AIDE-MEMOIRE ON

LAND ACQUISITION AND

REHABILITATION & RESETTLEMENT BILL (LARR), 2011

[Note: This paper has to be read along with PILSARC working paper 127]

PUBLIC INTEREST LEGAL SUPPORT AND RESEARCH CENTRE

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CONTENTS

  1. Preliminary Summary 3
  2. An overview of the LARR Bill 20104
  3. The Land Acquisition Act 1984 and its Recent Discontents5

Embarrassments and further controversies in

3.10 West Bengal 9

3.13 Singur10

3.15 Uttar Pradesh11

  1. Area of Concern and Amendments12

(i)Public and Private Acquisitions12

(ii)Social Impact Assessment14

(iii)Acquisition and hearing (Clause 11)16

(iv)Assessment of Compensation18

(v)Urgency Clause20

(vi)Cost, interest and appeal20

(vii)Scheduled Areas21

(viii)Suggestions by Cabinet21

  1. Preliminary Summary

1.1Recent experience shows protests by stronger communities to acquisitions succeed, whereas those by vulnerable communities who are more badly placed do not. Acquisition of land is often not made for bona fide purposes but initiated at the instance of industrialists, businessmen and builders who persuade governments to acquire land for them at low process from farmers and make profit by downstream selling to others.

Land acquisition has become a corrupt business.

Schedule V and VI

1.2 First and foremost, concern must necessarily be directed to the specially designated protected areas of the Vth and VIth Schedule,where inhabitants are the most vulnerable.

The proposed legislation does lip service to the importance of these areas. (eg. Clause 9(v) provisos; Clause 12(v) proviso) This seems a travesty. In these areas the principle underlying acquisition should be of consent not consultation.

1.3 The present Bill is a loss of an opportunity to strengthen PESA which was weakly drafted.

Suggestions

1.4 Apart from the above, we have problems with

  1. the concept of public purpose (section 2(y)) and the nexus with the “requiring authority” (section 2(2))
  2. the social impact assessment is flawed because of the 100 acre clause (section 3). Reference is made to affected areas(section 2(b) but what needs assessment is the zone of influence and impact which is wider than the area of acquisition – especially in tribal areas. The exemption clauses (section 6 and 30) are not salutary. Social impact Assessment must take place in all cases - even if undefined form.
  3. the acquisition and hearing regime should make the final report available to each acquiree or affected party (section 11)
  4. the Rehabilitation and Resettlement (RR) provisions are plagued by the 100 acre provision. RR should be for all acquisitions. (see sections 12, 31and 33). Private company acquisitions are again subject to the 100 acres limit.
  5. the assessment of compensation at circle rates as an alternative is flawed (section 20). The provision of 25% shares needs further clarification (section 20(2) proviso).
  6. the urgency clause eliminates social impact assessment (see the word ‘may’ in section 6)
  7. there are problems in terms of costs, proceedings and appeal (section 45, 46)

1.5 We are also concerned about the following arising from post-cabinet reformulation

(i) the bringing down of the land for land ratio for SC and ST from 1:5 to 1:25

(ii) the acquiring of multi cropped irrigated land albeit with a cap of 5% for each acquisition

(iii) the transfer of land not used for 10 years giving to a land bank in all cases irrespective of nature of land.

1.6 This is a preliminary summary.

II.An Overview of the LARR Bill 2010

2.1On 27 July 2011, the Ministry of Rural Development of the Government of India issued a comprehensive document called “The Draft National Land Acquisition and Rehabilitation and Resettlement Bill 2011” (Bill of 2011). Its novelty lay in the fact that it did not just present a text of the Bill of 2011 but a reader-friendly version with a foreword by the Minister, Jairam Ramesh (p.1-2) and a clear statement of the agenda with flow charts and explanations (pp.1-20). The Draft of the Bill of 2011 has 74 clauses (pp.1-38) with 3 Schedules [pp. (i) – (vii)]. To the extent that this is a new approach to explain Bills to the public, it is to be welcomed.

2.2.The Bill is appear to be

(i)the Land Acquisition Act, 1894 (Act of 1894) along with its amendments is outdated.

