S12

LAND ACQUISITION: A SAGA OF MISPLACED PERSPECTIVES AND
MISSED OPPORTUNITIES
Abstract
The Land Acquisition Ordinance has been a bone of much contention. Interestingly, however, what both the Ordinance and
the disputation surrounding it symbolize is the misdirected nature of the effort of the State vis-à-vis the law on land
acquisition. In this paper, this misdirected nature is sought to be illustrated by means of a delineation of the weaknesses in
the Ordinance. The first weakness- a shortcoming that strikes at the soul of the Ordinance- lays in the failure of the
Ordinance to pass muster with the Constitution and the second weakness- a shortcoming that strikes at the effectiveness of the
Ordinance- lays in the failure of the same to correctly identify, acknowledge and address the weaknesses of the law on land
acquisition.
In this context, in this paper, we argue that two provisions of the Ordinance violated Article 14 of the Constitution on an
application of the Doctrine of Reasonable Classification and the Doctrine of Over-Inclusiveness. Subsequently, we argue that
the constitutional conundrums aside, the genesis of the problems that have crippled the process of land acquisition in the
country and those that carry the potential to do so in the future, namely, the calculation of market value to compute
compensation and the intricate scheme of Rehabilitation and Resettlement have been shoddily addressed and largely
overlooked in the entire process. Importantly, in fact, the Government failed to take any measures whatsoever to abate the
numerous litigations and agitations that may follow as a consequence and that may multiply manifold by an implementation
of the new law enacted in 2013. Instead, the Ordinance took such measures that may add to these litigations and agitations.
Naturally, thus, the the efforts of the State as reflected in the Ordinance need to be revamped urgently. In this vein, we
conclude the paper with solutions to do away with these weaknesses and to improve the law on land acquisition.
INTRODUCTION .................................................................................................................................................. 2
CONSTITUTIONAL CONUNDRUMS ................................................................................................................. 4
COMPENSATION: ‘MARKET VALUE’ REMAINS UNTOUCHED ................................................................ 15
RESETTLEMENT AND REHABILITATION: PROBLEMS AWAIT CONFRONTATION ................................ 22
SOLUTIONS: A WAY FORWARD .................................................................................................................... 27
CONCLUSION .................................................................................................................................................... 30
INTRODUCTION
Land acquisition has for long been a bone of contention in India. The ‘public purpose’ for which
the land is to be acquired, the widespread displacement of people without their consent, the
inadequacy of compensation, the absence of suitable rehabilitation, the non-utilisation of
acquired land and lengthy court battles are some of the common issues that have consistently
plagued the process of acquisition of land in this country. To address these concerns with the
Land Acquisition Act of 1894, to smoothen the process of acquisition and to import
constitutional values into the same, the Parliament of India enacted the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act in
2013.
Mildly put, this law introduced a paradigm shift in the domain of acquisition of land. A Social
Impact Assessment (SIA) to assess the social, the demographic and the environmental impact of
acquisition vis-à-vis the feasibility of the same, a consent clause to water down the forcible
nature of acquisition of land for non-State actors, a comprehensive scheme of Rehabilitation and
Resettlement of displaced persons, a multiplier-based method for the computation of adequate
compensation, a clear outline of ‘public purpose’, an expanded notion of ‘persons affected by
acquisition’, an independent authority for the redressal of grievances, a narrowing of the ‘urgent’
circumstances for immediate acquisition and a provision for the return of acquired land left
unutilised were some of the prominent changes ushered in by this law. Naturally, and as also
follows from the Statement of Objects and Reasons of the Act as well, the law sought to make
the process of acquisition and the consequent economic development participative and inclusive.
However, to achieve the same, the costs and pre-conditions imposed on the persons for whom
land was to be acquired were perceived to be steep and burdensome and, on account of that the
law was perceived to be unworkable. In fact, the number of acquisitions subsequent to the
enactment of the law, too, was minimal.
In a wave of legislative reforms, therefore, the President of India promulgated and re-
promulgated twice The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement (Amendment) Ordinance, 2015 (Hereinafter “the Ordinance”). A
sizeable number of provisions of the law enacted in 2013 were amended.1
By and large, the Ordinance (a) exempted acquisition for the purposes of infrastructure, rural
infrastructure, affordable housing, industrial corridors and national security from the purview of
SIA and consent clause,2 (b) included a mandate for compulsory employment, as stipulated in the
Rehabilitation & Resettlement package,3 (c) amended the ambit of the clause that provided for
the return of unutilised land4 and (d) extended the applicability of the law to acquisitions
undertaken under thirteen other legislations previously exempted for a period of one year.5
Additionally, the Ordinance also modified the scope of the retrospective application of the law
and introduced a requirement of sanctions for the prosecution of public servants.
In view of the amendments proposed, the Ordinance was a source of trenchant opposition and
considerable agitation. In spite of such opposition, however, the question as to whether the
Ordinance effectively addressed the supposed shortcomings of the law enacted by the Parliament
in 2013 remains to be probed. Importantly, the question as to whether the Ordinance correctly
identified the shortcomings of the law, too, has not been considered. Obviously, then, the
question as to whether the Ordinance was a suitable solution to the problems that plague the
land acquisition process in the country has not been answered holistically. Consequently, our
efforts in this paper are directed at an analysis of these questions. It is our submission that
irrespective of whether the Ordinance lapsed or not, what the Ordinance symbolised was a
misplaced focus of the legislature with respect to the land acquisition law. In this paper, thus, an
attempt shall be made to restore such focus and to propose suitable measures that need to be
undertaken by the legislature. In pursuit of the same, this paper is divided into four parts.
In Part I, we seek to illustrate misplaced nature of the focus of the Legislature and we propose to
do the same through a constitutional analysis. We argue that Sections 5 and 11 of the Ordinance
violated Article 14 of the Constitution on an application of the Doctrine of Reasonable
1The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013,
No. 30, GAZETTE OF INDIA (Hereinafter “LARR Act”).
2The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation And Resettlement
(Amendment) Ordinance, 2015, No. 4, GAZETTE OF INDIA, §§ 3 and 5.

(Amendment) Ordinance, 2015, No. 4, GAZETTE OF INDIA, § 7.



Classification and the test of Over-Inclusiveness respectively. Naturally, the inability of a reform
measure to pass the constitutional muster is an epitome of its deficiencies and is indicative of the
fallacious approach of the legislature. However, it does not mark an end of such shortcomings.
Therefore, in the subsequent parts, we seek to comprehensively analyse these shortcomings.
In Part II of this paper, we identify that a prime factor responsible for the acrimonious and
cumbersome nature of acquisition has been litigation and we submit that the same was shoddily
addressed by the Ordinance. The Ordinance did not deal with the root cause of most such
litigation viz. the problems inherent in the computation of market value of land- the basis for the
computation of compensation- because it failed to acknowledge how the law enacted in 2013
continued with a faulty legacy on this point.
In Part III, we move on to illustrate the difficulties involved in the scheme for Rehabilitation and
Resettlement (R&R) as laid out in the LARR Act, 2013 and the potential of the same to add to
the social costs of land acquisition. In view of the same, we comment on the grossly inadequate
manner in which the Ordinance addressed these difficulties and on the potential perpetuation of
litigations and agitations.
Naturally, a delineation of the failings of the law is incomplete in the absence of possible
solutions to overcome these failings. Consequently, in Part IV, we propose measures that must
be adopted to truly reform the land acquisition law and to make the process both acceptable and
constitutional.
CONSTITUTIONAL CONUNDRUMS
Social Impact Assessment- A Preliminary Enquiry
To understand as to why certain provisions of the Ordinance failed to pass the test of
constitutional inquiry, it is important that we first take a look at what a Social Impact Assessment
entails. SIA is a novel concept introduced for the first time in India by the LARR Act as the
preliminary step in the acquisition process.6 It is primarily conducted to study the intended and
unintended consequences, both positive and negative, of any project, program, plan or policy for
which land is to be acquired.7 In specific terms, the study intends to look at the implications of
Land Acquisition in terms of (i) the public purpose served, (ii) the scale of displacement and
number of families affected, (iii) the impact on local ecology, (iv) the consequences on the
No. 30, GAZETTE OF INDIA, § 4(1).
7William R. Freudenburg, Social Impact Assessment, 12 ANN. REV. SOC. 451 (1986).
livelihood of owners as well as dependants of the land and (v) the extent of land acquired.
Importantly, a Social Impact Assessment must also analyse whether the land proposed to be
acquired is the bare minimum land needed for the said purpose and whether the said land is the
only land feasible for the same.8
Simply put, SIA is a cost-benefit analysis of the acquisition of land- the social impact of the
acquisition and the cost of addressing the same vis-à-vis the prospective benefits likely to be
derived from the project.9 The importance of SIA lies in its ability to consult the local governing
bodies, hear grievances, anticipate conflicts and take remedial steps to minimise opposition. SIA,
thus, incorporates the spirit of inclusive development and is of considerable significance in a
Democracy.
Often, it has been argued that the new land acquisition law is expensive and time consuming.10 In
view of the detailed nature of the processes involved in an SIA, it is undeniable that SIA
increases the cost of, and adds to the overall time taken for, a completion of the process of
acquisition.11 As per the LARR Act, SIA alone may take up to eight months for completion. 12
Crucially, even after the said eight month period, the acquisition may not materialise. Based on
the appraisal of the SIA report by the expert group, the State may choose to not to go ahead
with the acquisition.13 Moreover, in cases where consent of affected persons is mandated, the
State would be bound to shelve the acquisition process in the event of a lack of requisite
consent. Naturally, then, detractors of SIA abound. However, these detractors fail to recognize
the crucial role played by SIA.
What is not accounted for are the numerous protests organised across the country with respect
to land acquisition and the important causal link between such protests and the lack of
participative approach to development. The disjunction between the post-acquisition remedial
measures adopted by the State and the concerns of the local populace and the consequent
disenchantment caused by this disjunction has been indicated on many an occasion.14 SIA allows
No. 30, GAZETTE OF INDIA, § 4(4).
9The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, note to cl. 4.
10Maitreesh Ghatak and Parikshit Ghosh, Empower, don’t patronise, the farmer, THE INDIAN EXPRESS, Mar. 30, 2015,
http://indianexpress.com/article/opinion/columns/empower-dont-patronise-the-farmer/.
11The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement
(Amendment) Bill, 2015, cl. 3, Statement of Object and Reasons.

