0

JAMIA MILLIA ISLAMIA

Preparation and review of rehabilitation scheme, lapse

of acquisition.

GUIDED BY PROF. DR. KAHKASHAN Y. DANYAL

SUBMITTED BY: BUTOOL

IXTH SEMESTER
Roll-15BLW0031
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ACKNOWLEDGEMENT
Firstly, I would like to express my profound sense of gratitude towards the Almighty
“ALLAH” for providing me with the authentic circumstances which were mandatory for the
completion of my research work.

I am also thankful to Dr. Kahkashan Y. Danyal, for her invaluable support, encouragement,
supervision and useful suggestions throughout this research work. Her moral support and
continuous guidance enabled me to complete my work successfully. Her intellectual thrust
and blessings motivated me to work rigorously on this study. In fact this study could not have
seen the light of the day if her contribution had not been available. It would be no
exaggeration to say that it is her unflinching faith and unquestioning support that has
provided the sustenance necessary to see it through to its present shape.
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TABLE OF CONTENT
1. Research Methodology 3
2. Introduction To The 1894 Act 4
3. Meaning Of Land Acquisition 6
4. Basic Features Of Land Acquisition Act 6
5. Process And Steps Under Land Acquisition Act 1894 7
6. Land Acquisition Under Part II 7
7. Acquisition In Emergency 10
8. Land Acquisition Under Part VII 11
9. Acquisition Under Part Vii Can Be For The Following Purposes 11
10. The Agreement Between A Company And The Government Must Include 12
11. Calculation Of Compensation 12
12. Amendments In Land Acquisition Law 14
13. Background 15
14. R&R Of The Project Affected People 17
15. Rise Of Protests 19
16. Towards A New Legislation 20
17. The New Act 21
18. The Exemption List 22
19. Reactions From Various Quarters 24
20. Implications Of The Act On Various Projects 27
21. Reactions To The Amendment 28
22. The Ordinance Route 29
23. The Land Acquisition Rehabilitation And Resettlement Bill 2011 32
24. Key Features 32
25. Major Amendments Made To LAA 1894 34
26. Analysis of 2013 Act 37
27. Drawbacks of 2013 Act 43
28. Conclusion 44
29. The Critical Analysis 45
30. Bibliography 46
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RESEARCH METHODOLOGY

This research was conducted using the Doctrinal method of research.

Doctrinal legal research, as conceived in the legal research domain, is research about what the
prevailing state of legal doctrine, legal rule, or legal principle is. A legal scholar undertaking
doctrinal legal research, therefore, takes one or more legal propositions, principles, rules or
doctrines as a starting point and focus of his study.

I located principles, rules or doctrines in statutory instrument(s), judicial opinions thereon,

discussions thereof in legal treatises, commentaries, textbooks, encyclopaedias, legal
periodicals, and debates, if any, that took place at the formative stage of such a rule, doctrine
or proposition. Thereafter, I read them in a holistic manner and made an analysis of the
material as well as of the rules, doctrines and formulated my conclusions.

Doctrinal legal research, thus, involves:

1. Systematic analysis of statutory provisions and of legal principles involved therein, or

derived there from, and
2. Logical and rational ordering of the legal propositions and principles.
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INTRODUCTION TO THE 1894 ACT

History lends perspective, even as, and perhaps because, it repeats itself. Land
Acquisition Law, whether in 2011 or in 1894, are but links in the long chain of institutional
arrangements and conveniences, to address the specific issues of the day. Some of the have
not gone away in a century and a half. In India the system of keeping records of cultivable
land by the state for the purpose of revenue collection originated in Pre-Colonial period,
while systematic legal and administrative machinery for acquiring land from private owners
developed during the colonial regime. The all-embracing nature of the colonial state power
found one of its successful expressions through the Land Acquisition in India under the
Bengal Regulation Act (I) of 1824, enacted to promote British commercial interests in the
country. The succession of some land mark events, which led to the enactment of this
enabling piece of legislation showed a consolidation of British colonial power in the Indian
subcontinent.

This consolidation of the colonial power was not only a political phenomenon, but it
also ushered in a chain of technological as well as economic events which needed a well-
organized legal and bureaucratic structure. In 1820, Coal mining in Raniganj (West Bengal)
and extensive irrigation network started in North India. After this the Bengal Regulation Act
(I) is replaced by Act (I) of 1850, the Act XXII of 1863, the Act X of 1870, the Bombay Act
No. XXVIII of 1839, the Bombay Act No. XVII of 1850, the Madras Act No. XX of 1852
Madras Act No.1 of 1854 X of 1861, the Act VI of 1857-all enacted by the colonial
administration to facilitate the easy acquisition of land and other immovable properties for
roads, canals and other ‗public purposes‘ with compensation to be determined by specially
appointed arbitrators without any legal problems. The construction of the first Indian
steamship, coffee and tea plantations in Mysore and Assam started by the late 1830s.

By 1857, various laws on the subject of land acquisition were consolidated as Act IV
applicable to the whole of British India. Till 1880‘s, the first telegraph line, railways, modern
cotton and jute mills were established. This period also witnessed the first legislation, which
curtailed the access of the local people to forests and mechanised mining as well as growth of
manufacturing sector of the economy. In 1893, the first Indian Petroleum Refinery was
established and finally, the Land Acquisition Act of March 1894 replaced all previous laws
 5

relating to land was enacted for acquiring privately owned land by the state for public
purposes. The succession of events which led to the enactment of the enactment of this Act
clearly showed that it was need of the time. Mining, plantation, establishment of railway
lines, manufacturing industries, beginning of major irrigation works and road building all
needed land which again was already under various forms of state controlled and customary
tenurial systems that existed from the pre-colonial period. This enabling Act empowered the
state to acquire any privately owned as well as common property Land for public purpose.

The key concerns of the colonial legislators were quite evident. The state had to be
enabled to acquire land swiftly while minimizing compensation payment, seen as a drain on
the state exchequer. Further, there was a need for mobilizing larger amounts of land for
expanding railways in the country. The imperial stance was evident in one simple fact:
public purpose was neither defined nor elaborated by the law; it was sufficient for the state to
declare it to be so. Intricate and elaborate rules were framed to keep compensation payments
to a minimum. This Act made the collector‘s award of compensation final unless alerted by a
decree of the Civil Court in a regular suit and it helped speed up the process of determining
compensation.1

Little surprise then, that none of this legislation had provided for an opportunity to
object to the acquisition of land itself, while nevertheless allowing the opportunity to raise
issues regarding compensation. The Land Acquisition Act of 1894, meant to bring some
uniformity to the acquisition decisions of the Empire, now that it had consolidated its hold
since 1857. It means to ‗amend the law for the acquisition of land for public purposes and for
companies and to determine the amount of compensation to be made on account of such
acquisition. This meant a single law to control a single administration, one that also helped
derive legitimacy for the administrative foundations of empire. In a predominantly
agricultural landscape, such a law also provided a basis to generate revenue from the
productive uses of land.

It was only in 1923, after the Non-Cooperation movement, and after Indian leaders
entered Local Administration through elections, that the amendment of Section 5A to the
1894 Act was introduced: one that allowed the possibility of raising objections, albeit with a
warning on its limitations. The Statement of objects and Reasons contained in Bill No. 29 of
1923 stated that the Act did not provide that persons having an interest in the specific land

1
(Kannan Kasturi, 2007).
 6

had a right to object to such acquisition; the Government too was not duty bound to enquire
into and consider such objection. Instead the amendment was supposed to be a check on the
local government, by prohibiting the declaration of any such acquisition for public purposes,
until objections were considered by the local government. In other words, the idea of
objection was introduced while leaving open the possibilities for interpretation of such
objection, and more significantly, in a manner that did not obstruct the land acquisition itself.
The end of colonial rule in 1947 and the Republican Constitution of 1950 did not bring about
any significant change in the land acquisition law. The Constitution of India, by Article 372,
allowed all colonial laws to remain in force unless they were explicitly repealed.

Drawbacks of the 1894 Act2

‘Urgency clause’ is the most criticised and misused section of the 1894 Act. The blatant
misuse of Section 17 by the state governments is a serious cause for concern. The Land
Acquisition Act, 1894 has been referred to as a draconian law, because the landowner whose
land is proposed to be acquired cannot seek injunction against it. He can only file objections
under Section 5A against the proposed land acquisition which is a basic right of the
landowner under the principles of Natural justice – audi alterem partem. But there have been
a number of cases where various state governments have acquired land by misusing the
provision of Section 17(4)7 of the ‘urgency clause’.
Under this provision, the state government may direct that the provisions of Section 5A shall
not apply and take away the basic rights of the landowners to file his objections. Hence state
power is used to misuse the provisions of urgency. The acquisition of land under Section 4(1)
read with Section 17(1) and 17(4) has generated substantial litigation in the last 50 years.
The Supreme Court in Radhey Shyam (D) through LRs and others v. State of U.P. and
others8 held as under:
“In cases where the acquisition is made by invoking Section 4 read with Section 17(1) and
17(4)…excluding the application of Section 5A is likely to make the landowner a landless
poor and force him to migrate to the nearby city only to live in a slum.Adeparture from this
rule should be made only when the land is required to meet really emergent situations like
those enumerated in Section 17(2). If the acquisition is intended to benefit private person(s)
and the provisions contained in Section 17(1) and/or 17(4) are invoked, then the scrutiny of

2
http://docs.manupatra.in/newsline/articles/Upload/FF6D173D-E5C5-4954-A73A-9D77708DD9B6.pdf
 7

the justification put forward by the State should be more rigorous in cases involving the
challenge to the acquisition of land.”9

Thus, according to the Supreme Court, Section 5A represents the statutory embodiment of the
rule of audi alteram partem and the urgency provision under section 17(1) should not be
invoked unless there is real and substantive urgency. Apart from the misuse of the urgency
clause, there are certain other drawbacks of the 1894 Act.

MEANING OF LAND ACQUISITION

The Land Acquisition Act of 1894 is a law in India that allows the government to acquire
private land in the country. Land Acquisition‖ literally means acquiring of land for some
public purpose by government/government agency, as authorized by the law, from the
individual landowner(s) after paying government fixed compensation in lieu of losses
incurred by land owner(s) due to surrendering of his/their land to the concerned government
agency.