(ii)The purposes for which acquisition can be made.

(i)strategic purposes (armed forces national security, defence, police, safety)

(ii)infrastructure, industrialization and urbanization

(iii)provision for village or urban sites, project affected people

(iv)residence for the poor or displaced

(v)for companies, if they get 80% by private negotiation [Section 2(y)].

(iii)Provision for social impact assessment (Sections 3-7).

(iv)New rules to determine compensation through market value, multiplied by 3 for rural areas, a solatium of 100% apportionment of award and payment (Sections 20-21, 48-53).

(v)Rehabilitation and Relief (Sections 12, 14, 22-23, 31-47).

(vi)Temporary occupation of land (Sections 54-56).

(vii)Impermissibility of change of purpose and return of land (Section 69).

(viii)Machinery and penal provisions (Sections 57-74).

These are certainly an improvement on the archaic provisions of the 1894 Act. But are they enough.

III.The Land Acquisition Act 1894 and its Recent Discontents

3.1The State’s power to acquire the land of its subjects stems from the common law of eminent domain which gives the State to acquire land for a public purpose on payment of adequate compensation. This came to be embodied in the British Indian Land Acquisition Act 1894 which went through many amendments including those of 1923 (in which right to be heard provisions were included)[1] and 1984 (whereby the solatium was increased from 15 to 30%, acquisition for private companies made easier and time limits imposed for completing acquisitions and payment of additional interest for delay if the compensation was delayed[2].

3.2Judicial interpretations of the law were not helpful. Since the compensation was rooted in market value of the initial acquisition notice (Section 4), values were frozen on that date. The imposition of a time schedule for quick disposal in 1984 was rendered nugatory if the acquiree landowner filed a case in court and got an injunction from the court. He had a choice, dispute the acquisition, get a court order and freeze the proceedings[3]; or accept the market value and render the appeal provisions on quantum of acquisition nugatory.

Even more strange were the judicial decisions that even a Re.1 contribution by the State or public sector would validate an acquisition for a private company[4]. Public policies about acquiring rural land and built up areas were not consistent. The courts were not wholly clear on computing compensation. Lawyers refer to the Justice K. Ramaswamy era as one that was favourable to the State rather than the landowner whose land was being acquired.

3.3In 1979, by a constitutional amendment, the right to property had been shifted out of the Fundamental Rights chapter to cease to become a fundamental right and become a mere constitutional right (as Article 300A)[5]. The literal interpretation of this meant that the eminent domain power to acquire property required the enactment of a law and could not be exercised simply by executive action. All the constitutional protections about ‘public purpose’ and adequate compensation were taken away. This meant that the property of a person in India could be taken away without reference to any compensatory or public purpose principles enjoyed before 1979. Of course, volumes have been written on the Nehru-Gandhi regimes (1950-73) enacting constitutional amendments to make low-cost acquisitions against powerful rural landlords and urban owners and protecting them from judicial and fundamental rights scrutiny.[6] Equally, the Janata governments abolition of the right to property as a constitutional right over looked that ordinary people needed the constitutional right to property to protect them from acquisition at a time of industrial, urban and infrastructure expansion was being done on arbitrary whims at the instance of private parties.

3.4But, there was a volte face by the judiciary on the constitutional right to property being abolished as a fundamental right. Instead, article 300-A was introduced which simply said that no person shall be deprived of their property except by law after 1979. However, the judges declared that article 300-A was not just an empty formality but constitutionally significant requiring fair play and due process[7]. Equally, the natural justice provisions requiring the landowner to be heard before acquisition was finalized were made more stringent in the latter’s favour[8]. Re-defining public purposes for random acquisitions especially in rural areaswas also struck down.

3.5This was accompanied by a fight for rehabilitation and resettlement (R&R) cases which were taken all the way to the Supreme Court in the Sardar Sarovar, Omkareshwar, Tehri and other dam cases[9]. Left to the judiciary the right to R&R was a fragile right. Then there were public protests in Nandigram in West Bengal, Haryana and UP. In UP the acquisitions were struck down by the Supreme Court to leave potential flat owners who were the beneficiaries of the acquisition in a quandary[10].

