LAND LAWS

RETROSPECTIVE CLAUSE UNDER RTFCTLARR ACT 2013,

ITS APPLICABILITY AND DISADVANTAGES OF 1894 ACT

Submitted By-

Anany Upadhyay

Roll No- 11 ( 16BLW126 )

IXth Semester

5th Year Self-Finance

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 ACKOWLEDGEMENT

Exchange of ideas generates new objects to work in a better way. Whenever a person is helped
and co-operated by others, his heart is bound to pay gratitude and obligation to them.

I would like to thank my Land Laws teacher, Prof. Kahkashan Danyal and my parents for
providing me with invaluable support and guidance which led to the completion and conception
of this project.

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 TABLE OF CONTENTS

INTRODUCTION .......................................................................................................................... 4

HISTORICAL BACKGROUND AND JUDICIAL LINEAGE ON LAND ACQUISITION ....... 6

RETROSPECTIVE APPLICATION UNDER 2013 ACT ............................................................. 9

5 YEAR TERM TO GRANT AWARD .................................................................................... 11

DISADVANTAGES OF 1894 ACT ............................................................................................. 13

CONCLUSION ............................................................................................................................. 15

BIBLIOGRAPHY ......................................................................................................................... 16

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 I. INTRODUCTION

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act (RFCTLARR Act), 2013 has created a distinctive rubric aimed at establishing
a fair, participatory and transparent land acquisition regime in India. The redefining of land
market for industrial and infrastructural activities, pursuant to the Act, has generated differing
viewpoints and responses among various stakeholders - landowners, state government, central
agencies, industry and judiciary. Even as existing institutional arrangements align with the new
legislation, organizational structures are emerging in accordance with the processes and
procedures stipulated in the RFCTLARR Act, 2013, The RFCTLARR (SIA and Consent), Rules
2014 and The RFCTLARR (Compensation, Rehabilitation and Resettlement and Development
Plan), Rules 2015.

The enactment of Rules by several state governments under Section 112 read with Section 109 of
The RFCTLARR Act, 2013 has smoothened the execution process but capacity-deficit of
stakeholders remain an area of concern. The judicial scrutiny of the legislative action of state
governments and interpretations of certain critical provisions of the law are likely to significantly
impact the course of acquisition of land for public purposes. A compilation of best practices
through experience-sharing of social impact assessment studies, public hearing and consent
seeking, computation of cash compensation and designing of rehabilitation and resettlement
award can be a useful guide to policy formulators and practitioners.

The old Act was replaced and substituted by the new law, i.e. The Right to Fair Compensation
and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ("the 2013
Act") which governs Land Acquisition throughout the country. Clause 18 of the objects of the
2013 Act provides that:

"The benefits under the new law would be available in all the cases of land acquisition under the
Land Acquisition Act, 1894 where award has not been made or possession of land has not been
taken".

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Thus, the object of the Act seems to be clear that it is to benefit the land owners who are
suffering because of the delay on part of the government in providing compensation to the land
owners.1

There were multiple areas of uncertainties at the time the New Act of 2013 got presidential
accent. One of the areas of the uncertainties is the operation of Section 24(2) of the New Act of
2013. The said provision states that fresh proceedings for land acquisition shall have to be
carried out under New Act of 2013 succeeding the proceedings under the LA Act 1894, in case
no physical possession of land has been taken or if compensation has not been paid five years
after an award has been made under Section 11 of the LA Act 1894. Effectively, this provision
makes the applicability of the New Act retrospective in that respect

1
https://www.mondaq.com/india/real-estate/576510/retrospective-applicability-of-larr-act-
2013#:~:text=11%20of%201894%20Act%20has,the%20old%20Act%20after%2001.01.

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 II. HISTORICAL BACKGROUND AND JUDICIAL LINEAGE ON
LAND ACQUISITION

Land is a critical resource - physical, commercial and financial in any country’s industrial
and infrastructure development. It is also a major social and economic asset for any
individual, especially in a country like India where a large part of the population depends on
it’s as their primary source of livelihood. Possession of land is a mark of respect. If anyone,
possess more land, then the common people respect him as a prosperous man. In India, land
means much more than in any other country. Elsewhere the land is the means of economic
production but in India land also means social prestige, social power and right, command
obedience of the landless, along with the economic production.

