Do Bigha Zameen

A look at what has changed in land acquisition law from 1894 to 2015.

WrittenBy:Anand Ranganathan
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Dharna clouds are hanging low. Thunder from the loudspeakers, lightning from the cameras. Except that this time around it has nothing to do with the Aam Aadmi Party. Anna Hazare is coming to Delhi on February 24, 2015 to protest against the Land Acquisition Bill or, to be faithful to the jargon-makers, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014. This ordinance, signed by the President of India on the last day of 2014 is the doing of the present National Democratic Alliance (NDA) government, and it lists the amendments to the Act passed by the United Progressive Alliance (UPA) government in 2013: The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Hard as it is to believe, before the UPA – to its full and immense credit – brought in the 2013 Act, we were following the so-called 1894 Act, a 120-year-old legislation drafted when corsets and parasols and tiger hunts were in fashion.

Anna doesn’t like the changes that have been made to the UPA Act. Before we delve into why this is so, it is important to first list precisely what the changes are. 

The amendments:

  1. (1) This Ordinance may be called the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement (Amendment) Ordinance, 2014.

    (2) It shall come into force at once.

So far so good.

  1. In the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as the principal Act), for the words “private company” wherever they occur, the words “private entity” shall be substituted.

Although to an untrained eye a company is also an entity, “private entity” is a broader term and includes private organisations not registered under the Companies Act. The NDA Act defines it as proprietorship, partnership, company, corporation, or a non-profit organisation.

  1. In the principal Act, in section 2 –

(i) in sub-section (1), in clause (b), in sub-clause (i), the words “private hospitals; private educational institutions and” shall be omitted.           

In the UPA Land Act, sub-clause (i) of clause (b) of sub-section (1) of section 2 – bear with me, please – says the government can acquire land for infrastructure projects excluding private hospitals, private educational institutions and private hotels.

The NDA Act has amended this clause so that now the government can acquire land for private hospitals and private educational institutions. The government cannot however acquire land for private hotels. Small mercies.

  1. In the principal Act, in section 2 –

 (ii) in sub-section (2), after the second proviso, the following proviso shall be inserted, namely: –

            “Provided also that the acquisition of land for the projects listed in section 10A and the purposes specified therein, shall be exempted from the provisions of the first proviso to this sub-section”.

The first proviso of sub-section (2) of section 2 in the UPA Act says that private companies would require the prior consent of at least 80% of those affected families before acquiring land. For public-private partnership projects (PPP), prior consent has to be of at least 70% of those affected families.

The NDA amendment means that for projects relating to national security or defence, including preparation for defence, defence production; rural infrastructure including electrification; affordable housing and housing for the poor people; industrial corridors; infrastructure, social infrastructure and PPP projects where government holds the land, there is no longer any need to obtain prior consent of 80% (for private projects) or 70% (for PPP projects).

This is a major new change. These projects are usually massive in scale – industrial corridors alone would require an investment of tens of billions of dollars. Starting this year, any private company wishing to commence such projects does not require 80% or 70% consent of the people whose land it is.

  1. In the principal Act, in section 3, –

 (i) in clause (j), in sub-clause (i), for the words and figures “the Companies Act, 1956”, the words and figures “the Companies act 2013” shall be substituted;

Again, for a layman this sounds acceptable, but those half-a-dozen Indians brilliant enough to be well-versed with the Companies Acts of 1956 and 2013 may know better.

  1. In the principal Act, in section 3, –

(ii) after clause (y), the following clause shall be inserted. Namely –

‘(yy)“private entity” means any entity other than a Government entity or undertaking and includes a proprietorship, partnership, company, corporation, non-profit organisation or other entity under any law for the time being in force.’.

The mandarins are defining what a “private entity” means. Much obliged.

  1. In the principal Act, after Chapter III, the following Chapter shall be inserted namely –


 10A. The appropriate Government may, in the public interest, by notification, exempt any of the following projects from the application of the provisions of Chapter II and Chapter III of this Act, namely –

            (a) such projects vital to national security or defence of India and every part thereof, including preparation for defence; or defence production;

            (b) rural infrastructure including electrification;

            (c) affordable housing and housing for the poor people;

            (d) industrial corridors; and

            (e) infrastructure and social infrastructure projects including projects under public private partnership where the ownership of land continues to vest with the Government,”.

Chapters II and III of the UPA Act are concerned with Social Impact & Pubic Purpose, and Food Security respectively. Chapter II talks of consultations with panchayats and municipal corporations, conducting preliminary investigations for determining social impact, and appraisal of social impact assessment report by an expert group.

Chapter III, on the other hand, talks of food security and irrigable, multi-cropped land. It specifically says that, save as otherwise provided in sub-section (2), no irrigated multi-cropped land shall be acquired under this Act. And sub-section (2) says: Such [irrigated multi-cropped] land may be acquired subject to the condition that it is being done under exceptional circumstances, as a demonstrable last resort.

