Land Acquisition Act 2013: Balancing Demand and Compensation

With the growing population in India, the demand for land acquisition also grows. Hence, to ensure a proper balance between demand and supply, and facilitate infrastructure development of the country, without hindrances, the Government of India has formulated certain rules and regulations. The Land Acquisition Act 2013 is an essential pillar of this system. 

Since land is a scarce resource in India, granting fair compensation to each citizen involved in any kind of land transaction is imperative. To serve this purpose the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was introduced over the redundant Land Acquisition Act, 1894. The Land Acquisition Act, 2013 mandates fair resolutions to legal disputes and makes way for smooth land acquisition.

The original land acquisition act first came into existence in British India, in the 1870s. However, there were still many essential provisions missing from the law regarding any settlement grant to the original owners of the land. This resulted in a lot of grievances among the citizens of the country. After several changes, the new, improved land acquisition act was finally passed and approved in 2013. This act is also known as the right to fair compensation and transparency in the land acquisition Act or the rfctlarr act 2013.

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Now, it’s an important tool in determining the rights of landowners. Read on to know more.

What is Land Acquisition?

This is a process through which any government union or state, acquires private land for infrastructure development and industrialisation. In return for this, the government pays compensation to the landowner. This compensation amount is based on the market value. The LARR (Land Acquisition, Rehabilitation and Resettlement) Act 2013 helps in rehabilitating and resettling the original landowners.

Provisions and Purpose of Land Acquisition

This Act mandates that the state government or the Central Government can acquire any land for its use, for private companies or for public purposes. This includes:

• Any establishment catering to the state or national defence/security services. This typically includes naval, military or armed force bases/centres. 
• For building public infrastructure. However, this excludes private hospitals and clinics, educational institutions and hotels.
• For any agriculture-related services. This is also applicable for allied industries such as dairy or fisheries that are owned by farmers cooperatives or the government.
• For industrial corridors, manufacturing zones or other projects listed in the National Manufacturing Policy. This can also include mining activities.
• Water conservation projects or for planned development of villages.
• For setting up Education and research bodies funded by the Government 
• For government housing development schemes. This is important for planned developments for the rehabilitation of the poor.
• For developing residential projects for the poor or landless, or people affected by natural calamities.

What is the Land Acquisition Act?

The Land Acquisition Act is also known as the RFCTLARR act 2013 gives both parties (government/private entity and the original landowner) the right to fair compensation and transparency in land acquisition rehabilitation and resettlement. It also helps regulate this whole land transaction with transparency and obligates the Government to properly compensate the original landowners. This Act stresses the importance of properly compensating the poor people whose land has been taken away.

Land Acquisition Act Timeline

The 2013 land acquisition act has gone through multiple changes since its inception in British India in the 1870s. There were no provisions for any kind of compensation to the poor landowners. This resulted in grievance and anarchy.  Even after the Indian Independence (1947), this act saw several revisions. Here is a proper timeline of this land acquisition act. 

1. September 7, 2011: First introduction of the Land Acquisition, Rehabilitation and Resettlement Bill, 2011 in Lok Sabha.

2. August 29, 2013: Lok Sabha passed the Bill

3. September 4, 2013: Rajya Sabha passed the Bill. 

4. September 27, 2013: President approves the Bill.

5. January 1, 2014: Land Acquisition Act comes into force.

6. May 30, 2015: President promulgates the amended Act.

• He must be either qualified to be a District Judge or must have seven years of experience practicing law. 
• Social Impact Assessment- The government carries out an assessment of the area and the population along with local committees like the Gram panchayat. They prepare a report and submit it to the concerned authorities. After due consideration, the assessment can be overruled too.
• SC/ST Provisions- Land from SC/STs can be acquired only under special circumstances with the prior consent of the Gram Sabha committee. Development must start within 5 years to ensure no harm to their livelihood. They must be paid a part of the compensation before the start of the Land Acquisition Act, 2013

Under the new larr act 2013, landowners are given more power. Private/Government entities have to get the consent of the original landowners before acquiring any land in the village or the city. 

No consent is needed from the landowner if the government acquires the land directly for developing public infrastructure. However, if the land is meant for setting up private companies, then the consent of 80% of affected families is needed. In the case of a public-private partnership project, at least 70% of affected families should give their consent.

Main Features of the 2013 Land Acquisition Act

Salient features of The Land Acquisition Act, 2013 include the following-

• Public purpose in land acquisition act 2013- Section 2(1) defines “public purpose” as national security/defence purpose. Other strategic purposes for which land can be acquired are housing development projects for the poor or rehabilitation projects for people affected by natural calamities.
• Consent clause- As mentioned above, there are certain factors of landowner consent during any land acquisition process.
• Emergency Acquisition- Under the salient features of the land acquisition rehabilitation and resettlement act 2013, land can be acquired faster in case of national security services and for rehabilitation of the population affected by natural disasters.
• Limits on Land Acquisition- The right to fair compensation and transparency in the land acquisition act 2013 mandates that multi-cropped areas cannot be acquired. In case of acquisition for emergency purposes, the concerned authority should set up a cultivable wasteland of equivalent area.
• Compensation- The landowners are compensated in amounts twice the market value in urban areas and four times the market value in rural areas. 
• Land Acquisition, Rehabilitation and Resettlement Authority– It will be established by the state government as a “One Person” Land Acquisition, Rehabilitation and Resettlement Authority with powers of civil court development projects.
• Unused Land after acquisition- Land acquired for one purpose cannot be used for another purpose. If it is considered unfit for the intended purpose, then the government can use the land for a different purpose. The original landowner will get back his land if there is no activity on the land for 5 years.

