29 Operationalising LARR 2013. Land Acquisition Acts in India-V.

We conclude with a brief comment on the practical aspects of the LARR Act 2013, and the options open before the NDA government and the development protagonists who feel that the requirements are so onerous as to effectively put a stop to any new projects.

The underlying philosophy of LARR 2013 is that the state and the acquirer of private property has a moral obligation to look after the affected persons and communities in the long term, and this has now been made a legal obligation as well. Previously, acquisition was seen as a one-time operation, and once the compensation had been awarded through the due process, good or bad, the transaction was considered a closed deal, and no further obligations resided on the government’s side. The drafters of LARR 2013 apparently felt that the State has a much wider responsibility in ensuring that the project did not leave the affected persons worse off in the long term. In this sense, we may characterize LARR 2013 as a legal form of the strong egalitarian criterion in welfare economics, where a proposed public project is to be passed only if it can generate sufficient surpluses to not only compensate the losers fully in principle, but also has the obligation to effect this in practice. Welfare economics offers a choice of measures to arrive at a just valuation, such as the different consumers’ surplus concepts, and the willingness to pay (to obtain benefits or to avoid losses), and willingness to accept (compensation for losses or forgone opportunities) concepts.

One of the weaknesses of the LARR edifice my well be the absence of a dedicated cadre to carry out the onerous obligations it casts on the administration, starting from the social impact assessment (SIA), and including the subsequent R&R etc. The SIA itself could be made to say anything, as it will require the investigator to draw up scenarios or predictions of what will happen with and without the project. This will be likely to be based on personal assumptions rather than any dependable models. The implementation of the R&R plans would, as already mentioned, be weak in the absence of a dedicated cadre on the ground (a weakness shared with the FRA 2006).

What does LARR 2013 portend in practical terms? Because of the increased number and complexity of processes and the many stages at which public confrontation between project proponents and the public is envisaged, it is likely that acquisition proceedings on the whole will be more protracted, will cost more, and will be more contested and fractious. This may force project proponents, especially in the joint and private sectors, to think twice before embarking on such ventures. This will probably put much more demands on the public sector undertakings and government departments to take up development projects, with private firms receding to the background as service providers rather than proponents. To some extent, this will take us back to the pre-liberalisation days, with its drawbacks of lesser choice of products, perhaps poorer quality of finish and packaging, poorer responsiveness to customer feedback, and perhaps not quite up-to-date technology, but the benefits would be in the provision of a minimum level of services to the public at lower prices than the private sector is wont to charge.

A more serious effect of the LARR 2013 may be the withdrawal of the public sector machinery itself from the sphere of development projects. This is because of the greater personal responsibility of officials up and down the line for the implementation of all the stages and the safeguards. Previously, public servants and government officials were shielded to a large extent by the immunity clause from prosecution for acts done in the course of duty, and the requirement of government sanction for any such prosecution. That immunity now seems to have been withdrawn, partly by court judgements that the government officer no longer has the status of a public servant after retirement, so that government sanction is no longer needed for prosecution; and partly by new laws like the LARR 2013 that make the public official primarily responsible for fulfilling the expectations of the public in respect of the rights conferred by the UPA’s rights-based legislation (Right to Information, Right to Food, Recognition of Forest Rights, Right to Education, Right to Services, Right to Employment, and now the right to fair compensation and R&R under the LARR 2013). The NDA amendment (ordnance) did make it necessary to obtain government permission for prosecution of officials, but this has been vehemently opposed as a dilution of the act (Ramesh & Khan, p.127).

The fact is that the government machinery is likely to simply not be in a position to provide the type of continuing support to livelihoods and to R&R envisaged in the LARR (and before that, in the R&R policy declarations of various government and entities). In fact Sanjoy Chakravorty, who has written a definitive book on the subject (2013), goes so far as to characterize this act as “ unworkable” (Chakravorty, 2015). If the government could achieve all the welfare measures contemplated for all the ‘affected persons’ in addition to the ‘oustees’ of development projects, this could as well have been achieved through all these decades of developmental spending in independent India. The fact is that people do not become better-off directly by such spending, and the R&R efforts will be sure to fall behind targets, and projects will get bogged down endlessly in litigation and counter-charges. So probably the immunity granted as a matter of form to the individual government employee will have to be restored for ‘laches’ or failure to ensure enjoyment of rights by the people. While the enthusiasm and idealistic intents  of the law-drafters like Ramesh and Khan can be lauded, in practical terms these rights are more aspirational than realistic, and to hold individual bureaucrats responsible for their non-fulfilment would appear to be too drastic and may even be counter-productive. Too much scape-goating by watchdog authorities has a dampening effect on the sense of initiative and risk-taking by the average bureaucrat.

