CHAPTER - IV
LAND REVENUE
Highlights
Why CAG did this Audit What CAG Found
In terms of the MP Land Revenue During a test check of records of the
Code, 1959 (MPLRC), land revenue Office of Principal Revenue
includes all moneys payable to the Commissioner (PRC) and 28 out of
State Government for holding land, 47 Collectorates, Audit found system
and includes premium, rent or lease deficiencies and non-compliance
money, quit rent or any other cognate with various provisions of the
variation of these expressions. Act/Rules, as discussed below:
When agricultural land is diverted for • Non- compliance with the
residential/ commercial purposes, provisions of the Upbandh and
land revenue and premium for Government Notifications,
diverted use of land are assessed by resulted in Under-assessment of
the Sub-Divisional Officers (SDO). Diversion Rent, Premium and
Ground rent, premium and interest are Panchayat Upkar,
levied on the Nazul/ Government land
• Issuance of diversion orders
allotted on permanent and temporary
without recovering the land
lease in the State. Fines, penalties,
revenue, Premium, Panchayat
processing fee and interest are also
Upkar and penalty resulted in non-
levied under MPLRC 1959, Revenue
realisation of land revenue
Book Circular (RBC) and executive
instructions issued from time to time. These shortcomings, in aggregate,
have an overall revenue impact of
Moreover, Panchayat Upkar (Cess) is
` 4.85 crore.
also levied on land revenue in respect
of land situated in Panchayat area.
This Audit was conducted to assess
whether cases relating to diversion of
land were being assessed, and
premium rent and Panchayat Upkar
were being collected in accordance
with the MPLRC, 1959.
Audit Report (Revenue Sector) for the year ended 31 March 2019
4.1 Introduction
Revenue Department functions as the custodian of Government lands and
ensures proper maintenance of land records of the State. It also implements
various provisions of Madhya Pradesh Land Revenue Code (MPLRC), 1959
relating to assessment and realisation of land revenue with reference to the use
of land.
Revenue Department is headed by the Principal Secretary at the Government
level. The Principal Revenue Commissioner (PRC) is the Head of the
Department and is assisted by the Commissioner, Settlement and Land Records
(CSLR). Commissioners of Divisions exercise administrative and fiscal control
over the Districts included in the Division. In each District, the Collector
administers the activities of the Department and is assisted by one or more SDOs
in the rank of Assistant Collectors/Deputy Collectors/Joint Collectors as the
case may be. Superintendent/Assistant Superintendent, Land Records
(SLR/ASLR) are posted in the Collectorates for maintenance of revenue records
and settlement. Tahsildars/Additional Tahsildars are deployed in the Tahsils as
representatives of the Revenue Department. There are 10 Revenue Divisions
(each headed by a Commissioner), 52 Districts (each headed by a Collector) and
369 Tahsils in the State. The organogram of the Department is given below in
Chart 4.1.
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Chapter 4: Land Revenue
Chart 4.1: Organogram
Principal Secretary, Administrative Head of
Revenue Department Department at Government
level
Principal Revenue
Head of the Department
Commissioner (PRC)
Divisional Commissioner Administrative and Fiscal
(10 Divisions) Control
District Collectors Administrative Head of
Revenue collection at
(52 Districts)
District
Sub Divisional Officers Administrative Control at
(Revenue) Tahsil level and assessment
of Nazul and Diversion cases
Tahsildars Collection of Revenue and
(369 Tahsils) maintenance of land records
4.2 Trend of receipts
The trend of receipts of land revenue during the five-year period 2014-2019 is
given below in Chart 4.2.
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Audit Report (Revenue Sector) for the year ended 31 March 2019
Chart 4.2: Land revenue receipts
` in crore)
(`
600.00
490.99
500.00
400.00
406.65 383.91
300.00
276.86
200.00 243.10
100.00
0.00
2014-15 2015-16 2016-17 2017-18 2018-19
Source: Finance Accounts of Government of Madhya Pradesh
As can be seen from the chart given above, there has been an increase in land
revenue from year-to-year during the period 2014-2018. However, there was a
steep decline of 21.81 per cent in land revenue receipts during 2018-19. Further,
despite the annual increase during 2014-18, the actual receipts during this
period have not matched the budgetary expectations in any of the years. In fact,
at ` 383.91 crore, land revenue receipts during 2018-19 have fallen short of
budgetary expectations by 68 per cent.