The State takes the land with the help of doctrine of Eminent Domain2 . This doctrine says
land belongs to the Sovereign i.e. State. The sovereign power of every state has authority to
appropriate for the purpose of public utility lands situated within the limits of its jurisdiction.
The principle underlying acquisition by state of private party rests upon the famous maxim
salus populi est supreme lex that is the welfare of the people or of the public, is the
paramount law, and also on the maxim necessitas publica major est quam privita which
means public necessity is greater than private. The State has to indemnify and equivalent for
the injury sustained by the individual. This is based on the maxim audi alteram partem that is
every subject has a right to be heard before he is deprived of his right to property by the
State.

The Land Acquisition Act 1894 was the general law relating to acquisition of land for public
purposes and also for companies and for determining the amount of compensation to be made
on account of such acquisition. The provisions of the said Act had been found to be
inadequate in addressing certain issues related to the exercise of the statutory powers of the

2
Hugo Grotius, credited to give the phrase “eminent domain,” wrote “The property of subjects is under the eminent
domain of the State, so that the State or who acts for it may use and even alienate and destroy such property, not
only in the case of extreme necessity, in which even private persons have a right over the property of others, but for
the ends of public utility, to which ends those who founded civil society must be supposed to have intended that
private ends should give way. But it is added to that that when this is done the State is bound to make good the loss
to those who lose their property.

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 State for involuntary acquisition of private land and property. The Act did not address the
issues of rehabilitation and resettlement to the affected persons and their families.3

In Kishore Gupta v. State of U. P.4, the Supreme Court has held that for big projects like
construction of express highway bring all round development of area and benefit to citizens
of entire State. Private interest was bound to be affected to some extent by such projects. The
Court held that Courts should, take holistic view in deciding legality of acquisition.

In Chameli Singh v. State of U.P.5 the Supreme Court has held in every acquisition by its
very compulsory nature for public purpose, the owner may be deprived of the land, the
means of his livelihood. The State exercises its power of eminent domain for public purpose
and acquires the land. So long as the exercise of the power is for public purpose, the
individual's right of an owner must yield place to the larger public purpose.

In Haryana State Handloom & Handicrafts Corpn. Ltd. v. Jain School Society6, where
challenge to acquisition of land was made after delay of 22 years. Such delay was sought to
be justified by land-owners by stating that some other party had challenged acquisition and
got stay order from Court. The court Held that as said litigation had nothing to do with those
land-owners or with acquisition of their land, hence mere fact that State had sought to justify,
non-use of land for purpose for which it was required, on ground of that litigation could not
afford land-owners an excuse to justify delay, and laches on their part.

The Supreme Court of India in the case Ramji Veerji Patel & Ors. v. Revenue Divisional
Officer& Ors7., in relation to Land Acquisition Act, 1894 ("old Act") observed:

"The provisions contained in the Act, of late, have been felt by all concerned; do not
adequately protect the interest of the land owners/persons interested in the land. The Act

3
Acharya N.K. Commentary on The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act. 2013, at p. 12.
4
AIR 2010 SC 3654.
5
AIR 1996 SC 1051 at 1057.
6
AIR 2004 SC 850 : (2003) 9 Scale 39 : (2003) 7 Supreme 499 : (2003) 6 SLT 572 : (2004) 3 SRJ 354.
7
(2011) 10 SCC 643.

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 does not provide for rehabilitation of persons displaced from their land although by such
compulsory acquisition, their livelihood gets affected. For years, the acquired land remains
unused and unutilized. To say the least, the Act has become outdated and needs to be
replaced at the earliest by fair, reasonable and rational enactment in tune with the
constitutional provisions, particularly, Article 300A of the Constitution".