BASIC FEATURES OF LAND ACQUISITION ACT

According to the Land Acquisition Act, the state can exercise its right of eminent domain
wherein it is the ultimate owner of all Land, which it can acquire for public purpose after
paying full compensations calculated on the basis of market value. Despite several
amendments of the Act after Independence, the two basic principles of Land acquisition, viz

1. public purpose, and

2. Compensation on market value remain unchanged.

The various criticisms of Land Acquisition Act in India have also centered round these two
cardinal principles. One of the major criticisms of the Land Acquisition Act is that the
expression public purpose is nowhere defined in the Act and in India the courts do not have
the power to decide whether the purpose behind a particular acquisition was a public purpose.
The court can only direct the collector to hear the objections of a person who‘s Land has been
acquired, but the collector may not always listen to the objection raised by the legal owner of
the Land.
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PROCESS AND STEPS UNDER LAND ACQUISITION ACT 1894

In India, eminent domain powers are exercised by the state mainly through the Land
Acquisition Act, 1894. The Act, describes the processes that have to be used by the state to
acquire land for either itself or for a company. Although the Central Government broadly
determines the contents of the law, there can be regional variations in procedural matters.
Land Acquisition is a process that every country goes through as it marches on the path of
development. Land being a scarce resource has traditionally always had various power
holders claiming ownership. A set of rules, thus provided a convenient settlement for such
disputes. Unfortunately for India it was made by a group of colonial minds; the Britishers
who did not really care for the natives. The resulting law did not really fully compensate the
people who were having their land taken away for ‗the greater good‘. People found their land
being taken away in what they perceived was a very brutal manner. The law being talked
about was passed in 1894. And was last amended in 1984. 117 years hence, the situation has
not improved much.

As per the 1894 Act, land can be acquired under either Part-II or Part VII of the Act—
procedures laid out under these two parts are somewhat different as shown by the following
discussion. While the former is used when the acquiring body is the Central or state
government or companies that are either owned, partly owned or controlled by the State, the
latter is used in case of non-government companies. It may also be noted that while land
acquisition under Part II is entirely for ‗public purpose‘, acquisition under Part II can be for
both public purpose and ‗non-public purpose‘, although the scope for non-public purpose is
very limited the details of processes under these two routes are given below:

LAND ACQUISITION UNDER PART II

In this regard the process of acquisition involves the following sequential steps.

STEP 1: NOTIFICATION
The process for land acquisition begins with the issuance of a preliminary notification u/s
4(1) of the Act. The notification must be published in the Official Gazette and two daily local
newspapers. There must also be a public notice of the substance of the notification at
convenient places in the locality. The notification says that ‗land in one or more village(s) is
 9

(or may be) needed in the foreseeable future for a public purpose (or for a company) ‘. This
notice:

1. Makes it lawful for an authorized officer to enter and survey the land specified in the
notice without the owner‘s permission;
2. alerts the landowner that he should not invest any money or labour on any
improvements to his land without the collector‘s consent; and
3. Informs the public not to acquire any interest in such land.

Typically, the landowner continues to hold the land for a long time beyond this notification,
but this notice prevents him from making full use of his land and getting an appropriate
return.

STEP 2: FILING OF OBJECTIONS

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

Objections are typically made on the following grounds:

1. the purpose for which land is sought to be acquired is not a public purpose;
2. the land in question is not suitable for the stated purpose;
3. more land is being acquired than what is necessary for the proposed project;
4. an alternative piece of land could be acquired which would cause less (or no)
inconvenience to people; and
5. The land contains historic monuments, places of public interest, religious buildings,
tombs, graveyards, etc. and hence it should not be acquired.

After hearing all objections, the Collector submits are port to the appropriate government in
respect of the notified land containing his recommendations on the objections and the records
of the proceedings held by him. The government then takes a decision regarding the proposed
acquisition based on the report submitted by the Collector.

STEP 3: DECLARATION
Based on the decision of the government, a declaration is issued u/s 6(1), which becomes
conclusive evidence that land is needed for public purpose (or for a company) and that the
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government can go ahead with the acquisition process. The declaration must be given the
same publicity as the preliminary notification. The Act requires that such declaration should
be issued within a period of one year from the date of issuance of preliminary notification
(The Land Acquisition Act, 1894 (as modified up to 1 September 1985), Government of
India, Ministry of Law and Justice, New Delhi).

STEP 4: NOTICE TO INTERESTED PARTIES

After the declaration, the notified land is marked out, measured, and planned as per Sec. 7
and 8 of the Act. The Collector informs the landowners about the government‘s intention to
take possession of their land and invites claims from all interested parties to compensation by
sending them a notice u/s 9(1). Interested parties can submit their objections regarding
measurements and value of land to the Collector.

STEP 5: ENQUIRY AND AWARD

Under Sec. 11, an enquiry is conducted by the Collector regarding the objections submitted
by the interested parties as per Step 4 above. On completion of this enquiry, an award is
made, stating

i. area of the land,

ii. compensation payable, and
iii. Its apportionment among all the interested persons. No award can be made by the
Collector without prior approval by the appropriate government. The award should be
made within two years from the date of publication of the declaration (under Sec. 6),
else the acquisition proceedings lapse.

A landowner can object to the award regarding the measurement of land, amount of
compensation, the persons to whom it is payable and its apportionment by filing a written
application to the Collector, who shall refer the matter to the court. The landowner cannot file
a suit in the ordinary civil courts to establish his claim. The only course of option available to
him is to seek a reference to the District Court from the Collector. To retain their rights to
challenge the quantum of compensation in court, the landowners must receive the
compensation money under protest.
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STEP 6: POSSESSION
After passing the award, the competent authority may take possession of the land
immediately upon paying or offering to pay the compensation. The land then vests absolutely
with the government, free from all encumbrances, whatsoever. The transfer of title is delayed
till possession is taken by the government.

STEP 7: COMPENSATION
The Act provides that the compensation should be based on the market value of land on the
date of the preliminary notification. The payment of compensation can be delayed beyond the
date on which possession of land is taken. As a protection against delay in compensation, an
interest of12 per cent per annum is also given. Additionally, in view of the compulsory nature
of the acquisition, a solatium equivalent to 30 per cent of the market value is also provided
for.

ACQUISITION IN EMERGENCY

Sec. 17 of the Act confers special powers to the acquiring authority when land has to be
acquired in cases of urgency, by virtue of which the Collector can take possession of the land
without even giving away the award. The government has complete authority to define a
situation as urgent and invoke the urgency clause to acquire land. The process for such a
scenario is same as the process described above, with the following exceptions:

1. The government can dispense with Sec. 5 (A) which requires the Collector to hear
objections of landowners against the notification published u/s 4(1). In other words,
the declaration u/s 6(1) can technically be passed immediately after the preliminary
notification u/s 4(1);
2. Upon expiry of 15 days from the notice u/s 9(1), the Collector can take possession of
the land. It may be noted that the Collector can take possession of land even before
giving away the award

LAND ACQUISITION UNDER PART VII

As stated earlier, under Part VII, land can be acquired for non-government companies. To
access this route, a company has to pay the entire amount of compensation for the land it
 12

seeks to acquire (The Supreme Court judgment in the Devinder Singh vs State of Punjab
case.3 In contrast; Part II of the Act can be invoked if the compensation is funded wholly or
partly from public revenues or some fund controlled or managed by a local authority.

For Part VII purposes, the term Company includes companies (as defined by the Companies
Act, 1956), societies (registered under the Societies Registration Act, 1860), cooperative
societies and industrial concerns owned individually or as a partnership.

ACQUISITION UNDER PART VII CAN BE FOR THE FOLLOWING PURPOSES

i. for erecting dwelling houses for workmen or for providing amenities connected with
such dwelling houses ( This is the only ‗non-public‘ purpose for which land can be
acquired in the entire Act), and
ii. 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 or is
likely to prove useful to the public.

Although the steps involved in acquisition of land under Part VII are similar to that in Part II,
there are two major exceptions which make the former part significantly more cumbersome
than the latter. These exceptions relate to the company

1. getting appropriate government‘s consent and

2. Entering into an agreement with the same government before issuing the declaration
u/s 6(1). To give its consent, the government must be satisfied on a number of counts,
including that4:
i. the company has made reasonable efforts to buy land through negotiations
with the owners offering to pay a reasonable price and that such efforts have
failed;
ii. the land in question is suitable for the purpose for which it is sought and the
area to be acquired is not excessive; and
iii. The company is in a position to utilize the land speedily and efficiently.

3
dated 12 October 2007 in C.A No. 4843 and 4844 of 2007
4
( Vaswani et al., 1997)
 13

THE AGREEMENT BETWEEN A COMPANY AND THE GOVERNMENT MUST

INCLUDE

i. terms regarding the payment of the cost of the acquisition of land to the appropriate
government;
ii. terms regarding transfer of land to the company on such payment; and
iii. Terms on which the land shall be held by the company.
It may be noted that private sector companies can also acquire land under the urgency
provision. Of course, such acquisitions can only be made for a Public Purpose.
i. The provision of village-sites, or the extension, planned development or improvement
of existing village sites;
ii. The provision of land for town or rural planning;
iii. The provision of land for planned development of land from public funds in
pursuance of any scheme or policy of government and subsequent diposal thereof in
whole or in part by lease. Assignment or outright sale with the object of security
further development as planned.

CALCULATION OF COMPENSATION

The principal issue in land acquisition by the Government is the compensation cost it
engenders. The LAA, 1894 provides that the compensation for land is to be based on its
market value. However, the Act does not specify any guidelines for the assessing officer (viz.
the Collector) to assess this market value. It is often alleged that the assessing officer
undervalues the land and the poor landowner ends up subsidizing the acquirer. The
compensation price as directed by the Supreme Court ruled in April 2012 that Government
shall increase this value to the highest market price of the land, on the basis that someone
who is forced to sell his land should be able to claim a higher compensation than what a
similar land owner would receive if he was willing to sell his property.

Consequently, acquiring land for development is likely to become more and more costly.
Moreover, rehabilitation and resettlement policy for displaced people imply, among other
means, allotment of Government land, grant for house construction and substantives
allowances, which are adding to the gross cost of land acquisition. Finally, the social cost of
land acquisition cannot be disregarded. It encompasses issue such as loss of employment, as
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well as social surrounding and emotional trauma.5

It has been noticed that in most cases rehabilitation and resettlement aspects that should
follow land acquisition are often neglected., leaving the displaced population suffer the
consequences of being uprooted from their land. These negative effects include: landlessness,
homelessness, joblessness and marginalization.6 Another worrisome aspect in land
acquisition is that expropriated owners realize they are often better off refusing to give up
their land, given the increasing pressure on land and thus, its increasing value over the time.

