See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/327155932

Comparative Analysis of Land Acquisition Acts in India: A Case-Based Approach

Article · August 2018

CITATIONS READS
0 6,297

5 authors, including:

Ramakrishna Nallathiga
National Institute of Construction Management and Research
223 PUBLICATIONS   353 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

An assessment of infrastructure performance of Indian states View project

Public Private Partnerships in Infrastructure View project

All content following this page was uploaded by Ramakrishna Nallathiga on 22 August 2018.

The user has requested enhancement of the downloaded file.

International Journal of Law & Management Studies | Volume III Issue II`

COMPARATIVE ANALYSIS OF LAND ACQUISITION ACTS IN

INDIA: A CASE-BASED APPROACH

Prof. R. Nallathiga1, Prof. A. Abhyankar 2,

A. Gurnani3, A Goyal3, M. Umredkar3

Abstract
Land acquisition is essential for the development of a country in order to provide
employment, social infrastructure, physical infrastructure and other public amenities. In
India, Land Acquisition has been brought out by a set of legislations: (i) the Land
Acquisition Act, 1894, which was imposed during the British rule (ii) the Land
Acquisition, Rehabilitation and Resettlement Bill, 2013 brought out by the United
Progressive Alliance (UPA) Government, which was different in several aspects as
compared to 1894 Act; (iii) the Land Acquisition, Rehabilitation and Resettlement
Ordinance, 2015 brought out by the National Democratic Alliance (NDA) government,
which has changed many clauses of the 2013 Act. This paper makes a comparative
analysis of the Land Acquisition Acts in India through a discussion of the various
provisions and also the case analysis of the effect of differences of the Act provisions
for three different development projects requiring land. The case analysis points to the
need for addressing ground level issues in order to make land acquisition successful.

Keywords: Eminent domain, Land Acquisition, Development Projects, Comparative

Analysis

1
Associate Professor, School of Projects Real estate and Infrastructure Management,. National Institute
of Construction Management and Research, Pune
2
Associate Professor, School of General Management, National Institute of Construction Management
and Research, Pune
3
PGP Students of REUIM, National Institute of Construction Management and Research, Pune

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

1. Introduction

Eminent domain law is the essential power of the State to take hold of citizen’s private
property, take away it, or the seizure of a citizen's rights in property with due monetary
compensation, but without the property owner's consent. It is considered to be one of
the most controversial and politically superficial instruments of exercising State power
which is used in several parts of the world (Bedi and Gangwani 2015). However,
implementing the eminent domain law is not easy task and it is very tough to deal with
ground level issues (Nielson 2011). The execution of eminent domain (or, compulsory
acquisition of land) by the State often results in various social, cultural, economic and
psychological pains for the affected communities i.e. land and property owners. Such
acquisition and the consequent displacement not only leads to loss of economic assets,
habitat and livelihood but also disrupts the communities, social relationships, cultural
identities, local markets for goods as well as labour, consequently placing the ousted in
a “spiral of impoverishment” (Jojan et al 2013). In view of such painful consequences,
a legal rule representing eminent domain needs to restrict its application only to the
cases of ‘compelling public interest’ and further minimise (or, compensate suitably for)
the socio-economic costs of land acquisition and consequent displacement of property
owners. Moreover, it is also necessary that such rule also include provision for a fair
reconstruction of standards of living, community relations and production systems
enjoyed by the affected persons prior to land acquisition so that the community moves
on an ascent path (rather than a descent path) (Cernea 1999).

Depending on how the eminent power is used, it can clear the way for rapid economic
growth, technological progress and infrastructure development; otherwise, it can
infringe upon property rights, the economic interests of poor and vulnerable groups,
and fundamental principles of justice (Gupta 2014). In India, the legal foundation for
eminent domain was established by colonial era law - the Land Acquisition Act 1894,
which continued to prevail and served the purpose until 2000s. The Land Acquisition
Act, 1894 allowed government to acquire private land for public purposes after paying
a government-fixed compensation to cover the losses incurred by landowners from
surrendering their land to concerned public agency. This act was criticized for its tough
nature i.e., the State was authorized to acquire the land even without the willingness of

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

land owners to part with it. Yet it survived over a very long time due the simple
process and also due to undeveloped land markets in an agrarian dominant economy.

