The most repeated sentence about the LARR Act 2013 is wrong. It says that land in India cannot be acquired without the consent of seventy or eighty per cent of the people losing it. That is true only when the government acquires land for somebody else. When the government acquires land for its own use, hold and control, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 requires no consent from anyone, and the family facing displacement has exactly the same experience of loss in both cases. Everything else in this statute, the Social Impact Assessment, the multiplied compensation, the rehabilitation owed to people who own nothing at all, has to be read through that first design choice, because the applicability provision decides how much of the Act a given project ever meets.

The Act is formally the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Act 30 of 2013. It received the assent of the President on 26 September 2013 and came into force on 1 January 2014, repealing the Land Acquisition Act, 1894, the colonial statute under which India had taken land for one hundred and twenty years. It runs to one hundred and fourteen sections and four schedules. Its long title promises what its three innovations attempt to deliver: a humane, participative, informed and transparent process for acquisition, fair compensation to owners, and rehabilitation and resettlement as an entitlement rather than an act of administrative grace. This article explains how the machine is built, which parts of it carry the weight, where it does not reach, and what the record of argument about it actually supports.

What the 1894 Act did, and why it could not survive

The statute this Act replaced deserves a short, precise account, because the 2013 design is unintelligible except as a list of answers to its failures. The predecessor statute is treated in full in the companion account of the Land Acquisition Act 1894, and what follows is the compressed version a reader of this pillar needs. The 1894 Act allowed the state to acquire land for a public purpose, a term it left largely to the acquiring government to define in practice, on payment of the market value of the land plus a solatium of thirty per cent in consideration of the compulsory nature of the acquisition. It compensated owners. A tenant, a sharecropper, an agricultural labourer, a family that fished or grazed or gathered on the land and held no title to it received nothing from the statute, because in its scheme they did not exist. Rehabilitation was not a statutory obligation at all; whatever a project offered the displaced was policy, charity or negotiation, varying from project to project and enforceable nowhere.

A fourth feature deserves recording because it shaped what the courts could and could not do. Under the 1894 Act, a challenge to the stated public purpose of an acquisition faced a judiciary that treated the government’s declaration of purpose as close to conclusive, and challenges to purpose as such almost never succeeded across a century of litigation; the cases that landowners won were won on procedure, on notice, on the hearing of objections, on the urgency clause’s misuse in the individual case, never on the proposition that the purpose was not public. The lesson the 2013 drafters drew was that a purpose test administered by courts deferring to the acquiring government is no test at all, which is why the new Act relocates the discipline from the courtroom to the front of the process: an enumerated definition, a study that must ask whether the purpose is served and the land is the minimum, an appraisal that can recommend abandonment, and a consent condition on the routes where the beneficiary is private. The Act distrusts ex post judicial review of purpose because it had watched a century of it.

Three further features of the old law did the political damage. The urgency clause in Section 17 of the 1894 Act allowed the government to dispense with the hearing of objections and take possession on fifteen days of notice in cases it characterised as urgent, and over the decades urgency became a routine administrative convenience rather than an emergency power, used for industrial estates and housing projects that were urgent only in the sense that the acquiring body wanted the land quickly. The determination of market value rested on registered sale prices in an economy where registration values systematically understated real prices, so compensation was frequently a fraction of what replacement land cost. And once land was acquired, nothing in the statute asked whether it was used; land taken for one purpose could lie idle, or be put to another, or be transferred onward, with the original owner watching the appreciation from outside the fence.

The politics of the replacement were built out of specific places. At Singur in West Bengal, land acquired under the 1894 Act from 2006 for a Tata Motors car factory produced a resistance movement that ended with the company withdrawing in 2008, and years later, in 2016, the Supreme Court quashed that acquisition itself. At Nandigram in the same state, the proposal for a chemical hub to be built on acquired land was abandoned in 2007 after violence that made the costs of coerced acquisition undeniable in electoral terms. In Odisha, the steel plant proposed by POSCO from 2005 stalled for years against local resistance centred on forest land and the livelihoods built on it. At Bhatta and Parsaul in Uttar Pradesh in 2011, protests over land acquired for development along an expressway turned violent shortly before the replacement bill was introduced. The pattern across these episodes is the one the drafters of the 2013 Act were responding to: the state could still take the land, but it could no longer take it cheaply, quietly or legitimately, and each conflict taught affected communities that resistance worked better than the statutory process did.

