A battle is on in the Supreme Court to save landowners from predatory land-grab practices of the government, in the name of the ‘public good’. Surprisingly, the practice under the British raj was much more just and humane than one finds in today’s regime.
The Supreme Court of India is examining cases on the lapse of land acquisition under the new Act of 2013. The current law suffers from certain flaws due to which the landowners whose land is acquired by the government for state projects may be deprived of the compensation due to them.
This issue is dealt with in Section 24(2) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It states as follows:
24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.– (1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,—
(a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or
(b) where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.
(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:
Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.
During January 2014, in the Pune Municipal Corporation & Anr vs Harakchand Misirimal Solanki case, the bench headed by Justice RM Lodha and comprising Justice Madan B Lokur and Justice Kurian Joseph, held that if compensation is refused by the landowner the acquiring body should deposit the same in Court and once it is deposited in the Court, the acquisition shall not lapse. Merely depositing the compensation back to the treasury account (i.e., government’s own account) does not absolve the responsibility of the acquiring body to the land owner. Various land acquisition proceedings were held to have lapsed under this judgement.
However, in the Indore Development Authority vs Shailendra, a three-judge bench headed by Justice Arun Mishra and comprising Justices Adarsh Kumar Goel and Mohan M Shantanagoudar held this judgement to be per in curium stating that the land owner, after refusing the compensation cannot take advantage of his own wrong.
Pune Municipal Corporation Lays Down the Correct Law
In my view, considering the wide variety of procedural abuse by government acquiring bodies (no proper notice, no copies of award, delay in payment) the process put in place by Justice Lodha is practical and in the true spirit of the law.
It is also consistent with the land acquisition procedure even envisaged by the British in the Land Acquisition Manual by FG Hartnell Anderson. In the Manual, Mr Anderson says:
11. Though it would not be correct to describe the Act as confiscatory, still it undoubtedly causes hardship to individuals because it restricts them to the market value of what is taken from them. Although all the pecuniary losses, even the cost of moving and the loss on earnings resulting from interference with the good-will of business and the like, are taken into account and paid for, there are many sentimental losses which cannot be paid for, because they have no market value. The Act does not commit what is known as reinstatement under which a man losing a property artistically improved at great expense and enjoying advantages of secenery (sic.) etc., might claim to be reinstated in another property, at however great a cost, possessing the same amenities. This is not what the Act offers but only the current prosaic market value. The owner whose land is notified is in the same position as if he were compelled to sell by some sudden reverse of fortune. He cannot stand out for a reinstatement value, but only for what a fair-minded purchaser will offer him in the existing state of the market. It is the legitimate aim of all officers administering land to secure for the public all land required for the use of the State at the least burden to the tax paying public; on the other hand, no one should be deprived of his property even on account of State necessity without giving him at least as much as a prudent private purchaser would pay. Since the Act therefore imposes a burden on those whose land is taken, it must be interpreted like penal statutes strictly in favour of the private party and every irregularity prejudicing him is fatal to proceedings thereunder. It is most incumbent on all A. Os. [Acquiring Officers] in the issue of notices and in giving facilities to parties to be heard, to bear this general principle in mind.
In every case, the utmost consideration, consistent with fairness to both sides, should be shown to the wishes and feelings of people who have to suffer for the public good.
This is but a mere glimpse into the rigour Mr Anderson applied in balancing the need of the State and the right of the landowner. We must not forget that this was a British civil servant developing procedure for acquiring Indian lands for the British Government.
This precise ethos of the law has been lost since Indira Gandhi introduced socialism into the Indian Constitution. After the constitutional amendment, Indian courts’ approach towards the Indian landowner has been lamentable.
The Indore Development Authority judgement created a bigger controversy within legal circles. While it may be summed up as a storm in a tea cup, it upset the judicial procedure in a number of ways. Some commentators point out that a three-judge bench overruling another three-judge bench is not good judicial discipline.
Technically, the Indore judgement side-steps the Pune judgement by claiming it is per in curium—passed overlooking some other law. But proper discipline would have required the Indore judgement to refer it to a larger bench.
However, controversy was further aggravated when two of the judges from the first bench, i.e., Justice Madan Lokur and Justice Kurien Joseph were confronted with the Indore Judgement. These judges sitting in the division bench (two-judge bench) directed the High Court to keep cases under Section 24(2) pending till the matter is settled by a larger bench.
While this was proper, it has resulted in delays of more than two years in disposing such cases.
The Indore Development Authority judgement has allowed officers of the government acquiring bodies to falsely record and allege that the compensation was refused. The Indore judgement has taken a hyper-technical approach to the law itself. In the process, it tries to defeat the spirit of the very law it was trying to protect. I hope the Supreme Court upholds the Pune Municipal Council judgement at the earliest.
(Rahul Prakash Deodhar, Advocate, Bombay High Court, has counselled Fortune 500 companies, public and private sector banks, hedge funds and private equity funds. He has previously worked with Aditya Birla Group, CRISIL and Morgan Stanley. He is the author of two books – Subverting Capitalism and Democracy and Understanding Firms. He can be reached at [email protected], on twitter at @rahuldeodhar or at his website www.rahuldeodhar.com.