Draft Rules to the LA Act 2013

DRAFT RULES TO THE LA ACT 2013 (THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT 2013 – “TRTFCAT in LARR Act 2013).

The above TRTFCAT in LARR Act received the assent of the Hon’be President of India on the 26th September 2013 and awaiting the Gazette Notification in January 2014 or later. The Central Government makes the attached Draft Rules for ensuring the smooth implementation of the Act with regard to the consent process, the Social Impact Assessment process, the compensation mechanism and the rehabilitation and resettlement benefits enumerated under the TRTFCAT in LARR Act 2013. The working draft rules are published on 14th October 2013 and 45 days are given for receiving suggestions.

Land acquisition refers to the process by which government forcibly acquires private property for public purpose without the concurrent of the land owner. The land owner is not a willing seller, therefore, compensation and the way in which compensation were payable, is to be fair and reasonable. The TRTFCAT in LARR Act 2013 (The LARR Act) provides for land acquisition as well as rehabilitation and resettlement (R & R) and replaces the Land Acquisition Act 1894.The Act u/s 46 permits for private purchase of land for public use.

The LA Act 2013 Brief: The appropriate Government shall constitute multi-member land pricing commission or authority to finalize cost of land acquisition/compensation State-wise/area-wise as determined under Section 30(1) read with Schedule I to the Act. The Second Schedule lists eleven (11) elements of Rehabilitation and Resettlement entitlements in addition to those provided in the First Schedule. Third Schedule enumerates twenty five (25) infrastructural amenities to be provided for resettlement to the affected families. Fourth Schedule lists thirteen (13) Central legislations, which are sought to be exempted from the provisions of the Act.

 If aggrieved by the Award of the Collector by person interested in compensation and any reference is made to Authority u/s 64 by the Collector, the final Award shall be in accordance with S. 69. U/s 63; no lower civil court shall have jurisdiction to entertain any dispute relating to land acquisition in respect of which the collector or the authority is empowered and no injunction shall be granted by any court in respect of any such matter.

Appeal to High Court: The appropriate Government or a Requiring Body or any person aggrieved by the Award passed by an Authority under section 69 may file an appeal to the High Court within sixty days from the date of Award; provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days as per S. 74. A period of six months is the time limit for disposal of case.

Retrospective operation: Where no award under the 1894 LA Act has been made, the new Act shall apply with regard to compensation in the following circumstances: where an award has been made but the affected individuals have not accepted compensation or have not yet given up possession, and the proceedings have been pending for 5 years or more and where a majority of individuals in an affected area have not received compensation, then the new law shall apply.

Pith and substance of the Act: Application of the Act: S: 2 (1). The provisions of this Act relating to land acquisition, compensation, rehabilitation and resettlement, shall apply, when the appropriate Government acquires land for its own use, hold and control, including for Public Sector Undertakings and for public purpose, and shall include the followingpurposes, namely:-

U/s: 46. When private companies intends to purchase land through private negotiation, shall file an application to the Collector stating their 

(a) intention to purchase,

(b) purpose for which such purchase is being made,

(c) particulars of lands to be purchased. It shall be the duty of the Collector to refer the matter to the Commissioner of R&R for the satisfaction of all relevant provisions under this Act related to rehabilitation and resettlement.

Based upon the Rehabilitation and Resettlement Scheme approved by the Commissioner, the Collector shall pass individual awards covering Rehabilitation and Resettlement entitlements.  No land use change shall be permitted if R&R is not complied with in full.

U/s 2 (3) (a) & 46 (6), Original land owner specified date is 5/9/2011. lf any land has been purchased through private negotiations by a person other than specified person on or after the 5th day of September.2011, which is more than such limits as may be notified by the appropriate Government as per Section 46(1) and If the same land were acquired within three years from the date of commencement of this Act, then, forty per cent of the compensation paid for such land acquired shall be shared with the original land owners. Any purchase of land by a person other than specified persons without complying with the provisions of Rehabilitation and Resettlement Scheme shall be void ab initio; provided that the appropriate government may provide for R & R provisions on sale and purchase of land in its state and shall fix the limits or ceiling for the said purpose.

