Land Acquisition for Industrial Use: Revenue Law Compliance and Due Diligence

In India, the demand for industrial land is rising with the expansion of manufacturing hubs, logistics corridors, and infrastructure development under initiatives like Make in India and PM Gati Shakti. However, acquiring land for industrial use is far from a mere real estate transaction — it involves navigating a complex web of revenue laws, land records, regulatory approvals, and due diligence checks.

This blog explores the key revenue law compliances and the critical due diligence process involved in acquiring land for industrial purposes.

Understanding the Legal Framework

Land acquisition in India is primarily governed by:

1. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act)
2. Respective State Land Revenue Codes (e.g., Gujarat Land Revenue Code, Maharashtra Land Revenue Code, etc.)
3. Industrial Area Development Authority Acts (State-specific)
4. Environmental and Zoning Regulations
5. In addition to these, the Revenue Department of the state plays a key role in verifying land titles, classification, occupancy rights, and land use permissions.

Key Revenue Law Compliances

1. Land Classification Check

Verify whether the land is agricultural, non-agricultural, forest, or grazing land.

Industrial use requires conversion (NA – Non-Agricultural status) if the land is agricultural.

2. Title and Ownership Verification

Scrutinize 7/12 extracts, Record of Rights (RoR), mutation entries, and encumbrance certificates.

Ensure no pending disputes, litigations, or government acquisition notifications.

3. Land Ceiling Laws

State-specific land ceiling laws may restrict acquisition beyond a certain extent.

If applicable, seek exemption from the competent authority.

4. Zoning and Master Plan Compliance

Confirm that the land falls under the designated industrial or mixed-use zone as per the local development plan or master plan.

5. Payment of Land Revenue and Taxes

Ensure all dues such as land revenue, cess, and penalties are cleared before or during the acquisition process.

Due Diligence Checklist for Industrial Land Acquisition

1. Legal Due Diligence

Examine all title documents, prior transactions, and litigation history.

Identify whether the land is freehold or leasehold, and examine lease terms.

2. Revenue Due Diligence

Verify:

1. Mutation entries
2. Possession status
3. Land use certificate
4. Demarcation and survey records
5. Pendency of any land ceiling, tenancy, or tribal restrictions

3. Environmental and Local Body NOCs

Obtain:

1. Environmental clearance if required
2. NOC from Gram Panchayat or local authority
3. Zoning clearance

4. Industrial Permissions

1. Apply for change of land use (CLU) approval.
2. Register with the State Industrial Development Corporation (SIDC) or Special Economic Zone (SEZ) authority, if applicable.

5. Stamp Duty and Registration

1. Ensure correct stamp duty calculation and execution of the sale deed/lease deed before the revenue officer or sub-registrar.

Common Pitfalls to Avoid

1. Proceeding with acquisition without verifying actual possession and boundary disputes
2. Ignoring restrictions under tribal land or forest land laws
3. Assuming conversion is automatic upon purchase — CLU must be applied and approved
4. Overlooking customary rights or grazing rights of local communities

Conclusion

Land acquisition for industrial use must be approached with caution, strategy, and legal precision. Involving a professional team of lawyers, revenue consultants, and land surveyors is critical to ensure compliance with revenue laws, avoid costly litigations, and secure a clear and marketable title.

As India pushes forward with infrastructure-led growth, aligning industrial development goals with legal and social compliance will ensure sustainable, efficient, and dispute-free expansion.

Land Acquisition for Industrial Use: Revenue Law Compliance and Due Diligence.