Balancing of rights in land acquisition

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, has been cleared by the cabinet and has been introduced in parliament. The bill seeks to make far reaching changes in the archaic Land Acquisition Act, 1894.

The major changes proposed by the bill include the provision for rehabilitation and resettlement of the displaced persons. Like the act, the bill also enables the government to acquire land and transfer it to private companies for public purposes.

The bill’s provisions relating to rehabilitation and resettlement apply not only where the government acquires land for private companies but also where the independent purchase by private companies through private negotiations with land owners results in the purchase of more than 100 acres of land in rural areas and more than 50 acres in urban areas.

Critics of the bill argue that all direct private purchases of land must be outside the ambit of the mandatory provisions relating to rehabilitation and resettlement of the displaced persons. The bill also provides for compensation and resettlement for not only land owners, but also all those whose livelihood is affected by the acquisition of land. There are concerns that this would make the acquisition of land costly and cumbersome.

Public purpose defined

The most awaited change proposed by the bill relates to the definition of “public purpose”. The bill attempts to chalk out the acts that are classified under the definition of public purpose.

Where land is acquired for private companies, the consent of at least 80% of the project affected people must be obtained.

One of the major criticisms of the current act arises from the provision that enables the government to acquire land for a public purpose without following the due process of land acquisition on the grounds of urgency.

There were various instances where farm land that had been acquired by the government by invoking the urgency provisions was allotted to private developers for the construction of residential and commercial units.

In a recent case, the apex court observed that the acquisition of land for residential, commercial, industrial or institutional purposes can be treated as an acquisition for a public purpose but does not justify the exercise by the government of its power to invoke the urgency provisions. In this regard, the bill proposes to bring sweeping changes by mandating that the urgency provisions can be invoked only in cases of the defence of India, national security or emergencies arising out of natural calamities.

Acquisition reversed

Another important aspect of the bill can be illustrated by considering the following example. Land at Singur, West Bengal, was acquired from the land owners and allotted to Tata Motors for setting up a car factory by invoking the provisions of the act. However, early this year, the West Bengal government enacted the Singur Land Rehabilitation and Development Act, 2011, to return the acquired land to the original land owners.

Tata Motors opposed this and, by a motion in Calcutta High Court, challenged the constitutional merits of the Singur Land Rehabilitation and Development Act and the Land Rehabilitation and Development Rules framed under this act. Calcutta High Court recently ruled that the act and the rules framed under it were constitutional and valid, and ordered that the land be returned to the original land owners.

This leads one to ponder that an act that is considered to be serving a public purpose at one point of time, by one government, can become an anathema with a change in government. It is hoped that the bill, through its definition of public purpose, will help to minimize if not completely eradicate this anomaly.

Preserving farm land

Lastly, it may be noted that at present, more than 68 million hectares of land are lying as wastelands in India. The emphasis by the government and the private sector must be on the acquisition of these wastelands for development, instead of acquiring prime agriculture land.

The bill provides that only 5% of the total irrigated multi-crop land in any district can be acquired. The acquisition of wastelands would not only reduce resistance from land owners but at the same time ensure that the extent of cultivable farm land is not diminished.

Some critics have said the bill is one-sided and pro land owners. Although the bill proposes to bring in far reaching changes, that fact remains that the increased cost of acquisition may in turn be passed on to the end-users.

Mrinal Kumar is a partner and Shruti Garg is a senior associate with Amarchand & Mangaldas & Suresh A Shroff & Co. The views expressed in this article are those of the authors and do not reflect the official policy or position of Amarchand Mangaldas. The authors can be contacted at mrinal.kumar@amarchand.com and Shruti.garg@amarchand.com.