LAND ACQUISITION

BLOG- Land Acquisition, Rehabilitation and Resettlement Bill, 2011

BLOG/ NEWS Civil Law LAW EXPLAINED Legal Transfer of Property
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INTRODUCTION  

A revision of the century-old Land Acquisition Act, 1894 has been on the anvil for quite some time, with the Supreme Court and all stakeholders repeatedly emphasizing the archaic nature of the present statute and the need for reforms that ensured a more consultative and equitable process for land acquisition and rehabilitation of affected persons.

Accordingly, the Land Acquisition, Rehabilitation and Resettlement Bill, 2011 (the “Bill”) has been tabled in the Lok Sabha and subsequently referred to a Standing Committee, which has duly placed its recommendations on record. The Bill introduces several far-reaching changes in the permitted purpose and process of land acquisition while adding into the scheme of the legislation, sections on rehabilitation and resettlement which were formerly absent.

The Lok Sabha on 29 August 2013 passed the Land Acquisition, Rehabilitation and Resettlement Bill, 2011, also called the Land Acquisition Bill. The bill was passed by a majority of 216 votes out of 235 votes. 19 members voted against the bill.

The aim of the bill is providing fair compensation to people whose land has been taken away for setting up the buildings or factories. The aim of the bill is to bring in more transparency to the process of land acquisition, thereby bringing assurance of rehabilitation to the affected people.

Primary Features of the Land Acquisition, Rehabilitation and Resettlement Bill, 2011

  • The Bill established new rules and regulations for compensation of the land acquired for the industry as well as infrastructure projects.
  • The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 stipulates mandatory consent of minimum 70 percent for the acquisition of land for the Public Private Partnership (PPP) projects, as well as 80 percent for the acquisition of land for the private companies.
  • The Bill seeks for compensation of around 4 times the market value of the land in rural areas as well as two times the value in the urban areas.
  • The Bill includes a total of 107 clauses.
  • The Bill will provide protection to the farmers as well as the rights of the farmers.
  • The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 replaced the century-old India’s Land Acquisition Act of 1894 which had various shortcomings.
  • The new Land Acquisition Bill will apply when Government will acquire the land for its own control, hold or use; or when the Government will acquire the land for transferring it to use of private companies for stated public purpose. The bill will also apply in case the Government acquires the land for the purpose of immediate and declared use by private companies for the public purpose.
  • The Bill, after being enacted into law, will affect the rural Indian families who have farms as their primary source of livelihood. The Bill will also have an effect on the urban households where land is acquired for industrialization and urbanization.
  • The Bill however, exempts the land acquisition for the linear projects like ports, railways, irrigation canals as well as highways.
  • In order to safeguard the food security as well as for preventing the arbitrary acquisition, the Bill also directs all the states for imposing the limits on those areas which are under the agricultural cultivation and can still be acquired.
  • In the case where the land is not utilized even after the acquisition, the Bill empowers all the states to return such a land either to the State Land Bank or to the owner.
  • The Bill also proposed that no land can be acquired in the Scheduled Areas without Gram Sabhas’ consent.
  • The Bill proposed that no person shall be dispossessed unless all the payments have been made as well as alternative sites for purpose of rehabilitation and resettlement have been prepared.
  • The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 proposed several benefits such as land for employment, land, housing as well as annuities, which will accrue apart from one-time cash payments to people whose land has been acquired.  \
  • Under the law of this new Bill, Wakf land will not be acquired.

Key changes

Key changes include a change in the definition of ‘public purpose’, to bring the law in consonance with the reality of private corporations driving development, a mandatory social impact assessment (“SIA”) before any notification of acquisition, a comprehensive resettlement and rehabilitation package, a new, expansive definition of the term ‘person interested’ and the significant watering down of the draconian and much-abused urgency clause.

A significant change in the approach of the State to land acquisition is characterized by Clause 2(2)(a), which provides that the provisions relating to resettlement and rehabilitation (“R & R”) will apply even if a private party is privately purchasing land from an owner, if such acquisition exceeds certain prescribed thresholds.

The term ‘public purpose’ has been the subject of intense public controversy and debate and the Bill defines it in an inclusive manner, maintaining several clauses of the old definition and adding a few more. Key among these are clauses (vi) and (vii), which allow for land acquisition for public-private partnerships as well as private companies producing public goods/services.