In the last few years, the Government of India has understood the need for bringing up
new acts rather than making small changes so that land acquisition can be achieved
while protecting some of the rights of its own citizens. In the process, the Land
Acquisition Act has been modified and brought out in the form of a new legislation
Land Acquisition, Rehabilitation and Resettlement (LAR&R) Bill, 2013; it has been
further been subject to some more changes and to be brought out as Land Acquisition,
Rehabilitation and Resettlement (LAR&R) Ordinance, 2015. The implications of the
changes in land acquisition act are not fully understood by various stakeholders both
legally and operationally. Therefore, this case paper attempts to bring out the major
legislative changes in the form of a comparative analysis of the provisions of these acts
in the next section. The implications of the changes in the provisions are then brought
out in the form of select cases, each of which brings out these changes in a comparative
manner. Finally, the case paper concludes with the implications of the Land acquisition
act changes with reference to the case projects and also spells out the major learnings.

2. Eminent Domain Acts in India: A Comparison

The Land Acquisition Act, 1894 (LAA 1894) is the first eminent domain act that came
into being under the British rule. This act was sought to be replaced by the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013 (RFCT LAR&R 2013)), which was promulgated by the United Progressive
Alliance (UPA) government after extensive consultations and several rounds of
discussion of first legal draft prepared in 2011. The next being the Right to Fair
Compensation for Land Acquisition, Rehabilitation and Resettlement (Amendment)
Bill, 2015 which is now in the parliament seeking some amendments to the RFCT
LAR&R 2013. In the current section of the paper, we will discuss the features of all
these three eminent domain/land acquisition acts of India.

2.1. Land Acquisition Act, 1894

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

Land Acquisition Act 1894 (LAA 1894) is a well drafted and well served piece of
legislation that served land acquisition purpose for more than a century. In general land
acquisition is composed of three macro-processes (Mahalingam and Vyas 2011):
 First, affected parties and their land ownership are to be identified.
 Second, fair processes by which stakeholders are notified of the acquisition and
are given a chance to voice their views followed by the declaration.
 Finally, an acceptable compensation package to be arrived upon and distributed.

On the face of it, the LAA 1894 seems to take all these three issues into consideration
(GoI 1985). The Act contains a definition of “persons interested” in the project which
is intended to be used to determine groups affected by the acquisition of the land,
essentially the owners of property i.e., farm or non-farm land. A detailed land
acquisition process consists of public authorities required to notify land owners prior to
acquiring the land and giving the affected stakeholders with an opportunity to contest
both the acquisition of land (on the grounds, for instance, that a particular parcel of land
is not wholly or in part needed for the project, that due process was not followed, or the
purpose of acquisition is not for public good), and determining the amount of
compensation that is to be paid to them. Here again, LAA 1894 defines several ways
by which compensation can be awarded-including a consideration of the market value
of land, assets present on the land, income derived from the land and a solatium for
compulsory acquisition (GoI 1985), which is based on the commonwealth experience.

However, there are several shortcomings in the practical implementation of the Act
(Raghuram, Bastian and Sundaram 2009):
 First, there is no clear basis as to how affected parties can be determined and the
existing definition is imprecise. Very often, only the minimum subsets of
landowners who are affected are identified. Encroachers, sharecroppers,
landless labourers and so on, who have an interest in the land, are not
compensated. Several people practising agriculture are not legally registered
and are thus not eligible for compensation, leading to widespread unrest.
 Second, the process of acquisition is very time-consuming and can take up to
three years even if implemented without undue resistance. Further, although the

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

broad steps of the land acquisition process are outlined in the Act, an enormous
amount of discretion is vested upon the district collector and deputy collector
(or tehsildar), who effectively adjudicate on several objections related to the
acquisition as well as on the compensation to be provided. This often leads to
decisions and awards that are ad hoc and are not readily accepted by the local
community.
 Finally, no clear formula is given as to how compensation must be calculated.
Government officials often consider the least value derived from all possible
compensation approaches and as a result the final compensation arrived at is
often an order of magnitude lower than that expected by landowners. The real
value of this compensation is further reduced due to the time lag between
determining the compensation and awarding it to project-affected parties.
Project-affected stakeholders then need to seek recourse to the judiciary. The
unfairness of the compensation amount has been demonstrated in several cases,
where, the courts have ruled that the government pay compensation more than
three times the original amount, to affected parties. Nevertheless, the process of
obtaining such an award is extremely lengthy and in the interim, affected groups
are effectively uncompensated and landless.

