PILSARC NEW DELHI

WORKING PAPER NO. 127

AIDE-MEMOIRE ONLAND ACQUISITION AND

REHABILITATION & RESETTLEMENT BILL (LARR), 2011

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GENERAL PROBLEMS AND SPECIFIC DEFICIENCIES

[Note: This is in addition to PILSARC working paper 126]

PUBLIC INTEREST LEGAL SUPPORT AND RESEARCH CENTRE

(www.pilsarc.org)

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CONTENTS

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PART-II: GENERAL PROBLEMS AND SPECIFIC DEFICIENCIES

I. Preliminary: Link to Part-I on Tribals and Tribal Lands

1.1 This paper follows on the footsteps of the earlier which dealt with: Tribals, Tribal Lands and Land Acquisition: Need to amend the LA and RR Bill 2011. (PILSARC Working Paper No. (126) “Tribal Lands Paper”).

1.2 The Tribal lands paper sought to emphasize that the Constitution itself cast a protective veil across areas included in the Vth and VIth Schedule. There was no reason why this protective veil should not extend to not permitting ‘land acquisitions’ in tribal areas unless certain requirements were made. The more absolute argument that there should be no acquisitions under the LA and RR Bill 2011was not accepted as the way forward although such an approach can be an alternative whereby special acquisition legislations be devised for each acquisition in the tribal areas. However, the proposals in the Tribal Lands Paper subjected the invocation of the LA&RR Bill 2011 to a principle of consent through Gram Sabhas in the Vth Schedule areas and the relevant Councils in the VIth Schedule areas. It also canvassed the case that ‘land acquisitions’ in tribal areas required a much more comprehensive Impact Assessment and RR not just in respect of the area to be acquired but the “zone of influence” and effect induced by the land acquisition.

1.3 The proposals in this paper are in addition to and not in derogation of the proposals in the Tribal Lands Paper dealing with tribals and tribal lands.

II. GENERAL PROBLEMS

2.1 The general problems with land acquisition are well known.

2.2 At a statutory level, the LA Act 1894 was clearly a rapacious Act to meet the need of the empire. In 1923, there were attempts to examine the impact of the Act, but the only significant change was the introduction of the right to be heard introducing Section 5A. But even

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this right to hearing got diluted in two ways. Until recently, the extent and nature of the hearing was never scrutinized, depriving the hearing the status of a mandatory due process requirement. At the same time invocation of the urgency clause (Section 17) dispensed with the hearing requirements altogether. Once again whether the urgency invocation could be scrutinized was not examined by courts until recently. In 1984, the changes concerned themselves with an increase of compensation (from 115% to 130% of market value) and placed a time schedule on the acquisition process (final notification in 1 year; award two years thereafter).

2.3 It was the judiciary that breathed life into the hearing [Hindustan Petroleum Corpn. Ltd. v. Darius Shapur Chenai (2005) 7 SCC 627] and urgency provisions (Dev Sharan v. State of U.P. (2011) 4 SCC 769; State of West Bengal v. Prafulla Charau Law (2011) 4 SCC 537; Anand Singh v. State of U.P. (2010) 11 SCC 242; Babu Ram v. State of Haryana (2009) 10 SCC 115). What also gave some solace to the court’s legal interpretation was the conversion of the right to property as a due process oriented constitutional right (reposed in article 300A) even though it had ceased to be a fundamental right from 1979. (Constitution (Forty-fourth Amendment) Act, 1798; Hindustan Petroleum Corpn. Ltd. v. Darius Shapur Chenai (2005) 7 SCC 627 at prs. 6, 9) Industry and SEZs met with peoples protest and police brutality resulting in the project being abandoned. In Singur, an acquisition had already taken place in favour of the Tata small car (Nano) project. On Mamta Banerjee’s coming to power the Singur Land Rehabilitation and Development Act 2011 reversed the process. Meanwhile in Uttar Pradesh, on 6 July 2011 the Supreme Court struck down an acquisition in Shahberi on grounds of wrongful invocation of the urgency clause (Greater Noida Industrial Development Authority v. Devendra Kumar 2011 (7) SCALE 439). This was repeated by the Supreme Court in respect of the leather city acquisition wrongly invoking the urgency clause (Devender Kumar Tyagi v. State of U.P. 2011(9) SCALE 310).

2.4 At a project level, there was concern with how the big river valley projects such as Narmada and Tehri handled the issue of displacement and RR (Narmada Bachao Andolan v. Union of India (2000) 10 SCC 664; Narmada Bachao Andolan v. Union of India (2005) 4 SCC 32; N.D. Jayal v. Union of India (2004) 9 SCC 362). Here RR was written

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into the scheme of acquisition (The worst interpretation is to be found in the Omkareshwar dam case.) (State of M.P. v. Narmada Bachao Andolan,(2011) 7 SCC 639)

Now, the question was whether RR should be attached to every land acquisition – either irrespective of size or in respect of the larger acquisitions.

2.5 Finally, the actual discontent over the Nandigram project where acquisition were made inter alia, for the Salim group to set up.

