Land Acquisition Act PDF
Land Acquisition Act PDF
6.1 Introduction
Property guarantees freedom to individuals, when it is land, it embodies a
bundle of rights. Land is one of the scarce natural resource in the world. It is not
possible either to increase or to decrease the land. It is to be ensured that land is
managed judiciously and in a suitable manner to the common good of people that
can be ensured in a long run. Property is special because it allocates scarce resources
and is fundamental for the exercise of other rights. In other words, property rights
determine access to the basic means of subsistence, they are the prerequisite to the
meaningful exercise of all other rights. In Waman Rao v. Union of India1 a
constitutional bench had observed that India being a predominantly agricultural
society, there is a “strong linkage between the land and the personal status in the
social system.” The tip of land on which they till and live, assumes them equal justice
and dignity of their person by providing to them a near decent means of livelihood.
Right to property is the natural and inherent right of individual. Hence, every
individual has a right to own and possess the property. This right of the individual
conflicts with the right of the State to acquire property under the doctrine of eminent
domain. This conflicts of rights i.e., the right of the individual to protect his property
and the right of the State to acquire property of the subjects has become a matter of
debate in this decade. Eminent domain is the incidental exercise of sovereign power
of the State to acquire private property for public purpose by providing just
compensation. The power of eminent domain has been explained that when public
need requires acquisition of property, the need is not to be denied because of an
individual’s unwillingness to sell. When the need arises, individuals may be required
to relinquish ownership of property, so long as they are given just compensation.
Eminent Domain means State sovereign power to take property for public
cause without owner’s consent, coupled with the obligation to make good to the loss
and it is the power of the State to appropriate any land from a private person for a
public purpose. It is the ability to take privately owned property. Hence, Eminent
Domain refers to “the power possessed by the sovereign or the State over all the
1
AIR 1981 SC 271
208
property within the jurisdiction of State”. Every government has an inherent power to
take and appropriate the private property for public use. In justification of the
eminent domain power, two maxims are often cited: Salus Populi Est Supreme Lex
and necessitas publica major est quam private.
Salus Populi Est Supreme Lex means welfare of the people is only
consideration may be said to be the corner stone of the law of the land. The maxim
means that ‘regard for the public welfare is the highest law’. This phrase is based on
the implied agreement of every member of society that his own individual welfare
shall in cases of necessity yield to the community; and that his property, liberty and
life shall, under certain, circumstances, be placed in jeopardy or even sacrificed for
the public good. necessitas publica major est quam private means public necessity is
greater than private necessity, application of this doctrine in India gives immense
powers to the State for acquiring land for public purpose. State can expropriate
property rights through compulsory acquisition processes. Compulsory acquisition
law, as a restraint on the property right of individual therefore, people cannot sell-off
their property as per their wish. The exercise of such power has been recognized in
the jurisprudence of all civilized countries as conditioned by public necessity and
payment of compensation. On these two maxims whole law of Land Acquisition is
based.
The importance of the power of eminent domain to the life of the state has
been recognized by almost all the sovereign civilized countries. It is so often
necessary for the proper performance of the governmental functions to take private
property for public use. Thus property may be needed or acquired under the power of
eminent domain for government offices, libraries, slum clearance projects, public
schools, colleges and universities, public highways, public parks, railways and many
other projects of public interests, conveniences and welfare. The power is inalienable
founded upon the common necessity of appropriating the property of the individual.
Interest of the whole of the community is greater than the individual interest.
2
(1883)27 LED1015.
209
constitutional provisions provide safeguards subject to which the right may be
exercised. Limitations (safeguards) are (i) valid law (ii) public purpose and
(iii)compensation. Private property can be acquired through valid law only; secondly,
property acquired only for public purpose and not for private purpose; and thirdly,
compensation must be given for acquisition of property means property should not be
condemned. The right of eminent domain is the right of State through its regular
organization to reassert either temporarily or permanently, its domain over any
portion of the soil of the State on account of public agency and for public good in
time of war or insurrection. The proper authorization may possess and hold any part
of the territory for common safety in time of peace for public purpose.3
The preamble to the Act, States categorically that individuals whose property
is taken over has a right to receive compensation. The bulk of the Act is devoted to
creating a regime relating to the manner in which an acquisition is to be made, the
compensation to be paid and the procedures are to be followed while pursuing the
acquisition. In the twenty first century, everything looked from the perspective of
3
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.
4
Ibid at 1.
5
Ibid at 3.
6
Om Prakash Aggarwala, ‘Commentary on the Land Acquisition Act’,(M.L. Sarin, LL.M. rev’d (U.S.),
8th edi., 2008), p 3.
210
human right, as such this colonial Land Acquisition Act in many respects violated the
human rights. For example under this Act no procedure was adopted for displacement
of project affected families, therefore, when property was acquired, they are forcible
displaced and displacement may be inhumane. There is no provision for Social
Impact Assessment of any projects, there is no any additional protection for
marginalized people like SCs and STs land losers except monetary compensation,
moreover, it does not provide any kind of protection except monetary compensation
to the land losers. As a result of which to have a unified legislation dealing with
acquisition of land, just or fair compensation and to have rehabilitation and
resettlement mechanisms for the project affected persons the new LARR Bill was
drafted which was laid on the table of parliament in 2011, due to political
unwillingness to bring out this legislation, it was lapsed. On 1st January 2014 the
Right of Fair Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013 came into force and replaced the earlier colonial Land
Acquisition Act, 1894. Therefore present chapter gives an overview of the Land
Acquisition Act, 1894, its provisions, its deficiencies and the need of a reformation in
land acquisition laws. Further, an attempt has been made to analyse, appraisal and
critique the Land Acquisition Act, 1894 while comparing it with present Act.
211
In Bombay, the building Act XXVIII of 1839 was the first piece of legislation
whereby the machinery for acquisition of land for the purposes of widening or
altering any existing public road, street or other thorough fare or drain or for making
any new public road or thorough fare within the islands of Bombay and Colaba was
provided. This Act was extended by the Act XVII of 1850 to taking lands for railway
purposes within the presidency.8 In Madras Act XX of 1825 was passed for the
purpose of facilitating the acquisition of land for public purpose in the presidency of
Fort St. George. Generally in Madras presidency, the compensation as per the Act
was to be settled by the collector or if the parties disputed it, by arbitration.
Simultaneously Act 42 of 1850 (Bengal) was extended to the presidency. Both these
Acts were extended by Act 1 of 1854 for acquisition of Land in Madras town.9
For the purpose of making one general law for acquisition of land for public
purpose all the earlier Acts were repealed. The first enactment on this subject for the
whole India was Act VI of 1857. Its object, as Stated in its preamble was to make
better provision for the acquisition of land needed for public purposes within the
territories and under the governance of the East India Company and for the
determination of the amount of compensation for the property acquired.10 Under this
Act, the collector was empowered to fix the amount of compensation by agreement, if
possible; but if there was no such agreement, the dispute had to be referred to
arbitrators whose decision was to be final and arbitrator could not be impeached,
except on the ground of corruption or misconduct. This Act was amended by Act 11
of 1861 and XXII of 1963. A few years’ experience of the working of the Act
revealed that the method of settlement of compensation by arbitration was
unsatisfactory as the arbitrators were found to be incompetent and sometimes even
corrupt. There was no machinery (provision) provided in the Act to get their decision
revised and there was no provision to appeal against award of arbitrators. The
legislature had to intervene and Act X of 1870 was passed. This Act for the first time
provided for reference to a civil Court for determination of the amount of
compensation when the collector could not settle it by agreement. It laid down a
detailed procedure for acquisition of land and also provides definite rules for
8
P.K. Sarkar, ‘Law of Acquisition of Land in India’,(Easter Law House, Kolkata, 2002), p 5
9
Supra note 1, at 5.
10
Kasturi Kannan, ‘Land Acquisition from Colonial Times to the Present’, (accessed on 30.08. 2011,
4:20 PM), http://www.ghadar.in /vol2 issue 1 pdf/v211 cover story pdf
212
determination of compensation. In 1885, a separate Act (XVIII of 1885) was passed
with the object of making provision for the grant of compensation to the owners of
mines under the land which was acquired by the government, where such mines were
not required by the government but the owners were prevented from working on
them11.
Since, there were still loopholes in that Act, therefore the Act of 1894 was
passed and it enabled to apply to the whole of British India.12 But some of the native
states like Mysore, Travancore, Hyderabad etc., were having their own Acquisition
Laws. 13 Under the government of India Act, 1919 and the Government of India Act,
1935 (item 9 of list II of the VII Schedule) provinces had power to legislate with
respect to compulsory acquisition of land. In exercise of this power, some of the
provinces amended the provisions of the Act in certain respects. After the
Independence Act, 1947 subsection (2) of section 1 of Land Acquisition Act was
amended by substituting the words ‘all the provinces of India’ for the words ‘the
whole of British India’. After the constitution, under the adaptation order of 1950 for
the words ‘the provinces of India’ the words ‘the whole of India except part B States’
were substituted. The Part B States Laws Act, 1951 (III of 1951), did not extend the
Land Acquisition Act to Part B State.14
11
Supra note 8, at 5 & 6.
12
Dr. N Maheshwara Swamy’s ‘Land Law’,(Asia Law House, Hyderabad, 1st ed., 2009), p 5
13
Mysore Land Acquisition Act, 1894; the Travancore Land Acquisition Act, 1914 and Hyderabad
Land Acquisition Act, 1909 etc.
14
Supra note 3, at 18
213
The Main Objectives of the Land Acquisition Act 1894:
a. To abolish the institution of arbitrators, who previously were entrusted with the
duty of valuing the land. The 1870 Act laid down no rules for their functioning
and as such the entire system could be said to be incomplete.
b. The 1894 Act was supposed to incorporate detailed instructions regarding
compensation.
c. To avoid unnecessary delays, the position of the assessor was to be abolished.
