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Why The New Land Acquisition Act Turned Out This Way

Pranav Garimella,
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The new Land Acquisition Act, 2013, which came into force on 1st January 2014 and replaced the old Land Acquisition Act, 1894 is an ambitious attempt by the Government to make the process of land acquisition fair and transparent, and ensure resettlement and rehabilitation of families affected by land acquisition.

 

The Act has already come in for criticism, for instance from industry which feels that the process of acquiring land will now be stretched considerably. Potentially making the projects that would come up on the land unviable. Supporters of the Act have acknowledged it reduces uncertainty.

 

This Act, like many others, is a follow through to considerable judicial action in this space, over time. We felt it would be instructive to study the disputes and cases that led to the implementation of the new Act. And then help you conclude if the Government has considered all the problems and filled the gaps.

 

A key facet of any land acquisition process is compensation. And in several cases during the last two years, ambiguity on compensation has remained an issue. For example, in the Mehrawal Khewaji Trust (Regd.) Faridkot & Others Versus State of Punjab & Others, the Supreme Court enhanced the compensation for the landowner as the lower courts were held to have been erroneous in setting a lower compensation.

 

A similar issue arose in the Tukaram Kana Joshi & Others through Power of attorney holder Versus MIDC & Others, where the possession of land was taken but no compensation was given, which again the court held to be violation of constitutional rights.

 

This is an issue the new Act seeks to address by providing for a minimum compensation of four times the market value to farmers in rural areas and twice to people in urban areas.

 

Another issue that’s cropped up is the misuse of powers by state Governments and other Government officials. For example, in Ram Dhari Jindal Memorial Trust Versus Union of India and Others, the Government invoked its special power in case of urgency to deny the interested parties from filing objections, which was held to be abuse/misuse of power by the Supreme Court.

 

In another instance, in Patasi Devi Versus State of Haryana & Others, the court went as far as to say the Government misused its power under the Land Acquisition Act for the gain of a private party.

 

In the new Act, greater transparency and fairness is sought to be achieved like mandating consent of 80% of farmers when purchasing land for public use and 70% in cases of public-private partnerships.

 

Experts, however, feel that the new Act will lead to delays in acquisition, which is another trend in the cases examined in this article.

 

 

April 2013

 

Executive Engineer, Nandur, Madhameshwar Canal Versus Vilas Eknath Jadhav and Others [Link] Justices: Surinder Singh Nijjar and Pinaki Chandra Ghose, JJ.

 

In this case, the land owner was dispossessed prior to the preliminary notification under the Land Acquisition Act.

 

The court held that in case the land owner has been dispossessed prior to the issuance of the preliminary Notification under the Act, it will be open to the land owner to recover the possession of his land by taking appropriate legal proceedings. In case the possession is not recovered, he would be entitled to rent or damages for use and occupation for the period the Government retained possession of the property.

 

Takeaway from the case:

 

The court rules that if a land owner is dispossessed of his/her land prior to initiation of acquisition proceedings, the land owner is entitled to damages he might have suffered due to actions of the Government.

 

March 2013

 

Laxman Lal (Dead) Through Legal Representatives and Another Versus State of Rajasthan and Others [Link] Justices: RM Lodha and Chelameshwar, JJ.

 

In this case, the state Government acquired land from the owners for a bus stand. The Government invoked the power of urgency and waived hearing of objections under the Land Acquisition Act after 7 years of issuance of notice under the Land Acquisition Act.

 

The questions before the court were:

 

(i)                 Whether invocation of power of urgency after 7 years of issuance of notification is legally sustainable.

(ii)               Whether preliminary notification issued in 1980 lapsed since declaration was made in 1987 after expiry of two years as                                  prescribed by the Rajasthan Land Acquisition amendment Act.

 

The court held that the power of urgency, which takes away the right to file objections, can only be exercised by the state Government for such public purpose of real urgency which cannot brook delay of few weeks or even a few months. The Government, therefore, has to apply its mind before it invokes its power of urgency and dispensation of inquiry under the Land Acquisition Act.

 

Takeaway from the case:

 

What the court lays down in this case is that invocation of power of urgency by the Government for acquisitions such as building bus stands and other development schemes are not legally sustainable. The court also asked the state Governments to carefully consider invoking the urgency provision of the Land Acquisition Act.

 

 

February 2013

 

The Commissioner, Bangalore Development Authority & Another Versus Brijesh Reddy & Another [Link] Justices: P Sathasivam and Jagdish Singh Khehar, JJ.

 

In this case, the land in dispute was acquired by the development authority in 1960-70. In 1995, the respondent purchased the land in dispute from the original land owners and filed a civil suit against the development authority for permanent injunction.

