LAND ACQUISITION AND ADEQUATE COMPENSATION IN INDIA
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LAND ACQUISITION AND ADEQUATE COMPENSATION IN INDIA
Land Acquisition Act 1894 and Criticism in relation to it: It has been criticized by groups that view the act as weak and ineffective, and by groups that view the act as draconian. People who feel that act is weak argue that the procedure followed is cumbersome and costly, often resulting in inordinate delay in land acquisition. This group argues that, the determination of public purpose should be matter of executive discretion and should not be contestable at law. It has also been argued that the property valuation techniques are flawed and that the land owners get to peg the value higher than the real value, based on ‘potential value’ and ‘opportunity value’ of their property; resulting in, what is claimed as, a heavy strain on public finances and restrictions on the scale of development and redevelopment projects. There is also opposition to the additional payment of solatium to landowners over the property value.
Perhaps, the historical importance of land that has made the question of the rights to land a very broad and complex subject matter.
The Muslim rebellion in the Philippines, the Palestinians’ struggle for the return of their homeland, the Zapatista movement in Mexico and many other conflicts that are very much part of today’s news, involve land. Indeed, issues of access to land and land security continue to have an impact on a very significant part of the world’s population who still depend on land access and security for their subsistence and livelihood.
“For the billions of the world’s rural poor, land security must be seen as a necessary precondition for the realization of other internationally protected human rights.”5 Despite this, land rights issues have rarely been addressed from an international human rights perspective. This is in part due to the fact that land issues are very complex. Land rights do not just pertain to the right of ownership. They also refer to access, use, possession and occupation of land, and security of such use, possession or tenure. Local and national landowning and land use systems vary considerably from country to country and, frequently, within countries. As a result, identifying and reaching agreement on principles and standards that can usefully be applied across borders and systems have proved to be very difficult.
International and Regional Human Rights Law and Land Rights
Article 17 of the Universal Declaration of Human Rights states:
1. Everyone has the right to own property alone as well as in association with others.
2. No one shall be arbitrarily deprived of his property.
The reference to property rights was altogether dropped in the two human rights Covenants adopted by the United Nations in 1966. In addressing the right to be free from hunger, article 11 of the ICESCR makes only one indirect reference to land when it encourages states parties to develop or reform “agrarian systems in such a way as to achieve the most efficient development and utilization of natural resources.” (See Module 12 on this point.)
The First Protocol to the European Convention on Human Rights states:
“No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law”
However, these provisions shall not “in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
Article 21 of the American Convention on Human Rights states:
Everyone has the right to the use and enjoyment of his property. The law may subordinate such use and enjoyment to the interest of society . . . No one shall be deprived of his property except upon payment of just compensation, for reasons of public utility or social interest and in the cases and according to the forms of established law.7
Article 14 of the African Charter on Human and Peoples’ Rights reads:
“The right to property shall be guaranteed. It may only be encroached upon in the interest of public need or in the general interest of the community and in accordance with the provisions of appropriate laws”
Article 21(2) says, “In case of spoliation the dispossessed people shall have the right to the lawful recovery of its property as well as to an adequate compensation.”
United Nations declarations more specific to land include the Declaration on Social Progress, adopted by the General Assembly in 1969, which recognizes the social function of property, including land, and calls for forms of land ownership that ensure equal rights to property for all.