The Department attributed the significant increase of land revenue in 2016-17
to recovery of arrears by targeting large defaulters. While stating that the targets
for 2017-18 were set high in the Budget, the Department stated that revenue
receipts for 2017-18 were 20.74 per cent more compared to the receipts of
2016-17. As regards the decrease in receipts during 2018-19, the Department
attributed (November 2019) it to shortage of officers and staff at District level
and engagement in other Government works.
4.3 Results of Audit
Audit of land revenue receipts was conducted through a test check of records
relating to assessment and collection of land revenue and premium in diversion
cases in 28 Collectorates (out of 47) and 28 SDO offices (selected on the basis
of highest amount of Diversion rent receipts) for the three-year period 2016-17
to 2018-19 to gain assurance that the taxes were levied, collected and accounted
for in accordance with the relevant Acts, Codes and Manuals, and the interests
of the Government are safeguarded. Besides, information was also collected
from PRC’s Office and 10 Divisional Commissioners’ offices31.
At the conclusion of audit, the findings were forwarded to the Department
(January 2020) for comments/responses; despite repeated requests (between
June to August 2020), exit meeting could not be held.
Audit brought out instances of deviations/non-compliance with the
provisions of the Acts and Rules and non-recovery of land revenue receipts in
640 cases involving an amount of ` 4.85 crore, due to various reasons,
31
In respect of Departmental Inspections.
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Chapter 4: Land Revenue
as detailed in Table 4.1.
Table 4.1: Category of Audit Observations on Revenue Receipts
` in crore)
(`
Sl. Category of Audit observations No. of Audit Amount
No. deviations
1 Short levy of diversion rent, 527 2.94
premium and Panchayat Upkar
due to
(i) adoption of incorrect market
value of land for assessment;
(ii) incorrect application of rates
and,
(iii) non-levy of Panchayat
Upkar etc.
2 Non-realisation of Land 113 1.91
Revenue in diverted cases
Total 640 4.85
The broad categories of audit findings under land revenue are discussed in detail
in the succeeding paragraphs. Similar irregularities, errors/omissions may also
exist in other units not covered in the test audit. The Department may, therefore,
examine all the units to ensure that land revenue are assessed, levied and
collected as per provisions of the Acts and Rules.
Audit findings
As per the provisions of MPLRC, Revenue Book Circular and executive
instructions issued from time to time, when agricultural land is diverted for
residential/commercial purposes, rent and premium for diverted purpose of land
are assessed by the SDO. Ground rent, premium and interest are levied on the
Nazul32/Government land allotted on permanent and temporary lease in the
State. Moreover, Panchayat Upkar (Cess) is also levied on land revenue in
respect of land situated in Panchayat area.
4.4 Short levy of Land Revenue and Premium
As per Section 59 of the MPLRC, 1959, if land assessed for one purpose is
diverted for any other purpose, the land revenue and premium payable on such
land shall be revised and assessed, in accordance with the purpose for which it
was diverted. The rates of land revenue and premium for diverted use shall be
payable at the rates prescribed in the Rules33 on the basis of market value of
land. Further, the market value of land is assessed under the Upbandh
(provision) of Market Value Guidelines issued by the Chairman, Central
Valuation Board and Inspector General, Registration (April 2015).
Test-check (between June 2019 to December 2019) of 8,313 (19.60 per cent)
out of 42,408 diversion cases assessed between April 2015 and March 2019 by
the SDOs in 28 selected Collectorates revealed non-compliance/deviations in
assessment of market value of land for levy of land revenue and premium in 527
cases in 26 units. This resulted in short levy of land revenue and premium of
32
Nazul land is Government land which is used for construction or public utility purpose,
viz. bazar or entertainment places.
33
Rules made under section 258 and section 59 of the MPLRC, 1959.
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Audit Report (Revenue Sector) for the year ended 31 March 2019
` 2.89 crore, besides non levy of Panchayat Upkar of ` 0.05 crore, aggregating
` 2.94 crore (Appendix XIII).
The Department intimated (September 2020) that compliance was being sought
from Districts.
The details of Audit observations regarding these 527 cases are as follows:
4.4.1 Adoption of incorrect market value of land
(a) As per para 4 of Upbandh of MVG 2015, lands situated either within Nagar
Nigam limits of Bhopal, Indore, Gwalior and Jabalpur, Nagar Nigam and
Nagar Palika limit of other cities and Nagar Parishad /Vishisht Gram limits or
in the specified investment areas, were to be assessed at the rates prescribed for
developed land for first 1,000 square metre (m²), 500 m² and 300 m²
respectively as specified in ibid Updandh and then rest of the land was to be
assessed at the rates prescribed for agricultural land.