AMENDMENTS IN LAND ACQUISITION LAW

Before land acquisition was amended in 1984, the ownership of the land was acquired was of
public interest. Since 1984, however, the land ownership could not only be the Government
but also a company, opening the possibility of projects aiming at other objectives. In addition,
only the amount of compensation for the land could be debated but not the term public
purpose. The case of India is particular in that sense, as in other democratic nations this
purpose can be challenged to Court, and lead to the nullification of compulsory Acquisitions.7
It appears indeed that the definition of public purpose is inclusive and too wide, and thus can
be used to serve the interest of only a portion of the community, rather than benefits the
whole society.8
On December 31, 2014, President Pranab Mukherjee promulgated the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement
Ordinance, 2014. The ordinance amended the Right to Fair Compensation and Transparency
in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR).
The RFCTLARR was passed by the Parliament on September 5, 2013 and came into force on
January 1, 2014. The Act overrode the colonial Land Acquisition Act (LAA), 1894 which
had been criticized for giving both the Government of India (GoI) and the State Governments
absolute power to acquire private land in the name of ‗public purpose‘ and for promoting an
unfair compensation policy. The 2013 Act, for the first time, integrated land acquisition with
5
(Dhru, 2010).
6
Saxena, 2011
7
(Morris and Pandey, 2007).
8
(Dhru, 2010).
 15

rehabilitation and resettlement (R&R) and Social Impact Assessment (SIA). As per Section
105 of the Act, the provisions of the Act did not apply to 13 Central Acts which acquired land
under special provisions specific to their domain, considered critical for development.
However, the GoI could issue a notification and direct any provision of the Act, relating to
compensation and R&R, to be made applicable to these 13 Acts within a year of its
enactment. The notification had to be placed before Parliament for a period of 30 days for its
approval.
The Act faced stiff opposition from the industry and the State Governments. The industry
raised concerns regarding the stalling of projects due to large consent requirements,
compulsory SIA, increased project costs due to high compensation, R&R package for
displaced families, and retrospective implementation of the Act.
The State Governments were also of the similar view. Therefore, the NDA Government,
which came to power in May 2014, decided to amend RFCTLARR, 2013. The notification
with respect to Section 105 provided a limited time frame for the amendment. The GoI had
not been able to place the notification before the Parliament during the monsoon session of
the Parliament due to the paucity of time. In the case a notification was not issued before the
end of the year, the 13 Acts would have continued acquisition as per their respective Act
provisions.
After the washout of the winter session of the Parliament, the GoI decided to take the
ordinance route to amend Section 105. On December 31, 2014, the last day for the
notification, the ordinance applied all the compensation and R&R provisions of RFCTLARR
to the 13 exempted laws. The ordinance also relaxed the requirements of consent and SIA
survey for projects in the areas of defence and defence production, rural infrastructure,
affordable housing, industrial corridors and social infrastructure projects which included
Public Private Partnerships.

BACKGROUND

In India, the Land Acquisition Act (LAA) 1894 had served as the basis for all government
acquisition of land for public purposes. The first land acquisition law was enacted during the
British Raj in 1824, which underwent several modifications and was finally replaced by the
LAA, 1894. The GoI in 1947 adopted the LAA 1894. The Constitution of India placed
‗Acquisition and requisitioning of property‘as Entry 42 in the Concurrent List. This meant
that both the Centre and States could make laws governing land acquisition. However, in case
 16

of a conflict between the central and state law, the central legislation would prevail.
The Act was reviewed by various committees appointed by the GoI. In 1967, a committee
was appointed by the GoI to study, consult and recommend principles to amend the 1894 Act.
As a result of such reviews, the LAA 1894 was amended 17 times, after independence in
1947, by various elected governments. Various State Governments also amended the Act in
order to respond to the local demands, like in the case of Land Acquisition (Amendment and
Validation) Act of 1967 by the state of Karnataka.9
The Standing Committee on Rural Development (SCRD), in its report on the Land
Acquisition, Rehabilitation and Resettlement (LARR) Bill 2011, a precursor to RFCTLARR,
explained the amendments made over the years.10
Initially, the exercise of the doctrine of Eminent Domain was limited to acquiring land
for public purpose such as roads, railways, canals, and social purposes like state run schools
and hospitals. The Act, however, added the words or Company to public purpose to
distinguish land acquisition by the State for public purposes from land acquisition by the
State for a Company. Moreover, acquisition of land for Companies was restricted to Railway
Companies, until by an amendment effected in 1933, acquisition was permitted for the
erection of dwelling houses for workmen employed by the Company or for the provision of
amenities directly connected therewith.
The ambit of the LAA 1894 was then significantly expanded by a number of amendments in
1962 which permitted acquisition 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 amendments made
in 1984 in the LAA 1894 extinguished any differentiation between acquisition for a State
purpose and acquisition for a private enterprise or State enterprise by amending section 411 of
the original Act to insert the words or for a Company after any public purpose.
However, the law failed to address some important issues associated with land acquisition,
particularly forcible acquisitions, the definition of ‗public purpose‘, widespread misuse the of
urgency clause, compensation, lack of transparency in the acquisition process, participation

9
“Land Acquisition Law in India: A historical perspective”, Vikas Nandal, International Journal of Innovative
Research and Studies, May 2014, Vol 3 Issue 5, accessed on February 9, 2015;
http://www.ijirs.com/vol3_issue-5/33.pdf
10
Standing Committee report on the Land Acquisition and Rehabilitation and Resettlement Bill, 2011,
Department of Land Resources, Ministry of Rural Development, Government of India, accessed on February 9,
2015;
http://dolr.nic.in/dolr/downloads/pdfs/Land%20Acquisition,%20Rehabilitation%20and%20Resettlement%20Bi
ll%202011%20-%20SC%28RD%29%27s%2031st%20Report.pdf
11
Section 4 of the 1894 Act deals with the publication of preliminary notification for acquisition of a particular
land and the powers of the officers thereon
 17

of communities whose land was being acquired and lack of R&R package.
Due to a lack of clear definition of public purpose‘, there had been considerable difference of
opinion among various judgments of the Supreme Court, which resulted in granting very
broad discretionary powers to the state in terms of deciding the contours of ‗public purpose‘
under particular circumstances.
In the State of Bombay v. R. S. Nanji12, the SC observed, ―It is impossible to precisely
define the expression public purpose. In each case, all the facts and circumstances will
require to be closely examined in order to determine whether a public purpose has been
established. Prima facie, the government is the best judge as to whether public purpose is
served by issuing a requisition order, but it is not the sole judge. The courts have the
jurisdiction and it is their duty to determine the matter whenever a question is raised whether
a requisition order is or is not for a public purpose.13
In the 1988 case of Coffee Board v. Commissioner of Commercial Taxes, the SC again
stated, Eminent domain is an essential attribute of sovereignty of every State and authorities
are universal in support of the definition of eminent domain as the power of the sovereign to
take property for public use without the owner‘s consent upon making just compensation.14

R&R OF THE PROJECT AFFECTED PEOPLE

R&R of the people affected by land acquisition remained neglected due to the complete
absence of a statutory mandate on R&R in LAA 1894. In 1990s, infrastructure projects like
Konkan Railway Corporation (KRC) faced stiff opposition from the livelihood losers leading
to long delays. There was demand for the realignment of the railway line in Goa due to
reasons like the line passing through thickly populated areas, proximity to heritage structures,
pisculture and agriculture getting affected, etc.

In order to fill the legislative void, the Department of Land Resources (DoLR) under the
MoRD formulated the National Policy on Resettlement and Rehabilitation for Project
Affected Families, 2003‘. The objective was to minimize displacement and to identify none
displacing or least displacing alternatives and also plan the R&R of Project Affected Families

12
1956
13
“Judicial interpretation of Public Purpose with respect to land rights”, Sreya B, Social Science Research
Network, July 8, 2013, accessed on February 9, 2015;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2290863
14
“Is it on the right track” India Environmental Portal dated October 30, 1992, accessed on March 12, 2015;
http://www.indiaenvironmentportal.org.in/content/21/is-it-on-the-right-track/
 18

(PAFs) including special needs of tribals and vulnerable sections. This policy was later
replaced by the National Policy on Rehabilitation and Resettlement 2007.

Several State Governments enacted separate legislations on R&R like Madhya Pradesh
Resettlement Act, 1985, Karnataka Resettlement of Project Displaced Persons Act, Karnataka
Act No. 24 of 1994, Maharashtra Project Affected Persons Rehabilitation Act and
Maharashtra Act No. 21 of 1999. Some states also came out with policies on R&R like Orissa
Rehabilitation and Resettlement Policy, 2006, Policy for Resettlement and Rehabilitation of
Persons Displaced or Affected by Water Resources Development Projects in Rajasthan,
Andhra Pradesh State Resettlement and Rehabilitation Policy, 2005, Jharkhand Rehabilitation
and Resettlement Policy, 2008, Bihar Land Acquisition Resettlement and Rehabilitation
Policy, 2007 and Madhya Pradesh Resettlement Policy, 2002 among others. However, in the
face of growing resistance against land acquisition, a need for central legislation on R&R was
felt.

In many large scale projects, due to difficulties in arriving at consensus through the LAA
1894, the compensation and rehabilitation packages were determined through negotiations
between the authorities and landowners. A case in point was land acquisition for the Cochin
International Airport Limited (CIAL). CIAL authorities, through negotiations with the
opinion leaders, arrived at a broad framework for compensation and rehabilitation of the
affected people. A high power committee chaired by a state minister negotiated the prices
with representatives of land owners.15 Each family which lost land was given six cents of
land at different locations. Additionally, one member from each family which lost both house
and land was considered for direct employment or provided indirect employment
opportunities in the airport like taxi permit, managing public telephone facility or vending
beverages.

Morris and Pandey, in their submission to the GoI in May 2007, suggested a way forward.
They emphasized that the complications in the process of land acquisition were inherent in
the law itself. The suggestions included restrictive definition of public purpose based on
specific land requirements, independent valuation of land, removal of restrictions on land use,

15
“Governance issues in Airport Development: Learnings from Cochin International Airport Ltd” by G.
Raghuram and Biju Varkkey in the India Infrastructure Report 2002
 19

low transaction costs, use of ‗transfer development rights‘ for the process of town planning
and corridor development and pareto optimal rehabilitation.16

Consequently, two bills The Land Acquisition (Amendment) Bill, 2007 and The
Rehabilitation and Resettlement Bill, 2007 were introduced in Lok Sabha on December 6,
2007. The key features of these bills are provided in Exhibits 4 and 5 respectively. The Bills
were referred to the SCRD. The Committee submitted its report on October 28, 2008. The
two bills were passed in the LS on February 25, 2009 which was the last day of the session. 17
The Bills were pending final approval under the Rajya Sabha and therefore lapsed at the
dissolution of the 14th LS.

RISE OF PROTESTS

The demand for a better legislation was further strengthened after various instances of violent
opposition to land acquisition in different parts of the country. In 2007, violent protests broke
out in 100 villages near Nandigram in the East Midnapore district of West Bengal when the
Communist Party of India Marxist (CPI (M)) Government attempted to acquire 10,000 acres
of land for a Special Economic Zone (SEZ) to be developed by the Indonesian real estate
giant, the Salim Group. On March 14, 2007, 2500 policemen were sent to capture the land.