A basic weakness in the legal morality of LARR is the acquiescence to the general practice of under-reporting land values, and therefore setting compensation rates at multiples of these bogus reported market-value. This will make every District Collector a party to what is strictly a criminal act of misleading or even cheating the state. If and when people start reporting values closer to the actual money exchanged (perhaps because transactions are being watched and tracked more closely through information technology), acquisition will become prohibitively costly, and moreover may attract adverse comments from audit, and even criminal proceedings against the officials complicit in such actions.  The government departments will, therefore, tend to avoid running after such wild geese, and will prefer to work within the resources that they have already garnered in the past, and hesitate to venture into new expansions.

One positive side-effect of LARR 2013 may be that leaders of development sectors and individual firms decide to use their existing resources  much more efficiently. Scores of examples could be envisaged, and we proffer just a few here. Urban developers, for instance, will find ways of squeezing in more habitation or office units onto a smaller extent of land, by growing vertically rather than spreading horizontally. Many companies may be having excessive land holdings (especially public sector giants and old private companies in sunset sectors), and will surely minimize their requirements of fresh acquired land in future. While community consent may not apply to government projects, the R&R and compensation process requirements would be a disincentive to ask for too much land, especially if there is some leeway in design to enable the project to scrape in under the threshold limits for various requirements that will be fixed by LA Rules or by state governments. One example that comes to mind is the huge campuses required by ministry guidelines to set up central universities, which are difficult to administer and look after, and are immensely inconvenient for their primary clients, the students, who have to walk up and down a few kilometres to get from one office to another. They will probably press the education policy-makers to settle for smaller campuses in future.

A not so happy side-effect may be increased pressure for providing government wastes and forest land, subject to the seemingly lesser costs of compensating only for community uses like fuelwood or grazing, but this will be bad for forest and wildlife conservation.

 Another aspect is that the new types of rights-based legislation, exemplified by LARR 2013, will call for much more detailed operations manuals with copious notes, legal opinions and flow charts to guide the public official as well as the non-official professionals who may be involved as members of expert groups, as assessors and evaluators, and so on. Since each of their actions and decisions will be up for public scrutiny as well as, inevitably, judicial review in a large number of cases, these professionals will have to be very clear about the procedures, methodologies, standards, and so on they are expected to follow and uphold. Their actions and laches may well subject them to not just being over-ruled by higher authorities, but also being hauled up for criminal liability or negligence for failure to do due diligence and so on. As the sphere of action and discretion of the public official shrinks, we may expect a corresponding expansion of the role of the expert bodies and the quasi-judicial authorities and appellate bodies, and of course of the higher courts, as has happened in the forestry sector. The net result of all this is likely to be an evolution of Indian polity to a much more contested, litigious and adversarial form, which seems to be an emulation by the intellectual class of the fashion of “adversarial legalism” in the USA (Fukuyama, 2014, p.473) and generally in the liberal democracies of the west. The difference, of course, would be that in those countries, the state developed before full democracy, so that people are much more conscious of their responsibilities as citizens,  and hence the high costs of transparency and egalitarian decision modes can be absorbed without crippling damage to the fundamental capability of the state. In third world democracies like India, however, democracy seems to have come before strong state formation, so that these niceties and sophistications of liberal western democracy sit like an uneasy veneer over decidedly inegalitarian and illiberal modes of social functioning.

A final consideration we would like to place before the disgruntled industrial sector is that the LARR 2013 probably calls for a basic change in their approach to resource garnering. What galls the dispossessed landholders, especially in hitherto predominantly agrarian tracts, is the windfall gains that the ‘city slicker’ is able to make on their backs. Even tribal communities, who have repeatedly lost possession of their hard-won land holdings for trivial debts incurred to preserve their social prestige and honour in the community, resent their regression to the  role of landless labour in their own homelands (see, for instance, Fuerer-Haimendorf,1979). On the other hand, stories are told every day in cities like Delhi, of how the lowest staff in the city’s offices were beneficiaries of the land boom in the capital region; they come to work in menial positions in their battered Maruti cars from their villages round and about Delhi, to pass the day, but they are actually sitting on crores of rupees of bank deposits after selling their land for property development. True or not, these anecdotes suggest that development proponents, who need land, can think of including rural landowners in some sort of (sleeping!) partnership.

Suggestions that this is feasible are seen in the new Andhra Pradesh government’s ‘pooling’ approach to township building (for instance, see the report in the Economic Times by Sukumar and Kesireddy, 2015). The original landowners will at least have a claim on part of the huge capital gains that will accrue when the developed land is sold on in the distant future, just like any retail shareholder. There may even come a time when the rural landholders themselves may develop aspirations to use their resources jointly for different types of development, designed after their own predilections and their own styles.

The question of the landless project-affected persons will remain, but here also some stake, some realistic hope in a better future at least for the younger generation, would have to be built, along with plans and buildings for the factory or township. It is possible, in this view, that private entrepreneurs will rapidly realize that there are no more windfall gains to be made from acquired land alone, and will come round to this partnership mode of thinking once the unavoidable reality of LARR 2013 and the new rights-based approach pioneered by the UPA sinks in.

