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Background Note on 1st session: ‘The Participative Process

RFCTLARR Act, 2013: state of the law’ One of the foremost objective of the LARR Act is to make
It has been five years since Right to Fair Compensation land acquisition process a participative exercise. The Act
and Transparency in Land Acquisition, Rehabilitation defines the ‘Public Purpose’ for which land can be acquired.
and Resettlement Act, 2013 was enacted (hereinafter The Act mandates that consent must be obtained from the
referred to as LARR Act). The objectives of the Act are land owners while acquiring land.2 The acquisition of land
indicated in the long title of Act itself. One of the defining for private companies for projects of public purpose is
features of the LARR Act is the emphasis on transparency, incumbent on the consent of 80% of land owners, consent
rehabilitation, and resettlement along with compensation. of 70 percent of land owners is required in case of public-
It enjoins upon the State to be fair, just, and transparent in private partnership projects.3 However, the requirement
the process of land acquisition and ensure rehabilitation of consent operates only if the land being acquired is for
and resettlement of the land owners, in addition to private companies or public-private partnership projects.
compensation. At the same time the definition of public purpose, defined
in Section 2(1,) can be extended to private companies
Importantly, the Preamble to the Act envisages a humane,
and public-private partnership projects, thus, making
participative, and informed process to acquire land and
the scope of acquisition wider. It helps State to leverage
to ensure persons affected due to the developmental
upon strategic partnerships with private bodies for
compulsions are equal partners in the fruits of the
development of infrastructural and industrial capabilities
development.1
without significant intervention of State.
In the following note the statutory provisions which
In order to ensure that the process is participative and
enable these objectives shall be detailed. Along with them
transparent, the Act mandates Social Impact Assessment
the legislative and executive interventions since 2013
and a public hearing at the conclusion of the study.4
and judicial pronouncements shall also be presented to
The purpose of Social Impact Assessment is aligned to
provide a holistic view of the developments that have
the sustainable and participative development goals.
taken place in respect to the Act.
The SIA reports must give a finding whether the project
serves public purpose, the land required is the bare
See Preamble to The Right to Fair Compensation and Transparency
1

in Land Acquisition, Rehabilitation, and Resettlement Act No. 30 of 2

Ibid. Section 2 (2).
2013 available at http://www.legislative.gov.in/sites/default/files/ 3
See Supra note 2, Section 2(2) and Section 3(i), 3(v)
A2013-30.pdf last accessed on October 09, 2018. 4
See Supra note 2, Chapter II
minimum, alternate sites have been considered and it land acquired. The LARR Act is very categorical about
is the least displacing option. The SIA report will include the compensation that is to be awarded for loss of land,
details of Project –Affected –Families, the entitlements for livelihoods, and any other losses that may arise due to the
compensation and R&R award. It must also include the land acquisition and processes incidental thereto. Apart
Social Impact Management Plan (SIMP).The SIA report from compensation, the Act also provides for solatium
must be shared with the Affected Families in a public and interest on the compensation amount. Solatium is
hearing during which their concerns and issues have to an additional amount added to the compensation award
be addressed. The outcome of the public hearing must be and has been fixed at 100% of compensation. Similarly, an
incorporated in the final SIA report. The proceedings of interest on the award of the compensation at the rate of 12
public hearing must be video recorded and transcribed. % per annum shall be paid for the period between the date
The SIA report has to be appraised by an Expert Group of notification and date of actual payment of final award.
which shall give a finding on whether the project serves The compensation for land has been fixed at four times the
public purpose and the potential benefits outweigh the market value in rural lands and two times in urban areas.
social costs and adverse social impacts. This ensures that substantial life sustenance resources are
The necessity of the impact assessment report, prior to made available to the affected families who are displaced
land acquisition, is an important marker of the objective and help them in resurrecting their lives and livelihoods.
of the LARR Act.5 It compels the State to take an informed Rehabilitation and Resettlement
approach towards land acquisition and, at the same time,
One of the marked improvements of the LARR Act over
ensure the participation of affected communities in the
the previous Land Acquisition Act, 1894 is the shift in focus
acquisition process from the very beginning. It also helps all
from compensation to rehabilitation and resettlement. The
the stakeholders to understand each other’s concerns and
earlier law was solely focused on providing compensation
collectively move towards a solution oriented approach.
and, in some cases, a solatium. However, in the LARR Act,
This feature of the LARR Act is in sharp contrast to the the focus has shifted to rehabilitation and resettlement of
previous Land Acquisition Act, 1894. The 1894 Act did not the displaced persons. The SIA reports, as discussed above,
provide for any kind of assessment reports or public hearing must include the impact of the acquisition on the lives and
before the acquisition process began. Although objections livelihoods of the affected families, their community and
were invited, but only after notification to acquire land social life, infrastructure and public utilities. This makes
was issued.6 However, the LARR Act mandates that the estimation of rehabilitation and resettlement easier. Once
notification to acquire land must include a statement the impacts of the acquisition on the affected families
of the public purpose involved, reasons necessitating and communities are evident, the rehabilitation and
the displacement of affected persons, summary of resettlement plans can be made accordingly.
the Social Impact Assessment report and particulars
Secondly, Chapter V of the LARR Act mandates that
of the Administrator appointed for rehabilitation and
the possession of the land can be taken only after
resettlement purposes.7 A complete shift in the approach of
the payment of full compensation and notification of
the State can be seen here: land acquisition under previous
rehabilitation and resettlement award. The Collector has
law was fait accompli as far as the owners of the land were
been made responsible to ensure that the rehabilitation
concerned, whereas, under the new law all the stakeholders
and resettlement scheme for each family is completed in
have a chance to take part in the acquisition process.
all respects before the families are displaced.
Compensation
Thirdly, the process of preparation of rehabilitation
The other significant aspect is the compensation for the and resettlement scheme also includes notices for