According to the police records, 14 farmers were killed in the firing while over 100
were declared missing.18 West Bengal saw similar protests by farmers in Singur in 2008. The
protests started in 2002 when Tata Motors acquired over 900 acres of land for its Nano car
project. The situation worsened over the next six years. The State Government fenced off the
land on December 6, 2006. As a result, Trinamool Congress leader Mamata Banerjee called
for a state-wide bandh and later went on a 25 day hunger strike. Villagers continued to attack
on the fences to disrupt the functioning of the project. In 2008, Tata group decided to shift the
manufacturing base to Sanand in Gujarat.

In the meanwhile, re-elected UPA Government‘s attempt to reintroduce the The Land
Acquisition (Amendment) Bill, 2007 and The Rehabilitation and Resettlement Bill, 2007,

16
IIM-A Working Paper “Towards reform of land acquisition framework in India” Sebastian Morris and Ajay
Pandey, accessed on March 12, 2015
17
3 “The Land Acquisition (Amendment) Bill 2007”, PRS Legislative brief;
http://www.prsindia.org/billtrack/theland-acquisition-amendment-bill-2007-109/
18
“Nandigram story till now”, Live Mint, March 19,2009, accessed on February 02, 2015;
http://www.livemint.com/Politics/I1CAfbH2Und58UkVckctVP/The-Nandigram-story-till-now.html
 20

which had lapsed in the earlier session, failed after stiff resistance from its then ally and
Railway Minister Mamata Banerjee. She was of the view that State should not have any role
in the process of land acquisition.19

In 2011, widespread protests against land acquisition took place in Uttar Pradesh and Orissa.
On May 6, 2011, farmer agitations began against the proposed acquisition for the Yamuna
Expressway project in Bhatta Parsaul village in the Greater Noida district of Uttar Pradesh. It
resulted in sporadic incidents of violence, killing two farmers and two policemen.20 On May
11, 2011, Rahul Gandhi, Member of Parliament from the Indian National Congres, held a
dharna against the Bahujan Samajwadi Party Government in Uttar Pradesh. The protests
started widespread debate on the viability of the colonial Act.

On June 10, 2011, about 2000 villagers in Orissa began protests against the South Korean
company POSCO as it laid down its plan of acquiring 4000 acres of land for a steel plant.21

Protestors, including women and children, formed a human chain around the site. Local
opposition had long delayed the project which was considered India's biggest foreign
investment project in Orissa. POSCO had signed the agreement for the mill in 2005 and was
scheduled to begin production by the end of 2011. However, the protests forced the Orissa
Government to halt land acquisition for the proposed $12 billion steel plant.

TOWARDS A NEW LEGISLATION

In the light of these incidents, the UPA Government decided to introduce a new land
acquisition law. The National Advisory Council (NAC), the advisory body of the UPA
Government made recommendations for the LARR Bill, 2011 by combining land acquisition
with R&R.

According to NAC, land acquisition and R&R had to be seen as two sides of the same coin
and R&R, in each instance, must follow acquisition of land. It further said that not combining
the two aspects – R&R and land acquisition – within one law, risked the neglect of R&R.22

19
“Pranab Mukherjee invites Mamata Banerjee for talk Land Acquisition Bill” Economic Times dated October
14, 2010, accessed on March 6, 2015; http://articles.economictimes.indiatimes.com/2010-10-
20
“Digvijay demands three-point relief for Bhatta farmers”, The Times of India, May 11, 2011, accessed on
February 02, 2015; http://timesofindia.indiatimes.com/india/Digvijay-demands-three-point-relief-for-
Bhattafarmers/articleshow/8247794.cms?referral=PM
21
“Villagers protest a POSCO’s $12 bn Orissa project” Reuters India dated June 11, 2011, accessed on February
20, 2015; http://in.reuters.com/article/2011/06/11/idINIndia-57642720110611
 21

On September 7, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011
which was inspired by the NAC recommendations, was introduced in the LS. The Bill was
referred to the SCRD which submitted its report in the LS on May 17, 2012.

The SC also emphasized on the need to enact a new land acquisition law. In November 2011,
a joint bench of Justice RM Lodha and Justice Khehar in their judgement wrote, ―It has
been felt that the LAA 1894 does not adequately protect the interest of owners/persons
interested in the land. For years, the acquired land remains unused. To say the least, the Act
has become outdated and needs to be replaced at the earliest with fair, reasonable and rational
enactment in tune with the constitutional provisions, particularly, Article 300A.23 We expect
the lawmaking process for a comprehensive enactment with regard to acquisition of land
being completed without any unnecessary delay.24

In an all-party discussion held on April 18, 2013, various political parties raised their
disagreements with various clauses in the LARR Bill. The Bharatiya Janta Party (BJP) urged
the UPA Government to make the Act more pro farmer. It suggested 12 amendments to the
Bill, which included giving the land owners and tillers an option to lease the land instead of
acquisition, sharing the benefits of development on acquired land with the farmers and other
dependents, and discouraging displacement of an individual more than once. The TMC
emphasized that land should be acquired only with a 100 percent consent even for
government projects. CPI (M) felt that the compensation and R&R measures were
inadequate.

THE NEW ACT

The UPA Government accepted most of the amendments proposed by the principal
opposition party BJP and clinched a ‗broad political consensus‘ on the contentious LARR
Bill.25

22
Draft National land acquisition and rehabilitation and resettlement bill 2011, Ministry of Rural Development,
GoI
23
19 Article 300A of the Constitution: No person shall be deprived of his property by authority of law.
24
“Outdated land acquisition act should go”, in The Hindu, dated November 08, 2011, accessed on February
02, 2015; http://www.thehindu.com/news/national/outdated-land-acquisition-act-should-go-
sayscourt/article2607298.ece
25
“Government clinches broad broad consensus on Land Acquisition Bill, to be tabled in Parliament”
Econommic Times dated April 18, 2013, accessed on February 18, 2015;
http://articles.economictimes.indiatimes.com/2013-04-18/news/38647331_1_land-acquisition-
billresettlement-bill-industry-regarding-acquisition
 22

In the LS, the Left parties, AIADMK and BJD members staged a walkout. TMC voted
against the Bill while BJP along with SP and BSP supported the legislation. The Bill was
finally passed by Indian Parliament on September 5, 2013, with further amendments, under
the name of The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013. The Act received the assent of the President on
September 26, 2013. As a result of the notification issued by the GoI on December 19, 2013,
the Act came into force on January 1, 2014.26

The primary objective of the Act was to provide fair compensation, thorough R&R of those
affected, adequate safeguards for their wellbeing and complete transparency in the process of
land acquisition.27 The most important features of the Act were the consent of 80 per cent of
landowners concerned was needed for acquiring land for private projects and of 70 per cent
landowners for public private projects

 The term ‗public purpose‘ which was left vague in the LAA 1894 was restricted to
land for strategic purposes, infrastructural projects, PAFs, planned development or
improvement of village or urban sites or residential purpose for weaker section and
persons residing in areas affected by natural calamities or displaced
 Compensation was increased to four times the market value in rural areas and twice
the market value in urban areas
 R&R package for the affected families with additional benefits to the SC/ST families

THE EXEMPTION LIST

Section 105 of RFCTLARR exempted 13 Central Acts from the purview of the Act. These
Central Acts acquired land for particular sectors in accordance with their specific Act. The
provisions of the RFCTLARR Act like compensation, SIA and R&R did not apply to the land
acquisition carried out under these 13 Acts. The LARR Bill 2011 had 16 Acts under the
exemption list. The 16 Acts included24:

1. The Ancient Monuments and Archaeological Sites and Remains Act, 1958
2. The Atomic Energy Act, 1962

26
Gazette of India notification, Ministry of Rural Development,
http://rural.nic.in/sites/downloads/NewReleases/Noti_Commencement_LR19dec13.pdf
27
“All you wanted to know about new land acquisition bill”, Live Mint, dated August 30, 2013, accessed on
February 06, 2015; http://www.livemint.com/Politics/FXZ9CrJApxRowyzLd8mb2O/All-you-wanted-to-
knowabout-new-land-acquisition-Bill.html
 23

3. The Damodar Valley Corporation Act, 1948

4. The Indian Tramways Act, 1886
5. The Land Acquisition (Mines) Act, 1885
6. The Metro Railways (Construction of Works) Act, 1978
7. The National Highways Act, 1956
8. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act,
1962
9. The Requisitioning and Acquisition of Immovable Property Act, 1952
10. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948
11. The Coal Bearing Areas Acquisition and Development Act, 1957
12. The Electricity Act, 2003
13. The Railways Act, 1989
14. The Special Economic Zones Act, 2005
15. The Cantonments Act, 2006
16. The Works of Defence Act, 1903

Justifying the exemption for these Acts in front of the SCRD, the DoLR said, ―There is a
slight difference in enmass acquisition and row acquisition. The row acquisition is like roads,
railways, power supply and all where a very little land is being acquired. The reservation of
these concerned Ministries is that if we are to apply R&R to them, then they will have to
provide that infrastructure which we have mentioned in Schedule III28 which is extensive. For
rehabilitation, they will have to set up a school, community centres and other facilities like
post offices, roads, etc. Now, for a small chunk of land they say that if we have to be
governed by R & R facilities as per the Bill, then it will not serve the purpose. That is why,
these Acts were actually considered and we thought that row acquisition should not actually
form part. Nevertheless, the GoI has kept the powers with itself that in case it is required that
under Section 9829, we can make these R & R facilities applicable to these Acts.30

In its deposition to the SCRD, the Ministry of Defense with respect to its two acts the
Cantonment Act 2006 and the Works of Defense Act, 1903 said that it had not sought
exemption from the provisions of the Bill and it would undertake all compensatory
provisions. The exemption of SEZ Act, 2005 faced stiff opposition in the SCRD. The
28
Infrastructure provisions under RFCTLARR
29
Section 105 was earlier Section 98 in the LARR 2011
30
Standing Committee on Rural Development’s report on LARR Bill 2011;
http://dolr.nic.in/dolr/downloads/pdfs/Land%20Acquisition,%20
 24

Government of Madhya Pradesh appearing before the Committee argued that SEZ Act was
one of the major reasons for the controversies on the question of land acquisition since it
required large tracts of land and resulted in massive displacement. Even the SCRD in its
recommendation said, ―Inclusion of SEZ Act, 2005 in the Fourth Schedule is a case which
does not go well with the argument of DoLR at all as under this Act en mass acquisition in
thousand acres is done. Up to March 2012, 587 approvals have been accorded for formation
of SEZs.

The SCRD was of the unanimous view that the exemption should not be permitted to the 16
Acts as most of the land acquisition took place in the mining, power and other infrastructure
sectors. However, in the redrafting, the MoRD sought to retain the 13 Acts after eliminating
the two defence Acts and the SEZ Act.