This would lend fluidity and more transparency system.
d. The 1870 Act ensured that Collector was to bear the costs of litigation of the final
award was in excess of his tender. This led to ‘extravagant and speculative’ claims
being made. The Land Acquisition Act made the award of the collector final
unless by a decree in a civil suit.
e. Similarly, in the 1870 Act, interest was payable on the amount of the award
arrived at from the date of the collector’s taking possession of the land. As the
interest would continue to accumulate through a period of litigation, this prompted
many land owners to go in for excessive litigation, thereby slowing down the
entire process of acquisition as well as draining the State exchequer.
f. The previous rule of compulsory reference in cases where there was no agreement
amongst the several claimants as regards apportionment amongst the claimants
was also abolished. In the 1894 Act, the collector may make an apportionment
against the claimants and if a person is aggrieved, he may within a period of time
specified in section 18, apply to the collector for a reference to the Courts.15
The provisions of the Act are not hit by the constitution. Even when Articles
19(1)(f) and 31 were not deleted it was held that the Act is an existing Law. Article
31(5) laid down that nothing in clause (2) of Article 31 would affect the provision of
any existing law other than a law to which the provisions of clause (6) of Article 31
would apply. The Act being law to which the provision of clause (6) did not apply
was held to be constitutional even when article 31 was not deleted. Now position is
different Article 31 has been deleted and Article 300A provides that no person shall
be deprived of his property save by authority of law, therefore Land Acquisition Act,
15
K.C. Jain, ‘Land Acquisition Act Revisited’, 9 (SCC 1998, vol.7).
214
1894 cannot be held to be hit by the Constitution. Moreover, the acquisition under the
Land Acquisition Act is for public purpose, on payment of adequate compensation,
though the Act provides for compulsory acquisition of property for public purpose, it
cannot be held that such deprivation is not authorized by law. 16
16
M.K. Mallick, ‘Land Acquisition Act, 1894’,(Kamal Law House, Calcutta, 1990), p 3.
17
Supra note 3, at 17.
18
Kamantha Raman,‘Acquisition of Land, Companies other than Government Companies’,
87(32)Corporate Law Advisor 27 (Jan-March 1999).
19
AIR 1963 SC 151.
215
that city or town after the enforcement of the development Act has to be in
conformity with the said Act, but it will not be correct to say that land could be
acquired after the Development Act coming into force under the said Act only and
once it could be acquired under Urban Development Act, same could not be acquired
under the Land Acquisition Act. 20
20
Ali Hassan v. Lt. Governor, ILR (1976)1 Delhi 485.
21
Supra note 3, at 17.
22
Ram Jiyaman v. State of Uttar Pradesh, AIR 1994 SC 38.
216
The experience of more than one century witnessed that the provisions of this
Act have been found to be inadequate in addressing certain issues like rehabilitation
and resettlement of project affected persons, social impact assessment of projects.
Therefore, this Act replaced by the Right to Fair Compensation and Transparency in
Land Acquisition, Rehabilitation and Resettlement Act, 2013. Aim of the Act was to
ensure a humane, participatory, informed consultative and transparent process of land
acquisition with the least disturbance to the owner of the land and other affected
families and to provide just and fair compensation to the affected families whose land
has been acquired or proposed to be acquired or are affected by such acquisition.
Make adequate provisions for such affected persons for their rehabilitation and
resettlement thereof, and for ensuring that the cumulative outcome of compulsory
acquisition should be that affected persons become partners in development leading to
an improvement in their post-acquisition and social economic status and of matters
connected therewith or incidental thereto. The scope of the Act extend to all over
India except the State of Jammu and Kashmir. The Government of India requires a
combined law, one that legally requires rehabilitation and resettlement necessarily
and simultaneously follow government acquisition of land for public purpose.
The Law is clear that States are free to enact their own legislations and
policies on land acquisition, provided provisions on resettlement and rehabilitation
shall not be less than what is provided in the Central Act (Right to Fair Compensation
and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013).
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013 would apply when:
1. Government acquires land for its own use, hold and control.
2. Government acquires land with the ultimate purpose to transfer it for the use of
private companies for States public purpose. The public purpose of Act includes
public private partnership project, but excludes land acquired for stated national
highways projects.
3. Government acquires land for immediate and declared use by private
companies for public purpose.
217
Act,1894 over the years, there was absence of a cohesive national law that addresses
to:
1.Fair compensation when private land is acquired for public use and
2.Fair rehabilitation of land owners, who are directly affected from loss of
livelihood.
218
“The expression land includes benefits arising out of land acquired and things
attached to the earth or permanently fastened to anything attached to the
earth”.23
For the purpose of land acquisition, proceeding 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 24,
Supreme Court inter alia, decided on this point and held that hearing as per section 5-
A of Land Acquisition Act,1894 is not judicial or quasi-judicial it is only an
administrative nature proceedings.25
23
Supra note12, at 10.
24
(1964)5 Section C.R. 294, 317.
25
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.
219
4. Whether the land acquisition at an alternative place has been considered and
found not feasible; and
5. To study the overall cost investment and benefits of the project.
220
deemed to have lapsed and a fresh social impact assessment shall be required to be
undertaken prior to any acquisition.
221
scheme. Unless, the compensation has been deposited either in full or part no
declaration shall be made.26
222
as the case may be in the Official Gazette and in daily newspapers circulated in the
concerned local authority of which at least one shall be in regional language, and also
uploaded in the appropriate government website. Preliminary notification issued
under the section 11(1) of Act shall also contains summary of social impact
assessment report and particulars of the administrator appointed for the purposes of
rehabilitation and resettlement under section 43 of the Act. Damages awarded under
section 13 are different from those contemplated under section 69 for sudden
dispossession under emergency condition.
31
2001(5) ALT 565 (LB).
32
AIR 1976 AP 134 (FB).
223
of compensation for the acquisition of land in terms of sale agreement.33 In Amar
34
Singh Jadar v. Shanti Devi a party who is in possession of is the prima facie
evidence entitled to compensation, so he is a person interested. Whether he is in
occupation in the capacity of a tenant or a licensee is immaterial.
Whereas section 5A of the Land Acquisition Act, 1894 provides for hearing
of objections. The main advantages of the enquiry were assessed by the Gujarat High
36
Court in Patel Gandalal Somnath v. State of Gujarat the Government can decide
whether any particular land is needed for a public purpose or for a company and the
enquiry also enables persons interested to show how acquisition of land in question
will not serve the public purpose at all involved in the manner. However decision
once taken under section 5A cannot be cancelled or altered.37 In case the State
government has taken the decision in favour of objector, it is no longer possible to
make declaration under section 6 of the Land Acquisition Act and the land notified
under section 4(1)38 cannot be acquired.
After considering such report made by the collector under section 15(2) of the
present Act the government shall issue a declaration 39 within twelve months from the
date of the preliminary notification to acquire land for public purposes, PPPs or
company. Declaration is a mandatory requirement for every acquisition. No such
33
Hindu Kanya Mahavidyalaya v. Municipal Committee, 1988 SCC 718.
34
AIR 1987 Pat 191(FB).
35
See Section 5A of the Land Acquisition Act, 1894.
36
AIR 1963 Guj. 50.
37
Supra note 30, at 260.
38
Bedenhah Fatenshah Fakir v. State of Maharashtra 1980 BOM CR 1791.
39
See Section 6 of the Land Acquisition Act, 1894.
224
declaration shall be made unless the Requiring Body deposits an amount of
compensation, in full or part, as may be prescribed by the appropriate government
towards the cost of acquisition of the land.40 Failure to give a personal hearing is fatal
and renders the proceedings illegal.41
40
Supra note 12, at 118.
41
Farid Ahmed v. The Municipal Corporation, Ahmedabad, AIR 1976 SC 2095.
42
Brijmohan v. State of Uttar Pradesh, AIR 1967 All. 237.
43
Sudhansu Sekhar Maity v. State of W.B., AIR 1972 Cal. 320.
44
Abdul Sattar v. State of Utter Pradesh, AIR 1994 All. 77.
225
Acquisition of Land for Companies
Ashok Kumar Kesharwani v. State of Uttar Pradesh 45, in this case acquisition
of land for the company, the land owner is entitled to an opportunity of being heard
under Rule 4 of the Land Acquisition (companies) Rules, 1963 over and above an
opportunity of hearing an objection under section 5A of the Act. Objections raised
under Rule 4 cannot be raised in an enquiry under section 5A therefore, failure to
hear the objection under Rule 4 will be fatal and enquiry under section 5A of the Act
did not satisfy the requirement contained in Rule 4 of the Companies Acquisition
Rules. The owners of the land are entailed to an opportunity of being heard in an
enquiry under Rule 4 and enquiry under section 40 of the Act. When no such
opportunity is given, the acquisition is vitiated.
Section 5A didn’t apply in the following cases viz. (1), for emergent
acquisition of land sought under section 17; (2) temporary occupation of waste or
arable lands under the Act; (3) acquisition of part of house or building under section
49 of the Act. However, above facts are required to be mentioned in the notification
issued under section 4(1) of the Act.46
Under the new Act there is no such kind of different procedure of acquisition
of land for public purposes and for companies. Whereas under the new Act land
acquired for the purposes mentioned under the section 2(1) of the Act rehabilitation,
resettlement and compensation shall be applied and land acquired under section2(2)
of the Act consent, rehabilitation, resettlement and compensation shall be applied.
Even if a private company purchase land or it request the appropriate government for
acquisition of a part of an area so prescribed for a public purpose is above the trigger
i.e., more than 50 acres in urban area and more than 100 acres in rural areas must
comply with rehabilitation and resettlement provision in addition to compensation.
45
AIR 1981 SC 866; AIR 1984 AII 283 (FB)
46
Supra note 28, at 261.
226
appear to the appropriate government that the land in any locality is needed or is
likely to be needed for any public purpose, then appropriate government after being
satisfied with the report made under section 15(2) of the Act, a declaration shall be
made to that effect, along with a declaration of an area identified as the “resettlement
area” for the purpose of resettlement and rehabilitation of the affected families.
Publication of summary of Rehabilitation and Resettlement Scheme is mandatory.
Hence, present the Act provides more security to the land losers. The said
declaration made under section 19 of the Act shall be conclusive evidence that the
land is sought to be acquired.
Under the repealed Land Acquisition Act, 1894 in case of land acquisition for
companies it is imperative compliance with the acquisition procedure under part VII
of the Act and Rule 4 under the Land Acquisition Rules 1963. Unless the conditions
enjoined by rule 4 are complied with, the notification issued under section 6 would be
invalid. In the present Act acquisition of land for infrastructural development project
by the private companies or for public-private partnership project prior informed
consent of 80 per cent of the project affected persons are mandatory.
After making such declaration the local government may acquire the land
through procedure. Section 19 comprise two parts (1) satisfaction of the government
that particular land is needed for public purposes and (2) appropriate government
only can make a declaration after considering the report. The declaration would be
bad, if it is made by the appropriate government which is not appropriate and
proceedings for acquisition founded on such bad declaration may be quashed through
writ petition. However, particular land needed for a public purpose or for a company
is subjected to satisfaction of the government. Subjective satisfaction of the
government is not reviewed by the Court as an appellate form but grounds for
arriving to such satisfaction could be reviewed by the Court. Declaration shall be
made under the signature of the secretary or of duly authorized officer. No declaration
under this section is to be made unless the requiring body deposits amount in full or
in part which is to be paid by a company, or wholly or partly out of public revenue.
