Fixing historical injustice or reinforcing state control: Assessing the Land Acquisition Act, 2013.

By Arpitha Kodiveri

29 April 2020

Farmers, with bodies buried till neck in pits, stage ‘Satyagrah’ protest against forced acquisition of their land by Jaipur Development Authority (JDA) at Nindar Village in Jaipur, 2017. Photo: PTI

Before 2013, acquisition of land in India by the state was governed by the Land Acquisition Act of 1894 which was patently unfair to marginalized landlowners. In 2013, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act was passed, which sought to correct historical wrongs in the process of land acquisition by the state for development projects and insisted on fair compensation for landowners, past and present. However, since then the Indian Supreme Court has attenuated the provisions of the forward thinking 2013 law by hollowing it out and narrowing the scope for poor and marginalized landowners to bring compensation cases before the courts, and in doing so, simplifying the hurdles presented by that law before the business community. Arpitha Kodiveri does a deep dive in this essay where she says that at stake is the undoing of progressive jurisprudence surrounding the retrospective clause. This is significant as land conflicts in India are on the rise. India with its ambitious growth trajectory is likely to demand more land for development. The application of the retrospective clause could have addressed the unrest in cases where ill-thought-out acquisition had taken place under the older law but instead, the Modi government has been trying hard to return to the older draconian legal framework of acquisition.

Forcible land acquisition and dispossession without compensation in India

The acquisition of land by the Indian state was governed by the Land Acquisition Act, 1894 a colonial, draconian law that gave citizens little room to oppose the acquisition or negotiate the terms of compensation. In 2013 a new law was enacted. This new law was called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The 1894 law was based on the doctrine of Eminent Domain, which recognized the state’s ultimate right of ownership and control over land. The standard of compensation under the 1894 law was very low in comparison to the prevalent market value of the land. The 1894 law enabled the state to arbitrarily acquire land for the building of dams to the development of special economic zones[1] despite stiff opposition from the local communities that would be impacted by such acquisition. Many cases that have historically come before the Indian Supreme Court post-1947, dealt with the question of inadequate compensation.[2]

Land acquisition in India after 1947 was initially motivated by state-led development projects. After the economic liberalization of India in 1991, the state took an active part in acquiring land for private corporations thus transitioning from being a participant in the development process to using its institutional and legal capacity to become an intermediary, and acquire land for industrial projects.[3]

The poor track record of the Indian state in fulfilling the requirements of compensating landowners is visible, for instance, in their treatment of oustees from the Narmada Dam. Land was forcibly acquired in the Narmada Valley Project. The Narmada Dam is a massive development project that spans the three states of Madhya Pradesh, Maharashtra, and Gujarat. It consists of twenty-nine large dams, 135 medium dams, and 3,000 small dams. This project was subject to fervent opposition by the Narmada Bachao Andolan (Save the Narmada Movement), which has been waging this battle for thirty-three years now where adequate compensation to the oustees is yet to be paid. By September 2019, as the dam reached full capacity, 178 villages in the Northern Indian state of Madhya Pradesh were likely to be submerged. While the Narmada Control Authority that is in-charge of different aspects of this project states that rehabilitation of all families has been done, the reality on the ground is vastly different. It has been documented by activists from the NBA that of the 43,000 families that are affected, 40,000 families are yet to be adequately compensated and rehabilitated.

The adverse impact from such forcible acquisition and displacement is experienced by the vulnerable communities who suffer a tremendous loss of livelihood and are dispossessed without being compensated. A study done by the Rights and Resources Initiative in 2016 examined 289 land conflicts across India and found that “Together these conflicts affect close to 32 lakhs (3.2 million) people and span close to 12 lakhs (1.2 million) hectares of land in India. These conflicts affect industrial or development projects amounting to roughly Rs. 12 lakh crores (Rs. 12 trillion) in investment.[4] This is a sampling of the scale and impact of land conflicts in India.

