UPSC MAINS 2019: Supreme Court notice to 5 states on land acquisition law

Rehabilitation and Resettlement


Topic: Supreme Court notice to 5 states on land acquisition law


Topic in Syllabus: GS Paper 2: Indian Governance

Land Acquisition Law


The Supreme Court on recently  issued notices to the states of Gujarat, Andhra Pradesh, Telangana, Jharkhand and Tamil Nadu on a plea challenging state amendments to the central land acquisition law following arguments that the states cannot make changes to the central law.


More about on news:

  • A Bench of Justices Madan B. Lokur and Deepak Gupta issued notice to the Tamil Nadu, Gujarat, Andhra Pradesh, Telangana and Jharkhand governments for amending their land acquisition laws to the extent that consent of farmers or land owners is not required before their land is acquired for projects like industrial corridors, expressways and highways.
  • The petitioner said that States allow land acquisition without participation of representative local bodies like gram sabha in social impact assessment studies, without expert appraisal processes, public hearings, objections, and safeguard provisions to ensure food security.
  • The petition said the amendments violate the “core spirit” of the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act of 2013.
  • It mandates that 70% of the affected land owners should consent to the acquisition of land for a public private participation project.
  • The 2013 Act replaced its colonial predecessor of 1894 and was intended to uphold the farmers’ right to dignity and life.
  • The Ordinance eventually lapsed in August 2015, following which, the “stage shifted to the States.”


The Constitutional Framework for land acquisition :

  • Originally the Constitution of India consisted of provisions under Article 19(f) and Article 31 which constituted Right to Property.
  • But there were number of difficulties that the state was confronted with, Right to property, Articles 14, Articles 19 and Article 31 read in tandem by the Courts proved to be anti-developmental, as the courts struck down various acts of the state.
  • In a number of cases the courts declared the reforms initiated by the state as being ultra vires, which hampered the development by means of growth of infrastructure which was essential for development soon after the independence.
  • It was because of the difficulties in the functioning of the right to property that had been brought to light by the judicial decisions the Constitution (First) Amendment Act, 1951 was enacted and the Right to Property was done away with.
  • Article 31(A) which was enacted categorically states that no law which provides for acquisition by the state of an estate can be held void as being ultra vires Article 14 or Article 19.
  • It also provided for payment of compensation at a rate not less than market value of the property.
  • Acquisition and Requisition of property falls in the concurrent list , which means that both the centre and the state government can make laws on the matter.
  • There are a number of local and specific laws which provide for acquisition of land under them but the main law that deals with acquisition is The Land Acquisition Act, 1894.


The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013:


Why was there a need for a new Bill?

There is unanimity of opinion across the social and political spectrum that the current Law (The Land Acquisition Act 1894) suffers from various shortcomings. Some of these include:

  • Forced acquisitions: Under the 1894 legislation once the acquiring authority has formed the intention to acquire a particular plot of land, it can carry out the acquisition regardless of how the person whose land is sought to be acquired is affected.
  • No safeguards: There is no real appeal mechanism to stop the process of the acquisition. A hearing (under section 5A) is prescribed but this is not a discussion or negotiation. The views expressed are not required to be taken on board by the officer conducting the hearing.
  • Silent on resettlement and rehabilitation of those displaced: There are absolutely no provisions in the 1894 law relating to the resettlement and rehabilitation of those displaced by the acquisition.
  • Urgency clause: This is the most criticised section of the Law. The clause never truly defines what constitutes an urgent need and leaves it to the discretion of the acquiring authority. As a result almost all acquisitions under the Act invoke the urgency clause. This results in the complete dispossession of the land without even the token satisfaction of the processes listed under the Act.
  • Low rates of compensation: The rates paid for the land acquired are the prevailing circle rates in the area which are notorious for being outdated and hence not even remotely indicative of the actual rates prevailing in the area.
  • Litigation: Even where acquisition has been carried out the same has been challenged in litigations on the grounds mentioned above. This results in the stalling of legitimate infrastructure projects.


Highlights of the Bill:

  • The Bill provides for land acquisition as well as rehabilitation and resettlement. It replaces the Land Acquisition Act, 1894.
  • The process for land acquisition involves a Social Impact Assessment survey, 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 the market value in case of rural areas and twice in case of urban areas.
  • 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. Purchase of large pieces of land by private companies will require provision of rehabilitation and resettlement.
  • The provisions of this Bill 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.

Rehabilitation and Resettlement


Key Issues and Analysis:

  • It is not clear whether Parliament has jurisdiction to impose rehabilitation and resettlement requirements on private purchase of agricultural land.
  • The requirement of a Social Impact Assessment for every acquisition without a minimum thresholdmay delay the implementation of certain government programmes.
  • Projects involving land acquisition and undertaken by private companies or public private partnerships require the consent of 80 per cent of the people affected. However, no such consent is required in case of PSUs.
  • The market value is based on recent reported transactions. This value is doubled in rural areas to arrive at the compensation amount.  This method may not lead to an accurate adjustment for the possible underreporting of prices in land transactions.
  • The government can temporarily acquire land for a maximum period of three years. There is no provision for rehabilitation and resettlement in such cases.


