Land acquisition on stabler ground

Written by Indu Bhan | Indu Bhan | Updated: Feb 5 2014, 10:25am hrs
The Right to Fair Compensation, Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, a complex but comprehensive legislation, aims at providing just and fair rehabilitation of even the minimally-affected people, favours greater transparency and emphasises on prior consultation with local bodies and landowners.

The Act, which replaces the century-old Land Acquisition Act (1894), came into force from January 1, 2014, and seeks to fix deficiencies by focussing mainly on equitable compensation to farmers and integration of acquisition with resettlement and rehabilitation (R&R) measures.

Though many have labelled it as the UPA governments vote politics law in view of the ensuing national elections in May, the need for an improved piece of legislation for land acquisition was felt with nearly 70% of the investment stuck in projects stalled due to opposition to the acquisition of land for these projects. Tata Motorss experience in Singur, West Bengal, where it had originally planned the factory for Nano, is one such example.

While the old Act had various shortcomings like forced acquisitions without adequate safeguards, the new laws principal objective is reflected in its title itself. The most important feature of the new law is that it requires developers to get the consent of up to 80% of the people whose land needs to be acquired for private projects and 70% of the land-owners in the case of public-private-partnership projects.

It has commendably increased the compensation amount and enhanced the solatium to 100% (earlier, it was 30%) while special provisions have been inserted to ensure that multi-crop land is acquired only as a last resort. Besides, a pre-notification discussion with the local Panchayati Raj institutions is a procedural innovation that would reduce litigation and speed up the acquisition process. Even the land not used can now be returned to the original owners if the state so decides.

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.

While the urgency clause in the 1894 Act never truly defined what constituted an urgent need and was left to the discretion of the acquiring authority, the low rates of compensation paid were not even remotely indicative of the actual rates prevailing in the area. The collector will now have to update the land records so that compensation can be paid on true values.

Of lately, the courts have also joined the big policy debate and decried mindless land acquisitions as it feels the government is failing to address societys basic needs.

The Supreme Court also from time to time has been critical of the archaic law. It has observed that the law has become a fraud and seems to have been drafted with scant regard for the welfare of the common man.

This sentiment was even echoed in another judgement. Pulling up state governments for adopting a callous approach in acquiring farmers land at throwaway prices for big corporate, the top court also recently interpreted the retrospective clause (Section 24) in the interests of those landowners who have been affected by arbitrary acquisition mechanisms.

In the first-ever judgment applying the new law, the Supreme Court last month tacitly approved the validity of the retrospective clause, which was the subject of enormous debate prior to the passage of the law and reinforced the idea of fair compensation inasmuch the judges found the deposited compensation to be inadequate because it did not include the interest that has been accruing on the amount since the deposit.

Dismissing the plea by Pune Municipal Corporation, the Supreme Court held that if compensation for the acquisition of 43.94 acres for development of a Forest Garden under the 1894 Act has not been paid to the land owner or deposited with a competent court and retained in the government treasury (normal practice with most acquisitions), then the acquisition would be deemed to have lapsed and would be covered under the 2013 law entitling the landowners to higher compensation. However, the only rider is that such an award of compensation should be five years or more prior to the enactment of the new law.

The new legislation has has its share of criticism, too. Business houses and real estate developers have warned that the Act will adversely impact industrialisation, create uncertainty and push back growth. Some sections feel that land prices will be too steep due to compulsory R&R conditionalities, besides the lengthy acquisition process which will delay projects.

Contrary to this, social activists opine that the Act doesnt look into the historic injustices committed in the name of development and public purpose and is solely aimed at facilitating acquisitions for corporate houses rather than benefiting marginalised land owners.

With these diverse set of views, now the government needs to a more pragmatic and scientific approach to cost determination as the registry of land parcels around may be taking place far below market rates. Similarly, necessary amendments in the laws, particularly the Coal Bearing Area Acquisition Act of 1957, the National Highway Act of 1956 and the Land Acquisition Mines Act of 1885 are necessary so that the provisions of R&R could be implemented.