The definition of the expression “public purpose” as given in the Act is very wide. It has,
therefore, become necessary to re-define it so as to restrict its scope for acquisition of land
for strategic purposes vital to the State, and for infrastructure projects where the benefits
accrue to the general public. The provisions of the Act are also used for acquiring private
lands for companies. This frequently raises a question mark on the desirability of such State
intervention when land could be arranged by the company through private negotiations on a
“willing seller-willing buyer” basis, which could be seen to be a more fair arrangement from
the point of view of the land owner. In order to streamline the provisions of the Act causing
less hardships to the owners of the land and other persons dependent upon such land, it was
proposed to repeal the Land Acquisition Act, 1894 and to replace it with adequate provisions
for rehabilitation and resettlement for the affected persons and their families.8

There had been multiple amendments to the Land Acquisition Act, 1894 not only by the
Central Government but by the State Governments as well. Further, there had been
heightened public concern on land acquisition, especially multi-cropped irrigated land and
there is no central law to adequately deal with the issues of rehabilitation and resettlement of
displaced persons. As land acquisition and rehabilitation and resettlement need to be seen as
two sides of the same coin, a single integrated law to deal with the issues of land acquisition
and rehabilitation and resettlement became necessary and hence as a result 2013 act was
enacted.9

8
Supra Note 3.
9
http://hdl.handle.net/10603/246512

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 III. RETROSPECTIVE APPLICATION UNDER 2013 ACT

Section 24 of the Act make following provisions with regard to the applicability of the
provisions of the RFCTLARR Act to land acquisition proceedings initiated under the 1894
Act10
a) Where no award u/s 11 of the 1894 Act has been made – All provisions of the Act
relating to the determination of compensation, rehabilitation & resettlement (R&R) shall
apply to land acquisition proceedings initiated under the 1894 Act.

b) Where an award has been made under the 1894 Act (within i.e. less than 5 years
prior to commencement of 1894 Act) - RFCTLARR Act provisions will not apply in this
case. Proceedings under the 1894 Act shall continue as if the said Act has not been repealed.

c) Where an award u/s 11 of the 1894 Act has been made 5 years or more prior to the
commencement of the Act but the physical possession of the land not taken or
compensation not paid - Land acquisition proceedings initiated under the 1894 Act shall be
deemed to have lapsed. However, if compensation in respect of a majority of land holdings
has not been deposited in the accounts of the beneficiaries - Then, all beneficiaries specified
in the notification for acquisition u/s 4 of the 1894 Act shall be entitled to compensation in
accordance with the provisions of this Act.

Hence, the benefit under the provisions of the 2013 Act as per the above-stated statutory
provision is being given in the cases wherein the award has been made under the provisions
of the old Act five years (5) or more prior to the commencement of the 2013 Act (i.e. on or
before 01.01.2009) but the compensation has not been paid or the physical possession of the
property has not been taken.

10
Section 24 of RFCTLARR Act, 1894: Land acquisition process under Act No. I 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.

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 In the case Delhi Development Authority v. Sukhbir Singh & Ors11, the Hon'ble Supreme
Court has granted the benefit of sec. 24(2) of the 2013 Act to the land owners, as the award
under section 11 of the Land Acquisition Act, 1894 was passed in the year 1997, i.e., prior to
01.01.2009. In the above mentioned case the court held that

“Section 24(1) begins with a non-obstante Clause and covers situations where either no
award has been made under the Land Acquisition Act, in which case the more beneficial
provisions of the 2013 Act relating to determination of compensation shall apply, or where
an award has been made. Under Section 11, land acquisition proceedings shall continue
under the provisions of the Land Acquisition Act as if the said Act had not been repealed.”

The Hon'ble Supreme Court, while deciding above mentioned case, has found that it is
squarely covered by the ratio of another Supreme Court judgement, i.e Pune Municipal
Corporation v. H.M. Solanki & others12. In Pune Municipal Corporation case, the date of
award passed under section 11 of the Land Acquisiton Act, 1894 was 31.01.2008, i.e. prior to
01.01.2009
Conditions for availing the benefit of section 24(2) of the 2013 was noted in the case of Delhi
Development Authority13:
1. Land Acquisition should have been initiated under Land Acquisition Act, 1894;
2. Award under Section 11 should have been made 5 years or more prior to the
commencement of the 2013 Act, i.e. award should have been made on or before
01.01.2009;
3. Physical possession has not been taken or the compensation has not been paid.

