( 1) All lands vested or deemed to have been vested in a Panchayat under this Act, shall be utilised or, disposed of by the Panchayat for the benefit of the inhabitants .
of the village concerned in the manner prescribed:
Provided that where two or more 1 villages have a common Panchayat, shamilat deh of each village shall be utilised and disposed of, by the Panchayat for the benefit of the inhabitants of that village:
Provided further that where there are two or more shamilat tikkas in a village, the shamilat tikka shall be utilised and disposed of, by the Panchayat for the benefit of the inhabitants of that tikka:
1[Provided further that where the culturable area of land in shamilat deh of any village, so vested or deemed to have been vested in a Panchayat is in excess of two-thirds of the tota l of that village (excluding abadi deh), then culturable area upto the extent of two-thirds of such total area shall be left to the Panchayat and one-half of the remaining culturable area of shamilat deh, shall be utilised for the settlement of landless tenants and other tenants ejected or to be ejected of that village and the remaining culturable area shall be utilised for distribution to the small land owners of that village by the collector in consultation with the Panchayat, in such manner as may be prescribed.]
(2) The area of shamilat deh to be utilized for the purposes of the third proviso to sub-section (1) shall be demarcated by such officer in consultation with the Panchayat and in such manner as may be prescribed.
(3) The State Government or any officer authorised by it in this behalf may, from time to time, with a view to ensuring compliance with the provision of the second proviso to sub-section (1) or sub-section (2) issue to any Panchayat such directions as may be deemed necessary.
2[(4) Nothing contained in the th ird proviso to sub-section (1) and in sub-section (2) and sub-section (3) shall apply to the "Hilly area".]
3[(5) Notwithstanding anything contained in the preceding sub sections, on land vested or deemed to have been vested in a panchayat under this Act, shall be disposed of by way of sale, gift or exchange, so as to leave with the Panchayat, culturable area which is less than fifty per cent of the total culturable area vested or deemed to have been vested in the Panchayat 4{:}] 5[Provided that the condition of retaining fifty per cent of the total culturable land vested or deemed to have been vested in the Panchayat shall not be applicable, when such land is disposed of by way of sale, gift or exchange to any of the Department of the State Government or the Board or the Corporation owned or controlled by the State Government.]
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