India’s perpetual strife with Land Acquisition Laws
Authored by: Abhay Tandon
Land acquisition often refers to appropriation of Land or transfer of Land use or ownership rights from one set of valid owners to another. State acquisition of Land in India has been extensively contested. In a country where a large majority of people live in rural areas, the term ‘Land’ cannot be thrown around loosely as it’s often passed on from generations; is of immense socio-economic importance, making it an arduous task to acquire Land for economic and developmental purposes.
Land acquisition has become the most vexing problem for policy makers in India. A piece of Land for them is their means of livelihood and something they pride themselves with as they are honoured with tremendous respect in the community. Right to Property is a natural and inherent right of an individual; is even guaranteed in our Constitution under Article 300A. A person has a right not to be dispossessed of his property except through due process of law. However, it is in conflict with the right of the state to acquire property under the Doctrine of eminent domain.
In this paper I’ll trace an outline of evolution of Land acquisition laws in the history of india, both pre and post-independence, its merits and demerits; the approach of the Hon’ble Supreme Court in a few Landmark judgements and its consequent impact.
What is Doctrine of eminent domain?
The primary owner of Land is the king or in modern sense the elected government in power. As such the right of ownership will always remain with the king or the elected government, notwithstanding the fact that Land is transferred to individual citizens for agricultural or other purposes by the king or the government as the case may be. Hence, it is the supreme power of the government under which property of any person can be taken over in the interest of general public. The doctrine is based on two sound principles – welfare of the people is the paramount law and that public necessity is greater than the private necessity.
The doctrine was first used by eminent jurist Grotius in 1625, since then it has become an accepted principle of constitutional law in almost all important countries. However, over the years such taking over the property by the government has been made possible only if it is needed for a public purpose and after compensating the Landowner of such property. Entry 42 list III of seventh schedule of the Constitution empowers both union and state governments to enact laws relating to acquisition of property.
In Chiranjit Lal V. Union of India, the Hon’ble Supreme Court held that the eminent domain is the inherent right in every sovereign state to take and appropriate the private property belonging to an individual for public purpose. Ergo, an incidental limitation of this power is that the property shall not be taken without just compensation.
In State of Bihar V. Kameshwar Singh, the Hon’ble Supreme Court defined eminent domain as the power of a sovereign to take property for public use without the owner’s consent upon making just compensation.
The doctrine is often denounced as acquisition on behalf of private entrepreneurs obliterates the notion of ‘public interest’. Furthermore, it fails to acknowledge that it juxtaposes interest of several thousand families, hence bringing a democratic deficit.
Evolution of Land Acquisition in India:
It was in the year 1824 that the erstwhile british government enacted India’s first Land acquisition statue – Bengal Resolution I of 1824. The law allowed the government to procure Land and other immovable property ‘at a fair valuation’ to promote british commercial interests. They then enforced Act XLII of 1850 to acquire Land for the purpose of building a rail network.
In 1857, they enacted a legislation (Act VI of 1857) that brought the whole of quondam India under one uniform legislation. It struck down all pre-existing enactments relating to Land acquisition. The act provided for – the power to the collector to fix compensation, and to refer disputes for arbitration. The 1857 Act was soon replaced by Act X of 1870. It enabled Civil Courts to resolve disputes pertaining to Land acquisition. However, the act was found to be ineffective as the mechanism of Appeal was time-consuming.
The Act of 1870 was repealed and the Act of 1894 was enacted for the purpose of facilitating the government to forcibly acquire private Land for public purposes. The Act authorised the government to value the cost of the Land. Furthermore, the Act did not afford any opportunity to the Landowners having interest in Land to raise objection against the acquisition of Land.
Independent India under the Indian independence (Adaption of Central Acts and Ordinances) Order, 1948 adopted the Land Acquisition Act, 1894. When India became a Republic in 1950, Article 13(2) grandfathered the application of colonial laws, including the Land Acquisition Act, 1894 as long as they were not in conflict with the Fundamental Rights guaranteed under Part III of the Constitution. Ergo, the colonial act remained in force for a prolonged time with considerable amendments over the years. Yet, two basic principles of Land acquisition – for public purposes and compensation on basis of market value remained unchanged.