However, the issue which remains contentious is the interpretation of 5 year period, i.e.
whether the above stated provision will benefit the land losers, whose lands have been
acquired after 01.01.2009. Till date there is no precedent of any court which provides clarity
over this issue.

11
(2016) 16 SCC 258.
12
( 2014 ) 3 SCC 183.
13
Supra Note 11.

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The judgement in Pune Municipal Corporation v. H.M. Solanki & others14 was overruled in the
most recent judgment of Supreme Court in Indore Development Authority v Manoharlal And
Ors15, wherein a Constitution Bench, led by Justice Arun Mishra, has overruled an earlier co-
ordinate Bench ruling in the Pune Municipal Corporation case of 2014 under the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of
2013. The provision said that in such cases, if the physical possession has not been taken “or” the
compensation is not paid, the acquisition proceeding is “deemed to have lapsed”. The
government, if it so wishes, would have to initiate “fresh acquisition proceedings” under the new
Act of 2013, which provides for “fair compensation”.

“We are of the considered opinion that Section 24 cannot be used to revive dead and stale claims
and concluded cases. They cannot be inquired into within the purview of Section 24 of the Act of
2013. The provisions of Section 24 do not invalidate the judgments and orders of the Court,
where rights and claims have been lost and negatived. There is no revival of the barred claims
by operation of law. Thus, stale and dead claims cannot be permitted to be canvassed on the
pretext of enactment of Section 24. In exceptional cases, when in fact, the payment has not been
made, but possession has been taken, the remedy lies elsewhere if the case is not covered by the
proviso. It is the Court to consider it independently not under section 24(2) of the Act of 2013.”16

Resultantly, the decision rendered in Pune Municipal Corporation & Anr. (supra) was hereby
overruled and all other decisions in which Pune Municipal Corporation (supra) has been
followed, were also overruled.

Further, the Bench held that Section 24(2) of the Act of 2013 does not give rise to a new cause of
action to question the legality of concluded proceedings of land acquisition.

5 YEAR TERM TO GRANT AWARD

The Government of India on the basis of the Solicitor General's opinion came out with a circular
which clarified the position with respect to interpretation of section 24(2) of the Act. The said
circular states that a landowner becomes eligible to the benefit available under sec. 24 (2) of the
Act in cases where the award under section 11 of the 1894 Act is passed after 01.01.2009 and the

14
Supra Note 12.
15
2020 SCC OnLine SC 316.
16
Ibid

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period of 5 years has not lapsed from the date of passing of this award and the date of
commencement of this Act and if the said period of 5 years gets lapsed on any date after the
commencement of the Act and the compensation is not paid till such date.17

Further the Hon'ble Supreme Court in numerous instances including cases, Union of India v.
Shiv Raj & Ors18 and Ram Kishan & Ors .v. State of Haryana & Ors19 has considered the above
said circular of Government of India stating that:

"The picture that therefore emerges on a reading of Section 24(2) is that the State has no
business to expropriate from a citizen his property if an award has been made and the necessary
steps to complete acquisition have not been taken for a period of five years or more. These steps
include the taking of physical possession of land and payment of compensation. What the
legislature is in effect telling the executive is that they ought to have put their house in order and
completed the acquisition proceedings within a reasonable time after pronouncement of award.
Not having done so even after a leeway of five years is given, would cross the limits of legislative
tolerance, after which the whole proceeding would be deemed to have lapsed."

However the above the issue has been put to rest in finality by the Supreme Court in Indore
Development Authority v. Manoharlal And Ors20 wherein the court held that:

“In case the award has been passed within the window period of five years excluding the period
covered by an interim order of the court, then proceedings shall continue as provided under
Section 24(1)(b) of the Act of 2013 under the Act of 1894 as if it has not been repealed. The word
‘or’ used in Section 24(2) between possession and compensation has to be read as ‘nor’ or as
‘and’. The deemed lapse of land acquisition proceedings under Section 24(2) of the Act of 2013
takes place where due to inaction of authorities for five years or more prior to commencement of
the said Act, the possession of land has not been taken nor compensation has been paid. In other
words, in case possession has been taken, compensation has not been paid then there is no lapse.
Similarly, if compensation has been paid, possession has not been taken then there is no lapse.”