3.6This was further complicated by the Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act 2006, which protected tribal rights even in forest areas. Unfortunately, in its zeal to protect forests, tribal rights were overlooked. Environment and social justice had to be reconciled. This was sought to be done by Jairam Ramesh in recongnizing the right of tribals to bamboo.

3.7At the same time, juristic debate on eminent domain sparked up. Some of this was triggered of the US Supreme Court’s Kelo decision (2005) to permit acquisition of existing housing areas for dwelling units[11].

3.8Internationally, the right to property was recognized as a human right[12] and this was recognized by the Supreme Court as such[13]. There was a reemphasis on and further development of peoples’ rights – especially the vulnerable indigenes. Their rights over lands and natural resources were recognized and safeguarded, and their culture, traditions and procedures were to be respected[14].

Embarrassments and further controversies

3.9The Land Acquisition Act 1894 has jogged along with the majority of concerns being articulated by lawyers filing cases in three areas. The first is the right to hearing and the dispensation of the right to hearing under the urgency clause (Section 5A and 7). Hitherto, this was not taken seriously. But courts have now taken a serious view of non compliance with the hearing clause; and the mindless use of the urgency clause to dispense with hearing altogether.[15] The second area has been over the quantum of compensation where the Supreme Court has been called up to reassess the compensation by itself examining comparable sale deeds.

This is another case of landowners running from legal post to judicial pillar. This is a huge burden on farmers in terms of anxiety and the transaction cost of lawyering – all in the hope that the High Court and Supreme Court may give them a little more. The third area has been the exclusion of land from acquisition either before or after acquisition. But while the Supreme court has been most alert on the due process of proper hearing and improper exclusion of hearing, it has not taken a comprehensive view.

West Bengal

3.10What has woken people up have been peoples’ reaction and protests. A major controversy started in Nandigram, West Bengal. On 22 August 2005, West Bengal’s Chief Minister virtually finalized Rs.50,000 crores deal with Indonesia’s Salim group to set up industry on 5,100 acres in South 24 parganas which would provide 50,000 jobs. Two days later, a general message was sent to the international business community to join this industry oriented economic reform. By 31 July 2006, an MOU was signed with the Salim group to implement various development projects. There was discontent within the CPM and the West Bengal government to convert prime agricultural land for industrial purpose with all the predictable ensuring results.

3.11A committee, dubbed as Krishak Uchchhed Birodhi O Jonoswartho Roksha Committee (Committee Against Eviction Of Peasants And To Save People’s Interest) was formed in 2006 by Socialists Unity Centre of India (SUCI) along with Indian National Congress for propaganda work against forced land acquisition. Another committee started functioning in Nandigram and adjacent Khejuri block, called Krisi Jami Raksha Committee (KJRC) (Committee To Save Farmland), a state wide initiative led Trinamool Congress. Another initiative, Gana Unnoyon O Jana Odhikar Sangram Samity (GUJOSS) (Association For the Struggle Of Mass Development And People’s Right), comprised of Jamait I Ulema Hind and Communist Part of India (Marxist-Leninist) (Santosh Ranafaction) started working in Nandigram during November 2006.

3.12The effect was electric except on the government. ON 6 October 2006, the Union’s Board of Approval for SEL approved nine sites including the Salim group proposal. The Haldia Development Authority consolidated their proposal on 28-29 December 2006 and 2 January 2007. But they had not anticipated the violent clashes between villagers and the administration on 3 January 2007 resulting in arrests and a virtual battle of attrition. It is said that on 7 January CPI (M) related goondas threw bombs and fired shots. By 19 January 2007 all peace initiatives had failed. On 2 February 2007, the Calcutta High Court decided that the public notice about creating a chemical hub or SEZ was an advertisement not an acquisition. Despite promises, the police entered Nandigram on 14 March in which 14 villagers were killed and 75 injured. On 15 March 2007 the High Court ordered a probe into the incident by the CBI. On 16 March there was a call for a general strike. By 29 March 2007, the government announced that the Nandigram project was scrapped “if people do not want the SEZ there”. But government plans continued. Violence started again from 15-17 June 2007.

