LAND LAWS PROJECT

“Section 24, Retrospective clause under Right to Fair Compensation and

Transparency in Land Acquisition, Rehabilitation and Resettlement Act,
2013”

Submitted to: Prof. Kahkashan Y. Danyal

Submitted by Name: Mohd Izaan Rizvi

Roll Number- 33

B.A. LL.B. (IX Semester) (Regular)

Faculty of Law, Jamia Millia Islamia

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ACKNOWLEDGEMENT
.

I take immense pleasure in thanking our respected teacher of Land Laws Dr. Kahkashan Y
Danyal, for having permitted me to carry out this project. I express my gratitude to her for giving
me an opportunity to explore the world of information concerning my project topic.

Finally I’d thank my family members for their blessings and wishes for the successful completion
of the project.

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TABLE OF CONTENTS

1) INTRODUCTION

2) LAND ACQUISITION ACT, 1894

• Affected parties within the Act

• Derivation of an acceptable compensation package to be arrived upon while

considering other factors in determining the numbers

3) LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013

4) ANALYSIS OF THE 2013 ACT

5) JUDICIAL APPROACH ON THE RETROSPECTIVE CLAUSE

6) SCOPE OF THE ACT

7) CRITICISM OF THE ACT

8) MAJOR EVENTS

• What Was The Provision Under Consideration And Why It Needed

Interpretation?

• Issue Over Compensation

• What Happened In The Case Before The Supreme Court?

• How Was This Precedent Dealt With In Another Case In 2018?

• What Does The Controversy Mean For Land-Owners And Project

Proponents?

9) THE POLITICAL ECONOMY OF EASY ACQUISITION, DEMOCRACY

10) DRAWBACKS

11) CONCLUSION

12) BIBLIOGRAPHY

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INTRODUCTION

Land acquisition in India is governed by the Land Acquisition Act of 1894 (the 1894 Act), Land
Acquisition, Rehabilitation and Resettlement Bill of 2013 (the 2013 Act) and Land Acquisition,
Rehabilitation and resettlement Ordinance, 2015 (the 2015 Bill).

Hence, the laws concerning compensation are intertwined with laws relating to acquisition of land.
The intent behind these legislations is to strike a balance between smooth acquisition of land while
keeping in mind the interests and rights of the landowners and also, to avoid the misappropriation
of land. The two intrinsic conditions essential for a valid acquisition are: the right of the owner
to get compensation and; strict adherence to the purpose of acquisition being limited to a
public purpose only.

The aim here, is to draw a comparison between the Land Acquisition Act of 1894 and 2013. The
idea behind such a comparison is to compare the purpose of both these Acts as the former was
enacted keeping in mind acquisition of land and the latter was enforced with the main principle
being fair compensation which is to be achieved via resettlement and rehabilitation with complete
procedural transparency.

Land acquisition in India is governed by the Land Acquisition Act of 1894 (the 1894 Act), Land
Acquisition, Rehabilitation and Resettlement Bill of 2013 (the 2013 Act) and Land Acquisition,
Rehabilitation and resettlement Ordinance, 2015 (the 2015 Bill).

Land acquisition laws are powers vested with the State to acquire a private citizens property while
paying compensation with due regard to various circumstances. These laws surround themselves
in controversy and may be considered to be excessive powers that lie with the State. Land
acquisition and its subsequent effects relating to displacement lead to loss in economic assets,
livelihood and disruption in the overall functioning of a community. Hence, implementation of
land acquisition laws in India are not easy with various issues at the basic ground level.

The correct use of such a power can have advantageous effects such as increased economic growth,
development of infrastructure, significant progress in technology etc., These need to be
appropriately balanced in order to safeguard the individual interests of stakeholders i.e. landowners
and to ensure that their property rights are not infringed upon.

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The first legislation pertaining to land acquisition was established in the colonial era and known
as Land Acquisition Act 1894. Major criticisms of this Act arose from the nature of the power
entrusted to the State i.e. authorization of acquiring the land even when there is no consent from
the landowners. Yet, this Act survived for over a decade due to the underdeveloped markets in our
agrarian economy and the less complex procedures of the Act.

In the recent past, the government recognized the urgent need of enacting new legislations rather
than modifying or amending the previous laws in order to be more inclusive of the changing needs
of our society while protecting the individual interests of its citizens. The Land Acquisition,
Rehabilitation and Resettlement Act of 2013 was a result of such deliberation. The 2013 Act was
subject to more modifications to fill the void wherever needed by the Land Acquisition,
Rehabilitation and Resettlement Ordinance of 2015.

LAND ACQUISITION ACT, 1894

The 1894 Act has remained the primary source of legislation for the purpose of acquiring land for
more than a century. It is a well drafted piece of legislation which includes three processes:

• Affected parties within the Act

As per the Act, “persons interested” are those individuals who are affected by the acquisition of
the land. These are usually the owners of the land.

Upon being notified of the acquisition, affected parties must be given a fair chance to voice their
concerns and views.

The reason behind this provision is to give the affected stakeholders with an opportunity to contest
the acquisition. For example, if a proper procedure was not followed in acquiring the land or the
land in question is not needed for that specific project or compensation is not appropriately
decided, it may be contested in court.

• Derivation of an acceptable compensation package to be arrived upon while

considering other factors in determining the numbers.

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The Act contemplates various ways in which compensation may be paid such as market value of
the acquired land, number and kind of assets present on the land and whether or not income may
be derived from the land.
However, Raghuram et al. identified several issues and shortcoming in terms of practical
implementation of the Act.

1. Lack of transparency in determining who the affected parties are as the existing definition
is vague. More often than not, encroachers, landless laborer's etc., are not taken into
consideration and not compensated even when they have an interest in the land. Also, it
makes it difficult for those individuals to claim compensation who practice agriculture but,
are not registered.