An important aspect of these clauses is the subsequent proviso, which states that the prior informed consent of at least 80% of the project affected people is to be procured before any compulsory acquisition takes place. Furthermore, in the event that a party acquires land independently at first and later seeks State assistance for acquisition of the remainder, such party is bound by the terms of compensation and R & R even with regard to the land already acquired independently.

A comparison of key provisions of the Act and Bill

Some key differences between the Land Acquisition Act, 1894 and the Bill are:

 

    GROUNDS

 

STATUE

 

STATUE

 

        Land Acquisition Act, 1894     

         LARR Bill, 2011

Definition of “person interested” Section 3 (b) states that it includes-all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land Clause 3 (x) states that it means-(i) all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; (ii) tribal and other traditional forest dwellers, who have lost any traditional rights recognised under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006; (iii) a person interested in an easement affecting the land; (iv) persons having tenancy rights under the relevant State laws including

share-croppers by whatever name they may be called; and (v) any person whose primary source of livelihood is likely to be adversely affected

Definition of “public Purpose” Section 3(f) states that it includes—(i) the provision of village-sites, or the extension, planned development or improvement of existing village-sites;(ii) the provision of land for town or rural planning;

(iii) the provision of land for planned development of land from public funds in pursuance of any scheme or policy of Government and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development as planned;

(iv) the provision of land for a corporation owned or controlled by the State;

(v) the provision of land 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 Government, any local authority or a corporation owned or controlled by the State;

(vi) the provision of land for carrying out any educational, housing, health or slum clearance Scheme sponsored by Government or by any authority established by Government for carrying out any such scheme, or with the prior approval of the appropriate Government, by a local authority, or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any corresponding law for the time being in force in a state, or a co-operative society within the meaning of any law relating to co-operative societies for the time being in force in any State;

(vii) the provision of land for any other scheme of development sponsored by Government or with the prior approval of the appropriate Government, by a local authority;

(viii) the provision of any premises or building for locating a public office, but does not include acquisition of land for companies;

Clause 3(za) states that it includes—(i) the provision of land for strategic purposes relating to naval, military, air force, and armed forces of the Union or any work vital to national security or defence of India or State police, safety of the people;(ii) the provision of land for railways, highways, ports, power and irrigation purposes for use by Government and public sector companies or corporations; or(iii) the provision of land for project affected people;

(iv) the provision of land for planned development or the improvement of village sites or any site in the urban area or provision of land for residential purposes for the weaker sections in rural and urban areas or the provision of land for Government administered educational, agricultural, health and research schemes or institutions;

(v) the provision of land 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 Government, any local authority or a corporation owned or controlled by the State;

(vi) the provision of land in the public interest for—

(A) use by the appropriate Government for purposes other than those covered under sub-clauses (i), (ii), (iii), (iv) and (v), where the benefits largely accrue to the general public; or

(B) Public Private Partnership projects for the production of public goods or the provision of public services;

(vii) the provision of land in the public interest for private companies for the production of goods for public or provision of public services:

Provided that under sub-clauses (vi) and (vii) above the consent of at least eighty per cent. of the project affected people shall be obtained through a prior informed process to be prescribed by the appropriate Government;

Provided further that where a private company after having purchased part of the land needed for a project, for public purpose, seeks the intervention of the appropriate Government to acquire the balance of the land it shall be bound by rehabilitation and resettlement provisions of this Act for the land already acquired through private negotiations and it shall comply with all provisions of this Act for the remaining area sought to be acquired.

