The Evolution on Recognition Of Land Rights in India: A Study of Legislations Pertaining to Acquisition of Land

Authored by: Hitabhilash Mohanty & Susampad Hota

DEVELOPMENT OF LAW FOR LAND ACQUISITION

The first land acquisition legislation in India was enacted by the British government in 1824.[1] It enabled the British government to “obtain, at a fair valuation of land or other immovable property required for developmental works such as building of roads, canals and other public purposes. The Bengal Regulation I of 1824 was replaced by Act I of 1850, by which the provision for land acquisition was extended to Calcutta town. By 1857, various laws on land acquisition were consolidated as Act VI of 1857 and it was made applicable to the whole of British India. The 1857 Act was replaced by the Land Acquisition Act (Act X of 1870). However, as noted by the Hon’ble Supreme Court in RadheyShyam(D) Through LRs and Others v. State of U.P. and Others[2], the Act was made ineffective. The Act of 1870 was repealed and the Land Acquisition Act, 1894 (Act I of 1894) which was said to be enacted for the purpose of facilitating acquisition of private land by the Government for public purposes. After India gained independence in 1947, it adopted the Land Acquisition Act of 1894 by the “Indian Independence (Adaptation of Central Acts and Ordinances) Order” in 1948.

Since 1947, land acquisition in India has been done through the British-era act. It was in 1998 that the rural development ministry initiated the actual process of amending the act. The Congress-led United Progressive Alliance (UPA) in its first term (2004-09) sought to amend the act in 2007 introduced a bill in parliament. It was referred to the standing committee on rural development, and subsequently, cleared by the group of ministers in December 2008, just ahead of its eventual passage. The 2007 amendment bill was passed in Lok Sabha as the “Land Acquisition (Amendment) Act, 2009″ in February 2009, and the UPA returned to power for a second term in May that year. However, with the dissolution of the 14th Lok Sabha soon after, the bill lapsed. The government did not have the required majority in the Rajya Sabha to pass the bill.

The Bill of 2007 called for a mandatory Social Impact Assessment (SIA) study in case of large-scale “physical displacements” in the process of land acquisition.[3] The act ensured the eligibility of tribals, forest-dwellers and persons having tenancy rights under the relevant state laws. As per the bill, while acquiring the land, the government had to pay for loss or damages “caused to the land and standing crops in the process of acquisition” and additionally, the costs of resettlement and rehabilitation of affected persons or families. This cost or compensation would be determined by the “intended use of the land” and as per prevailing market prices.

The above mentioned Bill of 2007 in 2011 as the “Land Acquisition Rehabilitation and Resettlement Bill, 2011″ or LARR, 2011.[4] The bill proposed that for a private project, land could be acquired only if 80% of the affected families agree to its acquisition.[5] For a public-private partnership (PPP) project, 70% affected families must agree. Besides, it proposed compensation for the affected parties—four times the market rate in rural areas and two times of the market rate in urban areas. It also sought to compensate artisans, traders and other affected parties through a one-time payment, even if they didn’t own land in the area considered for acquisition. The bill was passed in August 2013 as “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013″ and came into effect on 1 January 2014.[6]

In 2014, the government stated in Parliament that it is difficult to execute the projects, including the “Make in India” programme, which seeks to revive and boost domestic manufacturing hence, the land acquisition is also central to the government’s thrust in infrastructure development. To facilitate the same, the land acquisition amendment ordinance in December 2014 was framed with a view to introducing legislation in the Budget session of parliament.[7]

Under the proposed 2015 bill, there will be five categories which will be exempt from certain provisions of the previous act, including consent for acquisition. They are: national security and defence production; rural infrastructure including electrification; affordable housing for the poor; industrial corridors; and PPP (public private partnership) projects where the land continues to vest with the central government.[8]

These categories are also exempted from the SIA provisions, as provided for in the 2013 Act.