12The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act,
2013, No. 30, GAZETTE OF INDIA, §§ 4(2) and (7).

2013, No. 30, GAZETTE OF INDIA, § 7(4).

14Chitrangada Choudhury, Adivasis and the New Land Acquisition Act, 48(41) ECO. & POL. WKLY. (Oct. 12, 2013).
for an accommodation of these concerns at a preliminary stage and, thereby, seeks to minimise
subsequent protests.15 Comparatively, the benefits to be derived from SIA far exceed the losses
incurred on account of plans and programs stalled by protests.16
Unfortunately, the Government viewed matters differently and sought to do away with SIA
altogether. Section 5 of the Ordinance inserted Section 10A into the LARR Act. This section
allowed the appropriate Government to exempt the projects specified therein from the
application of Chapters II and III of the LARR Act, namely, the chapters pertaining to Social
Impact Assessment and restrictions as to multi-cropped, irrigated lands respectively. Projects
that are entitled to the exemption include those dealing with national security, rural
infrastructure, affordable housing and housing for the poor, industrial corridors and
infrastructure projects. What is notable among these five categories, though, is the term
‘infrastructure projects’.
‘Infrastructure project’ has been defined in the LARR Act u/s 2(1)(b) as including agro-
processing projects, mining activities, sanitation, water conservation, research institutions,
healthcare, sports, tourism, transportation, space programme et al.17 Importantly, the said sub-
section also stipulates that all activities or items (except private hospitals, private educational
institutions and private hotels) listed in the notification dated 27th March, 2012 and issued by the
Department of Economic Affairs, Government of India would also be covered by the term
‘infrastructure project’.18 As per the notification, then, roadways, railways, bridges, airports, ports,
inland waterways, electricity generation, electricity transmission, power distribution, gas pipelines,
oil pipelines, water supply pipelines, storm water drainage, telecommunication,
telecommunication towers, education, hospitals, three-star or higher category hotels and SEZs
among others would all fall within the ambit of ‘infrastructure project’ and would, thereby, also
be eligible for exemption from the requirements of consent,19 SIA and restrictions as to multi-
15Varad Pande, A business case for the new land acquisition law, LIVEMINT, Sept. 9, 2013,
http://www.livemint.com/Opinion/LyZNf2fuUopRDtT81H9FoN/A-business-case-for-the-new-land-acquisition-
law.html.
16The same may especially be the case when read with the improvements made to SIA from the experiences of an
Environment Impact Assessment (EIA). Unlike EIA, SIA is to be conducted by an independent body. The
Requiring Body shall not be involved by any means in the appointment and selection of such independent
personnel. Moreover, the Requiring Body shall also not have any say in the collection and processing of
information. The Rules, thus, make for the SIA Report to be neutral and accurate.
2013, No. 30, GAZETTE OF INDIA §§ 3(o) and 2(1)(b).

2013, No. 30, GAZETTE OF INDIA, § 2(1)(b)(ii).

19The LARR Act provided for a requirement of de-minimus consent in case the land was being acquired for private
or PPP projects. However, the Ordinance has done away with this requirement for the projects enlisted in Section 5
crop irrigated lands.20 At this stage, it is indeed worthwhile to wonder as to the existence of
projects, if any, that are not entitled to this exemption.
The Public Private Partnership (PPP) Database made available by the Union Government does
offer an insight. According to the database, six sectors, namely, roads, ports, airports, urban
development, energy and railways account for nearly all PPP ventures in India.21 In specific
terms, in the State Sector, the abovementioned 6 categories account for 73% of all projects in
terms of volume and 92% in terms of value. Similarly, in the Central Sector, national highways,
ports, railways and airports account for all PPP projects with two sectors (national highways and
ports) alone accounting for 89% of all ventures in terms of volume and 68% in terms of value.22
Therefore, virtually every PPP venture in the near future may be entitled to an exemption under
Section 5. Although similar data is unavailable for private sector investments, mid-term
appraisals of the eleventh five year plan by the Planning Commission show that sectors such as
electricity, roads and bridges, railways, irrigation, water supply and sanitation, ports, airports, oil
and gas pipelines et al. account for a major chunk of private sector investment.23 Clearly, a
majority, if not all private sector projects would also be eligible for exemption under Section 5.
Admittedly, a case for exemption from SIA is made out for certain identified purposes such as
national security, defence and emergencies. However, Section 5 entitled practically all
conceivable projects for an exemption from the requirement of SIA. As a consequence, the very
provision of SIA in the LARR Act was rendered redundant and we may have seen a return to the
era of the 1894 Act.24 More importantly, this counterproductive provision of the Ordinance is
what lead to some constitutional concerns.
of the Ordinance. See The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013, No. 30, GAZETTE OF INDIA, § 30.
20Min. of Finance, Dep’t. of Eco. Affairs, Infrastructure Section, Harmonised List of Infrastructural Sub-Sectors
and Institutional Mechanism for its Upgradation (2012), available at

http://finmin.nic.in/the_ministry/dept_eco_affairs/infrastructure_div/HarmonisedMasterList_Infrastructure28032
014.pdf.
21M.S. Priya and P. Jesintha, Public Private Partnership in India, 1(1) J. MGMT & SCI. 61, 63 (2011).
22Plan. Commission, Govt. of India, Compendium of PPP Projects in Infrastructure 15 (2014), available at
http://planningcommission.gov.in/sectors/ppp_report/3.Reports%20of%20Committiees%20&%20Task%20force
/6.Compendium_PPP_Project_In_Infrastructure.pdf.
23Plan. Commission, Govt. of India, Investment in Infrastructure (2012), available at
planningcommission.gov.in/plans/mta/11th_mta/chapterwise/chap14_invest.pdf.
24Basant Kumar Mohanty, Land bill hearing score: one for, 33 against, THE TELEGRAPH, June 29, 2015,
http://www.telegraphindia.com/1150629/jsp/nation/story_28473.jsp?utm_content=buffer1111a&utm_medium=s
ocial&utm_source=facebook.com&utm_campaign=buffer#.VZFXQvmqqko.
Evidently, Section 5 of the Ordinance accorded different treatment to different projects. It was
this difference in treatment that fell foul of the equality clause of the Indian Constitution i.e.
Article 14.25
Failing the Constitution
I. Section 5 & the absence of a ‘Reasonable Classification’
The Supreme Court of India has devised two tests to ascertain the compliance of a law with
Article 14 of the Constitution, namely, (i) The Doctrine of Classification and (ii) The Doctrine of
Arbitrariness. Whereas the latter sought to replace the former, the Doctrine of Classification
continues to be resorted to by the Judiciary to test the constitutional validity of the law and the
exercise of executive power.26
It is well established that while Article 14 forbids class legislation, it does not forbid reasonable
classification for the purposes of legislation. Classification for this purpose means segregation in
classes which have a systematic relation as a result of common properties and common
characteristics. It postulates a rational basis and does not mean herding together of certain
persons and classes arbitrarily.27 In pursuance of the same, a two part test needs to be satisfied in
order for permitting a classification as reasonable.28 It needs to be shown that, first, the
classification is founded on an intelligible differentia which distinguishes persons or things that
are grouped together from others left out of the group, and second, that the differentia has a
rational relation or nexus to the object sought to be achieved by the statute in question.29 In
other words, the classification must not be arbitrary, artificial or evasive.
To demonstrate intelligible differentia, what needs to be shown is that there exists some metric
to classify persons or things into distinguishable classes.30 In other words, there must be a
discernible factor to distinguish the classes. Let us now apply this prong of the Doctrine of
Classification to Section 5 of the Ordinance. On a composite reading of this Section along with
25INDIA CONST. art.14.