 

The suit filed by the new land owner was dismissed.  The High Court allowed an appeal but sent the case back to the same trial court. So, the case came to the Supreme Court.

 

The apex court held that the power of the civil court (trial court) to take up the matter is excluded in the Land Acquisition Act, and the civil court has no jurisdiction to go into the validity or legality of notification or declaration under the Land Acquisition Act except by the HC in writ proceedings.

 

Takeaway from the case

 

The Supreme Court made it clear that the civil court (trial courts) is devoid of jurisdiction to give declarations or even bare injunctions on the invalidity of the procedure contemplated under the Land Acquisition Act. This means that no trial courts can go into the procedures of the Act.

 

 

November 2012

 

Tukaram Kana Joshi & Others through Power of attorney holder Versus MIDC & Others [Link] Justices: Dr. BS Chauhan and Jagdish Singh Khehar, JJ. 

 

In this case, the land was acquired by MIDC for industrial development. Subsequently, the acquisition proceedings lapsed but the possession of land was taken by state authorities and handed over to Industrial Development Corporation. The land owners were not granted any compensation while other land owners in a similar situation were compensated. The land owners filed a writ in the HC, which was dismissed citing delays and non-availability of documents.

 

The Supreme Court held that acquisition of property is tantamount to deprivation, and such deprivation can take place only in accordance with law and cannot be done by way of executive fiat or order or administrative caprice. Right to property is not only a constitutional right or fundamental right or statutory right but also a human right. Depriving the land owners of their immovable properties was a clear violation of Article 21 (Protection of life and liberty).

 

Takeaway from the case

 

The court reiterated the right to property of land owners, and said that taking possession of or acquiring the property of a citizen most certainly is equal to deprivation, and such deprivation can take place only in accordance with the “law” as the said word has specifically been used in the constitution.

 

September 2012

 

V. Chandrasekaran & Another Versus The Administrative Officer & Others [Link] Justices: Dr. BS Chauhan and

 

Jagdish Singh Khehar, JJ.

 

In this case, acquisition proceedings with respect to certain land (including the land in the present case) started in 1978. The original land owners never challenged the acquisition proceedings at any point and even accepted compensation. Later, in 2004 and 2005, the original land owner sold the land to another party. The original land owners filed an application before a lower court to get the land back, which was rejected.

 

The new purchaser of land then sought to quash the acquisition proceedings and another application to get the land back from the authorities. The High Court first allowed the writ and then reversed it. So, an appeal was filed in the Supreme Court.

 

The apex court held that a person who purchases land subsequent to the issuance of a Section 4 notification with respect to it is not competent to challenge the validity of the acquisition proceedings on any ground whatsoever.

 

The court also held that if the original land owner does not raise any objection at the time and accepts the compensation and does not challenge the acquisition proceedings, he cannot be permitted to challenge the proceeding after about three decades.

 

Takeaway from the case:

 

The court cut through the complex litigation involved in land acquisition cases, and concluded that the land still vests with the authorities and any person who buys the land subsequent to acquisition proceedings will not have the rights to quash the acquisition proceedings.

 

 

August 2012

 

Patasi Devi Versus State of Haryana & Others [Link] Justice: GS Singhvi and Sudhanshu Jyoti Mukhopadhaya, JJ.

 

In this case, the land owner challenged the acquisition of her land on the ground that the State Government, in the garb of public purpose, misused its power for the benefit of a private colonizer who was constructing a residential colony.

 

The land owner claimed that her land should have been exempted/released in terms of the policy framed by the State Government since she had constructed a house on the land prior to the issuance of the notification. Since the HC dismissed the writ petition, the present case was filed in the SC.

 

The apex court held that the acquisition of the appellant’s land was vitiated due to colourable exercise of power by the state Government. The real object of the acquisition was to benefit a private colonizer. The court also said that Government officials are guilty of practising discrimination in the matter of release of land.

 

Takeaway from the case:

 

In this case, the court clearly finds the state Government and its officials in the wrong, and holds the acts of the Government to be misuse of power granted under the Act for the purpose of private parties.

 

 

July 2012

 

Haryana State Industrial Development Corporation Ltd. Versus Mawasi & Others ETC. ETC. [Link] Justices: GS Singhvi and Sudhanshu Jyoti Mukhopadhaya, JJ.

 

The Haryana State Industrial Development Corporation filed a review being aggrieved by an earlier Supreme Court judgment.

 

The Corporation filed the review petition on the ground that the earlier order was based on a sale deed which was not genuine since the transaction had taken place between two corporate entities controlled by the same management and the land was overvalued with an oblique motive.