2.2. Land Acquisition, Rehabilitation and Resettlement Act, 2013

The RFCT LAR&R 2013 had introduced some significant changes to India’s land
acquisition law. The primary among them is the vastly increased compensation for the
land owners, who were also recognised as urban and rural land owners. The law
therefore distinguished the operation of differential forces of land markets operating in
urban and rural setting while determining land value. Therefore, the cash award
required was raised to be at least four times the estimated local market value of land in
rural areas, and at least twice in urban areas. The act also mandates that all affected
parties be paid a Rehabilitation and Resettlement (R&R) package in addition to the
cash compensation for lost assets so that the displacement costs are met by projects.
The scope of ‘Affected parties’ was also expanded to the persons and families whose
primary source of livelihood was the land that is being taken, which therefore includes

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

the intended beneficiaries as tenants of property, sharecroppers and agricultural

workers who were employed on the seized land (Bedi and Gangwani 2015).

The stipulated R&R package for affected community includes a variety of entitlements,
including transportation and resettlement allowances, a monthly stipend for one year,
and a job for one family member which can be exchanged for a lump sum payment.
The compulsory R&R benefits may add up to the cash value of nearly Rs. 6.5 lakhs for
every affected family (Bedi and Gangwani 2015), which were ignored so far. There
are, in addition, conditional benefits to be provided to affected families, such as the
provision of constructed housing (with different built space entitlement for rural and
urban areas) when there is loss of homestead, some land-for-land in the case of
irrigation and urbanisation projects, and a share of capital gains if the land is resold
undeveloped. Even industries buying land on the open market will have to meet R & R
obligations if the procured area is 100 acres or more (50 acres in urban areas).

The RFCT LAR&R Act 2013 requires that a Social Impact Assessment (SIA) be
conducted to identify the affected families and calculate the social impact when land is
acquired. A committee of independent experts examines the SIA and approves the
social impact assessment of the project, an administrative committee reviews if it
serves the public interest and also if the benefits outweigh the costs, and the disputes
are to be referred to a specially constituted body instead of civil courts. Multi-cropped
land is proposed not to be acquired except under special circumstances, and, even under
such, land acquisition must not exceed 5% of the cultivated area in the district.

The RFCT LAR&R Act 2013 required that if land acquired under it remained
unutilised for five years, it would be returned to the original owners or the government
land bank. The Ordinance states that the period after which unutilised land will need to
be returned will be five years, or any period specified at the time of setting up the
project, whichever is later. The RFCT LAR&R Act 2013 also states that the Land
Acquisition Act, 1894 would continue to apply in certain cases where an award was
made under the LAA 1894. However, if such as award was made five years or more
before the enactment of the RFCT LAR&R Act 2013, and the physical possession of

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

land has not been taken or compensation has not been paid, the LAR&R Act 2013
provisions would apply (GoI 2013).

The Ordinance also states that while calculating this time period, any period during
which the proceedings of acquisition were held up: (i) due to a stay order of a court, or
(ii) a period specified in the award of a Tribunal for taking possession, or (iii) any
period where possession has been taken but the compensation is lying deposited in a
court or any account, will not be counted.

2.3. Land Acquisition, Rehabilitation and Resettlement Bill, 2015

The RFCT LAR&R Bill 2015 is still under the process of becoming a law and it seeks
to make some amendments to the earlier act of 2013. It has been passed by the Lok
Sabha but yet discussion of its controversies is going in Rajya Sabha to get passed. It
has same lines as that of RFCT LAR&R 2013 Act but with some major modifications.
The modifications are as below (Chopra 2015).

The RFCT LAR&R Act 2013 exempted 13 laws (such as the National Highways Act,
1956 and the Railways Act, 1989) from its purview. However, the RFCT LAR&R Act
2015 required that the compensation, rehabilitation, and resettlement provisions of
these 13 laws be brought in consonance with the RFCT LAR&R Act 2015, within a
year of its enactment, through a notification. The Ordinance also brings the
compensation, rehabilitation, and resettlement provisions of these 13 laws in
consonance with the RFCT LAR&R Act 2013.

The RFCT LAR&R 2015 Ordinance creates five special categories of land use to be
exempt from the provision of public consent: (i) defence, (ii) rural infrastructure, (iii)
affordable housing, (iv) industrial corridors, and (v) infrastructure projects including
Public Private Partnership (PPP) projects where the central government owns the land.
The RFCT LAR&R Act 2013 requires that the consent of 80% of land owners is
obtained for private projects and that the consent of 70% of land owners be obtained for
PPP projects. The new Ordinance exempts all the five categories mentioned above from

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

this provision of the Act. In addition, the Ordinance permits the government to exempt
projects in these five categories from the following provisions, through a notification:

The RFCT LAR&R Act 2013 excluded the acquisition of land for private hospitals and
private educational institutions from its purview. The new Ordinance removes this
restriction. While the RFCT LAR&R Act 2013 was applicable for the acquisition of
land for private companies, the new Ordinance changes this to acquisition for 'private
entities'. A private entity is defined any entity other than government entity, and could
include a proprietorship, partnership, company, corporation, non-profit organisation, or
other entity under any other law. It therefore expanded the scope of ‘purpose’ from
strictly ‘public agency’ to lenient ‘public-like private body’. The compulsion of the
current government to make such change lies in its drive to propel economic growth
through large scale industrial and urban development. However, taking such legal
short-cuts may only harm the citizenry and may become detrimental in the long term.