17
https://www.mondaq.com/india/real-estate/576510/retrospective-applicability-of-larr-act-
2013#:~:text=11%20of%201894%20Act%20has,the%20old%20Act%20after%2001.01.
18
(2014) 6 SCC 564
19
(2015) 4 SCC 347
20
2020 SCC OnLine SC 316.

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 IV. DISADVANTAGES OF 1894 ACT

The main negative impact of Land acquisition act 1894 is urgency clause. The wrong use of
section 1721 of the act by the state government was the main issue for the drawback. If a land
owner is affected he can file objections under section 5A22 of the act against the activities done
and it is a basic right for the land owners and also according to the natural justice- Audi alteram
partem. But they were numerous cases where the state government have acquired land buy the
wrong use of section 17 (4)23 which is urgency clause. Accordingly the state government made
as if they cannot apply and it should take away their basic right of the land owners to file is
objections. Hence state government misused power for the wrong use of the provisions of
urgency. This was the main drawback and the disadvantage of land acquisition act due to the
misuse of urgency clause by the state governments.

The Supreme Court in Radhey Shyam (D) through LRs and others v. State of U.P. and others24
held as under:

“In cases where the acquisition is made by invoking Section 4 read with Section 17(1) and
17(4)…excluding the application of Section 5A is likely to make the landowner a landless poor
and force him to migrate to the nearby city only to live in a slum. A departure from this rule
should be made only when the land is required to meet really emergent situations like those
enumerated in Section 17(2). If the acquisition is intended to benefit private person(s) and the
provisions contained in Section 17(1) and/or 17(4) are invoked, then the scrutiny of the

21
Section 17 reads Special powers in cases of urgency. Clause (1) In cases of urgency, whenever the [appropriate
Government] so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days
from the publication of the notice mentioned in section 9, sub-section (1), [take possession of any land needed for a
public purpose]. Such land shall thereupon [vest absolutely in the [Government]], free from all encumbrances.
22
Section 5A reads Hearing of objections. Clause (1) Any person interested in any land which has been notified
under section 4, sub-section (1), as being needed or likely to be needed for a public purpose or for a company may,
[within thirty days from the date of the publication of the notification], object to the acquisition of the land or of any
land in the locality, as the case may be.
23
Section 17(4) reads- In the case of any land to which, in the opinion of the appropriate Government, the
provisions of sub-section (1) or sub-section (2) are applicable, the provisions of section 5A shall not apply where the
appropriate Government so directs to where possession of the land has been taken with the consent of the person
interested.
24
Civil Appeal No. 3261 decided on April 15, 2011

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justification put forward by the State should be more rigorous in cases involving the challenge to
the acquisition of land.”25

Further there was no provision for rehabilitation and resettlement of persons displaced due to
acquisition of land. This generated a lot of discontentment amongst the people. There were no
safeguards as there is compulsory forced acquisition of land. The compensation paid under the
Act was at prevailing circle rates in the area which were not even remotely indicative of the
actual rates. As a result the government paid at its own market rate which was nowhere near to
the actual prevailing market rates. Once the government expressed its desire to acquire a
particular plot of land, there was no mechanism whatsoever to stop the process of acquisition.
There was only a provision for providing an opportunity of being heard to the person whose land
is proposed to be acquired by filing objections to the Collector under Section 5A within 30 days
from the date of publication of notification. But the Collector is not bound by the objections.26

Under the 2013 Act, the amount of Compensation must be sufficiently fair so as to justify the
forcible acquisition of land. Under the 1894 Act, compensation was required to be paid at market
value. But as discussed earlier, quantum and basis for determining market value was the root
cause of a number of disputes, injustices to the landowners and litigation. The Court has also
recognized in Ram Jiyawan v. State of Uttar Pradesh27 the importance of paying compensation
as “Acquisition without payment of compensation is violative of Article 14”. Compensation
provisions are contained in Sections 26-30, 39 and the First Schedule of the Act. Section 26
provides for determination of the market value of the land by the Collector according to the
criteria mentioned therein which lays down “(a) the market value, if any, specified in the Indian
Stamp Act, 1889 for the registration of sale deeds or agreements to sell;” or “(b) the average sale
price for similar type of land situated in the nearest village or nearest vicinity area;” or “(c)
consented amount of compensation in case of acquisition of lands for private companies or for
public private partnership projects.”

