Maha: Bill passed to provide legal protection for recovery of ‘mortgage fee’ on Class-2 lands of occupants
Nagpur, Dec 12 (LatestNewsX)—Revenue Minister Chandrashekhar Bawankule introduced a bill to the Legislative Assembly on Friday that intends to grant legal status to the mortgage fee imposed on Class‑2 lands when they are mortgaged to banks for non‑agricultural use. The measure, called the Maharashtra Land Revenue Code (Second Amendment and Legalisation) Bill, 2025, seeks to validate fees that have been collected since 2009.
In February 2009, a government order mandated a mortgage fee on Class‑2 parcels that were mortgaged to banks or other financial institutions for any purpose other than farming. However, the Nagpur Bench of the Bombay High Court later declared that provision invalid, arguing that a fee imposed solely by a government order and not backed by law cannot stand, as the minister noted.
“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.
Under the bill, retroactive effect would be granted: mortgage charges collected on Class‑II lands from February 27 2009 onward would be deemed lawful. To accomplish this, Section 36 of the 1966 Act would be amended, thereby recognizing fees collected by state or revenue authorities from 2009 to the present as legitimate and preventing any court challenge or refund claim on the basis that the collection was illegal.
The legislation stipulates that the fee applies whenever a Class‑2 occupant mortgages land to a cooperative society, State Bank of India, a comparable new bank, or the Maharashtra State Financial Corporation for non‑agricultural reasons. The State Government would retain authority to set mortgage charge rates, which could be fixed by either a general or a special order.
Minister Bawankule clarified that the bill’s purpose is to legally protect amounts already recovered and to streamline future collections, without imposing an additional burden on the state exchequer.
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