A Setback For States Going Around The Central Land Acquisition Law
What implications will a Madras HC ruling have on land acquisition laws in states like Maharashtra, Gujarat and Telangana?
On Wednesday, a division bench of the Madras High Court delivered a path-breaking ruling when it found inoperative a set of legislation employed by the government of Tamil Nadu to acquire land for public purposes in the state. Justices S Manikumar and Subramonium Prasad declared illegal the state’s efforts at continuing to employ its special laws for acquisition despite the enactment by the central government in 2013 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act.
Although arguments were advanced on the arbitrary nature of Tamil Nadu’s laws, the judgment’s rationale ultimately turned on narrow and technical grounds. The Tamil Nadu Acquisition of Land for Harijan Welfare Scheme Act of 1978, the Tamil Nadu Acquisition of Land for Industrial Purposes Act of 1997 and the Tamil Nadu Highways Act of 2001, the laws that the government had used to acquire land, the court found, may not in and of themselves infract any fundamental right. But these laws, the court nonetheless held, had become void on the Land Acquisition, Rehabilitation and Resettlement Act’s making. And the device used by the government to revive their operations, in the court’s belief, was plainly unconstitutional. The consequences of this verdict are enormous.
Now, virtually every acquisition made by the state of Tamil Nadu, since September 27, 2013, the date when the LARR received the President’s assent, has been rendered nugatory.
Of wider interest, though, are the judgment’s implications for the rest of the country. At least one state, Maharashtra, has adopted a virtually identical scheme in seeking to resuscitate its own legislation, which includes among others, The Maharashtra Highways Act of 1955 and The Maharashtra Industrial Development Act, 1961. Other states have sought to overcome the rigours of the LARR by enacting fresh legislation and securing the President’s assent. States such as Gujarat and Telangana, for example, have exempted various different projects, including projects concerning industrial corridors and infrastructural projects, from the requirements of social impact assessment and mandatory consent of landowners, which represent a cornerstone of the LARR.
Draconian Old Laws
Under India’s constitutional scheme, land acquisition is a subject over which both the central and the state governments have power to legislate. Although grossly draconian, even after independence, the Indian state continued to use the colonial-era Land Acquisition Act of 1894 to expropriate private property.
Different state governments made their own sui generis laws governing the acquisition of land. But these state enactments were invariably even more severe.
They granted unlimited power to the government to acquire private land for a professed public purpose, in exchange for compensation, which was almost always pitiful. What is more, these laws allowed the state to expropriate land with no concern for the social impact that such measures might have on a landowner. The statutes required neither a prior social nor a prior environmental impact assessment and they also placed no concomitant obligation on the state to rehabilitate and resettle the dispossessed. In the process, governments were granted a carte blanche to take land in whatever manner they pleased, and the inveterate power of eminent domain that was thought as inhering in the sovereign was only further confirmed on the state.
This power was, in fact, considered so intrinsic in a government that the Supreme Court, as far back as in 1952, recognised its broad contours. In State of Bihar v. Kameshwar Singh, the court traced the term “eminent domain” to Hugo Grotius’s 1525 work, “De Jure Belli et Pacis,” and held that the principle accords to the state authority to take property without consent, so long as the land is meant for public use and so long as compensation is paid to the landowner.
In the decades that followed, with a gradual withering of the right to property, which ultimately resulted in the 44th constitutional amendment through which property rights were altogether abolished from the charter on fundamental rights, the state began to wield untrammeled powers of expropriation. In the short run, the exercise of this power may have aided the state’s avowed socialist aims; it may have even helped usher an element of greater equity in land ownership. But in time, with the liberalisation of the economy in 1991, the costs of abandoning the right to property began to be truly felt. Now, land was being taken not only from rich zamindars with a view to bringing about parity in possession, but also from poorer landowners, including small farmers, often at the behest of private interests. The state, aided by courts that bought into the government’s vision, enlarged the definition of “public purpose”, and lands were routinely taken with a view to solely benefitting private industry.
To marginal landowners these acquisitions were tantamount to a civil death—not only were they paid a derisory compensation at best, but they were also neither rehabilitated nor resettled, inflicting, in the process, enormous damage to their livelihoods.
What The 2013 Law Changed
The LARR was an effort at remedying some of these inequities. As the Madras High Court’s verdict recognises, the National Policy on Resettlement and Rehabilitation, framed first in 2003 and later in 2007 “accepted that society should have a clear perception of the reason behind land acquisition, and the benefits that will flow from such acquisition.” The LARR isn’t without its flaws, but it did seek to clearly chalk out the meaning of “public purpose,” and it ensured that where land was acquired for a private project the consent of at least 80 percent of the landowners was obtained.
Even more significantly, the LARR commanded both an environmental and a social impact assessment before an acquisition was made.
And where land was eventually acquired compensation was to be paid at four times the market value of the land, in cases where the property was situated in a rural area, and at two times the market value for properties situated in an urban area.
How States Circumvented The 2013 Law
Although the law was enacted on a nonpartisan mandate, when the central government changed in 2014 attempts were immediately made to dilute its various requirements. When those efforts failed to fructify, state governments were encouraged to make their own alterations—and many did this with relish. In Tamil Nadu’s case, the government introduced legislation to which it got the president’s assent and introduced a Section 105A and a Schedule V to the LARR. Into the schedule went the old set of laws that the government was now seeking to revive. But the problem for the state government, as the Madras High Court has now held, was that those laws which were placed in the fifth schedule were already dead. They could only be resuscitated through express re-enactment.
As a consequence, for over five years, the Tamil Nadu state government was acquiring land without legislative backing, which, on any reasonable reading, ought to be considered a flagrant misuse of power.
There is, however, the larger systematic dismantling of the LARR that remains to be addressed. Even now, it’s unclear whether the Tamil Nadu government will accept the verdict, or whether, like other state governments, it will make a fresh law once again undermining the LARR’s mandates. Challenges are already pending in the Supreme Court questioning some of these state legislations. The right to property may no longer be a fundamental right. But when expropriating laws impair the dignity of human life, when they deny people their right to livelihood, they strike at the Constitution’s core guarantee of equal treatment.
Suhrith Parthasarathy was counsel for some of the petitioners in the case before the Madras High Court.
The views expressed here are those of the authors, and do not necessarily represent the views of BloombergQuint or its editorial team.