Key Takeaways
- Nazul land is government-owned urban land historically vested in the State and leased out to occupants — the lessee holds possession, not ownership.
- In Maharashtra it is most common in the Nagpur and Amravati (Vidarbha) divisions, the former Central Provinces and Berar.
- It is governed by the Maharashtra Land Revenue Code, 1966. Section 37A restricts sale, transfer, redevelopment and change of use of Government and Nazul land without the Collector’s prior permission and payment of premium.
- Leasehold Nazul land can sometimes be converted to freehold (Occupancy Class-I) under the 2019 conversion rules and, in Vidarbha, the reduced-premium Abhay Yojana — but this is policy-dependent, division-specific and changes by Government Resolution.
- Always confirm the exact lease term, premium and transfer conditions with the local Collector or municipal authority before buying. Do not rely on a broker’s summary.
What is Nazul land in Maharashtra?
Nazul land is government-owned urban (non-agricultural) land that historically vested in the State — through escheat, lapse or colonial-era acquisition — and was then leased out to individuals and institutions rather than sold. The word “Nazul” comes from an Urdu term for property that has passed to the State. The person in possession holds a lease, so the underlying title stays with the Government even after decades of use.
In Maharashtra, Nazul land is concentrated in the Nagpur and Amravati revenue divisions — the Vidarbha region that was part of the Central Provinces and Berar under British rule, where the Nazul system was administered. You will also encounter State-owned leasehold plots (often called Collector’s land) elsewhere in the State, including Mumbai, which are governed by similar restrictions even when not labelled “Nazul.”
The practical point for a buyer is simple: on Nazul land you are buying a lease interest, not absolute ownership. That single fact drives every rule below.
Which law governs Nazul and government leasehold land?
The primary law is the Maharashtra Land Revenue Code, 1966 (MLRC), read with the Maharashtra Land Revenue (Disposal of Government Lands) Rules and division-level Nazul rules. Under the MLRC, the State’s title to Government land and the conditions attached to grants are set out, and occupants’ rights are held to be conditional on the terms of the grant.
The most important provision for transfers is Section 37A, inserted by amendment in 2015. It restricts sale, transfer, assignment, redevelopment and change of use of Government and Nazul land in notified areas — including Mumbai City — unless the Collector grants prior permission and the holder pays the applicable premium, charges and a share of the “unearned income” (the increase in value the State claims). A proviso carves out Nazul lands in the Amravati and Nagpur divisions from part of this restriction, which is why Vidarbha runs its own conversion track. The Bombay High Court has upheld the State’s power to charge such transfer premia on government-held land.
Occupancy classes: leasehold vs freehold on paper
Maharashtra records land tenure in occupancy classes. Occupancy Class-I is effectively freehold and freely transferable; Occupancy Class-II and leasehold (which covers most Nazul plots) are restricted and need Government permission to transfer. Understanding which class your plot sits in tells you exactly how much freedom you have.
| Feature | Nazul / Leasehold (Occupancy Class-II) | Freehold (Occupancy Class-I) |
|---|---|---|
| Who owns the land | The Government; occupant holds a lease | The occupant, near-absolute title |
| Transfer / sale | Needs Collector’s prior permission + premium | Freely transferable, no permission |
| Construction / redevelopment | Restricted to sanctioned use; permission needed to change | Subject only to normal building rules |
| Tenure | Fixed lease term set in the deed; renewable on conditions | Perpetual |
| Conversion | May convert to Class-I on premium, where policy permits | Already the target class |
For a fuller treatment of the tenure difference, see our guide on leasehold vs freehold land in Maharashtra. The lease term itself is fixed in your individual lease deed — do not assume a standard duration; read the deed and confirm the renewal conditions.
How is Nazul land transferred? The step-by-step process
A Nazul or government leasehold plot cannot simply be sold on the open market — the transfer runs through the Collector, who must permit it and levy a premium. The broad sequence is:
- Read the lease deed. Identify the sanctioned use, the lease term, renewal clause and any express bar on transfer.
- Apply to the Collector (through the Sub-Divisional Officer / Tehsildar) for prior permission to transfer, stating the buyer and consideration.
- Verification of breach. The Collector checks whether any condition of the grant — use, dues, unauthorised construction — has been breached, and requires it to be regularised first.
- Assessment of premium. The office computes the transfer premium, unearned-income share and any arrears payable to the State.
- Payment and No-Objection Certificate (NOC). On payment, the Collector issues permission / NOC for the transfer.
- Registered deed and mutation. Execute the registered transfer deed and update the record of rights and, in urban areas, the property card.
The premium figures and exact documents vary by division, city and current Government Resolution, so treat this list as the shape of the process, not a fee schedule. Confirm the live requirement at the Collectorate.
Can Nazul leasehold be converted to freehold?
In some cases yes — leasehold and Occupancy Class-II land can be converted to Occupancy Class-I (freehold) on payment of a premium, under the Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold Lands into Occupancy Class-I Lands) Rules, 2019. Conversion removes the need to seek permission for every future transfer, which is why it is valuable.