On 31 May 2011, the Allahabad High Court voided a planned development acquisition of 170 acres in Gulistanpur on grounds of wrongful use of the urgency clauses (Smt. Rajni and Ors. v. State of U.P. 2011(6)ADJ140; MANU/UP/1583/2011). In Gautam Budh Nagar, the Allahabad High Court used the wrongful invocation of the urgency clause to invalidate the acquisition of 589 hectares in Patwari village (Har Karan Singh v. State of U.P. Order Dated 19.7.2011 in W.P. (C) No. 17068 of 2009, but also see Gajraj v. State of U.P., order dated 26.07.2011 in W.P.(C) No. 37443 of 2011). In all this, there were concerns that builders had already allocated plots. In UP, protests similar to those in Bengal forced the Varanasi project in Katesar to create Kashi city were abandoned on 31 May 2011 (UP gives in to farmers, defers Katesar land acquisition, Indian Express dated 30.05.2011; Chandauli Farmers call off agitation, The Financial Express dated 01.06.2011). There were also protests over the Yamuna Expressway in Bhatta and Parsoul villages resulting in death and injury. (2 Policemen, farmer killed as U.P. hostage drama turns violent, The Hindu dated 08.05.2011; Farmers’ Stir: situation tense but under control, The Hindu dated 10.05.2011).

2.6 The central government was anxious to show that rapacious acquisitions were not supported by the UPA led coalition. It could do from a distance because Congress governments were not in power in UP and West Bengal; or involved in the mining scandal in Karnataka.

2.7 The LA and RR Bill 2011 does not just have to be reviewed as a response to the present discontents, but as a long term legislation.

Why the Bill?

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2.8 There are two clear views on the Bill. The first is that the Bill is of a problem solving nature that has still not worked out how rural and tribal lands are to be protected from challenge. The second view espoused by the government is that this Bill represents a new vision.

2.9 We have already taken the view that the LA and RR Bill does not take into account the needs and protection of the tribals, and tribal lands effectively (Tribal Lands Paper)

This looks at the LA application of the Act in other areas.

III. PRE-PRELIMINARY EXERCISES IN THE LA AND RR BILL 2011

3.1 Unlike the LA 1894, the LA and RR Bill 2011 require certain pre-preliminary exercises to be undertaken which include.

(i) Pre-Preliminary consultation with Gram Sabha(ii) Pre-Preliminary Survey of Land required(iii) Pre-Preliminary Social Assessment Report(iv) The 80% and 50-100 acres rules

(i) Pre-Preliminary consultation with Gram Sabha

3.2 There is a prior requirement that even the preliminary notification shall not be issued without consulting the relevant Gram Sabha or council. The provision is as follows:

Clause 11(2):“(2) No notification shall be issued under sub-section (1) unless the concerned Gram Sabha at the village level and municipalities, in case of municipal areas and the Autonomous Councils in case of the Sixth Schedule areas have been consulted in all cases of land acquisition in such areas as per the provisions of all relevant laws for the time being in force in that area.”

3.3 But, what is the procedure and consequence of this consultation. Few questions arise.

(i) The procedure of the consultation is not indicated since the Gram Sabha is a primary body, information needs to go to each member.

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(ii) Who will conduct this exercise?

(iii) The principle of informed consent or consultation is not elaborated.

(iv) The effect of the consultation is not indicated.

(v) The exercise is conditional by the relevant laws for the time being in force.

What happens if the Gram Sabha or Council rejects the proposal? At present, the consultation provision seems like an empty formality.

3.4 We feel that clause 11(2) should be amended as follows:“No notification shall be issued under sub-section (i) unless the concerned Gram Sabha at the village level and municipalities have been consulted on the basis of informed consent after ensuring each member of the said Gram Sabhas and councils have been individually informed.

Provided that where the land in question is in a Vth Schedule area, the relevant Gram Sabha and municipalities must consent to the proposal for acquisition.

Provided further that where the land is in a sixth schedule area, the consent of the relevant council must consent to the proposal.

Provided further that in the case of Gram Sabhas and municipalities other than those in the Vth or VIth Schedule areas, the deliberations of the Gram Sabha and the response of the appropriate government shall be placed along with the preliminary notification.”

(ii) Pre-Preliminary Survey of Land required3.5 It is not clear if clauses 12-13 are to operate before the preliminary

notification or after.

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“12. For the purposes of enabling the appropriate Government to determine the extent of land to be acquired, it shall be lawful for any officer, either generally or specially authorized by such Government in this behalf, and for his servants and workmen,—

(a) to enter upon and survey and take levels of any land in such locality ;(b) to dig or bore into the sub-soil;(c) to do all other acts necessary to ascertain whether the land is adapted for such purpose;(d) to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon; and(e) to mark such levels, boundaries and line by placing marks and cutting trenches and where otherwise the survey cannot be completed and the levels taken and theboundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle:

Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwelling-house (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days’ notice in writing of his intention to do so.

13. The officer so authorised under section 12 shall at the time of entry under section 12 pay or tender payment for any damage caused, and, in case of dispute as to the sufficiency of the amount so paid or tendered, he shall at once refer the dispute to the decision of the Collector or other chief revenue officer of the district, and such decision shall be final.”