 

The court held that the corporation placed on record certain documents but the documents neither singularly nor collectively supported the petitioner’s plea that the management of the two companies, i.e., the vendor and the vendee, was under the control of the same set of persons or that the vendee had paid unusually high price with some oblique motive. The review petitions were dismissed.

 

Takeaway from the case:

 

The court in this case examined its own power to review itself and concluded that the case did not justify a review, which set the precedent that such cases do not fall under the category of cases eligible for review by the court.

 

April 2012

 

Mehrawal Khewaji Trust (Regd.) Faridkot & Others Versus State of Punjab & Others [Link] Justices: P Sathasivam and J Chelameshwar, JJ.

 

In this case, the land in question was acquired in December 1979, and award with respect to the land was passed by the collector in 1982. Dissatisfied with the award, the land owners filed an application for enhancement of compensation to the reference court which granted Rs. 10,000/- per acre. This was considered inadequate, and the land owners appealed to the HC, which declined to interfere.

 

An appeal was filed in the Supreme Court where the land owner claimed a higher compensation in terms of higher exemplar instead of averaging prices and interest on solatium.

 

The court held that when the land is being compulsorily taken away from a person, he is entitled to the highest value, which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. When there are several exemplars with reference to similar land, it is the general rule that the highest of the exemplars, if it is satisfied that it is a bona fide transaction, has to be considered and accepted.

 

Takeaway from the case

 

The court has enhanced the compensation due to the land owners, and said that the land owner is entitled to the highest value in terms of compensation for his land.

 

March 2012

 

Ram Dhari Jindal Memorial Trust v. Union of India and Others [Link] R.M. Lodha and HL Gokhale, JJ

 

In this case, the Lt. Governor of Delhi used his special power in case of urgency under the Land Acquisition Act to acquire land for the Rohini Residential Scheme. Such a step was taken due to the acute shortage of houses in Delhi.  Declaration of the acquisition was made in 2000, and the land owner in this case challenged the actions of the Lt. Governor. Since the HC dismissed the case, the land owner filed an appeal in the SC.

 

The apex court held that if the Government wants to invoke its power of urgency, it has to first form an opinion that the land is urgently needed for public purpose. And the opinion has to be founded on the need for immediate possession of the land for carrying out the urgent work.  The power of urgency does not in itself eliminate hearing objections under the Act.

 

The Government has to consider two aspects:

 

  1. Need for immediate possession of the land for carrying out stated purpose; and
  2. Urgency has to be such that it necessitates waiving off hearing objections.

 

The use of power of urgency and waiving of hearing of objections for a routine activity like “planned development of city” or “development of residential area” is not consistent with the Land Acquisition Act. Therefore, the power of urgency cannot be invoked by Governments for residential schemes. So, the exercise of power of urgency by the Lt. Governor was held to be bad in law.

 

Takeaway from the case:

 

What this case does is that where the Government invokes urgency power under Land Acquisition Act for public purpose like ‘planned development of city’ or ‘development of residential area’ or ‘residential scheme’, the initial presumption in favour of the Government does not arise, and the burden lies on the Government to prove that the use of power was justified and dispensation of enquiry was necessary.

 

 

February 2012

 

State of Madhya Pradesh & Another Versus Bheru Singh & Others [Link] Justice AK Ganguly and Gyan Sudha Misra,JJ.

 

In this case, the land of 448 families was acquired for the Man Dam on the tributary of Narmada by the Madhya Pradesh Government.

 

While 62 families opted for land, the remaining 386 families opted for full cash compensation. A Special Rehabilitation Grant (SRG) was declared by the state Government. Disputes arose in disbursement of SRG which was taken by Grievance Redressal Authority (GRA).

 

Writs against GRA’s orders went to the HC, which directed the state Government to allot land to every son of the landholder who had become a major on or before notice under the Land Acquisition Act and was part of the larger family from whom the land had been acquired. An appeal was filed by the state Government against this order.

 

The Supreme Court held that entitlement would be based strictly on the policy formulated by the state Government. The policy holds that a displaced family is entitled to 2 hectares of land but only such displaced family from whom more than 25% of its land holding has been acquired would be entitled for compensation of 2 hectares of land.  So, even if the family had several major sons, allotment on account of acquisition to each major son does not arise in terms of the policy.  So, the HC order for allotment of land to each major son of the displaced family was overturned.

 

Takeaway from the case:

 

The order strengthened the rehabilitation & resettlement (R&R) policy formulated by the state Government, and held that the HC was wrong in trying to expand the scope of the R&R policy of the state Government.

 

The genesis of most legislation lies in precedents like this. While an Act or legislation might appear unreasonable in its final form, it is indeed worth remembering that its genesis might indeed lie in complex and lengthy litigation over time.

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