REACTIONS FROM VARIOUS QUARTERS

The RFCTLARR Act was welcomed by various civil society organizations who had been
demanding the replacement of the colonial Act though they felt that the new Act had several
loopholes. Various social movements had been demanding for a new pro people
comprehensive legislation, especially after increased instances of violent protests due to
forced displacement. However, the civil society was not satisfied with the provisions of the
Act since many of their demands were not incorporated in the legislation.

After the passage of the Bill in the LS, former bureaucrat and social activist EAS Sarma in an
interview rose the concerns of the civil society, ―There are three positive features in this
Bill. First, R&R is part of the Bill and they should be taken up hand in hand with the
acquisition. Second, the compensation rates are far more attractive. Third, prior consent of
the affected families (80 per cent) is mandatory. But the Bill still has a few shortcomings.

First, the meaning of public purpose which had been progressively enlarged in the existing
Act to include land for private companies remains as it is. Second, those who are the tillers of
the land are often tenants of absentee landlords who usually pocket the compensation. The
latest Bill fails to address this. The same is the case with landless cultivators in occupation of
government lands, who may not get any compensation. Third, many private companies are
circumventing the mandatory prior consent clause by deploying brokers to purchase lands in
 25

advance.31 On November 20, 2013, Medha Patkar, noted social activist and advisor of the
National Alliance of People‘s Movement (NAPM) said, ―We are at a new point today, there
are mixed feelings regarding the new law. On the one hand, it is a good thing that an old law
by British is being replaced by a new one due to numerous urban and rural movements, on
the other hand there is a lot to be done.32

NAPM, an apex body of several mass organizations across the country, demanded for
several changes in the law to make it more pro farmers and land owners. The most important
changes demanded were restrictive definition of public purpose, no forcible acquisition for
private and PPP projects, no forcible acquisition of agricultural land, inclusion of the 13
exempted central acts, consent and direct involvement of majority of the Gram Sabhas in
each and every project, including public projects for public purpose and promotion of
alternate livelihood options as part of R&R. On the other hand, the Industry also raised
several apprehensions regarding the RFCTLARR 2013. Industry bodies like Confederation of
Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and
the Associated Chambers of Commerce and Industry of India (ASSOCHAM) felt that the
legislation was more in favour of the landowners.

On August 29, 2013, the President of CII, S Gopalakrishnan said, and ―CII has always
emphasized on the need to streamline the land acquisition process to promote job creation in
Industry. With economic growth slowing down, it is imperative to boost manufacturing that
will add to jobs and incomes. The Industry has serious concerns on some of the provisions of
the Land Acquisition Bill passed by the LS in the Parliament. Cost of Land Acquisition is
likely to increase by 3 to 3.5 times, making industrial projects unviable and raising (rising)
costs in the overall Indian economy.33
RV Kanoria, chairman of the FICCI task force on land reforms and policy, also raised similar
concerns on August 30, 2013, ―Several provisions will have adverse consequences on the
industrial development of the country, which is already in bad shape. It is completely a

31
“Land Acquisition Bill has some flaws, say civil society members”, The Hindu, dated September 7, 2013,
accessed on February 14, 2015; http://www.thehindu.com/todays-paper/tp-national/tp-
andhrapradesh/landacquisition-bill-has-some-flaws-say-civil-society-members/article5103262.ece
32
“Land Acquisition Act has ‘loopholes’: Medha Patkar”, The Economic Times, dated November 30, 2013,
accessed on February 13, 2015; http://articles.economictimes.indiatimes.com/2013-11-
20/news/44285191_1_land-acquisition-act-medha-patkar-resettlement-act
33
“Industry has serious concerns on some of the provisions of the Land Acquisition Bill”, CII, August 29, 2013;
http://www.cii.in/PressreleasesDetail.aspx?enc=EF/S6H11d8MEm/utgL5MK17ssb4JMfak6V4RAP0+zG+uBPmrv
AQYyctb1/ibxvf8toai8/MnBcZ+ojP+YW4UkQ==
 26

retrograde step. This certainly doesn‘t augur well for manufacturing. Cost of land will go up
significantly. Process of acquiring land will also get stretched.

The major issues raised by the industry were:

 Mandatory R&R would have huge cost implications which may result in three fold
increase in the cost
 Requirement to seek consent of 80 per cent of affected families would considerably
increase the time taken to acquire land. Industry felt that the actual time taken would
be much higher than the 50 months laid out in the Act, as there are likely to be delays
at each stage due to absence of timelines and implementation difficulties
 Lack of clarity in definition of urban and rural areas
 SIA would make the acquisition process extremely complex, lengthy and difficult
 Provision to return the acquired land, which was unutilised for five years, would
hamper large infrastructure projects since they took longer periods to kick start
 Retrospective clause would add to the uncertainty because it disrupted the land
acquisition process which was underway in various infrastructure and industrial
projects
 Manufacturing sector was heavily dependent on the governments for acquisition and
should be included in the definition of public purpose
 The definition of affected families, who were eligible for R&R, was too broad
because it included livelihood losers working in the affected area for three years prior
to acquisition of land and whose primary source of livelihood was affected.

Real estate developers also criticized the new law for increased financial burden. Lalit Kumar
Jain, chairman of Confederation of Real Estate Developers Association of India on August
31, 2013 said, ―The process of acquiring land for projects will become tedious, especially in
the case of large land parcels. While we agree that the Bill will increase transparency in land
deals, the higher compensation to land owners could make several real estate projects
unviable. Interestingly in October, 2013, amid concerns of the industry over RFCTLARR,
studies conducted by two private financial institutions, ICICI Bank‘s Treasury Research
Group and Kotak Institutional Equities, gave thumbs up for the measure, observing that some
of the worries of business houses might be ‗exaggerated and overblown.34 Both the reports

34
“Pat for land acquisition act”, The Hindu dated October 19, 2013, accessed on February 14, 2015;
 27

acknowledged that the Act would make the land acquisition process time bound and provide
greater clarity.35

IMPLICATIONS OF THE ACT ON VARIOUS PROJECTS

The enactment of RFCTLARR had significant impact on the future of the projects. According
to the Centre for Monitoring Indian Economy (CMIE), projects entailing a staggering Rs.6.26
trillion of investment were shelved, abandoned, or stalled in 2013-14, the highest ever in
India‘s history. A total number of projects abandoned, shelved or stalled was as high as 524
in 2013-14. According to the CMIE report, the major reasons given were difficulties related
to land acquisition, delay in getting environment clearances and promoter‘s lack of interest.
Promoter‘s lack of interest in the project could be due to non-favourable market conditions,
delay in getting clearances, high cost of land, lack of financial resources or inadequate
resources. As per the definitions, a stalled project could be revived, a shelved project was
where implementation hadn‘t started and an abandoned project was one that was withdrawn
after implementation had started.

The stalled projects, both in terms of value and volume, had been rising since early
2009. Average quarterly stalling of projects which hovered around Rs. 143 billion from 2000-
2008, rose steeply after 2007-08 when slowing down effect in the economy had just set in. It
rose to Rs. 586 billion in 2008-09. Rs. 573 billion in 2009-10 and slipped to Rs. 402 billion in
2010- 11. Quite a few projects which were mere investment intentions during the investment
boom period between 2004-05 and 2008-09, soon started getting shelved. Post 2009-10, the
quantum of projects stalled was much higher. The quarterly average rose sharply to 1.2
trillion in 2011-12, Rs. 1.1 trillion in 2012-13 to peak at Rs. 1.6 trillion in 2013-14. The Delhi
Mumbai Industrial Corridor (DMIC) was one of the biggest projects stalled due to problems
in land acquisition. DMIC was a mega infrastructure project of USD 90 billion with the
financial & technical aids from Japan, covering an overall length of 1483 KMs between the
political capital and the business capital of India, i.e. Delhi and Mumbai. The project planned
major expansion of infrastructure and industry – including smart cities, industrial clusters

http://www.thehindu.com/todays-paper/tp-features/tp-propertyplus/pat-for-land-
acquisitionact/article5249415.ece
35
“Land Acquisition will become time-bound: Reports” The Economic Times dated October 10, 2013, accessed
on February 14, 2015; http://articles.economictimes.indiatimes.com/2013-10-
10/news/42903171_1_landacquisition-law-icici-bank-retrospective-applicability
 28

along with rail, road, port, and air connectivity – in the states along the route of the Corridor.
Many smart cities were to be developed alongside, such as the Dholera SIR in Gujarat, which
was envisaged to be six times the size of Shanghai and two times the size of Delhi. The
DMIC project had been facing delays for past four years due to bottlenecks in land
acquisition. In early 2013, farmer organizations like the Farmers Anti corridor Struggle
Action Committee, an outfit of peasants from 78 villages of Raigad district, demanded the
halt to the land acquisitions for the DMIC project till the Act came into force so that
acquisition could be done in a more equitable manner. Due to constant protests, the
Maharashtra Government was forced to reduce the land required for the Dighi port node of
the Delhi Mumbai Industrial Corridor (DMIC) to a fraction of its originally intended size,
from 25,000 hectares to a mere 3,600 hectares. The Act further delayed the project as prices
shot up. Amitabh Kant, the Director of DMIC on June 22, 2014 said, ―While acquiring land
in Aurangabad, land prices went up to 5.5 times the market rates simply because landowners
were not willing to sell at a lower price. Everything is becoming unviable. The Pithampur
Dhar Mhow investment node of DMIC was also stuck due to land acquisition woes. When
the land acquisition for the proposed industrial corridor began in 2010, the Madhya Pradesh
Government was depending on LAA 1894 to acquire the land. However, the whole process
moved at a snail‘s pace because the new legislation required SIA and a comprehensive R&R
package. It also escalated the project cost as the GoI was required to pay a higher
compensation to the land owners.35 Many other parts of the Corridor like Manesar in
Haryana faced similar land acquisition problems.36

REACTIONS TO THE AMENDMENT

On August 1, 2014, Jairam Ramesh, Congress leader and former Minister of Rural
Development who spearheaded the movement towards RFCTLARR, opposed the move
saying, ―The 2013 law was passed with the complete support of the BJP and, indeed, of all
political parties, each of which made important contributions to the final version. Both
amendments recommended by the BJP in the LS, relating to lease and share in future sale of
acquired land, were included without changes…Drafting a law requires a balancing of
competing interests — a task of immense proportions in a country with many diverse groups.
The new land acquisition law must be given a fair chance because, for the first time, the

36
5 “Industrial corridor stuck due to land acquisition woes” Hindustan Times, dated September 8, 2014,
accessed February 10, 2015; http://www.hindustantimes.com/indore/industrial-corridor-project-stuck-due-
toland-acquisition-woes/article1-1261512.aspx
 29

concerns and interests of farmers, livelihood losers and scheduled caste and scheduled tribe
communities have been given the highest priority as part of land acquisition. That should not
now be abandoned.37

The decision of the NDA Government to amend the provisions of the 2013 Act was also
strongly criticized by various civil society organizations. Medha Patkar in an interview on
August 26, 2014 said, ―The consent and SIA provision of Right to Fair Compensation and
Transparency was introduced to do away with the anomalies in the colonial Act, since
farmers and those dependent on the land were never consulted or made a participant in the
process of development planning. Huge tracts of fertile land were acquired at throw away
prices and given to private and public corporations in the name public purposes. It will be a
retrograde step if we were to go to back to the colonial process of forced land acquisition
with no regard for impact of land acquisition on the people, environment and democratic
institutions that need to be consulted and their consent taken in the process of SIA.38

THE ORDINANCE ROUTE

The winter session of the Parliament, which started on November 24, 2014, was marred by
disruptions. Proceedings of RS were washed out as opposition parties stalled the House by
pressing the demand for a statement by the PM on alleged forced religious conversions in
Agra. Several crucial bills, including RFCTLARR Amendment Bill, Goods and Services Tax
Bill and Insurance Bill, could not be discussed in the Parliament due to stiff opposition by
some parties.

