By Girish Chhalwani, Founder & CEO, THE EDGE Developments · 20+ years in Maharashtra land acquisition and NA conversion · Reading time: 7 minutes · Last updated: 13 August 2026

The short answer: why you cannot just buy and resell this land

Direct answer: Government-granted, concessional and industrial land in Maharashtra is given to a holder for a purpose and on conditions, so the state keeps a residual interest in it. That is why reselling Class-II, MIDC or granted land in Maharashtra needs prior sanction from the Collector or MIDC, plus a premium or transfer charge. Sell without that sanction and the transfer is void, the mutation is rejected, and the buyer inherits a defective title.

Class-I land (freehold occupancy) is fully transferable. The trap is that on paper both look like a normal 7/12 extract with a survey number and an owner. The difference sits in the tenure class and the “other rights” column — and the buyer who skips those columns is the one who pays for it.

Occupant Class-I vs Occupant Class-II: the core distinction

Direct answer: Section 29 of the Maharashtra Land Revenue Code, 1966 splits occupants into two classes. Occupant Class-I holds unalienated land in perpetuity with an unrestricted right to transfer. Occupant Class-II holds land in perpetuity but with a restriction on the right to transfer — meaning no sale, gift, mortgage, lease or exchange without the previous sanction of the Collector.

In everyday Marathi land documents the same idea appears as Bhogvatadar Varg-1 (Class-I) versus Bhogvatadar Varg-2 (Class-II), and as “Juni Shart” (old tenure, unrestricted) versus “Navi Shart” (new tenure, restricted). Land allotted to landless persons, restored tenants, project-displaced persons, housing societies on government land, and most government grants reaches the buyer as Class-II. It is heritable but not freely saleable. Section 36 of the Code confirms the frame: an occupancy is heritable and transferable, but always “subject to any conditions lawfully annexed to the tenure” — and those conditions are what make a Class-II parcel restricted.

Land tenure in Maharashtra: can you resell, and what it costs

Use this table as a first filter. The tenure class shown on the 7/12 extract tells you which row you are in before you commission any legal opinion.

Tenure type	Can you resell freely?	What sanction / premium applies
Occupant Class-I (Bhogvatadar Varg-1 / Juni Shart)	Yes	None. Fully transferable freehold occupancy.
Occupant Class-II (Bhogvatadar Varg-2 / Navi Shart)	No	Prior sanction of the Collector + nazrana / premium on transfer.
Government-granted land on conditions	No	Sanction per the grant order; breach of purpose can trigger resumption by the state.
MIDC industrial plot (leasehold)	No	Prior written permission of MIDC + transfer charge / differential premium.
Inam / Watan / Devasthan land	No	Collector sanction + payment; some devasthan corpus is treated as inalienable.
Tribal (Scheduled Tribe) occupancy — Section 36A	No	Collector sanction plus Gram Sabha consent; transfer to non-tribals is tightly barred.

The premium: nazrana and “unearned income” on transfer

Direct answer: When the Collector permits transfer of Class-II or granted land, the state charges a premium — commonly called nazrana — that captures part of the increase in value the holder never paid for. It is the government’s share of the “unearned income” on land it granted cheaply or free.

The rate is set by rule, not folklore. Under the Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold Lands into Occupancy Class-I) Rules, 2019, notified on 8 March 2019, the premium to free up such land ranges from about 15% to 75% of the land value (per the Annual Statement of Rates / ready reckoner), depending on how the land was originally acquired. Rather than pay a premium on every sale, many holders now pay a one-time premium to convert permanently to Occupant Class-I, after which the Collector’s permission is no longer needed for future sales.

Proposal, not yet enacted: the Maharashtra Cabinet on 22 April 2026 approved a restructured, tiered premium (broadly 25%–30% of market value for agricultural land not transferred since allotment) under proposed conversion rules for 2026. As of this writing this is a cabinet-approved policy, not a notified rule — treat the 2019 Rules as the operative framework and confirm the current premium with the Collector’s office before you budget.

MIDC plots: leasehold, not freehold

Direct answer: A MIDC industrial plot is not owned but leased from the Maharashtra Industrial Development Corporation, usually on a 95-year lease with development conditions. You cannot transfer it by simply signing a sale deed — you need MIDC’s prior written permission and you pay MIDC a transfer charge.

MIDC distinguishes a formal transfer (name change within the same entity — merger, inheritance) from a non-formal transfer (sale to a new party). For non-formal transfers, MIDC levies a charge linked to the differential premium — the gap between the plot’s premium at today’s rate and the premium the original allottee paid at allotment — and it also depends on how much of the plot’s permitted FSI has been built out, so an undeveloped plot is treated less favourably.

Exact percentages change with MIDC circulars, so do not rely on a broker’s number: get the current transfer policy in writing from the MIDC Regional Office. Two points do not change — unauthorised sub-letting or sale can lead MIDC to resume the plot, and any “sale” that skips MIDC permission gives the buyer no enforceable right against MIDC.

Inam, watan, devasthan and tribal lands: the highest-risk category

Direct answer: Lands that originated as inam (revenue-free grants), watan (service tenures) or devasthan (dedicated to a temple or deity) carry the tightest restrictions, and buying into them without sanction can be not just void but unwindable years later.