2. The process of acquisition under the Act can take up to three years even in cases where
there are no disputes and hence, it is very time consuming. The amount of discretion vested
with the district and the deputy collector is massive even when the Act provides steps for
the acquisition of land. They have been entrusted with the responsibility to adjudicate on
objections pertaining to compensation as well as acquisition leading to ad hoc decisions
and arbitrariness which ultimately is met with resistance from the community.

3. The Act does not contain a straight-jacket formula in term of how to calculate the
compensation for a land. This often leads to arriving at a valuation which is way below
what is expected by the landowners. The compensatory value is reduced further due to the
interplay between determination of compensation and awarding compensation to the
affected parties. In cases like these, the parties have no other recourse but to approach the
judiciary in hopes of getting a fair amount of their land however, this process is way too
lengthy, time consuming and in the meanwhile, the affected groups remain without land
and uncompensated.

LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013

The 2013 Act introduced significant changes to land acquisition laws in India and with an aim to
fill the gaps left behind by the previous archaic legislation. The most important aspects of this Act
include a significant increase in compensation for owners of the land and their categorization into

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urban and rural land owners. Therefore, there is a recognition of the differences in the way markets
operate in rural and urban settings in determining the value of the land.

On the basis of this, the award payable as compensation had to be increased almost 4 times to the
estimated local market value in rural areas and at least two times the market value in the urban
areas. The Act makes Rehabilitation and Resettlement (R&R) package to be paid to all affected
parties along with compensation for lost assets as mandatory. In terms of determining the ambit of
who constitutes as an affected party, the Act expands it to be inclusive of individuals and families
who depended upon the land as their primary source of livelihood. This also includes tenants,
agricultural workers, beneficiaries etc., The contents of the R&R package are inclusive of
resettlement allowances, transportation costs, a stipend for a year etc.

The Act requires a Social Impact Assessment (SIA) to be conducted which helps in identifying
who the affected families are and how to calculate the social impact on the acquired land. An
independent committee of experts examine the SIA while the administrative committee reviews it
to see how well it serves the needs of the public along with a comparison between the costs and
benefits of a project. In case of a multi-cropped land, the Act proposes to not acquire such a land
however, this is subject to certain special circumstances. Further, disputes arising from there are
referred to a specially constituted body and the civil courts have no jurisdiction over matters arising
thereof.

If the land acquired under the Act is not utilized for five years or any period specified during the
setting up of the project (whichever is later), it would be returned to its original owners or to the
government land bank. The Act also states that in calculating the time period during which the
proceedings of acquisition were at a halt due to courts stay order or if possession has been taken
but compensation has not been paid, this period shall not be counted in determining the five-year
period. The Act specifies that its provisions would continue to apply in cases where an award was
made under the Land Acquisition Act of 1894.

ANALYSIS OF THE 2013 ACT

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Section 2 of the Act provides for the application of the provisions of the Act to various types of

land acquisitions. It classifies the acquisition of land into three categories – (1) appropriate

government acquire land for its own use and for public purposes;

(2) appropriate government acquires land for PPP projects/ for private companies for public
purpose;

(3) purchases by private companies through private negotiations.

According to the Section 3 (za) of the Act, ‘public purpose’ means the activities specified under
Section 2 (1), and includes the following:

(a) For strategic purposes relating to naval, military, air force, armed forces of the Union, including
paramilitary forces or any work vital to national security or defence of India or State policy,
safety of the people;

(b) For infrastructure projects, agriculture, industry, educational purposes, sports, tourism and
transportation and any other infrastructural facility;

(c) Relief Development;

(d) Planned Housing;

(e) Planned Development;

(f) Housing for Displaced Persons.

When the government acquires land for its own use, hold and control including for any Public
Sector Undertaking(PSU) and for public purpose, the provisions of the Act relating to acquisition,
compensation, rehabilitation and resettlement shall apply. 1 But where the government acquires
land (i) for public private partnership projects, where the ownership of the land continues to vest
in the government, for public purpose and (ii) for private companies for public purpose, the
provisions of the Act relating to land acquisition, consent, compensation, rehabilitation and
resettlement shall also apply. 2

1
Section 2(1).
2
Section 2(2).

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Under the proviso to Section 2 (b), in case of acquisition of land for public private partnership, the
prior consent of at least 70% of the affected families3 is required and in case of acquisition of land
for private companies, the prior consent of at least 80% of the affected families is required.
Whereas, there is no requirement of prior consent in case the government acquires land for its own
use, hold and control, including for Public Sector Undertaking.

Further when the government acquires land either

(i) for its own use for a public purpose,

(ii) for a private company for a public purpose or

(iii) for public private partnership for a public purpose, all the provisions of the 2013 Act
relating to land acquisition, compensation, rehabilitation and resettlement shall apply.

That is, if the land is acquired by the government for a private company or for a public private
partnership or for its own use, then provisions of land acquisition shall apply and compensation
has to be paid and rehabilitation and resettlement of the parties shall also to be done. In case of a
land acquired by the government for a public private partnership, the land continues to vest with
the government.

Section 4 of the 2013 Act provides for Social Impact Assessment Study to be conducted before
acquisition of land by the government for a public purpose in consultation with the concerned
Panchayat, Municipality or MCD in the affected area. That is, this provision provides for study of
impact of the impending project on the society. “While undertaking a Social Impact Assessment
study, the government has to consider the impact that the project is likely to have on various
components such as livelihood of affected families, public and community properties, assets and
infrastructure, particularly roads, public transport, drainage, sanitation, sources of drinking water,
sources of water for cattle, community ponds, grazing land, plantations, public utilities such as
post offices, fair price shops, food storage godowns, electricity supply, health care facilities,
schools and educational or training facilities, anganwadis, children parks, places of worship, land
for traditional tribal institutions and burial and cremation ground.”4 Section 9 provides that where

3
The term ‘affected families’ is defined in section 3(c) of the Act.
4
Section 4(5) of the 2013 Act

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the land is proposed to be acquired invoking the urgency provisions under Section 40 5 of the Act,
the government may exempt the undertaking of the Social Impact assessment Study.