Resettlement & Rehabilitation (“R & R”)                    NA Chapters V, VI and VII provide a comprehensive mechanism to prepare a scheme for R & R as well as a multi-tier monitoring mechanism Authorities such as Administrator for R & R and Commissioner for R & R also created.
Social Impact Assessment                    NA Chapter II mandates an SIA by an independent body for all acquisitions, followed by a review by an Expert Group or a special Committee in certain circumstances. An SIA evaluates the necessity of the acquisition in the context of overall public interest, and will employ a consultative approach.
  Authority Civil Court, with an appeal to the High Court Chapter VIII mandates the appropriate Government to create a Land Acquisition, Rehabilitation and Resettlement Authority for the settlement of disputes and from whose order an appeal to the High Court lies
Emergency Clause Section 17: Can take possession 15 days after notification, allowed for ‘public purpose’ generally and not specific uses only Clause 38: Can take possession 30 days After notification, but only for national security or in the case of natural calamity
Compensation Section 11 vests discretion with the Collector, with the possibility of a reference to the Court in the event of dissent. Several factors are listed in Sections 23 and 24, which the Collector is to be guided by in deciding compensation Clause 26 prescribes a method for calculation of compensation based on market value, which is fixed as follows:(a) the minimum land value, if any, specified in the Indian Stamp Act, 1899 for the registration of sale deeds or agreements to sell, as the case may be, in the area, where the land is situated; or (b) the average sale price for similar type of land situated in the nearest village or nearest vicinity area.
Process and Scheme of Acquisition Preliminary Notification – Survey and Analysis – Objections to Collector – Hearing and Report – Declaration of Requirement – Objections to Collector – Acquisition   Award – Possession (Sections 4 – 16) Social Impact Assessment – Evaluation of SIA by Expert Group and if needed, by special Committee – Preliminary Notification – Survey and Analysis –  Objections to Collector – Hearing and Report – Preparation of draft R & R Scheme – Approval of scheme from Collector & Commissioner – Declaration of Requirement – Objections to Collector – Acquisition Award – R & R Award– Possession  (Clauses 4 -37 )

 

Present status of the Bill

The Bill was introduced in the Lok Sabha on 7 September, 2011 and subsequently referred to a Standing Committee, whose recommendations have been given in May, 2012. The Bill was listed for consideration in the winter session of Parliament in 2012, but reports indicate that it will now be considered only in the Budget session of 2013. It appears that certain minor changes to the Bill have been made by the Ministry after the Committee Report, including a reduction of the private acquisition requirement discussed above from 80% to 67%. However, the Bill in its changed form has not been re-introduced and consequently, this revised draft is not publicly available.

Land acquisition in India

Land acquisition in India refers to the process by which the union or a state government in India acquires private land for the purpose of industrialization, development of infrastructural facilities or urbanization of the private land, and provides compensation to the affected land owners and their rehabilitation and resettlement.

Land acquisition in India is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR) and which came into force on 1 January 2014. Till 2013, land acquisition in India was governed by Land Acquisition Act of 1894. On 31 December 2014, the President of India promulgated an ordinance with an official mandate to “meet the twin objectives of farmer welfare; along with expeditiously meeting the strategic and developmental needs of the country”. An amendment bill was then introduced in Parliament to endorse the Ordinance.

Lok Sabha passed the bill but the same is still lying for passage by the Rajya Sabha. On 30 May 2015, President of India promulgated the amendment ordinance for the third time. Union Government of India has also made and notified the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Social Impact Assessment and Consent) Rules, 2014 under the Act to regulate the procedure.] The land acquisition in Jammu and Kashmir is governed by the Jammu and Kashmir Land Acquisition Act, 1934.

Purpose of LARR

As per the Act, the union or state governments can acquire lands for its own use, hold and control, including for public sector undertakings and for “public purpose”, and shall include the following purposes:

  • 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;
  • for infrastructure projects as defined under the Act;
  • project for project affected families;
  • project for housing for such income groups, as may be specified from time to time by the appropriate Government;
  • 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;
  • 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.

The land can be acquired for private bodies for certain purposes:

  • for public private partnership projects, where the ownership of the land continues to vest with the Government, for public purpose as defined in the Act;
  • for private companies for public purpose.

Land acquisition process in Uttar Pradesh

In 2011, the state government of Uttar Pradesh announced “Karar Niyamavali” as the guiding policy for land acquisition by the government from the citizens of its state.

“Karar Niyamavali” policy’s section 6 provides certain protections to any farmer whose land has been fraudulently transacted. The rules require that any such transaction be considered for appeal and cancelled. The farmer whose land has been fraudulently transacted has a right to compensation and damages from the state government whenever fraud is discovered and reported.