So, even though the UPA Act also put in clauses through which irrigable land could be acquired, it was strict and measured in its order – “under exceptional circumstances; as a demonstrable last resort”. NDA amendments have removed all these clauses in a sweep for what may turn out to be thousands of projects.

This is the most contentious amendment and one that I suspect will become the root of all future dharnas and television revolutions.

Starting January 1, 2015, for projects relating to national security or defence, including preparation for defence, defence production; rural infrastructure including electrification; affordable housing and housing for the poor people; industrial corridors; infrastructure, social infrastructure, and PPP projects – if the government so desires, there is no social impact assessment required,  and no consultations required either with panchayats and municipal corporations. Furthermore, all these projects can be provided irrigable, multi-cropped land.

  1. In the principal Act, in section 24, in sub-section (2), after the proviso, the following proviso shall be inserted, namely –

 “Provided further that in computing the period referred to in this 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 a Tribunal for taking possession or such period where possession has been taken but the compensation lying deposited in a court or in any account maintained for this purpose shall be excluded.”.

Sub-section (2) in section 24 of the UPA act says: if the land acquisition proceedings were initiated 5 years before the commencement of the UPA Act, but neither the land acquired nor compensation paid, the proceedings shall be deemed to have lapsed and one would have to begin afresh. In cases where land was acquired under the 1894 Land Act but compensation not yet paid, all specified beneficiaries shall be entitled to compensation in accordance with the provisions of the UPA Act.

The NDA amendment includes the circumstances where land acquisition proceedings were held up because of court injunction. Specifically, those cases where the land had been acquired through the 1894 Act but the compensation that was to be paid to the beneficiary was somehow withheld and lying deposited in the a court, would now be excluded from the UPA Act’s order.

To a layman this seems a fair deal. There is hardly the need to begin afresh the proceedings for acquiring land when the compensation money has already been paid but is lying frozen because of a court injunction.

  1. In the principal Act, in section 46, in sub-section (6), in the Explanation, in clause (b), the words “any person other than” shall be omitted.

Sub-section (6), section 46 of the UPA Act says: lf land was purchased by specified persons after September, 2011 and is acquired before September, 2016, 40% of the compensation shall be shared with the original land owners. ‘Specified persons’ includes any person other than the government or a government company, or a trust aided by the government.

The NDA amendment, by removing “any person other than” from the clause, specifies that only the government or a government company, or a trust aided by the government will pay the compensation. Some wonderful word-jugglery by the mandarins at display here – those who were excluded in the UPA Act are now included, and all it took was removing “any person other than”. Sir Humphrey’s doing, one suspects.

  1. In the principal Act, for section 87, the following section shall be substituted, namely –

“87. Where an offence under this Act bas been committed by any person who is or was employed in the Central Government or the State Government, as the case may be, at the time of commission of such alleged offence, no court shall take cognizance of such offence except with the previous sanction of the appropriate Government, in the manner provided in section 197 of the Code of Criminal Procedure.”.

Section 87 of the UPA Act talks of offences committed under the Act. With suitable proviso, it states: if an offence has been committed by any department of the government, the head of the department shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

The NDA amendment states that, starting January, 2015, no court can take cognizance of such offences without the sanction of the government.

To a layman, this appears to be infringing on the authority of the courts as well as the rights of the aggrieved citizen to take someone to court.

  1. In the principal Act, in section 101, for the words, “a period of five years” the words “a period specified for setting up of any project or for five years, whichever is later,” shall be substituted.

Section 101 of the UPA Act states that if the acquired land remains unutilised for a period of five years from the date of taking over the possession, the land shall be returned to the owners.

The NDA amendment has swapped a defined period – that of five years – with “a period specified for setting up of any project or for five years”. Trying to be clever here, the mandarins. Starting January, 2015, any company can specify a period of say 10 or 20 years and were they to sit on the land for that long, it will remain with them. This sounds like land grabbing, especially for private projects where the government is also involved.

If the castle is supposedly of national importance, one can’t make it in the air and not return the land besides.

  1. In the principal Act, in section 105 –

 (i) for sub-section (3), the following sub-section shall be substituted, namely –

 “(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from l January, 2015.”;

Sub-section (3) of section 105 in the UPA Act states that the compensation and rehabilitation provisions that are in accordance with the first, second, and third schedules (these schedules are listed in the UPA Act page 37 onwards) also apply to the orders stated in the fourth schedule “with such exceptions or modifications that do not reduce the compensation or dilute the provisions of this Act”.

The NDA amendment has removed the proviso shown above in quotes. To a layman, it appears harmless. The Fourth schedule lists 13 Acts of Parliament, like the Railways Act, the Electricity Act, the Atomic Energy Act, etc (see page 45 of the UPA Act).

  1. In the principal Act, in section 105 –

(ii) sub-section (4) shall be omitted.