The replacement had itself been attempted once and had failed in instructive ways. In 2007 the government introduced two companion bills: a Land Acquisition (Amendment) Bill to rewrite parts of the 1894 Act, and a Rehabilitation and Resettlement Bill to give the displaced a statutory package for the first time. The amendment bill narrowed the definition of public purpose, raised the solatium and addressed the urgency clause; the rehabilitation bill created entitlements for affected families, but only where displacement crossed a threshold of two hundred or more families in the plains and one hundred or more in hilly and Scheduled Areas, and its benefits were tied to acquisition under the old statute. Both bills passed the Lok Sabha in February 2009 and lapsed when the Fourteenth Lok Sabha was dissolved, without the Rajya Sabha enacting them. The failure taught the drafters of 2011 three lessons that show in the final text. A threshold on rehabilitation, below which the displaced get nothing, was indefensible in principle and unworkable in practice, so the 2013 Act attaches entitlement to every affected family. Splitting compensation into one statute and rehabilitation into another invited each to be amended against the other, so the 2013 Act fused them into a single code in which the rehabilitation award is part of the acquisition proceeding itself. And amending the 1894 Act preserved its skeleton, including its owner-only theory of loss, so the 2013 Parliament chose repeal and replacement over amendment.

Two decades of such episodes produced a settled public judgment that the 1894 Act was indefensible, shared across parties that agreed on little else. That shared judgment matters to everything that follows in this article, because the 2013 Act was not a party statute imposed on a reluctant opposition. It was examined by a standing committee, debated over two years, and passed with broad support, which is why the attempt to amend it two years later, treated in the next article in this cluster, had to contend with the awkward fact that many of those asked to dilute it had voted to enact it.

The architecture of the LARR Act 2013

The Act is best understood as five machines bolted onto one chassis. The first machine is the applicability and consent machinery in Section 2, which defines public purpose, defines the routes by which land may be acquired, and attaches the consent requirement to two of those routes. The second is the Social Impact Assessment in Sections 4 to 9, a mandatory study and appraisal process that must precede acquisition and must ask, among other things, whether the land proposed is the bare minimum required. The third is the food security provision in Section 10, a short chapter with a long shadow, restricting acquisition of irrigated multi-cropped land. The fourth is the acquisition procedure proper, running from the preliminary notification in Section 11 through the award by the Collector in Section 30, with the rehabilitation and resettlement scheme prepared inside the same process rather than after it. The fifth is the money: the compensation code in Sections 26 to 30 and the First Schedule, and the rehabilitation code in Section 31 and the Second and Third Schedules, which together fix what an affected family receives. Onto this chassis the Act bolts a dispute forum, the Land Acquisition, Rehabilitation and Resettlement Authority established under Section 51, offences and penalties, and a set of closing provisions on unused land, transferred land, exemptions and repeal that occupy Sections 101 to 114.

One extent point belongs to the architecture. As enacted, Section 1(2) extended the Act to the whole of India except the State of Jammu and Kashmir, which operated its own land acquisition statute, so the national floor this article describes had a territorial hole in it for its first years; the hole closed when the reorganisation of 2019 extended the central Acts to the successor Union territories, so the Act runs across the whole country. The exception and its closing are a reminder that even the Act’s geography was negotiated.

Two definitions do more work than any others. The first is public purpose in Section 2(1), which is a defined and enumerated term rather than an open one: it covers strategic purposes relating to the defence of India and the armed forces; infrastructure projects, with the express exclusion of private hospitals, private educational institutions and private hotels; projects for agriculture and allied activities owned by the government, by farmers’ cooperatives or by institutions owned or controlled by the government; industrial corridors, manufacturing zones and other projects in the National Manufacturing Policy, including mining; water harvesting and conservation structures and the planned development or improvement of village sites; government aided or administered educational and research schemes or institutions; planned development, including housing for the weaker sections; and residential projects for the poor, the landless, persons in areas hit by natural calamity and persons displaced by government schemes. The enumeration matters because a purpose outside it is not a public purpose under this Act at all, and the exclusions matter because they show Parliament drawing a line between public infrastructure and private commercial amenity. The exclusion of private hospitals, private educational institutions and private hotels from the infrastructure head deserves attention, because all three serve the public in an obvious sense and all three were deliberately left outside the coercive power: a private hospital that wants a site must buy it, however worthy its wards, while a government aided educational institution is inside the definition, so the line Parliament drew runs not between public benefit and private benefit but between public provision and private enterprise, and a developer structuring a project must locate it on the right side of that line before anything else is computed. The breadth at the other end is equally instructive: mining enters through the National Manufacturing Policy head, and industrial corridors enter by name, so the definition that excludes a private hotel includes a mine, which is why arguments about the Act that treat public purpose as a narrow gate misdescribe it. It is a wide gate with three named doors shut.

The second working definition is the affected family in Section 3(c), and it is the definition on which the Act’s social claim rests. An affected family includes a family whose land or other immovable property is acquired; families among the Scheduled Tribes and other traditional forest dwellers who have lost forest rights recognised under the Forest Rights Act 2006; a family whose primary source of livelihood stands affected by the acquisition, expressly including tenants, sharecroppers, agricultural labourers and others who have worked the land or depended on it for the three years prior to acquisition; families in urban areas whose primary source of livelihood is affected on the same three year footing; and families assigned land under government schemes. The breadth is deliberate. The 1894 Act paid the titleholder. The 2013 Act counts as affected the people the title system does not record, and then owes many of them rehabilitation whether or not they lose a square metre of owned land. A companion definition multiplies the entitlement in practice: for the purposes of rehabilitation, an adult of either gender, with or without a spouse, children or dependants, is treated as a separate family, so that a household in which a widowed mother, an adult son and an adult daughter each live from the same land is not one affected family but several, each owed the Schedule’s package. Two further definitions frame the whole proceeding. The appropriate government is the State Government for acquisition within a State and the Central Government for acquisition for a Union purpose and in the Union territories, which is why the same central Act is administered, and its rules written, by twenty eight different governments. The person or body for whom land is acquired is the requiring body, which bears the cost of compensation and rehabilitation and whose deposit funds the award, so that even in the consent-free government route the money does not come from the Collector’s own budget but from the project that takes the land.

