JURISPRUDENCE OF LAND ACQUISITION

ABSTRACT OF THE SUBMISSION

If individual be unrelenting to part with his land and yet a mandate requires him to do so, what then is the remedy available to the person whose land (and sometimes the only home, or the only ...

By: Aakanchha jhunjhunwala and zeenia S | Update: 2016-11-30 14:49:59

JURISPRUDENCE OF LAND ACQUISITION

ABSTRACT OF THE SUBMISSION

If individual be unrelenting to part with his land and yet a mandate requires him to do so, what then is the remedy available to the person whose land (and sometimes the only home, or the only means of livelihood) has been acquired? Does not the present RFCTLARR (Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement) Act, 2013 require a revamp?

While the Land Acquisition Act, 1894 only recognized the right of land owner providing for inadequate compensation based on the market value, neither does it specify any guidelines to assess its market value nor is the rehabilitation and resettlement of the people who are deprived of their land, spoken of. Hence we see the emergence of LARR Act 2013 which partly filled the loopholes of the 1894 Act yet has, as we analyze, failed to meet its purpose.

The first problem being the 2013 Act applies only when private project developers acquire more than 100 acres in rural areas or 50 acres in urban areas through a private negotiations or when a private project developer asks the government to acquire land on their behalf. The other big drawback is that if the land has been acquired under sixteen previous acts like SEZ Act, Atomic Energy Act etc then this Act does not applies.

Secondly, no public consent is required by public sector units in acquiring land, be it for  mining,  power projects, highway building or any other purpose.

Thirdly, there is still a current debate regarding the compensation, rehabilitation and resettlement.

Fourthly, the Act does not recognize local self governments as appropriate government in matters of  acquisition.

 In spite of several provisions in the enactment, the sufferers are not guaranteed with their rights as these provisions are not mandatory, and also the. project developers are not mandated to provide these provisions. At the same time, the timeline under which these facilities are to be provided is unclear.

In the process of Land Acquisition, it is important to strike a balance between the need of land for developmental activities and  to protect the interests of those affected. This can be done only  by taking due diligence and  exercising some political will.  The emergence of a wholesome Act is now possible  only with the incorporation of these quintessential provisions which were previously overlooked. They include:

  1. To incorporate  a clear  definition to the term public purpose.
  2. Compulsory employment to one member of the affected family of farm labourers.
  3. Limiting the industrial corridor to one kilometer on both the sides of the highways and railways.
  4. Farmers may get right to appeal/ complain over land acquisition, hearing and redressal of grievances at the district level.
  5. Record and supervision of vigilance activities with regards the implementation of the provisions at the ground  level.

Addressing the above concerns shall go a long way in fulfilling the objective behind inclusion of the term “transparency” incorporated in the very title of the Act.

Under the power of eminent domain, government is given rights to such extent that when ‘public needs’ require the acquisition of property, it need not to be denied because of an individual’s need or unwillingness to give. What then is the remedy available to the person whose land(and sometimes the only home, or the only means of livelihood ) has been acquired? Does not the present RFCTLARR (Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement) Act, 2013 require a revamp?

In Waman Rao v. Union of India[1] it was observed by the constitutional bench  that as India is predominantly an agricultural society, there is a “strong linkage between the land and the personal status in the social system.” The land on which they cultivate and live, assures them dignity as a person as well as justice at the same time by providing to them a near decent means of livelihood.

The U.S. Courts, in U. S. v. Jone[2] has observed that there is no need to confer this authority (power of eminent domain) expressly by the Constitution it exists without any declaration to that effect. In this way the right of an individual conflicts with the right of the state to acquire property.

In India, the government was empowered to acquire land for public purpose by the central law passed by the legislature in the year 1894, which is known as “Land Acquisition Act,1894” and later on several other acts were enacted and amended as per the need of the hour. In the case of Smt. Ram Rakhi v. UOI[3] and others, the provisions of land acquisition are not applicable to any case unless and until the procedure under the Act is met.

  • Land Acquisition Act , 1894

 After independence the Land Acquisition Act, 1894 forms the parent Act in India and it is the basis of all control and State laws relating to compulsory acquisition and compensation[4]. The Act also described the process that has to be used by the state to acquire land for either itself or for a company.