25
Ibid.
26
Prof. Kahkashan Y. Danyal, Land Acquisition in India Past and Present, JLJ. 2016; 2:1-10.
27
AIR 1994 All 38.

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 V. CONCLUSION

In the process of Land Acquisition, it is important to strike a balance between the need for land
for developmental activities and the need to protect the interests of those impacted by the
acquisition of the land—landowners, tenants, landless labourers, and other others whose
livelihoods depend on the land. And this can be done only by exercising some political will. The
question which remains unanswered is the incidence of the said Provision in cases where the
award is passed within 5 years of the commencement of the 2013 Act and the possession has not
been taken or the compensation for such acquisition has not been paid even after the expiry of 5
year period from passing of such award.

The decisions of the Hon'ble Apex Court cited above have created confusion with regard to
applicability of section 24(2) in cases where the award under Sec. 11 of 1894 Act has been
passed after 01.01.2009 and the compensation has not been paid even after 5 years. As per the
strict interpretation of the 5 year period, as envisaged under Section 24(2) of the 2013 Act, the
land losers whose lands have been acquired by an award passed under the old
Act after 01.01.2009 and the compensation has not been paid till date shall be kept devoid of the
benefits of the 2013 Act, while the same benefit shall be given to the land losers whose lands
have been acquired by an award passed under the old Act on or before 01.01.2009. It is well
settled principle under the law that a beneficial piece of legislation has to be given a liberal
interpretation. Hence, there exists a need that the apex court must step in and give a liberal
interpretation with regard to interpretation of `5 year period' under section 24(2). Hence, the land
losers whose lands have been acquired after 01.01.2009 should be accorded with the benefits
under the 2013 Act.

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 VI. BIBLIOGRAPHY

BOOKS

 The Law of Land Acquisition and Compensation, Volume 18, T. V. Sanjiva Row & Janki
Prasad Singhal, 2017

 Dr J N Pandey; Edition : 57th Edition 2020; ISBN-13

ARTICLES

 Bhattacharjee, S., Sinha, R., & Dutta, K. (2014). Fair Pricing of Land and its
Compensation in an Emerging Economy: Case for India. New Delhi: Thought Arbitrage
Research Institute.
 Burdge, R. J. (2012). Benefiting from the Practice of Social Impact Assessment. Impact
Assessment and Project Appraisal , 21 (3), 225-229.
 Cheshire, P., & Vermeulen, W. Land Markets and their Regulation: The Welfare
Economics of Planning. London School of Economics.
 Mathur, H. M. (2011). Social Impact Assessment : A Tool for Planning Better
Resettlement.
 Robert, M., Dale, P., & McLaren, R. (2007). Land Markets - Why are They Required and
How Will They Develop? FIG WW2007. Hong Kong: International Federation of
Surveyors.
 Samanta, D. (2015). Land for Industrial Development: A Critical Assessment in the
context of Bihar. Fifth Development Meet: What Works for Development. Patna: Central
University of Bihar.
 Sathe, D. (2015). Land Acquisition Act and the Ordinance: Some Issues. Economic and
Political Weekly , 50 (26&27), 90-95.
 Singh, C. (2014). Improving Land Governance and Securing Land Rights. Journal of
Land and Rural Studies , 2 (1), 71-74.
 The World Bank. (2007). India: Land Policies for Growth and Poverty Reduction. New
Delhi: Oxford University Press.

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 Vanclay, F. (2003). International Principles For Social Impact Assessment. Impact
Assessment and Project Appraisal , 21 (1), 5-12.

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