Further under proviso to Section 6, in respect of irrigation projects where the process of
Environment Impact Assessment is required under the provisions of any other law, the provisions
relating to Social Impact Assessment shall not apply. Once the social impact assessment process
has been executed satisfactorily, the proceedings of acquisition of the identified land can begin
with a ‘Preliminary Notification’ issued under Section 11. This is an initial notice to the public at

5
Section 40. Special powers in case of urgency to acquire land in certain cases.–(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

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large that a certain parcel of land is to be acquired along with details relating to the area. This
notification is different from its 1894 counterpart in the sense that it must contain a statement on
the nature of the public purpose involved along with the reasons necessitating the displacement of
the affected persons. This has to be accompanied with a Social Impact Assessment Report and
particulars of the Administrator appointed for the purposes of rehabilitation and resettlement who
is required to conduct a survey and undertake a census of the affected families under Section 16 of
the Act. Further, under Section 14, when the preliminary Notification under Section 11 is not
issued within 12 months from the date of appraisal of the Social Impact Assessment Report, then
such report shall be deemed to have lapsed and a fresh Report is required to be taken prior to issue
of Notification of acquisition under Section 11.

Once the Preliminary Notification has been issued, any person interested in the land which has
been notified for acquisition may within sixty days from the date of publication of the Preliminary
Notification, raise objections under Section 15 of the Act with regard to the area and suitability of
land to be acquired, the justification offered for public purpose or the findings of the Social Impact
Assessment Report. This is followed by a survey and census of the affected families by the
Administrator for Rehabilitation and Resettlement and declaration for acquisition under Section 9
of the Act. Under Section 23, the Land Acquisition award is passed by the Collector. It contains
the following details - the true area of the land, the compensation as determined, the Rehabilitation
and Resettlement award as determined and the apportionment of compensation among all
individuals who have an interest in the land. Under the old Act, possession could be taken without
satisfactorily compensating or resettling the families.

But under the 2013 Act, the Collector can take possession of the land only after ensuring the full
payment of compensation including the rehabilitation and resettlement entitlements to the entitled
persons.6 Under the 2013 Act, the amount of Compensation must be sufficiently fair so as to justify
the forcible acquisition of land.

6
Section 38 Power to take possession of land to be acquired.–(1) The Collector shall take possession of land after
ensuring that full payment of compensation as well as rehabilitation and resettlement entitlements are paid or tendered
to the entitled persons within a period of three months for the compensation and a period of six months for the
monetary part of rehabilitation and resettlement entitlements listed in the Second Schedule commencing from the date
of the award made under section 30

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Under the 1894 Act, compensation was required to be paid at market value. But quantum and basis
for determining market value was the root cause of a number of disputes, injustices to the
landowners and litigation. The Court has also recognized in Ram Jiyawan v. State of Uttar
Pradesh 7
the importance of paying compensation as “Acquisition without payment of
compensation is violative of Article 14”. Compensation provisions are contained in Sections 2630,
39 and the First Schedule of the Act. Section 26 provides for determination of the market value of
the land by the Collector according to the criteria mentioned therein which lays down “(a) the
market value, if any, specified in the Indian Stamp Act, 1889 for the registration of sale deeds or
agreements to sell;” or “(b) the average sale price for similar type of land situated in the nearest
village or nearest vicinity area;” or “(c) consented amount of compensation in case of acquisition
of lands for private companies or for public private partnership projects.”

The Act provides a method for calculating the average sale price referred to in clause (b). It 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.” 8 The market value calculated
as average of the last three years on the basis of the Collector’s rate or the sale deeds, is to be
multiplied by a factor to be specified in the First Schedule. Multiplying factor mentioned in First
Schedule in case of rural areas is 1.00 (One) to 2.00 (Two) based on the distance of the project
from urban area as may be notified by the government.

In the case of urban areas, multiplying factor is only one. Section 30 provides for award of solatium
(compensation for emotional harm caused) and the manner of determination of solatium is
provided under the First Schedule. It has to be paid in addition to the compensation payable to any
person whose land has been acquired. The Collector having determined the total compensation to
be paid, to arrive at the final award, impose a solatium equivalent to 100% of the compensation
paid. Solatium is not a new concept as it had already existed under the 1894 Act, in which by the
1984 amendment, affected individuals were required to be paid an additional 30% of the market
value in consideration of the compulsory nature of the acquisition [Section 23(2) of the 1894 Act].

7
AIR 1994 All 38
8
Explanation section 1 to 26

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Hence under the 2013 Act, the landowner will get the full compensation as calculated above while
the compensation to be paid to the affected families as referred to in clause (c) of Section 3 shall
be in proportion to be decided by the appropriate government.

In addition to the market value of the land under Section 26, the Collector shall award under
Section 30(3), an amount at the rate of 12% per annum on such market value for the period from
the date of publication of the Notification of the Social Impact Assessment Report till the date of
award of the Collector or the date of taking possession of the land whichever is earlier. The 2013
Act provides for land acquisition along with compulsory rehabilitation and resettlement due to past
experiences in case of large scale projects like the Narmada Dam.

In case of acquisition for the purposes of building dams, entire villages got submerged but the
displaced families were never resettled. Section 31(1) of the 2013 Act provides that the Collector
shall pass Rehabilitation and Resettlement awards for each affected family (both landowners and
the families whose livelihood is primarily dependent on the land acquired) in terms of the
entitlements provided in the Second Schedule. This is in addition to the compensation provided
under the First Schedule. There are provisions of housing units in case of displacement both from
rural and urban areas; land for land; offer for developed land; choice of annuity or employment;
subsistence grant for displaced families for a period of one year; transportation cost for displaced
families; cattle shed/petty shops cost; one time grant to artisans, small traders and certain others;
fishing rights; one time resettlement allowance and stamp duty and registration fee.

When an entire population is moved to a new area, it would be a farce to suggest that all the people
have been rehabilitated. For resettlement and rehabilitation in a true sense, basic infrastructural
facilities have to be provided at the proposed site. These have to be constructed at the cost of the
authority at whose behest the acquisition is taking place.