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Surely this exercise should be conducted before the preliminary notification. It seems incongruous that the government’s estimate of what it requires comes after the preliminary notification.

3.6 We, therefore, suggest that Clauses 12 and 13 be made to operate prior to the preliminary notification as follows:

“Clause 12: Prior to the Preliminary notification under clause 11(1), the Government shall indicate the land sought to be acquired with markers to enable the Gram Sabhas and councils as the case may be and any person interested may know the extent of land proposed for acquisition.

Provided further this exercise shall be conducted in the presence of the Gram Sabha, council or municipality.

Provided further that where any exploration is required it must be with the consent of the person interested.”

3.7 We believe that the present clauses 12 and 13 be deleted.

The reason for this is that if the purpose of clause 12 and 13 is after the preliminary notification, it represents a frightening expression of state power – representing as it were a fait accompli which will necessarily affect the preliminary notification.

Thus the present clause 12 and 13 should be deleted.

(iii) Social Assessment Report (SAR)

3.8 The exercise of a Social Impact Assessment is also a preliminary exercise which has to be conducted before the Preliminary Notification under clause 11(1). The relevant clauses are clause 4(1) to clause 9.

(i) clause 4-5 deal with the preparation of the SAR.(ii) clause 6 is concerned with its publication(iii) clause 7-8 consists of examining the SAR by an Expert

Group (cl. 7) and General Committee (cl.8).(iv) clause 9 dispenses with the SAR in urgency cases.

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3.9 At the very outset, it is not clear why only the SAR study should be made available. Why not the Expert Committee Report and the Report of the Collector.

3.10 Accordingly, it is recommended that clause 6 after “affected area” add:

“so as to reach all affected families”.

After clause 7 add:“Clause 7A: The appropriate government shall ensure that the Expert Committee must consult all affected families in the affected area in respect of its proposals.

Clause 7B: The appropriate government shall publish and make available the Expert Committee’s recommendations in such manner that it reaches all affected families; in such manner as may be prescribed and uploaded on a website especially for that purpose.

Clause 7C: Comments and objections shall be sought following the exercise in clause 7A and 7B and forwarded to the Committee established under clause 8.”

Clause 8(1): Proviso dealing with acquisitions less than 100 acres should be deleted because it suggests that acquisitions will go to some inferior Committee.

Proviso after clause 8(4) should be deleted.This clause stands out like a sore thumb and the whole question of private acquisitions should be dealt with separately.

After clause 8 add: “Clause 8A: The Committee shall make an effort to collect the views of the affected families and persons in the affected area and forward them to the collector and the appropriate government.”

(iv) Private Acquisitions 50-100 acres and 80% rules

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3.11 The LA & RR Bill is certainly a bonanza for private acquisitions. According to the Bill 77 of 2011, the act shall apply to both acquisitions to government as well as for private purposes.

Section 2(1)“2. (1) The provisions of this Act relating to land acquisition, rehabilitation and resettlement, shall apply, when the appropriate Government acquires land,—

(a) for its own use, hold and control; or(b) with the purpose to transfer it for the use of private companies for public purpose (including Public Private Partnership projects but not including national or state highway projects); or(c) on the request of private companies for immediate and declared use by such companies of land for public purposes:

Provided that no land shall be transferred by way of acquisition, in the Scheduled Areas in contravention of the law relating to land transfer, prevailing in such Scheduled Areas.

(2) The provisions relating to rehabilitation and resettlement under this Act shall apply in the cases where,—

(a) a private company purchases or acquires land, equal to or more than one hundred acres in rural areas or equal to or more than fifty acres in urban areas, through private negotiations with the owner of the land as per the provisions of section 42;(b) a private company requests the appropriate government for acquisition of a part of an area so identified for a public purpose:

Provided that where a private company requests the appropriate Government for partial acquisition of land for public purpose then the rehabilitation and resettlement entitlements shall be applicable for the entire area identified for acquisition by the private company and not limited to the area for which the request is made.”

The 50 acre-100 acre rule

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3.12 What is immediately apparent is that while the acquisition provision shall apply to private acquisitions where the private company requests the government of part of an area, it shall not apply where a private company has purchased less than 100 acres in rural areas or 50 acres in urban areas:

Clause 42 makes this abundantly clear.“42. (1) Where any person other than a specified person is purchasing land equal to or more than one hundred acres, in rural areas and fifty acres in urban areas, through privatenegotiations he shall file an application with the District Collector notifying him of—

(a) intent to purchase;(b) purpose for which such purchase is being made;(c) particulars of lands to be purchased.

(2) It shall be the duty of the Collector to refer the matter to the Commissioner for the satisfaction of all relevant provisions under this Act related to rehabilitation and resettlement.(3) Based upon the Rehabilitation and Resettlement Scheme approved by the Commissioner as per the provisions of this Act, the Collector shall pass individual awards covering Rehabilitation and Resettlement entitlements as per the provisions of this Act.(4) No land use change shall be permitted if rehabilitation and resettlement is not complied with in full.(5) Any purchase of land by a person other than specified persons without complying with the provisions of Rehabilitation and Resettlement Scheme shall be void ab initio.

