The Right to Fair Compensation &Transparency in Land Acquisition, Rehabilitation & Resettlement Act, 2013 – An analysis of compensation Scheme under the Act

The History of Land Acquisition dates back to the Bengal Regulation I of 1824 which was enacted to facilitate British commercial interests. This was followed by the legislations namely, the Bombay Presidency Act, XVII, 1885; Act VI of 1857; the India Act XVIII, 1885. Later on, The Land Acquisition Act, 1894 was formed and enforced by the British to acquire land belonging to rural landowners with an aim to build infrastructure to transfer their army and weapons to various parts of India. In the recent times, large scale acquisition of land has taken place for companies proposing to use lands for public purposes. The Land Acquisition Act, 1894 provided for low rates of compensation and there wasn’t any provision for rehabilitation and resettlement of persons displaced due to acquisition of land under the act.

The Act had a lot of drawbacks and created disappointment among the affected persons who were displaced due to land acquisition.

Over a period of time due to the 120-year-old law enacted during the British Rule, land acquisition issues became a public concern in India. The colonial law made governments acquire land from people by force and pay them unjust and unfair amounts as compensation. Therefore, there was a need to bring about provisions for just and fair compensation for landowners whenever private land would be acquired for public use. Finally, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which came into force on 1st January 2014 replaced the Land Acquisition Act, 1894. The Act was brought about by the Indian Parliament to provide fair compensation to the affected persons and bring transparency to the process of land acquisition in our country.

Constitutional Journey: Right to Property under Indian Constitution

The original constitution gave the right to property through Article 19(1) (f), Article 31 (1) and Article 31(2). Article 31(1) states that nobody can be deprived of his property, except by the authority of the law. Earlier it was land acquisition act 1894 and now it is land acquisition Act, 2013

Original Constitution

In which under the article 31(2) where the government will acquire property only for the public purposes and the compensation must be given to the deprived person.

Later, Court held that compensation will be equal to full market value of the property but the government of India was not able to provide full market value of compensation because of deficient nature of state exchequer. So, gradually this provision was weakened. Accordingly, Jawahar Lal Nehru brought amended in the year 1955 wherein, under article 31(2) in which it was added that compensation given cannot be questioned in any court of Law about its adequacy.

Later, Indira Gandhi brought amendment in Constitution of India under Article 31(2) in the year 1971 by way of 25th Amendment act in which the word “Compensation” was replaced by “Amount” to remove the notion of proportionality. But the Supreme Court gave the decision in the favor of the government by stating the amendment is valid but the amount paid should not be so low that the acquisition becomes confiscation.

Exceptions to Right to Property

• Under Article 31 A which was added by 1st Constitutional Amendment Act 1951 where the Law which provide for acquisition of large estates will not be invalid on grounds of violation of article 14 and article 19(1)(f) provided that personal cultivation land under ceiling limit to be compensated at market value.
• Under Article 31 B which also added by 1st Amendment Act 1951 and alongside article 31 B added to schedule IX. This was done to do Land Reforms and protect laws from judicial challenge but the amendment did not mention the nature of laws to be kept in a schedule IX and that’s why it got ultimately scope.
• Under Article 31 C added by 25th Amendment Act provided for saving of Laws giving effect to certain directive principles i.e., Article 39 (b) and Article 39(c) were given precedence over Article 14, 19 and 31.
• Under Article 31 D which was added by the 42nd amendment act 1971 that any law in the context of checking anti national activity shall not be violative of grounds mentioned in Article 14 and Article 19 respectively. But later, this article was repealed by 43rd constitutional Amendment Act 1977.

After, the 44th Constitutional Amendment Act of 1978 removed the Right to Property from Part – III and placed under Article 300 A which means that right to property is no longer a Fundamental right i.e., the aggrieved individual would not be competent to move to Supreme Court under Article 32 for any violation of Article 300 A.

The Land Acquisition Act, 1894: A Flawed Legislation

The amount of compensation paid under this act was based on circle rates in the concerned area which was not even remotely close to the actual rates. So, the Government would pay at their own market rate which was not even remotely close to the actual market rates. This archaic, unfair, unjust colonial law provided forced acquisition of land from the landowners. Once the government would decide to acquire a piece of land, no body could object to such process of acquisition. The landowner could not go to the court of law and seek injunction against such acquisition. The Act did not provide Rehabilitation and Resettlement Provisions for people who were being displaced due to land acquisition. The Act contained a lot of drawbacks and created discontentment among the persons who were affected due to land acquisitions.

In the case of Ramji Veerji Parel and Ors. V. Revenue Divisional Officer (2011), the Honourable Supreme Court held that: “The provisions contained in the Act do not adequately protect the interest of the landowners or persons interested in the land. The Act does not provide for rehabilitation of persons displaced from their land although by such compulsory acquisition, their livelihood gets affected. The Act has become outdated and needs to be replaced at the earliest by a fair, reasonable and rational enactment in tune with constitutional provisions, particularly Article 300 A of the Constitution. .”

