The proposal to amend the Land Acquisition Bill, introduced by
the Minister of Rural Development in the Lok Sabha, was cleared
on September 2011 by the Union Cabinet and is now under review
for revision. The amendment, once passed, will revolutionalise
legal procedures for acquiring land in India.
The Bill proposes 'unified legislation for the acquisition
of land and adequate rehabilitation mechanisms for all affected
persons', and will replace the Land Acquisition Act, 1894. Once
passed, it will be the first national law in the country that
governs resettlement and rehabilitation issues involved in land
The Bill requires the consent of at least 80% of landowners
affected by the acquisition of land for private projects. It
has also set out minimal compensation standards for
resettlement and rehabilitation in the land acquisition
process. In addition, the Bill has proposed a centralised
authority for handling land disputes, with appeal to the High
Court. And private parties will now need to file intimation
with district collectors should they have the intention of
Prior to the Bill, there was no centralised mechanism in
India for handling land disputes. Despite much effort spent in
amending the Land Acquisition Act 1894, there remained the
absence of a national law that addressed fair compensation and
fair rehabilitation in cases where displacement was involved in
land acquisition. And no previous rules regarding mandatory
consent were required when acquiring land.
In recent years, displacement issues relating to land
acquisition have received more attention as development and
construction projects have been expanding across the country.
Villagers and non-government organisations (NGOs) have voiced
their concerns and have protested against forced acquisitions
and displacements. And recent court decisions have demonstrated
a stronger awareness of the rights of landowners.
Farmers' rights to their land were barely protected
previously, but various acquisitions by state governments over
the last two years have since been quashed by the courts. For
example, in July 2011, the Allahabad High Court cancelled the
acquisition of 589 hectares of land in Greater Noida by the
Mayawati State Government, having decided that the rights of
1,500 farmers to protest or negotiate for the deal were
ignored. And in a separate case, in January 2012, the Supreme
Court ruled against the Delhi Government's acquisition of
private land of Darshan Lal Nagpal for the establishment of an
electric sub-station by Delhi Transco.
Despite the merits of the Bill, some legal practitioners are
concerned about the cost implications of any amendment and have
suggested that industry is mostly likely to respond negatively
towards such amendment.
Khaitan Sud & Partners' Tanuj Sud says: "The Land
Acquisition Bill amendment will completely revolutionalise the
procedures involved in acquiring land. The land acquisition
process will take much longer and, not surprisingly, developers
have responded very negatively towards the proposed amendments.
The time and economic costs involved are huge."
Formers chief ministers, including Sharad Pawar, Weerappa
Moily, Vilasrao Deshmukh, Sushil Kumar Shinde and Virbhadra
Singh, have also expressed concerns about the potential
repercussion of the Bill on industrialisation and
And yet, other members of the legal industry have expressed
appreciation of the new land acquisition mechanism, as
potential disputes and conflicts will be able to be managed
more comprehensively if a centralised system is put in
Infrastructure Development Finance Company legal director
Raju Doti says: "Most short-term investors have responded
negatively towards this development as this certainly will
increase the cost and lengthen the time needed for acquiring
land. However, I see this as a positive development for foreign
investors as the risks involved in land acquisition will be
better managed, with more transparency being brought to the
land acquisition process."
He adds: "Companies can handle potential legal risk during
the early stages of projects when there are more comprehensive
regulatory procedures with which to comply. On a long-term
basis, such regulatory changes are necessary in mitigating
public sentiment triggered by development, as is similar to
anywhere else in the world."
On the other hand, some members of the legal industry are
doubtful that the new legal procedures stated in the Bill will
bring in any positive element to furthering communication
between developers and occupants. In India, the Government of
India (GOI) acts as agent for land purchase and has substantial
interest in selling land to private developers. Land occupants,
especially villagers, are very sceptical towards the GOI's
initiative in fairly handling land acquisition issues.
JSW Steel's legal and group general counsel Girish Gokhale
says: "The government has always been on the developers' side.
The rights of the occupants have long been ignored. The profit
involved in land selling is simply huge."
He adds: "It doesn't help even when there is a compensation
programme. Even if there is a centralised mechanism now, it is
unlikely that the system can provide an effective mechanism in
resolving conflicts between land occupants and developers. The
distrust among rural land occupants is simply too strong. It is
almost impossible for them to be confident that the new legal
procedures can effectively and fairly balance the rights
between developers and occupants."
Recent developments suggest it is no longer possible to deny
negotiation and compensation in the land acquisition process,
and initiatives by the regulators and the courts have
demonstrated the need to accommodate the interests of land
occupants. The focus now will be on managing associated risks
relating to the acquisition of land.
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