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Analysis of the Land Acquisition (Amendment) Bill, 2015

The practice of land acquisition related regulations for public purpose dates back to the British Raj, specifically to the time when the Railways was being constructed in early 1800s. In 1824, the Bengal Resolution was passed to acquire land and compensate the landowners fairly. Laws were passed in Bombay Presidency in 1839 and in Madras Presidency in 1852 to further facilitate the infrastructure development for railways. In 1857 however, a new legislation was drafted that was applicable to whole of India, which was further amended in 1870 wherein a provision for resettlement (and not just compensation) was brought by the British Government1.

Post independence, India was poor country with approximately 65% of the population living in absolute poverty. Urban population was less than 20% of total population2. To put it briefly, India was a country broken and crushed by the looting of British colonialism and imperialism. As such urbanization and industrialization was necessary for rapid development and poverty alleviation.

The Government of India took a socialist approach and attempted to design India as a centrally planned economy along the lines of the model set up by the Union of Soviet Socialist Republics. However unlike in USSR, property rights were a bit stronger and more relevant in India. The right to property was enshrined in the Indian constitution as a fundamental right under Article 31C, but it was disposed off and replaced with a constitutional right to property via Article 300A in the year 1977. This was a result of the more aggressively socialist approach of the then Prime Minister Indira Gandhi3.

The purpose of land acquisition is to allow to government to go ahead with the infrastructure projects which are crucial for a developing economy like India. Although India is no longer a centrally planned economy, land acquisition by the government for the purpose of development remains as relevant as ever. This can be understood from the massive hindrance that the land disputes in India present to the development of infrastructure and public projects in India, which cannot progress and contribute to the growth of economy unless the projects are completed within the stipulated period of time4.

The law passed by the British Raj in 1870 was further amended and finally replaced by Land Acquisition Act, 1894, which was eventually adopted by the Government of India post-independence as well, and remained applicable till 2007, when the then UPA government tried to amend it further. However, the bill introduced to carry out the amendment collapsed with the dissolution of Lok Sabha during the General Elections of 2009.

UPA came back to power in 2009, and in 2011 it introduced the Land Acquisition Rehabilitation and Resettlement Bill, 2011. This Bill was passed in 2013 as the Land Acquisition Act, 2013 which is currently in place. The legislation, called The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, was passed in order to make sure that the government pays off necessary and just compensation to the private individual whose property has been acquired for the purpose of state sanctioned development projects. The contents of the Act including defining what public purpose means, for which the state needs to acquire property from the private individuals.

It also provides for compensation which is fair, as well as rehabilitation and resettlement of the individuals whose property is acquired under the provisions of this Act. The Act states that government can acquire property for public purpose without the consent of the private individual(s) too, although if it has to acquire the property for private enterprise then it needs to obtain the consent of at least 80% of the people affected by the acquisition of the land. The Act also provides an urgency clause that expedites the process, but it can only be invoked under exceptional circumstances relating to national security or natural calamity.

It also provides the definition of a land owner, provides limits on acquisition and largely prohibits acquisition of a land that has multi-crop irrigated area. Only under exceptional cases the government can acquire such a land, even then the government has to develop a similar multi-crop irrigated area. Monetary and other forms of compensation is also described in detail within the Act.

The Act has made a huge impact upon the livelihood of the rural citizens, most of whom depend on farmlands for their livelihood. As per NSSO report dated 2015, more than half of Indian households depend on agriculture 5. The Act provides for benefiting the people who are dependent on agriculture via compensation derived from non-agricultural sectors, i.e., a redistribution mechanism.

The Act provides the effected families with jobs (1 per family), new land for rehabilitation purposes, as well as monetary aid for transportation and resettlement and additional benefits too in case of Scheduled Caste/Scheduled Tribe families. Critics have argued that the Act is biased in favour of landowners and doesn't fulfils its purpose, whereby it is supposed to grant the Indian state the power to use land for public good by building affordable housing, educational and healthcare facilities.

Other experts have argued that the definition of public good is vague, and should be restructured on a state government level, to avoid arbitrary decision making and possible future conflicts. The Act is said to be too biased in favour of a minority of rich land-owners, and somewhat antithetical to the interest of the larger majority. In 2014, the new NDA Government came up with an ordinance that seek to amend the parent act6. This ordinance provides for the 5 types of public projects wherein the government wouldn't have to necessarily take consent of 80% of the affected families.

