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Can a company be an agriculturist?

An agriculturist is one who 'cultivates the land personally'. A company is an artificial person having a distinct personality. Being an artificial person it cannot cultivate land personally and even if it hires labour it cannot be said to cultivate on its own account

The mischief to bypass laws is never ending. Each one tends to interpret the law in a way beneficial to him. Since land is a scarce commodity (and they do not make it anymore), there is a greater scope for imposed and induced aberrations in property matters. One Google search on whether,  companies can buy agricultural property in Maharashtra, throws up myriad options. A concerted effort to veer public opinion towards believing “Yes, it is possible”, is also afoot. At a seminar that we   attended, the audience was informed that if all the directors were agriculturists, and the object of the company was to carry out agricultural activities, then such a company could indeed acquire agricultural land. Confounding the confusion are copies of record of rights from other states reflecting the name of a company and its directors as land holders, floating around here, in a different province. Such documents, even if their veracity is unimpeachable, would not go far; immovable property is a state subject. But, what does the statue book have to say?  
 

Our quest should, at the very least, begin with the Bombay Tenancy and Agricultural Act, 1948 (BTAL), if not end there. It does not impose a complete bar on the acquisition of agricultural land by a company. In fact it does not even speak in terms of ‘corporate’ or ‘non-corporate entities’, employing instead the terms ‘agriculturist’ and ‘non- agriculturist’. BTAL just goes so far as to say that the permission of the Collector shall be required for sale, exchange, gift, lease, mortgage with possession, from an agriculturist to a non-agriculturist. But then, who is an agriculturist? He who ‘cultivates land personally’. By contrast, he who does not or cannot cultivate land personally is a non-agriculturist. Here is where all the trouble begins. Hired labour, servants on wages can be employed without distributing the element of cultivate-land-personally provided it’s on one’s own account. And now, the headache turns into a migraine.
 

Legal ownership of property in a company vests in the company itself and not in the directors, employees, any hired labour, or servants. A company is an artificial person having a distinct personality. Being an artificial person it cannot cultivate land personally and if it hires labour it cannot be said to cultivate on its own account.
 

For various other purposes, under BTAL, the test of ‘cultivates land personally’ has been carried out on idols, deities as juristic persons, and on public trusts. The Bombay Public Trust Act defines a trustee as a person in whom the trust property vests. On these premises, the Supreme Court, way back in 1948, observed that a managing trustee in whom the legal ownership of the property vested could cultivate land personally. As a natural corollary, the courts have drawn a distinction between a trustee, in whom the property vests in law, and a manager or Shebait of properties, which vest in an idol, which is the legal owner. Such a manager or Shebait is no more than an administrator managing the property for and on behalf of the idol, and they all thus fail the test of ‘cultivate-land-personally’.
 

It may well be the intention of our zealots to override authority by spreading Gobbelian lies. Beware, beware, beware. The Mamlatdar, a government appointee at the local revenue level, has the power to decide on the question of who is an agriculturist. Moreover, an unauthorised occupant can be summarily evicted. 
 

The New Industrial Policy, in 1994, introduced many exemptions and waivers. However, for them to be applicable, the land would have to be acquired for bona fide industrial use or Special Township, and they all come with other strings attached.  
 

Caveat Emptor-buyer beware- in this land, is not just legalese expressed in Latin, but a way of life, and at every step of the way.
 

(Divya B Malcolm is a senior associate with Kochhar & Co. The views expressed are her own and not to be construed as legal advice)

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