Of the UN specialized agencies, the Food and Agriculture Organization (FAO) and the International Labour Organization (ILO) have given most attention to land rights concerns, in either binding conventions or nonbinding declarations. At its World Conference on Agrarian Reform and Rural Development in 1979, the FAO adopted a Declaration of Principles and Programme of Action, referred to as “The Peasants Charter,” a major section of which is concerned with the reorganization of land tenure. It advocates the imposition of land ceilings in countries where substantial reorganization of land tenure and land redistribution to land-less peasants and smallholders is needed as part of a rural development strategy and as a means to redistribution of power. Other sections of the charter are concerned with tenancy reform, regulation of changes in customary tenure and with community control over natural resources
Land Tenure, Livelihood and the Environment
In Centre for Environmental Law, WWF-I v. Union of India and others,11 the petitioners, World Wide Fund for Nature, approached the Supreme Court of India by way of a public interest petition in 1995. All over the country, state governments had issued notifications of intent under the Wildlife Protection Act, 1972, demarcating areas for wildlife sanctuaries and national parks. However, the process for assessing claims for compensation of those who would be dispossessed was not being undertaken and as a result, the final proclamation notifications under section 21 of the act were not being made. At the request of the petitioners, the court issued a blanket direction in August 1997 to all the state governments to complete the compensation procedure and issue final notifications within one year.12
A further twist in the tale arises out of the Parbati Hydel project being constructed by the government in an area adjoining the park. One part of the area demarcated for the park, which formed part of the core area, was “left out” from the final notification in order to make way for a surge tunnel, which would feed the Parbati project. Thus, while the government has excluded rural communities from any participation in the conservation of this ecologically rich area, which these very communities have preserved over centuries, it has not thought twice about allowing so-called “developmental interests” to have their way. The tragedy is that the Supreme Court and the state have refused to hear the voices of these rural communities. An application by several NGOs that are working with communities dependent on these areas, seeking permission to be heard by the court, has been rejected.
ILO Convention No. 117, The Social Policy (Basic Aims and Standards) Convention of 1962, covers measures to improve the standard of living for agricultural producers. They are to include control of the alienation of land to nonagriculturalists, regard for customary land rights and the supervision of tenancy arrangements.
The ILO’s Indigenous and Tribal Peoples Convention No. 169 of 1989 is a key instrument in the evolution of concepts of land rights in international law.13 That convention
- recognizes the special relationship between indigenous people and their lands;
- requires states to adopt special measures of protection on their behalf;
- provides safeguards against the arbitrary removal of indigenous people from their traditional land, with procedural guarantees; and
- includes other provisions related to the transmission of land rights and respect for customary procedures.
Land Rights in Domestic Law
There are two basic principles that underlie most national legal systems, constitutions and domestic laws on the question of land ownership.
The first is the right of private ownership. This right includes not only the right to use and enjoyment, but also the right to exclude others. Most systems of land ownership in domestic law seek to uphold and recognize this concept of private ownership, which gives absolute control and exclusive rights on the basis of legal, state-conferred ownership.
The second common and fundamental principle underlying domestic land laws is the regalian doctrine, which holds that all lands belong to the state. A corollary of this principle is that it is only by a grant from the state that land can pass into private ownership.
One can immediately sense inevitable conflicts between the two principles just mentioned. Much of the struggle on the domestic legal front has been to reform, if not change, these two principles of land ownership, which have their origins in most of the developing world’s colonial past.
There are also a number of land ownership and use patterns that form exceptions to, or mitigate, these principles. These generally fall into three categories:
1. Land as a resource with a “social function”
2. “Time immemorial” concepts and ancestral land claims
3. Collective rights to land use and/or ownership
compensation with relevant authorities, as compared to Singapore.LESSONS FROM OTHER COUNTRIES
A study involving comparisons of the United Kingdom, USA, Hong Kong, China, India,
Australia and New Zealand found six advantages of the systems in those countries as
compared to Malaysia. These factors are perhaps relevant for Malaysian compensation
structure in land acquisition to consider, in moving towards improving its compensation
framework. The advantages are as follows:
i) The recognition of business compensation;
UK, USA, Australia and New Zealand recognise payment for loss of goodwill as an
attribute of compensation. In Malaysia, business losses are allowed under
compensation claims as stipulated in section 2(e) of First Schedule but they do not
cover loss of goodwill and loss of earnings.
ii) Equity of disturbance payments (relocation hardships);
Disturbance payment can include a wide range of items such as professional fees for
acquiring alternative premises; costs of adapting alternative premises, including
carpets, curtains and shelving; removal costs and any other reasonably quantifiable
losses. In Malaysia, a claim under this heading is only for cost of transfer.
iii) Payment of solatium/premium over and above the total compensation;
344 Pacific Rim Property Research Journal, Vol 12, No 3
Solatium is an additional sum in respect of the owner injured feelings or the insult
due to the unilateral action of the acquiring authority in arbitrarily expropriating the
land. A solatium may be awarded as a percentage of the compensation or it may be an
amount calculated without reference to any percentage. This payment has been the
practices in many countries but Malaysia has yet to adopt it.