The political composition of both the Houses of Parliament was evident in the functioning of
each of the Houses. The LS was more productive with 126 hours of functioning during the
stipulated 20 sittings. The productivity percentage of the Lower House was as high as 105
percent. In contrast, productivity of RS was only 68 per cent. This could be viewed in
juxtaposition with the numerical strength of NDA in each of the Houses. In the LS it had an
overwhelming majority of 334 out of the 543 seats, but in the RS it had just 62 out of the 250.
On December 23, 2014, the Cabinet Committee on Political Affairs recommended to the
President to prorogue both the Houses of the Parliament to enable promulgation of two
37
“Give 2013 Act a fair chance” Indian Express dated August 1, 2014, accessed on February 16, 2015;
http://indianexpress.com/article/opinion/columns/give-2013-law-a-fair-chance/99/
38
“Medha Patkar opposed to amendments to new land act” The Hindu dated August 27, 2014, accessed on
February 16, 2015; http://www.thehindu.com/todays-paper/tp-national/tp-otherstates/medha-
patkaropposed-to-amendments-to-new-land-act/article6354819.ece
 30

official ordinances namely Coal Amendment Ordinance and Insurance Amendment

Ordinance. Proroguing of the session was crucial because, as per the rules laid down in the
Constitution, an ordinance could be passed only when the Parliament was not in session and
the previous session had been prorogued. Consequently, both the Houses were prorogued by
President Pranab Mukherjee on December 23.

On December 27, 2014, the GoI decided to take the ordinance route to make amendments to
RFCTLARR. The GoI sources informed that the necessary directions had been issued to the
MoRD to get the draft ordinance vetted by the Law Ministry. 39 Article 123 of the
Constitution enabled the President of India to promulgate an ordinance if both the Houses of
Parliament were not in session and ‗circumstances existed, which rendered it necessary for
him to take immediate action. Every ordinance had to be laid before Parliament, and ceased
to exist six weeks from the end of the next sitting of Parliament. Since the Constitution
mandated that Parliament to be called into session at least once every six months, an
ordinance has a de facto expiration period of approximately seven and a half months. 40 On
December 29, 2014, the Union Cabinet chaired by the PM approved the amendments and
recommended the President to promulgate the RFCTLARR Ordinance 2014. The
RFCTLARR Ordinance was the eighth ordinance passed in seven months of the NDA
Government and the ninth for the calendar year.

The ordinance brought in the following amendments:

 Compensation and R&R specified in the Act was extended to the acquisition under
thirteen Acts mentioned in the Fourth Schedule.
 Projects in the areas of
i. defense and defense production
ii. rural infrastructure
iii. affordable housing
iv. industrial corridors

39
“Centre to take ordinance route to effect changes in the Land Acqusition Act” IBNLive dated December 27,
2014, accessed on February 16, 2015; http://ibnlive.in.com/news/centre-to-take-ordinance-route-to-
effectchanges-in-land-acquisition-act/520030-37-64.html
40
“Ordinance route” Frontline dated August 9, 2013, accessed on March 12, 2015;
http://www.frontline.in/the-nation/ordinance-route/article4944717.ece
 31

v. Social infrastructure projects including PPPs in which ownership lies with the
government, were exempted from conducting SIA and taking the consent of
affected families.
 Definition of public purpose was widened to include private hospitals and private
educational institutions
 The term private company was changed to private entity to encompass other forms of
companies like proprietorship, partnership, corporation, non-profit organization, and
other non-governmental entities
 Companies Act 1956, which was the reference for the definition of Company was
replaced by Companies Act 2013
 The period after which unutilised land had to be returned was extended to any period
specified at the time of setting up the project. RFCTLARR 2013 required land, which
remained unutilised for five years, to be returned to the original owners or the land
bank.

On December 31, 2014, President Pranab Mukherjee sought further clarification regarding
the urgency to promulgate the ordinance since the Amendment Bill was not presented before
the Parliament. According to the Constitution, an ordinance could be promulgated by the
President only after he was ‗satisfied that circumstances exist which render it necessary for
him to take immediate action. Another reason for the clarification was said to be the
increased instances of the NDA Government taking the ordinance route to avoid the logjam
in the Parliament. The GoI had issued seven ordinances within a fortnight of the end of the
winter session which had also raised concerns within the Cabinet.41 Since the Rural
Development Minister Chaudhary Birender Singh was unavailable to brief the President,
three senior Union Ministers including Finance Minister Arun Jaitley, Law Minister D V
Sadananda Gowda and Highways Minister Nitin Gadkari met the President. Nitin Gadkari
who had earlier held the rural development portfolio explained that an ordinance was
necessary to bring the 13 Central Acts at par with the compensation and rehabilitation

41
“Ordinance Raj: President questions urgency behind Modi-government issuing seven ordinances”, Indian
Express dated January 08, 2015, accessed on March 03, 2015;
http://indianexpress.com/article/india/indiaothers/ordinance-raj-three-cabinet-ministers-had-raised-
objections/
 32

provisions of RFCTLARR.42 After the discussion, the President gave his assent to the
RFCTLARR Ordinance 2014.

THE LAND ACQUISITION REHABILITATION AND RESETTLEMENT BILL

2011

The Land Acquisition Act 1894 does not mandate compensation and rehabilitation of the
people affected by acquisition of their land. Thus the Government announced the national
Policy on Resettlement and Rehabilitation in 2003. The Act came into force with effect on
February 204. Subsequently, the government on October 2007 announced the revised
National Resettlement and rehabilitation Policy 2007. Unfortunately however, with the
dissolution of the 14thLokSabha for the formation of the new government, the bill lapsed. On
September 7, 2011, an ambitious initiative was put forward by Jairam Prakash as he tried to
combine the two acts (Land Acquisition and Rehabilitation and Resettlement Bill, 2011.The
Bill proposes a unified legislation for acquisition of land and adequate rehabilitation
mechanisms for all affected persons and replaces the Land Acquisition Act, 1894.

The provisions of this Bill shall not apply to 16 existing legislations that provide for land
acquisition. These include The Atomic Energy Act, 1962, The National Highways Act, 1956,
SEZ Act, 2005, Land Acquisition (Mines) Act, 1885, The Railways Act, 1989.

KEY FEATURES

The Bill specifies provisions for land acquisition as well as Rehabilitation and
Resettlement(R&R). Some of the major changes from the current provisions are related to:

a. the process of land acquisition;

b. Rights of the people displaced by the acquisition;
c. Method of calculating compensation; and
d. Requirement of R&R for all acquisitions.

Let‘s see some of the major changes:

42
“Rural Development Minister gave the government a scare by remaining incommunicado”, DNA dated
January 02, 2014, accessed on March 03, 2015; http://www.dnaindia.com/india/report-how-
ruraldevelopment-minister-gave-government-a-scare-by-remaining-incommunicado-2049070
 33

i. The provisions of the Bill relating to land acquisition, rehabilitation and resettlement
shall be applicable in cases when the appropriate government acquires land,
a. for its own use and control,
b. to transfer it for the use of private companies for public purpose, and
c. on the request of private companies for immediate use for public purpose.
ii. The Bill proposes that private companies shall provide for rehabilitation and
resettlement if they purchase or acquire land, through private negotiations, equal to or
more than100 acres in rural areas and 50 acres in urban areas. In addition, if such
companies request the appropriate government to acquire part of an area for public
purpose, they shall be liable for rehabilitation and resettlement of the affected persons,
for the area acquired by the government, as well as the land purchased previously
through private negotiations.
iii. The term public purpose in the Bill includes provision of land for,
a. strategic defence purposes and national security,
b. roads, railways, highways, and ports, built by government and public sector
enterprises
c. project affected people,
d. planned development or improvement of villages, and
e. Residential purposes for the poor and landless. Public purpose includes other
government projects which benefit the public as well as provision of public
goods and services by private companies or public private partnerships; these
require the consent of 80 per cent of project affected people. Affected families
include those whose livelihood may be affected due to the acquisition, and
includes landless labourers and artisans.
iv. A maximum of five per cent of irrigated multi-cropped land may be acquired in a
district, with certain conditions.
v. Every acquisition requires a Social Impact Assessment (SIA) by an independent body
followed by a preliminary notification and a final award by the District Collector.
vi. In the case of urgency, the Bill proposes that the appropriate government shall acquire
the land after 30days from the date of the issue of the notification (without SIA). This
clause may be used only for defence, national security, and conditions arising out of a
national calamity.
vii. The compensation for the land acquired shall be based on the higher of
 34

a. the minimum land value, specified in the Indian Stamp Act, 1899 for the
registration of sale deeds; and
b. The average sale price of the higher priced 50% of all sale deeds registered in
the previous 3 years for similar type of land situated in the vicinity. This
amount is further doubled in case of rural areas. The value of the assets (trees,
plants, buildings etc.) attached to the land being acquired will be added to this
amount. This total amount will then be multiplied by two to get the final
compensation amount; in case of the urgency clause, this multiplication factor
will be 2.75.
viii. The Bill proposes the following authorities; Administrator; Commissioner for
Rehabilitation and Resettlement; Rehabilitation and Resettlement Committee(for
acquisition of 100 acres or more of land); National Monitoring Committee for
Rehabilitation and Resettlement; and Land Acquisition, Rehabilitation and
Resettlement Authority (which shall adjudicate all disputes, with appeal to the High
Court).
ix. If an acquired land which is transferred to a person for a consideration, is left
unutilised for a period of 10 years from the date it was acquired, it shall be returned to
the Land Bank or the appropriate government.
x. The Bill proposes that in cases where the ownership of an acquired land is sold to any
person, without any development made, 20 per cent of the profit made shall be shared
among all the persons from whom the land was acquired.