The Constitution in its original un-amended form guaranteed right to property as a fundamental right. The 44th Constitution Amendment Act, 1978 omitted Article 31 (Right to Property) and shifted it to Article 300 A of Chapter IV in Part XII of the Constitution, effecting merely a statutory right. The relocation justifies doctrine of eminent domain. It further erased Article 19(1)(f) (Right to acquire, hold and dispose of property) from the Constitution.
One of the reason for deletion of Articles 19(1)(f) and 31 was to reduce the right to property from the status of fundamental right and make it as a legal right, i.e., the right will be available against the executive interference but legislature has the power to make laws interfering with the individual’s property right.
However, it provided a safeguard that no one could be deprived of his property, expect without authority of a valid law. Article 31A, 31B, and 31C were added to provide immunity to laws curtailing property rights, for e.g. abolition of the zamindari system, Land ceiling, tenancy reform, etc.
The Hon’ble Supreme Court has very clearly stated that the executive authority cannot deprive a person of his property without the authority of law and law in this context means ‘an Act of Parliament or of a State legislature, a rule, or a statutory order, having force of law, that is positive or State made law’.
Why the 1894 act failed to deliver?
Substantive legislation under the act was due to forced acquisition. The most censured provision of the act was Section 17 – Urgency Clause, under which the Landowner whose Land was proposed to be acquired could not seek injunction. He could only file objections to the collector under Section 5A. The provision was blatantly misused by the State as it refused to accept objections under Section 6, stating that the Land was required for public purposes, going against the basic principle of natural justice – to receive a fair and unbiased hearing.
The right to file objections is regarded a substantial right when a person’s property is threatened against acquisition.
The Hon’ble Supreme Court held that Section 5A embodies the statutory rule of audi alteram partem and the urgency provision under section 17(1) could only be invoked to meet exigencies enunciated in Section 17(2). Furthermore, it prescribed rigorous scrutiny of justification given by state. Furthermore, there was no provision for rehabilitation of persons displaced due to acquisition of Land, withal the rates of compensation fixed by the government were paltry, which were well below the market price of the property.
The only saving grace was that the Landowner could challenge the amount of compensation fixed. However, the compensation fixed by the collector was final unless altered by a decree of a civil court in a regular suit. The award had to be made within a stipulated time frame of two years under Section 11. The period of stay if any, had to be excluded from time fixed for passing the award.
The government kept acquiring Land in the false pretext of public purpose. The term ‘public purposes’ was given a wide amplitude and included – Any extension or improvement or development of existing infrastructure, any rural town or city planning, any development in pursuance of any scheme or policy of the government., making it a source of plunder by the structures of what is called a ‘predatory state’. The Hon’ble Supreme Court held that, any law, which deprives a person of his private property for private interest, will be amenable to judicial review.
Following the 1991 economic reforms involving liberalisation of foreign investment laws, and the inflow of foreign capital, there had been a surge in Land acquisition by the state. Private sectors gradually started taking over responsibilities which were earlier discharged by the government.
This enabled the state to acquire large portions of Land in rural areas for public purpose. After a change in Land use on paper, these Lands were handed over to private builders to construct housing complexes, schools, hospitals, malls, industries, etc. The finished segment of property was then sold to the general public at a premium. The Landowners – mostly belonging to rural areas were beguiled with employment opportunities, rightful compensation, etc. Per contra, the Landowners never got the real market price for their Land due to undervalued sale deeds and the government being an intermediary for private entrepreneurs. This was done to avoid paying high tax on the purchase.
Moreover, ages of working on Land made it difficult for them to adopt to some other occupational means for their survival other than farming. Since most of the Landowners weren’t skilled nor qualified, they hardly ever secured employment. Whatsoever meagre compensation they received, a majority of them spent it recklessly, reducing once a noble Landowner to a vagabond. There was no agency to counsel the Landowners nor were there any uniform guidelines to assess the market value of the property. Furthermore, the rehabilitation and resettlement provisions for the displaced populace provided for allotment to government Land, grant for house construction and other substantive allowances rendering it impractical in nature.
