Gunthewari is the de facto mechanism of carving housing plots out of non agricultural land by circumventing the regulatory agencies.
In land transaction the acre is often used to express areas of land. Land records are written in metric system. An acre is approximately 40% of a hectare. A Guntha on the other hand is smaller unit of measurement amounting to approximately one-fortieth of an acre.
Thus One Guntha is equal to
1 gunta = 120.999 sq. yards = 101.1714 Sq.mt
1 guntha (R) = 33 ft (10 m) × 33 ft (10 m) = 1,089 sq. ft. (101.2 sq.mt.)
Gunthewari as the name suggests is the sale of land, on per guntha basis. Before we dive into the details we need some prerequisite information. The Maharashtra Prevention of Fragmentation and Consolidation of holdings Act 1947 (as modified upto the 18th July 2018) explicitly prohibits fragmentation under section 8 of the Act. It reads as follows
No land in any local area shall be transferred or partitioned so as to create a fragment (Section 8, The Maharashtra Prevention of Fragmentation and Consolidation of holdings Act 1947)
However, such fragments are allowed to be transacted if they are situated in the limits of an area created by the Maharashtra Regional and Town Planning (MRTP) Act, 1966 and are created as a result of sub-division or layout approved by the planning authority or the Collector under the provisions of the said Act.
The MRTP Act under section 18 and 43 also restricts the change of use as well as the development in above described areas. Thus, any development in contravention of the provisions of the MRTP Act is classified as unauthorised development. The MRTP Act also empowers the Planning Authority or the Collector as the case may be to remove such unauthorised development.
Thus legally, creating fragments of Agricultural land below standard areas and developing them for non-agricultural uses is in contravention of atleast two enactments. However, given the rate of urbanisation in India especially in a urban state like Maharashtra, the demand for affordable housing exceeds the supply. This gives rise to the Gunthewari system.
In the Gunthewari system fragmented parcels of undeveloped land is sold as plots for the purpose of housing. The salient features of such development are:
- As these plots are created by subverting the official agencies, the seller skips on the NA charges, Development fees, etc. required for creation a approved layout of land. Moreover, such plots also lack relevant infrastructure as compared to a approved layout.
- The elimination of upfront expenditure of the seller allows him undercut the formal market, allowing him to sell Gunthewari plots at a cheaper rate compared to plots from an approved layout.
- Gunthewari development is often seen in the fringe areas of a town or in localities which are likely to be absorbed into nearby town.
- Gunthewari plots also attract opportunistic buyers who are willing to take the risk as it is impractical for the government to move against such developments by taking punitive action.
- The lands are not converted for non agricultural use.
- The transaction of such properties is often not registered. This also makes them ineligible for formal channels of financing. However, such unregistered deeds can be accepted in view of Section 53A of the Transfer of Property Act, 1882.
- Such parcels of land are not properly laid out, lack any municipal infrastructure and are unauthorised development.
It shall be noted that any encroachment on land reserved for public use does not fall under the Gunthewari system (click here for more). However, policy exceptions are often made by the in the interest of public good. The Gunthewari system rooted itself throught the state to such an extent that the Government of Maharashtra had to enact The Maharashtra Gunthewari Developments (Regularisation, Upgradation, and Control) Act, 2001. The Act came into force on 30th April 2001 click here to read a brief about the Act. ding fee and development charge.
The Maharashtra Gunthewari Developments (Regularisation, Upgradation and Control) Act, 2001 (Mah. XXVII of 2001) has been enacted for regularisation and upgradation of certain Gunthewari developments and for the control of Gunthewari developments and for matters connected therewith in the State, as there had been a growing tendency to form unauthorised plots by subdividing private lands and transfer them to needy persons for the construction of dwelling units. The Gunthewari developments existing as on the 1st January 2001 were allowed to regularised and upgraded under the said Act.
Although, Gunthewari developments are unlawful and there is an obvious need to curb such developments, the government acknowledges that, it is neither practicable nor desirable to demolish, on a mass scale, the old and long existing constructions made on such plots. This is especially so because the formal housing market has failed to meet the demands of economically weaker sections of the society for shelter in terms of both quantity and price. Gunthewari developments are a form of informal housing and have to be viewed as a positive response, however flawed and imperfect, of the common people to meet their shelter needs.
The people belonging to lower income group and middle income group, due to lack of proper implementation of the said Act and regularisation of Gunthewari, are deprived from Government benefits or got limited benefits of Government Schemes. Hence, taking into consideration the basic needs for housing of economically weaker sections and general public belonging to middle income group and also the rising demands from the public in this respect, The Act was amended to regularise and upgrade the Gunthewari developments existing as on the 31st December 2020, on the 12th March 2021.
The Govenment tried to control the issue of Gunthewari development by issuing circular providing that the Sub-Registrar shall not register the document presented for registration unless sanctioned layout is enclosed with such layout.
The circular issued by the Inspector General of Registration and Controller of Stamps (IGRCS), on July 12, 2021 based on Rule 44(1)(i) of the Maharashtra Registration Rules, 1961, mandated enclosure of permission from the concerned authority in view of section 8B of the Maharashtra Prevention of Fragmentation and Consolidation of Holding (Amendment) Act. The circular barred Sub-Registrar's from registering any sale/transfer deed, if the no objection from the competent authority was not produced.
It was challenged in WP No. 2111 OF 2022, Govind Ramling Solpure and Ors. versus The State of Maharashtra and Ors. in the Augangabad Bench of The Bombay High Court. The Hon'ble Court held that:
The rules which can be framed cannot be beyond the rule making power conferred by the Parent statute or supplants any provision for which power is not conferred. In our view, Rule 44 (1)(i) is not in accord with the provisions of sections 34 and 35 of the Indian Registration Act and cannot travel beyond the said provisions.
It also held that,
In our view, the Sub-Registrar while registering the document under sections 34 and 35 of the Registration Act is not an adjudicating authority and has no power of adjudication as to whether the transaction which is subject matter of the document lodged for registration is validly executed or not or is prohibited by any law or not. If the respondents wanted to confer such powers upon the Sub-Registrar or registering authority, such powers would have been conferred specifically by carrying out appropriate amendment by following due procedure in the Parent Act and not by framing rules or by issuing circular,
The Bombay High Court has thus read down Rule 44(1)(i) of the Maharashtra Registration Rules, 1961 which imposed additional conditions on the person seeking registration of sale deeds for lands of certain size and therefore produce a No Objection Certificate for fragmentation of the land from the competent authority.
To conclude, the Gunthewari system has opened up a unregulated property market for MIG, LIG and EWS class of people in the state of Maharashtra. However, the lack of formal housing supply coupled with rising urbanisation is cutting into government revenue along with adding into the planning issues of new and upcoming towns and cities.