Rights of Landowners in Land Acquisition Proceedings

By – Sangeeth Narayanan and Debasmita Goswami

Table of Contents

Introduction: The Need for Land Acquisition in India’s Development

Land is one of the most important resources which is required for carrying out any developmental projects / infrastructure projects. The success of any developmental project depends largely upon the ease of availability of land for executing the project. Further, availability of land becomes crucial for infrastructure projects devised for public welfare be it for building roads to the remotest parts of the country and even for economic growth of a state / region by way of allotment of lands to industries by various industrial development corporations under the State governments. This necessity falls under what is broadly referred to as land acquisition, defined as the process by which the government legally obtains private land for public purposes.

Just as how important the availability of land is for the successful execution of these projects, it is equally a complex and sensitive process as the interests of the landowners needs to be balanced with the need for carrying out the developmental projects. Balancing the interests of the landowners is also important as often it is the biggest roadblock a government faces while acquiring large parcels of land for its projects. It is not uncommon in India that a project of public interest does not see the light of the day due to the project coming to a standstill at its very first stage due to the litigations initiated by various landowners affected by the project. In such a scenario, it becomes essential to have a land acquisition regime which provides equal importance to the interests of the landowners. 

Evolution of Land Acquisition Laws in India

Shortcomings of the Land Acquisition Act, 1894

The process of land acquisition in India was governed by the Land Acquisition Act, 1894, a colonial-era legislation that formed the core of the land act framework in India for over a century. However, being an act which was over a century old, it was felt that the 1894 Act was lacking in provisions in favour of the interests of the landowners be it in the form of compensation or rehabilitation. Over the years, this land acquisition act India relied on was criticized for being outdated and disproportionately in favour of the state.

Though on the face of it, the 1894 Act seemed to adequately take into consideration the rights / interests of the landowners, however several shortcomings were observed during the practical implementation of the land acquisition process. 

On the face of it, the 1894 Act seemed to properly identify all the affected parties to a land acquisition process. It also seemed that the 1894 Act gave the landowners sufficient opportunity of being heard and sufficiently compensated on by following several ways of deciding the compensation amount including consideration of marked value of the land, assets present on the land, income derived from the land and a solatium. However, during the actual process of land acquisition, it was observed that the procedure under the 1894 Act severely lacked in identifying all kinds of affected parties. Other than the actual landowners, the 1894 Act failed to consider the rights/interest of the other affected parties to the land acquisition such as landless labourers, sharecroppers, people carrying out agriculture etc. The rights of these people were ignored during land acquisition, and they were not eligible for compensation. 

Another major drawback felt regarding the 1894 Act was that it lacked a clear formula with respect to calculation of the compensation amount. There were multiple ways of calculating the compensation amount and the acquiring authorities often used to consider the least value derived from all the possible methodologies available for deciding the compensation amount. As a result, the landowners were not adequately compensated for their land. 

Also, as there was a huge time lag between determining the compensation and awarding the compensation, the tangible value of the land got further reduced. All these deficiencies in the 1894 Act, often resulted in each land acquisition proceeding to be challenged before a court of law. As a result of the various deficiencies in the 1894 Act and more specifically as the said Act was severely outdated, it was felt necessary to overhaul the legislation governing the land acquisition proceedings which culminated in the passing of the 2013 Act.

The Right to Fair Compensation and Transparency in Land Acquisition Act, 2013

In order to address and resolve the imbalance that was prevalent between the interests of the government and the landowners, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“2013 Act”) was enacted by the Parliament and replaced the 1894 Act. 

The 2013 Act underscored fairness, transparency and rights of the landowners thereby marking a significant shift from the 1894 Act. As per the 2013 Act “landowner” is defined as any person whose name is recorded as the owner of the land or building in the records of the authority; any person who is granted forest rights under the Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 is also a landowner. Further, any person who is entitled to be granted Patta rights on the land under any law of the State including assigned lands is also considered to be a landowner.  

Government Powers and Obligations Under the 2013 Act

As per Section 2 of the 2013 Act, the provisions of the land acquisition, compensation, rehabilitation and resettlement shall apply when the Government acquires land for its own use, holds and controls, including for Public Sector Undertakings and for public purpose relating to naval, military, air force and armed forces including central paramilitary forces or any work which is vital to the national security or defence or India. 

Therefore, the Government can acquire land for infrastructure projects such as 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. Further, it can also acquire land for industrial corridors or mining activities, project for water harvesting and water conservation structures, project for Government aided educational and research schemes, project for sports, health care, tourism etc. 

Importantly, the provisions of the 2013 Act are also applicable when the appropriate Government acquires land for public private partnership projects where the ownership of the land continues to vest with the Government for public purpose. When the appropriate Government acquires land for private companies for public purpose, the prior consent of at least eighty percent of those affected families is required. In case of the public- private partnership projects, the prior consent of at least seventy percent of the affected families is required. The process of obtaining the consent shall be carried out along with the Social Impact Assessment. 

Further, while acquiring the land it shall be ensured by the appropriate Government that there is a legitimate and bonafide public purpose for the proposed acquisition. It shall also be ensured that the potential benefits and the public purpose shall outweigh the social costs and adverse social impact as determined by the Social Impact Assessment. 

As per Section 16 of the 2013 Act the administrator for rehabilitation and resettlement shall conduct a survey and undertake a census of the affected families which shall include the particulars of lands and immovable properties being acquired for each affected family, livelihoods lost in respect of land losers, list of public utilities and Government buildings which are affected and the details of the amenities and infrastructural facilities which are affected. 