For Nazul land in Vidarbha, the State launched a Special Abhay Yojana in March 2024 that reduced the freehold-conversion premium for residential Nazul plots in the Nagpur and Amravati divisions from 5% to 2% of the Annual Statement of Rates (ready reckoner) value, per The Hitavada’s report of the 12 March 2024 Cabinet decision. The window was later extended to 31 July 2026. Both the rate and the deadline are set by Government Resolution and can change — verify the current terms before relying on any percentage. Long-term lease taxation is a separate question we cover in our note on how long-term land leases are taxed in Maharashtra.
How does a buyer identify Nazul land — and what are the risks?
You identify Nazul or government leasehold land from the record of rights: the 7/12 extract or the urban property card will name the Government as holder and show the tenure as leasehold or Occupancy Class-II, not Class-I. In city areas the property card (Malmatta Patrak) is the document to read; you can pull records through the State’s land-records portals directory and the Bhulekh Mahabhumi system before you ever meet the seller.
The main risks of buying Nazul land are: a seller who cannot in fact transfer without permission; unpaid premium or lease arrears that attach to the plot; construction that breaches the sanctioned use; and a lease nearing the end of its term with uncertain renewal. Many recorded disputes in the State trace back to exactly these government-tenure issues — see our analysis of common land disputes in Maharashtra. Treat any “Nazul” entry as a signal to slow down and verify tenure at source.
“On Nazul land, the deal is only as good as the Collector’s permission. I have seen buyers pay full price for what they thought was freehold, then discover the State still owns the ground and a transfer premium is due. Read the tenure column on the record of rights first — if it says leasehold or Class-II, budget for the premium and get the permission in writing before you part with money.”
— Girish Chhalwani, Founder & CEO, THE EDGE Developments
Frequently Asked Questions
What is Nazul land in Maharashtra?
Nazul land is government-owned urban land that historically vested in the State and was leased out to occupants rather than sold. In Maharashtra it is most common in the Nagpur and Amravati (Vidarbha) divisions. The occupant holds a lease, so ownership of the land stays with the Government.
Can Nazul land be sold or transferred to a buyer?
Not freely. Under Section 37A of the Maharashtra Land Revenue Code, 1966, a Nazul or government leasehold plot can be transferred only with the Collector’s prior permission and on payment of a transfer premium and unearned-income share. A sale done without that permission is legally exposed.
Can Nazul leasehold land be converted to freehold?
Sometimes. Leasehold and Occupancy Class-II land can be converted to Occupancy Class-I (freehold) on premium under the 2019 conversion rules, and Vidarbha has a reduced-premium Abhay Yojana for residential Nazul plots. The rate and deadline are set by Government Resolution and change, so confirm the current terms with the Collector.
How do I check whether a plot is Nazul land?
Read the record of rights. The 7/12 extract or the urban property card (Malmatta Patrak) will name the Government as holder and show the tenure as leasehold or Occupancy Class-II rather than Class-I. Pull the record through the Bhulekh Mahabhumi portal before committing to the plot.
Is it safe to buy Nazul land?
It can be, if you verify tenure and obtain the Collector’s transfer permission in writing. The risks are unpaid premium, breach of sanctioned use, and a lease nearing expiry. Because the rules vary by division and change by GR, confirm every specific with the local Collector or municipal authority before you pay.
Thinking of buying government leasehold or Nazul land?
THE EDGE Developments runs tenure and title diligence on Maharashtra land before you commit — so a leasehold surprise never lands after you have paid.
Related Reading
- Pillar: Maharashtra Land Records Portals: The Complete Directory of Government Websites
- Leasehold vs Freehold Land in Maharashtra: What Buyers Must Know
- Property Card (Malmatta Patrak) Explained: Urban Land Records in Maharashtra
- 99-Year Lease Stamp Duty: How Long-Term Land Leases Are Taxed in Maharashtra
- Case study: Infrastructure-Triggered Land Appreciation: Karjat Corridor Case Study
- Contact: Talk to THE EDGE Developments
Citations & Sources
- Maharashtra Land Revenue Code, 1966 — India Code (Government of India): indiacode.nic.in/handle/123456789/15974
- Section 37A, Maharashtra Land Revenue Code, 1966 — Indian Kanoon: indiankanoon.org/doc/165325965
- Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold Lands into Occupancy Class-I Lands) Rules, 2019: maharashtrahousingandbuildinglaws.com
- “State Govt reduces nazul land freehold charges to 2%” — The Hitavada, 12 March 2024: thehitavada.com
- Nazul land amnesty scheme extended to 31 July 2026 — The News Dirt: thenewsdirt.com
- Bombay High Court upholds State power to charge transfer premia on government land — Mondaq: mondaq.com
- Maharashtra land records (7/12 & property card): Bhulekh Mahabhumi: bhulekh.mahabhumi.gov.in
Disclaimer: This article is general information, not legal advice. Nazul and government-land rules vary by division and city and change through Government Resolutions. Verify every lease term, premium and permission requirement with the local Collector or municipal authority before transacting.