MAJOR AMENDMENTS MADE TO LAA 1894

LAND ACQUISITION AMENDMENT ACT 191943

The definition of Company which was 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 or of the Governor General in Council, or by Royal Charter or Letters Patent was
extended to include a society registered under the Societies Registration Act, 1860 and a
registered society within the meaning of the Cooperative Societies Act, 1912.

43
Text of Central Acts, Ministry of Law and Justice, GoI; http://lawmin.nic.in/legislative/textofcentralacts/1919
 35

LAND ACQUISITION AMENDMENT ACT 192144

The award declared for the claimant by the Collector was given the status of a decree and the
statement of the grounds of every such award a judgment.

Land Acquisition Amendment Act 192345

Any person interested in any land which had been included in the preliminary notification
could, within thirty days, after the issue of notification, object to the acquisition of the land or
of any land in the locality to the Collector in writing. The Collector was required to submit
the report containing his recommendations to the Local Government.

The valuation of the land was to be done as on the date of the publication of preliminary
notification.

LAND ACQUISITION AMENDMENT ACT 193346

Acquisition of land for Companies was extended to include ‗industrial concern, ordinarily
employing not less than one hundred workmen owned by an individual or by an association
of individuals and not being a Company, desiring to acquire land for the erection of dwelling
houses for workmen employed by the concern or for the provision of amenities directly
connected therewith.

LAND ACQUISITION AMENDMENT ACT 196247

Acquisition of land for Companies was extended to include acquisition needed for the
construction of some building or work for a Company which was engaged or was taking to
steps for engaging itself in any industry or work which was for public purpose.

LAND ACQUISITION AMENDMENT AND VALIDATION ACT 1967

The Act validated the acquisition initiated under the Land Acquisition Ordinance 1967.

44
Text of Central Acts, Ministry of Law and Justice, GoI; http://lawmin.nic.in/legislative/textofcentralacts/1921
45
Text of Central Acts, Ministry of Law and Justice, GoI; http://lawmin.nic.in/legislative/textofcentralacts/1923
46
Text of Central Acts, Ministry of Law and Justice, GoI; http://lawmin.nic.in/legislative/textofcentralacts/1933
47
Text of Central Acts in, Ministry of Law and Justice, GoI;
http://lawmin.nic.in/legislative/textofcentralacts/1962
 36

In cases where the final declaration of intended acquisition was made after three years of
expiry of the preliminary notification, the compensation award was to include a six percent
interest on the market value of the land.

LAND ACQUISITION AMENDMENT 198448

Local authority included a town planning authority set up under any law.

Company meant

i. a company defined under Companies Act 1956

ii. societies registered under the Societies Restriction Act, 1860
iii. A cooperative society within the meaning of any law relating to cooperative societies

Public purposes included

i. the provision of village sites, or extension, planned development or improvement of

existing village sites
ii. the provision of land for town or rural planning
iii. the provision of land for planned development from public funds
iv. the provision of land for corporation owned or controlled by the State
v. the provision of land for residential purposes to the poor or landless or to persons
residing in areas affected by natural calamities, or to persons displaced or affected by
reason of the implementation of any scheme of the government
vi. the provision of land for carrying out any educational, housing, health or slum
clearance scheme sponsored the government or Society or Cooperative
vii. the provision of land for any other schemes of development sponsored by government
viii. The provision of any premises or building for locating public office.

The words or for a Company were added after any public purpose to extend the scope of the
purpose of acquisition. The time for hearing of objections was extended from thirty day from
the issue of notification to thirty days from the publication of notification. Final declaration
of intended acquisition would not be made after the expiry of one year from the date of
publication of the notification. The award by the Collector would be made an award within
the period of two years from the date of publication of declaration and if no award is made
within that period, the entire proceedings for the acquisition of land would lapse. In addition

48
Text of Central Acts in Ministry of Law and Justice, GoI; http://lawmin.nic.in/legislative/textofcentralacts/
 37

to the market value of the land, in every award an amount calculated at the rate of twelve per
cent per annum on the market value for the period commencing on and from the date of the
publication of the notification.

Analysis of the 2013 Act49

Section 2 of the Act provides for the application of the provisions of the Act to various
types of land acquisitions. It classifies the acquisition of land into three categories – (1)
appropriate government acquire land for its own use and for public purposes; (2)
appropriate government acquires land for PPP projects/ for private companies for
public purpose; (3) purchases by private companies through private negotiations.

According to the Section 3 (za) of the Act, ‘public purpose’ means the activities
specified under Section 2 (1), and includes the following: (a) For strategic purposes
relating to naval, military, air force, armed forces of the Union, including paramilitary
forces or any work vital to national security or defence of India or State policy, safety
of the people; (b) For infrastructure projects, agriculture, industry, educational
purposes, sports, tourism and transportation and any other infrastructural facility; (c)
Relief Development; (d) Planned Housing; (e) Planned Development; (f) Housing for
Displaced Persons.

When the government acquires land for its own use, hold and control including for any
Public Sector Undertaking (PSU) and for public purpose, the provisions of the Act
relating to acquisition, compensation, rehabilitation and resettlement shall apply. But
where the government acquires land (i) for public private partnership projects, where
the ownership of the land continues to vest in the government, for public purpose and
(ii) for private companies for public purpose, the provisions of the Act relating to land
acquisition, consent, compensation, rehabilitation and resettlement shall also apply.
Under the proviso to Section 2 (b), in case of acquisition of land for public private
partnership, the prior consent of at least 70% of the affected families is required and in
case of acquisition of land for private companies, the prior consent of at least 80% of the
affected families is required. Whereas, there is no requirement of prior consent in case
the government acquires land for its own use, hold and control, including for Public

49
Land acquisition in India past and present BY Prof. Kahkashan y Danyal available at
http://docs.manupatra.in/newsline/articles/Upload/FF6D173D-E5C5-4954-A73A-9D77708DD9B6.pdf
 38

Sector Undertaking.

Further when the government acquires land either (i) for its own use… for a public
purpose, (ii) for a private company for a public purpose or (iii) for public private
partnership for a public purpose, all the provisions of the 2013 Act relating to land
acquisition, compensation, rehabilitation and resettlement shall apply. That is, if the
land is acquired by the government for a private company or for a public private
partnership or for its own use, then provisions of land acquisition shall apply and
compensation has to be paid and rehabilitation and resettlement of the parties shall also
to be done. In case of a land acquired by the government for a public private partnership,
the land continues to vest with the government.

Section 4 of the 2013 Act provides for Social Impact Assessment Study to be conducted
before acquisition of land by the government for a public purpose in consultation with
the concerned Panchayat, Municipality or MCD in the affected area. That is, this
provision provides for study of impact of the impending project on the society.

“While undertaking a Social Impact Assessment study, the government has to consider
the impact that the project is likely to have on various components such as livelihood of
affected families, public and community properties, assets and infrastructure, particularly
roads, public transport, drainage, sanitation, sources of drinking water, sources of water
for cattle, community ponds, grazing land, plantations, public utilities such as post
offices, fair price shops, food storage godowns, electricity supply, health care facilities,
schools and educational or training facilities, anganwadis, children parks, places of
worship, land for traditional tribal institutions and burial and cremation ground.”

Section 9 provides that where the land is proposed to be acquired invoking the urgency
provisions under Section 40 of the Act, the government may exempt the undertaking of
the Social Impact assessment Study. Further under proviso to Section 6, in respect of
irrigation projects where the process of Environment Impact Assessment is required
under the provisions of any other law, the provisions relating to Social Impact
Assessment shall not apply.

Once the social impact assessment process has been executed satisfactorily, the
proceedings of acquisition of the identified land can begin with a ‘Preliminary
Notification’ issued under Section 11. This is an initial notice to the public at large that
a certain parcel of land is to be acquired along with details relating to the area. This
 39

notification is different from its 1894 counterpart in the sense that it must contain a
statement on the nature of the public purpose involved along with the reasons
necessitating the displacement of the affected persons. This has to be accompanied with
a Social Impact Assessment Report and particulars of the Administrator appointed for
the purposes of rehabilitation and resettlement who is required to conduct a survey and
undertake a census of the affected families under Section 16 of the Act.

Further, under Section 14, when the preliminary Notification under Section 11 is not
issued within 12 months from the date of appraisal of the Social Impact Assessment
Report, then such report shall be deemed to have lapsed and a fresh Report is required
to be taken prior to issue of Notification of acquisition under Section 11.

Once the Preliminary Notification has been issued, any person interested in the land
which has been notified for acquisition may within sixty days from the date of
publication of the Preliminary Notification, raise objections under Section 15 of the Act
with regard to the area and suitability of land to be acquired, the justification offered for
public purpose or the findings of the Social Impact Assessment Report. This is
followed by a survey and census of the affected families by the Administrator for
Rehabilitation and Resettlement and declaration for acquisition under Section 9 of the
Act. Under Section 23, the Land Acquisition award is passed by the Collector. It
contains the following details - the true area of the land, the compensation as
determined, the Rehabilitation and Resettlement award as determined and the
apportionment of compensation among all individuals who have an interest in the land.

Under the old Act, possession could be taken without satisfactorily compensating or
resettling the families. But under the 2013 Act, the Collector can take possession of the
land only after ensuring the full payment of compensation including the rehabilitation
and resettlement entitlements to the entitled persons.

Under the 2013 Act, the amount of Compensation must be sufficiently fair so as to justify
the forcible acquisition of land. Under the 1894 Act, compensation was required to be
paid at market value. But as discussed earlier, quantum and basis for determining
market value was the root cause of a number of disputes, injustices to the landowners
and litigation. The Court has also recognized in Ram Jiyawan v. State of Uttar Pradesh
the importance of paying compensation as “Acquisition without payment of
compensation is violative of Article 14”.
 40

Compensation provisions are contained in Sections 26-30, 39 and the First Schedule of
the Act. Section 26 provides for determination of the market value of the land by the
Collector according to the criteria mentioned therein which lays down “(a) the market
value, if any, specified in the Indian Stamp Act, 1889 for the registration of sale deeds or
agreements to sell;” or “(b) the average sale price for similar type of land situated in the
nearest village or nearest vicinity area;” or “(c) consented amount of compensation in
case of acquisition of lands for private companies or for public private partnership
projects.” The Act provides a method for calculating the average sale price referred to
in clause (b). It shall be “determined taking into account the sale deeds or the
agreements to sell registered for similar type of area in the near village or near vicinity
area during immediately preceding three years of the year in which such acquisition of
land is proposed to be made.”

