The Supreme Court is now hearing the arguments on land acquisition which has been stalled for some years now. We had looked at the issue in a previous article titled
Supreme Court To Decide on the Land Acquisition Act. Today we discuss the important arguments the Supreme Court should consider.
The Issue in Brief
The issue under consideration is about when the acquisition proceedings lapse under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
The controversy is created by two conflicting judgements. As per a Pune municipal corporation judgement, the acquiring body must deposit the compensation amount in a court (we will call this the Pune judgement.) The Indore development authority judgement
says it is not required. I have explained
the issue in the previous article (we will call this the Indore judgement).
The Difficulty with the Pune Judgement
The Pune judgement requires the acquiring body to tender the compensation to the landowner within five years of notification. If the landowner refuses the compensation, it requires the acquiring body to deposit the amount in the court.
When the landowner does not agree with the compensation amount, she is supposed to file a land acquisition reference in a reference court (the district court). If such a reference is filed, the reference court can accept the deposit of the compensation and keep the deposited money in fixed deposits of a nationalised bank. The landowner can make an application to the reference court and the amount is released to him.
But what if no reference is filed? Then there is no way to deposit the money in a reference court. So where to deposit the money as required by the Pune judgement? Since the Pune judgement specifically states that a deposit in the treasury is not acceptable, it cannot be deposited in the treasury.
The Indore judgement says that this creates an opportunity for landowners to first refuse compensation, not file reference and, after five years, file an application under the new land acquisition law would declare the acquisition lapsed. According to Justice Mishra, who authored that judgment, landowners are taking advantage of their own mistake.
There is another problem. Supposing the acquiring body, say the Railways, or some such organisation, wants to acquire your land. The Railways send the proposal to the State government and the acquisition proceeding is carried out by the state government through the collector. Assume that the Railways pay the decided compensation to the State government.
The state government is supposed to pay this compensation to the landowner. But the landowner refuses to accept the compensation. In such a case, the acquiring body has deposited the compensation and, hence, rightly expects to get the land. Just because the State government is not able to pay the compensation, it cannot impose costs and inconvenience on the acquiring body.
So how to reconcile these conflicting rights?
First Principles for Resolving the Land Acquisition Issue
In principle, the State is required to protect the rights of citizens including their property. When the State desires to acquire the property, it has a conflict of interest – it is taking away the very thing it should be protecting. Therefore, the law imposes (ideally) a strict burden on the State when it wants to acquire land. Let us clarify—the burden is imposed on the state – not the landowner. This is a crucial difference between a country, which respects property rights versus a country that does not.
How strict is this burden? If you ask the British, the burden for acquiring Indian land is very strict. If there is some lacuna in the procedure, the acquisition lapses.
The acquisition has to be completed in a timely manner as, once the land is notified, till the government pays the compensation, the landowner cannot sell the land or make any improvements. In the time when the government notifies the land for acquisition and when the government actually pays the compensation, the prices of land, which the landowner can buy, skyrocket and she is displaced—she must buy land far away or buy smaller land.
This was the approach of the courts when it came to land acquisition before 1975. In 1975, since the word socialist came into the Indian Constitution, the courts have sided with the government when it comes to imposing the burden of acquisition.
Thus, today, it is the landowner who must file a reference within 42 days of the notice even if the notice is not delivered to her (this has been partly overturned on a case-to-case basis). It is the landowner who must ensure that she has accepted the compensation 'under protest'. It is the landowner who must file petitions and recovery suits to get compensation paid to her. On top of this, often, government deducts tax on this compensation, which the Supreme Court has disallowed.
Why Was the Pune Judgement Important?
Let us appreciate two points.
First, the cases we are considering are instances where five years have passed after the land was notified for acquisition and compensation was not paid to the landowner. In many cases, decades have passed since the land was notified. And, back in the 1970s and 1980s, the landowners, illiterate villagers, were not aware of their rights.
Further, by the time the high court declares the acquisition as lapsed, another five years pass. So, the State, that is supposed to take care of the property rights of landowner, itself has not made a payment to landowners and is using their lands.