Watan land re-granted after the abolition acts remains, by law, non-transferable and non-partible without the previous sanction of the Collector and payment of the amount the state fixes — a restriction affirmed in the Maharashtra Inferior Village Watans Abolition Act, 1958. Devasthan land dedicated to a religious institution is often treated as the inalienable corpus of the deity and cannot be sold at all.

Tribal land is protected separately. Under Section 36A of the Code, an occupancy held by a member of a Scheduled Tribe cannot be transferred to a non-tribal without the Collector’s sanction — and, per the 14 June 2016 notification amending Section 36A, the prior sanction of the Gram Sabha as well. An illegal tribal-to-non-tribal transfer can be reopened and the land restored to the original holder.

What a buyer must check on the 7/12 before paying anything

The whole risk is visible in the record if you know where to look. Reading the 7/12 (Satbara) is the cheapest due diligence you will ever do — do it before token money, not after.

• Tenure / occupant class: Look for “Bhogvatadar Varg-1” (safe, Class-I) versus “Bhogvatadar Varg-2” or “Navi Shart” (restricted, Class-II). This single line decides whether sanction is needed.
• The “other rights” (Itar Hakk) column: This is where a restriction is recorded — “sarkar” (government) interest, grant conditions, “kul” (tenant) rights, mortgages, court orders, or a note that transfer needs the Collector’s permission. A blank here is good news; an entry here is a stop sign.
• Origin of title: If the land came via allotment, tenancy purchase, restoration, or a government grant, assume Class-II until the record proves otherwise.
• Mutation (Ferfar) history: Trace how earlier transfers were recorded. A past sale that was entered without the required sanction is a live defect that travels to you.
• MIDC / CIDCO / SRA origin: A plot inside a MIDC estate is leasehold — verify the lease deed and MIDC’s transfer NOC, never just the sale deed.

“The costliest land mistakes we unwind in Maharashtra rarely come from a bad price — they come from a buyer who read the survey number and the owner’s name and stopped there. The tenure class and the other-rights column decide whether you are buying a title or a lawsuit. When those say Class-II or MIDC, the deal is not dead — it just has a sanction and a premium built in, and that has to be priced before you commit.”

How to buy this land safely (if you still want it)

Restricted-tenure land is not untouchable — much of Maharashtra’s land is Class-II. It just has to be handled in the right sequence:

1. Identify the tenure from the 7/12 and 8A before negotiating.
2. Make the sanction a condition of the deal. Either the seller obtains the Collector’s / MIDC’s prior permission before conveyance, or the agreement is expressly contingent on it — with the premium accounted for.
3. Price the premium in. The nazrana or MIDC transfer charge is a real cost; decide who bears it in writing.
4. Consider converting to Class-I where the rules allow, so the parcel becomes freely transferable for the future.
5. Register only after sanction. A registered deed does not cure a missing sanction; the mutation will still be refused.

Related reading

• 12 red flags to check before you buy a plot in MMR
• How to read a 7/12 extract in Maharashtra
• 8A extract explained: the land-record companion to 7/12
• Stamp duty and registration charges on land in Maharashtra (2026)

Frequently asked questions

What does Occupant Class-II mean on a 7/12 extract in Maharashtra

Occupant Class-II (Bhogvatadar Varg-2, or Navi Shart) means the holder owns the land in perpetuity but with a restriction on transfer. Under Section 29 of the Maharashtra Land Revenue Code, 1966, such land cannot be sold, gifted, mortgaged or leased without the previous sanction of the Collector. Class-I (Varg-1) land carries no such restriction.

Can I sell a MIDC industrial plot without MIDC permission

No. A MIDC plot is leasehold land held from the Maharashtra Industrial Development Corporation, not freehold. Any transfer needs MIDC’s prior written permission and payment of a transfer charge linked to the differential premium. A sale that skips MIDC permission gives the buyer no enforceable right and can lead MIDC to resume the plot.

What is nazrana or premium on transfer of Class-II land

Nazrana is the premium the state charges to permit transfer or conversion of restricted-tenure land — its share of the unearned increase in value. Under the Maharashtra Land Revenue conversion rules of 2019, this premium ranges from roughly 15% to 75% of the land value depending on how the land was originally acquired. Confirm the current figure with the Collector before budgeting.

How do I convert Class-II land to Class-I in Maharashtra

You apply to the Collector under the Maharashtra Land Revenue conversion rules and pay a one-time conversion premium based on the Annual Statement of Rates. Once converted to Occupant Class-I, the land becomes freely transferable and no longer needs the Collector’s permission for future sales. A restructured premium was cabinet-approved in April 2026 but is not yet notified.

Where on the 7/12 extract do I check for transfer restrictions

Check two places. First, the tenure line — Varg-1 versus Varg-2 or Navi Shart. Second, the other rights column, called Itar Hakk, where government interest, grant conditions, tenant rights, mortgages and permission requirements are recorded. An entry in that column is a signal that prior sanction may be required before any sale.

Citations and sources

• Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold Lands into Occupancy Class-I) Rules, 2019
• MIDC
• Maharashtra Inferior Village Watans Abolition Act, 1958
• 14 June 2016 notification amending Section 36A

Related land-policy updates from THE EDGE

• Maharashtra NA conversion: the one-time premium under MLRC Section 47
• Maharashtra digital land records 2026: 7/12, ULPIN and GIS maps
• CRZ and eco-sensitive zone rules for coastal land in Maharashtra