Explanation.—For the purpose of this section, the expression “specified persons” includes any person other than—

(a) appropriate Government;(b) Government company;(c) association of persons or trust or Society as registered under the Societies Registration Act, 1860, wholly or partially aided by the appropriate Government or controlled by the Appropriate Government.”

It is not immediately clear that this purchase relates to a Private Public Partnership acquisition (under clause 3(2a)(vi)(B)) or public interest acquisition for producing public goods or providing public services

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(clause 3(2a)(vi)(vii)) or both. Be that as it may, presumably the 50 acre – 100 acre rule shall apply to cases where 80% of the land has been acquired by private negotiations because where the purchase was of the 100%, the State’s acquisitive power would not be required even though ‘land use’ requirements may have to be changed.

3.13 Presumably on a combined reading of the 50 acre – 100 acre rules with the 80% rule, the R&R would not apply to cases of private negotiated sale of less than 50 acres (urban) and 100 acres (rural). This has immense possibility of misuse. Especially in a land scarce country, this is a signal fraud in favour of private entrepreneur and a denial of RR to a large number of displaces.

The up shot of these provisions is private acquisitions by negotiations [less that 50 acres (urban areas) and 100 acres (rural areas)] will be examples of brutal acquisitions without relief and rehabilitation.

3.14 We feel that this provision is invidious.

The following amendments are proposed.Cl. 2(2)(a) should be deleted.

Cl. 42(1) the words “equal to or more than one hundred acres in rural areas and fifty acres in urban areas” be deleted.

80% Rule

3.15 A novel feature of the LA and RR Bill is to support private acquisitions for a public purpose where the private company has 80% consent of the persons affected. It seems untidily clear from the applicability clause 2(1) that there is a distinction between PPP acquisition and other acquisitions.

“(c) on the request of private companies for immediate and declared use by such companies of land for public purposes.”

Question is, does the 80% rule does apply to PPP acquisition? What is clear is that subject to the 50-100 acre provisions, RR will apply to the

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whole acquisition including the areas derived by sale from private negotiations (see cl. 2(2) proviso and cl. 3 (2a)(vi) and (vii) proviso).

3.16 One version of the 80% requirement is to be found in the definition of public purpose (cl. 3(2a)(vi) and (vii).

“(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.”

Consent and purchase are two separate requirements. The first refers to (i) “consent of at least 80% of the project affected people” and (ii) “purchase of part of the land needed for a project”.

3.17 It may be noted that the 80% rule will apply to all cases including (a) government acquisitions in certain cases; (b) PPPs; (c) Private acquisitions.

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The 80% rule is articulated in two places where the provision is:(a) for purchase by private negotiations;(b) consent of at least 80% of project affected people.

There are two separate requirements conjoined together by context (cl.2(2); 3(2a)(vi)(vii) and proviso 1 and 2 related thereto; cl. 8(4) proviso). There seems to be a misconception that 80% of the land has to be purchased. This is no where in the Bill. As far as the extent of the land to be bought by private negotiations is “the balance of the land”; obviously this will be by consent. But to what extent? The consent is of project affected families.

3.18 The manner in which the 80% consent is required is not given but to be prescribed.

Cl. 8(4) proviso“Provided that where land is sought to be acquired for the purposes as specified in clause (b) or (c) of sub-section (1) of section 2, the Committee shall also ascertain as to whether the consent of at least eighty per cent of the affected families as required under the proviso to sub-clause (vii) of clause (za) of section 3, has been obtained in the manner as may be prescribed.”

Cl. 2(2a)(vii) 1st proviso speaks of this consent “through a prior informed consent to be prescribed by the appropriate government”.

3.19 There is a further catch as to the basis on which the acquisition in such cases will happen. The relevant provision reads as follows:

“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.”

This means that

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(a) RR shall apply to the whole area(b) for the remaining area the provision of the Act will apply

One reading of these provisions is that the land acquisition provisions (apart from RR) shall apply only to the remaining area acquired by government.

3.20 But what will be the compensation provision for the privately negotiated purchase

(a) This the government acquisition for private companies shall be subject to the generous land acquisition provisions (including solatium under cl. 29 and market value under cl. 26(2) read with the first schedule).

(b) the land obtained through private negotiations shall be on the basis of the negotiation.

This creates an anomalous situation.

80% rule is a fraud

3.21 We feel that the 80% rule is a hoax, misleading and incomplete because of the following reasons:

(i) We know that land was massively bought up in Haryana by Reliance at inflated prices. All that remained was to get land use change.

(ii) The Singur and Nandigram do not point in the direction of consent but misuse of power.

(iii) Consent is purchased by money and goondas.

(iv) The non-reference to 80% of the land but of persons affected makes the object vague and unclear.

(v) Although uniform RR will apply, it is not clear if full compensation as provided in the Act will apply to negotiated private sales.

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(vi) If the idea is to introduce democratic consent, it must necessarily fail as awkward and incomplete.

(vii) The consent is to be obtained by a private persons.

