Acquisition of land by the company

Introduction:
Land acquisition is the process by which a company acquires land from private
landowners. This process is governed by the Land Acquisition Act, 1894, which
sets out the procedures that companies must follow in order to acquire land.In
order to acquire land, a company must first apply to the government for
permission. The government will then conduct a preliminary investigation to
determine whether the land is indeed required for the purpose stated by the
company. If the government is satisfied, it will issue a notification declaring that
the land is required for public purpose or for a company.
Relevant provision:
Section 38 to 43 of the land acquisition act, 1894
Definition of company under company act, 2017
Section 2 (17):
Company means a company formed under this Act, or by company law.
Company may be authorized to enter and survey.
Under section 38:
 Commissioner to authorize an officer of a company to acquire land for the
company's purposes.
 The Commissioner has the power to grant this authorization under sub-
section (2) of section 4 of the Act.
 In such cases, section 4 of the Act is to be interpreted as if the words "for
such purpose" were replaced with "for the purposes of the Company".
 Additionally, sub-section (3) of section 4 is to be interpreted as if the words
"of the Company" were inserted after the words "the officer".
Explanation:
This provision essentially allows companies to acquire land for their specific
purposes, with the authorization of the Commissioner and the interpretation of
the Act.
This provision only applies to companies and their officers, and not to individuals
or other entities seeking to acquire land.
Previous consent of the commissioner and execution of agreement is necessary:
Under section 39:
The provisions of sections 6 to 37 of the Land Acquisition Act, 1894, which
deal with the acquisition of land, cannot be enforced for acquiring land for
any company without the prior consent of the Commissioner.
 The Commissioner is a government official responsible for overseeing the
acquisition of land and ensuring that it is done in accordance with the law.
 The company seeking to acquire land must also execute an agreement.
This agreement likely outlines the terms and conditions of the land acquisition,
including the compensation to be paid to the landowners and any other relevant
details.
Explanation:
 The requirement for obtaining the Commissioner's consent and executing
an agreement is likely in place to ensure that the land acquisition is done
fairly and transparently, without any undue influence or coercion.
 This requirement may also help to prevent any disputes or legal challenges
that may arise from the land acquisition process.
Previous enquiry:
Under section 40:
Such consent shall not be given unless the commissioner is satisfied either on the
report of the collector under section 5-A, sub-section (2) or by an enquiry held as
provided by this Act:
 (a) That the purpose of acquisition is to obtain land for the erection of dwelling
houses for workmen employed by the company or for the provision of
amenities directly connected therewith or,
(aa) that such acquisition is needed for the construction of some building or
work for a company which is engaged or is taking steps for engaging itself in
any industry or work which is for a public purpose, or
(b) That such acquisition is needed for the construction of some work, and that
such work is likely to prove useful to the public, or
(c) That the area proposed to be acquired is reasonable for the purpose.
(2) such enquiry shall be held by such officer and at such time and place as the
commissioner shall appoint.
(3) such officer may summon and enforce the attendance of witnesses and
compel the production of documents by the same means and, as far as possible,
in the same manner as is provided by the code of civil procedure in the case of a
civil court.
Agreement with provincial government:
 if the Commissioner is satisfied that the purpose of the proposed land
acquisition is to obtain land for one of the purposes referred to in clause (a)
or clause (aa) or clause (b) of sub-section (1) of section 40.
 The Commissioner must consider the report, if any, of the Collector under
section 5-A, sub-section (2), or the report of the officer making an inquiry
under section 40 to determine if the proposed acquisition is for one of the
specified purposes.
 If the Commissioner is satisfied that the proposed acquisition is for one of
the specified purposes, they must require the Company to enter into an
agreement with the Provincial Government.
 The agreement must provide for
(1) the payment of the cost of the acquisition to the Commissioner,
(2) the transfer of the land to the Company upon payment,
(3) the terms on which the land shall be held by the Company.
 (4) If the acquisition is for the purpose of erecting dwelling houses or
providing amenities, the agreement must also specify the time within
which, the conditions on which, and the manner in which the
dwelling houses or amenities shall be erected or provided.
(5) If the acquisition is for a purpose falling under clause (b) of sub-
section (1) of section 40, the agreement must specify the time within
which and the conditions on which the work shall be constructed and
maintained.
Publication of agreement:
Under section 42:
Every such agreement shall, as soon as may be after its execution, be published in
the official gazette and the acquisition shall be deemed to have been made
subject to the terms of such agreement.
Restrictions on transfer
Under section 43A:
According to this provision, any company for which land is acquired under this act
cannot transfer the land or any part of it by sale, mortgage, gift, lease, or any
other means without the prior approval of the provincial government.
Explanation:

 This restriction is put in place to ensure that the land acquired for a specific purpose is not misused or
transferred for other purposes without the government's knowledge and approval.

 The provincial government has the power to grant or deny permission for the transfer of land, depending
on the circumstances and the purpose of the transfer.

Overall, the restriction on transfer is an important safeguard to ensure that land acquired for public purposes is
used in the best interests of the community and not for private gain.

Engro corporation Ltd vs state of Punjab (2005)

The case arose from a challenge to the acquisition of land by the Government of Punjab for a private company,
Engro Corporation Limited. The landowners argued that the acquisition was not for a public purpose and that they
were not being adequately compensated.

The Supreme Court held that the acquisition was valid because the Land Acquisition Act, 1894, applies to all
acquisitions of land, regardless of whether the land is being acquired for a public purpose or for a private purpose.
The Court also held that the landowners were being adequately compensated, as the compensation was based on
the market value of the land.