The LA Act did not place any obligation of resettlement or rehabilitation on the Government or to provide an adequate compensation to the landowners, which led to multiple litigations against the acquisitions made under the LA Act.

Acquisitions under the LA Act have led to protests and opposition from time to time, owning to the blatant disregard for the rehabilitation of the affected families in such acquisitions, sometimes leading to the proposed projects being stalled or abandoned. Certain significant instances of which are, the protest against the land acquisition in Singur, West Bengal for the Tata Nano factory, the acquisition of land in Gujarat for the Sardar Sarovar Dam, the acquisition of the land for the Vedanta mines in Odisha,  the acquisition of land for the development of the Posco port and steel plant, the acquisition of land at Nanar, a village in Ratnagiri district, Maharashtra for developing oil refinery last year and seeking revision in compensation offered for rehabilitation of landowners for the acquisition of land for development of airport at Jewar in Gautam Buddh Nagar, Uttar Pradesh. In fact, in the case of Ramji Veerji Patel & Ors  v. Revenue Divisional Officer& Ors.^[1], the Hon’ble Supreme Court of India observed that, “…The provisions contained in the Act, of late, have been felt by all concerned; do not adequately protect the interest of the land owners/persons interested in the land. The Act does not provide for rehabilitation of persons displaced from their land although by such compulsory acquisition, their livelihood gets affected. For years, the acquired land remains unused and unutilized. To say the least, the Act has become outdated and needs to be replaced at the earliest by fair, reasonable and rational enactment in tune with the constitutional provisions…”. (Emphasis Supplied)

The New LA Act

In 2013, the New LA Act was passed which brought radical reforms in the process of land acquisition in order to protect the rights of vulnerable communities of landowners against arbitrary acquisition.

Brief overview of the key changes introduced by the New Act:

Definition of public purpose

Both the LA Act and the New LA Act provide for acquisition of land to serve public purpose, and while both the LA Act and the New LA Act define ‘public purpose’, the term ‘public purpose’ had a very wide purport under the LA Act. Prior to the New LA Act, the interpretation of the term ‘public purpose’ (in the context of land acquisition) by the Courts in India significantly contributed to regulation of land acquisition by the Government. For instance, a Constitutional bench in the case of Somawanti & Ors vs State of Punjab^[2] held that the Government would be the one to determine whether a specific purpose fell within the ambit of the phrase ‘public purpose’.

The New LA Act put end to the ambiguity in this regard by comprehensively defining the term ‘public purpose’ and thus providing a basis for the initial evaluation by the Government with regard to the necessity and impact of a proposed acquisition of land.

Steps to be undertaken prior to issuance of the preliminary notification for land acquisition for public private partnership and private company projects

The New LA Act distinguishes between acquisition of land for the purpose of public private partnership or private company projects and acquisition of land for the purpose of use by the Government and prescribes certain steps for the Government to conduct the social impact assessment of a proposed acquisition. This process also includes a public hearing at the affected areas to record views of the affected families. A social impact management plan is prepared to identify measures to ameliorate impact of the proposed acquisition, covering components such as livelihood of the affected families, infrastructure, public transport, drainage, water resources, public utilities, to name a few.

However, certain State Government have mis-utilized their power to notify the rules or made state specific amendments to the New LA Act diluting its provisions. For example, an amendment passed by the legislature in the State of Maharashtra, land acquisitions under Maharashtra Industrial Development Act have been exempted from the provisions of the New LA Act; and in the State of Karnataka, multiple Government authorities, continue to acquire land under specific statutes that govern these authorities and not in accordance with the New LA Act, despite not being in the list of the exempted legislations as mentioned in the New LA Act.

Compensation to landowners

While both, the LA Act and the New LA Act mention market value and certain other parameters, for arriving at the compensation payable, the New LA Act has further elaborated on the concept of ‘market value’ by providing a detailed mechanism for determination of market value resulting in fair compensation to the landowners. In addition to this, the New LA Act also provides for a solatium of one hundred percent (100%) of the market value to the landowner. These parameters provide the much required guidance for arriving at a fair and just compensation to the landowners.

Rehabilitation and Resettlement of landowners

The framework introduced by the New LA Act, provides that in addition to compensation, landowners and affected families are also entitled to rehabilitation and resettlement benefits, which was unaddressed in the LA Act. Based on assimilation of assessment of factors like loss of livelihood; affected public utilities; resources of common property being acquired etc., a rehabilitation and resettlement scheme is prepared. To ensure that these benefits in fact reach the landowners, the New LA Act prescribes that possession by Collector can only be taken after full payment of compensation as well rehabilitation and resettlement entitlements.

Food security

The New LA Act prohibits acquisition of irrigated multicrop land, unless the acquisition is under exceptional circumstances as a last resort. Even in case such a land is acquired, either an equivalent area of cultivable wasteland is required to be developed for agricultural purposes, or an amount equivalent to the value of land is to be deposited with the Government for investment in agriculture for enhancement of food security.

Lapse of proceedings commenced under the LA Act

The New LA Act envisages lapse of acquisition proceedings initiated under the LA Act under certain circumstances. In case land acquisition proceedings under the LA Act have been initiated, but no award under the LA Act has been passed, the provisions of New LA Act in relation to determination of compensation shall be deemed to apply and in cases where the award under the LA Act has been made five (5) years prior to the commencement of the New LA Act, but physical possession of the land has not been taken by the Government ‘or’ compensation has not been paid, acquisition shall be deemed to have been lapsed. In such a circumstance, the Government can choose to initiate fresh land acquisition proceedings under the New LA Act.

The Supreme Court while interpreting this provision, in its order dated March 6, 2020^[3] clarified that word “or” in the relevant provision in the New LA Act should be read as “and”, this means that the proceedings under the LA Act will lapse only if there is failure to take possession “and” failure to pay compensation.

The New LA Act also provides that if land acquired remains unused for a period of five (5) years from the date of taking over of possession by the Government, then such land needs to be returned to the landowners or their heirs.

Shortcomings of the New LA Act

Inspite of this beneficial legislation which aims at making acquisition of land by the Government a just and fair process, the New LA Act still falls short on certain aspects. For instance, the consent of the affected families is only required when the acquisition is for a public private partnership project or a private company, and not for the acquisition by the Government itself. Further, the timelines proposed in the New LA Act envision a long period of time for the acquisition of land, which poses a disadvantage.

Conclusion

While the landowners and the affected families are entitled to a comprehensive compensation package which encompasses monetary compensation, rehabilitation as well as resettlement, as provided by the New LA Act, the courts in India are still in process of aiding the evolution of interpretation and enforcement of the New LA Act by construing its provisions harmoniously to vest the benefits of the legislation to its ultimate beneficiaries, that is, the landowners and their families. This should pave the way to striking a balance between the interests of the landowners and their families on the one hand and acquisition of land by the Government to serve public purpose on the other hand.

Footnote

[1] 2012 (2) ALD1 (SC )

[2] (1963) 2 SCR 774

[3] 2020 SCC Online SC 316

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