The Third Schedule provides for infrastructural amenities to be provided. The 2013 Act provides
that the 1894 Act will continue to apply in certain cases where an award has been made under the
1894 Act. Section 24 makes provision for application of the provisions of the 2013 Act to land
acquisition proceedings initiated under the 1894 Act as follows:

1. “If no award has been made under Section 11 of the 1894 Act, then all provisions of the 2013
Act relating to compensation shall apply [ Section 24(1)(a);”

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2. “Where an award under Section11 of the 1894 Act has been passed, then such proceedings shall
continue under the provisions of the 1894 Act, as if the Act has not been repealed [Section
24(1)(b);”

4. “Where an award has been made under Section 11 of the 1894 Act and compensation in respect
of a majority of land holdings has not been deposited in the account of the beneficiaries specified
in the Notification for acquisition under Section 4 of the said Land acquisition Act, shall be entitled
to compensation in accordance with the provisions of the 2013 Act [proviso to Section 24(2)].”

Section 24(2) came as a ray of hope for a number of farmers whose land was acquired by the
respective state governments number of years ago and the award was made five years or more
prior the 2013 Act, but in case the physical possession of the land has not been taken or the
compensation has not been paid, the acquisition shall lapse or stand cancelled. These farmers found
the ‘retrospective clause’ or Section 24(2) a great respite as they could benefit from the provision
and get justice.

JUDICIAL APPROACH ON THE RETROSPECTIVE CLAUSE

The Supreme Court delivered in first judgement 9 on the newly enacted land Acquisition Act,
wherein it laid down the circumstances wherein the 2013 Act would have retrospective operation
2013 Act puts in place entirely new regime for compulsory acquisition of land and provides for
new scheme for compensation, rehabilitation and resettlement to the affected families whose land
has been acquired or proposed to be acquired or affected by such acquisition. In all the applications,
a period of five or more years had passed since the land acquisition award had been made under
Section 11 of the 1894 Act and the applicants had refused to accept the compensation. Section
24(1) begins with non obstante clause and this provision has been given an overriding effect to
over all other provisions of 2013 Act. It is provided in clause (a) that where the land acquisition
proceedings have been initiated under the 1894 Act but no award under Section 11 is made then
the provisions of 2013 Act shall apply relating to the determination of compensation. Section
24(1)(b) makes provision that where land acquisition proceedings have been initiated under the
1894 Act and award has been made under Section 11, then such proceedings shall continue under
the provisions of the 1894 Act as if that Act has not been repealed. Section 24(2) also begins with

9
Pune Municipal Corporation & Anr vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183)

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non obstante clause and has overriding effect over Section 24(1). Section 24(2) enacts that in
relation to the land acquisition proceedings initiated under 1894 Act, where an award has been
made five years or more prior to the commencement of the 2013 Act and either of the two
contingencies is satisfied, namely, (i) physical possession of the land has not been taken or (ii) the
compensation has not been paid, such acquisition proceedings shall be deemed to have lapsed. On
the lapse of such acquisition proceedings, if the appropriate government still chooses to acquire
the land which was the subject matter of acquisition under the 1894 Act then it has to initiate the
proceedings afresh under the 2013 Act. The proviso appended to Section 24(2) deals with a
situation where in respect of the acquisition initiated under the 1894 Act an award has been made
and compensation in respect of a majority of land holdings has not been deposited in the account
of the beneficiaries then all the beneficiaries specified in Section 4 notification become entitled to
compensation under 2013 Act. Section 31 of the 1894 Act makes provision for payment of
compensation or deposit of the same in the Court. The provision requires that the Collector should
tender payment of compensation as awarded by him to the persons interested who are entitled to
compensation. If due to happening of any contingency as contemplated in Section 31(2), the
compensation has not been paid, the Collector should deposit the amount of compensation in the
court to which reference can be made under Section 18. The mandatory nature of the provision in
Section 31(2) with regard to deposit of the compensation in the Court is further fortified by the
provisions contained in Sections 32, 33 and 34. For the purposes of Section 24(2) of the 2013 Act,
the compensation shall be regarded as “paid” if the compensation has been offered to the person
interested and such compensation has been deposited in the Court where reference under Section
18 can be made on happening of any of the contingencies contemplated under Section 31(2) of the
1894 Act. Thus, the compensation may be said to have been “paid” within the meaning of Section
24(2) when the Collector (or Land Acquisition Officer) has discharged his obligation and deposited
the amount of compensation in Court and made that amount available to the interested person to
be dealt with as provided in Sections 32 and 33. In the instant case, the award pertaining to the
subject land was made more than five years prior to the commencement of the 2013 Act and the
compensation so awarded was neither been paid to the landowners/persons interested nor deposited
in the Court. Deposit of compensation amount in the government treasury could not be held as
equivalent to compensation paid to the landowners/persons interested. Accordingly, the subject
land acquisition proceedings would be deemed as lapsed under Section 24(2) of the 2013 Act.

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Section 114(1) of the 2013 Act repeals 1894 Act. Sub-section (2) of Section 114, however, makes
Section 6 of the General Clauses Act, 1897 applicable with regard to the effect of repeal but this
is subject to the provisions in the 2013 Act. Under Section 24(2) land acquisition proceedings
initiated under the 1894 Act, by legal fiction, are deemed to have lapsed where award has been
made five years or more prior to the commencement of 2013 Act and possession of the land is not
taken or compensation has not been paid. The legal fiction under Section 24(2) comes into
operation as soon as conditions stated therein are satisfied. The applicability of Section 6 of the
General Clauses Act being subject to Section 24(2), there is no merit in the contention of the
Corporation.