When it is found that the notification has been issued under section 19 without taking
into account the report of the collector made under section 15(2), then such
notification could be invalid in Law.47
47
State of U.P. v. Venkateswar Singh, 1974 ALJ 822.
227
Under section 40 of the Right to Fair Compensation and Transparency in
Land acquisition, Rehabilitation and Resettlement Act urgency clause has also been
limited for the purposes of national defence, security purposes and rehabilitation and
resettlement in the event of emergencies or natural calamities. Appropriate
government under the urgency clause may on expiration of thirty days from the date
of publication of notice mentioned under section 21, take the possession of the land.
Before taking possession of the land collector shall tender payment of 80 per cent of
compensation to the interested persons.
In the repealed Land Acquisition Act, 1894 Government dispenses with the
requirement of enquiry under section 5A when collector invokes emergency clause
under section 17 of the Act. Before an amendment to the section 17(4) of the Act
there is no irregularity in publishing preliminary notification and declaration that the
land is needed for a public purpose simultaneously.48 After Amendment Act 68 of
1984, the notification under section 6 containing declaration that land was needed for
public purpose should be issued and published subsequent to the notification issued
under section 4(1) of the Act. Therefore, situation existed before repealing the Land
Acquisition Act is that issuing of notification under section 6 and under section 4
simultaneously was invalid.49
The proviso to the section 6(1) was inserted by 1967 Amendment Act it,
provides the time limit within three years of time limit a declaration shall be made
under section 6(1) from the date of notification issued under section 4(1) of the Act.
This proviso has undergone further amendment, as per the Amended Act, 1984 the
declaration shall be made under section 6(1) within one year from the date of
publication of notification under section 4(1) 50 of the Act, provided delay more than
one year for which government is responsible, notification issued under section 4(1)
deem to be annulled.51 Cancellation something different from withdrawal of
notification. Cancellation of notification under section 6 does not amount to
withdrawal of acquisition by the government under section 48. Suppose the
notification under section 6 is invalid, notification under section 4 cannot be
exhausted because its purpose could be fulfilled only by issue of a valid notification
48
B.K. Abul Azeez v. State of Mysore, AIR 1997 Mys 12; ILR (1956) Mys 146.
49
M.R. Mallick’s, ‘Land Acquisition Act 1894’,( Kamal Law House, Calcutta, 1990), p 107.
50
Ibid at 107-109
51
Kalamiya Karimmiya v. State of Gujarat, AIR 1977 SC 497; (1977)1 SCC 715.
228
under sections 6. 52 Where as in case of a valid notification under section 6 was
withdrawn, the notification under section 4 of the Act would get exhausted.53
Under section 6 of the colonial Land Acquisition Act, 1894 if the publication
of declaration that the land is proposed to be acquired is for public purpose in the
official gazette and in two daily newspapers circulated in the concerned locality of
which at least one shall be in the regional language. If the acquisition of land for
companies, declaration shall be published only after an agreement as specified under
section 41 of the Act is executed and the government has consulted the committee is
52
Suresh Pahwa v. Union of India, (1994)55 DLJ 362.
53
Raghunathan v. State of Maharastra, AIR 1988 SC 1615; (1981)3 SCC 294.
229
set up under rule 3 of the Land Acquisition (companies) Rules, 1963 and considered
the report made by the collector under rule 4.54
230
petitioner having acquired the evacuee land at a public auction on 7/6/1960 is entitled
to challenge the acquisition because notification under section 6 was included the
evacuee land even though section 4 notification exempted the evacuee land from
acquiring. Notification under section 6 cannot be sustained, because there was no
notification covering the land belonging to the petitioner under section 4 of the Act.
60
In Venkata Chalapat v. State of Tamil Nadu Court held that, where land is
acquired by the government for public purpose the question whether urgency exists or
not for dispensing with requirement of section 5A of the Act by invoking section
17(4) is a matter of wholly for the determination of government and it is not a matter
of judicial review. Same legal status continued under the present Act. Hence, there is
no inconsistency between section 11 and section 19 of the Act.
60
AIR 1986 Mad 309.
61
Mysore (Karnataka)- Section 8 shall be deleted, Mysore Act 17 of 1961, section 11 (w.e.f. 24.
8.1961)
62
As per Section 10 of the Act all persons includes every other person possessing any interest in the
land as co-proprietor, sub-proprietor, mortgage tenants.
231
nature of their respective interest in the land and make claims for compensation, their
claims to rehabilitation and resettlement along with their objections, if any, to the
measurement of land [section 20 of the Act]. This section requires the collector to
issue two notices, one in the locality of acquisition and other to occupants or people
interested in lands to be acquired, and it is a mandatory requirement.
232
the predecessor Act only thirty per cent of solatium calculated on amount of
compensation and nine per cent of interest calculate from the date of preliminary
notification to the date of possession of the acquired land and fifteen per cent of
interest calculated on amount of compensation from the date of possession of the
acquired land till the date final award.
63
Pratima Ghosh (Smt.) v. State of West Bengal, AIR 1973 Cal 283.
233
referred to “the Land Acquisition, Rehabilitation and Resettlement Authority” under
section 64 of the Act.
234
affected family or Rs 2000 per month per family as annuity for 20 years, with
appropriate index for inflation for agricultural labourers.
235
shall not be borne by any stamp duty and other fees, which is paid by the
Requiring Body.
64
Supra note 8, at 478.
236
6.18 Overview of Section 11A of Land Acquisition Act, 1894
Section 11A was inserted in the Land Acquisition Act by the Land Acquisition
(Amendment) Act, 1984. It makes it obligatory for the collector to declare an award
within a period of two years from the date of publication of the declaration, otherwise
acquisition proceedings will be lapsed. K.C. Jain Advocate of Supreme Court of India
observes the legislative anomaly regarding section 11-A that while on one hand,
despite dispossession of a land owner under the aspiration section 17 of the Act, there
is no time frame to make a award, on the other hand, where there is no dispossession,
the time frame operates. The dispossessed land owners need preferential treatment
and more expeditions payment of compensation is yet to be taken. Acquisition
proceedings are lapsed on account of collector’s failure to make an award, the person
concerned is not entitled to receive damages, however acquisition proceedings are
withdrawn voluntarily under section 40(1) of the Act concerned person entitled
receive the damages, if any suffered by him as a consequence of the acquisition
proceedings. K.C. Jain Supreme Court Advocate has observed that there is no
rationale for discriminatory treatment.65
65
K.C. Jain, ‘Land Acquisition Act Revisited’, 10-11(SCC, 1998, vol. 7).
66
AIR 1993 SC 2517
67
Supra note 65 at 12.
68
AIR 1994 NOC 197 (A.P.).
237
violated the right to property under Article 300A. An award made without the
approval of the appropriate government as required by the first proviso to sub section
(1) of section 11 would be invalid.69 Until the award is announced or communicated
to the parties concerned it cannot be said to be legally made in the absence of valid
award a Civil Court has no jurisdiction70 to take any proceedings on a reference made
it.71
Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act put full stop to all these anomalies. Under
section 25 of the Act within period of twelve months from the date of publication of
the declaration award shall be made, appropriate government shall have the power to
extend the period of twelve months if in its opinion circumstance that existed justified
the same. Under section 40 of the Act urgency clause shall be restricted to the
minimum area required for the defence of India or national security or for any
emergencies requiring rehabilitation and resettlement needs in the event of natural
calamities only. Under section 40 of the Act, the collector, though no such award has
been made, may, on the expiration of thirty days from the publication of the notice
mentioned in section 21 take the possession of the land provided before taking
possession of such land, the collector shall tender payment of eight per cent. of
compensation. Additional seventy-five per cent. of total compensation as determined
under section 27 of the Act shall be paid to the land owner.
6.19 Taking Possession of the Land under Acquisition process (section 38)
The collector may take the possession of the land after ensuring the full
payment of compensation as well as rehabilitation and resettlement entitlements are
paid or tendered to the entitled persons within the period of three months for the
compensation and a period of six months for the monetary part of rehabilitation and
resettlements. Provided within the period of 18 months from the date of award
components of the rehabilitation and resettlement package relates to infrastructural
entitlement shall be provided. The collector shall held responsible for ensuring the
rehabilitation and resettlement process is completed in all its aspects before displacing
the affected families, thereupon land shall vest absolutely in the government free from
69
M.D. Govindarajan v. State of Tamil Nadu, 1992(1) Mod L.J. 469.
70
Section 18 of the Land Acquisition Act, 1894
71
Macdonald v. Secretary of State, 19 PLR 1909; 41C 914; 123 PR 908.
238
72
all encumbrances then State uses the land for what purpose it has been acquired.
Under section 101 of the present Act if the land acquired remains unutilized for a
period of five years from the date of taking over the possession, it may return it to the
original land owner or their legal heirs, as the case may be, or to the land bank of the
appropriate government.
Whereas under Land Acquisition Act, 1894 the land acquired for public purpose
shall be used for the same. Nowhere in the Act places an obligation upon the State to
return the land to the original land owner or to the land bank of the appropriate
government, if it is not put to use for what purpose the land is acquired. When land
acquired for a company, it first vests in the State and then transferred to the company
on payment of amount or cost of acquisition in accordance with the agreement under
section 41. If the acquired land is no longer required by the company it should not be
offered back to the original owner or returned to land bank.
Under Land Acquisition Act, 1894 collector has power to acquire the land, in
cases of urgency for a period of three years from the date of preliminary notification
without following the procedure accorded in the section 5-A of the Act. The Act also
empowers the government to occupy temporarily waste or arable land for a period of
three years after paying compensation to the persons interested either as a lump sum
or in periodical payments, with the option to make the move more permanent by
following requisite steps as set out by the Act. The State government has the power to
resort to section 17(1) and dispensing with the compliance of section 5A on being
satisfied that the land sought to be acquired was the arable land which was urgently
72
Section 16 of the Land Acquisition Act, 1894.