26Dr. Subramaniam Swamy v. Director, Central Bureau of Investigation, AIR 2014 SC 2140.
27In Re Special Courts Bill, AIR 1979 SC 478.
28Budhan Choudhry & Ors. v. State of Bihar (1955) 1 SCR 1045.
29State of Bombay & Anr. v. F. N. Balsara, (1951) SCR 682; The State of West Bengal v. Anwar All Sarkar, AIR
1952 SC 75; Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538.
30For instance, imagine a rule which says that ‘A contract of employment shall stand terminated if the employee
becomes pregnant.’ The right to equality is clearly engaged because of the differential comparative treatment of the
two classes. The differentia created by this rule is between those employees who become pregnant and those who
don’t (or can’t). Here, pregnancy serves as a metric to classify the given employees into two distinguishable classes
and hence, is the intelligible differentia. See Dr. Tarunabh Khaitan, Legislative Review under Article 14 in OXFORD
HANDBOOK (Unpublished, 2014).
the harmonised master list of infrastructure sub-sectors issued by the Department of Economic
Affairs,31 it is evident that projects dealing with rural infrastructure, affordable housing and
housing for poor, infrastructure projects and industrial corridors et al. seem to have been
distinguished from those dealing with projects such as wildlife protection, private educational
institutions and hospitals, housing for industrial workers and project affected families, two-star
or lower category classified hotels32 et al. However, what is sought to be emphasised is that there
exists no intelligible differentia between the projects that were eligible for exemption and the
projects that were not.
For instance, on what parameter can it be said that a project for rural infrastructure or inland
waterways is entitled to an exemption under Section 5 whereas a project to house project-
affected families or to conserve wildlife is not? Even though these projects may be situated in
substantially similar positions, different treatment was accorded to them in terms of the
privileges conferred and the liabilities imposed. Importantly, there does not appear to be any
basis for such difference. Indeed, the court may account for common knowledge, matters of
common report and the needs and exigencies of the society as suggested by experience to
discern the intelligible differentia.33 However, in the instant case, there was nothing on the face
of law or in surrounding circumstances to help identify any kind of differentia between the set of
purposes entitled to an exemption under Section 5 and the set excluded from such exemption.
Therefore, in light of the absence of distinction between projects that were grouped together
from others left out of the group, it can be concluded that Section 5 fell the first part of the test
of reasonable classification.
In any case, even if we were to presume that there existed an intelligible differentia between the
projects that were entitled to exemption and the ones that were not, it is submitted that the
second prong of the Doctrine of Classification, too, was not satisfied. To fulfil the second test, it
needs to be shown that the classification or differentiation that the legislature seeks to introduce
must have a reasonable relation or nexus to the object of the legislation. It has been widely
31Min. of Finance, Dep’t. of Eco. Affairs, Infrastructure Section, Harmonised List of Infrastructural Sub-Sectors
and Institutional Mechanism for its Upgradation (2012), available at
http://finmin.nic.in/the_ministry/dept_eco_affairs/infrastructure_div/HarmonisedMasterList_Infrastructure28032
014.pdf.
32State of Maharashtra & Anr. v. Indian Hotel & Restaurants Assn. & Ors., AIR 2013 SC 2582. In this case, the
court held that the distinction created by the statute between ‘three star and above’ category hotels on one hand and
rest of the hotels on the another was without and intelligible differentia and that such a classification was in violation
of Article 14.
33In Re Special Courts Bill, AIR 1979 SC 478; Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538.
accepted that a useful guide to ascertain the objective and meaning of a statute is the Preamble or
the Statement of Object and Reasons of the said Act.34 The Preamble of the LARR Act reads,
“An Act to ensure, in consultation with institutions of local self-government and Gram Sabhas
established under the Constitution, a humane, participative, informed and transparent process for
land acquisition for industrialisation, development of essential infrastructural facilities and
urbanisation with the least disturbance to the owners of the land and other affected families and
provide just and fair compensation to the affected families whose land has been acquired or proposed
to be acquired or are affected by such acquisition and make adequate provisions for such affected
persons for their rehabilitation and resettlement and for ensuring that the cumulative outcome of
compulsory acquisition should be that affected persons become partners in development leading to an
improvement in their post acquisition social and economic status and for matters connected therewith
or incidental thereto.”35
Naturally, it may be argued that the Preamble of the Act contemplates land acquisition for
industrialisation, development of essential infrastructural facilities and urbanisation and that the
Ordinance being a step in furtherance of this objective, the classification was justified. However,
such an argument does not deserve merit in light of that fact that it presents an incomplete
picture of the objective of the legislation.
A holistic reading of the Preamble will reveal that the true objective of the Act is to ensure a
consultative, humane, participative, informed and transparent process of land acquisition for the
abovementioned purposes with the least disturbance to land owners as well as other affected
persons and with a view to achieve overall socio-economic improvement of all interested
parties.36 In fact, a bare perusal of the Statement of Object and Reasons appended to the LARR
Bill, 2011 also reveals a similar objective for introducing the law.37 The importance of a
consultative approach can be discerned from the fact that the same was specifically incorporated
in the Preamble by way of an amendment to the original text of the Land Acquisition Bill.38
On a conjoint reading, then, of Section 5 with the Preamble and the Statement of Objects and
Reasons of the LARR Act, we may well probe as to- How does this distinction between projects
entitled to an exemption and those that are not promote a system of consultative, informed and
participative development? How does the classification ensure an environment of minimal
disturbance? How does the classification identify the rights of other affected families and protect
34Stateof Rajasthan & Ors v. Basant Nahata (2005) 12 SCC 77; The State Of Madhya Pradesh v. Mahant Kamal
Puri, AIR 1965 MP 183; Taherally Mahomedally Kajiji v. Chanabasappa Mallappa Warad, (1943) 45 BOMLR 422.
2013, No. 30, GAZETTE OF INDIA, pmbl.

36Panjabrao Ganpatrao Borade v. The State Of Maharashtra, W.P. (Civil) No. 4274 of 2014 March 9, 2015
(Dharmadhikari J.) (Bombay High Court).

37The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, cls. 2,3,5 and 7.
38Amendments to the Land Acquisition, Rehabilitation and Resettlement Bill, 2011, cl. 1, available at
http://www.prsindia.org/uploads/media/Land%20and%20R%20and%20R/notice%20of%20amendments.pdf.
the claims and interests? These questions remain unanswered. Consequently, in view of the
absence of concrete answers as necessary, there appears to be no rational nexus between the
classification created and the objective of the law.39 Instead, because of how it limited the
applicability of the SIA and the consent clause, the classification was antithetical to the object of
the statute. It is well established that if no reasonable basis of classification may appear on the
face of it or be deducible from the surrounding circumstances, the court will strike down the law
as an instance of naked discrimination.40 In view of the above, it is our submission that Section 5
of the Ordinance fell foul of Article 14 of the Constitution and was susceptible to being struck
down.
Nevertheless, it could also be argued that in view of the object of the Act to further
industrialisation, development of infrastructure and urbanisation, the alleged classification was
intelligible and had a rational nexus to the objective of the law. However, such a claim strikes at
the very root of the Doctrine of Classification. This is because the object of the law cannot be
used to lend intelligibility to the difference.41 Instead, the said classification must by itself be
intelligible and must, then, have a rational nexus to the objective.42 The proposed argument that
may be raised in the defence of the section under consideration uses the object of the law to lend
intelligibility to the differentia and is, therefore, invalid. Section 5 of the Ordinance, then, was
indeed violative of Article 14 of the Constitution.
Further, it is to be noted that Section 5 did not grant the exemption per se. It merely allowed the
‘appropriate government’ to exempt the stated projects from the application of consent and SIA
provisions. Admittedly, the delegation of legislative authority is not uncommon. However, the
same must be accompanied by a principle or policy for guiding the exercise of discretion by the
Government in the matter of the selection or classification.43 Section 5 did not provide the
requisite guidance. Instead, it granted the government an unfettered discretion to ‘pick and
choose’ from similarly situated projects.44 In such cases, discrimination could be considered to be
39Vidhi Centre For Legal Policy, Submissions to the Joint Parliamentary Committee on the Right to Fair
Compensation, Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 4-5
(2015), available at
http://static1.squarespace.com/static/551ea026e4b0adba21a8f9df/t/5576d504e4b01387e3413042/1433851140095
/Vidhi_Submissions_JPC_LandAcquisition.pdf.
40Ram Prasad Narayan Sahi v. The State Of Bihar, AIR 1953 SC 215; Ameerunnissa Begum v. Mahboob Begum,
AIR 1953 SC 91; Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538.
41Vajravelu Mudaliar v. Special Deputy Collector Madras, AIR 1965 SC 1017.
42Surith Parthasarthy, Unconstitutional Exercise of Power, THE HINDU, Mar. 6, 2015,
http://www.thehindu.com/opinion/lead/unconstitutional-exercise-of-power/article6963544.ece.
43Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538.
44Vidhi Centre for Legal Policy, supra note 39, at 6-7.
inherent in the statute itself and the same would be liable to be struck down due to the arbitrary
and uncontrolled delegation of power.45
II. Section 11 & an ‘Over-Inclusive’ Exemption
Interestingly, Section 5 was not the only section of the Ordinance that could attract the wrath of
the Constitution. In addition to Section 5, Section 11 of the Ordinance, too, would fall foul of
Article 14. Concomitant to the Doctrine of the Classification is the tendency to over-classify and
to under-classify. The same has been elucidated by the apex court in the case of State of Gujarat v.
Ambica Mills46 as follows,
“A classification is under-inclusive when all who are included in the class are tainted with the mischief but
there are others also tainted whom the classification does not include. In other words, a classification is bad as
under,-inclusive when a State benefits or burdens persons in a manner that furthers a legitimate purpose but
does not confer the same benefit or place the same burden on others who are similarly situated. A
classification is over- inclusive, when it includes not only those who are similarly situated with respect to the
purpose but others who are not so situated as well. In other words, this type of classification imposes a burden
upon a wider range of individuals than are included in the class of those attended with mischief at which the
law aims.” (emphasis supplied)
In other words, persons, aspects or things that must otherwise have been excluded in the said
classification are included and vice versa. In each of these scenarios, Article 14 may be said to
have been infringed because the over-classification or the under-classification, as the case may
be, treats unequals as equals. It imposes an identical burden upon a broader range of individuals
than those who can legitimately be treated as constituting a single class for the purpose of
remedying the mischief at which the law aims and vice-versa.47
Essentially, the point advanced by these judgements is also neatly articulated by the following
example. Consider a government that intends to curb unsafe driving. To achieve the said
objective, all drivers above the age of 80 years are prohibited from driving. In this case, drivers
aged above 80 years who diligently follow traffic rules are not “similarly situated” to those in the
same age group who do not follow the requisite rules. The government directive, thus, would be
over-inclusive.
We propose to analyse Section 11 of the Ordinance in this backdrop. Section 11 sought to