In 2013, a landmark law called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act herein after referred to as the Land Acquisition Act, 2013 was passed . This changed the terms of engagement between the state and citizens in the acquisition process. The spirit behind the law was to protect the rights of citizens against arbitrary acquisition, which was the norm under the older law. To achieve this the law introduced some radical changes in the process of acquisition. The new law required consent from landowners and recognized higher standards of compensation as well as resettlement and rehabilitation of families affected by such acquisition of land. Resettlement and rehabilitation was often a matter of policy or soft law. The 2013 act brought it into the realm of enforceable legal standards. The law was a welcome change for many vulnerable communities that were adversely affected by land acquisition namely Adivasis, Dalits and farmers, who were at risk of losing their livelihoods in the name of development. Their resistance to unjust acquisition by the state now had a legal basis on which it could be fought.

Retrospective Operation

An important provision of the new Land Acquisition Act of 2013 is Section 24(2). This section allows for the retrospective application of progressive legal standards even to acquisitions that took place under the 1894 law. However, the 2013 law specified the circumstances under which such retrospective application could happen.

  1. If five years or more before the commencement of the 2013 Act physical possession of the land has not been taken; or
  2. compensation has not been paid (including instances where citizens refused to accept compensation).

In simple terms, if either of the above criteria were met, then any acquisition under the 1894 law would lapse. In these cases, for any remedy to occur fresh acquisition proceedings under the 2013 law would have to be initiated.

The  framers of this law, Jairam Ramesh the erstwhile Minister of Rural Development and Muhammad Alo Khan, saw this as an opportunity to correct historical injustices suffered by communities due to arbitrary acquisition under the 1894 law.[5]  They felt that land conflicts were violent ones. So there had to be some way of fixing unjust land acquisition that had taken place in the past under the older law.

A few months before the drafting of this law a violent protest took place in western Uttar Pradesh because of the forcible acquisition of land.[6] Protests against unjust land acquisition often turn violent as was seen in 2006 in the protests in Odisha against the setting up of a Special Economic Zone in Kalinganagar, where thirteen Adivasis or indigenous community members were shot at by the police trying to quell the protest. The retrospective clause was a subject of enormous debate before the passage of the law as it brought older acquisition processes under scrutiny.

The retrospective aspect of the 2013 law also opened the floodgates of litigation. 97% of the cases before the Supreme Court centered on retrospective remedy. The Supreme Court, based on these challenges, has ruled in favor of such retrospective application in 92% of the cases.[7] The precedent, which recognized the spirit of this clause as one of correcting historical injustice, was set by a three-judge bench consisting of Justice Lokur, Justice Joseph and Justice Lodha in 2014 in Pune Municipal Corporation vs. Harakchand Solanki on the question of when compensation was deemed to have been paid. This judgment required that in instances where the landowners refused to accept compensation, compensation would be said to have been paid if it was deposited in the courts and not the government treasury. The norm in most acquisitions was that compensation would be paid to the treasury and not the courts.[8] This interpretation was welcomed by the architects of this law as they state in Legislating for Justice, “The case interpreted and construed the retrospective clause in a harmonious manner and the interests of those aggrieved by arbitrary acquisition mechanisms.”[9]

Eighteen appeals were filed before the Supreme Court on this clause where the petitioners had refused to accept compensation. By recognizing that compensation had to be deposited in the court, it created a legal opportunity for landowners, who had suffered from forcible land acquisition, to avail of a more just process and standard of compensation under the new law.  This interpretation of the retrospective clause would be followed by subsequent Supreme Court judgments and other high courts. Interestingly a new chief justice, Justice Bobde along with Justice Lodha in a two-judge bench judgement overturned a 2004 judgement of the Punjab and Haryana High Court in  Bharat Kumar vs State of Haryana where the retrospective clause was applied to acquisition that had been undertaken in 1995 but where the parties to the case had not accepted compensation and did not let go of physical possession of the land.

Undoing the potential of correcting historical injustice through the retrospective clause

The precedent set with the Pune Municipal Corporation case on the retrospective clause was undone with the three-judge consisting of Justice Arun Mishra, Justice A.K Goel and Justice Shantanagoudar bench decision in 2017 in the Indore Development Authority vs. Shailendra and others which held an opposite view. It held that compensation was deemed to have been paid if the monies were deposited in the government treasury which is often the norm and does not need to be deposited in court. The refusal of landowners to accept compensation according to this judgment is required to be asserted by filing a case before the court. What we glean from this judgment is a sense of misuse of this section by landowners, who were looking to avail higher standards of compensation. A shift is visible from the interpretation of correcting historical injustice to one of misuse of the retrospective clause. The judgement reads, “In various ways, the provision has been sought to be blatantly misused. The law never envisages such absurd results as is being sought to be achieved. The beneficial provisions of the 2013 Act are put to misuse that tantamounts to grossest abuse of the provisions of law to reopen such acquisitions and the court has to thwart all such attempts at the threshold and not to receive such cases even for consideration for a moment. We see development has taken place in the area that has been acquired.”

