorities constituted under the Maharashtra Regional and Town Planning Act, 1966. The proposed exclusion also extends to lands earmarked in regional plans for residential, commercial, industrial, or any other non-agricultural use. Once formalised, this policy shift would remove longstanding constraints on the subdivision of non-agricultural and urban lands, facilitating more efficient utilisation and development in rapidly urbanising regions.

Taken together, the statutory amendments and the proposed policy reforms signal a clear evolution in Maharashtra’s approach to land administration. The emphasis has moved from rigid prohibition to structured compliance, from penal consequences to affordable regularisation, and from broad restrictions to targeted applicability aligned with present day planning realities. These measures are expected to significantly simplify transactions, reduce procedural uncertainty, and promote transparency in land dealings. They also align the legal framework with contemporary patterns of urban growth, diversified land use, and the need for flexible land markets. Overall, the recent reforms mark an important step toward modernising the land governance ecosystem in Maharashtra and fostering a more predictable, development oriented regulatory environment.