As per this Act, land can be acquired under either Part II or Part VII of the Act. Under Part II, the land is acquired by the central or state government, or companies that are either own or partly owned or controlled by the state for the public purpose. Whereas Part VII deals with non- governmental companies

  • Land  Acquisition under Part II

1st Step: Issuance of preliminary notification

The 1st procedure to be followed for acquisition of land is the issuance of preliminary notification under Sec 4(1) of the Act. The notification which is issued must be published in the official gazette and two daily local newspapers in vernacular language and also in english followed by a public notice at different convenient places in the locality. Later, after following the above mentioned procedure, the notice lawfully empowers an authorized officer to enter and survey the land specified in the notice without the owner’s permission.

For the purpose of land acquisition, proceedings are carried on by an officer appointed by the government known as Land Acquisition Collector. The proceedings carried out by the land acquisition collector  is of an administrative nature and not judicial or quasi judicial character. In Jayanti Lal Amrit Lal Shodhan V.F.N. Kana[5],Supreme Court held that hearing as per section  5-A of Land Acquisition Act,1894 is not judicial or quasi-judicial but the proceedings is only administrative in  nature [6].

And at the same time notice also alerts the land owner that he should not invest any money or labour on any improvements to his land without the collector’s consent.

2nd Step: Filing of Objection by the owner or by the person who have certain interest in acquired property

Owners and other people who have certain interest in the land are then required to file their objections, if any against this notice within 30 days. These objections have to be submitted to the collector. Thereafter, every objector gets an opportunity of being heard by the collector.

Objections can be made on certain grounds like the purpose for which land is sought to be acquired is not a public purpose, the land in question is not suitable for the stated objective, more land is being acquired than what is necessary for the proposed project, an alternative piece of land could be acquired which would cause less inconvenience to people, or land contains historic monuments, places of public interest, religious buildings, tombs, graveyards etc. 

After hearing all objections, the collector submits the report of objection to the appropriate government in respect of notified land. The government then takes a decision regarding the proposed acquisition based on the report submitted by the collector.

3rd Step: Declaration of the decision passed by the government

Once the government passes the decision, a declaration is issued under Sec. 6(1), which becomes conclusive evidence that land is needed for public purpose and that the government can go ahead with the acquisition process. The act requires that such declaration should be made within a period of 1 year from the date of issuance of preliminary notification.

4th Step: Notice to interested parties

After the declaration, the notified land is marked out, measured and planned as per the Sec 7 and 8 of the Act. The collector informs the land owner about the government’s intention to take possession of their land and invite claims from all interested parties to compensation by sending a notice under Sec. 9. Interested parties can file their objections regarding measurement and value of land to the collector.

5th Step: Conduction of enquiry and the award by the collector

 An enquiry is conducted by the collector regarding the objections submitted by the interested parties under Section 11 of the Act. On completion of this enquiry, an award is made, by the collector with the prior approval from the appropriate government. The award should be made within 2 years from date of publication of the declaration, else the acquisition proceedings lapse.

A landowner can further raise his objection regarding the measurement of land, amount of compensation awarded, the person to whom it is payable and its apportionment by filling a written application to the collector, who shall refer the matter to the court. The landowner cannot file a suit in the ordinary civil court to establish his claims.

6th Step: Taking of the possession by the competent authority

After passing the award, the competent authority may take possession of the land immediately upon paying the compensation. The land then vests absolutely with the government, free from all encumbrances. The transfer of title is delayed till possession is taken by government.

7th Step: Compensation

The act provides that the compensation should be based on the market value of land on the date of preliminary notification. The payment of compensation can be delayed beyond the date on which the possession of land is taken. As the protection against delay in compensation an interest of 12% per annum is also given.

  • Acquisition in Emergency

Sec.17 of the Act confers special power to the acquiring authority when land has to be acquired in case of urgency, by virtue of which the collector can take possession of the land without even giving away the award. The government has complete authority to define a situation as urgent and invoke an urgency clause to acquire the land within a short notice of 15 days.