References

Baden-Powell, B.s H. 1892. The Land-Systems of British India. Clarendon Press, Oxford. Reprint, 1974 by Oriental Publishers, Delhi.

Barton, Gregory A. 2002. Empire Forestry and the Origins of Environmentalism. Cambridge University Press, Cambridge, UK.

Chakravorty, Sanjoy. 2013. The Price of Land. Acquisition, Conflict, Consequence. Oxford University Press, New Delhi.

Chakravorty, Sanjoy. 2015. Improving an unworkable law. In The Hindu newspaper, 07 January 2015. (Bengaluru).

Draper, Hal. 1977. Karl Marx’s Theory of Revolution. Vol.I. State and Bureaucracy. Monthly Review Press, New York, 1977. Reprinted 2011 by Aakar Books for South Asia, Delhi-110091.

Fuerer-Haimendorf, Christoph von with Elizabeth von Fuerer-Haimendorf. 1979. The Gonds of Andhra Pradesh. Tradition and Change in an Indian Tribe. Vikas Publishing House Pvt. Ltd. New Delhi.

Fukuyama, Francis. 2014. Political Order and Political Decay. Profile Books, London.

Ramesh, Jairam and Muhammad Ali Khan. 2015. Legislating for Justice. The Making of the 2013 Land Acquisition Law. Oxford University Press, New Delhi.

Somaiah, K.K. (1959). Working Plan for a Portion of the Eastern Deciduous Forests of Coorg (from 1^st April 1957 to 31 March 1972). District Forest Officer, Working Plan Division, Mercara, Coorg.

Sukumar, C.R. and Raji Reddy Kesireddy. 2015. Naidu Stirs Up a Storm With Land Pooling. Economic Times newspaper, 6 January 2015.

USDA (United States Department of Justice). 2000. Uniform Appraisal Standards for Federal Land Acquisitions. Interagency Land Acquisition Conference. Published by  the Appraisal Institute, Chicago. Available for download at www.justice.gov/sites/default/enrd/legacy/2015/04/13/Uniform-Appraisal-Standards.pdf.

28 Comparison with forest legislation. Land Acquisition Acts in India-IV.

We make a brief comparison here with another legislation that originated in British India, the Indian Forest Act (1925) that set aside tracts of forest, along with the post-independence Forest Conservation Act (1980), that put curbs on the states’ powers to divert forest areas for other purposes. The IFA (and its local variants like the Karnataka Forest Act, 1963) provides principally for the notification of areas as Reserved or Protected Forest. This is parallel to the LAA in that it provides for notification of intent under Section 4, but the difference, of course, is that the IFA or the KFA seeks to sequester government land (the revenue ‘wastes’) for environmental and productive purposes, rather than taking over private lands. This last point is however disputed by current social environmentalists’ discourse, that claims even this uncultured land as part of the resource base of the village community. Under their prompting, the polity has legislated to restore some of the control, individually and communally, on these resources back to the community, through the Recognition of Forest Rights Act, 2006.

In the IFA, just as in the old LAA, there is process of enquiry, open hearing of objections and claims, etc., presided over, not by the Collector, but by a specially appointed Forest Settlement Officer (FSO), who should not be a member of the forest service (it is usually a revenue department officer). The end result of the proceedings will be a speaking order, listing out all the persons and their individual rights that have been recognized, apart from the general rights and privileges of the community due to force of long practice or past grants etc. For example, we have before us a revised working plan for the organized forests of Coorg by Somaiah (1959), wherein a “List of rights granted at the Forest Settlement” is given in Appendix II. For Anekad forest, for instance, there is a list of 75 individual names and the number of animals each is entitled to graze in the forest, starting with 3 head of cattle pertaining, to Shivagowda of Attur village. Of course, this settlement was done in 1894 for the Anekad reserve, and the very levy of grazing fees was itself abolished by resolution of the Coorg Legislative Council in 1948 (Somaiah, op cit., p.6-7), so the whole issue of regulating grazing in the forests appears to be a moot one.

For the jungle tribes (Kurubars and Yerwars) it is stated that although nothing is placed on record about the rights enjoyed by them, they are “as a matter of course allowed to be tenants at the will of the forest department”, and those “who prefer to remain in the forests and work for the department” are given “land for cultivation free of assessment together with the concession of free grazing for their cattle” (op. cit., p.8). Each forest settlement award is expected to have a similar list of rights and privileges, which are reproduced in some of the older working plans for the convenience of the forest administration.

