37-A, Grant of Permission to Industrial/Commercial Undertakings

What the guidance covers

Tamil Nadu Land Reforms guidance on section 37-A applies to industrial and commercial undertakings that seek to hold land beyond the applicable ceiling. Before section 37-A was introduced, a bona fide industrial or commercial undertaking approved by the Government could hold any extent of land under section 73(iv) of the Principal Act.

After section 37-A was inserted by the Amended Act, 1972 (Act No. 20/1972), the ceiling became 15 standard acres. Section 5(1)(e), inserted by the Amended Act, 2018 (Act No. 24/2018), provides a ceiling of 30 standard acres for an undertaking investing more than 20 crores of rupees, subject to stated requirements.

Who needs permission

An industrial or commercial undertaking must apply to the Government under section 37-A if it wants to hold more than 15 or 30 standard acres, as applicable. The application must be made within 180 days from registration of the documents.

For the 30 standard acre ceiling:

• The land must be dry land.
• The land must be used for industrial or commercial purposes within the prescribed period.
• The undertaking must continue using it for those purposes.

How permission is considered

The Government is the authority that grants or refuses permission under section 37-A. It obtains a field report and a report with recommendations from the District Revenue Officer. The Industrial Exemption Committee then considers the matter and makes recommendations to the Government.

The committee includes:

• Commissioner of Land Reforms as Chairman.
• Director of Land Reforms as Member Secretary.
• A senior officer of Deputy General Manager level or above from the Tamil Nadu Industrial Development Corporation or State Industries Promotion Corporation of Tamil Nadu as invitee.
• The head of the relevant department as a special invitee when required.

Restrictions and conditions

Land above the applicable ceiling is otherwise declared surplus under section 20. Government permission allows the undertaking to retain it for industrial or commercial purposes, subject to conditions under rule 56 of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Rules, 1962.

Key conditions include:

• Permitted land must be used only for industrial purposes.
• It cannot be sold, gifted, exchanged, surrendered, settled, otherwise transferred or mortgaged.
• Agricultural use may be permitted for three years and extended for periods not exceeding three years at a time, with a substantial portion of the produce used for the undertaking or its ancillary purposes.
• Mining permission continues while the licence or lease remains in force.
• Future expansion land must be fully used within the period specified by Government, or within five years from permission if no period is specified.
• The Government must cancel permission when a specified condition is breached.