The Hon’ble Supreme Court in Ramji Veerji Patel and others V. Revenue Divisional Officer  held that:
“The provisions contained in the Act, of late, have been felt by all concerned, do not adequately protect the interest of the Landowners/persons interested in the Land. The Act does not provide for rehabilitation of persons displaced from their Land although by such compulsory acquisition, their livelihood gets affected. For years, the acquired Land remains unused and unutilised. To say the least, the Act has become outdated and needs to be replaced at the earliest by fair, reasonable and rational enactment in tune with the constitutional provisions, particularly, Article 300A of the Constitution. We expect the law-making process for a comprehensive enactment with regard to acquisition of Land being completed without any unnecessary delay.”
Part VII of the Act (Sections 38A-44B) provided for the acquisition of Land for companies. Unlike Part II, where compensation was granted wholly or partly, barring a company under Part IV was bound to pay the entire amount of compensation for the notified Land. Obtaining private Land for companies under the 1894 Act raised a wringer on the desirability of state intervention. Many questioning whether Land could be arranged by the company without prejudice to the Landowners through private negotiations on a ‘willing seller willing buyer’ basis. Consequently, with the enactment of the Special Economic Zones Act, 2005, the acquisition of Land by the government for private industry, which took place improperly in previous decades, became official government policy.
The 1894 Act, was apathetic to the concerns of the labourers working on the Land as it failed to consider that India being an agro-based country, more than 60% of the population depend on agriculture as their livelihood. Public objects mentioned in the Act were wide-ranging, giving the government unrestricted and plenary powers to acquire Land in the guise of ‘public purposes’.
Massive public outrage and civil society movements in the late 90’s over increasing visibility and severity of Land conflicts translated into legislative efforts to bring about a change in the Act. The hen UPA government brought about an amendment in 2007, however it failed to pass in the lower house of the Parliament in 2009. After winning the general elections for a consecutive time, UPA brought in a new bill imitating the 2007 amendment – Land Acquisition Rehabilitation and Resettlement Bill, 2011. This Act sought to replace the old colonial Land acquisition law and marked a paradigm shift to uphold farmers’ dignity to life and livelihood. In 2013-14, the bill was passed and brought into effect.
Salient features of Land Acquisition Rehabilitation and Resettlement Bill, 2013:
The Act rests on five pillars – Social Impact assessment (SIA), consent of Landowners and affected families, felicitous compensation, resettlement and rehabilitation, and downsizes eminent domain. This makes the Act more transparent than the preceding Act. The Act exempted a total of 13 legislations namely, Land Acquistion (Mines) Act 1885, National Highways Act 1856, The Railways Act, 1989, etc.
It narrowed down the definition of ‘public purposes’ and made it obligatory to seek consent of affected families – 70% in case of acquisition for public private partnership and 80% in case of acquisition by private companies. This consent also included consent to the amount of compensation to be paid. However, there was no requirement of consent in case of PSU’s, and if the government acquired Land for its own use. Furthermore, there is strict restriction on multi crop acquisition and has to be carried out only as a last resort.
The process of acquisition starts with the issuance of preliminary notification, whenever, the appropriate government deems necessary that Land in any area (rural or urban) is required for any public purpose, a preliminary notification under Section 11 shall be published. The notification issued shall contain details of – the Land to be acquired, a statement on the nature of the public purpose involved, reasons necessitating the displacement of affected persons, summary of the SIA Report and particulars of the administrator appointed for the purposes of rehabilitation and resettlement. This ensured that the cumulative outcome should be such that afflicted parties become partners in development, improving their social and economic status, post-acquisition.
It provided for a Social Impact Assessment study to be conducted before acquisition in consultation with the panchayat or municipal body of the area. This ensured that affected Landowners were aware of the desired project on their Lands. However, the study could be eluded if the Land was required for any exigency.
The collector could take possession under the Act only after ensuring full payment of compensation including rehabilitation and resettlement claims to the affected families. The amount of compensation had to be ‘sufficiently fair’ as compared to ‘on basis of market value’ in the old act.
Acquisition without payment of compensation is violative of Article 14.