From the present topic’s point of view, it is noteworthy that the Forest Act gives government the power to ‘extinguish’ those of the rights for which no claim was put forth (Karnataka Forest Act, Sec. 9), “unless, before the final notification under section 17 is published, the person claiming them satisfies the Forest Settlement Officer that he had sufficient cause for not preferring such claim...” and so on. Section 10 of the KFA also provides that claims for shifting cultivation should be recorded and submitted to the government with the FSO’s opinion “as to whether the practice should be permitted or prohibited wholly or in part”. In any case, “The practice of shifting cultivation shall in all cases be deemed a privilege subject to control, restriction and abolition by the State Government”. Land portions against which claims are made may be deleted from the notification, or they may be acquired as provided by the land Acquisition Act, 1894 if admitted wholly or in part (Sec.11). Under Sec.13, if the FSO finds it “impossible” to admit certain rights in the interests of maintaining the forest, “he shall direct payment by the State Government”  of compensation determined in accordance with the applicable provisions of the LAA, 1894 (Sec.15). Further sections deal with appeals, notification of final award, revisions, etc.

One of the strengths of the framework of forest law was its clarity and finality. A very important part of the whole system was the follow-up measures in terms of survey, demarcation, organisation into blocks and compartments, drawing up of working plans, and custody of a trained and coherent force on the ground. However, the weakness of the British colonial system was the discounting or down-playing of the dependence of the village communities, especially tribal. The colonial government also had a constant struggle to come to terms with practices that were deemed to be damaging to the forests, like shifting cultivation, uncontrolled grazing by huge herds for commercial reasons (which we term livelihoods today), and rampant fuelwood and timber cutting, occupation of good forest  for cultivation, and so on.

After independence, industrial needs were placed on top, leading to excessive exploitation and neglect of ecological interest as well as of the relationship with local communities. The revised forest policy of 1988 made suitable course corrections, placed ecological conservation as the top priority, followed by needs of local community, and also gave a basis for the participatory or joint management with the people on the ground that has now become a nation-wide movement with over 125,000  village forest committees jointly taking care of over 28 million hectares of hitherto degraded forest.

The Recognition of Forest Rights Act (2006), popularly referred to as the ROFR or FRA, introduces a changed scenario. The village community has now has the power to decide its own rights in the forest without reference to the forest settlement proceedings or the forest notification. Obviously, there is still much ambiguity on many aspects of this landmark rights-based legislation made by the UPA government. However, it appears in retrospect that the FRA 2006 was a sort of pre-run for LARR 2013, in that the community has been given a decisive say in the disposal of land resources.

The weakness of FRA 2006 in comparison with the older IFA or KFA, is that  now the solidity  of the administrative structure in the form of the forest department etc. has come undone, leading to apprehensions that the forests will again become a no-man’s land, a proprietor-less commons. The community will have neither the time nor the structure to look after such extensive resources, nor will the forest department have a say. Thus, an aspirational legislation made with the best of intentions to safeguard the livelihoods of the poor may well become an exercise in futility due to neglect of the huge institutional effort that is required post-award of the forest rights.

Much the same weakness may well stymie the LARR Act 2013 as well, as there is no institutional set-up to implement the ambitious R&R component, or even the social impact assessment in any meaningful way. Some of these aspects of the practical side of the land acquisition process will be discussed in the concluding section.

References

Somaiah, K.K. (1959). Working Plan for a Portion of the Eastern Deciduous Forests of Coorg (from 1^st April 1957 to 31 March 1972). District Forest Officer, Working Plan Division, Mercara, Coorg.

27 Discontents with LARR 2013 and amendments proposed, 2014. Land Acquisition Acts in India-III.

We now come to the practical problems perceived in the LARR act by the successor government (termed the NDA) and the amendments proposed. In a revealing aside, Ramesh & Khan (2015, p.70) confess that the LARR (2013) law was drafted “with the intention to discourage land acquisition”, by adding all these onerous obligations, and thereby moving to a situation where “land acquisition would become a route of last resort” (ibid.). This reminds us of the diversion of forest under the Forest Conservation Act 1980, where left to themselves, the forest authorities would usually have no intention of making it an easy process (one industrialist was reported to have said in frustration that even the environmental clearance could be got, but forest clearance was almost impossible). It also brings up the interesting question of what other options are available in practical terms if a project requires large chunks of land.

There were analogous discontents with the LARR 2013, prompting the new NDA government to propose some amendments in December 2014, and imposed these through the ordnance route as the opposition parties refused to let it be passed in the Rajya Sabha, which stirred a huge hornets’ nest that effectively paralysed Parliament through the monsoon session of 2015. By August, the impasse was given a respite by the government deciding to backtrack on the amendments, and the whole bill being deferred to the winter session of 2015.