Legal Framework of Compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 Act

The Provisions for Compensation are given under Section 26 to 30, Section 39 and the First Schedule of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Collector having determined the market value of the land to be acquired under Section 26 of the act, shall calculate the total amount of compensation to be paid to the landowner by including all assets attached to the land . In order to determine the amount of compensation to be awarded for land acquired, the Collector shall take into consideration all the parameters laid down under Section 28 of the act. In addition to the compensation, an award of solatium equivalent to 100% compensation amount shall be paid to any person whose land has been acquired under Section 30 of the act. The Collector shall take possession of land after ensuring that full payment of compensation as well as rehabilitation and resettlement entitlements are paid . The Collector shall not displace any family which has already been displaced under the provisions of the act, and if such family is displaced, the Collector shall pay an additional compensation equal to that of compensation determined under the act for second or successive displacements .

Judiciary’s Approach towards Payment of Compensation in the Recent Times

In the case of Pune Municipal Corporation & Anr. V. Harakchand Misirmal Solanki & Ors. (2014), the Pune Municipal Corporation had stated that it had issued notices to the landowners to receive compensation but the landowners had refused to accept the compensation. So, the Corporation had submitted the compensation amount with the state treasury. The Corporation contended that submitting the compensation amount with the state treasury should satisfy the requirement of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and therefore the acquisition must be upheld. But the Honourable Supreme Court held that in order to evade the mandate of Section 24, the compensation amount has to either be considered paid to the landowners in question or be deposited before the Court. The Court clarified that depositing amount of compensation with the state treasury cannot be treated as payment of compensation to the landowner.

In the recent ruling of Indore Development Authority v. Shailendra (2018), the Apex Court came up with a contradictory interpretation of Section 24. The three-judge bench in this case by a 2:1 majority set aside a 2014 three-judge bench case of Pune Municipal Corporation v. Harakchand Misirmal Solanki (2014). The Court in the Indore Development Case decided that if the amount of compensation is deposited to the state treasury as the landowners refused to accept the amount of compensation, the acquisition cannot be considered to be lapsed under Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

In Government of NCT Delhi v. Manav Dharam Trust & Another (2017), it was observed that “Supreme Court has protected the rights of the subsequent purchaser to claim compensation despite holding that they have no locus standi to challenge the acquisition proceedings .” The Court clarified that the subsequent purchasers can file a case for declaration that the land acquisition proceedings have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

In recent case of Shivkumar v. Union of India (2019), the Honourable Supreme Court overruled the judgment of Government of NCT Delhi v. Manav Dharam Trust & Another (2017) case. The Court ruled that “Subsequent Purchasers cannot be said to be landowners entitled to restoration of land and cannot be termed to be affected persons within the provisions of the 2013 act. It is not open to them to claim that the proceedings have lapsed under Section 24(2) of the act .” The Court clarified that the subsequent purchasers i.e., those who purchase land after the government has initiated acquisition proceedings on such land, are not entitled to the compensation benefits under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

A five-judge bench overruled the case of Pune Municipal Corporation and Anr. V. Harakchand Misirmal Solanki and Ors. (2014) in the Latest Supreme Court ruling of Indore Developmental Authority v. Manoharlal and Others (2020). In this case, the major issue was regarding the correct interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It was held that land acquisition proceedings cannot lapse only due to failure of compensation to the landowners. The Court clarified that lapse of land acquisition proceedings can happen only if the State also fails to take physical possession of the land. Also, payment of compensation does not require State to deposit money to the landowner’s account. Tendering the amount of compensation is sufficient.

Analysis of Compensation Scheme under the 2013 Act

Although the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act aims to provide just and fair compensation to the affected families whose land has been acquired and to make adequate provisions for such affected persons for their rehabilitation and resettlement, the act fails to address the concerns of the landowners as its provisions are not implemented in the true sense.

In our country, compensation is to be paid on the market value of land. So, it is not easy to calculate the market value because of our parallel economy involving black money, cash transactions often made with black money, corruption in the form of understating the market value in the sale documents to avoid payment of stamp duty at the time of registration of the sale deed. The Compensation paid to the landowners are not just and fair because quite often people underquote prices in sale deeds to avoid payment high amount of tax. And this results in the government paying only a little amount of compensation which is way below the actual sale price or market price of the property. The Injustice done to the landowners who are mostly farmers and the displaced population in the form of insufficient compensation must be addressed as soon as possible.

Conclusion

As per the World Bank, about 60% of India’s land is agricultural land and 70% of Indian population is rural. All infrastructural projects that connect cities and farmlands, severely impact the farmers and their livelihood from the farms. The Landowners are mostly farmers whose livelihood is completely dependent on the lands that are being taken away from them because they have no skills apart from farming. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 has brought significant positive changes in comparison to the unjust colonial law of Land Acquisition Act, 1894. But the Current Law must change with the changing needs of the contemporary times and should not be heavily loaded in favour of the government or a private company acquiring land. The Act should be implemented in such a way so as to create a balance between the needs of the government or companies and the landowners who are mostly farmers.

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Meenakshi Kumar and Basayar Khan are students of University of Petroleum and Energy Studies, Dehradun. The views of the author are personal only, if any.