239
required for public purpose. Amending Act 1984 has extended this emergency
provision from arable land to any kind of land needed for a public purpose.73
74
In Venkata Chalpati v. State of Tamil Nadu a single judge of Madras High
Court has held that question as to whether urgency exists or not to invoke section 17
and to dispense with the requirement of section 5A of the Act is a matter solely for
the determination of the government and it is not a matter of judicial review. 75 The
question whether the enquiry under section 5A is necessary or not is a question of fact
hence, it is normally, a matter of subjective satisfaction of the State government
therefore the government is the best judge for determining the question of existence
of urgency, it is only in case of malafide exercise of power High Court may interfere
in writ jurisdiction.76
73
Supra note 49, at 1075.
74
AIR 1986 Mad 309.
75
It is for the appropriate government to apply its mind to the facts of the case and satisfy itself that
there it an urgency. Though it is not open to the Court to consider the adequacy or otherwise of the
material on the basis of which the appropriate government reaches its satisfaction but it is open to the
Courts to ascertain whether appropriate government applied its mind to the considerable material and
whether the conclusion or satisfaction was based on relevant consideration.
76
Satbir Singh v. State, AIR 1988 AII 177
77
AIR 1988 SC 1459; (1988)3 SCC 225.
78
Supra note12, at 125.
240
the government applies its mind and act in good faith.79 Publication of notification
under section 4 is a condition precedent for raising objections. The Government may
in its discretion in cases coming under section 17(1) and section17(2) dispenses with
the requirement of section 5A.80
Delay in taking possession of the land nearly 3 years where urgency provision
under section 17 has been invoked that would certainly be a factor leading to the
conclusion that there was no real urgency and acquisition authorities acted
mechanically.81 In Chandramani Sahu v. State of Orissa 82
Court held that delay of
one year, six months in making the declaration under section 6 after publication of
notifications under section 4(1) defeated the pleas of urgency under section 17(4) of
the Act. Under section 17(3A) of the Land Acquisition Act only 80% of the
compensation, estimated by the collector is paid to the land owner before taking the
possession of the property which is acquired.83 The amount paid or deposited under
sub section 3(A) of section 17 shall be taken in to account in final compensation.
79
Mudumekala Hanumannar v. District Collector, Ananthapur, AIR 1994 NOC 197 (AP)
80
Supra note 8, at 574 & 575.
81
Supra note 8 at 600.
82
AIR 1991 Ori. 205.
83
Supra note 8, p.604.
84
Jamandas Devashibhai Bhate v. Commissioner, Nagpur, AIR 1976 BOM 129.
241
district councils as the case may be obtained. Where the affected families belonging
to the scheduled castes and scheduled tribes are relocated outside the district, then
they shall be paid an additional twenty-five per cent. rehabilitation and resettlement
benefits to which they are entitled in monetary terms along with one time entitlement
of fifty thousand rupees.
Within the period of thirty days from the date of receipt of application for
reference, matter shall be referred to the Land Acquisition, Rehabilitation and
Resettlement Authority. If collector fails to make such reference within the specified
period, the applicant may apply to the authority, requesting it to direct the collector to
refer the matter to it within a period of thirty days. At the time of making award
applicant was present or represented before the collector, within six weeks from the
date of the collector’s award made an application to the collector to make reference
the matter to the Land Acquisition, Rehabilitation and Resettlement Authority. In
other cases, within six weeks of the receipt of the notice from the collector under
section 21, or within six months from the date of the collectors award, whichever
period shall first expire. Collector may entertain the application which is made after
the expiry of the specified period, within a further period of one year, if the collector
is satisfied about the existence sufficient cause for not filing application within the
specified period. Under section 69 of the Act every such award determined by the
authority shall be deemed to be a decree within the meaning of Civil Procedure Code,
85
Supra note 49, at 120.
242
1908. Any person aggrieved by the award passed by the authority under section 69
may file an appeal to the High Court within sixty days from the date of award. Under
section 74(2) of the Act every such appeal shall be disposed within six months from
the date on which the appeal was filed to the High Court.
In the colonial Land Acquisition Act, 1894 Civil Court not below the rank of
district has jurisdiction over reference application. In Satantra Land and Finance (P)
Ltd. v. State of Haryana,86 Court stated that following objections can be raised by the
respondent, namely (1) the applicant had accepted the award and therefore, he had no
right to apply for reference; or (2) that the application made by him to the collector
for reference was beyond time; or (3) the applicant is not a person interested; or (4)
that the application has been made not after the making of the award, but prior thereto
; (5) some matters other than those specified in section 18(1) have been included in
the application for adjudication.
A Land Acquisition reference case cannot be dismissed for default on non
appearance of the claimant and Court has to make an award even in the absence of
any evidence.87 If the applicant plead the collector within time limit required to refer
the matter to the Court.88 Second proviso to section 31(2) of the Act creates a
statutory bar to a person who has accepted the compensation without protest from
making an application under section 18.89 Old Section 25 has been deleted and new
section 25 inserted by the 1894 Amendment which declares that the amount of
compensation awarded by the Court shall not be less than the amount awarded by the
collector under section 11.90
91
The Division Bench of Madhya Pradesh High Court held that under section
50(2) expressly bars the company or local authority at whose instance the acquisition
is made from questioning the amount of compensation awarded by the collector under
section 11. Therefore neither the company nor the local authority on whose behalf the
acquisition is made shall demand for a reference to the civil Court. Hence, Section 25
expressly prohibits the Court from reducing the amount of compensation while
86
AIR 1975 Punj 52; 12 R (1974)2 Puj 75(FB)
87
Shyam Shankar Sahai v. State of Bihar, AIR 1984 Pat 176.
88
Kejarilal v. Union of India, AIR 1966 Sc 1538; Narayana Das v. Kashi Nath Pani, AIR 1968 Ori
94.
89
Bisan Das v. L.A.O. Vyas Dam protect, Talwara, AIR 1987 HP 33 Court has got the jurisdiction to
decide as to whether he has a right to make the application or not.
90
Supra note 49 at 120.
91
Santhosh Kumar v. Central Wear Housing Corporation, AIR 1986 SC 1164.
243
dealing with the matter referred under section 18. It clearly prohibits the company or
local authority to invoke the jurisdiction of the High Court under Article 226 of the
Constitution to challenge the amount of compensation awarded by the collector to
reduce it.92 Claimant may bring a writ petition before High Court questioning the
acquisition on the ground that acquisition itself is malafide and the burden of
establishing malafide is on the person who alleges it.93
94
In Adusumalli Parvathi and others v. the Special Tahsildar and LAO v.
Revanna Division, Collector, Vishakapatnam Andhra Pradesh High Court held that,
the receipt of amount under protest is a condition precedent to make an application
under section 18 within the specified period. The collector is enjoined to make a
95
reference to the Civil Court. In Ajit Singh v. State of Punjab Supreme Court held
that, receipt of compensation by the person interested is not a ground to deny
enhanced compensation. In spite of acceptance of compensation, when a reference is
made to Civil Court, there is implied protest by the claimant for the compensation
awarded by the LAO.
Reference made under section 18 cannot be dismissed by the Civil Court and
the Court is bound to determine the objections raised by the claimant even though he
was absent on the date of enquiry. Sections 20 and 26 of the Act pre-supposes that a
fresh determination has to be made by the Court on the material available.96 If the
claimant accepted the compensation without any protest, the reference Court or Land
Acquisition, Rehabilitation and Resettlement Authority may reject the reference
application but the collector has no power to refuse to make reference, leaving the
question open to be decided by the reference Court.97 Application for reference to
civil Court shall be made within the period of 6 weeks from the date of receipt of
notice regarding award made, or within 6 months from the date of the collector’s
award whichever period shall first expire.98 If we compare section 18 of the repealed
Land Acquisition Act with section 69 of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, in the earlier
92
Supra note 49, at 231.
93
Jamnadas Devashibhai Bhate v. Commissioner, Nagpur, AIR 1976 BOM 129.
94
(1994)3 ALT 114 A.P.
95
1994 (4) SCC67.
96
Supra note 8, at 129.
97
Patel Vashram Gopalbhai v. State of Gujarat, AIR 1989 Guj. 231; (1989) 1 Guj LR 128.
98
Supra note 12, at 128.
244
Act reference shall be made to the civil Court and in the latter Act reference shall be
made to the Land Acquisition, Rehabilitation and Resettlement Authority. Except this
no change will be seen in between these two Acts.
99
AIR 1988 SC 1652
245
3) The Land Acquisition, Rehabilitation and Resettlement Authority has to treat
the reference as an original proceeding before it and determine the market
value afresh on the basis of the material proceeded before it.
4) The claimant comes to the status of plaintiff he has to prove that the price
offered for his land in the award is inadequate.
5) The market value of land which is acquired has to be determined.100
For availing the remedy under section 28A conditions laid down therein are to
be fulfilled, the forum is collector and application has to be made to him within 90
days from the date of the judgment by the Civil Court. Redetermination of
compensation against the award of collector is a right restricted to the persons who
were not applied for reference the matter to Civil Court under section 18 of the Act,
whose land is also covered by the same notification. Later they may take advantage
under section 28A of the Act. 102 But section 28A does not apply to acquisition of
lands under the Requisitioning and Acquisition of Immovable property Act 1952.103
In computing the period of three months from the date of judgment of civil Court
within which an application shall be made to the collector, the day on which the
award was pronounced and the time requested for obtaining a copy of the award shall
100
Supra note 12, at 129.
101
Supra note 8, at 979.
102
Mema Ram v. State of Haryana, 1987 SCJ 479; (1986) 480C SCC 151; AIR 1987 SC 45.
103
Ramjibhai Harkhabhai v. Sectioned extra Special LAO: Ahmedabad, 1992(1) Guj LR 105.
246
be excluded. On the receipt of application under sub section (2) of section 28A, the
collector should conduct an enquiry after giving a notice to all the interested persons,
for being given an opportunity to be heard make an award. Any person who has not
accepted the award under sub section (2) of section 28A afore mentioned, may
submit a written application to the collector, to refer the matter to the Court for
determination of compensation, provisions of sections 18 to 28 shall so far as may be
applied to such reference as they like applied under section 18 of the Act.104
Intent of the legislature in enacting the new section 28A is to give equal
compensation to all persons whose lands are also have been acquired under the
same notification (section 4). Purpose is to remove anomalies in determination of
compensation by the collector and the Court in some cases, that is, to remove
inequality of payment of compensation for the same or similar quality of land to the
different interested person. It also provides for an additional remedy to inarticulate
and poor aggrieved persons whose land has been acquired to call upon the collector
to pay the compensation at the rate determined by the Court in other cases.105 Section
28A of the Act, it is a direction to the collector to re-determine the amount in
accordance with the award of the Court.106 Under section 73 of the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act compensation re-determined on the basis of award of the Land
Acquisition, Rehabilitation and Resettlement Authority. In this Act instead of Civil
Court, reference shall be made to the Land Acquisition, Rehabilitation and
Resettlement Authority. The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act bars the jurisdiction of Civil Court.