Sub-section (4) of section 105 in the UPA Act states that a copy of every notification proposed to be issued for application of the above-mentioned schedules shall be laid in draft before each House of Parliament, while it is in session, for a total period of 30 days. If both Houses disagree on the notification, the same shall not be issued or issued only when both Houses agree on it.

Did the mandarins just bypass the Parliament here? To a layman this provision could either be to bypass the Houses or perhaps to cut excessive delays or red-tape.

  1. In the principal Act, in section 113, in sub-section (1) –

(i) for the words “the provisions of this Part”, the words “the provisions of this Act” shall be substituted;

Remedying a typo.

  1. In the principal Act, in section 113, in sub-section (1) –

(ii) in the proviso, for the words “a period of two years”, the words “a period of five years” shall be substituted.

Sub-section (1) of section 113 in the UPA Act says that, to tide over unforeseen difficulties in implementing the Act, the government can make new provisions anytime within 2 years of the commencement of the Act. The NDA amendment has increased this period from 2 to 5 years. Presumably it takes 3 extra years for the mandarins to realise something is horribly amiss in the Act they helped draft.

So there we have it. These are the amendments over which Delhi may come to a halt on February 24, 2015. It cannot be denied that some of the amendments are drastic in nature, especially No. 3 and 5. That said, it is also true that, before the UPA brought the 2013 Act, for 60 years we were content with following the 1894 Act that was as controversial if not more, than what the present NDA government has drafted.

The 1894 Land Act begins imperiously with “Whenever it appears to the Government the land in any locality is needed or is likely to be needed for any public purpose or for a company, a notification to that effect shall be published in the Official Gazette…” This draconian Land Act was expunged  neither during the socialist governments of Jawaharlal Nehru or Indira Gandhi or Morarji Desai, nor during the period the communists held great sway over India’s politics and policies in the mid-1990s – when Jyoti Basu almost became India’s Prime Minister. All these grand protectors of our land were following 120-year-old British-made decrees like “Whenever it appears to the Government that the temporary occupation and use of any waste or arable land are needed for any public purpose, or for a Company, the Government may direct the Collector to procure the occupation and use of the same for such term as it shall think fit…”.

The words, “Social Impact” or “Environment” or “Assessment” do not appear even once in the 11,570 word 1894 Land Act.

Second, while it is true that allowing acquisition of irrigable, multi-cropped land is a contentious issue, what is the government to do if a railway line or a highway must necessarily pass through such land? Besides, on the question of setting up industries on such land, can one blatantly ignore the many concerns of the industry?

The Singur debacle created a fault-line that unfortunately many have decided to tow since. But there are exceptions. This is what Prof Amartya Sen – the man who looked over and over-looked UPA policies in equal measure – had to say on acquisition of irrigable land: “Prohibiting the use of agricultural land for industries is ultimately self-defeating. The locations of great industry, be it Manchester or Lancashire, these were all on heavily fertile land. For the prosperity of industry, agriculture and the economy, you do need industrialisation. Those in effect preventing that, either by politically making it impossible for an industrialist to feel comfortable in Bengal or making it difficult to buy land for industry, do not serve the interest of the poor well”

Third, the Finance Minister Arun Jaitley says the NDA has “tried to achieve a balance. Higher compensation will continue, procedural rigours would be loosened or eased in relation to the five defined purposes.” He adds that the 2013 UPA Act put up barriers that are holding up projects worth almost $300 billion, or 18 lac crores. His argument would have been more compelling had he provided the details of such projects.

Fourth, another NDA minister, Nitin Gadkari, says many UPA State governments also wanted changes in the 2013 UPA Act. True, the sliding scale mechanism devised for providing compensation to land owners – a hallmark of the UPA Act – has not been touched, but it is hard to believe that the UPA State governments wanted so many changes in the UPA Act, including Nos. 3 and 5. That said, when the 2013 UPA Act came out, industry and business commentators did say that it was “Worrying For Industry, Good For Farmers”. “Farmers cheer, industry jeers as LS clears land bill,” was another sentiment.

It should not go unnoticed that the 1894 Act allowed for forced acquisitions and low rates of compensation. Moreover there were no resettlement or rehabilitation clauses, so much so that even the Supreme Court called it “a fraud”.

And yet our caring, sensitive governments turned a blind eye to these excesses for 60 years. The 2013 UPA Act was a great and welcome advancement – a law made by Indians, for Indians. The present NDA government, by bringing in many contentious changes, has set the cat among the pigeons. Do we as citizens trust our government when it says projects worth $300 billion are stalled and therefore we need those amendments? Do we trust our economists who say irrigable land can be used for industrial purposes? Do we trust our Parliament to come up with just laws and a progressive economic policy that will take our nation forward and not backwards? 

While we search for the answers, rest assured that this revolution will also be televised.


Author’s note: For want of space some clauses and quotes have been abridged.


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