Table 1 makes a comparison of the three acts.

Table 1: Comparison of LAA 1894, RFCT LAR&R 2013 and RFCT LAR&R 2015
Parameter LAA 1894 RFCT LAR&R 2013 RFCT LAR&R 2015
Public “Includes several No Change as such Excludes acquisition
Purpose uses such as of land for private
infrastructure, hospitals and private
development and educational
housing projects. institutions.
Also includes use
by companies
under certain
conditions.”
Consent From No such clause “Consent of 80 % of Consent for five
affected applicable displaced people categories of projects
people required in case of is exempted

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

acquisition for private 1. Defence

companies and 70 % for 2. Affordable Housing
public-private 3. Rural Infrastructure
partnerships”. 4. Industrial Corridor
5. Infrastructure
The consent for the
other projects remains
same as that of 2013
Act.
Social Impact No provision “SIA has to be Exemption of SIA for
Assessment undertaken in every above mentioned five
(SIA) acquisition”. categories of Consent
and also limits on
irrigated land.
Compensation Based on the “Two times of market Same as 2013 Act.
market value. value for urban areas &
four times of market
value in rural area”.
Market Value “Based on the “Higher of: (a) value Same as 2013 Act.
current use of land. specified for stamp
Explicitly prohibits duty, and (b) average of
using the intended the top 50% by
use of land while recorded price of sale of
computing market land in the vicinity”.
value.”
Solatium 30% 100% 100%
Rehabilitation No provision “R&R necessary for all R&R award for each
and affected families. affected family
Resettlement Minimum R&R includes mandatory
entitlements to be employment to at least
provided to each one member of such
family. With an affected family of a

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

employment to the farm labourer.

members of the affected
family”.
Food Security No provision Multi-crop land to be No limit on multi-crop
acquired only as a last land to be acquired for
resort. above said five
States to impose limits categories.
on the area of
agricultural/ multi-crop
land that can be
acquired in a State.
If agricultural land is
acquired, the state has
to cultivate an
equivalent area of land
elsewhere.
Source: Based on LAA 1894, LAR&R 2013 and RFCT LAR&R 2015

3. Comparative Analysis of Land acquisition Provisions: A Study of Three Cases

In this section, a comparative analysis of land acquisition and R&R under the three
legislations is carried out with the help of three cases:
 the first being Tata Nano Project in Singur;
 the second being Noida Development; and
 third being Koyambedu Market, Chennai.

While first two cases are examples of failures of land acquisition and the third case is
an example of success. These cases can also help us to understand further reforms in
Land Acquisition Acts. We introduce these three projects first and later we compare
Land Acquisition Acts considering these projects.

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

3.1 Case 1: Tata Nano Project, Singur

This case is based on Divya Gupta (2014). In the second half of 2006, the West Bengal
government acquired 997 acres of prime agricultural land in Singur are of West Bengal
state (Refer figure 1) in order to enable M/s Tata Motors, a leading industry house in
India, to build a factory for manufacturing Nano car, its new model touted as small and
cheap car. In order to do so, the State government used its power of eminent domain
under the aegis of the 1894 Land Acquisition Act. The West Bengal government
subsequently decided to acquire the area required for the car factory and offer
compensation to the farmers and other land owners whose lands were being acquired as
required by the 1894 Act. The local community of Singur was incensed by this action,
and put up resistance led by farmer households against forced acquisition and
displacement.

This resistance soon snowballed into a protest movement, which the main opposition
party, the Trinamool Congress (TMC) subsequently galvanised. The state government
subsequently offered to improve the terms of compensation, including 25%
compensation for tenant farmers engaged in cultivation of acquired plots. No plans
were offered to compensate agricultural workers claiming to have lost employment on
acquired lands. Local outbreaks of violence occurred, and the protests acquired
national and international media attention. Eventually, two years later, after being
frustrated with the protests and non-acquisition, M/s Tata Motors decided to withdraw
from West Bengal, and took the Nano car manufacturing factory to Sanand, Gujarat.