The 2013 act facilitated land acquisition by private companies, which the 2015 bill has changed to “private entities.” As per its definition, a “private entity” is “an entity other than a government entity” and includes “a proprietorship, partnership, company, corporation, non-profit organisation, or other entity under any other law.”[9]

THE LAND ACQUISITION ACT 1894

This Act was enacted by the British with the definite objective of building infrastructure like railways, roads, bridges, canals, communication network and means to transfer their army and weaponry to different parts of the country. Their basic intention was to extend, control and further consolidate their rule throughout the country. Hence, land belonging to rural landowners was acquired under the Act. The ownership and control of the infrastructure and communication network built after land acquisition remained completely with the Government for utilization in public purpose. After independence, the process of acquisition of land from farmers for building steel plants, fertilizer plants, defence related plants and dams (number of villages were submerged to create dams) continued, all for public purposes. Thereafter, the government entered into housing, urban development and industrial sector and resorted to acquisition of land from farmers for developing housing colonies, laying electricity poles, and industries. All these activities were for public purposes.

In the past few years prior to the enactment of LAAR Act, 2013, large scale acquisition of land has been made for companies under Part VII of the 1894 Act.[10]

DRAWBACKS OF THE ACT

• ‘Urgency clause’ is the most criticised and misused section of the 1894 Act. The blatant misuse of Section 17[11] 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[12] against the proposed land acquisition which is a basic right of the landowner under the principles of Natural justice – ‘audialterem partem’. But there have been a number of cases where various state governments have acquired land by misusing the provision of Section 17(4)[13] 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, the 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. One such example could be traced from the judgment of the Supreme Court in RadheyShyam (D) through LRs and others v. State of U.P. and Others[14] wherein it was 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. A departure 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 the justification put forward by the State should be more rigorous in cases involving the challenge to the acquisition of land.”[15]

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 which are mentioned below:

• – There is no provision for rehabilitation and resettlement of persons displaced due to acquisition of land. This generates a lot of discontentment amongst the people.
• – The compensation paid under the Act is at prevailing circle rates in the area which are not even remotely indicative of the actual rates. As a result the government pays at their own market rate which is nowhere near to the actual prevailing market rates. According to Professor Ram Singh of the Delhi School of Economics:

“Market value is always hard to ascertain. Market rate is decided on the basis of ‘circle rates’ (the registry rate or the stamp duty rate is the minimum rate decided by the government for valuation of land for determining the tax imposed at the time of registration of sale deed of a property), or ‘ sale deeds’ of a similar property, whichever is higher. But people often under quote prices in the sale deeds to avoid paying a high tax. As a result, the government only pays a certain amount as compensation, which is well below the market price of the property.”[16]

• – Once the government develops an intention that a particular piece of land may be acquired, nothing can stop the government from acquiring that land without sparing any thought for the person whose land is being acquired. The individual so deprived cannot go to the Court and seek injunction against the proposed acquisition. What he can do is file objections in the written form under Section 5A and to appear before the Collector under Section 5A (2). The Collector shall prepare a report on the basis of his objections which shall be submitted to the appropriate government, the decision of the appropriate government shall be final. The government can overrule the objections on the ground that land is required for a public purpose under Section 6. Thereafter, the acquisition cannot be challenged. The landowner can only challenge the amount of compensation decided by the government. Under the Act, the collector’s award of compensation is final, unless altered by a decree of a Civil Court in a regular suit.

In Rajiv Saran v. State of Uttarakhand[17] the Constitution Bench of the Supreme Court held:

“The incident of deprivation of property within the meaning of Article 300A of the Constitution normally occurred mostly in the context of public purpose. Clearly, any law, which deprives a person of his private property for private interest, will be amenable to judicial review. In just sixty years, though the concept of public purposes has been given quite interpretation, nevertheless, the “public purpose” remains the most important condition in order to invoke Article 300A of the Constitution.”[18]

Finally, the Supreme Court in Ramji Veerji Patel and Others v. Revenue Divisional Officer[19] held that:

“The provisions contained in the Act, of late, have been felt by all concerned, do not adequately protect the interest of the landowners/persons interested in the land. The Act does not provide for rehabilitation of persons displaced from their land although by such compulsory acquisition, their livelihood gets affected. For years, the acquired land remains unused and unutilised. To say the least, the Act has become outdated and needs to be replaced at the earliest by fair, reasonable and rational enactment in tune with the constitutional provisions, particularly, Article 300A of the Constitution. We expect the lawmaking process for a comprehensive enactment with regard to acquisition of land being completed without any unnecessary delay.”[20]

NEED FOR NEW LAND ACQUISITION ACT 

The Government of India believed that a combined law was necessary, one that requires rehabilitation and resettlement necessarily and simultaneously to follow the government acquisition of land for public purposes.

