The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

What it does

The Act (Act No. 30 of 2013) lays down when and how the State may acquire land compulsorily, what the owner and others affected must be paid, and what must be done to rehabilitate and resettle them. It replaced the Land Acquisition Act, 1894, which it repealed, and it is commonly called the LARR Act, from Land Acquisition, Rehabilitation and Resettlement. The 1894 Act was short and gave the State broad powers of acquisition. The 2013 Act is long and puts a series of steps and safeguards between a proposal and an acquisition.

The steps include a social impact assessment before acquisition in the ordinary case, an expert group's appraisal of that assessment, a preliminary notification, a hearing of objections, a declaration that the land is needed for a public purpose, a determination of compensation by award, and payment or deposit before possession is taken. For acquisition by or for private companies and for public-private partnership projects, the Act requires the consent of a stated proportion of the affected families. The compensation is calculated on a statutory basis that gives the owner a multiple of the market value together with a solatium, and the Act separately provides for the rehabilitation and resettlement entitlements of families, including those who did not own land.

Who it binds

The appropriate Government, the requiring body for whose purpose the land is acquired, and the owners and others whose land and livelihood are affected. It also binds a private company that asks for land to be acquired for it. A Land Acquisition, Rehabilitation and Resettlement Authority hears disputes about compensation and entitlements.

What moved out of it

Section 105 of the Act took a number of older enactments that provide for acquisition, among them the National Highways Act, 1956, out of the Act for the purposes of the process, while requiring that the compensation, rehabilitation and resettlement under them be brought into line with the 2013 Act by notification. Acquisition under those laws therefore follows their own procedure, but the amount payable is expected to meet the standard of the 2013 Act.

What has changed, and when

• The Act came into force on 1 January 2014.
• Several States have enacted their own amendments or laws on the process, and some rules for consent and impact assessment differ from State to State, so a project has to establish which text applies where the land lies.
• The Supreme Court has decided the effect of section 24, which provides that proceedings begun under the 1894 Act lapse in specified cases, including where an award was made five years or more before the 2013 Act and possession was not taken or compensation was not paid. In Indore Development Authority v Manoharlal (2020), a Constitution Bench held that the lapse follows only where both possession has not been taken and compensation has not been paid.

What turns on it in practice

For an infrastructure project, the Act decides the length of the land acquisition phase and the risk attached to it. A project that depends on land acquired by the State, or by a private party with the State's help, has to allow for the impact assessment, the objection and hearing process, and the time that the award and payment take. Delay at that stage is a common cause of delay in the project as a whole, and a project agreement should say who bears it.

The second recurring question is the old acquisitions. A claim that an acquisition under the 1894 Act has lapsed under section 24 depends on facts about possession and payment, and on the law as the Supreme Court has settled it. Where land was taken a long time ago and the owner is still in dispute, the pleaded facts decide the case.

The third is the owner's challenge to the award. Compensation, the multiple applied and the entitlements to rehabilitation can be contested before the Authority, and the question of whether a public purpose existed can be raised in the High Court. These matters fall within the project and land work of this practice: advice and litigation on land acquisition, zoning and public-private partnerships for infrastructure projects.