These are:
  1. National Security and Defence Production,
  2. Housing for poor population,
  3. Electrification and infrastructure for rural areas,
  4. Industrial Corridors for the development of world-class economic zones that can support and sustain multinational manufacturing and service industries, and
  5. Infrastructure for social welfare purposes.

Further, the ordinance exempted acquisition for the purposes mentioned above from Social Impact Assessment (SIA), as well as public-private partnership (PPP) projects where the government owns the land already. It also allows private 'entities' instead of private 'companies' to acquire land for public purpose. A huge amendment that was brought through this ordinance was to include the building of private hospitals and private educational institutions as public purpose. Companies Act 2013 was included instead of Companies Act 1956, to define the 'companies' falling under the purview of this Act. The ordinance also makes it compulsory to obtain permission from the government before prosecuting a head of any department for any alleged mischievous conduct.

Also, as per this ordinance, if 5 years (or any other time period specified) have passed since the inauguration of the project, the land wouldn't be returned to original owner immediately. This has been done since the gestation period of public projects is quite long, hence the government decided that it was not a good idea to return the land if the gestation period is stretched, as it would make the government repeat the land acquisition process.

In the parent act, there was a provision that for those land acquisitions wherein the compensation wasn't made, and which acquisitions took place 5 years or more before the implementation of Land Acquisition Act, 2013, the law would be applicable retroactively and compensation would be made as per the provisions of the 2013 Act. This ordinance introduced an exception in this provision, stating that in cases where the compensation has been made but is delayed due to judicial or technical reasons, the Act of 2013 wouldn't apply retroactively.

The parent act gave a special power to Government of India to release orders that give directions in case any difficulty arises during the implementation of the Act. This power (to issue orders) was limited for 2 years after the implementation of the Act; however, the ordinance has increased the limit to 5 years. This ordinance was released in December 2014, and the Ministry of Rural Development, central government introduced the Land Acquisition Bill 2015 in the Lok Sabha (lower house of the Parliament) in May 2015 for discussion.

Contents of the Bill
The new bill retains most of the amendments made under the ordinance circulated in December 2014. It also comes into force from the date when the ordinance was promulgated. However, some additional steps were taken by the government in framing the Bill introduced in Parliament to further reform the Land Acquisition Act of 2013. Chapter IIIA is inserted after Chapter III, and this new chapter provides the government the power to exempt the 5 types of public projects mentioned in the ordinance.

Besides, the Bill limits the acquisition to be done for the purpose of Industrial Corridors, by restricting the exemptions to those corridors which will be set up by the government or government owned companies alone. The notification for the acquisition for the 5 specified purposes mentioned previously has to be released only after a bare minimum area of land has been ensured for the said project. The government carrying out the acquisition shall also take a survey of the land in question and keep a record of such land in any manner that the government itself prescribes.

The Bill also exempts the 5 special types of public projects from the provisions of Social Impact Assessment and Special Provisions for Food Security which were mentioned in the parent Act. The December Ordinance did the same thing and the Bill introduced later carried it forward. Another provision that was carried forward in a similar manner was replacing private 'companies' with private 'entities.' Here, private entities would include all those which don't fall under the definition of government entities or undertakings. Also, the Bill did follow on the provision of referring to private hospitals and private educational institutes as projects for public purpose, which was there in the December Ordinance.

Companies Act 2013 is again mentioned, as the companies defined under it will fall under the jurisdiction of this land acquisition law, and not the Companies Act 1956. The Bill also substitutes Section 87 of the parent act, wherein it clarifies that a prior sanction of the government is required before prosecuting a head of a government department specifically as per the procedure Section 197 of the Code of Criminal Procedure.

The provision regarding the necessity of government sanction before prosecuting a public official who is heading a department was mentioned previously in the ordinance as well. Amendment is made to Section 101 of the parent act is also amended. Now it states that land acquired wouldn't be necessarily returned to the owner immediately even if five years or more have passed since the project to be made on the said land was inaugurated. Instead, the land would be returned after a period specified for setting-up of any project or for five years, whichever is later, has elapsed.