In 436 cases (24 Collectors34), specified area of land was not assessed as
developed land as per the Upbandh. The SDOs assessed the entire land at the
rates applicable to agricultural land only, which resulted in short levy of rent,
premium and Panchayat Upkar on rent amounting to ` 2.58 crore.
(b) As per para 1 of Upbandh, in the villages/ area, where separate rates are not
provided for land situated near roads35, land shall be valued at 100 per cent,
50 per cent and 20 per cent higher than the market value of land for national
highways and its bypass, state highways and its bypass and district roads
respectively.
In 24 cases (six Collectors36), higher rates as per para 1 of Upbandh was not
applied although the land was situated near the road. This resulted in short levy
of rent, premium and Panchayat Upkar amounting to ` 6.08 lakh.
4.4.2 Application of incorrect rates for assessing Land Revenue
Government vide notification dated 28 September 2018 (applicable from
25 September 2018), revised the method for assessing the land revenue and
premium. Under the new method, land revenue was to be calculated on the basis
of per sq. mtrs rates prescribed for different purposes of use of land. Earlier,
market value of land was first assessed as per Market Value Guidelines and
thereafter, rate of diversion rent and premium were applied on the assessed
market value.
Audit found that in 22 cases (eight Collectors37), correct rates as prescribed in
the Government notification dated 28 September 2018 were not applied for
calculation of land revenue and premium. This resulted in short levy of land
revenue, premium and Panchayat Upkar amounting to ` 23.47 lakh.
34
Agar Malwa (35), Alirajpur (01), Chattarpur (01), Damoh (05), Dewas (02), Guna (02),
Gwalior (51), Indore (36), Katni (20), Khargone (05), Mandla (02), Mandsaur (31),
Morena (05), Panna (05), Ratlam (30), Rewa (10), Sagar (14), Satna (28), Sehore (18),
Shahdol (57), Sheopur (58), Ujjain (10), Umariya (08) and Vidisha (02).
35
Within the range of 20 metres from the road.
36
Agar Malwa (15), Alirajpur (02), Chhindwara (02), Mandsaur (02), Sagar (02) and Ujjain
(01).
37
Bhopal (02), Damoh (04), Guna (01), Mandsaur (06), Morena (02), Panna (02), Ratlam
(03) and Sheopur (02).
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Chapter 4: Land Revenue
4.4.3 Panchayat Upkar not levied
As per Section 74(1) of Panchayat Raj Avam Gram Swaraj Adhiniyam, 1993,
every tenure holder and Government lessee shall be liable to pay for each
revenue year for the purpose of this Act, a cess (Panchayat Upkar) in respect
of land held by him within the Gram Sabha area at the rate of 50 per cent of the
land revenue or rent assessed on such land.
Audit found that in 45 cases (six Collectors38), Panchayat Upkar was not levied
although the land was situated in Gram Sabha area. This resulted in short levy
of cess amounting to ` 2.72 lakh. Further, in 16 out of these 45 cases, instances
of short levy of rent and premium amount of ` 3.77 lakh were also noticed.
4.5 Non-realisation of Land Revenue in diverted cases
According to Section 59, read along with Section 172 of MPLRC 1959, where
a land which has been assessed for a purpose has been diverted for another
purpose, premium and rent on that land will be re-assessed by the SDO.
Premium is a one-time payment and rent is an annual charge for land diverted
for other purposes. The MPLRC does not clearly specify the advance
remittances of rent and premium assessed, before issue of diversion orders to
the land holder. Consequently, huge amount of rent and premium were
outstanding. The Department had made the required changes in the procedural
rules in June 2019 for prior payment of dues.
Audit scrutiny (June 2019 to December 2019) of records39 revealed that four
Collectors40 issued diversion orders in 7,768 cases during the period from
December 2014 to March 2019. Out of 1,255 cases test-checked in Audit, in
113 cases, order for diverted use of land were issued without recovering the
diversion rent of ` 22.54 lakh, premium of ` 35.91 lakh, Panchayat Upkar of
` 1.86 lakh and penalty of ` 130.83 lakh. It was observed in Audit that action
for recovery was also not taken by the Collectors in the cases of non-
compliance/deviations pointed out in audit. As a result, an amount of
` 1.91 crore was still pending for recovery in these Collectorates as per details
shown in Appendix XIV.
On this being pointed out in Audit, the Department replied that the Tahsildars
would be instructed to recover the outstanding revenue.