It further provides a mechanism to calculate the market value of the Land. Compensation has to be in proportion to market rates – Four times market value in rural areas, twice un urban areas. Affected artisans, small traders, fishermen etc. will be given one-time payment, even if they don’t own any Land. The award also has to include the cost of damage to standing crops, both after acquisition and at the time of inspection. It also imposes certain restrictions on the acquisition of irrigated multi-cropped Land and other agricultural Land. Any acquired Land which has been unutilized – for a period of five years, or any period specified at the time of setting up the project, whichever is later has to be returned back to the Landowners. Moreover, the collector also imposed a solatium (compensation for emotional harm caused) equal to 100% of the compensation paid, as compared to 30% in the 1984 Act.
The Act provides for the collector to pass rehabilitation and resettlement awards for each affected family in addition to the compensation. When an entire populace is displaced, there are provisions in the act to provide for basic infrastructure, employment, annuity, transportation cost, etc. This will ensure resettlement in its true sense. The expenses have to be carried out at the cost of the authority at whose behest acquisition is taking place. These provisions was added to learn from mistakes of large scale projects like the Naramada Dam, where entire villages got submerged due to rehabilitation implosion.
The law provides that no income tax shall be levied and no stamp duty shall be charged on any amount that accrues to an individual. In cases where the acquired Land is sold to a third party for a higher price, 40% of the appreciated Land value (or profit) is required to be shared with the original owners. In cases where the Land is acquired for urbanization, 20% of the developed Land has to be reserved and offered to the Landowners, in proportion to the area of their Land acquired and at a price equal to the cost of acquisition, plus the cost of development.
The Act provides for the establishment of Land Acquisition, Rehabilitation and Resettlement Authority for speedy disposal of disputes and for states to set up dispute settlement chairman.
Section 24 – Retrospective clause of the Act made provision for application of the provisions of the 2013 Act to Land acquisition proceedings initiated under the 1894 Act. The provision stated that in case of Land acquisition proceedings, if a developer failed to take possession of the Land acquired under the old laws for five years, or if compensation was not paid to the owner, the acquisition process would lapse. The process would then have to be re-initiated under the new act, which would allow the owner to get better compensation. This offered immense relief to Landowners to get justice.
In Pune Municipal Corporation V. Harakchand Solanki, 18 appeals were filed before the Hon’ble Supreme Court invoking the application of the retrospective clause. A 3-judge bench unanimously held that:
In all the applications, a period of 5 or more years had passed since the Land acquisition award had been made under Section 11 of the 1894 Act and the applicants had refused to accept the compensation. Pune Municipal Corporation argued that they had deposited the amount in the treasury of the government in fulfilment of their obligation and had therefore satisfied the requirement of paying compensation. The Court held that compensation would only be deemed to have been paid if it had been deposited with the Court and after having been offered to the individual concerned. In this case, the compensation had only been deposited in the treasury. As a result, compensation could not be deemed to have been paid and the acquisition was considered to have lapsed in conformity with Section 24 of the 2013 Act.
|Timeline of cases relating to Section 24 of 2013 Act|
|24/01/2014||Pune Municipal Corporation V. Harakchand Misirmal Solanki|
|04/05/2017||Government of NCT of Delhi V. Manav Dharam Trust|
|08/02/2018||Indore Development Authority V. Shailendra|
|21/02/2018||Order staying the Indore Case Judgment|
|22/02/2018||Order seeking a reference to a larger bench on the correctness of Pune and Indore Cases|
|14/10/2019||Shiv Kumar V. UOI|
This precedent was followed by the court in numerous judgements. In Shiv Raj V. UOI, the Hon’ble Supreme Court dealt with the issue whether subsequent purchasers, as opposed to the original Landowners, are entitled to claim that an acquisition under the 1894 act has lapsed due to the provisions of the new act. The Court ordered the return of the Land to its original owners who were fighting the case since last two decades and held that the acquisition had lapsed. It held that every officer, who records the hearing of the objector, must also submit the report and in case his successor decides the case without giving a fresh hearing, the order would stand vitiated having been passed in violation of principles of natural justice.
In 2014, NDA won the general elections, riding high on its development-driven agenda. Without Land acquisition, it argued, the government would find it difficult to execute its ambitious pet projects, including the ‘Make in India’ programme, which sought to encourage companies to manufacture their goods in India. This would help revive and boost domestic manufacturing. To facilitate this and somewhat dilute the 2013 Act, it promulgated the – The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014.
