Safiya Malik

The Supreme Court held that landowners seeking a change in the classification of paddy land under the Kerala Conservation of Paddy Land and Wetland Act, 2008, must pay reclamation fees for the entire landholding if it exceeds 25 cents. The Court overturned the Kerala High Court’s interpretation, which had excluded the first 25 cents from the calculation of fees for larger landholdings.

The case arose from a dispute concerning a government notification issued on February 25, 2021, which exempted land up to 25 cents from reclamation fees. The respondent, who owns 14.57 ares of land, applied for a category change but was required by the Revenue Divisional Officer (RDO) to pay a fee of ₹1,74,840, calculated at 10% of the fair value of the land. The respondent challenged this demand before the Kerala High Court, which ruled that the first 25 cents should be excluded from the fee calculation. The State of Kerala appealed the decision before the Supreme Court.

The respondent owns land in Karikode Village, Thodupuzha Taluk. On October 26, 2019, an application was submitted under Form 6 of Section 27 of the Kerala Conservation of Paddy Land and Wetland Act, 2008, seeking permission to change the land’s classification. A separate application was submitted under Form 5 for the removal of the land from the data bank.

On January 27, 2021, the Revenue Officer, Idukki, issued a notice informing the respondent that the property had been de-notified under the Kerala Paddy and Wetland (Amendment) Act, 2018. The respondent was directed to deposit ₹1,74,840, being 10% of the fair value of the land, which was determined to be ₹17,48,400. The government relied on the valuation of adjacent properties and statutory provisions to calculate the fee.

The respondent objected to the demand and approached the Kerala High Court, contending that under the government’s February 2021 notification, 25 cents of land should be exempt from the fee calculation.

The respondent’s case before the High Court was based on the submission that the application for conversion had been made in 2019, before the February 2021 notification, and that the demand for fees should be determined accordingly. It was further submitted that the exemption granted by the government should be applied to the first 25 cents of the landholding, and the fee should be calculated only on the remaining portion.

The State of Kerala opposed the petition, arguing that the exemption applied only to landholdings up to 25 cents and did not allow for a deduction of 25 cents from larger holdings before applying the fee. It was submitted that the government had not provided for any such reduction in its rules or notifications.

The Single Judge of the Kerala High Court ruled in favor of the respondent on February 6, 2023, setting aside the fee demand. The Court held that the reclamation fee should be calculated only for the portion of the land that exceeds 25 cents.

The Kerala government appealed the ruling before a Division Bench in Writ Appeal No. 983 of 2023. The appeal was dismissed on August 1, 2023. A review petition filed by the State was also dismissed on October 4, 2023. The Division Bench observed: "The fee for conversion of land is payable only for lands in excess of 25 cents. Being so, the contention that, if the land exceeds 25 cents, conversion fees will have to be paid for the entire extent, including the 25 cents, can only be rejected."

The State of Kerala challenged the High Court’s ruling before the Supreme Court, submitting that the lower court’s interpretation of the February 2021 notification was incorrect. It was submitted that the notification created two separate categories of landowners: those with holdings up to 25 cents, who are fully exempt from reclamation fees, and those with larger holdings, who must pay fees on the entire landholding.

The Supreme Court examined the notification and the relevant statutory provisions. The Court observed: "By way of the Notification, the appellant has sought to create two separate classes, one of people having land 25 cents or less; and the second, where people have land in excess of 25 cents. We are unable to understand how the two distinct categories were fused into one by the High Court."

The Court stated that the notification stipulated that any landholding exceeding 25 cents is subject to the full reclamation fee. The ruling of the High Court, which treated the exemption as applicable to the first 25 cents of a larger landholding, was not accepted.

The Supreme Court referred to Rule 12(9) of the Kerala Conservation of Paddy Land and Wetland Rules, 2008, which provides that for landholdings up to 25 cents, no fee is to be remitted. For holdings above 25 cents and up to one acre, a fee of 10% of the fair value is applicable. The Court noted that the government’s clarification of July 23, 2021, also maintained that if the total landholding exceeded 25 cents, no exemption could be granted.

The Court ruled: "The interpretation of the High Court is that such calculation of 10% fair value of total land, which exceeds 25 cents, shall be computable after having reduced the 25 cents, as exempted from the total. We are unable to accept such a view."

The Supreme Court allowed the appeal filed by the State of Kerala, setting aside the Kerala High Court’s ruling. It held that the respondent must pay the reclamation fee on the total extent of the landholding without any deduction of 25 cents.

The Court further stated that the Kerala government had issued a clarification reiterating that exemptions applied only to landholdings of 25 cents or less. The respondent, whose landholding exceeded this limit, was required to pay the full conversion fee.

The Supreme Court ruled: "The respondent must, therefore, pay a conversion fee as calculable on the total extent of land in their ownership."

Accordingly, the fee demand issued by the Revenue Divisional Officer was upheld, and the appeals were allowed.

Case Title: State of Kerala & Ors. v. Moushmi Ann Jacob

Case Number: 2025 INSC 255; SLP(C) Nos. 25736-25737 of 2023

Bench: Justice Sanjay Karol and Justice Manmohan

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