amend Section 101 of the LARR Act. Section 101 provided for a return to the original owners or
a transfer to a Land Bank of the land that remained unutilized for a period of five years. The
45State of West Bengal v. Anwar Ali Sarkar, AIR 1952 SC 75; Dwarka Prasad Laxmi Narain v. State of Uttar
Pradesh, AIR 1954 SC 224.
46State of Gujarat v. Ambica Mills, (1974) 4 SCC 656.
47Prag Ice and Oil Mills and Anr v. Union of India, AIR 1978 SC 1296.
purpose of the said Section may be traced to the widespread instances of land staying
unallocated, unutilized or vacant for long years after acquisition. The same may be appreciated
by a glance at an SEZ audit conducted by the Comptroller and Auditor General of India.48 In the
said audit, it was reported that large tracts of land acquired for SEZs were either diverted to real
estate projects or were mortgaged to banks in return for loans, by private beneficiaries, or lay
vacant and unutilized.
Consequently, it is obvious that the Section intended to promote optimal utilization of land and
to curb the misuse of State machinery for ulterior interests. Importantly, the Section did so by
distinguishing utilized land from unutilized land as was to be ascertained at the expiration of the
period of five years. However, the said section suffered from a lacuna as it failed to account for
practical realities of business negotiations. It is no secret that certain projects have a long
gestation period and cannot be completed within a period of five years.49 Further, it is true that
business negotiations, acquisition processes, procurement of requisite mandatory clearances,
post-acquisition litigations etc. delay projects, sometimes even taking more than five years. At the
same time, these transactions cannot materialise without the certainty of land being available for
the project. Naturally, then, such land is likely to remain without development as long as these
impediments exist. However, what is important to note that such land cannot be classified as
similar to the land that remains idle not because of the aforementioned reasons but because of
speculative or ulterior motives. Accordingly, unlike the land of the latter category, the land of the
former category cannot be termed as unutilized per se. At most, it may be called ‘under-utilized’
land. Evidently the land belonging to the category of ‘under-utilized’ land was, indeed, required
to be exempted from the application of Section 101.
However, the amendment introduced by Section 11 of the Ordinance is to the effect that the
time limit was changed from ‘a period of five years’ to ‘a period specified for setting up of any
project or for five years, whichever is later’. This period to be specified may be said to be
specified by the appropriate contract, in the absence of any clarification by the statute to that
effect.
Let us now apply the test of over-classification to Section 11 of the Ordinance. To determine the
Over-Inclusiveness of a classification what needs to be ascertained is whether the things in
48Comptroller and Auditor General of India, Performance Audit of Special Economic Zones (SEZs), No. 21 (2014),
available at
http://www.saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_
reports/union_performance/2014/INDT/Report_21/21of2014.pdf.
49What the ordinance on land acquisition says, and how it divides, THE INDIAN EXPRESS, Feb. 25, 2015,
http://indianexpress.com/article/india/what-the-ordinance-on-land-acquisition-says-and-how-it-divides/.
different categories can be said to be so differently situated in the context of and in relation to
the purpose for which the classification is created.50 In other words, the question is- Are they
'birds of a feather' who must 'flock together', tried alike and given the fruits of justice equally?51 It
is clear that Section 11 as it stands now can be used to deny return of land for both unutilized as
well as under-utilized land i.e. categories with clearly discernible differences.52 Therefore, the
concerned transferees of land are likely to obtain undue benefit by keeping the land unutilized.
The same is illustrated through the above-mentioned CAG report which shows that about 37%
of the surveyed land was unutilized per se as the land was allowed to remain vacant, diverted for
alternate uses, mortgaged to raise capital for other projects, de-notified to benefit from price
appreciation or used for speculative purposes for a term in excess of five years.53
In light of the same, Section 11 suffered from the vice of Over-Inclusiveness. The section
included not only those who were similarly situated with respect to the purpose (under-utilised
land) but others who were not so situated (unutilised land) as well. In other words, the
classification conferred a benefit upon a wider range of individuals than were sought to be
included in the class of those intended to be protected.54 Therefore, the constitutional validity of
the same was in doubt and as can be discerned from past judicial practice,55 the courts were likely
to interfere by striking down the offending part so as to exclude the category of under-utilized
land which ought not to have been included in it.
Consequently, the Ordinance had at least two provisions that may have infringed upon the
Constitution. The wrath of the Constitution, however, was a mere epitome of the shortcomings
of the Ordinance and of the endeavours of the Government. A reassessment, then, of the
amendments sought to be moved is truly the need of the hour. Importantly, however, such
reassessment may prove to be futile in the event that the concerns with LARR Act are
incorrectly analysed. Therefore, the article now seeks to examine the failings of the Act on other
counts viz. inadequate compensation and onerous R&R Scheme and then proceeds to examine
whether the Government attempted to address the same.
50Prag Ice and Oil Mills and Anr v. Union of India, AIR 1978 SC 1296.
51In Re Special Courts Bill, AIR 1979 SC 478.
52B. Meenakshi v. Government of Andhra Pradesh, 2002 (2) ALD 96 (Andhra Pradesh High Court).
53Comptroller and Auditor General of India, supra note 48.
54Dhruva Gandhi, Sarangan Rajeshkumar and Shubham Jain, Modi’s land ordinance may yet fail the biggest test – of the
Indian Constitution, SCROLL, April 15, 2015, http://scroll.in/article/720493/modis-land-ordinance-may-yet-fail-the-

biggest-test-of-the-indian-constitution.
55B. Rajendra Prasad v. Controller of Examinations, Nagarjuna University, 2004 (1) ALD 80 (Andhra Pradesh High
Court); B. Meenakshi v. Government of Andhra Pradesh, 2002 (2) ALD 96 (Andhra Pradesh High Court); Shanker
Birmiwal v. Union of India, AIR 1982 RAJ 187 (Rajasthan High Court).
COMPENSATION: ‘MARKET VALUE’ REMAINS UNTOUCHED
The Doctrine of Eminent Domain is the power exercised by the State over all land within its
territory.56 In the realm of acquisition of land, this power has been explicated as the power of the
State to take land for public use without the owner’s consent.57 Naturally, an exercise of this
power is an inequitable bargain for the owner whose land gets taken. To lessen such inequity,
then, the State seeks to compensate the owner for the deprivation of land. More often than not,
this compensation is in monetary terms. In India, both the Doctrine of Eminent Domain and
the concomitant concept of the payment of compensation were manifested in the law for the
first time in the Land Acquisition Act, 1894.
This law provided for the award of compensation,58 the computation of such compensation59
and the factors to be considered irrelevant in the computation exercise.60 Put simply, the
compensation to be paid to the owner whose land was taken was the market value of the said
land as on the date of the issuance of a preliminary notification for the acquisition of land
coupled with the other damages caused to the owner in the process of acquisition. Evidently, the
correctness and adequacy of such compensation hinged upon the possibility and accuracy of
calculation of the market value of that land. Deficiencies in calculation leading to inadequate
compensation would perpetuate the unjust nature of the process and would, thereby, warrant an
intervention by courts of law.61
To put matters in perspective and to understand the extent of these deficiencies that plagued the
working of the Land Acquisition Act, 1894, it is important to take note of a recent study
conducted by Prof. Ram Singh.62 The study analysed all such High Court (Punjab & Haryana
High Court, for the purposes of the study) cases wherein the compensation awarded by the
collector was challenged on the grounds of inadequacy. The study revealed that the High Court
intervened in 96% of the cases and in such cases the compensation awarded on an average, was
342% higher than that awarded by the collector.63 In fact, the study also made mention of
instances wherein there had been an increase of 800% in the compensation awarded by the
56Usha Ramanathan, A Word on Eminent Domain in DISPLACED BY DEVELOPMENT – CONFRONTING

MARGINALISATION AND GENDER INJUSTICE 133, 133 (Lyla Mehta ed., 2009).
57State of Bihar v. Kameshwar Singh, 1952 1 SCR 889.
58Land Acquisition Act, 1894, No. 1, § 11.
59Land Acquisition Act, 1894, No. 1, §§ 15 and 23.
60Land Acquisition Act, 1894, No. 1, § 24.
61Madar Samad et al., Managing Rehabilitation and Resettlement of the Involuntarily Displaced Population: Lessons from Selected
Hydro Projects in India, INT. WATER MGMT. INS. J. 123, 131 (2008).
62Ram Singh, Inefficiency and abuse of compulsory land acquisition: An enquiry into the way forward (Ctr. For Development
Economics, Department of Economics, Delhi School of Economics, Working Paper No. 209, 2012).
63Id., at 7. The Working Paper also studied 525 judgements of the ADJ courts in Delhi and found that in 86% of the
cases, the compensation awards made by the courts were significantly higher than those made by the collector.
courts.64 The contributions of this study are twofold. Firstly, it brings to the fore the necessity to
pursue litigation, namely, the grossly insufficient compensation and highlights that if the scourge
of post-acquisition litigation is to be minimised,65 one of the primary factors to be addressed
directly is compensation. Secondly, it tells us that if the issue of compensation is to be addressed
comprehensively, the reason that underlays the discrepancy between the awards as made by the
courts and as made by the collectors needs to be understood.
As insinuated earlier, the difference in compensation awarded by the Court and the collector can
be traced to the difference in the determination of the market value of the land. Ideally, market
value or true value of a said piece of land must be determined based on the special characteristics
viz. quality of soil, quantum of natural resources, and nature of assets constructed et al. of the
land, the price prevalent in the locality and the potential use of the land. 66 However, there are
several hurdles to a proper determination of true market value. Poorly maintained or non-
existent land records entail a lack of information as to the location and extent of the land;67 steep
rates of stamp duty mean that official sale prices are underquoted to evade the payment of tax;68
and a black market to circumvent distortions in the market for land means that land valuations
cannot be accessed easily.69 Moreover, these problems are exacerbated in the rural areas because
of a multiplicity of regulations70 and the unrecorded nature of rights to land. Therefore, market
values are decided on the basis of either the circle rates (minimum rates defined by state
governments at which property can be bought or sold) or the sale deeds of similar properties in
the vicinity.71 Neither of the two, notably, are accurate parameters.72 Whereas it is commonly
64Ram Singh, supra note 62, at 7. In this context, it is key to note that as per § 25 of the Land Acquisition Act, 1894,
courts were barred from decreasing the compensation amount as awarded by the Collector. Naturally, in the absence
of this provision of law, the average increase in compensation would be lower.
65G. Raghuram, et al., Mega projects in India: Environmental and Land Acquisition Issues in the Road Sector (Indian Institute
of Management, Ahmedabad, Working Paper No. 2009-03-07, 2009).

66Kaushik Dutta and Prasanna Mohanty, The official price of land is a joke, BUSINESS LINE, Dec. 17, 2014,
http://www.thehindubusinessline.com/opinion/the-official-price-of-land-is-a-joke/article6701536.ece.
67Maitreesh Ghatak, et al., Land Acquisition and Compensation: What Really Happened in Singur?, 48(21) ECO. & POL.
WKLY. 33, 38 (May 25, 2013).

68Niranjan Sahoo and Saumya Chaterjee, The Land Acquisition Stalemate: Contentions & Solutions, 11(1) ORF SEMINAR
SERIES 1, 16 (April 2013),

http://www.orfonline.org/cms/export/orfonline/modules/orfseminarseries/attachments/seminar11_1365584747
463.pdf.
69Ram Singh, Inefficiency and Abuse of Compulsory Land Acquisition: An Enquiry into the Way Forward, 67(19) ECO. & POL.
WKLY 46 (May 12, 2012).