3.22 We therefore suggest: Clause 3(2a)(vii) proviso 1 and 2 be deleted. Clause 8(4) proviso be deleted A new provisions be added as Chapter III of Section 9A

which reads as follows“All acquisition for public purposes under cl. 3(2a)(vi)(B) and 3(2a)(vii) shall only take place subject to the provisions below namely.

(i) a full statement of the purposes of the acquisition and the enterprise sought to be achieved including profits and profits sharing and job prospects shall be formulated.

(ii) The statement shall be placed before each affected person or family.

(iii) The statement shall have the approval of 80% affected persons or families as ascertained by the government in a transparent manner including profit sharing and job prospects.

(iv) The acquisition will then proceed under Section 11 and subject to the RR provisions.”

3.23 The present provisions seem entirely shady.

IV. PUBLIC PURPOSE AND OTHER DEFINITIONS

4.1 Land can only be acquired for a ‘public purpose’. The Table below shows public purpose under the 1894 Act and the 2011 Bill:

LA 1894 - Section 3(f) LA&RR Bill 2011 – Section 3(za)(f) the expression “public purpose”

(za) “public purpose” includes—

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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

(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; or(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 residentialpurposes 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

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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,

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

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but does not include acquisition of land for companies;

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.

4.2 It will be recalled that under the LA 1894, acquisitions were either under Chapter II (public purpose) or Chapter VII (for companies). We are not concerned with the latter which was for housing for workers of companies and the like. The loophole was that Chapter II acquisitions for private companies was enabled if there was public sector company involvement. This virtually became a fraud on the statute without even the Supreme Court validated such acquisitions where the public sector contribution was as low as Re 1 (Prathibha Neema v. State of M.P. (2003) 10 SCC 626; Manubhai Jethlal Patel v. State of Gujarat (1983) 4 SCC 553; Srinivasa Coop. Housing Building Society Ltd. v. Madam Gurumurthy Sastry (1994) 4 SCC 675; Jhandu Lal v. State of Punjab (1961) 2 SCR 459)

4.3 Therefore, we now have a clear path for private acquisition for(i) Public Private Partnership (PPP) for the production of

public goods or provision of public services.

(ii) Private companies for production of goods for public or provision of public services.

Apart from the PPP, there is a subtle difference between “public goods” and “goods for the public”. The latter terms is wider and inaugurates a free for all if goods for the public is given a wide meaning to all goods whether for the general public or down market use by industry and others.

Highway projects4.4 It will also be seen that whole the Act applies to PPP projects, it does

not apply to“national or state highway projects” (cl. 2(1)(b)).

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This is probably because they are covered by the Highway Acts. Compensation under the National Highways Act is differently structured.

“It is proposed that the procedure under the LA&RR Bill 2011 be followed in the case of State and National Highways also.”

(i) Public Purpose by Government

4.5 The concept of ‘public purpose’ is dramatically altered by the LA and RR Bill 2011 (a) under the LA Act 1894 there was not concept of private acquisitions except under Chapter VII (housing for pvt. Companies etc) (b) Equally the LA 1894 countenanced a kind of PPP with the public sector (a provision that got diluted through court interpretation).

But the LA&RR brazenly allows acquisitions for the private sector in the following way.

(i) Government and public sector acquisitions (Cl.2(2a)(i) to (v))

(ii) Surprisingly, even for government and public sector acquisition the 80% rule applies.

It is even stated that in these government and public sector acquisition

“where the benefits largely accrue to the general public”.

4.6 This seems to suggest that there are two categories of public purpose under the heads (i) to (v):

(i) those where no benefits largely accrue to the general public

(ii) those where benefits largely accrue to the general public

In the latter case alone, the 80% rule will apply.

We fail to understand the fine distinction between the two categories (i) and (ii). We also fail to understand why the 80% rule should apply to category (ii).

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(ii) Public purpose: Private acquisitions

4.7 The crucial change in the LA ad RR Bill is to pave the way for large scale private acquisitions on the basis of the formula.

(a) Private acquisitions can be PPP or private companies.(Section 2(1)(b))

(b) In both cases the 80% rule applies.

(c) RR shall not apply under the 50-100 acres rule. It is not clear whether the 50-100 acres rule will apply to PPP cases. We must assume that they it.

4.8 One cannot imagine a greater bonanza for private acquisition than the proposals in the LA and RR Bill 2011 even though it is hedged in by the 80% and 50-100 acres rule. The latter even dispenses with the RR provisions in small to medium to semi-large acquisitions. The provisions at present are neither public interest fish nor private interest fowl even though it provides huge escape clauses to the private entrepreneur.

We propose that(i) private acquisitions should be permitted where

necessary

(ii) subjected to RR in all cases

(iii) with 100% consent from all affected on the basis of incentives or investments offered.