Another proviso is inserted after Section 24, sub-section 2, whereby the Bill also carries forward the provision of the previous ordinance that prevents those parties from claiming compensation through 2013 Act (i.e., parent act), whose properties were acquired by the state 5 years (or more) before the 2013 Act was implemented, but the compensation couldn't reach them due to judicial impediments. The Bill further specifies that if the compensation is lying in the 'designated' account, the provisions of the parent act wouldn't apply.

There are other legislations that provide for resettlement and rehabilitation. Total of 13 such legislations have been brought under the purview of the parent act by this bill, which were mentioned in the fourth schedule of the parent act, and were to be made applicable as of January 1st, 2015.

These legislations are as follows:
  1. The Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958)
  2. The Atomic Energy Act, 1962 (33 of 1962).
  3. The Damodar Valley Corporation Act, 1948 (14 of 1948).
  4. The Indian Tramways Act, 1886 (11 of 1886)
  5. The Land Acquisition (Mines) Act, 1885 (18 of 1885)
  6. The Metro Railways (Construction of Works) Act, 1978 (33 of 1978).
  7. The National Highways Act, 1956 (48 of 1956).
  8. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 (50 of 1962).
  9. The Requisitioning and Acquisition of Immovable Property Act, 1952 (30 of 1952).
  10. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948 (60 of 1948).
  11. The Coal Bearing Areas Acquisition and Development Act, 1957 (20 of 1957).
  12. The Electricity Act, 2003 (36 of 2003).
  13. The Railways Act, 1989 (24 of 1989).
The power of government to give directions regarding the implementation of the parent act was originally restricted for 2 years after the passing of the parent act. This has been increased to 5 years, via an amendment to Section 113 of the parent act. Further, the said section originally only granted the government the power to issue directions if there is some difficulty in implementation of Chapter XIII of the act. Now, it has been changed to any difficulty in the implementation of the entire parent act.

Also, in Section 31, sub-section 2 of the principal act, there is provision in clause (h) to provide employment to the members of the families who are affected by the land acquisition, this Bill however, specifies that at least one member of such family (that of a farm labourer) would be given a job compulsorily.

The Land Acquisition Rehabilitation and Resettlement Authority (established under Chapter-VIII of the principal act) would be required to hold a hearing near the area where the acquisition is taking place, after receiving a notice from the Collector of the said district. Section 64 of the principal act provides the party affected by the land acquisition to request the collector to make reference to the authority, that said party hasn't accepted the compensation and has certain objections regarding the compensation.

The authority will then notify all the parties concerned before they hold the meeting, wherein the award that is to be given to the affected parties shall be discussed, in case any party is dissatisfied with the said awards.

Analysis and Conclusion
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was passed in order to make sure that an agreeable position can be reached with respect to the needs of the land-owners, the poor of the nation, the government and private industries looking to set up projects in India. In a developing nation like India, land acquisition related regulations play a key role in creating a business/investment friendly environment. India is a nation with massive inequality problem, and as such a small portion of the population holds vast amounts of resources, including land7.

In order to ensure affordable housing and other resources necessary for the vast majority, that is poor, the government needed a transparent and equitable method of redistributing the land. The best way to do so was obviously acquiring land from those who have it in plenty, and use the land to build sustainable infrastructure that can provide basic services to the poor masses, such as healthcare, education and housing, the Indian government came up with the Land Acquisition Act in 2013. However, several critics argued that the legislation was too much in the favour of the landowners whose lands were supposed to be acquired. By creating provisions that are extremely biased in favour of these landowners, the government somewhat compromised the interest of the larger public, i.e., the poor population.

The first amendment in the new Bill provides for 5 types of public projects for which the government wouldn't have to seek the permission of at least 80% of the affected families. This proposal is of course reserved for only a handful of infrastructure projects including those relating to national security, housing for poor, etc. This will help ease the process and severely improve the efficiency of infrastructure development projects.

Similarly, these kinds of projects are exempt from Social Impact Assessment, for the same purpose, i.e., to improve efficiency. Critics argue however, that the 5 types which have been shortlisted would consequently exempt most infrastructure projects from seeking permission of 80% of the affected families, as well as from SIA.

The government will also keep record of all lands acquired by it, in order to make sure that no land is left unused and wasted. A comprehensive database is to be made to allow the authorities to do so. The government also replaced the term private companies with private entities, which would allow several other non-government parties, who aren't 'companies' under the Companies Act, 2013 (as it has replaced Companies Act 1956 within the meaning of this act, as now companies registered under the 2013 legislation will be considered), to participate in building of infrastructure and acquisition of land for the same purpose.