70Varun, Land Acquisition: Compensation and R&R Policy – I, CRITICAL TWENTIES (Aug. 17, 2010),
http://www.criticaltwenties.in/economicsocialpolicy/land-acquisition-compensation-and-rr-policy-i.
71Maitreesh Ghosh and Parikshit Ghosh, Land Acquisition Bill: A Critique and a Proposal, 46(41) ECO. & POL. WKLY
65, 65 (Oct., 2011).

72Ram Singh, supra note 69, at 47.
known that circle rates are significantly under-valued,73 sale prices, though higher, are usually
affected by the features peculiar to the land and are under-quoted to evade stamp duty.74
Nonetheless, the judiciary has consistently adopted the latter as a preferred determinant of
market value. In the landmark decision of Jaw Ajee Nagnatham v. Revenue Divisional Officer,75 the
Supreme Court held that circle rates were prepared and maintained primarily for the collection of
stamp duty and could not form a basis for the determination of market value under the Land
Acquisition Act, 1894.76 Subsequently, in Land Acquisition Officer v. Jast Rohini,77 the Supreme
Court reiterated the position laid down in the above case and further went on to say that market
value should be determined on the hypothesis of the price fetched in a bona fide sale by a willing
vendor who would agree to sell the acquired land or the land in the neighbourhood possessed of
similar features, or portions thereof, to a willing vendee.78 Moreover, evidence of such a transaction,
without knowledge of the acquisition, on the acquired land was held to be the pragmatic and the
ideal method to make such a determination. In other words, the appropriate sale deed, namely, a
sale deed (a) of a bona fide transaction, (b) between two consenting parties and (c) of the acquired
land or the neighbouring land with similar features, was held to be the preferred and pragmatic
basis for the determination of market value and, thereby, of compensation.79
However, what is crucial to be noted is that the usage of sale deeds, too, has not been bereft of
disputes. Cases abound wherein sale deeds of smaller tracts of land were used to determine the
market value of larger tracts of land80 or wherein the sale deed of a plot of land on the periphery
of a city was used to determine the market value of a plot of land in the heart of the same81 or
wherein sale deeds of neighbouring plots of land were not adjusted for the commercial potential
73Tripti Lahiri, Why It’s So Hard To Fix Land Acquisition, THE WALL STREET JOURNAL, June 13, 2012,
http://blogs.wsj.com/indiarealtime/2012/06/13/why-its-so-hard-to-fix-land-acquisition/.
74Standing Committee on Rural Development, Lok Sabha, The Land Acquisition, Rehabilitation And Resettlement
Bill, 2011 (2012), available at

http://dolr.nic.in/dolr/downloads/pdfs/Land%20Acquisition,%20Rehabilitation%20and%20Resettlement%20Bill
%202011%20-%20SC(RD)'s%2031st%20Report.pdf.
75Jaw Ajee Nagnatham v. Revenue Divisional Officer, 1994 SCC (4) 595.
76This principle of law has also been upheld by the apex court and other High Courts in Krishi Utpadan Mandi
Samiti v. Bipin Kumar, (2004) 2 SCC 283, Krishi Utpadan Mandi Samiti v. Khushi Ram, 2004 (2) AWC 1305
(Allahabad High Court), U.P. Jal Nigam v. Kalra Properties Pvt. Ltd, 1996 SCC (3) 124.
77Land Acquisition Officer v. Jast Rohini, 1995 SCC (1) 717.
78In Land Acquisition Officer v. R.R. Hanmantanawar, AIR 1996 SC 1186, too, the Supreme Court has said that the
above method is the best method for the computation of market value.
79 In addition to the same, the Supreme Court in Jaw Ajee Nagnatham’s case also held (1) the opinion of experts and
(2) a suitable multiple of the rental value of the land to be possible options for the determination of compensation.
However, these methods have, if at all, been used scantily.
80Union of India v. Ram Phool, 2003 (10) SCC 166; Land Acquisition Officer v. N. Rajamallu, AIR 2004 SC 1031;
ADA, Allahabad v. Shakil Ahmad and Ors, 2004 (55) ALR 123.
81Nityananda Namtoar v. Land Acquisition Officer-cum-Collector, 2014 (1) ILR-CUT 785 (Odisha High Court).
of the land being acquired82 or wherein sale deeds used to determine market value were dated
and were not an apt reflection of market realities83 or wherein the lands whose sale deeds were
considered were materially different in some other manner from the lands being acquired.84
Consequently, the point sought to be emphasised is that determinations of the ‘appropriate’ sale
deed mentioned above and the suitable adjustments to be made because of specific features of
the land are not straightforward processes.
Unsurprisingly and unfortunately, thus, collectors seek to avoid these processes of

determinations of the appropriate sale deed and of the suitable adjustments and instead compute
the market value of the concerned land on the basis of circle rates.85 In other words, they seek to
play it safe. Importantly, the same is in direct contravention of the dictum of the judiciary
delineated above. In such a scenario, an intervention by the courts is the logical outcome and the
crippling effect of the scourge of litigation on the process of land acquisition. Naturally, then, to
address the problem of litigation86 and to ensure the timely award of adequate compensation, the
computation of the market value of the land needs attention.
Compensation & the LARR Act, 2013
Contrary to popular perception, the LARR Act, 2013 does not appropriately address the issue.
Instead, it allows for the abovementioned scheme of the Land Acquisition Act, 1894 to continue.
To appreciate the same, a look at Section 26 of the LARR Act, 2013 is imperative. Section 26
reads,
“26- (1) The Collector shall adopt the following criteria in assessing and determining the
market value of the land, namely:-.
(a) the market value, if any, specified in the lndian Stamp Act, 1899 for the registration of
sale deeds or agreements to sell, as the case may be, in the area, where the land is situated; 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 as agreed upon under sub-section (2) of section 2 in
case of acquisition of lands for private companies or for public private partnership projects,
82Allahabad Development Authority v. Asfaque Husain, 2007 (3) AWC 2388 (Allahabad High Court).
83National Capital Power Corporation v. Abhay Ram, 1999 (3) AWC 2687 (Allahabad High Court).
84U.P. Awas Evam Vikas Parishad v. Jagdish, 1999 (3) AWC 2363 (Allahabad High Court), Navshakti Townships v.
Deputy Collector (Revenue), W.P. (Civil) No. 27616 of 2014 November 25, 2014 (Karnan J.) (Madras High Court),
State of Bihar v. Ranawati Singh, 2004 (1) JCR 587 (Jharkhand High Court).
85FAQ by Jairam Ramesh on the Land Bill, TEHELKA, Aug. 29, 2013, http://www.tehelka.com/land-acquisition-bill-
2013/.
86To appreciate why litigation is a considerable problem, it is important to keep in mind the social costs associated
with the same. Court fees, legal costs, delays caused by the slow progress of cases are illustrative of these costs that
follow from litigation. Moreover, litigation is skewed against the poor on account of the burdensome economic
costs and, thereby, socially unfair.
whichever is higher”
This sub-section is further followed by four explanations. Explanation 1 states that for the
determination of the average sale price under (b), sale deeds or agreements to sell for similar
areas of land in the near vicinity or in the near village in the immediately preceding three years
shall be taken into account. Explanation 2 clarifies that this average sale price shall be calculated
on the basis of that half of the sale deeds in which the highest sale price has been recorded.
Explanation 3 says that in the exercise conducted under Explanations 1 and 2, any price paid as
compensation for land acquired under the LARR Act, 2013 on an earlier occasion in the district
shall be disregarded by the collector. Lastly, Explanation 4 mentions that the collector may also
disregard any such sale deed that he believes is not indicative of the actually prevailing market
value of the land.
The novelty of the law vis-à-vis compensation, however, is said to lay in Section 26(2) read with
Schedule 1 to the Act. This sub-section provides for a factor by which the market value
calculated under sub-section (1) is to be multiplied to arrive at the compensation amount.
Further, according to Schedule 1, this factor is to be decided by the State Government. Whereas,
in rural areas, this factor may range from one to two based on the remoteness of the acquisition
from an urban area, in urban areas, this factor is fixed at one. Crucially, though, (a) the law does
not define the terms ‘urban’ and ‘rural’ and (b) the law does not provide any basis to determine
the remoteness of an acquisition of land from an urban area. The implication of the same shall
be studied at a later point.
Three noteworthy aspects follow from the above description of the law. First, the collector is
vested with the discretion to choose between the prices as mentioned in the sale deeds or the
circle rates, whichever is higher. It was noted above that the determinations of the ‘appropriate’
sale deed and of the suitable adjustments are not a straightforward matters. Therefore, the
grounds that constituted the basis for a challenge of the selection of a sale deed under the old
law may, indeed, continue under Section 26(1)(b) read with Explanation 1 and under Section
26(1)(a). Simply put, the selection of a sale deed may continue to be challenged on account of (i)
non-consideration of features specific to the land and (ii) material differences between the land
being acquired and the land involved in the sale deed. Moreover, in view of the detailed nature of
the processes of determinations of the ‘appropriate’ sale deed and of the suitable adjustments,
collectors can continue to resort to circle rates to arrive at market values.87
87§26 of the LARR Act, 2013 obligates the collector to select circle rates as the basis for the calculation of market
value only when the same is higher than the average sale price or the price quoted in the ‘appropriate’ sale deed.
Second, the collector may choose to disregard any sale price that may appear to him to be non-
indicative of the actual prevailing market value. The true implication of this provision of law may
be ascertained, for instance, from the acquisition process for the Koyembedu Market Complex
Project in Chennai. Though 424 sale deeds were considered initially, only the two lowest priced
deeds formed the basis of compensation.88 Similarly, in another case of acquisition, though the
collector considered 1,152 sale deeds, the lowest sale deed was selected on the ground that the
others were over-priced or pertained to non-comparable plots of land.89 In other words, an
implementation of Explanation 4 may considerably dilute the positive change sought to be
ushered via Explanation 2.
Third, the collector is barred from the consideration of compensation awards provided for other
lands acquired on a previous occasion in the same district.90 Naturally, this may be counter-
intuitive because a satisfactory award made by the court or the collector on a previous occasion
need only be adjusted for inflation and other material differences to speedily arrive at adequate
compensation. Explanation 3, an import from the old law, is, therefore, counter-productive. On
a cumulative consideration of these three aspects, then, it may well be said that issue of accurate
calculation of market value remains unsolved.
Moreover, though the proponents of the LARR Act, 2013 argue that this problem has been
solved by the multiplier mechanism, the same is not the case.91 To begin with, the multiplying
factor itself is subject to challenge. Previously, we observed that this factor must be based on the
remoteness of an acquisition from an urban area and that there are no criteria to determine such
remoteness. As a consequence, when the State Government fixes a factor that is to apply across
the board to all rural areas92 or when it fixes the same factor for two areas at materially different
Importantly, though, it does not prohibit the collector from using circle rates altogether. Accordingly, in a challenge
before a court of law, the burden shall lie on the claimant to show both (i) the appropriate sale deed or the
appropriate average price, as the case may be, and (ii) the same to be higher than the circle rates. In view of the
difficulties associated with (i), the collector, in fact, has a greater leeway now to use circle rates.
88Ashwin Mahalingam and Aditi Vyas, Comparative Evaluation of Land Acquisition and Compensation Processes across the
World, 66(32) ECO. & POL. WKLY (2011).