104
Supra note 12, at 139.
105
M.R. Mallick, ‘Land Acquisition Act,1894’,(Kamal Law House, Calcutta) 1990 p 190.
106
Ibid at 191.
107
Dr. Awasthi’s, ‘Law of Land Acquisition and Compensation’, (Dwivedi Law Agency, Allahabad,1st
ed.,2008), p 14.
247
held. The term ‘compensation’ etymologically suggests the image of balancing one
things against the other.108
Acquisition is a right inherent in every sovereign State to take appropriate
private property belonging to individual citizens for public use. The right which is
described as eminent domain. Article 31(2) of the Constitution prescribes a twofold
limit within which such superior right of the State should be exercised. One limitation
imposed upon the acquisition or taking possession of private property is that such
taking must be for public purpose. The other condition contains a provision for
payment of compensation to the manner laid down in the clause.109
After 44th constitutional amendment, though the mass of citizens shall have no
longer any guaranteed right to compensation for the property acquired or
requisitioned and legislature shall have no constitutional obligation to pay any sum
amount to the appropriated owner. Two exemptions to this general position allowed
(a) if the property acquired belongs to an Educational Institutions established and
administered by the members of the minority community, law of acquisition must
provide for such acquisition, the compensation as would not abrogate the right of
minority to establish and administered educational institution (b) if the State seeks to
acquire the land which is within the statutory ceiling limit and personally cultivated
by the owner, State must pay compensation which is full market value of the land
acquired.
108
Supra note 107, at 15
109
Supra note 8, at 14.
110
Dr. Durga Das Basu, ‘Introduction to the constitution of India’ (Lexis Nexis Butler Worths
Madhwa, Nagpur 20th ed., 2012), p 130.
248
notwithstanding the omission of such constitutionally guaranteed right to
compensation, the Court would derive such right from the legislative power contained
in Entry 42 of List III111 of the Indian Constitution hence, ‘Acquisition and
requisitioning of property’ read with the common law doctrine of ‘Eminent Domain’.
111
Supra note110, at 131.
112
Ezra v. Secretary of State, 9 CWN 55.
113
O.P. Agarwal, Compensation for Compulsory Acquisition of Land in India 88 (1989).
114
Section 28: parameters to be considered in determining compensation: In determining the amount
of compensation to be awarded for land acquired under this Act, the collector or authority shall take
into consideration - First, the market value of the land at the date of the publication of the
[notification under section 11, subjection (1)]; secondly, the damage sustained by the person
interested, by reason of the taking of any standing crops or trees which may be on the land at the
time of the Collector's taking possession thereof; thirdly, the damage (if any), sustained by the
person interested, at the time of the Collector's taking possession of the land, by reason of severing
such land from his other land; fourthly, the damage (if any), sustained by the person interested, at the
time of the Collector's taking possession of the land, by reason of the acquisition injuriously
affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, if,
in consequence of the acquisition of the land by the Collector, the person interested is compelled to
change his residence or place of business, the reasonable expenses (if any) incidental to such change;
and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land
249
which may be very well taken into consideration in awarding compensation for the
land acquired hence this provision is not exhaustive.115 Market value calculated as per
sub-section (1) of section 26 for the land acquired in rural area multiplied by the
factor one to two, it is based on the distance of the land from urban area. Market
value calculated for the land acquired in urban area shall be multiplied by the factor
one. Further, compensation accompanied with solatium equivalent to one hundred per
cent of compensation and twelve per cent. of interest per annum on such
compensation (market value of the land) from the date of publication of the
notification of the social impact assessment study under section 4(2), till the date of
award or from the date of taking possession of the land, whichever is earlier.
Under section 80 of the Act if the amount of compensation was not paid or
deposited on or before taking possession of the land, collector shall pay nine per cent.
interest with awarded amount from the date of taking the possession of land until it
shall have been paid or deposited. Provided if such compensation or any part thereof
is not paid or deposited within a period of one year from the date of taking possession
of land, per annum fifteen per cent. of interest should be calculated from the date of
expiry of the said one year. Under the colonial Land Acquisition Act 1894, although
there is no mention of "reinstatement" in section 23(1), the Court in India have
recognized this principle.116
between the time of the publication of the declaration under section 19 and the time of the Collector's
taking possession of the land; seventhly, any other ground which may be in the interest of equity,
justice and beneficial to the affected families.
115
Baroda Prasad Dey v. Secretary of State, 25 CWN 677.
116
1992 SCR (2) 615.
117
Ibid.
250
individual whose property is taken, but to the public which is to pay for it; even if it
be a public corporation set up for public needs.
The Land Acquisition (Amendment Act) Act 1984, addressed the matter of
compensation and delays in payment.118 As to the level of compensation, the rate of
solatium was increased from 15% to 30%. For delays, the amendment provided that:
(i) A time of 1 year was fixed for completing all formalities in between
sections 4(1) and 6(1) from preliminary notification to declaration;
and
(ii) The compensation award must be determined within 2 years from the
date of issuing notification under section 6. Interest is payable at the
rate of 9% per year from the date of preliminary notification to the date
of dispossession.
These changes apply to the cases pending before the civil Court.119 Market
value is the price of property may fetch in the open market if sold by a willing seller.
The methods of valuation of land acquired under the Act may be classified under
three heads.120
(i) The opinion of valuators or experts
(ii) The price paid within a reasonable time in bona fide transactions of
purchase of the lands acquired or the lands adjacent to the land
acquired and possessing similar advantages, and
(iii) A number of years’ purchase of the actual or immediate prospective
profits from the land acquired.
It is generally necessary to take two or all of those methods in order to arrive
at a fairly correct valuation.121 In Nagpur Improvement Trust and Anr. v. Vithal Rao
122
and Ors the opinion of the Court was that the principles for the determination of
compensation would be same, regardless of the motive of the acquisition. In Suresh
118
Before amendment, compensation for land and houses was paid at the market value of the assets on
the date of preliminary notification. The valuation was based on a detailed examination of land and
structure section An additional 15% of the determined market value was paid as solatium to account
for the compulsory nature of acquisition. Interest in case of delayed compensation was paid at a rate
of 5% per year from the date of-dispossession. The amount of the award was determined by a land
acquisition officer, but could be appealed to a civil Court.
119
NP Shanker, ‘Section 23 of Land Acquisition Act, Judicial Pronouncements- A Full Circle’, 45,
ILR, Karnataka (1995).
120
B.D. Agarwal, ‘Rationalizing Land Acquisition Compensation’, 86 AIR 175 (1999).
121
Harish Chandra Neogy v. Secretary of State, 11CWN 875.
122
1973 SCR (3) 39.
251
Kumar v. Town Improvement Trust Bhopal 123 the Supreme Court has been observed
that in determining the amount of compensation the Court should not only look at the
present use to which the land has been put to, but also the probable uses of the land.
The agreement between government and claimant cannot defeat the statutory right of
compensation. Another interesting aspect with regard to the payment of compensation
is whether the claimants are entitled for compensation under the provisions of the Act,
when the assigned lands are resumed by the Government for a public purpose. There
was a dichotomy of judicial opinion on this point, however the legal position was
finally settled in the case of LAO-Cum-Revenue Divisional Officer, Chevella Division
And Orsection v Mekala Panda And Orsection.124
The legal conundrum germinated due to the view expressed by the full bench
of the Andhra High Court in State of A.P. v. P. Peda Chinnayya125, where it was held
that:
“Where the Government resorts to the provisions of the Act for acquisition of
the patta lands without resorting to the terms of the grant for resumption, it is
liable to pay compensation under the Act, but such compensation will be only
the market value of the interest of the owner or the assignee of the land, subject
to the clog. In such cases, no solatium may be payable but interest may be
claimed on the amount of compensation from the date of dispossession and till
the date of payment of compensation.”
This matter again came up for consideration before a larger bench in State of
A.P. v. Bondapalli Sanyasi126, wherein it was held that “…….the Full Bench
committed error insofar it held that where patta lands are resumed by the
government, the assignee would be entitled to compensation which would be equal to
the market value of their interest in the land subject to the clog. Quantum of damages
has to be ascertained having regard to the fact situation of each case. The right of the
State to resume land is conditional only to the extent referred to in D-Form patta.
Once such conditions are fulfilled, which have been done in the instant case, no grant
of compensation would be payable towards resumption of land. Compensation may,
123
1989 SCR (1) 908.
124
AIR 2004 AP 250.
125
1997 (1) ALT 498.
126
2002 (2) ALD I.
252
however, be payable if lands have not been resumed by following due process of law.
The act of the State in such cases would be tortuous in nature."
Thus, according to the larger bench, where the assigned land is taken
possession of by the State in accordance with the terms of the grant or patta the right
of the assignee to any compensation will have to be determined in accordance with
the conditions in patta itself and the assignee shall be entitled to compensation in
terms of the Land Acquisition Act not as an owner but as an interested person for the
interest he held in the property. The Andhra High Court127 finally laid the controversy
to rest by upholding the view expressed in the P. Peda Chinnayya case 128 the Court
observed:
“We are unable to agree with the view taken that the assignee shall be
entitled to compensation in terms of the Land Acquisition Act not as owner but
as an interested person for the interest he held in the property.”
127
LAO-cum Revenue Division Officer, Chevella Division & Others v. Mekale Panda and others, AIR
2004 AP 250.
128
State of A. P. v. P Peda Chinnayya,1997 (1)ALT 498
253
6.25 Acquisition of Land for Companies
Under the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act State can acquire land for private companies for
public use provided at least 80 per cent. of project affected families prior informed
consent shall be obtained and in case of public private partnership projects, at least
seventy per cent. of the project affected families prior informed consent shall be
obtained. The riddle associated with the repealed Land Acquisition Act is that
different acquisition process followed in acquisition and land for companies.