5
There are certain exemptions that can be made by the Appropriate public hearings and public representations. Here again
Governments under Section 9, however, those are to be exercised the approach of the law is to ensure that the relevant
only in cases of urgency as specified in Section 40.
6
See Section 4 and 5A of the Land Acquisition Act, 1984 available stakeholders are not left out of the process and have
at http://www.prsindia.org/uploads/media/Land%20Acquisition/ their say in the process. This provision empowers the
bill167_20080311167_The_Land_Acquisition_Act__1894.pdf last
accessed on October10, 2018. Project-affected-Families to raise objections, submit
7
See Supra note 2, Section 11.
claims for rehabilitation and resettlement and ensure that Amendments by state governments
adverse social impacts are managed and the needs of the So far seven states have enacted amendments to The
community are addressed. RFCTLARR Act, 2013. These are Tamil Nadu, Jharkhand,
Special provision for Schedule Tribes and Gujarat, Telangana, Haryana and Maharashtra. The
Amendment Act of Andhra Pradesh has received the
Scheduled Castes
Presidential assent and is awaiting notification. The state
The Act states that, as far as possible, land shall not be amendments have incorporated the changes introduced
acquired in Scheduled Areas under the Fifth Schedule of by the Central Ordinances which had lapsed in 2015. The
the Constitution. If acquired, it should be a demonstrable major changes are: exemption of social impact assessment
last resort. The prior consent of the concerned Gram Sabha, study for certain category of projects: exemption from
Panchayat or the autonomous District Councils must be consent requirement for projects in public-private
obtained even if the land is sought to be acquired under partnership mode and by the private companies; payment
the urgency clause. In case of involuntary displacement of of lump sum amount instead of rehabilitation and
SC and ST families, a Development Plan shall be prepared resettlement award for certain specified projects; direct
incorporating measures safeguarding their special needs purchase of land from land owners; speedy payment of
and interests. compensation amount by exemption requirements of
enquiry for certain projects.
Developments, post 2013
The RFCTLARR Act, 2014 came into effect on 1.1.2014. The It has been contended by these States that the
UPA Government that came to power in May 2014, soon amendments were necessitated by the delays in the land
felt the need to amend certain provisions of the Act, which, acquisition process thereby making the investment by the
in its opinion, were cumbersome and stood in the way of private sector in the developmental projects of the State
speedy acquisition of land for industrial and infrastructure non-lucrative. Further, delays in land acquisition are also
An Ordinance was promulgated in May 2014 which, stated to be hampering the growth of public infrastructure
although, did not tweak the provisions of compensation, like highways, road networks, airports, new cities, smart
rehabilitation and resettlement, did away with the cities, ports, affordable housing etc.
requirement for consent and social impact assessment for Apart from formulating the Amendment Acts, states are
industrial corridors, defence projects, rural infrastructure, using the delegated legislative powers under the LARR
etc., and diluted the provision regarding the return of Act, 2013 while framing Rules for land acquisition and the
acquired land to the landowners, if the land remained processes involved therein. Some states have framed Rules
unutilized beyond the stipulated period. which are markedly different from the provisions of the LARR
The 2014 Ordinance created a furore in the political Act. For example, the multiplier factor of compensation for
arena and among the civil society members, forcing rural land in Haryana, Chhattisgarh, and Tripura has been
its withdrawal in 2015, after two re-promulgations. The kept at 1.00, thus reducing the compensation amount for
Amendment Bill introduced in Parliament in Feb.2015, to the land owners. Further, instead of returning the unused
replace the Ordinance, was passed in the Lok Sabha in or unutilized acquired lands to their owners, some states
May, but due to the stiff opposition in the Rajya Sabha, was are transferring them to land banks. Moreover, the land