Compensation, Solatium and Resettlement Provisions

As per Section 28 of the 2013 Act while determining the amount of compensation to be awarded for land acquired the collector shall take into consideration the market value and the damage sustained by the person interested at the time of the Collector’s taking possession. As per Section 30 of the 2013 Act after the collector has determined the total compensation to be paid, in order to arrive at a final award impose a ‘Solatium’ amount equivalent to one hundred percent of the compensation amount. Post which the Collector would pass Rehabilitation and Resettlement Awards for each of the family. It shall include rehabilitation and resettlement amount payable to the family, bank account number of the person to which the rehabilitation and resettlement award amount is to be transferred, particulars of the house site and house to be allotted, details of mandatory employment to be provided to the members of the affected families etc. The collector can take possession of land after ensuring that full payment of compensation as well as rehabilitation and resettlement entitlements are paid or tendered to the entitled persons within a period of three months for the compensation. The 2013 Act strengthened the legal basis for land acquisition and compensation by outlining clear mechanisms for valuation and disbursal of monetary relief.

The Role of Social Impact Assessment in Land Acquisition

Social Impact Assessment means that whenever the appropriate Government intends to acquire land for a public purpose, in such scenarios it shall consult the concerned Panchayat, Municipality or Municipal Corporation in the affected area and carry out a Social Impact Assessment study in consultation with them. Further, the notification issued by the appropriate Government for commencement of consultation and of the Social Impact Assessment study shall be made available in the local language to the Panchayat, Municipality or Municipal Corporation and in the offices of District Collector, the Sub- Divisional Magistrate and the Tehsil and shall be published in the affected areas. 

In this regard it is relevant to mention that the appropriate Government shall ensure the completion of the Social Impact Assessment study within a period of six months from the date of its commencement. The Social Impact Assessment study shall include assessment as to whether the proposed acquisition serves the public purpose; estimation of affected families and the number of families among them likely to be displaced; extent of lands, public and private, houses, settlements and other common properties likely to be affected by the proposed acquisition; whether the extent of land proposed for acquisition is the absolute bare-minimum extent needed for the project; whether the land acquisition at an alternate place has been considered and found not feasible and the nature and cost of addressing them and the impact of these costs on the overall costs of the project vis-a-vis the benefits of the project. 

Landmark Judgments Strengthening Landowner Rights in India

In addition to the improvements brought about to the protection of rights / interests of the landowners through the 2013 Act, the Supreme Court through its various judgements actively promote the rights / interests of the landowners in land acquisition proceedings. Some of the recent judgments whereby the Supreme Court has laid down various important factors qua landowners rights are as under:

1. Ultra Tech Cement Ltd. v. Mast Ram and Others, 2024 SCC OnLine 2598: 

In this judgement the Supreme Court while highlighting the role of the State under Article 300-A of the Constitution which deals with right to property referred to its judgement in Kolkata Municipal Corporation v. Bimal Kumar Shah, 2024 SCC OnLine SC 968 whereby seven non-exhaustive sub-rights were identified that accrue to a landowner when the State intends to acquire his/her property. The seven sub-rights are:

• Duty of the State to inform the person that it intends to acquire his property i.e the right to notice.
• The duty of the State to hear objections to the acquisition i.e. the right to be heard.
• The duty of the State to inform the person of its decision to acquire i.e. right to a reasoned decision.
• The duty of the State to demonstrate that the acquisition is for public purpose i.e. duty to acquire only for public purpose.
• The duty of the State to restitute and rehabilitate i.e. the right to restitution and rehabilitation.
• The duty of the State to conduct the process of acquisition efficiently and within prescribed timelines of the proceedings i.e. the right to an efficient and expeditious process.
• Final conclusion of the proceedings leading to vesting i.e. the right to conclusion.

It was further held under the aforesaid judgement that acquisition of land for public purpose is undertaken under the power of eminent domain of the government much against the wishes of the owners of the land which gets acquired. It was, therefore, observed that when such a power is exercised, it is coupled with a bounden duty and obligation on the part of the government body to ensure that the owners whose lands get acquired are paid compensation as declared by the statutory award.

2. The Supreme Court in Dharnidhar Mishra (D) v. State of Bihar, 2024 SCC OnLine SC 932 and State of Haryana v. Mukesh Kumar, (2011) 10 SCC 404 held that the right to property is not only a statutory or constitutional right but also human right.

3. The Supreme Court in Tukaram Kana Joshi thr. Power of Attorney Holder v. MIDC, (2013) 1 SCC 353 held that in a welfare State, the statutory authorities are legally bound to pay adequate compensation and rehabilitate the persons whose lands are being acquired.

4. The Supreme Court in Kukreja Construction Company v. State of Maharashtra, 2024 SCC OnLine SC 2547 held that once the compensation has been determined, the same is payable immediately without any requirement of a representation or request by the land owners and duty is cast on the State to pay such compensation to the land losers, otherwise there would be a breach of Article 300-A of the Constitution.

Conclusion: Achieving a Balance Between Development and Landowner Rights

Though the 2013 Act, to a great extent, adequately takes into account the rights of the landowners in land acquisition proceedings, the judiciary is also actively aiding in effectively implementing the provisions and filling any lacunae in the legislation. A fine balance needs to be achieved between the growing demands for land acquisition for economic and infrastructure development along with adequate protection of the landowners and all the affected parties. As India balances rapid development with equitable rights, the framework around land acquisition and compensation must remain both transparent and inclusive. The robust provisions for rehabilitation and resettlement, when effectively implemented,  can prevent social unrest and promote trust in public processes.

FAQs

More from Neeti Niyaman Team –