INTRODUCTION

Sustainable development requires governments to provide public facilities and infrastructure that ensure
safety and security, health and welfare, social and economic enhancement, and protection and
restoration of the natural environment. An early step in the process of providing such facilities and
infrastructure is the acquisition of appropriate land. In some cases, several locations could be suitable for
a facility such as a new government office, and the government may be able to purchase land at one of
the locations through the land market. In other cases, specific land parcels are required, for example, in
order to accommodate the route of a new road, the protection of certain areas from flooding, or the
fulfilment of requirements of redistributive land reform legislation. That land may not be on sale at the
time it is required. In order to obtain land when and where it is needed, governments have the power of
compulsory acquisition of land: they can compel owners to sell their land in order for it to be used for
specific purposes. The power, discussed in this guide as the compulsory acquisition of land, is also
referred to as expropriation, eminent domain, compulsory purchase, land acquisition and resumption.

The compulsory acquisition of land has always been a delicate issue and is increasingly so nowadays in
the context of rapid growth and changes in land use. Governments are under increasing pressure to
deliver public services in the face of an already high and growing demand for land. Many recent policy
dialogues on land have highlighted compulsory acquisition as an area filled with tension. From the
perspective of government and other economic actors, the often conflictual and inefficient aspects of
the process are seen as a constraint to economic growth and rational development.

The process also brings tension for people who are threatened with dispossession. The compulsory
acquisition of land for development purposes may ultimately bring benefits to society but it is disruptive
to people whose land is acquired. It displaces families from their homes, farmers from their fields, and
businesses from their neighbourhoods. It may separate families, interfere with livelihoods, deprive
communities of important religious or cultural sites, and destroy networks of social relations. If
compulsory acquisition is done poorly, it may leave people homeless and landless, with no way of
earning a livelihood, without access to necessary resources or community support, and with the feeling
that they have suffered a grave injustice. If, on the other hand, governments carry out compulsory
acquisition satisfactorily, they leave communities and people in equivalent situations while at the same
time providing the intended benefits to society.

WHAT IS COMPULSORY ACQUISITION

Compulsory acquisition is the power of government to acquire private rights in land without the willing
consent of its owner or occupant in order to benefit society. It is a power possessed in one form or
another by governments of all modern nations. This power is often necessary for social and economic
development and the protection of the natural environment. Land must be provided for investments
such as roads, railways, harbours and airports; for hospitals and schools; for electricity, water and
sewage facilities; and for the protection against flooding and the protection of water courses and
environmentally fragile areas. A government cannot rely on land markets alone to ensure that land is
acquired when and where it is needed. However, a number of countries require that the government
should attempt to buy the required land in good faith before it uses its power of compulsory acquisition.

Compulsory acquisition requires finding the balance between the public need for land on the one hand,
and the provision of land tenure security and the protection of private property rights on the other
hand. In seeking this balance, countries should apply principles that ensure that the use of this power is
limited, i.e. it is used for the benefit of society for public use, public purpose, or in the public interest.
Legislation should define the basis of compensation for the land, and guarantee the procedural rights of
people who are affected, including the right of notice, the right to be heard, and the right to appeal. It
should provide for fair and transparent procedures and equivalent compensation. Box 1 gives some
principles for legislation on compulsory acquisition.

Compulsory acquisition is inherently disruptive. Even when compensation is generous and procedures
are generally fair and efficient, the displacement of people from established homes, businesses and
communities will still entail significant human costs. Where the process is designed or implemented
poorly, the economic, social and political costs may be enormous.

PRINCIPLES FOR LEGISLATION ON COMPULSORY ACQUISITION

Principles for legislation on compulsory acquisition should include:

· Protection of due process and fair procedure. Rules that place reasonable constraints on the
power of the government to compulsorily acquire land strengthen the confidence of people in
the justice system, empower people to protect their land rights, and increase the perception of
tenure security. Rules should provide for appropriate advance consultation, participatory
planning and accessible mechanisms for appeals, and should limit the discretion of officials.

· Good governance. Agencies that compulsorily acquire land should be accountable for the good
faith implementation of the legislation. Laws that are not observed by local officials undermine
the legitimacy of compulsory acquisition. Good governance reduces the abuse of power and
opportunities for corruption.

· Equivalent compensation. Claimants should be paid compensation which is no more or no less

Problems may arise when compulsory acquisition is not done well:

· Reduced tenure security: Policies and legislation that strengthen land rights of individuals and
 communities may be eroded through compulsory acquisition. People may believe they lack
tenure security if the government can acquire rights in private land without following defined
procedures, and/or without offering adequate compensation.

· Reduced investments in the economy: Insecure tenure, with the threat of the arbitrary loss of
land and associated income, discourages domestic and foreign investment.

· Weakened land markets: Threats to tenure security discourage land transactions, reduce the
acceptability of land as collateral, discourage people from investing or maintaining their
property, and depress land values.

· Opportunities created for corruption and the abuse of power: The lack of protection and
transparency can result in injustices which anger citizens and undermine the legitimacy of
government.

· Delayed projects: Appeals against unfair procedures may hold up the acquisition of land, and
thus block projects and increase costs.

· Inadequate compensation paid to owners and occupants: Financial awards may be inadequate
to allow people to enjoy sustainable livelihoods after their land is acquired. People may feel that
they are not compensated for the loss of cultural, religious or emotional aspects of the land.