The announced policy for land acquisition by Uttar Pradesh has three parts:

  • Infrastructure projects such as highways and canals will be based on “karar niyamavali” (mutual agreement) process
  • Planned development will be based on “karar niyamavali” process
  • Commercial projects led by private developers will require the developers to get prior consent of 70 percent of affected farmers before the project can be reviewed by the state. The private developer will be required to give 16 percent of the developed land back to the farmers.
  • The land acquisition policy announced in June 2011 by the state government of Uttar Pradesh provides the following compensation to the farmers from whom land is being acquired,
  • An annuity for 33 years of Rs. 23,000 per acre ($510 per acre every year), plus an increase of Rs. 800 per acre every year; or,
  • A lumpsum upfront payment of Rs. 2,76,000 per acre ($6,100 per acre)

Perspective on Land Acquisition, Rehabilitation and Resettlement Bill

Issues of land acquisition which has currently been considered as one of the major factors hindering the pace of development of infrastructure and industrialisation has been finally addressed by the Government through the new Land Acquisition and Rehabilitation and Resettlement Bill, 2011. Land acquisition issues have had severe implications in many parts of the country with big projects coming to a halt against protests by the local residents. The various provisions included in the new Bill takes into consideration some of the important issues which were long required and are thus quite commendable.

One of the most notable factors about the Bill is that it considers land acquisition along with rehabilitation and resettlement (R&R) of the displaced families. Earlier the land acquisition and rehabilitation issues were dealt by different ministries as a result of which in certain cases after completion of land acquisition, proper and timely rehabilitation & resettlement were not doled out to the displaced people at desired pace.

However, there arise some questions regarding certain provisions which raise doubt over its successful implementation. For constructing large infrastructure projects or industries, thousands of acres of land would be required, the ownership of which might belong to hundreds of families. In India property rights are not properly defined. Especially, when it is the case of agricultural land, the asset market is very fragmented and not well documented.

Thus improper documentation could turn out to be a major hindrance for land acquisition and settlement of legal issues. Thus more focus on the issue of land title is required for successful implementation of the new land acquisition Bill, without which the process of land acquisition might continue to face several hurdles.

However, in urban areas for implementing security of land title the Ministry of Urban Development has set up Project Platinum (Partnership for Land Title Implementation in Urban Management). A draft framework law called Land Titling Bill 2010 has already been prepared in this regard. Nonetheless, while the Bill aims to resolve land acquisition issues to promote balanced growth for urbanisation and industrialisation, the implications for food security should also be considered as vast stretches of agricultural land might be transferred for non-agricultural purposes.

The provision that after acquisition land cannot be transferred to any other purpose except for a public purpose does ensure that land once acquired is not misused. The Bill also states that the land would be returned to the original owner if not used within five years for the purpose for which it is acquired. Given the financial vulnerability of the farmers, in such cases, the displaced farmers in most circumstances might not be in a position to buy back the land.

The comprehensive resettlement & rehabilitation package listed in the Bill might turn out to be more rewarding for the families displaced in the urban areas rather than the rural areas. Typically for a farmer, cash entitlements might not always enable him in securing a viable alternate means of livelihood. The R&R package does not contain the provision of deployment of another plot of land for the land acquired (except in cases of irrigation projects).

Nonetheless, the fact that the Government has finally decided to overhaul the archaic Land Acquisition Bill of 1894, gives us hope that the Bill would be able to establish a more transparent and organised process for land acquisition and resettlement of displaced families thereby ensuring that going forward the bitter hostilities witnessed in several states would not be a recurrent affair.

Some of the major provisions of the LARR Bill

One important provision is the clear definition of the purpose for which land is being acquired. The draft Bill permits land acquisition under three broad categories – 1) when the government acquires land for its own use 2) when the government acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose (including PPP projects) and 3) immediate and declared use by private firms for public purpose.

The Bill also stipulates that the consent of at least 80% of the project affected families is mandatory before the government acquires land for use by private companies.

The Bill lays out safeguards to avoid indiscriminate usage of land after acquisition by incorporating the provision that the purpose of land use cannot be changed after acquisition.

The Bill also clearly defines the compensation of the land to be paid, sharing of the appreciated value of the land with the land owners and an extensive resettlement and rehabilitation package to be paid which includes mandatory employment. Besides, defining the compensation and the rehabilitation package, the Bill stipulates fixed timelines for paying the same. Not only that by including the provision that land will not be transferred until R&R is completed, the Bill ensures that the rehabilitation of the displaced families are being taken care of after land is being acquired.

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