Abstract –

       Land acquisition is acquiring of private land by the government for public purpose. The legislation relating to land acquisition had been in existence since the time of the British Raj in India as the Land Acquisition Act, 1894. The legislation being very old and with no provisions for compensation, rehabilitation and resettlement needed to be replaced with one which filled its loopholes. And hence, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act was passed in 2013 to replace the act of 1894. This article goes over some of the landmark rulings on land acquisition in India, including recent judgement on 6 March 2020 of Indore Development Authority v. Manohar Lal which answered the questions relating to the interpretation of Section 24 of the the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which deals with Land acquisition process under Act No. 1 of 1894 that shall be deemed to have lapsed in certain cases.

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INTRODUCTION

AN OVERVIEW OF 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.[1]

            The Government in India has the power to acquire land for the purpose of the public. The same was governed by a legislation that was very old with several lacunae as it had not been changed since the time of the British. Most prominently, provisions related to compensation or rehabilitation on acquiring land was not provided for. It was also believed by the Government of India, that there existed an increased public concern on issues related to land acquisition in India. Even after many amendments, to India’s Land Acquisition Act of 1894, the major concern that prevailed was that there was no presence of a cohesive national law that spoke about fair compensation to the owner of the private land at the time of acquiring his land for public purpose, and neither spoke about fair rehabilitation of land owners and people were affected directly from loss of livelihoods. The Government of India believed that the need of the hour was a combined law that legally required rehabilitation and resettlement of land owners mandatorily for the acquisition of land for public purposes by the government.

             Thus, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was passed to replace the old Act and tackle its shortcomings.

           The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is a legislation that regulates land acquisition and provides laid down rules for granting compensation, rehabilitation and resettlement to the affected persons in India. The Act has provisions to provide fair compensation to those whose land is taken away, brings transparency to the process of acquisition of land to set up factories or buildings, infrastructural projects and assures rehabilitation of those affected. The Act will replace the Land Acquisition Act, 1894, a nearly 120-year-old law enacted during British rule.[2]

The Act of 2013 brought on the following changes:

1. COMPENSATION- The compensation provided to landowners in urban areas increased to 2 times from 1.3 times the price of land and in rural areas increased to 4 times from 2 times the price of land.
2. REHABILITATION AND RESETTLEMENT- The old act had no provision for resettlement and rehabilitation. The 2013 act provides both resettlement and rehabilitation to not only the landowners but also to those dependent on the land for livelihood and affected by its acquisition.

• SOCIAL IMPACT ASSESSMENT– The Act requires that except in cases where land is required urgently, for all projects a social impact assessment be done. It helps assess various aspects of acquisition like whether the minimum area that is required is being acquired, whether the project serves a public purpose, and the social impact of the acquisition.  Fourthly, it also mandated that the

1. CONSENT- The 2013 Act mandates that for private projects the consent of 80% of land owners must be obtained, whereas, for public-private partnership projects the consent of 70% of land owners must be obtained. However, for government projects consent of land owners is not required.

LANDMARK RULINGS ON LAND ACQUISITION

• RULING I: Land Acquisition Officer, A.P v. Ravi Santosh Reddy[3]

          The Andhra Pradesh government in a 1987 land acquisition case dragged the landowner for 20 years, court to court, to challenge his claims of Rs. 50,000. In the meantime, the claimant passed away mid-way in this long drawn court process. When the state government approached the Supreme Court, successors of the deceased failed to appear before it. However, in May 2016, the Supreme Court in gave its judgement and went on to pass strong strictures against the state government for abuse of legal process and said, “In our considered opinion, the State unnecessarily pursued this pity matter to this Court in this appeal, which does not involve any arguable point either on facts or in law nor it involves any point of public importance and nor it involves any substantial money claim. What was involved was only the calculation of payment of interest on the decretal sum for a particular period. In this Court also, learned counsel was unable to show any kind of illegality or perversity in the said calculation made by the executing Court while working out the liability of the State in paying Rs.50, 000/- towards interest. Therefore, it was, in our view, a sheer abuse of process on the part of the State to pursue a matter in filing a misconceived appeal against an interim order, which we do not approve.”, further adding: “It is unfortunate that a genuine claim of the land owner was not satisfied by the state for such a long time.”

• RULING II: Balakrishnan v. UOI[4]

             In 2006, the Kerala State government proceeded to acquire about 27 acres of agriculture land for extension of a techno park in South Kerala. The landowner was not satisfied with the compensation awarded so he went into negotiation with the concerned party for award of enhanced compensation; however, to avoid litigation he agreed to sell the land at the price offered by the state. After the compensation was paid, the state revenue department levied capital gains tax on the amount from the landowner, reasoning that the transaction was “voluntary sale”, and did not qualify for exemption under Section 10(37) of the Income-Tax Act as compulsory acquisition. This ruling was challenged by the landowner in the High Court, however, rejected the appeal. The matter was taken to the Supreme Court which ruled that the owner “succumbed to the action taken by the Government” to avoid litigation. In light of that, the transaction was not a “voluntary sale” but “compulsory acquisition” and hence, it should be exempted from capital gains tax.