The market value calculated as average of the last three years on the basis of the
Collector’s rate or the sale deeds, is to be multiplied by a factor to be specified in the
First Schedule. Multiplying factor mentioned in First Schedule in case of rural areas is
1.00 (One) to 2.00 (Two) based on the distance of the project from urban area as may be
notified by the government. In the case of urban areas, multiplying factor is only one.

Section 30 provides for award of solatium (compensation for emotional harm caused)
and the manner of determination of solatium is provided under the First Schedule. It has
to be paid in addition to the compensation payable to any person whose land has been
acquired. The Collector having determined the total compensation to be paid, to arrive at
the final award, impose a solatium equivalent to 100% of the compensation paid.
Solatium is not a new concept as it had already existed under the 1894 Act, in which by
the 1984 amendment, affected individuals were required to be paid an additional 30%
of the market value in consideration of the compulsory nature of the acquisition
[Section 23(2) of the 1894 Act]. Hence under the 2013 Act, the landowner will get the
full compensation as calculated above while the compensation to be paid to the affected
families as referred to in clause (c) of Section 3 shall be in proportion to be decided by
the appropriate government.

In addition to the market value of the land under Section 26, the Collector shall award
under Section 30(3), an amount at the rate of 12% per annum on such market value for
the period from the date of publication of the Notification of the Social Impact
 41

Assessment Report till the date of award of the Collector or the date of taking
possession of the land whichever is earlier.

The 2013 Act provides for land acquisition along with compulsory rehabilitation and
resettlement due to past experiences in case of large scale projects like the Narmada
Dam. In case of acquisition for the purposes of building dams, entire villages got
submerged but the displaced families were never resettled. Section 31(1) of the 2013
Act provides that the Collector shall pass Rehabilitation and Resettlement awards for
each affected family (both landowners and the families whose livelihood is primarily
dependent on the land acquired) in terms of the entitlements provided in the Second
Schedule. This is in addition to the compensation provided under the First Schedule.
There are provisions of housing units in case of displacement both from rural and urban
areas; land for land; offer for developed land; choice of annuity or employment;
subsistence grant for displaced families for a period of one year; transportation cost for
displaced families; cattle shed/petty shops cost; one time grant to artisans, small traders
and certain others; fishing rights; one time resettlement allowance and stamp duty and
registration fee.

When an entire population is moved to a new area, it would be a farce to suggest that
all the people have been rehabilitated. For resettlement and rehabilitation in a true
sense, basic infrastructural facilities have to be provided at the proposed site. These
have to be constructed at the cost of the authority at whose behest the acquisition is
taking place. The Third Schedule provides for infrastructural amenities to be provided.

The 2013 Act provides that the 1894 Act will continue to apply in certain cases where
an award has been made under the 1894 Act. Section 24 makes provision for
application of the provisions of the 2013 Act to land acquisition proceedings initiated
under the 1894 Act as follows:

1. “If no award has been made under Section 11 of the 1894 Act, then all provisions
of the 2013 Act relating to compensation shall apply [ Section 24(1)(a);”

2. “Where an award under Section11 of the 1894 Act has been passed, then such
proceedings shall continue under the provisions of the 1894 Act, as if the Act has
not been repealed [Section 24(1)(b);”

4. “Where an award has been made under Section 11 of the 1894 Act and compensation
 42

in respect of a majority of land holdings has not been deposited in the account of the
beneficiaries specified in the Notification for acquisition under Section 4 of the said
Land acquisition Act, shall be entitled to compensation in accordance with the
provisions of the 2013 Act [proviso to Section 24(2)].”

Section 24(2) came as a ray of hope for a number of farmers whose land was acquired
by the respective state governments number of years ago and the award was made five
years or more prior the 2013 Act, but in case the physical possession of the land has not
been taken or the compensation has not been paid, the acquisition shall lapse or stand
cancelled. These farmers found the ‘retrospective clause’ or Section 24(2) a great
respite as they could benefit from the provision and get justice.

Drawbacks of the 2013 Act

The 2013 Act although far better than its earlier counterparts is not perfect and has a
number of drawbacks. Some of which are enumerated as under-

1. Regarding determination of the market value by the Collector under Section 26(b),
the market value calculated as average of the last three years on the basis of the sale
deeds, is to be multiplied by a factor to be specified in the First Schedule.
Multiplying factor mentioned here in case of rural areas is 1.00 to 2.00 based on the
distance of the project from urban area as may be notified by the government. In
the case of urban area, multiplying factor is only 1.00. Compensation has to be paid
to the landowners on the basis of the market value of the land. In India, it is really
difficult to calculate the market value because of a running parallel economy
involving black money, cash transactions often made with black money, corruption
in the form of understating the market value in the sale documents to avoid
payment of stamp duty at the time of registration of the sale deed. All this leads to a
loss to the landowner as the government steps into the shoes of the landowner at the
time of acquisition and pays only a small amount of compensation which is below
the actual sale price.

2. The 2013 Act provides for Rehabilitation and Resettlement, a commendable step for
the first time in India’s legislative history, that a law on land acquisition has been tied
up with the necessity to carry out rehabilitation and resettlement. But in case of land
which is temporarily acquired, there is no such policy of rehabilitation and
 43

resettlement.

3. Under Section 2(2)(a) and (b), the provisions of the Act relating to ‘ prior consent ’ of
the ‘affected families’ apply where the land is acquired for public partnership
project or for a private company ( both for a public purpose). This means that in
these cases, the landowners can refuse to part with their lands by refusing to give
the appropriate percentage of ‘prior consent.’ But when the land is acquired by the
government for its own use, hold and control, including for PSUs and for public
purpose under Section 2(1), ‘prior consent’ of the affected families is not required to
be taken. That is, when the government acquires land for its own use, prior consent
of the affected families is not required. It is a forcible acquisition by the government
in which the landowners have no say at all and they cannot refuse to part with their
land.

4. The State governments have objected to the Chapter III of the 2013Act dealing with
acquisition of agricultural land that since ‘transfer and alienation of agricultural
land’ comes under the purview of the State List, Entry 18, it is only the State
Legislatures who have a right to legislate on this matter.

5. The 2013 Act exempts the application of the provisions of the Act to certain
enactments dealing with land acquisition like the Railways Act, 1989, The
Electricity Act, 2003, The National Highways Act, 1956 (all the 13 enactments
specified under the Fourth Schedule).

CONCLUSION

In the process of Land Acquisition, it is important to strike a balance between the need for
land for developmental activities and the need to protect the interests of those impacted by
the acquisition of the land—landowners, tenants, landless labourers, and other others whose
livelihoods depend on the land. And this can be done only by exercising some political will.
The land Acquisition Act was passed in 1894. The last amendment was made in 1984. The
Land Acquisition and the Rehabilitation and Resettlement bill 2011isan excellent piece of
legislation that can be a powerful tool in solving the ‘land issue’ if brainstormed over and a
few clauses amended as a result.
 44

THE CRITICAL ANALYSIS

PRO - VIEW

The procedures of the land acquisition process through 2013 Act have increased manifold.
Once social impact assessment (SIA) is carried out, the report will be examined by an expert
committee, a chief secretary’s committee, a monitoring committee. This is essentially a
bureaucratic approach; there are concerns as to how the process will be ultimately carried out
by already burdened bureaucracy. There are fears of corruption, delays and politicization.

There are concerns about the sanctity of the Social Impact Assessment process itself; how
will it be carried out, how will it be assessed, how will it translate into costs.

LARR 2013 expanded the definition of project-affected people and expanded the rights,
protections and compensations for people who lose land or livelihood as a result of
acquisition. Though necessary; it failed to recognize that the price of land matters equally to
the land acquirer, as land-loser. As a result, LARR 2013 raised the price of land acquisition to
unsustainable levels.

There are concerns about the time taken to complete the land acquisition process; some
experts have said that the entire process may take as much as 3.5 years. This may lead to
substantial increase in the indirect and opportunity costs of the projects, despite land acquirer
shelling out huge sums to land affected people.

The consent norms of 70% for Public-Private Projects and 80% for Private Projects, under
the 2013 Act, are too subjective and high. It may lead to politicization of land acquisition
process, vested interests controlling the process.

The 2014 ordinance also brings 13 acts through which land can be acquired, in consonance
with the LARR Act 2013.

ANTI - VIEW

The LARR Act 2013 was not an ill-considered piece of legislation, but the final outcome of
almost three decades of debate and consultation within government, among political parties
and between state and civil society. Changing the act, within one year of its passing, does not
augurs well for the democratic process of the country.
 45

There is a little experience of working of the act on ground; it is therefore not acceptable to
call the act retrograde, unacceptable and in need of root-and-branch “reform”.

The exempted five categories of projects includes rural infrastructure, industrial corridors; the
categories are too subjective and may virtually cover every form of land acquisition; leading
to misuse of the act.

Social Impact Assessment is an important tenet of the 2013 act; it is critical to identify all the
land affected people, including the landless working on the fields. Negating the SIA process
is contrary to intentions of the act to be just to all sections of society.

The consultative and participatory acquisition process under the Act drastically reduced the
scope for arbitrary dispossession. It also provided legitimacy to the upcoming projects.

The relaxation of restrictions on acquisition of irrigated multi-cropped land is retrograde from

the point of view of food security of the country

BIBLIOGRAPHY

1. Ghatak,Maitreesh., & Ghosh, Pratikshit. (2011), The Land Acquisition Bill: A

Critique and A Proposal, Centre for Development Economics.
http://www.cdedse.org/pdf/work204.pdf
2. Goswami, Amlanjyoti. (2012). Land Acquisition, Rehabilitation and
Resettlement: Law and Politics, IIHS.
http://iihs.co.in/wpcontent/uploads/2013/11/Land_Acquisition_Law_and_Politics
_Amlanjyoti_Goswami .pdf
3. Jojan, Alphonso. (2012). Of Platitudes and Million-Dollar Promises – A Critique
Of The Land Acquisition, Rehabilitation And Resettlement Bill 2011, JILS.
http://jils.ac.in/wp-content/uploads/2012/09/3_alphonso-jojan-c.pdf
4. Morris, Sebastian., & Pandey, Ajay. (2010). The Question of Land and
Infrastructure Development in India: Urgently Required Reforms for Fairness and
Infrastructural Development, Indian Institute of Management, Ahemdabad.
http://www.iimahd.ernet.in/publications/data/2010-03-02Morris.pdf
 46

5. Morris, Sebastian., & Pandey, Ajay. (2007). Towards Reform of Land Acquisition
Framework in India, Indian Institute of Management, Ahemdabad.
http://www.iimahd.ernet.in/assets/snippets/workingpaperpdf/2007-05
04_Morris.pdf
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Learnings from Cochin International Airport Ltd, India Infrastructure Report.
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9D77708DD9B6.pdf