Ramesh & Khan (2015) criticize the NDA government’s amendment ordnance in the following terms (op. cit., p. 124). The press releases prior to the ordnance made it appear that there were only two significant proposals in it. One was the extension of the compensation and R&R (Rehabilitation and Resettlement) requirements to the exempted acts listed in Schedule IV, which Ramesh & Khan term as making a virtue out of a necessity, as the original LARR act had itself made this mandatory after the lapse of one year. The other was the exemption given by new Section 10A to certain categories of projects from the more onerous requirements of consent and social impact assessment. Ramesh & Khan criticize this exemption as being worded in a vague manner, for instance, “infrastructure projects (including PPP projects)”, which was not defined precisely anywhere), and which would in effect nullify all the progressive measures and safeguards to affected persons intended in the 2013 act. They make a plea that a fair trial should be given to the existing LARR 2013 act, instead of trying to dilute its effect by such amendments.

Seeing the mood of the people and the stiff resistance to the amendments, the NDA government finally seems to have decided to backtrack and defer consideration of the amendments to the winter session 2015. Further, on closer examination, it seems to have been realised that at least one of the enhanced requirements – that of consent by a large majority – has not been made mandatory for purely government undertakings. Defence, national security and natural calamities have anyway been, in effect, exempted under the applicability of the ‘urgency’ clause. Perhaps the government has decided to go along with the LARR 2013 for the present, as any dilution of the requirements in respect of other categories (such as PPP projects and private sector, however high they may come on the national priorities) may give the NDA an undesirable anti-poor image, to the advantage of the opposition parties.  

References

Ramesh, Jairam and Muhammad Ali Khan. 2015. Legislating for Justice. The Making of the 2013 Land Acquisition Law. Oxford University Press, New Delhi.

26 Need for change and the new LARR Act, 2013. Land Acquisition Acts in India-II.

Jairam Ramesh, the minister in the UPA-2 government who steered the new law, while admitting that such a law is indispensable in the modern world, still says that the way it has been applied over the years has “served to make acquisition a cannibalistic and inhuman process” (Ramesh & Khan, 2015, p.4). It is therefore necessary that we understand the grounds of this indictment and the perceived remedy in the 2013 Act.

Deficiencies perceived in the old LA Act

Ramesh & Khan (op. cit., p.7 et seq.) cites some of these perceived defects in the 1894 law (as amended):

1)      Lack of distinction between acquisition for a State purpose and for a private enterprise (the words “or for a Company” were inserted in Sec.4 by the 1984 amendment). Of course, it was noted above that private companies were included only to the extent that they were undertaking work that is likely to prove useful to the public, but according to the authors, a liberal interpretation led to the opening the “floodgates” (quote from the Parliamentary Committee report, Ramesh & Khan, op. cit.).

2)      Lack of attention to livelihoods and rehabilitation of persons displaced from their land by such compulsory acquisition (Ramesh & Khan, p.9, quoting from a court judgement).

3)        Time lapse from notification to declaration under Sec.6 was reduced from 3 years to 1 year in the 1984 amendment, and award to subsequently issued within 2 years after Sec. 6  (Ramesh & Khan, p.10), failing which the acquisition proposal would be deemed to have lapsed.

The new (LARR) legislation, 2013

The previous government (known as the UPA-2 from the label United Progressive Alliance adopted for the second term of the coalition of parties under the umbrella of the Indian National Congress) was marked by a vigorous championing of rights-based legislation, and therefore the amendment to the Land Acquisition Act also came to be couched in the language of enforceable rights: the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013, which is popularly called the LARR act or bill. Instead of tinkering with or modifying the erstwhile LAA, the LARR act should be seen as a completely different piece of legislation. The important features that make this such a departure from the past are as follows (see Ramesh & Khan, p.11):

1)      It addresses compensation for acquisition of property AND the consequences of displacement, meaning rehabilitation and resettlement for displaced families.

2)      Much reduced discretion to the authorities (Collector etc.).

3)      Fairer compensation.

4)      “Consensual acquisition for a clear public purpose” (ibid.).

5)      An “effective appellate mechanism” (ibid.).

Briefly, the new Act (LARR, 2013) seeks to achieve these by the following mechanisms and institutions:

1)      Rehabilitation and Resettlement (which was entirely lacking in the old LAA) has been mandated strongly: not just for the land losers, but for all others in the locality that would have been pursuing their vocations in myriad ways. One of the ways in which attention is sought to be focused on these issues is the mandated Social Impact Assessments, which contain a long list of matters to be investigated and costed.

2)      District Collectors (no doubt subject to pressure from around and above) had “almost unbridled authority” (op. cit., p.13) to rule on what is a ‘public purpose’, but this has been more narrowly defined now. Similarly there is less discretion on rates of compensation, taking possession, or calling on ‘urgency’ to do away with due process.

3)      Because land purchasers (and sellers!) under-report the consideration in cases of actual transactions,  the “market-value” would capture only a fraction if the authorities went by the recorded and registered land deals. Of course, the Collector cannot avoid doing this; so, recognizing the reality, LARR 2013 provides for compensation at a multiple of the so-called market-value. This formula also “completely removed the discretion of authorities” (ibid.).