Acquisition of lands for a company has always to be in the larger public interest and
never for the private purposes of a company. When lands acquired for a company
under the Land Acquisition Act, 1894 the acquisition has to be done under Part VII of
the Act. If instead, the acquisition is made under Part II of the Act, purportedly for a
public purpose then the entire proceedings are ultra vires, vitiated and a fraud upon
the statute. Part VII consists of sections 38A to 44B and apply to acquisition of land
for companies. But these provisions did not apply where compensation money is paid
partly out of public revenue and some fund controlled and managed by a local
authority.129
Under section 43 of the Land Acquisition Act, provisions of Chapter VII do
not apply to the cases of acquisition of land for a railway under the agreement
between the Company and the Secretary of State of India by which Government of
India is bound to provide land.130 In case of acquisition of land for companies the
company concerned is required to enter into an agreement with the appropriate
government, which shall be published. Acquisition of land for companies consent of
the government (section 41) is condition precedent.131 Consent implies that the
government is satisfied as to the matters provided in section 40 and satisfaction of the
132
government cannot be questioned in any Court of Law there is no particular form
of giving consent, but it should be clear unequivocal, admitting of no
differentiation.133 Consent of government cannot be challenged after the proceeding is
over.134
129
P.K. Sarkar, ‘Law of Acquisition of Land in India’,(Easter Law House, Kolkatta) 2002 p 1107
130
Ibid at 1136.
131
Ibid at 1112.
132
Shyam Behari v. State of Madhya Pradesh, AIR 1962 MB 80.
133
Ezra v. Sectionretary of State, IL 1230 Cal 36.
134
Keshav Pal v.. State of Bihar, AIR 1985 pat 70.
254
As per section 40 the collector submitted the report to the government if the
government is satisfied that, the purpose is one which is sanctioned under the statute,
it can require the company to execute an agreement with the government.135
Agreement made between government and a company shall be published in official
gazette. The agreement shall contain the clauses relating to the payment to be made to
the appropriate government, terms on which the land shall be held by the company,
the time and conditions on which the object for which the land is required to be
fulfilled. There should be clear provisions in the agreement ensuring the
reimbursement to the government136 by the company all costs incurred by it as
incidental to the acquisition. Omission of publication of agreement will affect the
acquisition.137
The process of acquisition shall not begin unless the appropriate government
has approved the acquisition for the company and the agreement mentioned above has
been executed. The consent of the government shall not be given unless the
government on an enquiry is satisfied that the land is being acquired for any of the
following purposes:
1. Erection of dwelling houses for the workmen;
2. Construction of some building or work for a company engaged in industry
or work for a public purpose;
3. Construction of some work that is likely to prove useful to public.
The company shall not sell, mortgage, lease or gift etc., the land except with
the prior sanction of the appropriate government. Prior to the amendment in 1984 the
company itself was empowered to enter and survey the land to be acquired.
The scope of acquisitions for a public purpose or for a company received the
closest legislative attention in the aftermath of the landmark judgment in the case of
the first R.L. Arora case 138 there could be no acquisition for a private company where
it was held that land acquired for a company could be regarded as for a public purpose
only if the public shall not only have right to a direct access and a direct participation
in the work, but also that the products of the enterprise shall be directly useful to the
public, the Hon'ble Supreme Court pointed out, the government will become a general
135
Section 41 of the LA Act.
136
Supra note 129, at 1135.
137
P. Iyar Nadar v. State of Madras, AIR 1965 Mad.50.
138
R.L. Arora and others v. State of Uttar Pradesh and others, AIR 1962 SC 764.
255
agent for companies to acquire lands for them for their private profit, simply because
the company might produce goods which were likely to prove to be useful to the
public. The judgment in this case threatened to invalidate all acquisitions for public
companies made through agency of the government under Part II of the Act and so
various governments started acquiring land under Part II of the Act. Therefore, to
prevent State governments to proceed under Part II and for relaxing the acquisition
for companies under Part VII, changes were brought to the Act in 1962, findings of
first Arora case was superseded by the Amending Act 31 of 1962, in so far as
acquisition made prior to 20th July 1962 even for private companies for public
purpose were validated with retrospective effect by virtue of newly inserted section
40(aa) in the principal Act. Following were the main changes brought up in the Land
Acquisition Act by the 1961 amendment-
(i) Clause (aa) was introduced in section 40.139
(ii) Sub-clause (4A) was inserted in clause (1) of section 40.140
(iii) Sections 44A and 44B were inserted.141
139
Clause (aa) reads: 'that such acquisition is needed for the 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 a public purpose'.
140
Sub-clause 4A reads: “where the acquisition is for the construction of any building or work for a
Company which is engaged or is taking steps for engaging itself in any industry or work which is for
a public purpose, the time within which, and the conditions on which, the building or work shall be
constructed or executed.” Section 44A reads: “No Company for which any land is acquired under
this Part shall be entitled to transfer the said land or any part thereof by sale, mortgage, gift, lease or
otherwise except with the previous sanction of the appropriate Government.” Section 44B reads:
“Notwithstanding anything contained in the Act, no land shall be acquired under this Part, except for
the purpose mentioned in clause (a) of sub-section
(1) of section 40, for a private company which is not a Government company.” Explanation "Private
company" and “Government company” shall have the meanings respectively assigned to them in the
Companies Act, 1956 (I of 1956).
141
Here the usage of term private company must be construed in terms of meaning under section 3 (1)
(iii) of the Companies Act, 1956.
256
prohibits acquisition of land for private company, that which is not a government
company.142
But at the same time the Court was of the opinion that while approaching the
question of construction of this clause, it cannot be forgotten that the amendment was
made in consequence of the decision in the first R. L. Arora's case.145 The Parliament
intended to fill the lacuna, which was, according to that decision, existed in the Act in
the matter of acquisitions for a company. The Parliament when enacted the
Amendment Act was well aware of Article 31(2) of the Constitution which provided
for the compulsory acquisition of land only for a public purpose. Therefore, the Court
observed that the intention of Parliament could not be said to make a provision which
would be in contravention of Article 31(2).
The Court also paid attention to specific usage of the words public purpose in
clause (aa), which according to the Court, indicates that the company for which land
142
R.L. Arora v. State of Uttar Pradesh and others, AIR 1964 SC 1230.
143
Supra note 129, at 1236.
144
AIR 1964 SC 1230
145
Supra note 149, at 1240
257
is required should be engaged or about to be engaged in some industry or work of a
public purpose. The Court felt it to be reasonable to hold that the intention of
Parliament could only have been that land should be acquired for such building or
work for a company as would sub serve the public purpose considering the setting in
which clause (aa) was introduced, and hence it could not have been intended that land
could be acquired for a building or work which would not sub serve the public
purpose of the company in such a setting.
Thus, turning its decision in first R.L. Arora's case, the Court stated that, it is
also not in dispute that the purpose of the company was a public purpose, namely,
manufacture of textile machinery parts and that the acquisition was also for the
construction of works for that public purpose.146 The public purpose requirement
which was emphasized till now both in the legislations and case laws was further
strengthened through the notification of the Land Acquisition (Companies) Rules
1963. It did elaborate for what all purposes the acquisition of land would be
permissible under part VII of the Act. It provided the procedure to acquire any land
under part VII thereby limiting the purposes for which land could be acquired. It
introduced a set of preconditions to be fulfilled by the companies who are willing to
acquire land for their purpose.147 In regard to public purpose the next major
amendment was in 1984.
Even after the Supreme Court's wide interpretation of public purpose under
section 40(1)(aa) of the Act so as to include the manufacturing of textile machinery in
1964, the governments were continuing the acquisition for companies under part II of
the Act. In order to prevent the misuse of the Land Acquisition Act, 1894, the Central
Government proposed further amendments to the Act. The Land Acquisition
(Amendment) Act, 1984 was passed by the parliament. Before this amendment, the
definition under Section 3(e), may be noted that, the Land Acquisition Act, 1894 did
not differentiate between the companies, registered societies and the co-operative
societies that are government entities (i.e., over whom the government had a deep and
pervasive control) and the companies, registered societies and co-operative societies
which were private enterprises on which the government only had statutory and
146
Rule 4 of the Land Acquisition (Companies) Rules, 1963.
147
Pandit Jandu Lai v. Union of India, AIR 1961 SC 343. In this case the Supreme Court by
interpreting the proviso (2) to sub-section (1) of section 6 of the Land Acquisition Act, 1894 held
that since a part of compensation amount was paid from public revenue, the acquisition is for a
public purpose.
258
regulatory controls. Thus, Section 3(e) as it then defining Companies, was applicable
both to government and non-government companies. The then sub-section read:
(e) the expression company' means a company registered under the Indian
Companies Act, 1882, or under the (English) Companies Act, 1862 to 1890 or
incorporated by an Act of Parliament of the United Kingdom or by an Indian
Law, or by Royal Charter or Letters Patent and includes a society registered
under the Societies Registration Act, 1860 and a registered society within the
meaning of the Cooperative Societies Act, 1912 or any other law relating to
cooperative societies for the time being in force in any State.
Prior to the Land Acquisition (Amendment) Act, 1984, section 3(f) as it originally
stood read as under:
(f) The expression public purpose includes the provision of village sites in
districts in which the appropriate government shall have declared by
notification in the Official Gazette that it is customary for the government to
make such provision.
The 1984 Amendment Act substituted the existing section 3(f) with a new
clause. The new section did not exhaustively define public purpose, it is only an
inclusive provision. However, it is significant to note that the section clearly in the
end excludes the acquisition of land for the companies from the ambit of public
purpose. As per the legislative history and parliamentary debates, it is clear that this
part aims at providing a level playing field for the land owners. But practically after
the decisions in Jhandu Lai case 148 and in first R.L. Arora cases 149, the misuse of the
provision of public purpose and of part II of the Act, was often done, by invoking the
current second proviso to sub-section (1) of section 6 of the Land Acquisition Act,
1894. Thus, by purporting to contribute a part of the cost of acquisition and
compensation to be paid from the public revenue, the acquisition was being made for
a public purpose, and the acquisition have been made legal and valid under the
provisions of part II of the Act. Even though, for all practical purposes the acquisition
was for the purposes of a company, and when it should have been done under part VII
of the Act.
148
AIR 1994 All 77.
149
AIR 1964 SC 1230
259
Even after the 1984 Amendment Act there was not any difference paying or
contributing to the compensation or cost of acquisition out of public revenue is still
used as a means for acquiring land for companies. In Abdul Sattar v. State of Uttar
Pradesh 150, which was decided after the 1984 amendment, the Allahabad High Court
followed Jandu Lai's interpretation 151 of proviso to sub-section (1) of section 6 of the
Act, while deciding a petition under Article 226 of the Constitution. Yet again in
Pratibha Nema v. State of M.P.152, the Supreme Court laid emphasis on the source of
funding to determine whether the acquisition is for public purpose. The Court
observed that “Thus, the distinction between public purpose acquisition and Part VII
acquisition has got blurred under the impact of judicial interpretation of relevant
provisions. The main and perhaps the decisive distinction lies in the fact whether cost
of acquisition comes out of public funds wholly or partly...” This line of reasoning
adopted by the judiciary is very concerning when it is clearly deducible from the 1984
amendment that source of the funds cannot be a sole criterion to judge the nature of
acquisition. this, could be discussed in detail in the next chapter.