  • Land acquisition under Part VII

Under Part VII, land can be acquired by a company only if they pay the entire amount of compensation for the land they seek to acquire. While part II of the Act can be invoked if the compensation is paid wholly or partly.

Acquisition under Part VII can be taken for erecting dwelling house for workmen or for providing amenities connected with such dwelling houses or for construction of some building or work for a company, which is engaged or is taking steps for engaging itself in any industry or work, which is for public purpose or is likely to prove useful to the public.

Steps of acquisition of land under Part VII are almost similar to that of part II of the Act except the compensation clause.

  • Analysis of Land Acquisition Act, 1894

Land Acquisition Bill, 1894 was the first bill which was accepted after Independence but this bill had a lot of adverse provision or lacunas in it which affected the owners or the person getting benefit out of the land.

First and one of the biggest problem is that this act only recognizes the right of land owner. While this is somewhat reassuring for land owners but at the same it’s unsympathetic for the people who earn livelihood from land acquired. It is agreed that landowner loses a lot when his land is taken away from him, while along with it the loss of the labourers working on the land is also something that should not be overlooked.

In Somawati v. State of Punjab[7] the Supreme Court held that object of the Land Acquisition Act was to empower the government to acquire land mainly for public purposes. So second and the most important problem which crops up is that the act can’t fulfill its object in itself properly as the term ‘public purpose’ in the act is given a very vague and wide meaning. Under the Land Acquisition Act the government has sovereign right to take over the land for public purpose. However the biggest weakness in the bill is that the definition is very broad and leaves almost no scope for general public to raise an objection against the acquisition. The expression of ‘public purpose’ includes: the provision of village sites, or the extension, planned development or improvement of existing village sites; the provision of land for town and village planning; the provision of land for planned development of land from public funds in pursuance of any scheme or policy of government and subsequent disposal thereof in the whole or part by lease. Assignment or outright sale with the object of security, further development as planned.

Lastly, the Land Acquisition Bill, 1894 does not provide adequate compensation for the acquisition. It says that the compensation for land is to be based on its market value. However, the act does not specify any guidelines for the assessing officer (viz. collector) to assess this market value. It is often alleged that the assessing officer under values the land and the poor landowner ends up subsidizing the acquirer. And at the same time Land Acquisition Act, 1894 does not talk about the rehabilitation and resettlement of the people who are deprived of their land or might be there only home/ place to live and survive.

  • Land Acquisition and Rehabilitation and Resettlement Act, 2013

The Land Acquisition Act, 1894 does not mandate rehabilitation and resettlement of people affected by acquisition of their land. Thus in the year 2003 the government announced the national policy on rehabilitation and resettlement to protect the interest of each land owner and landless person. For the purpose of the Act, ‘landless person’ means the person whose livelihood is primarily dependent on the land being acquired. The Act came into force with effect on February, 2004. Subsequently the government on October 2007 announced the revised national policy regarding the same. Unfortunately, however with the dissolution of the government at that time the new bill lapsed. Later again in year 2011, a new proposal was made regarding the bill to the present government at that time.

The bill proposes a unified legislation for acquisition of land and adequate rehabilitation mechanism for all affected persons. And at the same time it was also proposed in the new bill to replace the Land Acquisition Act, 1894 and Resettlement and Rehabilitation Policy, 2003 as a single enactment Land Acquisition and Rehabilitation and Resettlement Act. Due consideration was given to the proposed bill and it was enacted in the year 2013.

  • Key features of the Act which differentiates it from Land Acquisition Act,1894

The Act specifies provision for land acquisition as well as rehabilitation and resettlement along with it there are major changes in the new Act relating to the process of land acquisition, rights of the people displaced by acquisition, method of calculating compensation, requirement of rehabilitation and on resettlement for all acquisitions etc. Few of the major changes in the new enactment include-

  • the new act is applicable in cases when the appropriate government acquires land for of its own use and control or to transfer it for the use of private companies for public purpose and also when it acquires land on the request of private companies for immediate use for public purpose. The act also states that private company shall provide for rehabilitation and resettlement if they purchase or acquire land through private provision negotiations, equal to or more than 100 acres in rural areas and 50 acres in urban areas.
  • Under section 21(2) of the Act compensation and rehabilitation for the acquisition of land  for public purpose is payable only to person interested. So the next question arising  here is to know who is the person interested? According to section 3(1)(x) of the Act, “person interested”  is deemed to be interested in land who would be entitled to claim an interest in compensation if the land were acquired under the Act.                

