Land acquisition: time to return a little

By Deepti Mohan, Vidhii Partners
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Recent protests against the acquisition of land by some states and the move to return land to its owners in Singur, West Bengal, have brought the inadequacies of the current land acquisition laws into the limelight.

The legal framework

The Land Acquisition Act, 1894, is a central legislation enacted with the object of amending the law on acquisitions for public purposes and for determining the compensation payable to land owners. While the act, which is based on the doctrine of eminent domain, defines public purpose, the connotations attributed to the term have undergone drastic changes over the last century.

A principal problem with the act is that it does not provide for the return of acquired land to the original owners, if the purpose for which the acquisition was carried out ceases to exist or the project for which acquisition was required is abandoned or its scope changes. By virtue of section 16 of the act read with section 48, the acquired land vests absolutely in the government free from all encumbrances and it can only withdraw from the acquisition if possession of land has not yet been taken.

Deepti Mohan Partner Vidhii Partners
Deepti Mohan
Partner
Vidhii Partners

The court’s view

The Supreme Court in its judgments in State of Kerala and ors v M Bhaskaran Pillai and anr and Government of Andhra Pradesh and anr v Syed Akbar has further created an embargo on state governments from returning or reassigning unutilized acquired land.

The court has consistently held that acquired land cannot be reconveyed to the original owner merely on the basis of an executive order. It has also held that if the public purpose for which the land was acquired has been achieved, the remaining land could be used for any other public purpose. In case there is no other public purpose, instead of returning the land to its erstwhile owner, it should be put up for public auction and the amount received should be utilized for a public purpose.

Creating wiggle room

Tamil Nadu paved the way for returning acquired land to the original owners by introducing section 48B in the Land Acquisition Act. This allows the state government to transfer acquired land to its original owner if it is satisfied that the land is not required for the purpose for which it was acquired.

Prompted by this and after abandoning its initial plans to introduce a similar amendment to the Land Acquisition Act, in June the government of West Bengal passed the Singur Land Rehabilitation and Development Act, 2011. While this was done to enable the government to return 400 acres of land acquired in Singur, it can be argued the Singur act may be in conflict with the central act, which disallows such action. Indeed, the constitutional validity of the Singur act is presently under challenge before Calcutta High Court.

Amending the law

The Land Acquisition Act is expected to soon be repealed in the wake of the Land Acquisition and Rehabilitation and Resettlement Bill, 2011, which has been placed in the public domain for comments till 31 August. The bill applies to acquisitions in three cases, (i) acquisition by the government for its own use and hold, (ii) acquisition by government for ultimately transferring land for use by private companies for stated public purposes including PPP projects (but excluding highway projects) and (iii) acquisition of land for immediate and declared use by private companies for public purposes, provided in the latter two instances that 80% of the affected families consent to such acquisition. The bill also defines public purpose to include any purpose useful to the general public and, barring acquisition of land by government for its own use, the public purpose for acquisitions, once stated, cannot be changed.

More importantly, the bill introduces section 69, permitting return of unutilized land to the original owners, which is a departure from the Land Acquisition Act as well as the pending Land Acquisition (Amendment) Bill, 2009, which was expected to be passed by the parliament before the recent draft 2011 bill was issued. The newly introduced section provides that when any acquired land remains unutilized for a period of five years from the date of taking over possession, it shall be returned to the original owner on refund of one-fourth amount of compensation along with interest.

Measuring success

While the bill will definitely change the manner in which land acquisitions are carried out, it will be interesting to see what in form it will finally be passed. There is little doubt that its success will lie in how well it strikes a balance between the development and urbanization needs of the states and the rights of individual owners.

Deepti Mohan is a partner at Vidhii Partners and can be reached at deepti.mohan@vidhiipartners.com.

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