Land transactions in Gujarat often involve the crucial distinction between Old Tenure and New Tenure land. Buyers, sellers, farmers, and developers frequently misunderstand this difference, leading to litigation, stalled projects, and even cancellation of transactions. This blog simplifies the concept and explains the key restrictions, required permissions, and premium payment procedures involved under the Gujarat Revenue Laws.
What Is “Old Tenure” Land?
Old Tenure (OT) land—also called Freehold Land—is land that is freely transferable, with no requirement of government permissions for sale, purchase, gift, or mortgage (except general laws like Transfer of Property Act, Stamp Act, RERA, etc.).
Key Features:
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Freely saleable and transferable
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No premium or conversion charge
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No restriction on use (subject to zoning and NA rules)
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Bank financing is easy
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Minimal involvement of revenue authorities
Most private lands fall into this category.
What Is “New Tenure” Land?
New Tenure (NT) land—also known as Restricted Tenure Land—comes with government-imposed restrictions. Such lands are usually allotted to individuals for specific purposes such as agriculture, rehabilitation, industrial use, or as a concession by the State.
They cannot be transferred or used freely without prior permission from competent authorities.
Key Features:
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Transfer is restricted
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Permission of Collector/Mamlatdar is mandatory
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Conversion to Old Tenure usually requires payment of premium
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Intended use must follow original allotment conditions
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In case of breach, land may be resumed by the government
Why Does New Tenure Status Exist?
The State Government often grants land at concessional rates for:
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Agricultural rehabilitation
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Allotment to landless persons
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Resettlement after calamities
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Industrial development
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Charitable or public purposes
To ensure that beneficiaries do not misuse or commercially exploit the land, restrictions remain.
Legal Basis:
Restrictions on New Tenure land typically arise from:
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The Gujarat Land Revenue Code, 1879
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Rules relating to Government Grants
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Allotment orders issued by the Collector
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Relevant GRs (Government Resolutions)
The conditions mentioned in the allotment order are binding.
Restrictions on New Tenure Land
New Tenure lands often carry one or more of the following restrictions:
1. No Sale Without Permission
The land cannot be sold, gifted, or transferred without prior approval.
2. No Change of Use
Agricultural NT land cannot be used for non-agricultural purposes unless NA permission is obtained.
3. No Leasing or Mortgage Without Approval
Banks often refuse loans unless land is converted to Old Tenure.
4. Breach Can Lead to Government Action
Including:
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Inquiry
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Imposition of penalty
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Resumption of land
Conversion of New Tenure to Old Tenure (De-restriction)
This is the most common issue landowners face.
To sell or develop NT land, owners usually apply for conversion to Old Tenure by paying a premium.
➡️ Competent Authority:
Collector or District Revenue Officer (as per jurisdiction)
➡️ Procedure:
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Application under Section 43 or relevant GR
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Submission of documents (7/12, 8A, hak patrak, allotment order, map, etc.)
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Site inspection by revenue officials
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Calculation of premium based on Jantri value
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Payment of premium within stipulated time
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Collector issues Order converting New Tenure to Old Tenure
How Is the Premium Calculated?
Premium generally depends on:
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Jantri value of the land
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Nature of breach/sought permission
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Purpose of conversion (sale, development, loan, NA conversion, etc.)
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Government Resolutions in force
Typical premium ranges from 20% to 50% of Jantri value, depending on category and concessions applicable.
Can New Tenure Land Be Sold Without Conversion?
Yes, but only with prior Collector’s permission
and often after paying a transfer premium.
Sale without permission is illegal and attracts:
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Inquiry
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Penalty
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Possible land resumption
Every buyer must ensure revenue entries clearly indicate if land is NT or OT before purchase.
Practical Importance for Buyers & Developers
✔ Always check “New Tenure” notation in:
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7/12 extract
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8A
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Hissa form
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Mutation entry (dakhla)
✔ Developers must confirm NT status before planning NA or construction projects.
✔ Banks generally do NOT finance NT land.
✔ Genuine sellers must complete conversion before executing sale deed to avoid disputes.
Recent Trends & Litigation
Over the past decade:
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Courts have consistently held that conditions in allotment orders and NT restrictions are binding.
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State Government has issued several GRs relaxing premium rates for certain categories to encourage development.
However, unpermitted sale of NT land continues to lead to:
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RTS cases
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Revision applications
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Collector inquiries
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Cancellation of entries
This makes due diligence essential.
Conclusion
Understanding whether land is Old Tenure or New Tenure is vital for clear title, safe purchase, and compliance with Gujarat’s revenue laws.
Old Tenure land offers flexibility and freedom, whereas New Tenure land comes with restrictions that require careful legal handling, permissions, and payment of premiums.
For buyers, farmers, and developers alike, proper legal advice and revenue verification can prevent costly disputes and ensure smooth transactions.