89Id.
2013, No. 30, GAZETTE OF INDIA, § 26, Explanation 3.

91India’s proposed land acquisition bill defines market value by reference to the amounts stated in recent deeds for
comparable land, but includes a multiplier as a frank acknowledgement of the routine gap between stated values and
actual values. Although easier to apply, none of the approaches are ideal, and may in some cases result in significant
divergence between the “legal“ and “actual“ market value of land. See World Bank, Compulsory Acquisition of Land
and Compensation in Infrastructure Projects 4 (2012), available at http://ppp.worldbank.org/public-private-
partnership/sites/ppp.worldbank.org/files/documents/Compulsory%20Acquisition%20of%20Land%20and%20C
ompensation%20in%20Infrastructure%20Projects.pdf.
92Haryana, for instance, has set the multiplier for all acquisition of land in the rural areas at 2.
degrees of remoteness93 or when it fixes the factor at one even for rural areas peripheral to urban
areas in view of the undefined nature of the terms ‘urban’ and ‘rural’, these decisions are likely to
be challenged in a court of law. In other words, a new avenue for litigation may come to the fore.
Furthermore, even when the multiplying factor is set appropriately, it may, indeed, aggravate the
issue.
Let us consider an example to see how the same follows. Suppose, the circle rate in a district for
a unit of land is Rs. 500 and the price as mentioned in a sale deed for a similar property in the
vicinity is Rs. 750. Before the new law came into existence, the compensation not paid to the
claimant would have been the difference between these two amounts with the difference
multiplied by a factor of 1.3 i.e. 1+30% (Solatium was fixed at 30% under the old law). In other
words, the compensation lost out was Rs. 325 [{Rs. 750- Rs. 500}*{1.3} = Rs. 325]. However,
with the new law in force, the compensation lost out is the difference between the two amounts
multiplied by a factor of, say 4 i.e. (1+100%)*2 instead of 1.3 (Solatium is 100% under the new
law and the multiplying factor has been assumed to be 2 for the purposes of this example.
Compensation, thus, is arrived at by adding the solatium to the market value and multiplying the
sum total by 2). In other words, Rs. 1,000. [{Rs. 750- Rs. 500}*{4} = Rs. 1,000] Why, now,
would an affected person who took recourse to litigation to recover Rs. 325 not take recourse to
it to recover Rs. 1,000? Why would this not be the case when Rs. 1,000 is a statutory
entitlement?94
The basic point advanced through the above illustration is that the multiplier mechanism may in
effect incentivise litigation and may, thus, further cripple the process of land acquisition. It is
fundamental to remember that this novel mechanism does not address the root of the matter, as
elucidated earlier, namely, the accurate assessment of market value. What it does is to only
compound the problem that confronts land acquisition. In light of the same, the Ordinance
seems to have missed the essence of these problems that it ventured to weed out. Further, in
light of the omission of the issue of compensation and market value from the Ordinance, it is
questionable whether it furthered the objective of overall development and improved the
efficiency of the acquisition of land. In fact, on both these counts, the focus of the Ordinance
93Panjabrao Ganpatrao Borade v. State Of Maharashtra, W.P. (Civil) No. 4274 of 2014 March 9, 2015
(Dharmadhikari J.) (Bombay High Court). In the said case, the Government of Maharashtra pegged the multiplier
for all rural areas at 1.10, irrespective of the remoteness of the area from an urban centre. The Court held such
across the board fixation of multiplier as violative of Article 14 on grounds of colourable exercise of discretion and
non-application of mind.
94Dhruva Gandhi, Sarangan Rajeshkumar and Shubham Jain, Land Acquisition: The Continuation of a Faulty Legacy?, L.
& OTHER THINGS (April 22, 2015), http://lawandotherthings.blogspot.in/2015/04/land-acquisition-continuation-

of-faulty.html; Ram Singh, supra note 62, at 25.
was parochial and short-sighted. Importantly, compensation was not the only issue that
highlights such narrowness of approach as encapsulated in the Ordinance.
RESETTLEMENT AND REHABILITATION: PROBLEMS AWAIT CONFRONTATION
Just as compensation, the concept of Rehabilitation and Resettlement of persons displaced as a

consequence of the exercise of the power of eminent domain by the State was evolved to lessen
the inequitable nature of the process, to prevent gross destitution of the displaced95 and to secure
the objective of overall, participative development. Drawing, then from the positives and
shortcomings of the National Resettlement and Rehabilitation Policy, 2003, the National
Resettlement and Rehabilitation Policy, 2007 and the Resettlement and Rehabilitation Policy as
evolved by the World Bank and the Asian Development Bank, the LARR Act, 2013
encapsulated, for the first time in statutory form, a comprehensive scheme of R&R. In fact, the
scheme of R&R has widely been considered to be one of the highlights of the law.
Unfortunately, however, this scheme is riddled with a fundamental contradiction in its drafting
and with practical challenges in its implementation. In the absence of urgent attention to each of
these matters, the problems that cripple the process of land acquisition are likely to increase
manifold.
The primary contradiction in the drafting of the law that needs the immediate attention of the
Legislature lays in Section 38. Section 38(1) provides that the monetary part of R&R entitlements
as listed out in the Second Schedule of the LARR Act has to be paid within six months of the
date of the award and that possession can be taken only after this payment. The infrastructural
entitlements of the R&R scheme as listed out in the Third Schedule can be provided within 18
months from the date of the award. Therefore, as per Section 38(1), infrastructural entitlements
may be provided even after taking possession of the land. Section 38(2), however, mandates that
the resettlement and rehabilitation process must be completed in all aspects before the affected
families are displaced. The phrase “rehabilitation and resettlement process” in Section 38(2) is
significant in this context. The usage of this phrase indicates that all entitlements under R&R
process, namely, both the monetary as well as the infrastructure entitlements must be provided
before the affected people are displaced.96 Clearly, it is difficult to envisage a situation in which
95Housing and Land Rights Network, Habitat International Coalition – South Asia, Forced to the Fringes: Disasters
of ‘Resettlement’ in India 8 (2014), available at http://www.hic-
sarp.org/documents/Forced_to_the_Fringes_Complete.pdf.
96C. Ramachandraiah et al., Land Laws, Administration and Forced Displacement in Andhra Pradesh, India in CTR. FOR ECO.
AND SOC. STUDIES MONOGRAPH SERIES 1, 45 (2014).

possession of land can be taken without a displacement of the land owners. As a consequence,
what follows is an apparent contradiction between the two sub sections of Section 38.97
Importantly, though, this contradiction may only be the tip of the problems to surface vis-à-vis
the R&R scheme outlined under the LARR Act. Some of these other challenges may flow from
the enormity of the task imposed on the collectors by the law
As per the Second Schedule to the law, the collector is bound to make provision for (i) housing
units or financial assistance for construction of housing units, (ii) land for land in case of
acquisition of irrigated land, (iii) an offer for developed land in case of acquisition for
urbanisation purposes, (iv) skill development and employment opportunities to one member of
the family or a one-time grant of five lakh rupees or an annuity for twenty years, as the case may
be, (v) a subsistence grant for a one-year period and a transportation allowance to every
displaced family, (vi) financial assistance for construction of cattle sheds and petty shops and for
small traders and artisans, (vii) a one-off resettlement allowance and (viii), fishing rights in cases
of irrigation and hydel projects. By and large, then, the Second Schedule provides the monetary
entitlements of the resettlement and rehabilitation process. However, as insinuated earlier, the
same does not encompass the whole gamut of the law on this subject.98
Subsequent to the Second Schedule, the Third Schedule to the law makes provisions for the
minimum amenities and the infrastructural facilities to be provided to the displaced persons.
These basic amenities include roads, passages and easement rights, suitable drainage facilities,
sources of safe drinking water for every displaced household and for cattle, grazing land, a
reasonable number of fair price shops, panchayat ghars, village post offices, a storage mechanism
for seeds and fertilisers, irrigation facilities to the agricultural lands allotted, suitable public
transport facilities, cremation and burial grounds, sanitation facilities including individual toilet
points, electricity connections, anganwadi services, schooling and healthcare facilities,
playground for children, a community centre for every hundred families, places of worship,
97On the aside, § 38 is contradictory to another section of the LARR Act as well. This contradiction lays between §§
38(1) and 41(6) and is concerned with the rights of Scheduled Tribes and Scheduled Castes. On one hand, § 38(1),
which is of general application, guarantees that the land owner cannot be deprived of his possession before he
receives the compensation amount. On the other, § 41 which is ostensibly a special provision for Scheduled Castes
and Scheduled Tribes provides that land belonging to these communities can be acquired on the payment of merely
one-third of the compensation amount. Surprisingly, this contradiction is couched in a section that otherwise seeks
to provide additional safeguards for these communities. Moreover, it deprives them of the minimum protection
assured to the rest of the population. To say the least, the scheme of the Act in this regard is perplexing and needs
to be addressed urgently.
2013, No. 30, GAZETTE OF INDIA, §§ 31, 38(1), 105(3) read with sch. 2.
security arrangements, veterinary services, tribal institutions and forest rights for forest
dwellers.99
On a holistic consideration, it is clear that the law as to the R&R process is intricate in detail and
extensive in ambit. Effectively, the Third Schedule to law mandates that the collector provide the
displaced persons with an alternative township. Moreover, every aspect of such township is an
entitlement of the displaced persons and is, thereby, statutorily enforceable. Further, these
entitlements have to be provided in a time-bound manner viz. within a period of eighteen
months.100 However, in intricacy and extent lays the worrisome issue with the law on this subject
matter.
Undoubtedly, the intent behind providing an extensive list of entitlements is laudable.