4)      There has to be a consent from at least 70% of the “affected families” (in the case of public private partnership projects) to 80% (in the case of acquisition for a private company); interestingly, any such expression of consent is not required “if the Government is acquiring lands for its own, use, hold and control” (sic., op. cit., p.28). The other innovation is that the ‘urgency’ clause restricted to national defense and natural disasters. “The definition of public purpose has been circumscribed” (op. cit., p.12): this is one of the matters that the Social Impact Assessment is supposed to address, “…whether the proposed acquisition serves public purpose” (op. cit., p.16, 17), and the affected persons are expected to contribute decisively to this analysis (p.18). The SIA will be examined by an Expert Group and then decision taken by the authority concerned.

It is not feasible to go into all the details here, but one other facet can be taken up: the understanding of what is a public purpose. Ramesh & Khan (2015) say that it has neither  been defined in the older law, nor have courts chosen to circumscribe it (op. cit., p.23). The resolution of this was to reference a circular of the Finance Ministry (dated 27 March 2012) which had “laid out what in the eyes of the Government constituted ‘infrastructure’ “ (p.24). The outcome is a long list (Ramesh & Khan, p.25-26) covering items like national defence and security, infrastructure, agriculture, industry, and so on. The question really then becomes, what is not included in the list that should have found a place. Keen analysts will no doubt be able to  suggest items, but it appears on a cursory look that the one significant subject that is omitted would be the environment and biodiversity conservation. Perhaps it was felt that private land would not need to b acquired for these (belying the US experience, for one), or that they were well served by other laws like the Environmental Protection Act, Indian Forest Act, Wildlife Preservation Act, and the Forest Conservation Act.

The other important subject is that of Rehabilitation and Resettlement, R&R. There are already examples of national and state-level R&R policies or laws, as well as sector-level policies and practices followed by concerned industries like Coal India Ltd or the NTPC (Ramesh & Khan, p.63), and the best practices have reportedly been put together in the LARR act, and these components would be especially important for those who were not the primary landowners but whose livelihoods would be affected. The R&R part of the law is sought to be made effective by requiring its completion before possession is taken by the acquiring agency.

Another point to be noted is the clauses concerning retrospective application of LARR 2013: cases where final award had already been made under LAA 1894 would not be reopened, but in other cases where proceedings were still on would have to be completed under the new act, as would cases where a majority of persons had not yet received or accepted the compensation under LAA 1894. But it was also recognised that provision would have to be made for action taken under certain other laws; such laws would be exempted from the onerous conditions of LARR 2013, “at least for the time being” (op. cit., p.121). There is a baker’s dozen of such exempted laws listed in Schedule IV of the act, including the Atomic Energy Act 1962 and the Coal Bearing Areas Acquisition & Development Act 1957. However, it is required that all these acts would also be brought in consonance with LARR 2013 in respect of compensation and R&R within a year, that is by 31 December 2014. This was sought to be done, ironically enough, by the Amendment Bill 2014, which was issued as an Ordnance by the present NDA government. (To be taken up in the next post)

References 

Ramesh, Jairam and Muhammad Ali Khan. 2015. Legislating for Justice. The Making of the 2013 Land Acquisition Law. Oxford University Press, New Delhi.

25 Land Acquisition Acts in India-I. Eminent domain and the colonial LA Act

Land acquisition is not a new phenomenon in India, but it has become a highly contentious political issue of late. At the heart of the matter is need to find a balance between the aspirations of the development protagonists and the interests of the present land holders and others dependent on the existing configuration of natural resources and economic  inter-relations. These latter tend to be the poorest in the society, marginalized both economically and socially (by the centuries of operation of an unyielding caste system), and therefore highly vulnerable to such shocks as could be taken in the stride by better-off groups.

Principle of ‘eminent domain’ and forcible acquisition

The debate has been pitched in terms of forcible acquisition in the public interest, and how to define the public interest. However, there is an underlying and deeper question on whether any action can be taken on the basis of what is known as ‘eminent domain’, or the overall power of the State with regard to the citizens, under which the ‘taking’ of private property also comes in.

The State, whether in a democracy or other form of government, does pass various laws to control actions of individuals and groups. In a democracy, however, there is an underlying understanding that any individual liberties (such as are guaranteed in the Constitution) will not be curtailed unless there is a very significant public, or collective, cause or benefit. In other words, the State cannot take from one group in order to benefit another group. This is of course a narrow concept of ‘public interest’, but too broad an interpretation would allow the state, i.e. the government in power, to bend the law in favour of a particular group or even individual, by dressing up the cause for action as serving some national interest. The support to private entrepreneurs, for example, is projected as the State’s duty to keep the economy moving. This sort of reasoning can justify the taking of private property and common resources (water, soil) from some sections (e.g. the rural poor) and transferring them to the industrialists. No doubt the economy develops through private enterprise and private capital, but the question is, how far should the State use its power as ultimate owner of the nation’s resources, in favour of what are after all individual commercial players.