The respondents, the Pune Municipal Corporation (the acquiring authority) argued that they had
deposited the amount in the treasury of the government in fulfilment of their obligation and had
therefore satisfied the requirement of paying compensation. The Court held that compensation
would only be deemed to have been paid if it had been deposited with the Court and after having
been offered to the individual concerned. In this case, the compensation had only been deposited
in the treasury. As a result, compensation could not be deemed to have been paid and the
acquisition was considered to have lapsed in conformity with Section 24 of the 2013 Act. This was
followed by a spate of judgments of the Supreme Court. In Bharat Kumar v. State of Haryana10 a
similar judgment was pronounced. In the case of Bimla Devi v. State of Haryana11 award had been
passed in 1995 and the parties had still not accepted compensation or parted with possession. The
Court relying on the ‘retrospective clause’ ordered the return of the land to the original owners.
This was followed by the case of Shiv Raj v. Union of India11 in which the Court ordered the return
of the land to its original owners who were fighting the case for the last two decades and held that
the acquisition had lapsed. Coming to the position of Delhi and NCR region: “In a series of
judgments pronounced in recent months (as late as March), the Delhi High Court has scrapped
acquisition of several acres of land in Delhi by government agencies, some of them dating back to
1986. Delhi Development Authority (DDA) officials told TOI about 150 such judgments have
come and the total land that could be released would be at least 100 acres.”

10
(2014) 3 SCALE 393. 11
(2014) 6 SCC 583.
11
(2014) 6 SCC 564

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In the case of Jagjit Singh v. Union of India12 the Delhi High Court quashed a number of pending
acquisitions by the Delhi Development Aithority as it was found that the parties had satisfied the
terms of Section 24(2) of the 2013 Act. This was followed by other judgments like Surender Singh
v. Union of India13 Girish Chabra v. Lt. Governor of Delhi14 Raman Grover v. Union of India15
and Ashwal Vaderra v. Union of India16 continued to add to the growing jurisprudence on the
interpretation and application of Section 24(2) benefitting the landowners and farmers.

By the Gazette of India, Ministry of Law and Justice, an Ordinance titled as “The Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement
(Amendment) Ordinance, 2014 17 , a second proviso to Section 24(2) was inserted which is as
follows: “Provided further that in computing the period referred to in Sub-section, any period or
periods during which the proceedings for acquisition of the land were held up on account of any
stay or injunction, issued by any Court or the period specified in the award of any Tribunal for
taking possession or such period where possession has been taken but the compensation is lying
deposited in a Court or in any account maintained for this purpose shall be excluded.”

This proviso was argued by the government agencies such as DDA, MCD and L&DO but the High
Court of Delhi cited the Supreme Court judgment in M/s. Radiance Fincap (P) ltd. and others v.
Union of India and others18 wherein the Court held: “The said Ordinance is prospective in nature
and the rights created in favour of the petitioners on 01/01/2014 by virtue of the 2013 Act are
undisturbed by the second proviso to Section 24(2) of the Act which has been introduced by the
Ordinance. 19

This view was reinforced in the case of Karnail Kaur and others v. State of Punjab and others20 in
which again it was reiterated that: “The Ordinance in so far as insertion of proviso to the Section
24(2) by way of an amendment is prospective. The right of appeal is a vested right which can be

12
211(2014)DLT15
13
W.P.C. 2294/2014 decided on September 12, 2014.
14
W.P.C.2759/2014 decided on September 12, 2014.
15
W.P.C.13814/2009 decided on August 22, 2014.
16
W.P.C.1897/2014 decided on July 30, 2014.
17
Ordinance 9 of 2014.
18
C.A.4283/2013 decided on January 12, 2015.
19
ibid
20
I.A. No.8 of 2013 in C.A. No.7424/ 2013 decided on January 22, 2015.

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taken away only by a subsequent enactment if it so provides expressly or by necessary intendment
and not otherwise.” 21 Thus, the Court held that the right conferred to the landowners of the
acquired land under Section 24(2) of the Act is a statutory right and therefore, cannot be taken
away by an Ordinance by inserting the above proviso and giving it a retrospective effect. The
Ordinance will not have retrospective effect but it has a prospective effect. In J. L. Sarna v. Union
of India22 DDA pleaded helplessness in taking possession pointing out that they were unable to do
so as there was a court stay. The Court held: “These conditions [in Section 24(2) of the Act] are
unqualified. It does not matter as to what was the reason behind the non-payment of compensation
or for not taking possession. If the legislature wanted to qualify the above conditions by excluding
the period during which the proceedings of acquisition of land were held up on account of stay or
injunction by way of an order of a Court, it should have been expressly spelt out.” 23 In Surjan
Singh v. Union of India24 DDA argued that compensation payable to landowners was deposited in
the treasury.

In the process, the land-owning agency maintained that it is shielded from Section 24 and protected
by another insertion made in the Ordinance that if the government deposits money in the treasury
without the seller accepting it later, the acquirement process is valid. In this case, the Delhi High
Court held: “In so far as the payment of compensation is concerned, this much is clear that
compensation has not been paid to the petitioner, but has only been deposited in the treasury, which
does not amount to payment of compensation”. 25

The Supreme Court in the case of Aligarh Development Authority v. Megh Singh & ors26 elucidated
on the law relating to lapse of acquisition proceedings under Section 24 of 2013 Act.

The Apex Court stated that Section 24 of the 2013 Act envisages mainly two situations:

• Where the land acquisition proceedings had already been initiated under the 1894 Act but
no award was passed till the date the new Act came into force;

21
ibid
22
W.P.(C) 4965/2000,decided on March 10, 2015
23
ibid
24
W.P.(C)No. 9175/2014 &CM 20876/2014
25
ibid
26
IV (2016) SLT 153.

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• Where the Award has been passed but neither the owner has been dispossessed nor has he
been paid the compensation;

Under the first situation, where the award had not been passed, the acquisition proceedings could
continue, but the compensation will have to be determined under the scheme of 2013 Act.

Under the second situation, there is a statutory lapse of the proceedings. There is also an incidental
third situation, where award under the Land Acquisition Act, 1894 Act had already been passed
prior to coming into force of the 2013 Act, but payment is yet to be made and possession is yet to
be taken. In that case, the further proceedings after the award could continue under the old Act of
1894 but if either payment or possession has not taken effect in five years prior to the 2013 Act,
then proceedings will lapse.