This dichotomy is addressed by the executive in the Land Acquisition Bill,
2007, wherein it proposes to omit the provisions for the acquisition of land for
companies under the Act but not to omit the acquisition, as the Objects and Reasons
of the Bill holds that in certain circumstances it is necessary to acquire land through
State mechanism, in cases where only a limited portion of land is needed as the
person has already bought the rest. The new Bill proposes to abolish acquisition of
land for companies by the government. To facilitate the same, the Bill proposes to
repeal part VII of the Land Acquisition Act, 1894153 while at the same time the
government reserves its right to acquire certain lands for public purpose.
6.26 De-notification
Under the section 48 of the Land Acquisition Act, 1894 appropriate
government may withdraw from the acquisition at any time before taking possession
of the land and collector shall pay the amount of compensation due for the damage
suffered by the owner in the consequence of the notice or of any proceedings
150
AIR 1961 SC 343
151
AIR 2003 SC 3140.
152
Clause 21 of the Draft Land Acquisition (Amendment) Bill, 2007.
153
Sanjiv Rao’s ‘Land Acquisition & Compensation’ (J.P. Singhal, rev’d, Law Book Co. Allahabad 4th
ed.,1958) p 619.
260
thereunder including all cost reasonably incurred by him in the prosecution of the
proceedings to the interested person. Either under this section or under section 93 of
the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement Act completion of the acquisition as notified is not compulsory and
it is left to the discretion of the appropriate government to withdraw from the
acquisition of any land of which possession has not been taken.154
As long as possession remains with the owner and the possession of land has
not been taken by government, the government can unilaterally exercise its power of
withdrawal under section 48 Land Acquisition Act and it is not necessary that the
order of withdrawal is to be backed by reasons or that any opportunity of hearing to
the land owner has to be given before the order of withdrawal is passed. When the
State government wants to withdraw the proceedings for acquisition of land initiated
by it under the Act by exercising the powers under section 48 having found that the
land in question had been over turn by slum dwellers to such an extent that it was no
longer possible for the government to effect the intended purpose of acquisition and
the State government decided to withdraw the notification, the owner of the land
cannot insist that government should be decided to go ahead with the acquisition.155
154
H. Beverley ‘Commentary on the Land Acquisition Act 1894’,(Delhi Law house, Delhi, 9th ed.,vol.
2, 2010), p 1455.
155
M.R. Mallick, ‘Land Acquisition Act, 1894’,(Kamal Law House, Calcutta,1990), p 225.
156
Secretary of State V. Qumar Ali, 51 I.C. 501; 16 A L.J. 669.
157
Ibid
158
AIR 1975 SC 339 & 348.
159
AIR 1999 BOM, 71
261
In Jai Narain v. Land Acquisition Officer N.I.T. Nagpur 160, Government may
withdraw from the acquisition, again if the government consider it fit to acquire the
land, it shall have to act in accordance with the provisions of sections 4 to 8 of the
Act. It has no power to reissue a declaration without a fresh notification under Section
4 of the Act. The Land Acquisition Act does not permit the State government to
deliver back the required land which has vest in the State free from all encumbrances
after possession has already been taken by the State government. In Abha Pramanick
v. State of West Bengal 161 Court held that, there is no provision under the Act which
empowered the government to return any portion of unused land to original owners.
Section 48 does not lay down any particular procedure for withdrawing the land from
acquisition. Withdrawal from acquisition of questioned land can be effected only by a
formal gazette notification under section 48 of the Act. In Deputy Commissioner,
Dharwar v. Jeevan Navar,162 Court held that it is settled view that a claim for
compensation can be made only if it is the case of the claimant that has suffered
damages in consequences of notice issued under section 9(1) or of any proceedings
taken there under. Same procedure followed under section 93 of the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act.
Land Acquisition in US
In order to encourage and expedite the acquisition of real property by
agreements with owners, the following procedure is followed by the American federal
160
AIR 2006 NOC 1086 (al.) 363
161
1979 Kar. L.J.374 pp-377 & 378
162
R. Hanumanthappa v. Sons and State, AIR 1988 Kar. 329.
262
government.163 Firstly, the head of the federal agency undertaking acquisition is
supposed to make every reasonable effort to acquire the property through negotiation.
For this purpose an appraisal of the property is conducted, before the initiation of
negotiations, and the owner or his designated representative is usually allowed to
accompany the appraiser during his inspection of the property.
Before the initiation of negotiations for real property, the head of the Federal
agency concerned establishes an amount which he believes to be just compensation
and the owner of the property is given an offer to sell the property at that price. In no
event shall such amount be less than the agency's approved appraisal of the fair
market value of such property. Any decrease or increase in the fair market value of
real property prior to the date of valuation caused by the public improvement for
which such property is acquired, or by the likelihood that the property would be
acquired for such improvement, other than that due to physical deterioration within
the reasonable control of the owner, is regarded in determining the compensation for
the property. The head of the Federal agency concerned also provides the owner of
the property to be acquired with a written statement of, and summary of the basis for,
the amount he established as just compensation. Where appropriate the just
compensation for the real property acquired for damages to remaining real property
shall be separately stated.164 No owner is required to surrender possession of the
property before the head of the federal agency concerned pays the agreed purchase
price, or deposits with the Court.
163
To provide uniform and equitable treatment for persons whose property is acquired for public use,
Congress passed the Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1970, and amended it in 1987. Henceforth The Uniform Act.
164
Section 46 of the Uniform Act.
263
The focus in American law is very much on the owner. In no event can the
government (the head of the concerned federal agency) either advance the time of
condemnation, or defer negotiations or condemnation and the deposit of funds in
Court for the use of the owner, or take any other action coercive in nature, in order to
compel an agreement on the price to be paid for the property. In case the doctrine of
eminent domain is sought to be applied, the Federal agency concerned institutes
formal condemnation proceedings.165 No Federal agency can intentionally make it
necessary for an owner to institute legal proceedings to prove the fact of the taking of
his real property. Also, if the result of the acquisition of portion of a property leaves
the owner with an uneconomic remnant, the government cannot just leave the owner
to his own devices. An uneconomic remnant is a parcel of real property in which the
owner is left with an interest after the partial acquisition of the owner's property and
which the head of the Federal agency concerned has determined has little or no value
or utility to the owner. Under American law, the Federal agency concerned has to
offer to acquire that remnant as well.
165
Marion Clawson, Land system of the United States: An Introduction to the history & practice of
land use and land tenure, 201 (University of Nebraska Publishing, Lincoln, 1968).
166
[Interim]Constitution of the Republic of South Africa, 1993 (Act 200 of 1993).
167
Section l(iii) and l(v) of the Restitution of Land Rights Act 1994.
264
The “Property Clause" of South Africa's new Constitution.168
Section 25 reads as follows:
2. No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation of property.
3. Property may be expropriated only in terms of law of general application
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner
of payment of which have either been agreed to by those affected or decided or
approved by a Court.
3. The amount of compensation and the time and manner of payment must be
just and equitable, reflecting an equitable balance between the public interest
and the interests of those affected, having regard to all relevant circumstances,
including
(a) the current use of the property;
(b) the history of the acquisition and use of the property;
(c) the market value of the property;
(d) the extent of direct state investment and subsidy in the acquisition
and beneficial capital improvement of the property; and
(e) the purpose of the expropriation.
It should also be noted that restitution could well go far beyond the limits of
compensation only for land rights lost. In terms of present day expropriation
legislation, apart from compensation based on market value of any real interest,
168
Constitution of the Republic of South Africa, 1996 (Act 108 of 1996).
169
Martin J White, “Land Claims and Restitution in South Africa”, working paper presented at the 4th
Pecific Rim Real Estate Society Conference perth, 19-21 January 1998, available at
http://scnc.ukzn.ac.za/doc/GEOG/Land_ Claims/White-MJ_Land_claims.pdf, (accessed on
12.04.2011).
265
compensation may also be payable for actual (provable) financial loss. In addition, a
further payment known as solatium is made to reflect the inconvenience and distress
arising from the fact that the acquisition is compulsory. Loss of work opportunities,
residence rights etc. could also now come into the equation it again remains to be
seen how the Courts will respond to such claims.
The Restitution of Land Rights Act, 1994 170 introduced a new dimension into
South African real property law in that when defining a “right in land” it included
“any right in land, whether registered or unregistered, and may include the interest of
a labour tenant and sharecropper, a customary law interest, the interest of beneficiary
under a trust arrangement and beneficial occupation for a continuous period of not
less than 10 years prior to the dispossession in question.”171 The issue of labour
tenants' rights, quite apart from restitution, is now subject to separate legislation but
the highlighted section referring to beneficial occupation is one which is posing
problems of interpretation. Beneficial occupation is not defined in the legislation and
legal opinion on its meaning is not, at this stage, unequivocal.
170
http://www.info.gov.za/acts/1994/a22-94.pdf.( accessed on 12th April 2011)
171
S.l(xi) of the Restitution of Land Rights Act, 1994.
172
S.2 of the Acquisition of Land Act, 1981.
266
approval of the Government Minister specified in the particular Act (or the National
Assembly in Wales). However, the major part of land acquisition is done under the
Acquisition of Land Act 1981.173 In practice, the greatest users of compulsory
purchase powers are Local Authorities and the Highways Agency.174
173
P.K. Sarkar, ‘Law of Acquisition of Land in India’, ( Eastern Law House, New Delhi, 1998) , p 10.
174
Halsbury's Laws of England, 4th ed., Reissue, vol.21, para 823 (Acquisition of Land for Highways).
175
In an Article entitled "The Law & Ethics of Compulsory Acquisition of Land", Richard C. Fitgerald
the English jurist has critically examined the principles laid down in the English Act. He points out
that it is not the grant of compulsory power of acquisition which causes hardship but the exercise of
such powers. The problem is how to confer power to act to the public advantage rights. This
difficulty can be avoided to a considerable extent by framing the power in such a way that there is no
room for doubt as to the precise purpose for which land can be compulsorily acquired; by giving the
dispossessed owner a legal right to proper compensation & by devising reasonable safeguards for the
exercise of such power.