- four times the market value of the land, and
- an upfront payment of IN Rs. 1,36,000 (US$ 3,000) for subsistence, transportation and resettlement allowances, and
- an additional entitlement of a job to the family member, or a payment of IN Rs. 5,00,000 (US$ 11,000) up front, or a monthly annuity totaling IN Rs. 24,000 (US$ 550) per year for 20 years with adjustment for inflation – the option from these three choices shall be the legal right of the affected land owner family, not the land acquirer, and
- a house with no less than 50 square meters in plinth area, and
- additional benefits may apply if the land is resold without development, used for urbanization, or if the land owner belongs to SC/ST or other protected groups per rules of the Government of India
- IN Rs. 18,36,000 (US$ 41,727) to the rural land owner; which is the total of R&R allowances of IN Rs. 6,36,000 plus IN Rs. 12,00,000 – which is four times the market value of the land, plus
- a house with no less than 50 square meters in plinth area and benefits from Schedule III-VI as applicable to the rural land owner, plus
- additional payments of IN Rs. 6,36,000 each to any additional families claiming to have lost its livelihood because of the acquisition, even if they do not own the land
- It is heavily loaded in favour of land owners and ignores the needs of poor Indians who need affordable housing, impoverished families who need affordable hospitals, schools, employment opportunities and infrastructure. For example, ASSOCHAM, the Indian organization that represents the interests of trade and commerce in India, with over 200,000 small business and large corporate members, claims that LARR 2011 in its current version, prevents a conducive environment for economic growth. 
- Economists who have studied LARR 2011 as tabled in India’s parliament suggest it as well intentioned but seriously flawed. Its principal defect is that it attaches an arbitrary mark-up to the historical market price to determine compensation amounts, along with its numerous entitlements to potentially unlimited number of claimants. Such a Bill, some claim, will guarantee neither social justice nor the efficient use of resources. For example, Ghatak of London School of Economics and Ghosh of Delhi School of Economics,claim that the Bill places unnecessary and severe conditions on land acquisition which will stifle the pace of India’s development without promoting the interests of farmers. They suggest that the Bill should be amended to allow free market dynamism, such as competitive land auction. These economists claim that India’s greatest challenge in enacting laws and opening up to international markets is to balance the needs of economic growth, equitable distribution and human rights, while rescuing complex and sometimes conflicting objectives from the demagoguery of single issue advocates and political opportunists. The current Bill, they claim, fails to do so.
- LARR 2011 as proposed mandates that compensation and rehabilitation payments to land owners and livelihood losers be upfront. This misaligns the interests of land acquirer and those affected. Once the payment is made, one or more of the affected families may seek to delay the progress of the project to extract additional compensation, thereby adversely affecting those who chose long term employment in the affected families. The Bill, these economists suggest, should link compensation and entitlements to the progress and success of the project, such as through partial compensation in form of land bonds.These success-linked infrastructure bonds may also help poor states reduce the upfront cost of land acquisition for essential public projects such as hospitals, schools, universities, affordable housing, clean drinking water treatment plants, electricity power generation plants, sewage treatment plants, flood control reservoirs, and highways necessary to bring relief to affected public during fires, epidemics, earthquakes, floods and other natural disasters. The state of Kerala has decided to pursue the use of infrastructure bonds as a form of payment to land owners.
- LARR 2011 places no limit on total compensation or number of claimants; nor does it place any statute of limitations on claims or claimants. The beneficiaries of the Bill, with guaranteed jobs for 26 years, will have no incentive to be productive. The Bill should place a limit on total value of entitlement benefits that can be annually claimed per acre, this entitlement pool should then be divided between the affected families, and the government should run this program if it is considered to be fair.
- LARR 2011 as proposed severely curtails free market transactions between willing sellers and willing buyers. For example, DLF Limited – India’s largest real estate developer – claims that the current bill may limit private companies such as DLF from developing affordable housing for millions of Indians. DLF suggests that direct land transactions with owners on a willing voluntary basis, at market-determined rate, should be kept out of the purview of the bill. There should be no conditions imposed on free market transactions between willing sellers and willing buyers.