SCOPE OF THE ACT

The Act aims to establish the law on land acquisition, as well as the rehabilitation and resettlement
of those directly affected by the land acquisition in India.

The scope of the Act includes all land acquisition whether it is done by the Central Government of
India, or any State Government of India, except the erstwhile state of Jammu & Kashmir.

The Act is applicable when:

1. Government acquires land for its own use, hold, and control, including land for Public
sector undertakings.

2. Government acquires land with the ultimate purpose to transfer it for the use of private
companies for stated public purposes. The purpose of LARR 2011 includes public-
privatepartnership projects but excludes land acquired for state or national highway
projects.

3. Government acquires land for immediate and declared use by private companies for public
purposes.

The provisions of the Act do not apply to acquisitions under 16 existing legislations including
the Special Economic Zones Act, 2005, the Atomic Energy Act, 1962, the Railways Act,
1989, etc.

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CRITICISMS OF THE ACT

Some criticize the Act citing that it is heavily loaded in favor of landowners and ignores the needs
of poor Indians.

It attaches an arbitrary mark-up to the historical market price to determine compensation amounts,
along with its numerous entitlements to a potentially unlimited number of claimants. This
according to them shall guarantee neither social justice nor the efficient use of resources.

LARR proposed mandates that compensation and rehabilitation payments to landowners and
livelihood losers be upfront. This misaligns the interests of the land acquirer and those affected.
Once the payment is made, one or more of the affected families may seek to delay the progress of
the project to extract additional compensation, thereby adversely affecting those who chose long
term employment in the affected families.

The Act fails to adequately define “public purpose”.The current definition, he claims, can be
interpreted vaguely. In leaving public purpose too vague and porous, it would ensure that land
acquisition will remain hostage to politics and all kinds of disputes.

The Act inflates the cost of land to help a small minority of Indians at the cost of the vast majority
of Indian citizens, as less than 10% of the Indian population owns rural or urban land.

MAJOR EVENTS:

What Was The Provision Under Consideration And Why It Needed Interpretation?

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and
Resettlement Act 2013 (2013 Act) replaced the Land Acquisition Act, 1894 (1894 Act).

The new Act provides for higher compensation to those deprived of land by the government for
both public and private sector projects.

It also mandates the consent of a majority of land-owners and contains provisions for rehabilitation
and resettlement. Under Section 24(2) land acquisition made under the old law of 1894 lapses if
the award of compensation had been made five years before the new Act came into force, but has
not been paid.

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In such cases, the process will have to be gone through afresh under the new Act, which mandates
higher compensation.

Issue Over Compensation

• There are cases in which farmers and other land-owners have refused the compensation,
leading to delay in the government taking possession.

• In this situation, the compensation amount is deposited in the government treasury.

According to one interpretation, if this is done, the acquisition process is saved.

• Then again, others contend that such cases will fall under the new Act because
compensation has not been paid to the land-owners, and the lapsing clause in Section 24
should be applied.

• If through interpretation, a long-pending land acquisition process is closed under the old
law and fresh acquisition proceedings started under the new one, the land-owners stand to
benefit, but project proponents will have to pay higher compensation.

• Therefore, the provision concerned is often a subject of litigation.

What Happened In The Case Before The Supreme Court?

On January 24, 2014, the court ruled that the acquisition of a piece of land had “lapsed” because
the compensation awarded had neither been paid to the landowners/persons interested nor
deposited in the court.

The deposit of the compensation amount in the government treasury was held to be “of no avail”
as it was not equivalent to the compensation being “paid”.

Based on this judgment, subsequent cases were decided on the same principle: acquisition that had
taken place earlier than five years before the new Act commenced would lapse if compensation
amount was not paid to the land-owners or, in cases in which the owners refused to accept
compensation, deposited in court.

How Was This Precedent Dealt With In Another Case In 2018?

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The same question arose in the Indore Development Authority vs. Shailendra. Another Bench did
not accept the earlier Bench’s view. On February 8, 2018, the majority, consisting of the first two
judges, ruled that the acquisition would not lapse merely because the compensation amount was
not deposited in court, but was instead deposited in the treasury.

It ruled that the past practice of more than a century, under which the amount was deposited in the
treasury, was not taken into account by the earlier Bench. Some provisions and orders that allowed
this practice was not placed before that Bench. Further, the land acquisition in that particular case
had been quashed by a High Court in 2008.

Since it was not a subsisting process, the question under Section 24(2), whether the acquisition
lapsed because of non-payment of compensation or non-deposit in the court, did not arise at all.

On these grounds, Justice Mishra and Justice Goel overruled the earlier judgment and held that it
was per incuriam, that is a verdict passed in disregard of law and, therefore, wrong.

What Does The Controversy Mean For Land-Owners And Project Proponents?

A ruling that old acquisitions lapse for non-deposit of compensation will be more beneficial to
land-owners and farmers as they stand to get higher compensation and rehabilitation and
resettlement measures. On the other hand, project proponents feel such an interpretation would
mean that those who refused to take compensation, even after it had been fixed and the money
deposited in the government treasury, would be taking advantage of their own wrong.

The precedent set with the Pune Municipal Corporation case on the retrospective clause was
undone with the three-judge consisting of Justice Arun Mishra, Justice A.K Goel and Justice
Shantanagoudar bench decision in 2017 in the Indore Development Authority vs. Shailendra and
others which held an opposite view. It held that compensation was deemed to have been paid if the
monies were deposited in the government treasury which is often the norm and does not need to
be deposited in court.

The refusal of landowners to accept compensation according to this judgment is required to be

asserted by filing a case before the court. What we glean from this judgment is a sense of misuse
of this section by landowners, who were looking to avail higher standards of compensation.

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A shift is visible from the interpretation of correcting historical injustice to one of misuse of the
retrospective clause. The judgement reads, “In various ways, the provision has been sought to be
blatantly misused. The law never envisages such absurd results as is being sought to be achieved.
The beneficial provisions of the 2013 Act are put to misuse that tantamounts to grossest abuse of
the provisions of law to reopen such acquisitions and the court has to thwart all such attempts at
the threshold and not to receive such cases even for consideration for a moment. We see
development has taken place in the area that has been acquired.”