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

Figure 1. Image showing Location of Singur with respect to Kolkata

A household survey in 12 Singur villages, which were acquired for Tata Car Factory,
was conducted by Ghatak et al. (2013). The results of the study show that most of the
land was acquired from marginal landowners, and from those engaged in cultivation on
the acquired plots. For most affected owners, more than half the land they owned in
2005 was acquired. A significant fraction of landowners were under-compensated
owing to misclassification of their plots in the official land records, besides inability of
the latter to incorporate other sources of plot heterogeneity. Acquisition of land
resulted in 40% lower income growth for owners and half that for tenants. Agricultural
workers that were directly affected experienced significant reductions in employment
earnings compared with unaffected agricultural workers, who in turn, experienced
smaller earnings growth compared with non-agricultural workers.

Hence, land acquisition in Singur imposed significant economic hardships on a large

fraction of affected owners, tenants and workers. A large fraction of owners were
under-compensated relative to market values. Tenants were under-compensated and
agricultural workers were not compensated at all. Singur case clearly expressed the
ground level hurdles that need to be overcome for successful land acquisition (Nielson
2011). Table 2 makes comparison of acts with reference to land acquisition in this case.

Table 2. Effect on M/s Tata Nano Project considering various LARR Acts

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

Parameter LAA, 1894 RFCT LAR&R, 2013 RFCT LARR,

2015
Public Purpose No effect of this clause No effect of this No effect of this
would have affected clause would have clause would
affected have affected
Consent of As there was no This would have It would have the
affected purpose provision of consent, it increased the time for same effect as
reduced the time for acquisition but later that of 2013 Act
acquisition but this was people wouldn’t have
the main cause of Tata complained about
Nano Plant’s Failure. forceful acquisition of
their land
Social Impact Since there was no This would have It would have
Assessment provision of this clause, certainly helped been same as
(SIA) it was also the reason of Tata’s project, as all 2013 act.
failure of Tata Nano the parameters would
Plant. As people who have already looked
were affected later on upon to avoid any
rose up together in a problem at later stage
group along with the
Political support.
Compensation Market prices of the The compensation in It would have
lands were determined this act is much higher been same in
by land records of which would increase case of 2013
already sold lands. But the cost of the project, Act.
the records were but certainly it would
misclassified in order to lead to satisfaction of
save Stamp Duty. Due owners of acquired
to this many farmers land. And it would
were under lead to the success of
compensated, which the project.
was also the reason of

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

failure this project.

Market Value The market values were The market price in Same as 2013
misclassified, this lead this case would be Act.
to under compensation higher which increase
of many farmers which the cost of the project
lead to dissatisfaction but certainly it would
among these farmers beneficial during the
and then they rose up operation stage of the
together, which caused project
the project to go in vain
Solatium This was low only 30% 100% solatium will Same as 2013
of the market value. As certainly cost more for Act.
already stated market the project during the
value was misclassified, acquisition stage. But
the farmers didn’t get the chances of project
proper solatium which getting successful will
in turn affected the be much higher.
project’s success.
R&R The affected families Providing Job security Same as 2013
were not provided with to the members of Act
job security and the affected family and
shelter of their shelter for their
livelihood which livelihood would
created a more hurdles increase project cost
in the project which and also some portion
lead to failure of of employment would
project. be unqualified for the
project thereby
creating project
hurdle.
Food security Many lands where Only 5% of multi Same as 2013
multi crops were cropped land can be Act as the

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

cultivated were acquired under this act project doesn’t

acquired; this reduced which would help to fall under the 5
the production of many ensure the Food exempted
crops which affected security for all the categories.
the supply of these people across the stat
crops across the state. and help to ensure the
Thus food security to lower cost of
the people was reduced. acquisition.
Moreover the cost of
multi cropped land was
more so it increased
acquisition cost.

3.2 Case 2: NOIDA Development

This case is based on the publication of Patil (2012). Over the past ten years, the
National Capital Region (NCR) has been rapidly developing; New Delhi and its
vicinities in the NCR particularly witnessed high growth. New Okhla Industrial
Development Authority (NOIDA), which is located on the eastern side of Yamuna
River, has also been experiencing rapid development as a commuter town of the
capital, as can be seen by many industrial complexes being built one after another.
Figure 2 shows location of Noida.

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

Figure 2. Location of Noida with respect Delhi

NOIDA Development Authority prepared a plan for Greater Noida (Development Plan)
covering a total area of 21570 hectares. The land use of village Shahberi has been
shown in the Development Plan as “Industrial” was acquired for the purpose of
industrial development by Greater Noida Industrial Development Authority (GNIDA).
This area has been described, as Phase I of Greater Noida. The Land use specified in
the Development Plan is shown in Table 3.