Nonetheless, the same cannot be divorced from practical realities and past rehabilitation
experiences. This incongruence sought to be emphasised can be illustrated through R&R policies
and their failures in the states of Orissa, Andhra Pradesh and Haryana.
Orissa introduced the Orissa Resettlement and Rehabilitation Policy in 2006- a policy that was to
govern all future land acquisitions in the state.101 This policy made detailed provisions for a
survey and identification of the displaced families,102 a resettlement and rehabilitation plan,103 a
financial assistance inclusive of employment opportunities and a provision for shops and
infrastructural utilities et al.104 Simply put, the Orissa policy was in many ways a precursor to the
procedure and entitlements under the LARR Act. Importantly, the policy did not provide for any
time constraints. Nonetheless, a Performance Audit on Resettlement and Rehabilitation of
people affected by industrial projects in Odisha conducted by the Comptroller and Auditor
General of India (CAG) brought to the fore a few grim realities.105 The Audit studied 32
industrial projects in 13 districts wherein 6,533 families were displaced and 35,632 families were
affected from 1992-2013.
The findings of the Audit were as follows. For 14 industries established in 8 districts, no socio-
economic survey was conducted prior to the commencement of the R&R process; for several
2013, No. 30, GAZETTE OF INDIA, §§ 32, 38(1), 105(3) read with sch. 3.

101Orissa Resettlement and Rehabilitation Policy, 2006, r. 1(ii).
102Orissa Resettlement and Rehabilitation Policy, 2006, r. 4.
105Comptroller and Auditor General of India, Report on General and Social Sector, No. 7, ch. 2 (2014), available at
http://www.saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_re
ports/Orissa/2014/Report_7/Chap_2.pdf.
projects no public hearings were conducted and the reports prepared after the completion of the
survey were not examined by any experts; in case of 25 industries no comprehensive R&R plan
was prepared; in case of 5 other industries only 233 members from among 2085 members were
trained suitably for employment; in case of 10 industries no employment or cash in lieu of
employment was provided to members from displaced families; in 7 districts, the self-relocation
allowance of Rs. 50,000 per family was not disbursed to 490 families; for 8 industries in 6
districts no house construction allowance was disbursed to 408 displaced families; in the case of
9 industries in 7 districts, the allowance for the construction of cattle sheds was not paid to 508
displaced families; in 27 out of the 32 industrial projects, no shops or service units were
constructed for the affected families and in 14 projects, no Record of Rights was distributed to
1,304 families. More importantly, in the alternative townships provided in the 13 districts under
consideration, in 10 colonies, the public water supply was deficient and the health facilities were
inadequate; in 12 colonies, there was an absence of cremation and burial grounds; in 5 colonies,
street lights and suitable roads were unavailable; in 6 colonies, places of worship were absent and
in 11 colonies, educational institutes, too, were absent. In essence, thus, the R&R policy in
Odisha failed on many counts that were a precursor to Schedules 2 & 3 of the LARR Act.
Similar was the case with Haryana. The state introduced the Policy for Rehabilitation and
Resettlement of Land Owners and Land Acquisition Oustees in 2005. The policy provided for
payment of annuity over and above the usual land compensation, allotment of plots for the
displaced and infrastructure facilities et al.106 Yet again, a Report of the CAG on Social, General
and Economic Sectors for Haryana showed multiple failures. It said that till 2012-13, out of the
annuity of ₹423.28 crore due for payment, only ₹185.11 crore had been paid; for the 41,743
acres of land acquired, no beneficiaries were identified and no residential plots of land were
provided in all but one project and provisions worth ₹129 Crores for community development
and ₹65 Crores for skill development to be made by the Requiring Body never materialised.
Further, several such flaws were identified with the information and grievance redressal
mechanisms as well.107
Likewise, Andhra Pradesh, too, had introduced the Andhra Pradesh Rehabilitation and
Resettlement Policy in 2005. Chapter VI of the policy provided R&R benefits that included
106Policy for Rehabilitation and Resettlement of Land Owners, Land Acquisition Oustees, 2005,
http://www.dgde.gov.in/sites/default/files/acquisition/scan0007.pdf.
107Comptroller and Auditor General of India, Report on Social, General and Economic Sectors (Non Public Sector
Undertakings), No. 2, ¶ 3.15 (2014), available at

http://www.saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recent_re
ports/Haryana/2014/2of2014.pdf.
allotment of housing sites, financial assistances, grants for construction of cattle sheds,
transportation allowances and income generating scheme grants et al.108 Remarkably, as Orissa, a
2014 Report of the CAG on performance of Special Economic Zones observed that of 5079
families affected by a project for which the land was acquired in 2007-08, only 1487 could be
shifted to the settlement area.109
What is to be discerned, then from the above illustrations is that R&R schemes have not been
satisfactorily implemented in the past in several Indian states. Moreover, the failure has accrued
in a paradigm wherein the R&R benefits promised have not been as comprehensive as
entitlements envisaged under the LARR Act. Importantly, none of the State policies prescribed a
strict time limit of 18 months as assigned by the LARR Act. In view of the same, it is perhaps
critical to consider whether the onerous compulsions of Schedule 2 and 3 can be satisfied within
the time period specified for the same. Moreover, if such were to be the case, the litigation that
has been estimated because of correctness of compensation may only be the tip of the iceberg.
The R&R entitlements under the LARR Act being in the form of statutory rights- a failure on
part of the collector to provide any of the varied entitlements to the displaced persons may well
prove to be a significant source of litigation. Interestingly, on previous occasions, when
individual States have formulated R&R schemes in the form of mere policy documents, courts
have, indeed, intervened to enforce the benefits sought to be provided by these policies and to
suitably direct the officer-in-charge of R&R.110 Given the new scheme of things, courts may
increasingly be likely to do the same in the future. Undeniably, therefore, the R&R Scheme is a
serious cause for concern.
Just as was the case with compensation, the Ordinance, however, seems to have failed to
acknowledge and to address this serious concern. The only mention of R&R in the Ordinance
took the form of an amendment to make the provision of employment to the displaced families
mandatory. On the other hand, there was a clear omission of any of the issues, as delineated
above that may concern the effectiveness of the process of R&R. The parochial and short-
sighted nature of the Ordinance as to the efficiency of acquisition and the objective of the law,
then, only comes to be reiterated. Moreover, what also becomes evident is the misplaced focus
of the legislature as to the law on land acquisition.
108Andhra Pradesh Rehabilitation and Resettlement Policy, 2005, ch. 6,

http://aprr.gov.in/aprr/RANDR/engpolicy/englishpage6.pdf.
109Comptroller and Auditor General of India, supra note 48, at ¶ 2.2.2.
110Narmada Bachao Andolan v. State of Madhya Pradesh (II), (2005) 4 SCC 32, State of Madhya Pradesh v. Bheru
Singh, Civil Appeal No. 1211 of 2012 February 1, 2012 (A.K. Ganguly and G.S. Misra JJ.) (Supreme Court of
India), N.D. Jayal v. Union of India, (2004) 9 SCC 362.
SOLUTIONS: A WAY FORWARD
An exposition of the misplaced nature of the focus of the Ordinance and of the efforts of the
legislature may not serve the purpose in the absence of solutions that may offer us some
alternatives. An analysis of the same, thus, needs some attention.
It is clear that the omission of SIA for practically all conceivable projects will mean that the
determination of public purpose, the identification of affected families, the assessment of
alternatives and a cost benefit analysis of the project before the commencement of acquisition
will, in all probability, not be undertaken. As a consequence, the threat of future litigations and
agitations will continue to persist. In other words, a supposed cumbersome process in the
present will only be replaced by onerous delays in the future. Additionally, as was the case with
the Ordinance, it may even attract the wrath of the Constitution.
The futility of the said endeavour to improve the time-effectiveness of the project can, in fact, be
understood by a simple analysis of the procedure of land acquisition as provided in the LARR
Act. A composite reading of the Act reveals that the acquisition process can take between 3 to 5
years or perhaps even more in case extensions are granted. The law provides for a period of 6
months for SIA and a further 2 months for the appraisal subsequent to it.111 Therefore, an
exemption from SIA will only have a negligible impact on delays. It will merely reduce the time
frame to 2 ½ to 4 ½ years.
A more effective method to reduce the time consumed from the acquisition of land can be
found instead in the rationalisation of the multiple processes envisioned under the LARR Act.
What follows is such rationalisation. First, the requirement of appraisal of SIA by an independent
committee as under Section 7 must be done away with. The SIA under Section 4 must itself be
conducted by a group comprising independent experts within the same time period. Second, it is
noticed that both the SIA study112 and the R&R survey,113 seek to enquire into the families
affected, livelihoods lost, common utilities affected as a result of acquisition and the overall
social impact on the inhabitants of the area acquired. Moreover, both of them are supposed to
be followed by public hearings to address grievances. In other words, both the SIA study and the
R&R survey involve considerably similar processes. Therefore, it is proposed that the R&R
Survey be conducted as part of the SIA survey to minimise the duplicity of efforts. Third, this
2013, No. 30, GAZETTE OF INDIA, §§ 4 and 7.


