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Analysis Of Land Acquisition, Compensation And Consequences: Nhai Projects

Constitution And Land Acquisition
Over the next thirty years, constituent rules were progressively chipped away, culminating with the Forty-Fourth Amendment Act 1978 by which Articles 19(1)(f) and Article 31 were deleted from the Indian Constitution. The Forty-Fourth Amendment, having removed property as a fundamental right also located it as a much weaker statutory right in Article 300-A, where it now reads, as No person shall be deprived of his property save by authority of law.

Among other things, a particularly profound significance of this action is that by removing the right to property as a fundamental right, no one has the right to approach the Supreme Court under Article 32 (this Article confers the right to approach the Supreme Court if it is felt that one's fundamental rights are being violated) if the right to property is violated. In other words, currently, any violation of the right to property in India cannot be questioned as a constitutional issue. Before the Forty-Fourth Amendment, a series of Constitutional Amendments the First[20], Fourth[21], Seventeenth[22] and Twenty-Fifth[23] Amendments, to name the major alterations relating to property, preceded the apogee manifest in the Forty-Fourth Amendment.

In the recent case of K.T. Plantation (P) Ltd. v. State of Karnataka[24], the Supreme Court enshrines public purpose and compensation as within the purview of Article 300A when the State acquires land. In other words, both public purpose and compensation have been read into the language of Article 300A. This means reading Eminent Domain[25] (State shall take property by: 1. For Public Use, 2. Just Compensation, and 3. Due Process) into Article 300-A. In the KT Plantation case, the five-judge bench of the Supreme Court, headed by the Chief Justice, also stated variously that the meaning of Article 300A was that a person cannot be deprived of his property merely by executive fiat, without any specific legal authority or without the support of law made by competent legislature

Article 300A therefore protects private property against executive action� but the question looms large as to what extent their rights will be protected when they are sought to be illegally deprived of their properties on the strength of legislation� that law has to be reasonable. It must comply with the other provisions of the Constitution. The limitation or restriction should not be arbitrary or excessive or beyond what is required in public interest� not disproportionate to the situation or excessive� violation must be of such a serious nature which undermines the very basic structure of the Constitution and our democratic principles.

Important Definitions
The Act defines the following as land owner:
  • a person whose name is recorded as the owner of the land or building or part thereof, in the records of the authority concerned; or
  • a person who is granted forest rights under The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 or under any other law for the time being in force; or
  • A person who is entitled to be granted Patta rights on the land under any law of the State including assigned lands; or
  • any person who has been declared as such by an order of the court or Authority;
Under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (RFCTLARR), the term "affected persons" is not explicitly defined as a specific category. Instead, the Act outlines four main categories of individuals who are entitled to compensation and rehabilitation and resettlement (R&R) benefits. These categories are:
  1. Affected families: This category typically includes households or families whose land or livelihoods are directly impacted by the land acquisition process. They may face displacement, loss of livelihoods, or other adverse effects due to the acquisition of their land.
  2. Displaced families: These are families who are physically displaced from their land or residences due to the acquisition process. They may be required to relocate to make way for the development project, and they are entitled to compensation and resettlement assistance to support their relocation and rehabilitation.
  3. Landowners: The definition of "landowner" under the RFCTLARR or LRRA Act is inclusive and encompasses various types of individuals who have rights or interests in the land being acquired. This category includes:
    1. Owners of land or buildings recorded in the records of the concerned authority.
    2. Individuals declared as landowners by a court or authority.
    3. Grantees of forest rights under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.
    4. Persons entitled to be granted patta rights (land title) under any law, including assigned land.
  4. Persons interested: This category typically includes individuals who have an interest in the land being acquired, such as tenants, leaseholders, mortgagees, or other parties with legal or beneficial interests in the land. They are entitled to compensation for the loss of their interests in the acquired land.
The definition of "landowner" under the RFCTLARR Act or LRRA act is relatively clear and inclusive, encompassing various types of individuals who have rights or interests in the land. However, the definition of "affected families" is more inclusive and may encompass a broader range of individuals and households affected by the acquisition process.