Individual rights have been historically over-ridden in countries that were run by personal dictatorships, and ironically even in advanced states which claimed to be socialist or people’s dictatorships. In modern liberal democracies, however, the dominant power of the State has been moderated by the need to follow a prescribed process to come to a decision that a certain cause is in the public interest, and to accomplish the ‘taking’ in a transparent and equitable manner (by giving a reasonable compensation for the resources taken by the State). In the USA, the acquisition of land is also termed ‘condemnation’ (this does not imply any prejudicial finding against the state of the property in question). The judicial ruling  (quoted in the website of the Environment & Natural Resources Division of the US Department of Justice (www.justice.gov/enrd/history-federal-use-eminent-domain), is that eminent domain “appertains to every independent government. It requires no constitutional recognition; it is an attribute of sovereignty”. However, the Fifth Amendment to the US Constitution declared that “…nor shall private property be taken for public use, without just compensation”. There is therefore a whole judicial machinery for the appraisal of the just value in acquisition proceedings, and the “Federal courts have generally found that just compensation is measured by the market value (paid in money) of the property at the time of the taking” (www.justice.gov/enrd/appraisal-unit). Accordingly, the Appraisal Unit of the US Justice Department annually reviews about 350 to 400 appraisal reports for the guidance of the judicial officers. The prescribed standards are provided in the so-called “Yellow Book” developed by the land acquiring agencies of the federal government,  the Uniform Appraisal Standards for Federal Land Acquisitions, and the Uniform Standards of Professional Appraisal Practices of the Appraisal Foundation in the United States. The 2000 edition of the Yellow Book (published by the Appraisal Institute, Chicago “in cooperation with” the US Department of Justice) is available for download at www.justice.gov/sites/default/enrd/legacy/2015/04/13/Uniform-Appraisal-Standards.pdf.

The US courts have upheld the right of government to acquire private real property in a variety of cases, e.g. for transportation (communications), water supply, construction of public buildings, defence readiness, and most of all, for establishing public parks and setting aside open space, preserving places of historic interest and natural beauty, and protecting environmentally sensitive areas.

Land acquisition and eminent domain in India

The position of eminent domain has been a subject of intense investigation and discussion in India since colonial times. The problem arose because private property had apparently not been clearly recognized and codified in traditional Indian administrative and jurisprudential systems. In any study of the Indian land tenure system(s), however, it becomes evident that there is a whole range of situations and arrangements that can be given different labels to be comparable with tenures obtaining in the more advanced home countries (Britain or Western Europe). It is often assumed that the ruler has total propriety rights on all property, and in fact even the great political writer Karl Marx held that traditional Indian land tenure epitomised the ills of  “oriental despotism”, and that the emancipation of the suffering masses would not be realised unless the system of private property titles were developed (see Draper, 1977). Under such circumstances, the argument was put forth that the British colonial government also inherited this absolute proprietorship of all land and property once they took over the territorial jurisdictions of the Indian rulers or chiefs, big or small, whether by military conquest or by agreement:

Baden-Powell, for instance, after an exhaustive multi-volume survey of land tenure in India (the first volume of which he incidentally dedicated to Dr.Dietrich Brandis, the founder of the forest service in India), has this to say:

“There can be no doubt that in the latter part of the eighteenth century, when British administration began, the different native rulers who preceded us, had asserted rights as the universal landowners. That being the case, our Government succeeded, legally, to the same claim and title”. (Baden—Powell, 1892, Vol.I, p.216)

Land Acquisition Act (LAA) 1894 (as amended)

This of course was a ground for issuing the first official Land Acquisition Act, 1894 in British India (which we will refer to as the LAA). This Act, with periodic amendments, served the country even after independence, until it was replaced by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013, one of the flagship legislations achieved under the UPA-2 government (Ramesh & Khan, 2015), known popularly as the LARR Act. The LAA 1894, as modified up to 01 September 1985, with the most significant excerpts from the amendments of 1962 and 1984, is available on the web at dolr.nic.in/hyperlink/acq.htm.

The LAA (1894) follows the pattern that will be familiar to those who have dealt with the Indian Forest Act (indeed, the IFA itself can be seen as another vehicle for the sequestration, rather than acquisition, of a sizeable chunk of land and natural resources or uncultivated revenue ‘waste’ (which may not necessarily be wasteland in the literal sense). These lands were partly used as village commons, and the remoter tracts were part of the royal domains. In any case, they were not in private hands, but it called for some accommodation of traditional uses and compensation for some interests when the State proceeded to take possession of them for an overarching public interest (the preservation of the vegetation, and with it the soil and water balance of the country, which would be termed environmental conservation today; see Barton, 2002).  The intent to acquire land in the LAA 1894 is first notified (even the section number, Section 4, is the same for the parallel section to notify intent to form reserved forest in the IFA), then the parcels measured and marked out, a detailed hearing held, and a decision arrived at by the authorised official (the District Collector).  There is provision for appeal to the Court, and guidelines on arriving at the compensation to be paid.