composite should be followed by the government notification as under section 11 declaring an
intention to acquire the land. Crucially, this notification must be issued within a period of 2
months from the date of completion of SIA instead of the 12 month period, as is currently
allowed.114 However, the 2 month period provided to raise objections to the acquisition of land
after the issuance of a preliminary notification must continue. Objections must be followed by
the publication of public notice as under Section 21. Fourth, the collector must make the award
for compensation under Section 25 within a period of 12 months from the date of publication of
the preliminary notification. Given the complexity of the computation exercise, the sufficient
leeway accorded to the collector in terms of time must be continued.
Fifth, Section 38 must be amended so as to address the enormity of tasks that need to be
performed in the limited time period and to enable due possession of land. To this end, it is
suggested that R&R entitlements are graded as per their level of urgency and necessity. The bare
minimum essentials, namely, housing units with a provision for basic services such as drinking
water, electricity, drainage, and employment opportunities and the monetary entitlements listed
under the Second Schedule to the law should be provided within a period of 6 months from the
date of the award. The possession of land can be taken after this initial transfer and the
remainder of the R&R entitlements, as enumerated under the Third Schedule to the law, can be
provided in a phased manner over the next 18 months. Moreover, the monitoring agency
envisioned under the LARR Act must be entrusted with the responsibility to ensure a due
delivery of entitlements after the possession of land has been taken. A system of penalties that
are to be levied upon the Requiring Body must also be created to compel compliance after
possession over land has been transferred. A graded mechanism of this nature would not only
contribute towards the time-effectiveness of the process of acquisition of land but would also
deal with the problems, as explained previously, posed by the intricate scheme of R&R.
Cumulatively, then, the above modifications to the law may serve to shorten the process of
acquisition considerably to a period of 15 to 26 months and to avoid a violation of the
provisions of the Constitution.
Nonetheless, in case it is observed that it is necessary to grant exemptions to certain projects, the
same should be done only in cases of national security, defence and emergencies. Further, even
in these cases, a post-acquisition SIA must be made mandatory so as to identify all the affected
families and to provide them with compensation and R&R entitlements.
2013, No. 30, GAZETTE OF INDIA, § 14.
Next, it was also submitted that Section 11 of the Ordinance allowed both unutilized and under-
utilized lands to be exempted from the requirement of return after 5 years. Indeed, this approach
needs to be amended to do away with the over-inclusive elements present therein. A
constitutionally acceptable solution to the problem may be discerned through the addition of a
proviso to the unamended Section 105 of the LARR Act. This proviso could allow the
concerned Requiring Body to apply to a competent court, or even to the Land Acquisition,
Rehabilitation and Resettlement Authority, for an exemption from return in case the acquired
land remains under-utilized owing to commercial factors, delays in the obtaining of clearances,
post-acquisition litigation or long gestation period of projects et al.
Whereas the above measures may serve to considerably improve the process of acquisition, no
improvement to the law on land acquisition in India can be holistic in both vision and approach
unless the seemingly intractable issue of compensation is addressed. In ideal circumstances, a
free market transaction between the individual parties involved would be the desired measure to
secure the apt value of the land. However, in the absence of a robust land titling system,
comprehensive land records, the fragmented nature of land holdings, the inequality of bargaining
power and a perceived hold-out problem, land acquisition will continue to be a reality in India
for some time. Compensation, then, will have to be addressed efficaciously. In this context, the
computation of the market value of land to determine compensation is the biggest challenge
posed.
Earlier, we noted that the current method of is unscientific with respect to this calculation and
confers considerable discretionary powers on the collector. The mechanism to compute
compensation has been weak because it has failed to list guidelines or uniform standards for first,
measuring the true value of a land from undervalued circle rates or from sale deeds of lands
possessed with different characteristics and second, the value of other rights in the land and the
rights of other affected families. Naturally, it has been a cause of widespread resentment.
This inadequacy of compensation can be addressed by developing appraisal standards to

overcome the problems of undervalued sale deeds, lack of a well-developed market and
unaccounted special characteristics of land. These appraisal standards are to be a set of guiding
legal principles that will lay down the method of assessing the value of land and the rights
attached to the land, the elements and factors to be considered when using the value of another
land to ascertain the value of the land being acquired, the weight given to each one of them and
the standards of valuation. In other words, these appraisal standards are to lay down precise
guidelines from the stage of collection of raw data to the usage of such data to arrive at the true
market value of land even in the absence of free market indicators. Moreover, these standards
must be flexible to account for the peculiar circumstances in rural and tribal areas and the
inability of the legislature to foresee all potential losses.115Thus, these standards are to be evolved
through a multidisciplinary approach and are to be indigenous in nature.116
As a consequence, the judgment or opinion of the individual appraiser will be governed by

uniform and well-defined standards and will not be arbitrary or fanciful like the prevalent
trends.117What may also be observed is that the scientific nature of the process will reduce the
scope for intervention by the courts. Not only would the scientific nature ensure an adequacy of
compensation but would also ensure a correct calculation of market value and, thereby, lower the
causes of action. Litigation would be further minimised were the exercise to be executed by
suitable experts. Importantly, thus, the LARR Act must also be amended to allow the owners
and the State to avail services of professional appraisers to determine compensation scientifically
on the basis of the appraisal standards. These professional appraisers, too, would serve a dual
purpose. First, affected persons would be further empowered to secure a just and equitable
compensation and would be less inclined to approach the courts of law. Second, courts would be
reluctant to discard the opinion of experts and litigation, then, would be further de-incentivised.
The overall efficacy, then, of the acquisition of land can, indeed, be improved.
CONCLUSION
Undoubtedly, the Ordinance was promulgated by the President of India to improve the
efficaciousness of the law on land acquisition- an area of law bundled with complications.
Instead, the Ordinance violated the provisions of the Constitution and failed to deal with the
moot issues of compensation and R&R. It is widely acknowledged that there are no easy
solutions to these issues. What is unfortunate, though, is that the Ordinance failed to even
explore any of them. Seemingly, it even failed to identify the source of the problems that saddle
the process of land acquisition. A course correction then is, indeed, the need of the hour. To
115Food and Agriculture Organization of the United Nations, Compulsory acquisition of land and compensation 23
(2008), available at http://www.fao.org/3/a-i0506e.pdf.
116However, it is to be noted that we cannot rely on appraisal standards prevalent in the western countries. It is
commonly observed that legal approaches developed in the context of Europe or North America- where land rights
are generally standardized and well defined, land markets function duly, and land records are reliable- have proven to
be ill-equipped when applied directly to developing country contexts where such attributes are less common. See
World Bank, Compulsory Acquisition of Land and Compensation in Infrastructure Projects 4 (2012), available at
http://ppp.worldbank.org/public-private-
partnership/sites/ppp.worldbank.org/files/documents/Compulsory%20Acquisition%20of%20Land%20and%20C
ompensation%20in%20Infrastructure%20Projects.pdf.
117Appraisal Institute, Uniform Appraisal Standards for Federal Land Acquisitions 1 (2000), available at
http://www.justice.gov/sites/default/files/enrd/legacy/2010/11/16/Uniform-Appraisal-Standards.pdf.
conclude, we, therefore, urge that the approach and perspective of the Government is modified
to arrive at a real and lasting solution.

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LAND ACQUISITION: A SAGA OF MISPLACED PERSPECTIVES AND

(Amendment) Ordinance, 2015, No. 4, GAZETTE OF INDIA, §§ 3 and 5.

(Amendment) Ordinance, 2015, No. 4, GAZETTE OF INDIA, § 7.

(Amendment) Ordinance, 2015, No. 4, GAZETTE OF INDIA, § 11.

(Amendment) Ordinance, 2015, No. 4, GAZETTE OF INDIA, § 12.

(Amendment) Bill, 2015, cl. 3, Statement of Object and Reasons.

2013, No. 30, GAZETTE OF INDIA, §§ 4(2) and (7).

2013, No. 30, GAZETTE OF INDIA, § 7(4).

2013, No. 30, GAZETTE OF INDIA §§ 3(o) and 2(1)(b).

2013, No. 30, GAZETTE OF INDIA, § 2(1)(b)(ii).

and Institutional Mechanism for its Upgradation (2012), available at

Failing the Constitution

I. Section 5 & the absence of a ‘Reasonable Classification’

25INDIA CONST. art.14.

2013, No. 30, GAZETTE OF INDIA, pmbl.

(Dharmadhikari J.) (Bombay High Court).

II. Section 11 & an ‘Over-Inclusive’ Exemption

We propose to analyse Section 11 of the Ordinance in this backdrop. Section 11 sought to

Indian Constitution, SCROLL, April 15, 2015, http://scroll.in/article/720493/modis-land-ordinance-may-yet-fail-the-

56Usha Ramanathan, A Word on Eminent Domain in DISPLACED BY DEVELOPMENT – CONFRONTING

of Management, Ahmedabad, Working Paper No. 2009-03-07, 2009).

WKLY. 33, 38 (May 25, 2013).

SERIES 1, 16 (April 2013),

WKLY 46 (May 12, 2012).

65, 65 (Oct., 2011).

Bill, 2011 (2012), available at

Unsurprisingly and unfortunately, thus, collectors seek to avoid these processes of

Compensation & the LARR Act, 2013

World, 66(32) ECO. & POL. WKLY (2011).

2013, No. 30, GAZETTE OF INDIA, § 26, Explanation 3.

& OTHER THINGS (April 22, 2015), http://lawandotherthings.blogspot.in/2015/04/land-acquisition-continuation-

RESETTLEMENT AND REHABILITATION: PROBLEMS AWAIT CONFRONTATION

Just as compensation, the concept of Rehabilitation and Resettlement of persons displaced as a

AND SOC. STUDIES MONOGRAPH SERIES 1, 45 (2014).

Undoubtedly, the intent behind providing an extensive list of entitlements is laudable.

2013, No. 30, GAZETTE OF INDIA, § 38(1).

Undertakings), No. 2, ¶ 3.15 (2014), available at

108Andhra Pradesh Rehabilitation and Resettlement Policy, 2005, ch. 6,

2013, No. 30, GAZETTE OF INDIA, § 4(4).

2013, No. 30, GAZETTE OF INDIA, § 16(1).

This inadequacy of compensation can be addressed by developing appraisal standards to

As a consequence, the judgment or opinion of the individual appraiser will be governed by

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