Table 3. Land area for different uses in Noida

Land Use Land Area Percentage of land
Residential 5000 23.2
Industrial 4227.3 19.6
Commercial 1200 5.6
Institutional 3502.7 16.2
Green areas 5000 23.2
Transportation 2600 12.1
SEZ 40 0.2

These farmers, who were unilaterally evicted from their land without being given an
opportunity to file objections, waged a campaign against the acquisition, and of course
celebrated the judgment. However, about 6,500 people, who had booked flats to be
built in the district, were disappointed by the loss of their long-awaited dreams. Further,
residents of other villages in Greater Noida (Noida Extension), where land acquisitions
were conducted concurrently with Shahberi Village, also filed similar suits. This
situation has raised developers’ and builders’ fears of bankruptcy and of failure to
reimburse deposits to those who booked flats and houses in this area. While reports
heat up on how financial institutions, who provide companies with funds for
construction and buyers with housing mortgages, will address this issue, there are
concerns over what judgment the High Court and the Supreme Court will deliver next.

The Supreme Court set aside land acquisition (156.3 hectares) carried out in 2009 at
Shahberi Village Uttar Pradesh State (UP), Greater Noida, Gautam Budh Nagar District

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

by the UP government and Greater Noida Industrial Development Authority (GNIDA),

which is an UP government body. Based on this judgment, land was returned to the
original owners (most of them are farmers). This situation occurred because the land
acquisitions were originally carried out by the UP State government headed by Bahujan
Samaj Party (BSP) as a part of the Greater Noida’s Industrial Development Plan,
pursuant to the emergency clause (Article 17) stipulated in the LAA 1894, whereby
procedures for residents’ objections (Article 5A) were dispensed with. The grounds for
the judgment of the Supreme Court were: (1) such urgency was not likely to be present,
and (2) GNIDA changed the purpose of land use from industrial use to residential use
without the prior approval of the State government. Table 4 shows comparison of land
acquisition acts with reference to land acquisition in Noida.

Table 4. Effect on Noida land acquisition considering various LARR Acts

Parameter LAA, 1894 RFCT LAR&R, RFCT
2013 LAR&R, 2015
Public Purpose This clause was violated Same as 1894 Same as 1894
by GNIDA because they Act. Act but if land
acquired land for industrial developers fall
purpose and then gave it to under any
land developers. So, this public entity
was the first stage where they may sail
Nodia’s land acquisition through.
starting crumbling
Consent of As there was no provision This would have It would have
affected purpose of consent, it reduced the certainly reduced the same effect
time for acquisition but the risk of as that of 2013
people who were affected acquisition. If the Act unless it
were not considered consent by the was brought
during the acquisition, people was under the
who rose up at later stage supportive in exempt
to fight for their right as nature then it purposes of
the land was mis-used as would have led to new bill.

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

per the LAA,1894. the success of the

project.
Social Impact Since there was no such This clause would It would have
Assessment (SIA) provision for Assessing have certainly been same as
the social impact, the restricted the 2013 act unless
authority who handed over authority to hand it was brought
the land to the developers over the land to under the
became were linen, developers nand exempt
without considering the prevented from purposes of
society as a whole. any such new bill.
scandalous land
acquisition.

3.3 Case 3: Koyambedu Market, Chennai

This case is based on the documentation retrieved from the CMDA (2009). The
Koyambedu Wholesale Market Complex has been established by Chennai Metropolitan
Development Authority (CMDA) with an objective of decongesting the central
business district. The market is located out of the congested areas of Chennai. But at
the same time, it is easily accessible to the city’s residents. As highlighted the market
complex is located adjacent to Chennai Mofussil Bus Terminus (CMBT) and it is
connected to both the Central and Egmore railway stations and Chennai International
Airport through highways. The market complex development has been planned in
three phases over an area of around 295 acres. In the first phase, the wholesale market
for perishables has been developed over an area of around 60 acres.

Koyambedu Wholesale Market Complex has around 3154 shops where vegetable, fruit
and flower is sold and is one of the largest markets in Asia (Figure 3 shows the
location). The market has four discrete blocks; two for vegetable and one each for fruit
and flower market. Approximately one lakh people visit the market complex daily for
trading purpose, subsequently more vehicles also enter the market, which increases
significantly during peak festival seasons. The developed market complex has good
infrastructure facilities including well designed shops in various sizes; truck bays, wide

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

heavy duty roads for easy movements of goods. The market is provided with adequate
power and water supply, proper sanitation facilities, drainage and sewerage facilities.