eventually referred to a Joint Parliamentary Committee. return policy, in some cases, is not in consonance with the
The report of the Committee is still pending. In August intent of the Act. Karnataka, for example, requires that the
2015, the provisions of The RFCTLARR Act, 2013 relating landowner must pay the appreciated value of the land to
to the determination of compensation under the First the government for getting back the land.
Schedule, Rehabilitation and Resettlement under the Judicial Pronouncements
Second Schedule and infrastructure amenities under
After the LARR Act was enacted in 2013, more than 280
the Third Schedule were extended to all cases of land
cases have been filed in the Supreme Court, challenging
acquisition under the 13 laws listed in Schedule IV of
land acquisitions made under the previous law (Land
the Act.
Acquisition Act, 1894). 272 out of these 280 cases were
filed under Section 24 of LARR Act.8 Section 24 of the LARR Telangana Government from purchase of land under
Act mandates that in cases where land acquisition made GO 123 dated 30.7.2015. It shows that courts are not
under the Land Acquisition Act, 1894: ready to let the executive trample upon the rights of
the ‘landless’ through legislative innovations.13
a. But an award of compensation had not been made, the
provisions related to compensation under the LARR In the case of Pune Municipal Corpn. and Anr vs
Act, 2013 shall apply Harakchand Misrimal Solanki and Others the Supreme
Court held, in 2014, that compensation would be
b. The acquisition under Land Acquisition Act, 1894 shall
deemed to have been paid if it was first offered to
lapse if the payment of compensation has not been or
the land owners and then deposited in the treasury14.
the possession of land has not been taken, though the
However, in the case of Indore Development
award has been made in the preceeding five years of
Authority v Shailendra (Dead) Through LRS and
the enactment of LARR 2013.
Others, the Supreme Court decided, in Feb., 2018, that
c. If the majority of landowners whose land was acquired once the compensation is tendered unconditionally,
under the Land Acquisition Act, 1894 have refused but rejected by the landowner, it is not necessary
to accept the compensation, they shall be entitled to that it must be deposited in the Court and hence,
compensation under the LARR Act, 2013.9 proceedings under the Land Acquisition Act, 1894
97% of the cases before Supreme Court involved cannot be construed to have lapsed. The conflicting
Section 24 (2), i.e., where the award was made in the judgements, both by three-member Bench, will have a
preceeding five years but either the possession was cascading effect on pending cases. In March 2018, the
not taken or the compensation was not paid.10 In issue has been referred to a Constitution Bench.
83% of these cases, compensation had not been paid, Another case of far reaching implication is the
in 11% neither the compensation was paid nor the Gujarat High Court judgement of Nov., 2017 in the
possession of land taken, and in 2% cases possession case of Reliance Industries Ltd. Vs Union of India
of the land was not taken.11 In 95% of the cases the wherein the Court has held that once the company
Supreme Court ordered the earlier land acquisition had deposited the compensation amount in the
proceedings to lapse, and in 2% of the cases the government treasury, the acquisition would not lapse
matter was remitted to the respective High Courts.12 if the government had not paid the compensation
The trend in the judicial pronouncement seems to to farmers or taken possession of the land. The
have been in favour of the land owners who lose appeal again the judgement is pending in Supreme
their lands. The approach of the courts is clear from Court. The outcome of the appeal will determine the
the judgment of the Andhra High Court barring fate of similar cases challenging the retrospective

8
Wahi, Namita, Bhatia, Ankita (et. al), Land Acquisition in India: A applicability of the new land acquisition law.
Review of Supreme Court cases 1950-2016, Centre for Policy Research,
New Delhi, 2017, pp. 37-38.
9
See Supra note 1, Section 24.
Ibid.
13
10
See Supra note 9, pp. 37-38.
Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki
14
11
Ibid.
& Ors, Civil Appeal no. 877 of 2014 before the Hon’ble Supreme
12
Ibid.
Court.