           In Bhyrava Murthy v. M. Venkataraju[8] it was held that the term “person interested” should be given a broader meaning if a situation demands, it seeks to include a person having an            interest in an easement and also a beneficiary. At the same in the case of A.P. Agricultural University v. Mohamadunnisa Begum [9] it was held by the court that expression “person                interested” does not require that a person must really have an interest in the land sought to be acquired. It is acceptable if he claims an interest in compensation, as distinguished from an              interest in the property sought to be acquired. 

  • The term ‘public purpose’ in the Act was defined more clearly than the earlier Act for it is said that the term public purpose includes provision of land for strategic defense purpose and national security, roads, railways, highways and ports built by government and public sector enterprises, project affected people, planned development or improvement of villages and for residential purposes for the poor and the landless.

            Public purpose also includes other government projects which benefit the public as well as provision of public goods and services by private companies or private partnership, but these                 projects require the consent of 80% of the ‘projects affected people’.

  • Certain provision in the Act specifies that maximum of 5% of irrigated multi-cropped land may be acquired in a district, with certain conditions.
  • Act also says that every acquisition requires a Social Impact Assessment (SIA by an independent body followed by a preliminary notification and a final award by District Collector.

            For the emergency provision, Act specifies that the appropriate government shall acquire the land after 30 days from the date of issue of notification (without SIA). This clause may be used             only for defense, national security and conditions arising out of a national calamity.

  • Amendments regarding the compensation were also made in the Act. The Act speaks that the compensation for the land acquired shall based on the higher of :

            i) the minimum land value, specified in the Indian Stamp Act, for registration of sale deed;  ii) the average sale price of higher priced 50% of all sale deeds registered in the previous three               years for similar type of land situated in the vicinity. This amount is further doubled in case of rural areas, the value of the assets (trees, plants, buildings etc.) attached to the land acquired             will be added to this amount. This total amount will then be multiplied by 2 to the final compensation amount and in case of urgency clause the multiplication factor will be 2.75.

  • Act says that each affected family which is displaced shall get one time financial assistance of an amount not less than 50,000 as a transportation cost for shifting purpose.
  • The Act also forms certain authorities like Administrator; Commissioner for Rehabilitation and Resettlement; Rehabilitation and Resettlement committee (for acquisition of 100 acres or more of land); National Monitoring committee for Rehabilitation and Resettlement; and Land acquisition, Rehabilitation and Resettlement Authority (which shall adjudicate all disputes, with appeal to the High Court).
  • There are also provisions in the Act which says that if an acquired land which is transferred to a person for a consideration, is left unutilized for a period of five years from the date it was acquired, it shall be returned to the Land Bank or the appropriate government. And in case where the ownership of an acquired land is sold to any person, without any development made, 20% of the profit made shall be shared among all the persons from whom the land was acquired.
  • Analysis of the Land Acquisition and Rehabilitation and Resettlement Act, 2013

As we have already seen, Land Acquisition Act, 1894 does not mandate rehabilitation and resettlement hence there came a new act Land Acquisition and Resettlement and Rehabilitation Act, 2013 to suffice this purpose. But the biggest question is whether the Act suffices the purpose of its existence? The first problem here is with the fact that the act will apply only when private project developers acquire or purchase land more than 100 acres in rural areas or 50 acres in urban areas through a private negotiation with the landowner, or when a private project developers asks the government to acquire land on his/her/their behalf. The other big drawback is that if the land has been acquired under sixteen previous acts like SEZ Act, Atomic Energy Act etc. then this Act does not apply.

Secondly, there are some major lacunae regarding the consent clause in the Act. Large amount of land is acquired even today by public units like NTPC, BHEL and others. Yet, no public consent is required by public sector units in acquiring land, be it for mining, for power projects, for highway buildings or for any other purpose.