Figure 3. Location of Koyambedu Market with respect to Chennai

The general guidelines for land acquisition within the LAA 1894 were followed and
CMDA went beyond them, and the process was completed in 28 months. Cash
compensation was provided to land losers on the basis of the market value of the land,
standing crops, a solatium of 30% and interest charges of 12% for the period between
notification and acquisition. Furthermore, the affected families were rehabilitated and
resettled in new location. About 424 sale deeds were considered and all but two were
rejected on the grounds of being artificially priced. Even out of these deeds, the lowest
was picked to form the basis of compensation, leading to some dissatisfaction amongst
the affected parties. However, since project authorities had built houses in nearby
locations, allowed encroachers to resettle and provided employment opportunities in
the project, protests and resistance were minimal. Table 5 shows comparison of land
acquisition acts with reference to land acquisition in Koyambedu.

Table 5. Effect on Koyambedu Market project considering various LARR Acts

Parameter LAA, 1894 LARR, 2013 RFCT LARR,
2015
Public No effect of this clause No effect of this No effect of this

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

Purpose would have affected. clause would have clause would

affected. have affected.
Compensati Cash compensation along It would have It would have
on with the interest was paid to increased the cost for been same in
the affected people, but it acquisition, as the case of 2013 act
cost less as compared to compensation is
2013 and 2015 acts because twice the market
the compensation is equal to value for urban
the market value. areas.
Market The market price was There is a Same as 2013
Value calculated by checking probability that the act
recent sale deeds in that cost of acquisition
area, though the clause says would be high, as the
to calculate the market price clause states the
of land by considering market price is to be
current land use. This was calculated as higher
the main reason for the of
acquisition to be successful. 1. Value in Stamp
Duty papers or
2. Average of top
50% of sale deed
value in that area.
Solatium A solatium of 30% was This would have Same as 2013
given to the affected increased the cost of Act
families. It cost less as acquisition, as
compared to 2013 and 2015 solatium is 100%
Acts
R&R Even though there was no The R&R costs were Same as 2013
provision of this clause, the borne but not in line Act.
authority had built houses with the new Act.
for the affected people and The costs would
gave them employment in have remained same

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

the project. This turned out or more as that of

to be major dimension for 1894 Act.
the success of the project.

4. Conclusion

The above cases can be now summarised for comparison of the application of various
Land acquisition acts and show some broad directions.

Tata Nano project’s land acquisition case clearly indicates the reason of its failure.
This failure was due to improper market rate consideration of lands which led to less
compensation paid to farmers. The other reason being, no consent was obtained from
the farmers whose land was acquired, they got angry due to this and protested against
the government. As this case falls under LAA, 1894 there was no R&R for the affected
people. Moreover, the food security issue was not given any consideration during the
acquisitions which lead to reduced supply of various food grains. A lot of lessons were
learned by the government from this case, which helped them to formulate LAR&R,
2013. If this case would have fallen under LAR&R, 2013 or LAR&R, 2015 it would
have cost more to Tata group, but would have certainly led to its success. Also, it was a
lost opportunity as the employment in West Bengal would have increased to a great
extent considering various ancillary industries associated to Tata Nano Project.

NOIDA development case clearly shows that how the State government and its
agencies misuse the LAA 1894, which led to resistance from farmers. Flat purchasers,
developers and the financial institutions that have financed the residential projects also
suffered in the process as greedy investors. The main cause of failure of this project is
“public purpose” clause was violated and urgency clause was wrongly used for
acquiring land. If this case would have fallen under LA&RR, 2013 and LA&RR, 2015
it would have the same effect as that of LAA 1894. But in the case of 2013 and 2015
acts, as the public consent and SIA are made necessary, the authority appointed for the
same would certainly have helped for the success of the project in its original design of

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

industrial development. It was one of the lessons for various State governments, which
look upon short-term gains from misusing the law and statutory procedures.

It is very clear from the Koyambedu Market case that even though there were no
provisions for R&R as it falls under Land Acquisition Act, 1894, the authorities
provided R&R which increased the cost of acquisition but reduced the hurdles during
the acquisition stage. One more peculiar thing that can be noticed from this case is
though this case falls under LAA, 1894 but it replicated that as if it has come under
LAR&R Act, 2013 in some aspects. This is one of the case from which various lesson
can be learned. It also proves that if any project which falls under LAR&R, 2013 or
LAR&R, 2015, its probability of success in terms of Land Acquisition is high. The
authorities played a witty role in acquisition which helped them get through acquisition
successfully. However, the new Acts would have increased the costs of project to some
extent under new provisions.