Public Purpose:

Article 31(2) categorically states that a land can be acquired by the state only for Public Purpose. Broadly speaking, public purpose would include a purpose, in which the general interest of the community, as opposed to a particular interest of the individual, in generally and vitally concerned. In a generic sense the expression public purpose would include a purpose in which where even a fraction of the community would be involved. It has been identified as a work from which public in general would derive benefit or be benefited. Anything which is useful to the public, in the sense that it confers some public benefit, or conduces to some public advantage, is a public purpose. It is the requirement of public purpose that is determining factor on the question whether or not a particular land should be acquired, and the considerations of hardships to the individuals cannot outweigh the question of public demand


Public Purpose includes the following aims:

  • In which general interest of the community, or a section of the community, as opposed to the particular interests of the individuals, is directly or vitally concerned;
  • Which would preserve or promote public health, comfort or safety of the public, or a section of it, whether or not the individual members of public may make use of the property acquired;
  • Which would promote public interest, or tend to develop the natural resources of the state;
  • Which would enable department of the government to carry on its governmental functions;
  • Which would serve the public, or a section of it, with some necessarily or convenience of life, which may be required by the public as such, provided that the public may enjoy such service as of right; or
  • Which would enable individuals to carry on a business, in a manner in which it could not be otherwise be done, if their success will indirectly enhance public welfare, even if the acquisition is made by a private individual, and the public has no right to any service from him, or to enjoy the property acquired; or
  • If the use to which the property would be put, is one of the widespread general public benefit not involving any right on the part of the general public itself, to use the property or;
  • Which would result in an advantage to the public; it is not necessary that the property, or the work upon it, should be available to the public as such; the acquisition may be in favour of individuals, but, in furtherance of scheme of public utility, which would result in enhancement of public welfare.


How are interests and concerns of farmers protected?

  • Retrospective effect: Where awards are made but no compensation has been paid or possession has not been taken, compensation shall be paid at the rate prescribed under the new Act. Where the Award has not been made the entire process shall be considered to have lapsed. Also where acquisition has taken place five years prior to the commencement of the new law but no compensation/ possession has taken place the proceedings shall be deemed to have lapsed.
  • Consent: Prior-consent shall be required from 70% of land losers and those working on government assigned lands only in the case of public-private partnership projects and 80% in the case of private companies. This consent also includes consent to the amount of compensation that shall be paid.
  • Return of unutilized land: Land not used can now be returned to the original owners if the state so decides.
  • Share in sale of acquired land increased: The share that has to be distributed among farmers in the increased land value (when the acquired land is sold off to another party) has been set at 40%.
  • Income-tax Exemption: All amounts accruing under this act have been exempted from income tax and from stamp duty.
  • Strict restrictions on multi-crop acquisition: The acquisition of agricultural land and multi-crop land has to be carried out as a last resort. There will be definite restrictions on the extent of acquisition of such land in every state to be determined by the States concerned.
  • Safeguards to ensure fair price: Given the way in which market value is to be calculated and the imposition of a solatium of 100% over and above the amount, the farmers are guaranteed a fair price for their land.
  • Acquisition only if necessary: The Collector has to make sure that no other unutilized lands are available before he moves to acquire farm land.
  • Damage to crops to be included in price: The final award has to include damage to any standing crops which might have been harmed due to the process of acquisition (including the preliminary inspection).
  • Share in developed land: In case their land is acquired for urbanization purposes 20% of the developed land will be reserved and offered to these farmers in proportion to the area of their land acquired and at a price equal to the cost of acquisition and the cost of development.
  • Fishing rights: In the case of irrigation or hydel projects, affected families may be allowed fishing rights in the reservoirs.
  • Additional R&R benefits: Farmers are also entitled to the various rehabilitation and resettlement benefits which are enumerated in response to question 2.
  • Time-bound social impact assessment: The Bill mandates a social impact assessment of every project which must be completed within a period of six months.


How are interests and concerns of panchayati raj institutions protected?

  • SIA in consultation with PRIs: The Social Impact Assessment (SIA) has to be carried out in consultation with the representatives of the Panchayati Raj Institutions (PRIs). In fact, the appropriate Government is required by the law to ensure adequate representation of these institutions during the discharge of the process.
  • SIA reports to be shared: Reports prepared under the Social Impact Assessment are to be shared with these individuals in their local language along with a summary.
  • Representation in expert group: The expert group has to have two members belonging to the Panchayati Raj Institutions. This is a powerful body that has the power to reject a project.
  • Hearings in all gram sabhas: In case where an affected area involves more than one Gram Panchayat or Municipality, public hearings shall be conducted in every Gram Sabha where more than twenty five per cent of land belonging to that Gram Sabha is being acquired.
  • Consultation in compliance with PESA: Consultation with the Gram Sabha in scheduled areas under the Fifth Schedule referred to in the Constitution shall be in accordance with the provisions of the Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996.
  • Representation of panchayat chairpersons on R&R committee at project level: The Rehabilitation and Resettlement Committee at Project Level has to have the chairpersons of the Panchayats located in the affected area or their nominees as representatives.
  • Panchayat ghars have to be provided as per the list of Infrastructural amenities given in the Third Schedule.


How does the compensation mechanism work?

  • In urban areas there is no multiplier. This means no enhancement of the market value calculated occurs.
  • However a solatium of 100% (which currently exists at 30%) is imposed on this market value calculated. This ‘solatium’ amount is a compensation to ameliorate the pain of forcible acquisition.
  • In rural areas the multiplier has been left entirely to the discretion of state governments which may range on a sliding scale from 1 to 2 depending on the radial distance from urban centres.


Sample Questions:

“Land acquisition will continue to be problematic, as balancing industrial and infrastructure development with the needs of landowners and occupants is a tough act. Alternatives to land acquisition like pooling and leasing may not be always viable” critically examine the statement

It is said that a state-centric strategy on land acquisition will permit a more nuanced approach and it would also promote competitive federalism. Critically discuss how it is possible?