Consent Under the Land Acquisition Act 2013 and its Importance

The cooperation or consent of the landowners is not required when the government buys land for public use and directly manages the land bank. However, the approval of at least 80% of the affected families is required when the land is bought for the creation of private businesses. Seventy per cent of the impacted families must approve the land acquisition procedure if the project is carried out through a public-private partnership.

The act stipulates that if the acquired land or any piece of it is sold, 20% of the proceeds must be paid to the original landowner who it was purchased from or their legal successors in an effort to prevent profiteering.

How is Land Acquired under The Land Acquisition Act of 2013?

The Land Acquisition Act 2013 notes the following steps which are followed during the process of acquisition-

1. Social Impact Assessments (SIA) are carried out after consulting with the relevant local government.
2. State government accesses the SIA.
3. Following approval, a public notice is printed in two local newspapers and the official gazette.
4. People have 60 days to voice their objections.
5. Land surveys are completed together with assessments of relief and rehabilitation.
6. The use of measured, demarcated, and planned land.
7. Acquisition, relief, and rehabilitation claims are addressed.

Compensation under The Land Acquisition Act 2013

Section 26 of the Act establishes the framework for determining compensation for original landowners. This compensation is calculated based on multiples of the market value, whether the land is situated in rural or urban areas.

Market value, in this context, typically ranges from one to two times the highest minimum land value as specified in the Indian Stamp Act, of 1899. This value serves as the baseline for calculating compensation.

Compensation can take the form of a settlement amount, especially when land is acquired for private companies or public-private partnership projects. Under this Act, it's crucial to ensure that original landowners receive fair and just compensation for their land, which is integral to maintaining transparency and fairness in the land acquisition process.

It's important to note that the multiplication factor for market value in rural areas is typically set at 2 (two), or as specified by the appropriate Government in compliance with the RFCTLARR Act, 2013, whichever is lower, starting from January 1, 2015. This regulation ensures that landowners are adequately compensated for their valuable land assets while balancing the needs of infrastructure development and public interest.

Why Social Activists filed a Petition against State Amendments to the Law

The LARRAct 2013 mandates compensation for land acquisition for national highways, industrial corridors and expressways. The essence of this Act is public consultation while acquiring lands. However, a lot of social activists like Medha Patkar have complained that the amendments made by some states completely ignored this aspect. Unethical land acquisition procedures harmed the livelihood of lots of farmers and landowners.

Section 24 of The Land Acquisition Act 2013

Section 24 of the LARRAct 2013 outlines the situations in which land acquisition proceedings will be considered lapsed. According to this provision, if no compensation has been announced in land acquisition cases till January 1, 2014, then compensation will be determined based on the 2013 rfctlarr act. In case some compensation has already been awarded before this date, then acquisition proceedings will continue under the British 1894 Act.

Section 28 Of Land Acquisition Act, 2013

Section 28 deals with the compensation amount to be awarded for land that has been acquired under this Act. This involves determining the market value and assessing the overall position of the landowners who are involved.

Recent Case Studies in Land Acquisition

1. Balakrishnan v. UOI (2017)

In this case, the Kerala State Government acquired approximately 27 acres of agricultural land to expand a technopark in South Kerala. The landowner, initially dissatisfied with the compensation offered, eventually sold the land to the state to avoid litigation. However, the state revenue agency imposed capital gains tax, considering it a "voluntary sale." The dispute reached the Supreme Court, which ruled in favor of the landowner. The Court held that the transaction was a "compulsory acquisition" due to government pressure, exempting it from capital gains tax.

2. Guru Nanak Vidya Bhandar Trust Vs. Union of India and Ors (2017)

In this case, the petitioner's land was encroached upon illegally by the NDMC (New Delhi Municipal Council). The petitioner filed for possession, which was granted by the court. Later, the NDMC initiated land acquisition processes. The issue revolved around whether the proviso in Section 24 of the 2013 Act could be applied. The Court ruled in favour of the petitioner, stating that compensation must be provided according to the amended Land Acquisition Act of 2013. Compensation previously released to the petitioner would be deducted from the total amount determined under the 2013 Act.

3. Indore Development Authority v. Manohar Lal (2020)

In this significant case, landowners argued that acquisitions made under the Land Acquisition Act of 1894 had lapsed and needed to be restarted under the Land Acquisition Act of 2013. The Supreme Court clarified that new procedures under the 2013 Act were only required if two conditions were met: possession of land had not occurred, and landowners had not received compensation. The Court also ruled that landowners couldn't seek compensation under Section 24(2) of the 2013 Act if they declined the offered compensation. However, if compensation was not made as of the 2013 Act's commencement date, proceedings would not be deemed lapsed, and compensation must be awarded under the 2013 Act.

These case studies underscore the importance of fair compensation and adherence to land acquisition laws, ensuring that landowners' rights are upheld while balancing the needs of development and public interest.

Land acquisition Act 2013 is certainly a complex legal matter. Not everyone has the time to sit down and understand all the nuances of the land act. But, if you’re losing land due to the land acquisition act 2013, and you need to find another home to stay in, then start your search on NoBroker! Click the link below to find homes for any budget, without brokerage! 

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