Government replied (August 2020) that presently Section 172 of MPLRC of
diversion had been quashed and assessment rule of land revenue under sections
59 and 60 of MPLRC 1959, had been published in the Gazette on 28 September
2018 and procedural rules for advance remittance of rent and Premium assessed
had been issued on 07 June 2019.
Although the Department had amended the relevant rules and procedure w.e.f.
June 2019, appropriate action is required for ensuring recovery of assessed rent
and premium in old cases where diversion order has already been passed.
38
Alirajpur (03), Mandla (01), Mandsaur (15), Panna (01), Shahdol (10) and Sheopur (15).
39
Periodical returns sent by Tahsildars to the Collectors regarding pending amount of
recovery and records of Revenue Inspectors and SDO.
40
Guna, Sagar, Satna and Vidisha.
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Audit Report (Revenue Sector) for the year ended 31 March 2019
4.6 Departmental Inspections
As per provisions of para 34 of Section II (1) of the Revenue Book Circular
(RBC), the DC should conduct detailed inspection of each District under his
administrative control once a year. However, if the number of districts is more
than five, inspection should be so planned that all the Collectorates are
inspected within a period of two years. The DCs should conduct inspection of
Tahsils also in such a manner that each Tahsil is inspected at least once in a
period of three years. Test-check of the records of 10 DC Offices revealed that
there was a shortfall in inspections during 2016-17 to 2018-19. Details are given
in Table 4.2.
Table 4.2: Details of Inspections planned and conducted by DCs
Year Inspections required as Inspections planned as Actual Inspections
per RBC norms per Roster conducted
Collectorate Tahsil Collectorate Tahsil Collectorate Tahsil
2016-17 43 19 171 7 (63.16) 49 (71.34)
2017-18 43 22 103 8 (63.64) 35 (66.02)
369
2018-19 43 28 155 12 (57.14) 74 (52.25)
Total 129 369 69 429 27 (60.86) 158 (63.17)
Source: Data provided by Divisional Commissioner Offices
Note: Figures in parenthesis are percentage of shortfall vis-à-vis planned audits
As can be seen from the above table, there was a shortfall of 79 per cent
(average) and 57 per cent (average) in inspection of Collectorates and Tahsil
Offices respectively vis-à-vis norms prescribed for inspection in RBC and
61 per cent (average) and 63 per cent (average) in inspection of Collectorates
and Tahsil respectively, even with regard to the planned inspections.
Thus, not only were the targets of inspection of Collectors’ and Tahsil Offices
required as per RBC not achieved by the DCs, they could not even achieve the
inspections planned as per Roster which were much lower than the targets as
per RBC indicating inadequate internal controls in monitoring compliance of
Collectorates and Tahsils with prescribed procedures.
Further, IRs in respect of only 25 Collectorates and 147 inspections of Tahsil
Offices were found to have been issued and compliance in respect of five IRs
relating to only two Collectorates and 28 IRs of Tahsil Offices41 were received
by the DC Offices.
Government replied (August 2020) that PRC office was established in the year
2011 and the work of inspection is not included in the office setup. Offices of
District Collector and Divisional Commissioner were established prior to
independence and the responsibility of inspection of SDO and Tahsil Offices
has been entrusted to the Divisional Offices. Government further stated that a
letter was being issued to all the Divisional Commissioners and Collectors w.r.t.
ibid para.
41
Two Tahsil offices of Shahdol and 26 Tahsil offices of Ujjain.
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Chapter 4: Land Revenue
4.7 Conclusion
As brought out in the foregoing paragraphs, audit of land revenue receipts
through a test check of the relevant records in 28 Collectorates revealed that the
SDOs had not complied with the provisions of the Upbandh and Government
notifications regarding valuation of market value of land, resulting in under-
assessment of market value of land in 527 cases, with short levy of premium of
` 2.43 crore, diversion rent of ` 0.46 crore, besides short/non-levy of Panchayat
Upkar of ` 0.05 crore.
Further, action was not initiated by four Collectors in 113 cases for recovery of
` 1.91 crore relating to premium, diversion rent and Panchayat Upkar, before
issuing diversion orders. Moreover, internal oversight over the functioning of
the Collectorates and Tahsil and their compliance with established
codes/Acts/Rules etc. was not adequate.
(BIJIT KUMAR MUKHERJEE)
Bhopal Accountant General
The (Audit II)
Madhya Pradesh
Countersigned
New Delhi (GIRISH CHANDRA MURMU)
The Comptroller and Auditor General of India
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