One of the interesting issues is the definition of “public purpose”, which is to include the provision and development of village-sites, town and rural planning, including schemes intended for later disposal of the developed land by lease, assignment, or outright sale “with the object of securing further development”; providing land for a “corporation owned or controlled by the State”; provision of land for residential purposes to the poor or landless persons etc., provision of land for educational, housing, health, slum clearance, scheme etc., land for “any other scheme of development sponsored by Government or with the prior approval of the appropriate Government, by a local authority”; and for locating a “public office”, but “does not include acquisition of land for companies” (presumably, apart from those State corporations referred to above). The second interesting point is that any person “interested” in the notified land may file objections, but only those persons are recognised as interested parties “who would be entitled to claim an interest in compensation if the land were acquired”, so apparently the Act at this stage did not envisage taking on board objections in the broader public interest.  

The third matter of interest here is, of course, the basis of arriving at the compensation value, contained in Section 23, “Matters to be considered in determining compensation”, and Sec.24, “Matters to be neglected”. Thus, the Court (or the Collector in the first instance) should “take into consideration” 1) the market-value of the land on the date of notification, 2) damage to any crops, trees at the time of taking possession by the Collector, 3) damage due to severing of the land, 4) any other damage  at the time of taking possession, 4) damage at the time of taking possession, to any other land, or his earnings (Italics added), 5) reasonable expenses for change of residence, if called for, 6) any loss suffered due to diminution of profits between notification and taking possession. In addition, the Court was also to award an amount calculated at 12% of the market value “so calculated” from the date of notification to the date of award of the Collector or the date of taking possession, whichever is earlier. A further sum of 30% on “such market value” was to be added “in consideration of the compensatory nature of the acquisition” (this is what is sometimes termed the “solatium”, i.e a payment to assuage the injured feelings of the awardee.

Of the matters that should not figure in the Court proceedings, the interesting item is “any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired”, or equally any such increase to any other land of the awardee; apparently, the Act did not entertain any desire to make the awardee a partner in any capital gains that would accrue due to the later use.  This would be a major sticking point in recent years, when erstwhile owners have tended to get enraged at the windfall capital gains enjoyed by downstream beneficiaries. Interestingly, this is also indicated in the US Uniform Appraisal Standards (“Yellow Book”, 2000, p.18 and footnote 52): “The use to which the government will put the property after it has been acquired is, as a general rule, an improper highest and best use. It is the value of the land acquired which is to be estimated, not the value of the land to the government. If it is solely the government’s need that creates a market for the land, this special need must be excluded from consideration by the appraiser.” Further on, the Yellow Book (p.19) provides the basis of assessing market value, that is by support from “confirmed sales of comparable or nearly comparable lands having like optimum uses.” If these are not available the “development approach” can be used (ibid.).

Another matter of interest is the separate chapter in the LAA 1894 on “Temporary occupation of waste or arable land” (Part VI). Even for such purposes, the Collector is to give notices and decide compensation to anyone having an interest in such land, subject to appeal to the Courts. At the expiry of the period of taking over, the land will be restored and additional compensation paid for any damage to it.

Part VII of the original LAA provides for “Acquisition of Land for Companies”. Here the company has to first get consent from the government for the acquisition of the required land, for the purposes of building dwellings for the workers, or for the construction of some work, that is “likely to prove useful to the public”; and enter into an agreement with the government for the cost of the land to be acquired, etc. However, a further clause states that land acquisition for a private company can be agreed to only for one of the purposes, i.e. providing dwelling houses for employees.

We will next deal with the perceived shortcomings of the older LAA (1894 amended in 1962, 1984).

References

Baden-Powell, B.s H. 1892. The Land-Systems of British India. Clarendon Press, Oxford. Reprint, 1974 by Oriental Publishers, Delhi.

Barton, Gregory A. 2002. Empire Forestry and the Origins of Environmentalism. Cambridge University Press, Cambridge, UK.

Draper, Hal. 1977. Karl Marx’s Theory of Revolution. Vol.I. State and Bureaucracy. Monthly Review Press, New York, 1977. Reprinted 2011 by Aakar Books for South Asia, Delhi-110091.

Ramesh, Jairam and Muhammad Ali Khan. 2015. Legislating for Justice. The Making of the 2013 Land Acquisition Law. Oxford University Press, New Delhi.

United States Department of Justice. 2000. Uniform Appraisal Standards for Federal Land Acquisitions. Interagency Land Acquisition Conference. Published by  the Appraisal Institute, Chicago.