4.9 The present Bill is approved even by business (see Hindu of 11.9.2011).

4.10 The definition of affected family reads:“(c) “affected family” includes—

(i) a family whose land or other immovable property has been acquired or who have been permanently displaced from their land or immovable property;

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(ii) a family which does not own any land but a member or members of such family may be agricultural labourers, tenants, share-croppers or artisans or may be working in the affected area for three years prior to the acquisition of the land, whose primary source of livelihood stand affected by the acquisition of land;(iii) tribals and other traditional forest dwellers who have lost any of their traditional rights recognised under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 due to acquisition of land;(iv) family whose primary source of livelihood for three years prior to the acquisition of the land is dependent on forests or water bodies and includes gatherers of forest produce, hunters, fisher folk and boatmen and such livelihood is affected due to acquisition of land;(v) a member of the family who has been assigned land by the State Government or the Central Government under any of its schemes and such land is under acquisition;”

The requirement in sub clauses (ii), (iv) and (vi) that the person must have been working or residing in the affected area for three years preceding the acquisition seems entirely unnecessary. The fact that the primary source of livelihood is disrupted should be enough to entitle the family to the benefits of the Act.

We submit that the requirement of three years should be deleted.

V. ACQUISTION AND DUE PROCESS

5.1 The notification and acquisition process is similar to Section 4, 5A and 6 of the 1894 Act (Clauses 11, 16 and 19 of the present Bill).

1. As far as this is concerned, the due process has been strengthened.

2. However, we feel a notice should be given to each person

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5.2 The difficulty that arises is the complications that have been built round the acquisition by way of the following.

(a) the Social Assessment Report (cl. 11(3))

(b) the RR Report (cl. 11(3)

(c) the preliminary survey (cl.12, 20).

We feel that all these are a preliminary process germane to objections and should be fully placed.

(a) At present, these provisions should change the objection process which must be in respect of all these determinations. What is the point of simply indicating the particulars of the RR administrator (cl.11(3) and subject to a separate hearing of objections (cl.17(5).

(ii) The RR package must precede the objections and cannot be just a suffix.

(iii) Both the Collector and RR Administrator hearing must be together.

(iv) The government’s satisfaction under clause 19 must be based on reasons.

VI. Compensation, Urgency Clause, and cost, interest and appeal

i. Assessment of Compensation

6.1 The assessment of market value is stated in clause 26 which reads: “26. (1) The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:—(a) the minimum land value, if any, specified in the Indian Stamp Act, 1899 for the registration of sale deeds or

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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.whichever is higher:Explanation 1.—The average sale price referred to in clause (b) shall be determined taking into account the sale deeds or the agreements to sell registered for similar type of area in the near village or near vicinity area during immediately preceding three years of the year in which such acquisition of land is proposed to be made.Explanation 2.—For determining the average sale price referred to in Explanation 1, one-half of the total number of sale deeds or the agreements to sell in which the highest sale price has been mentioned shall be taken into account.(2) The market value calculated as per sub-section (1) shall be multiplied by a factor to be specified in the First Schedule.(3) Where the market value under sub-section (1) or sub-section (2) cannot be determined for the reason that—(a) the land is situated in such area where the transactions in land are restricted by or under any other law for the time being in force in that area; or(b) the registered sale deeds or agreements to sell as mentioned in clause (a) of sub-section (1) for similar land are not available for the immediately preceding three years; or(c) the minimum land value has not been specified under the Indian Stamp Act, 1899 by the appropriate authority, the concerned State Government shall specify the floor price or minimum price per unit area of the said land based on the price calculated in the manner specified in sub-section (1) in respect of similar types of land situated in the immediate adjoining areas:Provided that in a case where the Requiring Body offers its shares to the owners of the lands (whose lands have been acquired) as a part compensation, for acquisition of land, such shares in no case shall exceed twenty-five per cent. of the value so calculated under sub-section (1) or sub-section (2) or sub-section (3) as the case may be:Provided further that the Requiring Body shall in no case compel any owner of the land (whose land has been acquired)

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to take its shares, the value of which is deductible in the value of the land calculated under sub-section (1).”

The emphasis in clause 26(1) is on what is known as the circle rate. It is well known that the circle rate is a depressed figure and sits uneasily with cl (b).

6.2 The real problems have arisen because, comparison has sometimes been elusive. There has been an attempt in Explanation 2 to pay the highest price in 50% of the sale deeds. If similarity is found, surely it is enough to pay the highest rather than the highest of 50%.

Equally, there should be no bar to taking into account sales one year after the clause 11 notification.

Alternate ways of determining market value may also be considered. (see for example, Ghatak, Ghosh The Land Acquisition Bill: A critique and a Proposal CDE September 2011, Working Paper No. 204)

6.3 The first proviso in Cl. 26(3) stands out like a sore thumb. It is to the effect of offering 25% shares in the requiring authority or a sister company.

6.4 How this will work out remains unclear. This is to be off set against the compensation.

No off set against monetary value should be allowed.

If this is to be worked out, a more comprehensive plan of investments may be offered.

6.5 Clause 63 belongs here rather than later.

6.6 The Draft Bill provided a multiplier of three in rural areas. This has been reduced to two in the present Bill. This is an outrageous alteration in favour of requiring bodies by reduction in compensation.

We submit that the multiplier must be increased to 5.

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6.7 Another change in the present Bill is that the multiplier is provided in Schedule I. This change in the light of clause 99 (Power to amend Schedule) makes the compensation provision extremely weak and vulnerable.