Hence, the 44^th Amendment Act of 1978 omitted article 19 (1) (f)[21] with the net result being:-

The right not to be deprived of one property saved by authority of law has since been no longer a fundamental right. property saved by authority of law. the amendment ensure that the right to property is no more a fundamental right but rather a constitutional legal right and statutory write and in the event of preach the remedies available to decrease percent is too high court under article 226 of Indian Supreme court under article 32 of the Constitution

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[1]The Bengal Resolution I of 1824, the law applied “to the whole of Bengal province subject to the presidency of Fort William.

[2]Division Bench comprising S Sighvi and Asok Kumar GangulyRadheyShyam(D) Through LRs and others v. State of U.P. and others Civil Appeal No. 3261 decided on April 15, 2011.

“The history of land acquisition shows that in Eighteenth century, Bengal Regulation I of 1924, Act I of 1850, Act VI of 1857, Act XXII of 1863, Act X of 1870, Bombay Act XXVIII of 1839, Bombay Act XVII of 1850, Madras Act XX of 1852 and Madras Act I of 1854 were enacted to facilitate the acquisition of land and other immovable properties for roads, canals and other public purposes by paying the amount to be determined by Arbitrators. The Act of 1870 provided for proper valuation of the acquired land. In case of a dispute on the amount offered in lieu of acquisition, the Collector could make a reference to the Civil Court who were assisted by the assessors. In case of disagreement between the Civil Court and assessors, then an appeal can be filed in the High Court. The mechanism proved ineffective because a lot of time was consumed in litigation.”

[3]Insertion of new section 3A vide Clause 8 of the Land Acquisition (Amendment) Bill, 2007, Bill No. 97 of 2007. Mandatory Social Impact Assessment (SIA) prior to acquisition of land under this Act.

[4]The Land Acquisition, Rehabilitation And Resettlement Bill, 2011 introduced in Lok Sabha, Bill No. 77 of 2011

[5]Statement of Objects and Reasons, Bill of 2011 at page 44. Available at https://www.prsindia.org/sites/default/files/bill_files/Land_Acquisition%2C_Rehabilitation_and_Resettlement_Bill_2011.pdf

“Public purpose” has been comprehensively defined, so that Government intervention in acquisition is limited to defence, certain development projects only. It has also been ensured that consent of at least 80 per cent.”

[6]Enacted by Parliament of India on 1^st January 2014 vide Bill Citation No. 77-C of 2011.

[7]The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015, Bill Citation No. 152 of 2015.

[8]Amendment of Section 2 of LAAR Act, 2013 vide Clause 3 of the Bill of 2015.

[9]Ibid at page 5 available at

https://www.prsindia.org/uploads/media/Land%20and%20R%20and%20R/LARR%20(2nd%20A)%20Bill,%202015.pdf.

[10]Part VII of the 1894 Act provides for the Acquisition of Land for Companies. (Sections 38A-44B)

[11]Section 17- Special powers in cases of urgency. Clause (1) In cases of urgency, whenever the [appropriate Government] so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub-section (1), [take possession of any land needed for a public purpose]. Such land shall thereupon [vest absolutely in the [Government]], free from all encumbrances.

[12]Section 5A- Hearing of objections. Clause (1) Any person interested in any land which has been notified under section 4, sub-section (1), as being needed or likely to be needed for a public purpose or for a company may, [within thirty days from the date of the publication of the notification], object to the acquisition of the land or of any land in the locality, as the case may be.

[13]Section 17(4) – In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub-section (1) or sub-section (2) are applicable, the provisions of section 5A shall not apply where the appropriate Government so directs to where possession of the land has been taken with the consent of the person interested.

[14]Supra Note 2.

[15]Ibid at page 9.

[16]Namita Kohli, “Landing in Trouble”, The Sunday Hindustan Times of India, New Delhi, March 01, 2015, page 4.\

[17]Civil Appeal No. 4772 of 1998 decided on August 09, 2011.

[18]Ibid.

[19]2011 (2) SCALE 364.

[20]Ibid.                                                                         

[21]Vide Clause 2 (ii) of the The Constitution (Forty-Fourth Amendment) Act, 1978 enacted on 30^th April 1979.