Government amends fair compensation and transparency regime in land acquisition

The Union Cabinet, chaired by the Prime Minister, on December 31, 2014 promulgated the Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014 [1] (“Ordinance”) which brought in certain amendments in the Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“Act”).

A print release[2] by the Government claims that the purpose of the Ordinance is to remove a set of difficulties that are being faced in implementation of the Act, specifically concerning the prolonged procedure for land acquisition that results in delay in project completion, neither benefiting the farmer nor society at large. To cure this, the Ordinance boasts of “Pro-farmer” as well as “Pro-development” measures. It aims at further strengthening the provisions to protect interests of the ‘affected families’ and mitigate procedural difficulties in the acquisition of lands required for important national projects. Proposed amendments “…meet the twin objectives of farmer welfare; along with expeditiously meeting the strategic and developmental needs of the country”.

The Ordinance brings 13 (thirteen) most frequently used Acts[3] specifically concerning land acquisition for Central Government projects that were hereto exempted under the Act, within its purview. This enables a large percentage of farmers and affected families to obtain compensation as well as the rehabilitation and resettlement measures prescribed under the Act, a move that can be positively regarded as a pro- farmer step. Further, the Ordinance makes provisions for ensuring that developmental and security related works proceed much faster without compromising on the benefits/compensation to be given to the farmers, a strong step towards macro development.

This Article analyzes and explains some of the important amendments that affect the Act.

Entities included under the purview of the Act[4]:

The term “private company has been substituted with “private entity”, thus widening its scope to include corporate bodies, proprietorship concerns, non-profit organisations or any recognized other entity under any law. This replacement seeks to widen the scope of those who can acquire land under the Act.

Causes for which government may acquire land[5]:

The Act had excluded Government acquisition for private hospitals, private educational institutions and private hotels. The Ordinance now permits Government acquisition of land for private hospitals and educational institutions. The amendment compromises the intention of acquisition, which was hereto only allowed only for “public purpose”[6] under the Act.

Consent of affected families[7]:

Under The Act, acquisition of land required consent of the affected families to a minimum of 80% in case the acquirer was a private company and 70% in case of a public-private partnership.

A range of projects have been excluded from this condition, including all those relating to defense production, power projects and other projects for rural infrastructure, housing for poor, industrial corridors etc.,. The effect of this amendment has been touted to be particularly unfavorable to farmers because the majority of land acquisition has been for such power and irrigation related projects; farmer consent for which now, is immaterial.

Social Impact Studies and Assessments (SIA) & food- security[8]:

SIA is covered under Chapter 2 of the Act. It provides an impartial assessment as to how many families would be potentially affected, whether the land being acquired is the minimum of what is actually required, alternative site availability, etc. Additionally, the chapter had put stringent constraints on acquisition by corporate bodies.

Chapter 3 of the Act deals with ‘special provisions to safeguard food security’. It categorically states that irrigated multi cropped land shall not be acquired under this Act and only allows minimal and strict exceptions to this condition.

The newly inserted Chapter 3A, section 10A enumerates projects that shall be exempted from the provisions of Chapters 2 and 3. Thus acquisitions for projects vital to national security or Defence, rural infrastructure housing for the poor, industrial corridors etc., will not be liable to the procedures of SIA or the constraints put in place by the Act for protection of food security.

Thus by the above amendments, the Ordinance negates the consent of farmers for acquisition of their lands for many projects, the process of Social Impact Assessment and the protection given to fertile multi cropped agricultural lands.

Fate of unutilized lands[9]:

The Act prescribes that acquired land which remained unutilized for 5 years, was to be returned to the original owners or the land bank. The Ordinance relaxes this rule greatly by extending the time period for such return. According to the Ordinance, the period after which unutilized land will need to be returned will be 5 years, or any period specified at the time of setting up the project, whichever is later. This Amendment will enable entities/ government to hold acquired lands for a prolonged period even if unutilized, allow speculative activity and wastage of fertile agricultural lands.

Further changes proposed to the Ordinance:

More recently, pending assent of both houses to pass the Ordinance, the President of India Pranab Mukherjee, on 3 April 2015 promulgated the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement (LARR) (Amendment) Ordinance, 2015.[10] The newer ordinance provides for mandatory employment to one member of family of farm labour affected by land acquisition. This provision did not exist in the Ordinance, 2014. The re-promulgation had become necessary since the validity of the Ordinance, 2014 promulgated on 31 December 2014 expired on 5 April 2015 as per Article 123(2)(a) of the Constitution.

(The Author was an Associate in the Real Estate team of Jayanth Pattanshetti Associates)

[1]http://dolr.nic.in/dolr/downloads/pdfs/RFCTLARR%20Act%20%28Amendment%

29%20Ordinance,%202014.pdf
[2] http://pib.nic.in/newsite/PrintRelease.aspx?relid=114190
[3] Land Acquisition (Mines) Act 1885; Atomic Energy Act, 1962; Railway Act 1989;

National Highways Act 1956; Metro Railways (Construction of Works) Act, 1978;

Petroleum and Minerals Pipelines Act 1962; Electricity Act 2003 etc.,

which list has been enumerated under the Fourth Schedule of the Act.
[4] Clause 2 read with Clause 4(ii) of the Ordinance
[5] Clause 3(i) of the Ordinance
[6] “Public purpose” as defined under Section 2 (1) of the Act
[7] Clause 3(ii) of the Ordinance
[8] Clause 5 of the Ordinance
[9] Clause 9 of the Ordinance
[10] http://dolr.nic.in/dolr/downloads/pdfs/RFCTLARR%20Act%20%

28Amendment%29%20Ordinance,%202015.pdf