This article is general information only. It is not legal advice, it does not create an advocate-client relationship, and it is not an advertisement or solicitation.
Key takeaways
- Section 81 of the Kerala Land Reforms Act, 1963 lists the kinds of land to which the ceiling provisions of the Act do not apply, including plantations and commercial sites.
- The exemption attaches to the use of the land, not to the land as such. If the use changes, the exemption can be lost.
- A Kerala High Court Full Bench held that quarrying sites are not "commercial sites" under Section 2(5), so they do not get the Section 81(1)(q) exemption.
- Anyone buying or financing estate land should verify the exemption on the facts, and should not rely on the word "exempted" in a sale document.
Contents
How the ceiling works, and where Section 81 fits
The Kerala Land Reforms Act, 1963 (Act 1 of 1964) limits how much land a person or family may own or hold. Section 82 fixes the "ceiling area" in standard acres, and the figure depends on the size and type of the family or holder. Section 83 says that no person may hold land in excess of that ceiling. Where someone does, Section 85 requires the excess to be surrendered, and Section 86 vests the surrendered land in the Government. Land Boards and Taluk Land Boards administer this process.
Section 81 is the counterweight. It states that the provisions of that Chapter shall not apply to specified kinds of land. Land that falls within it is left out of the ceiling calculation altogether.
What Section 81 exempts
Section 81(1) lists the exempt categories. Among them are lands owned or held by the Government (clause (a)), plantations (clause (e)) and commercial sites (clause (q)). The proviso to clause (a) makes an important exception: the exemption does not cover lands owned by the Government of Kerala and held by a person under a lease, whether current, time expired or otherwise.
Two definitions in Section 2 decide many disputes. A "commercial site" is land, other than a kudiyiruppu or kudikidappu, used principally for trade, commerce, industry, manufacture or business (Section 2(5)). A "plantation" is land used principally for crops such as tea, coffee, cocoa and rubber, together with land ancillary to them and certain contiguous land up to 20 per cent of the cultivated area, and interspersed agricultural land as determined by the Land Board (Section 2(44)).
Section 81(3) allows the Government, in the public interest, to exempt land for a special use, or land bona fide required for conversion into a plantation or for a commercial, industrial, educational or charitable purpose, subject to a time limit for use. Section 81(4), as it stood in the text reproduced in the 2013 amending Bill, let a plantation holder use up to five per cent of the holding for floriculture, vanilla, medicinal plants, other agricultural crops, or hotels, resorts and tourism projects. That Bill's objects described environmental and conversion problems with this relaxation and proposed restrictions by rules.
Plantations: the exemption follows the use
A plantation exemption is an exemption for the plantation. It is not a declaration that the owner may do what he likes with the land. Explanation II to Section 87 deals with the situation where exempt land is converted into a non-exempt class and the holder's total then exceeds the ceiling: the excess is treated as newly acquired land liable to surrender. Commentary on the Act reads this as meaning that the exemption is lost for the converted portion, and that excess land follows if plantation use ceases.
Fragmentation raises the same question. In One Earth One Life v. State of Kerala (reported at 2019 (1) KLT 985), the High Court, as quoted in commentary, treated fragmentation and transfer of an estate as a conversion of plantation into some other category of land. For anyone buying a plot carved out of an estate, this matters more than any assurance in the sale deed.
Tenants have their own route. Commentary on Balanoor Plantations and Industries Ltd. v. State of Kerala (2018 (3) KLT 283) records that a cultivating tenant who wanted the benefit of Section 72B had to apply to the Land Tribunal within two years of vesting, and that tenancy status must first be proved through that process. The Land Board's exemption order does not decide tenancy or title.
| Decision | Point |
|---|---|
| Kerala High Court Full Bench (2:1), reported November 2018 | Quarrying sites are not "commercial sites" under Section 2(5), so Section 81(1)(q) does not exempt them. An earlier decision, State of Kerala v. Muhammedali Haji (1996), was overruled. The majority suggested that a surface industrial activity such as a metal crusher unit may qualify. |
| M/s Wayanad Granites v. District Collector (Kerala High Court, reported August 2023) | A revenue certificate cannot be denied only because the land is exempted from the ceiling provisions of the Act. |
| One Earth One Life v. State of Kerala (2019 (1) KLT 985) | Fragmentation of an estate and its transfer treated as conversion of plantation into another category of land. |
| Balanoor Plantations v. State of Kerala (2018 (3) KLT 283) | Cultivating tenant status must be established before the Land Tribunal through the process the Act provides. |
Practical checks for buyers and lenders
Ask for the Land Board or Taluk Land Board order that records the exemption, and compare its description of the land with what is on the ground today. Check whether the land is still used as a plantation or commercial site. Look at the revenue records, and at whether the plot is a fragment of a larger estate. Government-owned land held on lease, time expired or not, does not enjoy the Section 81(1)(a) exemption, so the title chain should show how the holder came to hold it. Our notes on Kerala's land reforms and plantation land and on unregistered sale deeds cover related points.
Questions we often hear
Does an exemption mean the land can be sold or divided freely?
Not necessarily. Commentary on the Act and the decision in One Earth One Life suggest that division and transfer of a plantation can be treated as conversion, with consequences under Section 87. The facts of each case matter.
Are quarries exempt as commercial sites?
A Kerala High Court Full Bench held by majority that quarrying sites are not commercial sites under Section 2(5) and so do not get the Section 81(1)(q) exemption.
Who decides whether land is exempt?
Matters of ceiling, surrender and exemption are dealt with by the Land Board and Taluk Land Board, while tenancy questions go to the Land Tribunal. Confirm the current procedure in the Act and the Rules.
Questions on a specific matter depend on the facts, and advice should be taken before acting.