S: 9/40 Urgency Clause can be invoked after Section 19 declaration or the expiry of 30 days from section 21 Notice. It provides special powers to the appropriate Government to acquire land in urgency cases for the purposes of defence of India or national security or for any emergency arising out of natural calamities.  Compensation payable shall be as per section 30 (1) and the First Schedule of the Act Say “MV” plus 75% of “MV”, out of which 80% shall be payable prior to taking possession. Any one or many provisions from chapter II to VI are exempted.  I.e. SIA to Food Security, R & R: Local administration shall make available temporary camp accommodation to the families whose house has been acquired till total compensation is paid or 90 days whichever is earlier.

S: 81 Temporary Occupation: The government may temporarily occupy and use any piece of waste or arable land for a public purpose when difference as to compensation exists. This occupation may be for a period of not more than three years. The compensation of such land may be decided mutually by the owner of the land and the Collector. Any disagreement on matters relating to compensation or the condition of the land on being returned shall be referred to the Land Acquisition and R&R Authority.

Section: 10. Food Security: (a) The collector has to make sure that no other unutilized land is available before he moves to acquire farm land.  (b)  Restrictions/threshold on limit of irrigated multi-crop land and net sown area per district or state available for acquisition is left to the discretion of state governments. (c) If acquired, the state government has to cultivate an equivalent area of land elsewhere as agricultural land. If they cannot do this, then they must deposit an amount equivalent to its value in an account to be used for the purposes of enhancing food security.

S.101. When any land or part thereof, acquired under this Act remains unutilized for a period of five years from the date of taking over the possession, the same shall be returned to the original land owner or the Land Bank as per decision taken by state government.

S.102. Whenever the ownership of any land acquired under this Act is transferred to any third party, and then 40 percent of the appreciated value will be shared with the original owner. This benefit to only the first time the land is sold after acquisition.

Award by the Collector: The individual award by the Collector shall be as per the formula of the First Schedule to the Act. The compensation payable shall be as per 26 to 30 (1) which  deal with the fixation of market value of land and other assets attached to the land, total compensation package payable to the land losers and solatium applicable. The First Schedule to the Act spells out the components that shall constitute minimum compensation package.

Determination of market value of land by collector u/s 26: The higher of (a) the market value specified in Indian 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 (The market value shall be determined by the Collector based on one-half of the total number of sale deeds or the agreements to sell recorded in preceding 3 years where highest sale price have been mentioned); (c) consented amount of compensation as agreed upon in case of acquisition for PPP or private companies projects as defined in section 2(2).

S. 30 (1) In addition to the market value of the land as above provided, the collector shall in every case award a solatium (i.e., extra compensation for the forcible nature of acquisition) of one hundred per cent over the total compensation amount.

Valuation as per First Schedule: The land value (Say “P”) thus calculated shall be multiplied by a factor 1 for urban area and regarding rural area, the Act only provides the baseline for compensation and has devised a sliding scale which allows state Governments to fix the multiplier from 1 to 2 when moved from urban to rural area. The precise slabs shall be left to respective state governments. Market value of land “MVL” thus calculated is added with assets attached to land say “B”. Market value of acquired property “MVAP” is MVL + B.  Add a solatium Say “S” of 100% of MVAP. The Award is MVAP+S.

Valuation: URBAN AREA:

Rural AREA:

(Please note: The land value in rural area is not like urban area; the above is only for illustration).

Parameters are to be considered by the collector in determination of award:

S. 28(1) in determining the amount of compensation to be awarded for land acquired under this Act, the collector shall take into consideration—

Firstly: The market value as determined under section 26 and the Award amount in accordance with the First and Second Schedules.

