Amendments to the Land Acquisition Law – The Real Picture
- Arun Jaitley
On December 31, 2014, the Government promulgated the ordinance to amend some provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation (Amendment) Act, 2013. What was the need to amend the 2013 law and what is the effect of these amendments?
It has been repeatedly mentioned that the Land Acquisition Act, 1894 had become obsolete and needed amendment. It indeed had. The compensation provisions in the 1894 Act were highly inadequate and, therefore, it was desirable that higher compensation coupled with a rehabilitation and resettlement package be provided. The 2013 Act did that.
I support the 2013 Act on that ground. However, thirteen Acts of Parliament, which provided for land acquisition, were put in the Fourth Schedule of the Act. Section 105 of the 2013 Act made the provisions of the Act inapplicable to these exempted Acts. The said Section provided that the Government could issue a notification and direct ‘any’ provision of the Act relating to compensation or R&R would be made applicable to the exempted acts.
The “Proposed” notification had to be placed before Parliament for a period of 30 days and Parliament was expected to approve, disapprove or modify the said proposed notification. The need for an ordinance arose because such a notification would have to be put before Parliament in the Budget session itself in July-August, 2014 and the approval or disapproval taken accordingly. 31st December, 2014 being the last day for such a notification, the Government decided to amend the Section 105 and apply all the compensation and R&R provisions of the 2013 Act to the thirteen exempted laws.
Through this provision the present ordinance provides that the farmers’ would get higher compensation if land is acquired under any of the exempted laws. It goes a step further than the 2013 Act itself. This also explains the urgency of issuing the ordinance on the last day of the year since otherwise the Government would have been in default of the complicated approval provisions outlined in the 2013 Act.
The 2013 Act provided for consent of the land owner in varying percentages in a number of cases. It is only when the land owner’s give consent that their land be acquired and the Government can initiate the acquisition process. Thereafter, the Act provided for a detailed social impact study. It further provided for special provisions with regard to food security.
Historically the power to acquire the land is a sovereign power. The State needs land for any form of development. Land is required for housing, townships, urbanization, sub-urbanisation, industrialization, infrastructure, both urban and rural, irrigation and defence of India. This list would be endless.
A larger public interest always prevails over private interest. However, the land owner who loses the land has to be more than adequately compensated. A highly complicated process of acquisition which renders it difficult or almost impossible to acquire land can hurt India’s development. When the 1894 law is amended in the 21st century, it must provide for a 21st century compensation and cater to the developmental needs of the 21st century. It cannot completely ignore the developmental needs of the society and mandate that India does not grow.
The present amendment carves out five exceptions for which this complicated process of acquisition will not apply. However, the compensation provisions remain untouched. The five exempted purposes are discussed herein below:
- The defence and security of India has been made an exempted purpose. The 2013 Act completely ignored it.
- Rural infrastructure, including electrification, is an exempted purpose. Roads, highways, flyover, electrification and irrigation will all add to the value of the farmer’s lands. This exemption is entirely in the interest of rural India.
- Affordable housing and housing for poor is an exempted purpose. Migration from rural areas to urban and sub-urban centers where employment opportunities are available, is a reality. It is the migrants from rural areas who would benefit from this exception.
- Industrial corridors which run for a narrow distance alongwith various highways, give a fillip to the entire development of those rural areas. A Delhi-Mumbai industrial corridor would benefit thousand of villages while running alongwith national highway. There could not be a greater opportunity for the rural areas than an industrial corridor running close to agricultural lands. This would generate employment opportunities and enhance the value of the land itself.
- Infrastructure and social infrastructure projects, including those under public private partnership, where ownership of the land vests with the Governments. This is bound to benefit the entire country, particularly the people in rural areas where infrastructure and social infrastructure is inadequate.
Almost all the exempted purposes benefit rural India. They would enhance the value of land, create employment and provide rural areas with better infrastructure and social infrastructure. This is in addition to the enhanced compensation and R&R provisions being expanded to the thirteen exempted acts.
The amendment, therefore, balances the developmental needs of India, particularly rural India, while still providing enhanced compensation to the land owners. Will the State Governments ruled by political parties, which are opposed to this ordinance, publically declare that they will not use the law which provides for enhanced compensation in the case of exempted acts and acquisition process which balances the developmental needs of society, particularly those of poor, weaker sections, rural India alongwith defence requirements of the country?
This 2013 Act had over 50 drafting errors. The provision with regard to the rectification of errors will be used to cure most of them. Some are being cured through this ordinance which alters the earlier mandate of the 2013 law that unused land has to be returned five years after the acquisition. The earlier provision was clearly defective. Creation of smart cities, townships, industrial corridors, business centers, defence projects, cantonments, ports, nuclear installations, building of highways, irrigation projects, dams have a long gestations period. They cannot be completed in five years. If the earlier provision is to be effected, we would be a nation of incomplete projects on account of defective legislative drafting.
The draft provisions of the 2013 Act enthusiastically provide that no part of an acquired land could be used for a private educational institution or a hospital. How will new smart cities and townships come up? Will they only have a civil hospital and a Government school/ college and no other healthcare and educational institutions will be allowed to be established there? The ordinance permits hospitals and educational institutions to be established on an acquired land. That is the purpose of acquisition for townships. A township without a social infrastructure would be inherently incomplete.