This would also help simplify the regulations relating to land acquisition simpler as now all government and non-government actors can participate in land acquisition and any issues relating to it would fall under the same legislation. Of course, this would increase the chances of exploitation as even non-registered private entities would be able to acquire land.

The requirement of government sanction is made compulsory before prosecuting any head of a department for any alleged malpractice. This amendment would prevent the senior bureaucrats from being overprotective and undecisive. Previously, the ability to prosecute any civil servant with no accountability resulted in judicial activism against the bureaucrats. Consequently, this led to senior officials refraining from making decisions which inversely impacted the efficiency. Thus, the immunity granted via this bill would allow the officials to make decisions faster, and would empower the government machinery.

At the same time, bureaucrats can still be prosecuted, but only if the prosecution has a strong case against them, as it would now require prior government sanction. It can be said that the government has tried to balance right to justice with efficiency of state mechanism. Whether the government will actively try to protect the bureaucrats from prosecution remains to be seen, although it is most certainly a possibility.

Previously, if the land remained unused for five years, it was returned to the landowners. However, the government argued that these public projects generally take more than 5 years before they actually take off, even if foundation stone was laid long before. Hence this limit was removed by the bill, and instead it provides for a period (of more than 5 years) which will be specified by the authorities at the time of setting up the project. Here the government has tried to be pragmatic, understanding its own limitations.

Another important amendment made by the bill was with respect to retrospective application of the parent act. Since the parent act allowed for the people whose land was acquired before 2008, to claim compensation under 2013 act (if it was yet to be paid), many parties started opening up their compensation related cases in courts, in order to claim compensation under the principal act of 2013. In order to put an end to this, the bill states that if the compensation hasn't been paid due to judicial delay (i.e., compensation is lying deposited in a court or any account), then such cases can't be reopened to demand compensation under the 2013 act.

The original act also declared that the central laws mentioned in fourth schedule and the provisions of rehabilitation and resettlement mentioned therein will be brought under the Land Acquisition Act of 2013 as well. The parent act said that this needs to be done within one year of its implementation, and that's what this bill does. Since the bill is yet to be passed, this amendment also remains to be implemented. This has been considered a good amendment by the opposition as well, as it would simplify the regulations and consequently the resettlement and compensation process.

An amendment to improve the implementation has also been made in the new bill. Implementation of laws have always been a problem in India. A nation as diverse as India means that some parts will prove problematic as far as implementation is concerned. In order to solve this, the original act provided that the government can issue directions to make sure that any impediments to the implementation of the act are dealt with efficiently.

However, there was 2 year-limit on issuing these directions, which has been increased to 5 years. Thus, the government can issue directions to improve implementation till 2018. Also, the amendment to Section 31 that provides for compulsory job to at least one member of the affected family, if the family is that of a farm labourer who is entirely dependant on the land for livelihood. Thus, the bill seeks to create a more equitable form of job-compensation mechanism.

The Authority formed under Chapter VIII of the parent act has been made more democratic via the amendment proposed. Now the authority has to hold a hearing with all the affected parties after being referred to by the Collector of the district where the land acquisition is taking place. Formerly, the authority was simply supposed to prevent exploitation, but now attempt has been made to bring all parties on the same table and reach a consensus.

Endnotes:
  1. https://www.livemint.com/Politics/T2tN2OWzJIy9SuFgsGsmHN/The-evolution-of-the-Land-Acquisition-Act-from-1824-to-2015.html
  2. https://www.urbanet.info/urbanisation-in-india-infographics/
  3. https://www.lawyersclubindia.com/articles/Right-to-Property-under-the-Indian-Constitution-3515.asp
  4. https://economictimes.indiatimes.com/news/economy/policy/government-targets-land-disputes-that-cripple-indias-infrastructure/articleshow/80680092.cms
  5. https://factly.in/58-percent-rural-indian-households-are-agricultural-households-nsso-report-on-agricultural-households-part-1/
  6. http://iksa.in/india-ink/land-acquisition-ordinance-2014/1660/
  7. https://www.ideasforindia.in/topics/poverty-inequality/wealth-inequality-class-and-caste-in-india-1961-2012.html

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