Secondly: The damage sustained by the person interested, by reason of the taking of any standing crops and trees which may be on the land at the time of the Collector’s taking possession thereof.

Thirdly: The damage (if any) sustained by the person interested, at the time of the Collector’s taking possession of the land, by reason of severing such land from his other land. (Damage due to severance arises when the land acquired contributes to the value of the retained land and the loss of the land acquired reduces the value of the land retained. The measure of compensation in respect of severance is the depreciation in the value of the claimant's retained interest arising from the severing of the land acquired from the original whole.)

Fourthly: The damage (if any) sustained by the person interested, at the time of the Collector’s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings. (Injurious affection to the retained land may arise as a result of the execution and use of the works; the depreciating effect is to be related to the new works to be situated on the land taken and elsewhere).

Fifthly:  In consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change.

Sixthly: The damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 19 and the time of the Collector’s taking possession of the land; and

Seventhly: Any other ground which may be in the interest of equity, justice and beneficial to the affected families.

S. 30. (3) In addition to the market value of the land, as above provided, the collector shall in every case award an amount calculated at the rate of twelve percent per annum on such market value for the period from 4(1) SIA study to the date of award of the Collector or the date of taking possession of the land, whichever is earlier.

The date of valuation is section 11 notification; provided that any price paid as compensation for land acquired under the provisions of this Act on an earlier occasion in the district shall not be taken into consideration and any price paid which in the opinion of the Collector is not indicative of actual prevailing market value may be discounted for the purposes of calculating market value.

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DRAFT RULE IV Compensation, item 25 (1) & (2) and Base Rate item 26 which are given below:

25 (1) The compensation shall be paid to all parties as prescribed in the first recital to Schedule I of the Act.

(2) Where the words “in the vicinity” have been used in Explanation I of section 26 they shall be taken to mean the land holdings immediately contiguous to the land where the acquisition in question is taking place.

26. Base Rate: For an acquisition process that takes place in phases and where land is acquired sequentially, the base rate as calculated under section 26 of the Act shall be taken to be the effective rate for all affected families to be compensated across the entire area to be acquired for the said acquisition.

Suggestion: The Act: Determination of market value of land by collector u/s 26: The higher of (a) the market value specified in Indian 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 (The market value shall be determined by the Collector based on one-half of the total number of sale deeds or the agreements to sell recorded in preceding 3 years where highest sale price have been mentioned); (c) consented amount of compensation as agreed upon in case of acquisition for PPP or private companies projects as defined in section 2(2).

Rural areas land records available in the vicinity may not reflect the true market value and a mechanism is needed to reflect the fair market value for compensation. Further regarding rural area, the Act only provides the baseline for compensation which allows state Governments to fix the multiplier from 1 to 2 when moved from urban to rural area. The precise slabs shall be left to respective state governments.

Suggestion for a sliding scale when moved from URBAN Limit to RURAL Limit: Divide TARGET DISTANCE (TaD) in KM by TOTAL DISTANCE (ToD) in KM and that result is multiplied by a Factor 1 and added with 1 = {( TaD/ToD x 1) + (1)} = Multiplier Factor. For example Total Distance is 5 KM and multiplier when moved from URBAN Limit to RURAL Limit can be as below:

JUSTIFICATION:

Compensation should reflect the fair market value. On the principle of “Eminent Domain”: Article 31(A) of the Constitution provides for saving of laws providing for acquisition of estates etc. it states that law can be enacted for the acquisition of the land provided that it ensures payment of compensation at a rate which shall not be less than the market values thereof. Further, Entry No.42 of List III – Concurrent List of the Seventh Schedule of the Constitution relates to “acquisition and requisition” of property.

Suggestions can be emailed to Department of Land Resources (DoLR): landacquisitionrules@gmail.com

Draft Rules can be viewed in: http://rural.nic.in/sites/downloads/lab-to-land-intiative/DraftRules2013.pdf

A. Mohammed  IBRAHIM

ARCHITECT