We submit that the multiplier must be precluded from the ambit of clause 99 so that it is may not be altered by a notification.

ii. The Urgency Clause

6.8 The urgency clauses in the Draft Bill and the present Bill (No. 77 of 2011) are given below:

Clause 30 of the Draft Bill Clause 38 of the present Bill.

30. Special powers in case of urgency(1) In cases of urgency, whenever the Appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9 take possession of any land needed for a public purpose. Such land shall thereupon vest absolutely in the Government, free from all encumbrances.(2) The powers of the Appropriate Government under sub-section (1) shall be restricted to the minimum area required for the defence of India or national security or for any emergencies arising out of natural calamities;

“38. (1) In cases of urgency, whenever the appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of thirty days from the publication of the notice mentioned in section 21, take possession of any land needed for a public purpose and such land shall thereupon vest absolutely in the Government, free from all encumbrances.(2) The powers of the appropriate Government under sub-section (1) shall be restricted to the

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PROVIDED that the powers listed under this section shall be used in the rarest of rare cases.PROVIDED FURTHER that the Collector shall not take possession of any building or part of a building under this sub-section without giving to the occupier thereof at least forty-eight hours notice of his intention to do so, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such building without unnecessary inconvenience.(3) Before taking possession of any land under sub-section (1) or sub-section (2), the Collector shall tender payment of eighty per cent of the compensation for such land as estimated by him to the person interested entitled thereto; (4) In the case of any land to which, in the opinion of the Appropriate Government, the provisions of sub-section (1), sub-section(2) or sub-section (3) are applicable, the Appropriate Government may direct that any or all of the provisions of Part II shall not apply, and, if it does so direct, a declaration may be made under section 18 in respect of the land at any time after the

minimum area required for the defence of India or national security or for any emergencies arising out of natural calamities:Provided that the Collector shall not take possession of any building or part of a building under this sub-section without giving to the occupier thereof at least forty-eight hours notice of his intention to do so, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such building without unnecessary inconvenience.(3) Before taking possession of any land under sub-section (1) or sub-section (2), the Collector shall tender payment of eighty per cent. of the compensation for such land as estimated by him to the person interested entitled thereto.(4) In the case of any land to which, in the

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date of the publication of the notification under section 9, sub-section (1).

opinion of the appropriate Government, the provisions of sub-section (1), sub-section(2) or sub-section (3) are applicable, the appropriate Government may direct that any or all of the provisions of chapters II to chapter VI shall not apply, and, if it does so direct, a declaration may be made under section 19 in respect of the land at any time after the date of the publication of the preliminary notification under, subsection (1) section 11.(5) An additional compensation of seventy-five per cent. of the market value as determined under the provisions of this Act, shall be paid by the Collector in respect of land and property for acquisition of which proceedings have been initiated under sub-section (1) of this section.”

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Section 6 of the Draft Bill Section 9 of the present Act.

“6. Exemption from Social Impact AssessmentWhere land is proposed to be acquired invoking the urgency provisions under section 30 of the Act, the appropriate Government may exempt undertaking of the Social Impact Assessment study.”

“9. Where land is proposed to be acquired invoking the urgency provisions under section 38, the appropriate Government may exempt undertaking of the Social Impact Assessment study.”

6.9 It will be immediately seen that the emphasis on the ‘rarest of rare’ provision has gone. Presumably, this was a double condition whereby even in the prescribed categories the urgency clause could be invoked only in the rarest of rare cases.

It is submitted that this conceptual impediment of ‘rarest of rare’ or ‘in only exceptional circumstances’ should have remained.

6.10 It is completely unsatisfactory that after so many Supreme Court decisions (Dev Sharan v. State of U.P. (2011) 4 SCC 769; State of West Bengal v. Prafulla Charau Law (2011) 4 SCC 537; Anand Singh v. State of U.P. (2010) 11 SCC 242; Babu Ram v. State of Haryana (2009) 10 SCC 115) the legislation has not thought it fit to ensure that there is due application of mind.

It is proposed that a clause 38(1A) be inserted to state:“before invoking the urgency clause, the appropriate Government shall apply its mind to the need for urgency and elaborate reasons to support the invocation.”

6.11 The Bill, for the purposes of the urgency has lost the wood for the trees. Clause 38(4) in addition to clause 9 are completely unsatisfactory.

In both clauses 38(4) and 9, the word used is ‘may’. This adds confusion. This means that in urgency cases provisions of Social

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Impact Assessment, notification and acquisition and even RR ‘may’ not take place. This leaves crucial provisions in the air.

Some sort of Social Impact Assessment is needed in all cases even though it may be structured differently in urgency cases. The assessment may take place after the initial notification.

In no circumstances should the RR provisions not apply.

As far as compensation is concerned, the upfront compensation should be 100%, and the additional multiplier 100% rather than 75%.

Temporary Urgency?

6.12 Under clause 38(1), in cases of urgency, after the possession is taken by the appropriate government, “the land shall thereupon vest absolutely in the Government, free from all encumbrances.”

It is unclear how the urgency can continue perpetually and why the government continues to hold land even after the purpose for which the acquisition was made ceases to exit. This also could become contradictory to clause 93 (No change of purpose to be allowed.) after the urgency is over.

It is submitted that unless the urgency is determined to be of a permanent nature, the land should not vest absolutely with the government.