- Amartya Sen, the India-born Nobel Laureate in economics, claims prohibiting the use of fertile agricultural land for industries is ultimately self-defeating. Sen claims industry is based near cities, rivers, coast lines, expressways and other places for logistical necessities, quality of life for workers, cost of operations, and various reasons.
- Sen, further suggests that even though the land may be very fertile, industrial production generates many times more than the value of the product produced by agriculture. History of industrialization and global distribution of industry hubs, Sen claims, show that the locations of great industry, be it Manchester, London, Munich, Paris, Pittsburgh, Shanghai or Lancashire, these were all on heavily fertile land. Industry always competes with agriculture, Sen claims, because the shared land was convenient for industry for trade and transportation.
- Amartya Sen further argues that in countries like Australia, the US or Canada, where agriculture has prospered, only a very tiny population is involved in agriculture. Agriculture prospers by increasing productivity and efficiency. Most people move out to industry. Industry has to be convenient, has to be absorbing. When people move out of agriculture, total production does not go down; rather, per capita income increases. For the prosperity of industry, agriculture and the economy, India needs industrialization. Those in India, who in effect prevent industrialization, either by politically making it impossible for entrepreneurs to feel comfortable in starting a business or by making it difficult to buy land for industry, doesn’t serve the interest of the poor well, claims Sen.
|and to secure the land rights of the community. It was also working on an integrated development plan which would provide that
• the residential land at Alexkor should be formalized as a town;
• the irrigation land should be transferred to an equity, which will operate for the benefit of and include participation of the Richtersveld and Namaqualand communities;
• the grazing land should be transferred to the Richtersveld community as part of the settlement of the land claim; and
• the mining land be retained by Alexkor.
Land Rights of Women
Special attention should be paid to the right of women to land. In many cultures and societies, women are excluded from owning property, including land, or they do not enjoy the same rights as the men. In marriage and family relations, women’s right to property is often subject to the authority of the husband or father. Ensuring equal rights to property translates into economic empowerment and has a direct bearing on the status of women. Denial of and/or limitations on rights to land and discrimination against women can be seen, for instance, in laws that exclude women from inheriting land.
Even though women play a very substantial role in agriculture in most countries around the world, land ownership and/or land tenure systems, whether customary or statutory, have historically very often discriminated against women. The Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) recognizes women’s land rights. Article 14 of CEDAW obliges states parties to
take all appropriate measures to eliminate discrimination against women in rural areas in order to ensure, on the basis of equality of men and women, that they participate in and benefit from rural development and, in particular . . . ensure to such women the right:
. . . (d) to obtain all types of training and education, formal and non-formal, including that relating to functional literacy, as well as the benefit of all community and extension services, inter alia, in order to increase their technical proficiency;
. . . (g) to have access to agricultural credit and loans, marketing facilities, appropriate technology and equal treatment in land and agrarian reform as well as in land resettlement schemes
- The Observer Research Foundation’s Sahoo argues that the bill fails to adequately define “public purpose”] The current definition, he claims, can be interpreted vaguely. In leaving public purpose too vague and porous, it would ensure that land acquisition will remain hostage to politics and all kinds of disputes. More clarity is needed, perhaps with the option that each state have the right to hold a referendum, whereby the voters in the state can vote to approve or disapprove proposed public purpose land acquisitions through the referendum, as is done through local elections in the United States for certain public acquisition of private or agricultural land.
- The Confederation of Real Estate Developers’ Association of India claims that the proposed LARR 2011 bill is kind of one-sided, its ill-thought-out entitlements may sound very altruistic and pro-poor, but these are unsustainable and will kill the goose that lays the golden egg.] This group further claims that the bill, if passed, will increase the cost of acquisition of land to unrealistic level. It will be almost impossible to acquire 50-acre or 100-acre land at one place for planned development. They suggest that if India does not facilitate urbanization in an organized manner, all the incremental population will be housed in disorganized housing developments such as slums with dire consequences for Indian economy. In the long run, even farmers will suffer as fringe development of urban centres will largely be in the form of unauthorized developments and they will not realize the true economic potential of their lands.