The Ordinance added a second proviso to Section 24(2):
Provided further that in computing the period referred to in Sub-section, any period or periods during which the proceedings for acquisition of the Land were held up on account of any stay or injunction, issued by any Court or the period specified in the award of any Tribunal for taking possession or such period where possession has been taken but the compensation is lying deposited in a Court or in any account maintained for this purpose shall be excluded.
The proviso was challenged as to whether the nature of the Ordinance was retrospective or prospective. The Hon’ble Supreme Court in many decisions held that Section 24(2) is a statutory right and therefore, cannot be taken away by an Ordinance by inserting the above proviso and giving it a retrospective effect. Hence, the proviso is prospective. It held that the right of appeal is a vested right and can only be taken away by a subsequent enactment or by necessary intendment and not otherwise.
In J. L. Sarna V. UOI, the Hon’ble Supreme Court held
The conditions in Section 24(2) are unqualified. It does not matter as to what was the reason behind the non-payment of compensation or for not taking possession. If the legislature wanted to qualify the above conditions by excluding the period during which the proceedings of acquisition of Land were held up on account of stay or injunction by way of an order of a Court, it should have been expressly spelt out.
Although the new act adopts a more humane, informed and transparent process of Land acquisition for developmental projects. It does have its drawbacks:
- The act will apply only when a private project developer acquires or purchases Land more than 100 acres in rural areas or 50 acres in urban areas through a private negotiation with the Landowner, or requests the government to do so on their behalf. To dodge responsibility under the act, the developer can simply take Land in multiple parcels instead of one-time acquisition.
- Compensation has to be paid to the Landowners on the basis of the market value of the Land, determined by the collector under Section 26(b). However, in India, it is really difficult to calculate the market value because of black money used in transactions, corruption, fending off stamp duty at time of registration. This results in loss to the Landowner as the government steps into the shoes of the Landowner at the time of acquisition and pays only a small amount of compensation which is below the actual sale price.
- The bill doesn’t seek to consider those people who would be affected after the establishment of the project. Moreover, no environmental regulations or norms have been mentioned in the Act.
- There is no provision of rehabilitation and resettlement of Landowners whose Land has been temporarily acquired. Furthermore, there is no clear timeline as to when these facilities are to be provided.
- To say that the Act has done away completely with forceful acquisition would be a travesty. When Land is acquired by the government for its own use, hold and control, including for PSUs and for public purpose under Section 2(1), ‘prior consent’ of the affected families is not required to be taken. The Landowners have no say in abovementioned criteria.
Both the acts of 1894 and 2013 lack sympathy to the Land owners who’ve lost their property and the displaced families and the interested parties, the state often treating them as subjects and putting them at receiving ends. Former Planning Commission secretary NC Saxena called the 2013 Act as “probureaucracy, anti-farmer and anti-industry” as it was too rigorous which made the acquisition process difficult, long-winding, 3.5 times costlier, thereby reducing the availability of Land for industry. Whereas Activists slammed the 1894 Act for its lack of clauses on adequate compensation, consent of Landowners and others dependent on the Land being acquired, and their rehabilitation.
Contrarily, Namita Wahi in an article refereed to the 2013 Act was a historic step in creating a culture of justification, as opposed to a culture of authoritarianism in state acquisition of Land.
Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2015:
After winning the general elections in May 2014, NDA government changed the Land acquisition rules by an ordinance. The amendment to Section 10(A), revived to an extent the ‘eminent domain thrust’, the consent clause and the social impact assessment are not necessary if Land is acquired for – national security and defence, rural and social infrastructure, affordable housing, industrial corridors; and infrastructure (including public private partnership projects on central government owned Land) in turn diluting safety measures. The categories are esoteric as details aren’t provided and are susceptible to be misused by the government. Many social activists protested against the changes made to the Land bill as anti-farmer and befitting large corporates. The ordinance was the government’s response to the explicit critique of the 2013 Act by state governments and industry that the Act would stall making the cost of acquisition restrictive and procedures inconvenient beyond measure. It will help remove hindrances and fast-track acquisition for development project stalled by the 2013 Act.
Section 5 of the ordinance allows the government to exempt certain projects like road, telecommunications, gas pipelines etc. from the requirements of consent, SAI and restrictions that apply to multi-crop irrigated Lands.