They further ruled that the judgment made in the Pune Municipal Corporation case was per
incuriam or that it did not apply the law with due care. This was unprecedented and took away the
capacity of this judgment to act as a precedent. Justice Shantanagoudar dissented against this
particular aspect of the judgment. The reason for shaving away this pro-landowner jurisprudence
and reinstating an interpretation that restricts the operation of the retrospective clause needs to be
located within the changing political economy of land acquisition on which I will elaborate later
in this essay.

The interpretation in the Indore Development Authority judgment is viewed as a pro-industry one
by journalist Kumar Sambhav Shrivastava and Nitin Sethi in the context of the Reliance Industries
case. Reliance Industries was building a Special Economic Zone (SEZ) in Jamnagar in Gujarat.
Twelve farmers whose land was being acquired for the SEZ had filed a case on the grounds of
Section 24(2) or the retrospective clause as they retained physical possession of the land and had
not accepted the compensation awarded. Reliance industries challenged the retrospective clause as
unconstitutional and in violation of fundamental rights in this case.

Reliance’s argument was in similar vein as the interpretation in the Indore Development Agency
case – as a misuse of the retrospective clause. The argument presented by Reliance Industries
before the Gujarat High Court on the retrospective clause was “It is unconstitutional and
unreasonable since it extinguishes the vested right of the company to obtain possession of the
landholding acquired for it by the state, by prescribing a period of limitation for taking possession
and disbursement of compensation which operates as a fiat accompli by an enactment of the very
provision. It is stated that such a provision was not there in the earlier Land Acquisition Act of

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1894.”27 The Gujarat High Court in 2015 read down the applicability of the retrospective clause
where it stated that it shall not apply where land is being acquired for companies where awards are
passed and compensation is deposited by the company. The farmers then challenged this High
Court judgment before the Supreme Court given its interpretation in the Pune Municipal
Corporation case.

Interestingly this matter got listed before a two-judge bench headed by Justice Arun Mishra and it
was around the same time that Justice Arun Mishra passed the judgement in the Indore
Development Authority case. This restricted interpretation is bound to benefit Reliance Industries
in its case which is yet to be heard. Justice Arun Mishra has been present in key cases where the
interpretation of the retrospective clause is involved namely the Indore Development Authority
case and the Reliance Industries case. In another recent case in Shiv Kumar vs. Union of India29,
in October 2019 a two-judge bench headed by Justice Arun Mishra further restricted the
application of the retrospective clause where subsequent purchasers of land under acquisition
cannot avail of this clause to challenge acquisition proceedings. In this judgment, he overruled
another of Justice Joseph’s interpretation in the case of Government of NCT of Delhi vs. Manav
Dharam Trust30 in 2017. This systematic attack on narrowing the scope of applicability and
interpretation of the retrospective clause can be traced in all of Justice Arun Mishra’s judgments
and ironically the reference made to a larger bench in deciding the appropriate interpretation of
this clause is headed by Justice Mishra himself.

THE POLITICAL ECONOMY OF EASY ACQUISITION, DEMOCRACY

Since 2014, attempts have been made by the Modi government to dilute land laws that protect the
rights of vulnerable communities particularly the new land acquisition law and the Forest Rights
Act,2006. These attempts have been made to enable easy acquisition of land by reinstating state
control and bureaucratic discretion in the acquisition. First of such attempts was the Ordinance of
2014 which eventually lapsed in August, 2015. In this ordinance the government tried to do away
with the requirement of consent from the landowners and restricted retrospective application under
Section 24 by creating a limitation on the calculation of the period of five years.

27
Reliance Industries Limited vs. Union of India ( Special Leave Petition No 20362 of 2015)

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The new land acquisition law has been characterised by the business community as cumbersome
requiring the compliance of many procedural safeguards like consent and the social impact
assessment process. In response to this critique the Modi government has since tried to simplify
this process. While it failed to do this through an ordinance, it has succeeded in bringing about
such changes through administrative mechanisms like Land Banks. Land Banks are a mechanism

29
(1995) 2 SCC 427. 260)
30
Civil Appeal No. 6112 of 2017

where land which was once acquired or is categorized as government land is banked to be
transferred to industries without complying with the procedural requirements of the Land
Acquisition Act of 2013. The government is trying to achieve this ease in acquisition through the
judicial route too, as the narrower interpretation of the retrospective clause will reduce the scope
of scrutiny of older unjust acquisitions like in the case of Reliance Industries.

The role the judiciary plays in interpreting the retrospective clause can either reinforce arbitrary
acquisition or make way for a more just process in the acquisition. The matter before the court is
closely linked to the need to create an enabling environment for business. As was argued by the
counsel for Reliance industries in the Gujarat High Court case of 2015 to begin the reacquisition
of land under the new law would be tedious as they would be required to obtain the consent of
80% of the landowners, conduct a social impact assessment and determine the standards for
compensation. It is to do away with the time taken to comply with these requirements that a
restricted interpretation is favored by industries.