Thirdly, there is still a current debate regarding the compensation provided in the Act. Activists argue that prior to coming up of the development project, the market price is quite low particularly in rural areas or semi-urban areas on the other hand, the corporate argues that the compensation provided to the aggrieved is too high particularly in urban areas where the price may be already set high. They also argued that once it is announced that a development project is going to be constructed in a particular place, the market price of that land increases significantly for any area let it be rural or urban.

Fourthly, 2013 Act does not recognize local self governments as appropriate government in matters of land acquisition.

Apart from all the above mentioned contentions, there are also some defects in the Act regarding rehabilitation and resettlement. As under this Act, there is no making of these provisions as mandatory, and the project developers can say that he/she is not in a position to do so with reasons, the project developer has not been really mandated to provide these provisions.  Also, there is no clear idea of the time line under which these facilities are to be provided.

  • Statistics relating to the implementation at the ground level

A study undertaken of 1,660 judgments of the Punjab and Haryana High Court, delivered between 2009 and 2011, demonstrates how farmers have been receiving the short end of the stick. It shows that the average government compensation is just about one-fourth of the market value of land. In other words, for a land worth Rs. 1 lakh, on average, the farmer has received Rs. 25,000 and paid a subsidy of Rs. 75,000 to whoever received the land. If this is the case with farmers who could afford costly litigation, what about those too poor to do so? As to the landless livelihood loser — sharecroppers, labourers, fishermen and artisans — their situation can best be described in the words of Shylock in The Merchant of Venice, Act 4, Scene 1: “You take my life when you do take the means whereby I live.”Over the years, farmers have lost 1.80 lakh hectares of farm land to acquisition. Many a time, land has been acquired for private companies under the guise of public purpose. Recently, large tracts have been acquired for real-estate developers and the Special Economic Zones (SEZs). The companies have earned huge profits by diverting the acquired land toward commercial activities. Developers in Noida and Gurgaon have made fortunes. A recent report of the Comptroller and Auditor General of India provides a damning account of misuse of land in SEZs. It concludes: “Land appears to be the most crucial and attractive component of the scheme. Out of 45635.63 ha of land notified in the country for SEZ purposes, operations commenced in only 28488.49 ha of land.” It further adds: “5402.22 ha of land was de-notified and diverted for commercial purposes in several cases. Many tracts of these lands were acquired invoking the ‘public purpose’ clause.”[10]

In 2011, the twelfth five year plan noted that of the estimated that around 60 million people displaced in development projects till today after  independence, over 40% were tribals. Taking into consideration the fact that tribals constitute about 8% of India’s population, the number of displaced people is quite high. The draft of government’s National Policy for Rehabilitation states that around 75% of the displaced are still not rehabilitated. Given the extent of exploitation the voiceless millions have gone through the reformation of laws governing land acquisition in India was extremely critical. Only direct displacement, does not cover fishermen, landless labourers, and artisans. Roughly one in 10 Indian tribals is a displaced person. Dam projects have  displaced  close to a million adivasis.

Remedial measures

In the process of Land Acquisition, it is important to strike a balance between the need of land for developmental activities and the need to protect the interests of those impacted by the acquisition of the land ie., landowners, tenants, landless labourers, and others whose livelihood depends on the land. And this can be done by exercising some political will. But the biggest question over here is whether our government took due diligence and was vigilant enough to meet the needs of both the ends?

An attempt is made to answer the above question by examining the points below-

  • Public purpose

Land Acquisition Acts encompasses the sovereign right of the government to take over the parcels of land for public purpose. The definition of ‘public purpose’ is hazy at the best in land acquisition acts. Considering the fact that the government can acquire the land for ‘public purpose’, the definition of the same is crucial in trying to ward of unjust usurpation of land. However, the biggest weakness of all these acts is that the definition is very broad and covers almost every possible area through which the government can acquire the land and leaves no scope for the consent or objection of the owners and others whose interest is infringed.

  • Consent clause

Originally, there was no requirement of any consent from the original land owner in acquiring his/her land. Later in Land Acquisition and Rehabilitation and Resettlement Act, 2013 consent of 70% of the land owners is required prior to acquiring land for ‘public- private partnership projects’, while consent of 80% of the land owners is required prior to acquiring land for ‘private projects’. Still, there are some major lacunae in the kind of provisions put up for one, a large amount of land is acquired even today by public sector units like NTPC, BHEL or others. Yet, no public consent is required by public sector units in acquiring land, be it for mining, for power projects, for highway buildings or for any other purpose.