Definition of public purpose� for Land Acquisition
Section 2 (1) of the Act[31] defines the following as public purpose[32] for land acquisition within India:
  1. For strategic purposes relating to naval, military, air force, and armed forces of the Union, including central paramilitary forces or any work vital to national security or Defence of India or State police, safety of the people; or
  2. For infrastructure projects, which includes the following, namely:
    • All activities or items listed in the notification of the Government of India in the Department of Economic Affairs (Infrastructure Section) number 13/6/2009- INF, dated 27 March 2012, excluding private hospitals, private educational institutions and private hotels;
    • Projects involving agro-processing, supply of inputs to agriculture warehousing, cold storage facilities, marketing infrastructure for agriculture and allied activities such as dairy, fisheries, and meat processing, set up or owned by the appropriate Government or by a farmers' cooperative or by an institution set up under a statute;
    • Project for industrial corridors or mining activities, national investment and manufacturing zones, as designated in the National Manufacturing Policy;
    • Project for water harvesting and water conservation structures, sanitation;
    • Project for Government administered, Government aided educational and research schemes or institutions;
    • Project for sports, health care, tourism, transportation of space programme;
    • Any infrastructure facility as may be notified in this regard by the Central Government and after tabling of such notification in Parliament;
  3. Project for project affected families;
  4. Project for housing, or such income groups, as may be specified from time to time by the appropriate Government;
  5. Project for planned development or the improvement of village sites or any site in the urban areas or provision of land for residential purposes for the weaker sections in rural and urban areas;
  6. Project 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 undertaken by the Government, any local authority or a corporation-owned or controlled by the State.

When the government declares public purpose and shall control the land directly, consent of the land owner shall not be required. However, when the government acquires the land for private companies, the consent of at least 80% of the project-affected families shall be obtained through a prior informed process before the government uses its power under the Act to acquire the remaining land for the public good, and in case of a public-private project, at least 75% of the affected families should consent to the acquisition process.[33] The Act includes an urgency clause for expedited land acquisition. The urgency clause may only be invoked for national defence, and security and in the event of rehabilitation of affected people from natural disasters or emergencies.

Highlights Of The Act, 2013:

  • The Act provides for land acquisition as well as rehabilitation and resettlement[34]. It replaces the Land Acquisition Act of 1894.
  • The process for land acquisition involves a Social Impact Assessment survey[35], preliminary notification stating the intent for acquisition, a declaration of acquisition, and compensation to be given by a certain time. All acquisitions require rehabilitation and resettlement to be provided to the people affected by the acquisition.
  • Compensation for the owners of the acquired land shall be four times[36] the market value[37] in the case of rural areas and twice in the case of urban areas[38].
  • In case of acquisition of land for use by private companies or public-private partnerships, consent of 80 per cent of the displaced people will be required. The purchase of large pieces of land by private companies will require the provision of rehabilitation and resettlement.
  • The provisions of this act shall not apply to acquisitions under 16 existing legislations including the Special Economic Zones Act, 2005, the Atomic Energy Act, 1962, the Railways Act, 1989, etc[39]

Process Of Land Acquisition:

  • The government shall conduct a Social Impact Assessment[40] (SIA) study, in consultation with the Gram Sabha in rural areas (and with equivalent bodies in case of urban areas). After this, the SIA report shall be evaluated by an expert group. The expert group shall comprise two non-official social scientists, two experts on rehabilitation, and a technical expert on the subject relating to the project. The SIA report will be examined further by a committee to ensure that the proposal for land acquisition meets certain specified conditions.
  • A preliminary notification indicating the intent to acquire land must be issued within 12 months[41] from the date of evaluation of the SIA Report. Subsequently, the government shall conduct a survey to determine the extent of land to be acquired. Any objections to this process shall be heard by the Collector[42]. Following this, if the government is satisfied that a particular piece of land must be acquired for public purposes, a declaration to acquire the land is made. Once this declaration is published, the government shall acquire the land. No transactions shall be permitted for the specified land from the date of the preliminary notification until the process of acquisition is completed.
  • In case of urgency[43], the above provisions are not mandatory. The urgency clause may be used only for Defence, national security, and in the event of a natural calamity. Before taking possession of land in such cases, 80 per cent of the compensation must be paid.