Section 9 of the ordinance amends Section 101 of the 2013 act, rescinding the provision that allowed the return of unutilised after five years. Furthermore, it sought to change five years to ‘a period of five years or the period specified for setting up the project’ which is later. This was done as many projects got delayed unnecessarily.
The ordinance was also to apply to the 13 legislations exempted in the 2013 Act. This meant that people can claim higher compensation and a better compensation package from the government for important national projects.
The ordinance stated that if an offence is committed by a government official, he cannot be prosecuted without prior sanction of the government. This was different from in the 2013 Act, in which if an offence is committed by the government, the head of the department would be deemed guilty unless he could show that – the offence was committed without his knowledge, or that he had exercised due diligence to prevent the commission of the offence.
Moreover, the ordinance now allowed ‘private entities’ in addition to private companies to acquire Land. A private entity is – an entity other than a government entity and includes a proprietorship, partnership, company, corporation, non-profit organisation, or other entity under any other law. The ordinance further removed restrictions on acquisition by private hospitals and educational institutions.
“Without a social impact assessment, rehabilitation and compensation measures are likely to be flawed and inadequate. Exempting projects from these assessments can in effect deprive communities of the opportunity to be consulted on decisions that have far-reaching social and economic impacts on them.”
The government was met with harsh opposition and bitter comments from farmer organisations including the Rashtriya Swayamsevak Sangh affiliated Bharatiya Kisan Sangh who took to the streets in large numbers to resist the ordinances. when it first tabled the ordinance. Many of BJP’s allies abstained from voting. The government decided to re-promulgate the ordinance in April, 2015. The ordinance was challenged in the Hon’ble Supreme Court as constituting an abuse of power on part of the government. Since no law was passed in two successive parliamentary sessions to replace the ordinance, it was re-promulgated the third time in May, 2015.
Finally, a bill to replace the ordinance was referred to a Joint Parliamentary Committee consisting of 30 members from both Lok Sabha and Rajya Sabha. However, at the end of the monsoon session of the parliament in 2015 the bill lapsed. Following this the Hon’ble Supreme Court dismissed the challenge to the ordinance as infructuous. The government due constant political opposition has been unable to garner support to convert the ordinance into a Bill. The Joint Parliamentary Committee consisting was given a ninth extension to submit its report in April, 2017.
However, in September, 2015, think tank Niti Aayog, advocated that in the absence of parliamentary consensus, state governments should go ahead with state amendments to the 2013 law. This was a first in the nation’s history that states were encouraged to take recourse to Article 254(2) of the Constitution which provides that a state law (on a subject in the ‘Concurrent List’ of the Seventh Schedule in the Constitution) can deviate from the provisions of a central law, if it receives Presidential assent.
Gujarat and Rajasthan passed amendments to the law in 2016. Other states soon followed including Karnataka and Maharashtra. Gujarat, Rajasthan, Maharashtra, Jharkhand and Telangana have enacted new laws using Article 254(2) of the constitution by seeking presidential assent. Their laws clone or reflect the key amendments proposed in the 2014 ordinance.
In 2015, Telangana passed several executive orders which complied with the compensation provisions under the 2013 Act but deviated from its rehabilitation provisions for construction of some irrigation projects in the state. In 2017, the Hon’ble High Court for Telangana and Andhra Pradesh invalidated these executive orders for such deviation.
Many states then started skimping on consent, rehabilitation and resettlement. Gujarat and Telangana exempted the types of projects mentioned in the ordinance from consent and SIA. In Maharashtra, only private projects have to adhere to the two clauses. In Tamil Nadu, acquisitions done under four state laws are exempted from consent and SIA clauses. Other changes by states include Andhra Pradesh reducing the notice period for public hearing for SIA from three weeks to one, and Jharkhand having no provision for return of unused Land for five years. Haryana, Chhattisgarh and Tripura have reduced the multiplying factor in rural areas from two to one, thereby reducing the amount of compensation that will be received.
What has the ordinance generated?
Central bodies such as the NHAI are now giving higher compensation, States like Haryana, Chhattisgarh and Tripura set low multipliers (used to calculate compensation) which lead to a maximum compensation of two times the market value in rural areas, instead of four as originally envisaged. While the government in Uttar Pradesh violated the provisions altogether.