This is a way to restrict the scope of judicial scrutiny on land acquisitions that have been undertaken under the 1894 Act. An interpretation on the technicality of whether compensation was paid or not under the retrospective clause has made a difference on whether vulnerable communities who have been struggling against forcible acquisition can access the courts to challenge it. They further ruled that the judgment made in the Pune Municipal Corporation case was per incuriam or that it did not apply the law with due care. This was unprecedented and took away the capacity of this judgment to act as a precedent. Justice Shantanagoudar dissented against this particular aspect of the judgment. The reason for shaving away this pro-landowner jurisprudence and reinstating an interpretation that restricts the operation of the retrospective clause needs to be located within the changing political economy of land acquisition on which I will elaborate later in this essay.

The interpretation in the Indore Development Authority judgment is viewed as a pro-industry one by journalist Kumar Sambhav Shrivastava and Nitin Sethi in the context of the Reliance Industries case. Reliance Industries was building a Special Economic Zone (SEZ) in Jamnagar in Gujarat. Twelve farmers whose land was being acquired for the SEZ had filed a case on the grounds of Section 24(2) or the retrospective clause as they retained physical possession of the land and had not accepted the compensation awarded. Reliance industries challenged the retrospective clause as unconstitutional and in violation of fundamental rights in this case. Reliance’s argument was in similar vein as the interpretation in the Indore Development Agency case – as a misuse of the retrospective clause. The argument presented by Reliance Industries before the Gujarat High Court on the retrospective clause was “It is unconstitutional and unreasonable since it extinguishes the vested right of the company to obtain possession of the landholding acquired for it by the state, by prescribing a period of limitation for taking possession and disbursement of compensation which operates as a fiat accompli by an enactment of the very provision. It is stated that such a provision was not there in the earlier Land Acquisition Act of 1894.”[10] The Gujarat High Court in 2015 read down the applicability of the retrospective clause where it stated that it shall not apply where land is being acquired for companies where awards are passed and compensation is deposited by the company. The farmers then challenged this High Court judgment before the Supreme Court given its interpretation in the Pune Municipal Corporation case.

Interestingly this matter got listed before a two-judge bench headed by Justice Arun Mishra and it was around the same time that Justice Arun Mishra passed the judgement in the Indore Development Authority case. This restricted interpretation is bound to benefit Reliance Industries in its case which is yet to be heard.  Justice Arun Mishra has been present in key cases where the interpretation of the retrospective clause is involved namely the Indore Development Authority case and the Reliance Industries case. In another recent case in  Shiv Kumar vs. Union of India, in October 2019 a two-judge bench headed by Justice Arun Mishra further restricted the application of the retrospective clause where subsequent purchasers of land under acquisition cannot avail of this clause to challenge acquisition proceedings. In this judgment, he overruled another of Justice Joseph’s interpretation in the case of Government of NCT of Delhi vs. Manav Dharam Trust in 2017. This systematic attack on narrowing the scope of applicability and interpretation of the retrospective clause can be traced in all of Justice Arun Mishra’s judgments and ironically the reference made to a larger bench in deciding the appropriate interpretation of this clause is headed by Justice Mishra himself.

Refusal to Recuse

An application was made by certain parties for the recusal of Justice Arun Mishra from the larger bench given his previous judgement in the matter was evidence of his bias and preference towards a narrower interpretation of the retrospective clause. A previous test laid down for understanding the likelihood of bias of a judge was whether a party to a case had reasonableness of apprehension in this regard.[11] Doing away with this precedent too, Justice Arun Mishra refused to recuse himself from being part of this larger bench by stating a previous test laid down for understanding the likelihood of bias of a judge was whether a party to a case had reasonableness of apprehension in this regard.[11] Doing away with this precedent too, Justice Arun Mishra refused to recuse himself from being part of this larger bench by stating

a judge rendering judgement on a question of law would not be a bar to her or his participation if in a larger Bench if that view is referred for re­ consideration. The previous judgment cannot constitute bias or a pre­disposition ­ nor can it seem to be such, so as to raise a reasonable apprehension of bias… Accepting the plea of recusal would sound a death knell to the independent system of justice delivery where litigants would dictate participation of judges of their liking in particular cases or causes.