- The bill inflates the cost of land to help a small minority of Indians at the cost of the vast majority of Indian citizens, as less than 10% of Indian population owns rural or urban land., The LARR Bill 2011 favors a privileged minority of land owners as the Bill mandates above market prices for their land plus an expensive rehabilitation package. The Bill does not mandate a process by which the time involved in land acquisition is reduced from current levels of years. Nor does the Bill consider the effect of excessive costs upfront, and expensive rehabilitation mandate over time, on the financial feasibility of large-scale, socially necessary infrastructure projects needed by 90%+ of Indians who are not landowners. In an editorial, Vidya Bala writes that the most important weakness in the Bill is bringing non-government transactions too under its purview. Private players buying 50+ acres of urban land tracts or 100+ acres of rural areas would be required to comply with the R&R package stated in the Bill]
- LARR 2011 Bill’s sections 97, 98 and 99 are incongruous with other laws of India in details and intent. Section 98, for example, says that the provisions of the Bill shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule of the Bill. According to Indian Legal Code, the Fourth Schedule referred to by LARR 2011 Bill, consists of 16 bills, including the ancient monuments and archaeological sites and remains Act, 1958, the atomic energy Act, 1962, the special economic zones Act, 2005, the cantonments Act, 2006, the railways Act, 1989 amongst others. Laws can not be in conflict with each other. LARR Bill carve outs through Sections 97, 98 and 99 add confusion, offering a means for numerous citizen petitions, law suits and judicial activism.
- The LARR 2011 Bill thus fails to deliver on the goals motivating My Recommendations in respect of Land Acquisition Bill woulde if we take on the whole, the bill protects farmers interests. b
- LARR Bill 2011 forbids land acquisition when such acquisition would:
- cumulatively exceed 5% of multi-crop irrigated area in any district in any state of India, or
- cumulatively exceed 10% of single-crop net sown area in any district in any state of India, if the net sown area in that district was less than 50% of the total area of the district
Even below these threshold, LARR 2011 requires that wherever multi crop irrigated land is acquired an equivalent area of culturable wasteland shall be developed by the state for agricultural purposes.
These limits shall not apply to linear projects. LARR 2011 illustrates linear projects with examples such as railways, highways, major district roads, power lines, and irrigation canals.
MY RECOMMENDATIONS IN RESPECT OF THE LAND ACQUISITION BILL 2011:
In view of the above ceiling on land acquisition shouldn’t exceed 5% of mufti crop irrigated area in any District in any State or if it’s a single crop net sown area in any district in any State in India, it shouldn’t exceed 10%, if the proposed acquisition ius less than 50% o9f the total area of the District. I strongly opine that Farmers interests, who are the depressed lot in India is fully protected by this clause in the proposed amendment to Land Acquisition Act(Bill), As stated by several Economists and Scholars Farmers need this much of protection from Government Acquisition of their precious land. Moreover Agricultural land should not be permitted to0 be acquired as by changing its use primarily from Agricultural use toi industrial or commercial use can alter the ecology and it would be flooded later as is seen in several western countries, where many agricultural lands were later converted in to industrial land, leading to global warming and floods. Storms like Sandy which devastated Northern America are a grim reminder of this picture.
Forests should not be acquired and cut for industrial development as less greenery leads to more pollution and global warming resulting in heat waves and floods, shortage of food etc. Urbanization and the so called development by way of industrialization is responsible for the current global warming with which we are all haplessly fighting. Growth shouldn’t be at the cost of human lives and property, which these very land Acquisition and allied laws ironically seem to protect.
In France and some western countries due to advanced Science and Technology and related Development, and the resultant sedentary life style((in India too), separate route/tracks for Bicycling have been created to promote exercise and keep people free from life style diseases such as Diabetes Melllitus Type II, and Hypertension TRAFFIC jams and pollution etc. I’d recommend more forests, more greenery at the cost of industrial development.
This little planet shouldn’t become concrete jungles. Let us invite more Eco friendly green laws be it Land Acquisition Bills or other Environmental legislation. Let us welcome them with open arms.
Ms. Nirmala P.Rao
Legal Expert and Political Analyst