OPINION ON LAND CEILING UNDER THE LAWS OF STATE OF KARNATAKA

I. BRIEF ABOUT OPERATION OF COMPANY

1. The Company is engaged in the business of conducting the agricultural activities.
2. For the purpose of conducting the agricultural activities, the Company procure the
land from the Khatedars or the local farmers or Farmer producer organization either
on lease basis or purchase the land.
II. LAW REGULATING THE PROCUREMENT OF LAND IN THE STATE OF
KARNATAKA
3. With an object of regulating the matters relating to agrarian relations, conferment of
ownership on tenants, ceiling on land holdings and other related matters State of
Karnataka enacted a uniform law in the form of Karnataka Land Reforms Act, 1961.
III. ISSUES TO BE ADDRESSED
4. The following issues are intended to be addressed through this opinion:
(a) Is there any limit on holding of agricultural land by a person?
(b) If there is any limit, then whether such limit is applicable on the land procured by
a person on lease?
IV. RESPONSES TO THE ISSUES
(a) Is there any limit on holding of agricultural land by a person?
5. Chapter IV of the Karnataka Land Reforms Act deals with the issue of ceiling of land
holdings in the State of Karnataka.
6. Section 63 of the Reforms Act, 1961 deals with the issue of ceiling on holding of
agricultural land by a person. It provides that no person who is not a member of a
family or who has no family and no family shall, except as otherwise provided in this
Act, be entitled to hold, whether as land owner, landlord or tenant or as a mortgagee
with possession or otherwise or partly in one capacity and partly in another, land in
excess of the ceiling area.
7. The limit under Section 63 is envisaged under sub-section (2) which provides that the
ceiling area for a person who is not a member of a family or who has no family or for
a family shall be ten units. The expression unit is defined under Section 2(35A) in
following words “Unit” means [one acre (40.47 ares)] of A Class land, the soil
classification value of which is fifty paise (eight annas) and above or an extent
equivalent thereto consisting of one or more classes of other land specified in Part A
 of Schedule I determined in accordance with the formula in Part B of the said
Schedule.
8. It is pertinent to note that the term person is not defined neither under the Karnataka
Land Reforms Act nor under the Karnataka Land Revenue Act nor under the Transfer
of Property Act but considering the general usage of the word, it can be assumed that
the term “person” would include the Company or LLP.
9. It is pertinent to note that initially vide Section 79-B of the Karnataka Land Reform
Act, there was a prohibition on a company to hold any agricultural land in the State of
Karnataka but vide amendment in the year 2020 Section 79-B has been omitted and
thereafter a company can lawfully hold an agricultural land.
10. Thus, it can be concluded that there exists limit on holding of an agricultural land by a
person in the State of Karnataka. However, there is an exemption on some agricultural
activities under Section 104 of the Karnataka Land Reforms Act. Section 104
provides that the provisions of section 38 section 63 other than sub- section (9)
thereof, sections 64, 79A, 79B and 80, shall not apply to plantations. ‘Plantation’ is
defined as to mean land used by a person principally for the cultivation of plantation
crop and includes: (i) any land used by such person for any purpose ancillary to the
cultivation of such crop or for preparation of the same for the market; and (ii)
agricultural land interspersed within the boundaries of the area cultivated with such
crop by such person not exceeding such extent as may be determined by the
prescribed authority as necessary for the protection and efficient management of such
cultivation.
Note: Plantation Crop is defined in following terms to mean cardamom, coffee,
pepper, rubber and tea;
(b) If there is any limit, then whether such limit is applicable on the land procured
by a person on lease?
11. For this purpose, it is pertinent to refer to the definition of “tenant” under the
Karnataka Land Reforms Act, 1961.
12. The expression “tenant” is defined under Section 2 (34) of the Karnataka Land
Reforms Act to mean “an agriculturist who cultivates personally the land he holds on
lease from a landlord and includes,— (i) a person who is deemed to be a tenant under
section 4; (ii) a person who was protected from eviction from any land by the
Karnataka Tenants (Temporary Protection from Eviction) Act, 1961; (iia) a person
who cultivates personally any land on lease under a lease created contrary to the
 provisions of section 5 and before the date of commencement of the Amendment Act.]
(iii) a person who is a permanent tenant; and (iv) a person who is a protected
tenant.”
13. Section 4 of the Karnataka Land Reforms Act declares certain class of person deemed
to be a tenant. Section 4 of the Act reads as “A person lawfully cultivating any land
belonging to another person shall be deemed to be a tenant if such land is not
cultivated personally by the owner and if such person is not,— (a) a member of the
owner's family, or (b) a servant or a hired labourer on wages payable in cash or kind
but not in crop share cultivating the land under the personal supervision of the owner
or any member of the owner's family, or (c) a mortgagee in possession: Provided that
if upon an application made by the owner within one year from the appointed day—
(i) the [Tribunal] declares that such person is not a tenant and its decision is not
reversed on appeal, or (ii) the Tribunal refuses to make such declaration but its
decision is reversed on appeal, such person shall not be deemed to be a tenant.
14. Thus, considering the applicability of ceiling in Section 63 and definition of tenant,
the ceiling is applicable on land procured on lease basis.