  • Objection clause

Under the Land Acquisition Acts, owners and other people who have certain interest in the land are given right to file their objections against acquisition of land, if any. There are certain grounds like the purpose for which land is sought to be acquired is not a public purpose; the said land may be some place of public interest, or the land may cause inconvenience to the people at large etc. on which they can raise their objection. But as we have already seen under the term public purpose and the consent clause, the government is vested with enormous powers to acquire land and leaves almost no scope for the land owners or the aggrieved party to raise objection against acquisition.

  • Compensation

Land Acquisition Acts provide compensation to people whose land is acquired. Initially, compensation was provided only to the land owners whose land is being acquired. But after amendment, compensation is also provided to other persons like tenants, landless labourers etc. whose interest is affected. But the question here is whether the amount of compensation provided is adequate to suffice the loss suffered?

  • Rehabilitation and resettlement

Under the Land Acquisition Act, 1894, no provision was there for rehabilitating and resettlement of those who will be losing their ownership of land or livelihood associated with the land acquired or any project. But under the Land Acquisition and Rehabilitation and Resettlement Act, 2013, a number of provisions have been made for rehabilitation and resettlement of all those affected by land acquisition in any manner. In spite of the these provisions in the enactment, the sufferers are not guaranteed with their rights as there is no making of these provisions as mandatory, and the project developers can say that he/she is not in a position to do so with reasons, the project developer is also not mandated to meet this provision. At the same time, there is no clear idea of the timeline under which these facilities are to be provided.

Ample amount of brain-storming exercise has been done by our government to solve the “land issues”. Yet,  failure of all these is evident and demands of those protesting against this Act has not been fulfilled till date, as, when the statue was enacted for land acquisition what it seeks to achieve  was acquisition and not confiscation.[11] For a satisfactory outcome as intended by the Legislature, inclusion of the below mentioned measures cannot be compromised:

  1. To incorporate a clear definition to the term ‘public purpose’.
  2. Compulsory employment to at least one member of the affected family of farm labourers.
  3. Limiting the industrial corridor to one kilometer on both the sides of the highways and railways.
  4. Ceiling on land for acquisition in industrial corridors.
  5. Farmers may get right to appeal/ complain over land acquisition, hearing and redressal of grievances at the district level.
  6. Record and supervision of vigilance activities with regards the implementation of the provisions of the Act at the ground level.
  7. What purpose will the land serve if an acquired land which is transferred to a person for a consideration, is left unutilized for a period of five years from the date it was acquired, is returned back as by the time land will have lost its fertility and also might be a delay for the other purposes for which land was ought to be used.

Though multifarious amenities and provisions have been provided for in the LARR Act, 2013, the statistics mentioned above proves that the ground reality with regards the implementation of the same is quite contrary. On an affirmative note, it can be concluded that alongside the above discussed lacunas, corrective remedies be incorporated prioritizing the agenda of “public welfare” at the earliest in the form of an amendment as apart what was proposed in the amendment bill of 2015.


[1] AIR 1981 SC 271

[2] (1883)27 LED1015.

[3] AIR 2002 Delhi 458

[4] Waman Rao v. Union of India,  AIR 1981 SC 271

[5] (1964)5 Section C.R. 294, 317.

[6] Subba Rao and Wanchoo, j j., The Enquiry made by the Collector is not judicial or quasi judicial enquiry and the report

made by the collector under Section 5A of the Land Acquisition Act is administrative.

[7] AIR 1963 SC 151.

[8] 2001(5)ALT 565(LB)

[9] AIR 1976 AP 134 (FB)

[10] Article, ”Private interest as public purpose” reported in “The Hindu”, dated March 07,2015

[11] V.G. Ramachandra’s, ‘The Law of land Acquisition & Compensation’, (Justice G.C. Mathur rev’d,

Eastern Book Company, Lucknow, 8th ed., 1995), p 1.

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