This narrow reading of Section 24(2) as has been held by the Supreme Court limits contestation
over older land acquisition proceedings on a changed legal terrain that demands transparency and
accountability from the state. Such judgments reinforce the doctrine of eminent domain. As
Michael Levien in his book Dispossession without Development categorizes the Indian state as a
land-broker state acting as an enabler of businesses by ensuring the quick and easy acquisition of
land, leaving behind its regulatory responsibilities of upholding the rights of its citizens. 28

28
Michael Levien, Dispossession without Development (Oxford University Press,2018).

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DRAWBACKS

The 2013 Act although far better than its earlier counterparts is not perfect and has a number of
drawbacks. Some of which are enumerated as under

• Regarding determination of the market value by the Collector under Section 26(b), the
market value calculated as average of the last three years on the basis of the sale deeds, is
to be multiplied by a factor to be specified in the First Schedule. Multiplying factor
mentioned here in case of rural areas is 1.00 to 2.00 based on the distance of the project
from urban area as may be notified by the government. In the case of urban area,
multiplying factor is only 1.00. Compensation has to be paid to the landowners on the basis
of the market value of the land. In India, it is really difficult to calculate the market value
because of a running parallel economy involving black money, cash transactions often
made with black money, corruption in the form of understating the market value in the sale
documents to avoid payment of stamp duty at the time of registration of the sale deed. All
this leads to a loss to the landowner as the government steps into the shoes of the landowner
at the time of acquisition and pays only a small amount of compensation which is below
the actual sale price.
• The 2013 Act provides for Rehabilitation and Resettlement, a commendable step for the
first time in India’s legislative history, that a law on land acquisition has been tied up with
the necessity to carry out rehabilitation and resettlement. But in case of land which is
temporarily acquired, there is no such policy of rehabilitation and resettlement.

• Under Section 2(2)(a) and (b), the provisions of the Act relating to ‘ prior consent ’ of the
‘affected families’ apply where the land is acquired for public partnership project or for a
private company ( both for a public purpose). This means that in these cases, the
landowners can refuse to part with their lands by refusing to give the appropriate percentage
of ‘prior consent.’ But when the land is acquired by the government for its own use, hold
and control, including for PSUs and for public purpose under Section 2(1), ‘prior consent’
of the affected families is not required to be taken. That is, when the government acquires
land for its own use, prior consent of the affected families is not required. It is a forcible

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 acquisition by the government in which the landowners have no say at all and they cannot
refuse to part with their land.
• The State governments have objected to the Chapter III of the 2013Act dealing with
acquisition of agricultural land that since ‘transfer and alienation of agricultural land’
comes under the purview of the State List, Entry 18, it is only the State Legislatures who
have a right to legislate on this matter.
• The 2013 Act exempts the application of the provisions of the Act to certain enactments
dealing with land acquisition like the Railways Act, 1989, The Electricity Act, 2003, The
National Highways Act, 1956 (all the 13 enactments specified under the Fourth Schedule).

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 CONCLUSION

The retrospective clause provided poor landowning communities who are affected by such
acquisition to challenge the terms on which it had happened. This as the framers of the law stated
was a way to address the violence that many of these protests witnessed. As Adivasi, Dalit and
farming communities across India are often subject to historical injustice in land acquisition, the
restricted interpretation of the clause presently in place perpetuates such injustice. Land acquisition
is a complex decision as it sits within two conflicting narratives, one of land as a critical resource
for development where the state has ultimate control and the other which is land as an important
source of livelihood, culture, and security for vulnerable communities. The retrospective clause,
with this narrower reading reinforces the power of the state as the ultimate arbiter of interests
over land seen as a critical resource for development while vulnerable communities are bereft of
the legal opportunity to challenge arbitrary and forceful acquisitions under the old law.

Land is a precious resource for the farmers and not anything less to any landowner. It is the most
important source of livelihood for the farmers who constitute almost half the labour force in India.
None of them wants to part with their land. The government has to carry out development work
for which land is the basic requirement. The British brought the 1894 Act which was in its own
right a draconian, unjust, archaic legislation. This legislation provided for compulsory acquisition
of land without the consent of the landowners, it only provided for monetary compensation
(determination of which was not satisfactory), there was no provision for rehabilitation and
resettlement of the displaced people.

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This legislation generated a lot of conflicts as large business groups pressed for land acquisition
for their mega projects and the landowners protested and the protests grew louder with events like
Singur and Nandigram. Finally, the Government enacted the 2013 Act with provisions of just and
fair compensation, rehabilitation and resettlement to the affected families. The effect of land
acquisition on the affected families was to be gauged by a Social Impact assessment before
resorting to land acquisition. It also provided for the return of land to the owners if it remained
unutilised for a period of 5 years. The determination of compensation was to be done under the
method provided under the Act, further enhanced by 100% Solatium. There are many more
provisions which are landowner’s friendly. But there are certain flaws which if removed can make
the Act more just and acceptable. The need of the hour is that a balance should be created between
the needs of the corporate sector which requires land for their projects and the landowners and
farmers. The Government should shelve the idea that development of the country can take place
only through industrialization and creation of more jobs. Agriculture and farming is a very essential
part of our economy which cannot be neglected for the sake of development. Both the sectors
should go hand in hand. Development is of course essential, but at what cost? Not at the cost of
our farmers who have been feeding us, at least. Food security and development, both are the need
of the hour today.

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 BIBLIOGRAPHY

Primary Sources:

• The Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and
Resettlement Act 2013
• Land Acquisition Act 1894
• The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement (Compensation, Rehabilitation and Resettlement, Development Plan) Rules,
2015.

• ‘Law Commission of India’, 10th Report on the Law of Acquisition and Requisition of
Land, (1958).
• Land Acquisition, Rehabilitation and Resettlement Bill, 2015.
• Constitution of India.
• The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement (Amendment) Ordinance, 2014.

Articles:

• https://thepolisproject.com/fixing-historical-injustice-or-reinforcing-state-
controlassessing-the-land-acquisition-act-2013/#_ftn13
• https://www.civilsdaily.com/burning-issue-supreme-court-judgment-on-land-
acquisitionact/
• https://www.lawbulls.in/section-24-2-land-acquisition/

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Books:

• P. K. Sarkar: Law of Acquisition of Land in India, Eastern Law House, Kolkata

• D.P.S. Kanwal, Land Laws (Including Land Acquisition and Rent Laws), Satyam Law
International, New Delhi
• Dr. N Maheshwara Swamy’s ‘Land Law’ (Asia Law House, Hyderabad, 1st ed., 2009). •
S.K.Aweshi, ‘Law of Land Acquisition and Compensation’,(Dwivedi Law Agency,
Allahabad, 1st ed., 2008).

Websites:

• Scconline.com
• Manupatra.com
• Legalservices.co.in
• Indiankanoon.com

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