In Singur

3.13The Singur controversy is no less disturbing. In May 2006, the West Bengal government sought to acquire 997 acres for Tata Motors for the small car project. This project was opposed no sooner than it was announced. A Tata team had to be rescued by the police; and State industry and commerce ministers were treated to black flag demonstration. Despite this, work on the acquisitions continued in June-July to complete the process. By 22 August 5000 Singur forms were in demonstration against the Collector’s hearings. Amidst continuing discontent, on 25 September, Singur land was sought to be forcefully acquired. On 1 October 2006, ex-justices of the Supreme Court wrote to Ratan Tata to abandon the project. Law and order broke down. Helpful suggestions were made to shift the project away from farm land. On 7 November the West Bengal government sought to deploy armed police and the Rapid Action Force. On 4 December 2006, Mamta Benerjee went on hunger strike. Later the body of an activist was found burning. A girl was raped and about to be buried. After persuasion Mamta Banerjee abandoned her 25 day fast on 5 February 2007. Prohibitory orders were made under Section 144 Cr.P.C. which were quashed by the Calcutta High Court on 14 February 2007. On 28 May 2008, Mamta Banerjee proposed that 400 acres of farmers land of those who did not accept compensation be returned. Things had gone too far. When Mamta Banerjee came to power, on 14 June the Singur Land Rehabilitation and Development Act was passed by the legislature and consented by the Governor on 20 June. The process of returning land began.

Singur reminds that if big land acquisitions of farmers’ lands are not founded on consent, strong communities will retaliate. The weaker ones will remain vulnerable.

3.14The Nandigram and Singur campaigns have many facets which both refine and blurr the issues. Party politics played its fair share. Issues of industrialization were raised but not resolved. The question of agricultural land for industry arose squarely. But it was not clear what kind of bar and limits could be imposed on this process. Relief, rehabilitation and sharing of equities arose as objectives.

Uttar Pradesh

3.15But in other states, the nexus between industry and the government continued. A typical example is Uttar Pradesh. The easiest way out was for the government to invoke the urgency clause so that no individual protests were made. Some of these attempts were thwarted by the Supreme Court. On 6 July 2011, the Supreme Court struck down an acquisition in Shahberi for 50000 units. The urgency clause had been mindlessly invoked. This meant that builders Amrapali, Supertech, Ajnara and others will have to give up land and refund money taken from potential residents. A fine of Rs.10 lakhs was imposed on Noida. Again on 23 August 2011 in respect of the Hapur-Pargana village Ghaziabad, the Supreme Court quashed the acquisition of 71 acres for creating a leather city. The urgency clause had been invoked. Since no reason existed for doing so, the acquisition was invalidated. On 31 May 2011 the Allahabad High Court also voided 170 acres in Gulistanpur for planned development for wrongful invocation of the urgency clause.

3.16Peoples temper was high. On 7 May 2011 people protested about the acquisition for the Yamuna expressway in Bhatta and Parsaul villages. 3 employees of the UP State Transport Corporation had been abducted on 6 May 2011 – with police attempts to rescue them resulting in the death of three persons and many injured. Congress entered the fray. For the time being the project was abandoned. The Varanasi Development Authority’s proposal to acquire 121 hectares in Katesar for a Kashi city met with strong protest on 31 May 2011, the project was abandoned.

3.17A big area of concern has been Noida extension which has been a haven for builders. 16 villages fall in this area. In Patwari village in Gautam Budh Nagar land was sought to be acquired for industry and residential units. Many had taken their compensation but some two dozen villagers stuck it out to challenge the acquisition. On 19 July 2011, one bench of the Allahabad High Court invalidated the acquisition of 589 hectares in Patwari village on grounds of wrongful invocation of the urgency clause. On 26 July 2011 another bench of the same High Court paved the way for negotiations. This process continued after the Supreme Court refused to interfere on 18 August 2011. May be this solution to find a via-media is inevitable where acquisitions have already been made. If so, the solution is awkward.