Second, as a high court judge once said that getting money out from the treasury is like taking meat out of a lion’s mouth. It takes a ludicrous amount of time to recover money from the government. The government simply does not pay. After your land acquisition reference is decided, appeal is decided, special leave petition is decided, then you need to file execution proceedings. These proceedings in all take more than 30 years, sometimes more.
The Pune judgement was, therefore, refreshing because it protected the rights of the landowners by putting the compensation closer to the landowner than the Indore judgement. It did create a procedural problem—a very laughable trivial procedural problem.
Why Does the Problem arise?
Law-abiding landowners refused compensation under the old law for two reasons. First, the compensation was grossly inadequate. The State offers a ridiculously low amount as compensation. It has offered rates of Rs20 per square metre (sq mtr). when the prevailing market value as per court judgements was Rs300 per sq mtr. In many cases, the amount of compensation is less than the stamp duty required to be paid for filing land acquisition reference (only in Maharashtra and Gujarat).
Second, they were not informed that such compensation is being offered to them. The government officers are notorious in paper declarations of awards, notices of payments, etc. In reality, the actual landowner is not informed at all. As a comparison, if you want to demolish an illegal construction in Mumbai, you have to give that encroacher a proper notice, or else the demolition, etc, are all deemed illegal.
On the other hand, if you are law-abiding landowner, no individual notice is given.
A declaration is issued in a newspaper with the least circulation; the award is declared in the collector’s office; the notice is drafted and promptly put in the drawer. The procedure for acquiring the land of a lawful owner is complete.
So how to solve the problem where landowners refuse compensation and stall for more than five years to ensure that land acquisition lapses?
Solution in Principle
First, ensure that the landowner is properly made aware that compensation is being tendered. It means sending individual notices to landowners and not keeping them in the drawer.
Second, ensure that compensation is actually being tendered. In common parlance, tendering means showing the cheque or demand draft. In land acquisition matters, it means only a visit to the collector’s office.
In most cases, no payment is made;
the landowner is asked to come on some other date with documents and submit forms and papers. This goes on for many visits over years and then a cheque or draft is ready and then after giving speed money to all and sundry, it is released to the landowner. This has to change.
Let the cheque or demand draft be tendered to the landowner and let him sign the refusal on it. Once you reach this stage, no landowner refuses the money (she has already lost her land). What usually happens is that she accepts the compensation under protest.
Third, ensure that the compensation is tendered within time. Before the courts intervened, the government would simply notify the land and not award the compensation for many years. After the courts intervened, and the Act was amended in 1984, the government started making low-value awards within a period of two years from the date of the notification. However, the payment still took time and possession was taken using the urgency clause. This is an abuse of property rights. If compensation is not tendered within five years from date of the award, it should be treated as not tendered.
Fourth, after all this, if the landowner refuses, her refusal should be treated as a reference. The land acquisition officer (usually the collector) should file a default reference stating that the landowner has refused compensation and appropriate compensation may be determined and paid to the landowner.
But Solution Is Not Possible
We are dealing with the old Act which lapsed in 2014. It has been more than five years since the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into effect. There is nothing that can be done now.
If compensation was not given to the landowners till date or deposited in the court after the Pune judgement, the acquisition should be deemed to have lapsed. If the acquiring body has made a payment to the government then to that extent, the difference in cost should be borne by the state government that failed to complete the acquisition proceedings.
How to deal with unscrupulous landowners who want to defraud the government by deliberately refusing the compensation? Let the government prove that (a) the compensation was duly tendered to the landowner following the first three steps in the solution given above (b) that the refusal of compensation was mala fide with an intent to specifically defraud the government (so just a refusal for other reasons is not counted). If the government is able to conclusively prove that beyond reasonable doubt, then landowners should be granted compensation as per the older Land Acquisition Act as per the old notification.
In Sum
In free countries where property rights are respected, it is the State which jumps through the process to ensure that the landowners get their due. In banana republics, we make the asset-owner jump through the hoops to get compensated for her own land. The Supreme Court has to make a choice about which kind of a country it want to make out of India.
