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Land Acquisition- a critical analysis

The Land Acquisition, Rehabilitation and Resettlement Bill2011was introduced in Lok Sabha in 2011. In pursuance of the the Right to Fair Compensation, Transparency in Land Acquisition, Rehabilitation and Resettlement Act(An Act of the Indian Parliament) came into force in2013. The main intent of the legislation is to regulate land acquisition, and lays down the procedure and rules for grant of compensation, rehabilitation and resettlement to the affected persons in India. This Act thus replaces the Land Acquisition Act 1894, enacted during the British Rule.

Public Purpose and Consent
The 2013 Act requires consent of 70%of the land owners in case of Public Private Partnership (PPP) Project(land acquisition for Jewar Airport in Greater Noida is an instance) and 80% of land owners in case of private entities. No consent is required for Government projects. The 2015 Bill passed by the Lok Sabha however exempts five types of projects from the requirement of obtaining consent from the land owners. These five categories of projects are (i) defence (ii) rural infrastructure (iii) affordable housing (iv) industrial corridors (v) infrastructure including PPP’s where the land owner is the government.

Valuation of Land

Often a question of valuation of the land for acquisition as per its being residential or commercial comes into play.

In 2009, the Punjab and Haryana High Court notified 229 acres of land for residential projects and the compensation was fixed at Rs 12 lakh per acre. The Reference Court further enhanced it to Rs 48.4 lakh per acre. The state accepted the award but the landowners moved the HC for further enhance ment. The High Court in 2016 then enhanced the land value at the rate of Rs 2 crore per acre stating that the land was situated at prime location. The Haryana Government challenged the same in the Honble Supreme Court stating that it had wrongly been classified as commercial land. In progression the of their arguments, they produced before the Apex Court the sale deeds pertaining to the land which had fetched between Rs 4 lakh and 8 lakh per acre. The land owners challenged the production of sale deed by the Government stating that the same failed to reflect the true market value of the land. The Honble Supreme Court held that the Punjab and Haryana High Court had wrongfully ignored the sale deeds which showed the land in question to be agricultural land and set aside the decision of the High Court.

Controversial provisions as under the Land Acquisition, Rehabilitation and Resettlement Act

The issue is the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.In 2014 in the matter of Pune Municipal Corporation vs Harakchand Misrimal Solanki, on 24th January, 2014,a three- Judge Bench of the Supreme Court interpreted it to mean that acquisition proceedings initiated under the 1894 Act, five years prior to the coming in force of the 2013 Act would lapse if the acquired land was not taken possession of by the state or compensation was not paid to the displaced farmers. It was further held in this case that if the landowner refuses to receive the compensation, then it should be deposited in the Court, rather than in the Government Treasury if the proceedings were not to lapse.

Another three judge bench headed by Justice Arun Mishra in Indore Development Authority vs Shailendra (D) through LRS and Ors on 8th Feb 2018. held that this ruling is per incuriam, because the landowner cannot take advantage of his own wrong by refusing to accept compensation under the old Act, in order to make it lapse so that he could obtain higher compensation under the 2013 Act. The facts of this case are that the IDA prepared a plan which came into force on March 21, 1995 for the purposes of constructing a Ring Road outside Indore City. Possession of the land was with the encroachers and not with the landowners. The Compensation was deposited by the IDA with the Land Acquisition Collector. The landowners were informed to collect it but refused to do so. It is then the Hon’ble Apex Court held that landowners cannot take advantage of their own wrong and that five years would exclude the litigation.

After conflicting opinions this matter has been referred to a larger Bench on Feb 22, 2018. The observations made are that the 2013 Act does not delineate a time limit for taking possession of the acquired land or payment of compensation to the landholder. It on the flip side enable grant of greater compensation benefits to the land owner provided the process of acquisition remained incomplete despite the passage of five years after it started under the 1894 Act. In this regard the proceedings under the new Act would come into play as the State would have to start land acquisition proceedings afresh for the same land.

Thus as per the Bill the computation of the Five year should exclude any period during which a court has granted a stay or possession has been taken but compensation has been deposited in the Court or designated account.

Impact of the Land Acquisition Act and Pitfalls

As the land acquisition costs are very high there is a setback for acquisition of land for affordable housing schemes.

In March 2018 the Lok Sabha passed the Specific Relief (Amendment Bill), 2018 amending the existing Specific Relief Act, 1963 whereby the legislation if passed by the Rajya Sabha, will alter the fundamental principles of property in India by prohibiting courts from granting injunctions in contract s involving infrastructure projects. Thus for instance if there is an infrastructure project like a building a metro line or highway involving a private firm and it decides to violate a citizen’s right by illegally dumping construction material on their land, earlier the property owner could have moved for an injunction restraining the company from violating his property rights. After this amendment, the ramifications will be massive as it will incentivize government and private owners to violate property rights with impunity rather than comply with the legal provisions of the Land Acquisition Act, 2013.

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