In June of this year, attempts to acquire Land for the proposed Jewar airport were met with widespread protests from farmers. The reason: UP had decided to award compensation at a maximum of two times the circle rate. Not the market value. They demanded compensation at four times the market rate. Circle rates (particularly in rural areas) are notoriously low and that is why the 2013 Act removed them as the basis for calculating compensation. UP now seeks to make it the base for other acquisitions as well.
States like Gujarat, Haryana, Maharashtra, Telangana and Tamil Nadu have exonerated the need for SIA. This has jolted the consent clause, as without SIA, those affected aren’t mindful of the impact. In projects, where it is being followed, transparency is being overlooked, many a times with no website to track progress and no SIA report made public.
In December, 2015, members of Trinamool Congress in Kolkata burnt copies of the ordinance refusing to amend the act in the state. Many protested against the Land Acquisition (Telangana) Amendment Bill, 2016 of being violative of the progressive provisions of the 2013 Act and would result in vast harm to marginalised communities.
Uttar Pradesh government adopted a new policy in 2015 which allowed agreement between the buyer and seller to acquire Land, as the 2013 Act has time-consuming procedures. States like Andhra Pradesh, Uttar Pradesh, Jharkhand, Kerala, Odisha, Sikkim, Tamil Nadu and Tripura have reduced the notice period to hold public hearings. This ensures minimum public participation and minimises the chances of the affected families being influenced by Land activists.
Maharashtra passed an ordinance to provide higher compensation and expedite the process of Land acquisition for highway projects across urban and rural Maharashtra. According to the ordinance, government is mandated that compensation for Land acquired should be at least four times the registered price.
On March 15, 2018, the Lok Sabha on recommendation by an Expert Committee Report passed the Specific Relief (Amendment) Bill, 2018. The bill was introduced in the parliament without any pre-legislative consultation. Section 20A forbids courts from granting injunctions in any lawsuit involving a contract related to an infrastructure project if such an injunction would cause an impediment or delay in the progress of the report.
- No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the Schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project.
Eventually the bill was passed by both the houses of the Parliament without debate and came into force on August 1, 2018. This made implementing development projects less incommodious for states.
Amidst the ongoing pandemic, India is developing a Land pool to lure businesses moving out of China. Land pools are considered as by-pass institutional measures to make Land expeditiously and sufficiently available to promote ease of doing business.
The furore around Section 24 and the present scenario:
A controversy arose on February 8, 2018 when a 3 judge bench by 2:1 majority of the Hon’ble Supreme Court in Indore Development Authority V. Shailendra (Dead) Through LRS & Ors. set aside the 2014 decision of Pune Municipal Corporation which was pronounced by another 3-judge bench. The court held that acquisitions would not lapse due to Landowner’s refusal to accept compensation within 5 years. It held that once compensation has been awarded, yet the person refuses to accept it, it would amount to a discharge of obligation under Section 31(1) of the 1894 Act. Moreover, 2 judges held the judgment to be ‘per incuriam’ (lack of care), while Justice Mohan Shantanagoudar delivered a dissenting opinion.
This meant that when Land losers who make reference to the Court, then the compensation must be deposited in court in accordance with Section 31(2) of the 1894 Act, but when they don’t make a reference to the court and don’t accept compensation, then the collector discharges his responsibility by depositing the compensation in the government treasury.
Under common law, a bench cannot overturn a judgement delivered by a bench of same strength. In State of Haryana V. G.D. Goenka Tourism Corporation the judges raised concerns on judicial impropriety. This created chaos and opened a Pandora’s box as many High Court had deemed the Pune Municipal Corporation judgement as the legal precedent. Days after the judgement, a 3 judge-bench stayed the operation of the judgement and called upon High Courts not to decide any case of Land acquisition on basis of the new ruling.