176
W.G.Nutley and C.H. Beatmont, ‘Land Compensation Act’ 1973, 91 (1974)
267
Besides these general principles, a slightly different approach is taken
depending on whether the dispossessed owner is a businessman, agriculturist or a
dweller. This is done because in all three cases the nature of land use is different,
therefore, their valuation is also slightly different. In all cases, the land is bought at
market value, as if the seller was a “willing seller”.177 However, the law also
provides for situations when there's no general market or demand (like a church). If
the property to be acquired is one for which there is no general market or demand it is
not possible to arrive at a value by adopting the market value approach. In these
circumstances it may be appropriate to assess compensation on the basis of how
much it would cost to reinstate the facility elsewhere.178 Both freeholders and
leaseholders can claim on this basis although it is more difficult to justify if there is
only a short-term lease. Thus, the focus, like India, is to compensate the dispossessed
such that they are not economically ill-affected by the land acquisition.
177
Harold Parrish, Cripps on Acquisition of Land 3-360(1962)
178
Michael Redman, “Compulsory Purchase Compensation” JPEL 315 (1999)
268
In terms of federal division of powers and responsibilities, land acquisition is
a concurrent subject matter hence, the Right to Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act provide for a common
mechanism for land acquisition by the Centre and the States. With reference to
resettlement and rehabilitation, while States are mandated to provide for the minimum
entitlements under the present Act, they are free to legislate to provide for higher
entitlements.
269
or work vital to the State police or national security, the second is for constructing
railways, highways, ports, power stations or irrigation projects, the third is for project
affected people, the fourth is for development or improvement of rural or urban areas
and land required thereby for residential purposes of the ‘weaker sections’ and also
land for government administered education and health facilities or research projects
and the fifth is for residential use by the communities affected by natural calamities
and any governmental scheme or policy.
The second stage of this process is the evaluation of the social impact
assessment (SIA) report by an 'expert group' under section 7 of the Act. The expert
group will evaluate the social impact assessment report and examine whether the
project serves the Stated public purpose, whether it is in the larger public interest and
whether the costs and adverse impacts of the project outweigh the potential benefits.
270
On these grounds, individually, the expert group is required to express its opinion as
to whether the project should be allowed to continue or not.
The third and final stage is the examination of the initial proposal to acquire
the land by a committee appointed by the appropriate government. This committee
consists of at least seven members of the executive and not more than three non-
official experts nominated by the government. The task of the committee is to
consider whether there is a legitimate and bona fide public purpose which justifies
acquisition of land, whether the long-term benefits to the general public would justify
the costs (in terms of social impact) identified by the social impact assessment (SIA),
whether the minimum required area is to be acquired and whether the collector has
considered possibility of acquisition of non-agricultural lands as opposed to
agricultural and irrigated land. The committee, under section 8 of the Act, considers
the recommendations of the expert group based on social impact assessment report
and is the final authority to determine the viability of the project. This committee also
verifies that the consent of the affected families is taken in accordance with the
second mode of transfer (i.e. partially compulsory sale).
271
area and suitability of the land for acquisition, the justification for public purpose or
the findings of the social impact assessment (SIA) report. These objections are heard
and recorded by the collector, who further makes recommendations as to the
objections. The government finally decides the claims. Finally, after deciding these
objections, under section 19(1), the appropriate government may issue a declaration
that the land in question is required for a public purpose along with another
notification that identifies the resettlement area and provides a summary of the
resettlement and rehabilitation scheme for the affected persons. Section19(4) states
that such a declaration amounts to conclusive proof that the land is required for public
purpose and the government may commence procedure for acquisition of land.
272
provisions of chapter II (relating to SIA) and chapter VI (relating to resettlement and
rehabilitation provisions). Before taking possession of such land, the collector must
allow 48 hours notice to the affected persons and pay 80% of the estimated
compensation. The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, additionally, provides another
75% of the market value of the property to be paid to a person who is displaced under
urgency clause.
4.Calculation of Compensation
The Land Acquisition Act provides that compensation shall be made to the
persons whose land has been acquired , which is to be based on the market value of
the property and other quantifiable losses suffered in the course of the acquisition
process. Similarly, market value is the basis for calculating compensation in the Right
to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act. Once market value of the property acquired is calculated to
calculate the total amount of compensation together with 100 per cent. of
compensation as solatium, plus the value of the assets fixed to the property in each
case. In case of rural areas market value of the land multiplied by factor one to two
based on the distance of the project area from the urban area, as may be notified by
the appropriate government. Whereas under the Land Acquisition Act compensation
only sum of the market value of the property acquired plus 30 per cent. of
compensation shall be paid as solatium.
The market value of the land is calculated on the basis of the minimum value
prescribed by law for registration of sale deeds or the average price of land in the
surrounding areas (whichever is higher). If this information is not available, the State
government will fix a minimum price of land based on the price in adjacent areas.
Alternatively, the requiring body (which may be a private or State-owned
corporation) is allowed to offer shares whose value does not exceed 25% of the
market value of the land. Section 26(3) provides that where such shares are
voluntarily accepted by the affected families, they are accepted in lieu of
compensation and the market value is reduced by the value of the shares.
273
5.Rehabilitation and Resettlement
The Land Acquisition Act did not govern the rehabilitation and resettlement
('R&R') entitlement for displaced persons. In the present Act, resettlement and
rehabilitation provisions, as discussed above, apply in three scenarios; when land is
acquired by the government for its own use, hold and control, including public sector
undertakings and for public purpose, and shall include the purposes mentioned in
section 2(1)(a-f); when a private corporation or public private partnership project for
the purposes mentioned in section 2(1)(a-f) acquires more than 100 acres in a rural
area, and more than 50 acres in an urban area and; when a private corporation
purchases land more than 100 acres in a rural area, and more than 50 acres in an
urban area through private negotiation with the owner of the land. The extension of
entitlements to persons affected beyond just title- holders is perhaps the most
important provision of the Act. The definition of 'affected families' in the Act
includes not just title holders of the land that is acquired, but also families whose
livelihood is dependent on the agricultural use of the land (share-croppers,
agricultural labourers, tenants) or on the other natural resources of the land (hunters,
fisher folk, gatherers). It also recognises community property rights ('CPRs') by
including those families who have traditional rights under the Scheduled Tribes and
other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006. In urban
areas, families that have resided on that land for more than three years, and whose
primary source of livelihood is affected by the acquisition are said to be affected
families.
The first step in the process of rehabilitation and resettlement begins with the
appointment of an administrator he is primarily in charge of the formulation and
execution of the rehabilitation and resettlement scheme subject to the supervision of
two authorities: the Commissioner of rehabilitation and resettlement and the Project-
level Committee on rehabilitation and resettlement. The responsibility of the
administrator begins with the publication of a preliminary notification (under
section11of the Act) by the collector. At this point, the administrator must conduct a
survey to document the extent of land that will be lost, connected livelihoods, as well
as the government buildings, public utilities and the infrastructure that will be
affected. After this survey, the administrator must draw up a draft rehabilitation and
resettlement scheme, which specifies the entitlements of each affected family, the
274
government buildings and public infrastructure to be provided in the resettlement
area. This draft is then put for a public hearing in the Gram Sabha or Municipality.
The administrator then sends the draft scheme to the collector along with a
record of the claims and objections raised in the public hearing. The collector then
shares the draft for comments and approval with two bodies created under the Act; the
first is the Resettlement and Rehabilitation Committee and the second is the
Commissioner for Resettlement and Rehabilitation. The Government must constitute
the Resettlement and Rehabilitation Committee under the chairmanship of the
collector, when the land to be acquired is more than 100 acres in rural area and more
than 50 acres in urban area. The Committee is intended to serve as a forum for the
participation of the affected people. It consists inter alia of one representative each of
the women, Scheduled Castes and Scheduled Tribes, a voluntary organisation,
member of parliament, member of legislative assembly and the requiring body. After
the Committee considers the draft scheme, it is referred to the Commissioner for
resettlement and rehabilitation. This Commissioner is appointed under section 44 of
the Act and it supervises the draft of the scheme and is responsible for a post-
implementation social audit.
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and choose method during acquisition and the misuse of the de-notification
clause to exempt land belonging to the powerful.
3. The section 99 of the Act allowed the states to change the purpose for which
the acquired land is finally used i.e. the public purpose can be changed after
acquisition.
4. Section 102 of the Act provide for unbridled power to transfer an already
acquired land to any person for a consideration.
5. Clause 93 provides for midway de-notification. These provisions give the
States untamed powers to acquire land in the name of some public purpose and
transfer it to companies.
6. The land Acquisition laws have not focused on the communities affected that is
the farmers and their psychological connection with the land.
Thus the Act in reinforcing this broad sweep of power and interest, keeps
the conflicts alive.
6.29 Conclusion
Nearly 120 years old Land Acquisition Act,1894 enacted during British
period was repealed and replaced by the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
Government of India believes that there was a heightened public concern on land
acquisition issues in India, despite of many amendments, over the years, to India’s
Land Acquisition Act of 1894, there was an absence of a cohesive national law that
addresses fair compensation and rehabilitation and resettlement to the land owners
and those directly affected from the loss of livelihoods. The Government of India
proposed the necessity to have a combined law, one that legally requires
rehabilitation and resettlement necessarily and simultaneously follow land acquisition
process. The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act represents a change in the legislative approach
to land acquisition. It introduces for the first time provisions for social impact
assessment of the proposed projects, recognises non-owners as affected persons like
agricultural labourers, tenants, share-croppers or artisans or who may be working in
the affected area for three years prior to the acquisition of the land, whose primary
source of livelihood stand affected by the acquisition of land. A mode of acquisition
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requiring consent of the displaced persons and statutory rehabilitation and
resettlement entitlements for the project affected families. In addition to this, it has
restricted the grounds on which land may be acquired under the urgency clause. In
doing so, it has recognised some of the problems arising out of land acquisition and
shifted the baseline of debate and discussion on acquisition policy. The recognition of
problems is, however, one thing and the provision of appropriate policy solutions is
another. We have argued that the Act is still problematic in many aspects. In relation
to the decision of acquisition, the SIA process still allows for arbitrary decision-
making and does not meaningfully allow affected parties to participate in the process.
The principle of social cost minimisation is recognised, but no meaningful way of
implementing has been proposed. With respect to compensation the Act still
continues to use the market value for determining compensation like the LAA.
Moreover, it does not supersede other legislations governing acquisition and
resettlement, leaving acquisition a legislatively fragmented and project-based
process. The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 is clearly a long overdue attempt to
address the inadequacies of the colonial Land Acquisition Act of 1894.
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