The needs of a modern growing and developing India need a balanced approach. Development and justice to the land owner must coexist. One cannot be done at the cost of the other. The amendment ordinance is based on extensive consultations where State Government of most political parties supported these changes. Those who are opposed to it can certainly mandate their party’s State Governments not to use the provisions of the ordinance. History will judge how these States will lose out in the era of competitive federalism.
Land Acquisition: An overview of proposed amendments to the law-The PRS Blog
On March 10, Lok Sabha passed a Bill to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Bill is now pending in Rajya Sabha. This blog briefly outlines the context and the major legislative changes to the land acquisition law.
Till 2014, the Land Acquisition Act, 1894 regulated the process of land acquisition. While the 1894 Act provided compensation to land owners, it did not provide for rehabilitation and resettlement (R&R) to displaced families. These were some of the reasons provided by the government to justify the need for a new legislation to regulate the process of land acquisition. Additionally, the Supreme Court had also pointed out issues with determination of fair compensation, and what constitutes public purpose, etc., in the 1894 Act. To this end, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was passed by Parliament, in 2013.
In addition to the 2013 Act, there are certain other laws which govern land acquisition in particular sectors, such as the National Highways Act, 1956 and the Railways Act, 1989. The 2013 Act required that the compensation and R&R provisions of 13 such laws be brought in consonance with it, within a year of its enactment, (that is, by January 1, 2015) through a notification. Since this was not done by the required date, the government issued an Ordinance (as Parliament was not in session) to extend the compensation and R&R provisions of the 2013 Act to these 13 laws. However, the Ordinance also made other changes to the 2013 Act.
The Ordinance was promulgated on December 31, 2014 and will lapse on April 5, 2015 if not passed as a law by Parliament. Thus, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 has been introduced in Parliament to replace the Ordinance. The Bill has been passed by Lok Sabha, with certain changes, and is pending in Rajya Sabha. The next section outlines the major changes the Bill (as passed by Lok Sabha) proposes to make to 2013 Act.
The government has stated that these exemptions are being made in order to expedite the process of land acquisition in these specific areas. However, the opponents of the Bill have pointed out that these five exempted categories could cover a majority of projects for which land can be acquired, and consent and SIA will not apply for these projects.
- The Bill replaces the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014.
- The LARR Act, 2013 outlines the process to be followed when land is acquired for a public purpose. Key changes made by the Bill are:
- Provisions of other laws in consonance with the LARR 2013: The LARR Act, 2013 exempted 13 laws (such as the National Highways Act, 1956 and the Railways Act, 1989) from its purview. However, the LARR Act, 2013 required that the compensation, rehabilitation, and resettlement provisions of these 13 laws be brought in consonance with the LARR Act, 2013, within a year of its enactment (that is, by January 1, 2015), through a notification. The Bill brings the compensation, rehabilitation, and resettlement provisions of these 13 laws in consonance with the LARR Act, 2013.
- Exemption of five categories of land use from certain provisions: The Bill creates five special categories of land use: (i) defence, (ii) rural infrastructure, (iii) affordable housing, (iv) industrial corridors, and (v) infrastructure projects including Public Private Partnership (PPP) projects where the central government owns the land.
- The LARR Act, 2013 requires that the consent of 80% of land owners is obtained for private projects and that the consent of 70% of land owners be obtained for PPP projects. The Bill exempts the five categories mentioned above from this provision of the Act.
- In addition, the Bill permits the government to exempt projects in these five categories from the following provisions, through a notification:
- The LARR Act, 2013 requires that a Social Impact Assessment be conducted to identify affected families and calculate the social impact when land is acquired.
- The LARR Act, 2013 imposes certain restrictions on the acquisition of irrigated multi-cropped land and other agricultural land. For example, irrigated multi-cropped land cannot be acquired beyond the limit specified by the appropriate government.
- Return of unutilised land: The LARR Act, 2013 required land acquired under it which remained unutilised for five years, to be returned to the original owners or the land bank. The Bill states that the period after which unutilised land will need to be returned will be: (i) five years, or (ii) any period specified at the time of setting up the project, whichever is later.
- Time period for retrospective application: The LARR Act, 2013 states that the Land Acquisition Act, 1894 will continue to apply in certain cases, where an award has been made under the 1894 Act. However, if such an award was made five years or more before the enactment of the LARR Act, 2013, and the physical possession of land has not been taken or compensation has not been paid, the LARR Act, 2013 will apply.
- The Bill states that in calculating this time period, any period during which the proceedings of acquisition were held up: (i) due to a stay order of a court, or (ii) a period specified in the award of a Tribunal for taking possession, or (iii) any period where possession has been taken but the compensation is lying deposited in a court or any account, will not be counted.
- Other changes: The LARR Act, 2013 excluded the acquisition of land for private hospitals and private educational institutions from its purview. The Bill removes this restriction.
- While the LARR Act, 2013 was applicable for the acquisition of land for private companies, the Bill changes this to acquisition for ‘private entities’. A private entity is an entity other than a government entity, and could include a proprietorship, partnership, company, corporation, non-profit organisation, or other entity under any other law.
- The LARR Act, 2013 stated that if an offence is committed by the government, the head of the department would be deemed guilty unless he could show that the offence was committed without his knowledge, or that he had exercised due diligence to prevent the commission of the offence. The Bill replaces this provision and states that if an offence is committed by a government official, he cannot be prosecuted without the prior sanction of the government.