Compensation To The Landowners
The compensation for land acquisition is determined[44] by the Collector and awarded[45] by him to the land owner within two years from the date of publication of the declaration of acquisition. The process of determination of compensation is given below.
  • First, the market value of the acquired land is computed as the higher of:
    1. The land value specified in the Indian Stamp Act, 1899 for the registration of sale deeds; or
    2. The average of the top 50 per cent of all sale deeds in the previous three years for similar types of land situated in the vicinity.
  • Once the market value is calculated, it is doubled for land in rural areas. There is no doubling of value in urban areas. Then, the value of all assets attached to the land (trees, buildings, etc) is added to this amount. On this amount, a 100 per cent solatium (i.e., extra compensation for the forcible nature of acquisition) shall be given to arrive at the final compensation figure.
  • Landowners whose property is acquired using the urgency provisions shall be given an additional 75 per cent of the market value of the land.

Process Of Rehabilitation And Resettlement[46]
  • The Act requires R & R to be undertaken in case of every acquisition.
  • Once the preliminary notification for acquisition is published, an Administrator shall be appointed.
  • The Administrator shall conduct a survey and prepare the R & R scheme.
  • This scheme shall then be discussed in the Gram Sabha in rural areas (equivalent bodies in the case of urban areas).
  • Any objections to the R & R scheme shall be heard by the Administrator.
  • Subsequently, the Administrator shall prepare a report and submit it to the Collector.
  • The Collector shall review the scheme and submit it to the Commissioner appointed for R & R.
  • Once the Commissioner approves the R & R scheme, the government shall issue a declaration identifying the areas required for the purpose of R & R.
  • The Administrator shall then be responsible for the execution of the scheme.
  • The Commissioner shall supervise the implementation of the scheme.
  • In case of acquisition of more than 100 acres, an R & R Committee shall be established to monitor the implementation of the scheme at the project level.
  • In addition, a National Monitoring Committee is appointed at the central level to oversee the implementation of the R & R scheme for all projects.
  • In case the land is being privately purchased (100 acres in rural areas and 50 acres in urban areas), an application must be filed with the Collector who shall forward this to the Commissioner for approval.
  • After the application has been approved, the Collector shall issue awards as per the R & R scheme.

Rehabilitation And Resettlement Entitlements:
  • Every resettled area is to be provided with certain infrastructural facilities. These facilities include roads, drainage, provision for drinking water, grazing land, banks, post offices, public distribution outlets, etc.[47]
  • The Act also provides the displaced families with certain R & R entitlements. These include, among other things,
    • land for a house as per the Indira Awas Yojana[48] in rural areas or a constructed house of at least 50 square meters of plinth area in urban areas;
    • a one-time allowance of Rs. 50,000 for affected families; and
    • The option of choosing either mandatory employment in projects where jobs are being created or a one-time payment of Rs. 5 lakh or an inflation-adjusted annuity of Rs. 2,000 per month per family for 20 years.

Other Provisions:
  • A Land Acquisition and Rehabilitation and Resettlement Authority shall be established for settling any disputes relating to the process of acquisition, compensation, and R & R.
  • There shall be no change of ownership of acquired land without prior permission from the government. Land may not be used for any purpose other than for which it is acquired.
  • Acquired land which has been unused for 10 years from the date of possession shall be returned to the Land Bank of the government. If any unused acquired land is transferred to another individual, 20 per cent of the appreciated land value shall have to be shared amongst the original landowners.
  • The government may temporarily occupy and use any piece of waste or arable land for a public purpose. This occupation may be for a period of not more than three years. The compensation of such land may be decided mutually by the owner of the land and the Collector. Any disagreement on matters relating to compensation or the condition of the land on being returned shall be referred to the Land Acquisition and R & R Authority.
  • In any district, land acquisition will be restricted to a maximum of five per cent of irrigated multi-crop land.
  • The provisions of this act shall not apply to land acquisition under 16 existing laws. These include- The SEZ Act, of 2005, the Atomic Energy Act, of 1962 and the National Highways Act, of 1956.

The Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation And Resettlement Act, 2013 & Land Acquisition Act Of 1894
Under our Constitution, land is a state subject[50] but land acquisition is a Concurrent subject[51]. So far, the basic law governing the land acquisition process has been the Land Acquisition Act, of 1894. Although it has been amended from time to time, it is painfully evident that the basic law has become archaic.

In order to cope with the anarchic Land Acquisition Act of 1894, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 has been introduced after a lot of hue and cry in the public domain. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 seeks to balance the need for facilitating land acquisition for various public purposes including infrastructure development, industrialization and urbanization, while at the same time meaningfully addressing the concerns of farmers and those whose livelihoods are dependent on the land being acquired.

The issue of who acquires land is less important than the process of land acquisition, compensation for land acquired and the Rehabilitation and Resettlement process, package and conditions. The new Act has been enacted with a view that in every case, land acquisition must take place in a manner that fully protects the interests of land-owners and also of those whose livelihoods depend on the land being acquired. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 introduced various safeguards in order to maintain transparency in the procedure of Land Acquisition.

Some of those safeguards are:
Firstly, in the original Land Acquisition Act (1894), there was no requirement of any consent from the original landowner in acquiring his/her land. But as per this The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, consent of 70% of the landowners is required before acquiring land for a public-private partnership� project, while consent of 80% of the landowners is required before acquiring land for a private� project. Land can be acquired for public purpose� only, where public purpose refers to several development projects: mining, infrastructure, defence, roads, railways, ports etc.

Secondly, Under the Land Acquisition Act (1894), an Urgency Clause� could be used to acquire land overnight without any basis. However, a proper procedure is designed under The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 for both the procedure of acquisition of land and of awarding compensation and rehabilitation and resettlement award by an authority as designated by the government under the Act.

Thirdly. As per the Land Acquisition Act (1894), nobody was affected by the land acquisition process, be they the landowners or those whose occupations were dependent on the land originally or even those whose lives or livelihoods were to be affected by the project for which land is acquired in future for a variety of reasons (such as land, water and/or air pollution) would be compensated. This Act provides a monetary compensation of up to four times the market value in rural areas, and up to two times the market value in urban areas for farmers/landowners. Compensation is also to be provided for the market price of the buildings standing on the land, and also a solatium amount is to be provided to farmers in case they are losing standing crops on account of the acquisition process.

Fourthly, Under the Land Acquisition Act (1894), again no provision was there for rehabilitation or resettlement of those who would be losing their ownership of land or livelihoods associated with the land acquired for any project. However under The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, several provisions have been made for the rehabilitation and resettlement of all those affected by land acquisition in any manner (loss of ownership and/or loss of livelihoods).

Fifthly, a major point in The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is that on the lines of Environmental Impact Assessment done before obtaining environmental clearances from the Ministry of Environment and Forests, the Act require that a Social Impact Assessment be done by an Expert Group appointed by the respective State government. The Expert Group can ask for land acquisition not to be done provided it is satisfied that the project is not in public interest, the costs outweigh the benefits or it does not serve the stated public purpose. The Expert Group has to assess the impact of the project on various things such as grazing land, transport, housing, lives of people, their occupations, their ownership, their economic conditions, physical infrastructure (drainage, roads, water availability, sanitation etc.) and many other things. A public hearing must also be held prior to the final Social Impact Assessment report formed, which should also include the minutes of the hearing.

Sixthly, Under the Land Acquisition Act (1894) if project did not start, then acquired land was secretly sold/Leased to private players at sky-high prices. But such practice has been done away under The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Under the Act, if the project doesn't start in 5 years, land has to be returned to the original owner.

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