• RULING III: Special Land Acquisition Officer v. Anasuya Bai[5]

           In this case the land was acquired under the Karnataka Industrial Areas Development Act; however, the compensation to the landowner was not paid in the stipulated time frame, where in this case such time limit was set by the old Land Acquisition Act, and the acquisition was quashed by the High Court. This decision of the High Court was set aside by the Supreme Court and observed that the Karnataka Industrial Areas Development Act is a self-contained code and the Central Act is not supplemental to it. It was, therefore, held that where a subsequent Act incorporates provisions of a previous Act, then the borrowed provisions become an integral and independent part of the subsequent Act and are totally unaffected by any repeal or amendment in the previous Act.[6]

RECENT LANDMARK RULING AS ON 06th MARCH 2020

Indore Development Authority v. Manohar Lal[7]

           In the case of Indore Development Authority v. Manohar Lal, it was argued by the landowners that acquisitions have lapsed under the Land Acquisition Act of 1894, and fresh proceedings must start under the Land Acquisition Act, 2013.

           In this important judgement the Supreme Court ruled that pending cases under the 2013 Act will lapse under two circumstances and the process of acquisition will need to start over again.

The apex court ruled that fresh proceedings under the Land Acquisition Act of 2013 will need to be initiated only if:

• Possession of land hasn’t taken place
• Compensation amount hasn’t been paid to landowners. Here, payment of compensation not only means that money must be paid to landowners or deposited in court, but the amount deposited in a government treasury will also be considered, the court has said. This means even if the compensation amount was deposited with the government, fresh acquisition under the 2013 law will not apply.[8]

           It was further held by the 5-judge bench that the landowners cannot claim compensation under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if they had refused the compensation provided or appealed for higher compensation. However, in case the compensation is not made under the provisions of Section 24(1)(a) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as on the date commencement of the 2013 Act, i.e., 1.1.2014, in such cases the proceedings will not amount to be lapsed and compensation has to be awarded as per the provisions of the Act of 2013.

With regards to Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which states:

“(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,—

(a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or

(b) where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.

(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:

Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.”[9], the court gave the following interpretations and held

1. “In case the award has been passed within the window period of five years excluding the period covered by an interim order of the court, then proceedings shall continue as provided under Section 24(1) (b) of the Act of 2013 under the Act of 1894 as if it has not been repealed.
2. The word ‘or’ used in Section 24(2) between possession and compensation has to be read as ‘nor’ or as ‘and’. The deemed lapse of land acquisition proceedings under Section 24(2) of the Act of 2013 takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation has been paid.
3. The expression ‘paid’ in the main part of Section 24(2) of the Act of 2013 does not include a deposit of compensation in court.
4. In case a person has been tendered the compensation as provided under Section 31(1) of the Act of 1894, it is not open to him to claim that acquisition has lapsed under Section 24(2) due to non-payment or non-deposit of compensation in court. The obligation to pay is complete by tendering the amount under Section 31(1).
5. The proviso to Section 24(2) of the Act of 2013 is to be treated as part of Section 24(2) not part of Section 24(1)(b).
6. The mode of taking possession under the Act of 1894 and as contemplated under Section 24(2) is by drawing of inquest report/ memorandum. Once award has been passed on taking possession under Section 16 of the Act of 1894, the land vests in State there is no divesting provided under Section 24(2) of the Act of 2013, as once possession has been taken there is no lapse under Section 24(2).
7. The provisions of Section 24(2) providing for a deemed lapse of proceedings are applicable in case authorities have failed due to their inaction to take possession and pay compensation for five years or more before the Act of 2013 came into force, in a proceeding for land acquisition pending with concerned authority as on 1.1.2014. The period of subsistence of interim orders passed by court has to be excluded in the computation of five years.
8. Section 24(2) of the Act of 2013 does not give rise to new cause of action to question the legality of concluded proceedings of land 319 acquisition. Section 24 applies to a proceeding pending on the date of enforcement of the Act of 2013, i.e., 1.1.2014. It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition.”[10]

[1] CD Staff, [Burning Issue] Supreme Court judgment on Land Acquisition Act, CIVILS DAILY (Mar. 12, 2020), https://www.civilsdaily.com/burning-issue-supreme-court-judgment-on-land-acquisition-act/

[2] Swati Duggal, Land Acquisition in India, LAWCTOPUS, (Aug. 7, 2014) https://www.lawctopus.com/academike/land-acquisition-india/

[3] AIR 2016 SC 2579

[4] 2017 Tax Pub (DT) 0362 (SC)

[5] (2017) 3 SCC 313

[6] Latest Cases: Civil, e-Newsletter 02 CJA Feb. 2017

[7] (SLP(C) No.-009036-009038 / 2016)

[8] Aparna Chaturvedi, Land Acquisition: Supreme Court Lays Down Two Conditions For Pending Cases, BLOOMBERG QUINT (Mar. 06, 2020) https://www.bloombergquint.com/law-and-policy/supreme-court-sets-two-conditions-for-land-acquisition-to-lapse

[9] Section 24, The Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation And Resettlement Act, 2013.

[10] Indore Development Authority v. Manohar Lal, SLP(C) No.-009036-009038 / 2016)

Disclaimer: This article has been published in Legal Desire International Journal on Law, ISSN 2347-3525, Issue 22 ,Vol. 7

RUPAL SINGH

Student of Law, Amity Law School, Noida, Amity University Uttar Pradesh