Following the fiasco, the then CJI Dipak Misra decided to refer the case to a constitution bench on February 26, 2018. Before the hearing many counsels argued that Justice Arun Mishra should recuse himself from the case as he suffered from perceived bias as he authored one of the judgements in question. However, on October, 23, 2019 he authored a 62-page concurring order refusing to do so. Relying on Bengal Immunity Co. Ltd. V. State of Bihar Bengal Immunity Co. Ltd V. State of Bihar & Ors. Appeal (Civil) 159 of 1953 and State of West Bengal V. Shivananda Pathak he held that – prejudging a question of law or policy does not disqualify a judge from hearing a case later on, and the opinion of the judge whose recusal has been sought should prevail.
|08/02/2018||Judgment of Indore Development Authority|
|26/02/2018||CJI Dipak Misra constitutes Constitution Bench|
|12/10/2019||Court lists matter for 15/10/2019|
|24/10/2019||Justice Arun Mishra delivers 60 page order on recusal|
|4/03/2020||5-judge bench overrules Pune Municipal Corporation|
In a five-judge bench judgement authored by Justice Mishra, the Hon’ble Supreme Court overturned Pune Municipal Corporation on March 4, 2020. It held that Land acquisition proceedings cannot lapse merely due to a failure to pay compensation to Landowners; affirmed lapse will only occur if the State also fails to take physical possession of the Land. Further, it held that payment does not require the State to deposit money in a Landowner’s account and tendering compensation is sufficient.
Deposit in treasury in place of deposit in court causes no prejudice to the Landowner or any other stakeholder as their interest is adequately safeguarded by the provisions contained in Section 34 of the Act of 1894, as it ensures higher rate of interest than any other government securities.
Justice Mishra held that word ‘or’ in Section 24(2) must be interpreted conjuctively and be read as ‘nor/and’. Furthermore, once the State has tendered compensation under Section 31(1) of the 1894 Act, its obligation is fulfilled. With regard to physical compensation, the State has to issue a memorandum in sequent to take possession of the Land. Hence, once compensation is tendered and memorandum is issued, possession no longer rests with the Landowner.
However, the judgment did not address the issue as to whether a bench can set aside a judgment of an earlier bench of the same strength.
In an Article in The Indian Express, the author relying on Census Commissioner & Ors. V. R. Krishnamurthy vituperated that the Hon’ble Supreme Court had diminished the scope of the beneficial legislation by setting foot into judicial law-making. The intention of the Legislature was limpid in the statement of objects and reasons. The Court by giving a contrary interpretation to an otherwise unambiguous provision has made a statutory provision redundant. He iterates that the provision must be interpreted in its ‘literal and ordinary’ meaning.
In another Article, Senior officials in the Union Ministry of Rural Development (which mainstays the Land acquisition law) mentioned the Constitution bench’s interpretation of Section 24(2) is in line with its own interpretation. They also stated that that once a state makes changes in its own law, there will be no need for them to push for the proposed amendments in the Central law.
“Several states had also wanted this and had proposed to amend Section 24(2) of the central law. But with the Constitution bench verdict, the amendments that states wanted will no longer be needed.”
They’ve already reached out to the Law Ministry to plan propositions for the future in consonance with the Apex Courts judgment.
Land is a precious resource for Landowners; the process of Land acquisition in India has been the source of increasing political and legal contestation for almost two hundred years. This stems from the immanently coercive nature of the process, which creates a severe imbalance in power between the state and Land losers, resulting in great inequality.
While the Indian Government gave away with the draconian, unjust, archaic 1894 legislation, the 2013 Act with provisions of just and fair compensation, rehabilitation and resettlement helped ameliorate several families. The ordinance of 2015 negated SIA and the consent clause to swiftly implement development projects. Although the ordinance is still in cold-storage, many aforementioned states have enacted the ordinance amending their state acts. Albeit, it grants for higher compensation and promises citizens fast paced development, alas it bears with it several complications, for e.g. the sudden influx of wealth in the hand of Jewar youth or razing an entire ecosystem for the Ahmedabad-Mumbai bullet train project.
Simply easing the process for Land acquisition won’t quicken industrial growth. What we need is equilibrium to balance both economic and social development and loss of livelihood and shelter. Empathy towards the Land losers, condign compensation, prompt rehabilitation, concise litigation, while preserving our neighbouring verdure and ecosystem. The 2013 Act is comprehensive and a step in the right direction. More holistic legal and administrative reforms can help us tackle the forthcoming challenges.
Law Centre – II, Faculty of Law, University of Delhi
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