We submit that as soon as the purpose of acquisition ceases to exist, the land acquired must be returned to the acquiree.

The existence of the urgency and the need of acquisition must be reviewed every one year. In any case the government must return the land within three years of acquisition.

iii. Cost, interest and appeal

6.13 The costs provision in clause 65 should be deleted in so far as claimants are concerned.

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6.14 There should be flat rate of 15% where compensation is delayed or where it is increased (clause 66).

6.15 The machinery for appeal or re-determination is the Authority. This area of the Bill needs tidying up.

iv. Non-acquisition, Land for Land and Land Bank

Non-acquisition

6.16 Clause 10 of the present Bill reads:“10.(1) Save as otherwise provided in sub-section (2), no irrigated multi-cropped land shall be acquired under this Act.(2) Such land may be acquired subject to the condition that it is being done under exceptional circumstances, as a demonstrable last resort, where the acquisition of the land referred to in sub-section (1) shall, in aggregate for all projects in a district, in no case exceed five per cent. of the total irrigated multi-crop area in that district.(3) Whenever multi-crop irrigated land is acquired under sub-section (2), an equivalent area of culturable wasteland shall be developed for agricultural purposes.(4) In a case not falling under sub-section (1), the acquisition of the land in aggregate for all projects in a district in which net sown area is less than fifty per cent. of total geographical area in that district, shall in no case exceed ten per cent. of the total net sown area of that district:Provided that the provisions of this section shall not apply in the case of projects that are linear in nature such as those relating to railways, highways, major district roads, irrigation canals, power lines and the like.”

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This clause acts as an exception to the rule permitting acquisition. It is fundamentally flawed. Sub-clause (3) provides for an equivalent area to be developed for agricultural purposes. This seems deliberately ambiguous as regards ‘developed for whom?’ This clause does not in any way guarantee land for land.

Land for Land

6.17 Para. 2 of Schedule II is the provision detailing ‘land for land’. There seem to be three categories: (a) irrigation projects leading to loss of land etc. one acre of land to be provided. (b) land for SCs and STs losing land due to a project; and (c) reservation of 20% developed land for land owning project affected families in cases of acquisition for urbanization.

It is submitted that in every case where land is acquired, land must be given elsewhere. Resettlement without land for land is a misnomer. Hence land must be provided in every case, not only in irrigation projects.

For comments on (b), see the Tribal Lands Paper.

The provision for the reservation of 20% developed land is wholly inadequate. The 20% land so reserved is proposed to be distributed among the erstwhile owners of 100% land at the price of the cost of acquisition and development. In addition, those accepting this offer will have to part with an equivalent amount of the compensation.

Our submissions regarding Cl. 26(3) are reiterated. No off set against monetary compensation must be allowed and no price for the 20% land offered should be charged.

6.18 Clause 31reads:“31. (1) Every displaced family shall be resettled in a resettlement area.(2) In every resettlement area referred to in sub-section (1), the Collector shall ensure the provision of all infrastructural and basic amenities specified in the Third Schedule.”

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These provisions do not guarantee land for land. Also the infrastructural provisions may be provided as late as 18 months from the date of award. (Clause 37(1) proviso) Again, clause 99 makes the land for land provisions in Schedule II and the infrastructural amenities in Schedule III vulnerable as they can be varied by a notification.

We submit that Schedule II must be precluded from the ambit of clause 99. Land Bank

6.19 Clause 95 of the Bill provides of a Land Bank. It reads:“95. When any land or part thereof, acquired under this Act remains unutilised for a period of ten years from the date of taking over the possession, the same shall return to the Land Bank of the appropriate Government by reversion;”

This provision is entirely unsatisfactory. The concept of a land bank itself is flawed.

In cases where all of the acquired land remains unutilised, it must be returned to the acquiree. In cases where parts of the land remain unutilised, the land must be returned to the acquirees in proportion to the area of their land acquired.

VII Conclusion

7.1 Our suggestions in this paper are to be read with the Tribal Lands Paper.

7.2 The suggestions here are to be found:

a. Pre-Preliminary exercises in the LA and R Bill, 2011

Pre-Preliminary consultation with Gram Sabha (para. 3.2 - 3.4)(i) Pre-Preliminary Survey of Land required (para 3.5 –

3.7)

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(ii) Pre-Preliminary Social Assessment Report (para 3.8 – 3.10)

(iv) The 80% and 50-100 acres rules (para 3.11 – 3.23)

b. Public Purpose and Acquisition (para. 4.1 – 4.10)

(i) Public Purpose by Government (Para 4.5 – 4.6)

(ii) Public Purpose: Private Acquisition (para 4.7 – 4.9)

c. Acquisition and Due Process (5.1 – 5.2)

d. Compensation, Urgency Clause, and cost, interest and appeal (para 6.1 – 6.19)

(i) Assessment of Compensation (para 6.1 – 6.6)

(ii) Urgency Clause (para 6.7 – 6.12)

(iii) Cost, interest and appeal (para 6.13 – 6.15)

(iv) Non-acquisition, Land for land and Land Bank (para 6.16 –

6.19)

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