The important conclusion about the Land Acquisition Acts in India and its
transformation is that the Government was on learning curve by including stakeholders,
increasing compensation and making R&R mandatory. But this learning is getting
reduced with very painful escape routes sought in new bill of 2015. The transformation
from 1894 to 2013 to 2015 is turning out to improve the success of large development
projects. It is already understood that land acquisition becomes an impediment if it is
not handled carefully and properly thereby affecting project success (Nallathiga 2009).
Although changes to eminent domain act are needed as per the need of the hour, they
need to strike a balance between ‘gainers’ and ‘losers’; also, what is more important is
that the implementation of the Acts at ground level from the spirit with which they have
been prepared. More and more amendments will make the bill to land nowhere due to
political oppositions and this political conflict may also affect the project success.

(Featured Article)

Published by Agradoot Web Technologies LLP

International Journal of Law & Management Studies | Volume III Issue II`

References

Bedi, P. and Gangwani, S. (2015), Legislative Brief - The Land Acquisition, Rehabilitation and
Resettlement Bill, 2011, PRS Legislative Research Institute for Policy Research
Studies, (Accessed at
http://www.prsindia.org/uploads/media/Land%20and%20R%20and%20R/LARR%20-
%20Final%20Brief.pdf
Cernea, M (1999), Why economic analysis is essential to resettlement – A sociologist’s view,
Economic and Political Weekly of India, XXXIV(31) (pp 2149-2158)
Chopra, Kanchar (2015), Land Acquisition for whom, by whom and why, CFO Connect, July
2015 (pp 36-38)
CMDA (2009), A report by Market Management Committee on Koyembedu market. Article
retrieved from Web page < http://www.cmdachennai.gov.in/pdfs/mmc.pdf >
Ghatak, M., S. Mitra, D. Mookherjee and A. Nath (2013), Land Acquisition and Compensation:
What really happened in Singur?, Economic and Political Weekly of India, XLVIII
(21): 32-44
Ghose, J., 2015, Bill Summary: The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015, PRS Legislative
Research Institute for Policy Research Studies Web page
http://www.prsindia.org/uploads/media/Land%20and%20R%20and%20R/Bill%20Sum
mary%20-%20LARR%20Bill%202015.pdf
GoI (1985), The Land Acquisition Act 1894, Indian Gazette, Government of India (GoI), New
Delhi, (http://dolr.nic.in)
GoI (2011), The Land Acquisition and Rehabilitation and Resettlement Act 2011, Ministry of
Rural Development, Government of India (GoI), New Delhi, (http://dolr.nic.in)
GoI (2015), The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement (Amendment) Bill, 2015, Bill No. 20-C of 2015 Web
page
<http://www.prsindia.org/uploads/media/Land%20and%20R%20and%20R/LARR,%2
02015%20as%20passed%20by%20LS.pdf>
Gupta, Divya (2014), Law and Economics: Analysis of Land Acquisition Issues in India-Case
Study of Singur, Online International Interdisciplinary Research Journal, {Bi-
Monthly}, Volume-IV, Issue-II, Mar-Apr 2014 (ISSN: 2249-9598)
Jojan, A., A. Chaturvedi, A. Talpade, M. Bose, S. James and S. Bhattacharjee (2013), “Of
platitudes and million-dollar promises-A Critique of the land acquisition, rehabilitation
and resettlement bill 2011”, Journal of Indian Law And Society, Vol. 3 (Winter), 2013

(Featured Article)

Published by Agradoot Web Technologies LLP

View publication stats

International Journal of Law & Management Studies | Volume III Issue II`

Mahalingam, A. and A Vyas (2011); “Comparative Evaluation of Land Acquisition and

Compensation Processes across the World”, Economic & Political Weekly, Vol XLVI,
No. 32, August 6, 2011
Nallathiga, R. (2009), Success or Failure of Large Infrastructure Projects: Is Compensation of
Displacement an Issue?, Projects and Profits, August 2009.
Nielsen K. B. (2011), Land, Law and Resistance, Economic and Political Weekly of India,
XLVI (41): 38-40.
Patil, Y. D. (2012). Land Acquisition & Human Right Approach: A Case study, SSRN e-
Journal Web page <http://ssrn.com/abstract=2001917>
Raghuram, G. S. Bastian and S. S. Sundaram (2009), “Mega Projects in India: Environmental
and Land acquisition Issues in Road Sector”, Working Paper, IIM Ahmedabad, 2009

(Featured Article)

Published by Agradoot Web Technologies LLP