The grounds for refusing recusal has changed from the apprehension displayed by the parties to a guarantee given by the judge himself of his own impartiality. This is quite problematic as his preference towards a certain interpretation has been well established through his previous judgements. It is unlikely that his interpretation will change in favor of the approach that was once settled law under the Pune Municipal Corporation case. Reflecting on the process of selection of benches, Constitutional law scholar Gautam Bhatia has stated in his blog

“The Court’s strength (at that time, 26 judges), combined with the gradual weakening of the gravitational force of precedent effectively means that the Office of the Chief Justice’s administrative power of selecting benches can at least potentially in some cases translate into the power to affect outcomes (if not to determine them).”[12]

What is at stake is the undoing of progressive jurisprudence surrounding the retrospective clause. This is significant as land conflicts in India are on the rise. India with its ambitious growth trajectory is likely to demand more land for development. The application of the retrospective clause could have addressed the unrest in cases where ill-thought-out acquisition had taken place under the older law but instead, the Modi government has been trying hard to return to the older draconian legal framework of acquisition.

The Judgement

In its recent judgement in the Indore Development Authority case a five-judge bench of the Supreme Court including Justice Arun Mishra has held that the interpretation of Section 24(2) will be where both the criteria laid down under Section 24(2) have to be met for retrospective application to occur. Justice Arun Mishra while reading the operational part of the judgement stated

“ The word “or” in Section 24(2) has to be read as “and” (meaning the proceedings under the old Land Acquisition Act will lapse only if there is failure to take possession and failure to pay compensation”

This further narrows down the scope for landowners to challenge unjust acquisition under the old law. Aruna Chandrashekhar an environment journalist who has been following the case closely states that this interpretation could mean that companies who acquired land by force and have possession without paying compensation can legitimately hold on to their land without ensuring that landowners are adequately compensated.

The court also observed that

“Deposit in the treasury in place of deposit in the courts causes no prejudice to the landowner or any other stakeholder as their interest is adequately safeguarded by provisions contained in Section 34 of the Act of 1894 as it ensures higher rate of interest than any other government security”

This as has been stated earlier has been the dominant practice of the government in the process of land acquisition where monies are deposited in the treasury and not the courts. This judgement legitimizes this practice and chips away at the scope of retrospective application. The narrowest interpretation of the retrospective clause has been upheld, this would legalize many unjust acquisitions under the colonial era law. The ability to redress these under the 2013 law has been quashed as this new reading increases the barriers to be overcome to allow for its application. This judgement will favour industries who have acquired land under the 1894 law like Reliance Industries and shield them from the due process requirements laid down in the 2013 law.  The Supreme Court has chosen ,  to enable easy acquisition for the industry by increased state control while undoing the ability of this clause to correct historical injustice of arbitrary acquisition.

The political economy of easy acquisition, democracy, and the judiciary

Since 2014, attempts have been made by the Modi government to dilute land laws that protect the rights of vulnerable communities particularly the new land acquisition law and the Forest Rights Act,2006. These attempts have been made to enable easy acquisition of land by reinstating state control and bureaucratic discretion in the acquisition. First of such attempts was the Ordinance of 2014 which eventually lapsed in August, 2015. In this ordinance the government tried to do away with the requirement of consent from the landowners and restricted retrospective application under Section 24 by creating a limitation on the calculation of the period of five years.

The new land acquisition law has been characterised by the business community as cumbersome requiring the compliance of many procedural safeguards like consent and the social impact assessment process. In response to this critique the Modi government has since tried to simplify this process. While it failed to do this through an ordinance, it has succeeded in bringing about such changes through administrative mechanisms like Land Banks. Land Banks are a mechanism where land which was once acquired or is categorized as government land is banked to be transferred to industries without complying with the procedural requirements of the Land Acquisition Act of 2013. The government is trying to achieve this ease in acquisition through the judicial route too, as the narrower interpretation of the retrospective clause will reduce the scope of scrutiny of older unjust acquisitions like in the case of Reliance Industries.