HUMAN RIGHTS LAW AND COMPULSORY ACQUISITION

The Universal Declaration of Human Rights (Article 17) provides that “everyone has the right to own
property alone as well as in association with others” and that “no one shall be arbitrarily deprived of his
property”.

Several regional conventions on human rights also protect rights to property, including:

The American Convention on Human Rights, adopted at the Inter-American Specialized Conference on
Human Rights, San José, Costa Rica, 1969, (Article 21 Right to Property): “1. Everyone has the right to
the use and enjoyment of his property. The law may subordinate such use and enjoyment to the interest
of society.2.No one shall be deprived of his property except upon payment of just compensation, for
reasons of public utility or social interest, and in the cases and according to the forms established by
law.”

The African Charter on Human and Peoples’Rights, 1986: “Article 14.The right to property shall be
guaranteed. It may only be encroached upon in the interest of public need or in the general interest of
the community and in accordance with the provisions of appropriate laws.”“Article 21.1.All peoples shall
freely dispose of their wealth and natural resources. This right shall be exercised in the exclusive interest
of the people. In no case shall a people be deprived of it. 2. In case of spoilation, the dispossessed
people shall have the right to the lawful recovery of its property as well as to an adequate
compensation.”

The European Convention on Human Rights and Fundamental Freedoms, 1950, (Article 8, First
Protocol): “1. Everyone has the right to respect for his private and family life, his home and his
correspondence. 2. There shall be no interference by a public authority with the exercise of this right
except such as is in accordance with the law and is necessary in a democratic society in the interests of
national security, public safety or the economic well-being of the country, for the prevention of disorder
or crime, for the protection of health or morals, or for the protection of the rights and freedoms of
others.” This right is expanded by Article 1, First Protocol: “Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public
interest and subject to the conditions provided for by law and by the general principles of international
law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such
laws as it deems necessary to control the use of property in accordance with the general interest or to
secure the payment of taxes or other contributions or penalties.

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Section 67 of the Town Planning Act is the provision dealing with de-reservation. The said Section reads
thus

"67. Obligation to acquire land in certain cases.-(1) Where any land is designated for compulsory
acquisition in a Master Plan or Detailed Town Planning Scheme sanctioned under this Act and no
acquisition proceedings are initiated for such land under the Land Acquisition Act in force in the State
within a period of two years from the date of coming into operation of the Plan, the owner or person
affected may serve on the Municipal Corporation, Municipal Council, Town Panchayat or Village
Panchayat concerned, within such time and in such manner, as may be prescribed, a notice (hereinafter
referred to as "the purchase notice") requiring the Municipal Corporation, Municipal Council, Town
Panchayat or Village Panchayat concerned to purchase the interest in the land in accordance with the
provisions of this Act;

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Chillakuru Rajagopala Reddy S/o Venkata Krishna Reddy v District Collector, Nellore and others 2014
Indlaw HYD 895

The Land Acquisition Act, 1894 is an expropriatory legislation as such the provisions of the said
legislation are required to be scrupulously and meticulously followed and adhered to. Deprivation of
property by way of compulsory acquisition is a matter of serious consequence. Therefore, the
authorities, discharging their statutory functions under this legislation should be highly cautious and
meticulous while discharging their functions.
The rule of audi alteram partem engrained in the scheme of Section 5A of the Act ensures that before
depriving any person of his land by compulsory acquisition, an effective opportunity must be given to
him to contest the decision taken by the State Government /competent authority to acquire the
particular parcel of land.

The Courts time and again held that to the extent possible the acquisition of the lands of the small and
marginal farmers should not be resorted to by way of compulsory acquisition. It is a well known fact that
the farmers are the backbone of our Indian economy and in the process of urbanization the Activity of
agriculture is getting crippled day by day and the number of farmers growing the food grains is also
getting diminished.

Therefore, to the extent possible, baring inevitable situation, compulsory acquisition of agricultural
lands, thereby creating shortage of food production should be averted and avoided. The indiscriminate
acquisition may also lead to unrest in the society and the compulsory acquisition of the lands sometimes
result in displacing farmers from their native villages may also lead to severance of their bond from the
native habitant, which would undoubtedly disturb the net work and this may eventually result
unwarranted and unhealthy excessive urbanization.

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Commercial Tax Officer and Others v Vishnu Agencies Private Limited 1974 Indlaw CAL 20

It has been further laid down that the transactions like forward contract, claim for damages, supply of
refreshment to members of a club or a co-operative society, consumption by the owner of goods and
compulsory acquisitions of goods are not "sales" within the meaning of the Sale of Goods Act

As has been laid down in the Supreme Court decisions discussed above, unless the transaction amounts
to compulsory acquisition of property, which completely eliminates all the four elements of sale, there
may be sale even under compulsion or when the terms of such sales are controlled by legislation for the
purpose and object laid down therein. The identical question came up before the Supreme Court in
relation to a case under the Prevention of Food Adulteration Act, 1954, where a dealer of spices was
convicted after a Food Inspector purchased a sample of the goods from him under the provisions of the
said Act and the question arose whether the sale under the compulsion of the said Act was a "sale".

It is only when the transaction amounts to compulsory acquisition of property by an order of a statutory
authority under any Act, that the transaction would not be a 'sale'.4

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the term "acquisition" does not necessarily mean "compulsory acquisition under the provisions of the
Land Acquisition ActThis is clear from Ss. 68 and 69, which refer respectively to acquisition by agreement
and compulsory acquisition.