The role the judiciary plays in interpreting the retrospective clause can either reinforce arbitrary acquisition or make way for a more just process in the acquisition. The matter before the court is closely linked to the need to create an enabling environment for business. As was argued by the counsel for Reliance industries in the Gujarat High Court case of 2015 to begin the reacquisition of land under the new law would be tedious as they would be required to obtain the consent of 80% of the landowners, conduct a social impact assessment and determine the standards for compensation. It is to do away with the time taken to comply with these requirements that a restricted interpretation is favored by industries.

This narrow reading of Section 24(2) as has been held by the Supreme Court limits contestation over older land acquisition proceedings on a changed legal terrain that demands transparency and accountability from the state. Such judgments reinforce the doctrine of eminent domain. As Michael Levien in his book Dispossession without Development categorizes the Indian state as a land-broker state acting as an enabler of businesses by ensuring the quick and easy acquisition of land, leaving behind its regulatory responsibilities of upholding the rights of its citizens.[13]

Conclusion

“The state came in early 2005, conducted a single survey and communicated to us that our land was acquired.” Said Prakash Jena a senior activist with the Posco Pratirodh Sangram Samiti or the committee fighting against the acquisition of land in Jagtsinghpur, Odisha for the integrated steel plant which was to be developed by the South Korean steel giant Posco and is now being undertaken by the Indian steel conglomerate Jindal Steel Works.[14] Such arbitrary acquisition of land has been an integral part of India’s growth story. The retrospective clause provided poor landowning communities who are affected by such acquisition to challenge the terms on which it had happened. This as the framers of the law stated was a way to address the violence that many of these protests witnessed.  As Adivasi, Dalit and farming communities across India are often subject to historical injustice in land acquisition, the restricted interpretation of the clause presently in place perpetuates such injustice. Land acquisition is a complex decision as it sits within two conflicting narratives as Namita Wahi has argued, one of land as a critical resource for development where the state has ultimate control and the other which is land as an important source of livelihood, culture, and security for vulnerable communities. The retrospective clause, with this  narrower reading reinforces  the power of the state as  the ultimate arbiter of interests over land seen as a critical resource for development while vulnerable communities are bereft of the legal opportunity to challenge arbitrary and forceful acquisitions under the old law.

Arpitha Kodiveri is a Hans Kelsen Fellow and Doctoral Researcher at the European University Institute where her work focuses on the acquisition of forest land and rights of forest-dwelling communities in Odisha, India.

[1] Is an identified zone with the objective to enhance foreign investment and promote exports. It provides tax breaks for foreign investors.

[2] Wahi, N., Bhatia, A., Gandhi, D., Jain, S., Shukla, P., and Chauhan, U. Land Acquisition in India: A Review of Supreme Court Cases from 1950 to 2016, Centre for Policy Research, New Delhi, 2017

[3] Michael Levien, Dispossession without Development (Oxford University Press,2018).

[5] Jairam Ramesh and Muhammad Ali Khan, Legislating for Justice: The Making of the 2013 Land Acquisition Law. (Oxford University Press,2015)

[6] Jairam Ramesh and Muhammad Ali Khan, Legislating for Justice: The Making of the 2013 Land Acquisition Law. (Oxford University Press,2015)

[7] Wahi, N., Bhatia, A., Gandhi, D., Jain, S., Shukla, P., and Chauhan, U. Land Acquisition in India: A Review of Supreme Court Cases from 1950 to 2016, Centre for Policy Research, New Delhi, 2017

[8] Ibid 10.

[9] Ibid 10.

[10] Reliance Industries Limited vs. Union of India ( Special Leave Petition No 20362 of 2015)

[11] As established in Ranjit Thakur vs. Union of India (1985)

[12] Gautam Bhatia.’ The Land Acquisition Bench and the Continuing around the “Master of the Roster”’ in Indian Constitutional Philosophy and Law blog available at https://indconlawphil.wordpress.com/2019/10/14/the-land-acquisition-bench-and-continuing-issues-around-the-master-of-the-roster/ last accessed on November 4, 2019.

[13] Michael Levien, Dispossession without Development (Oxford University Press,2018).

[14] Interview conducted by the author in July, 2018.

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