Consent: who has to agree, and who is never asked

Section 2 contains the provision most often misstated in public discussion, and it repays slow reading. The Act applies when the appropriate government acquires land for its own use, hold and control, including for public sector undertakings. It also applies, under Section 2(2), when the government acquires land for public private partnership projects in which ownership of the land continues to vest in the government, and when it acquires land for private companies for a defined public purpose. The proviso to Section 2(2) then attaches the consent condition, and it attaches it to those two routes only. For acquisition for private companies, the prior consent of at least eighty per cent of the affected families must be obtained. For public private partnership projects, the prior consent of at least seventy per cent of the affected families must be obtained. For acquisition by the government for itself, the proviso says nothing, because there is no consent requirement to state. The consent process is to be carried out along with the Social Impact Assessment study, and the appropriate government must ascertain, before it decides to proceed, that the required consent has actually been obtained. The Act therefore operates two distinct consent instruments that public discussion habitually merges. The Section 2(2) consent is numerical and proprietary: a percentage of defined families, counted on records, attached to two acquisition routes and to no others. The Section 41 consent, examined below, is institutional and territorial: the agreement of the Gram Sabha or the autonomous council, required for every acquisition in the Scheduled Areas whatever the route. A project can satisfy one and fail the other, and a project in a Scheduled Area for a private company must satisfy both, the family’s percentage and the Sabha’s agreement, which is as close as the Act comes to making consent a general condition of taking land. Keeping the two instruments separate is not pedantry; they have different holders, different procedures and different remedies, and a challenge mounted on the wrong one fails on its own terms.

Two refinements matter. The consenting population is defined by reference to sub-clauses (i) and (v) of the definition in Section 3(c): that is, families whose land or immovable property is being acquired, and families holding land assigned under government schemes. It is a narrower electorate than the full affected family definition, since the livelihood losers of sub-clause (iii), the tenants, sharecroppers and labourers, are owed rehabilitation but are not counted toward the consent percentage. And the Act builds consent into a process, prescribed by rules, rather than treating it as a signature harvest: the consent of the Gram Sabha or the local body is sought in the prescribed form, the process runs alongside the impact study, and the government’s own decision stage must record whether consent was obtained. A project that cannot reach its percentage cannot proceed on that route at all; the family’s veto here is collective and numerical, not individual, so a family inside the dissenting twenty or thirty per cent is acquired over its objection once the threshold is met. The differentiation between the two figures is itself a drafting artifact worth noticing: the bill as introduced in 2011 set the consent requirement at eighty per cent across private and partnership acquisition alike, and the seventy per cent figure for partnership projects, in which the land continues to vest in the government, emerged during the bill’s passage as the compromise between the standing committee’s position, which would have barred acquisition for companies and partnerships altogether, and industry opposition to any consent condition at all. The consent process is governed by the rules made under the Act, the Social Impact Assessment and Consent Rules the Centre notified in 2014, which require the consent of the Gram Sabha or the local body to be sought in a public meeting, the terms of the proposed agreement, the compensation and rehabilitation package to be explained, and the consent to be recorded in writing in the prescribed form. Whether a process of that design produces informed agreement or manufactured assent in a village where the acquiring body controls the meeting, the information and the timetable is a question the case record and the implementation literature keep open; what the statute guarantees is the record, and a defective record, a consent figure short of the threshold, a meeting not held, a form not executed, is a ground on which the acquisition itself can be attacked.

The table below is the findable core of this article, because it resolves in one view the question the public argument keeps getting wrong: what does a given route of acquisition actually demand?

Acquirer and purpose	Consent requirement	Social Impact Assessment	Rehabilitation obligation	Compensation basis
Government, for its own use, hold and control, including public sector undertakings	None. No consent of affected families is required at any proportion	Required, Sections 4 to 9, unless urgency under Section 40 is invoked	Full. Second and Third Schedule entitlements owed to all affected families	Sections 26 to 30 with the First Schedule multipliers and 100 per cent solatium
Government, for a public private partnership project, ownership vesting in the government	Prior consent of at least 70 per cent of affected families under the proviso to Section 2(2)	Required, and the consent process runs along with the study	Full. Second and Third Schedule entitlements owed to all affected families	Sections 26 to 30 with the First Schedule multipliers and 100 per cent solatium
Government, for a private company for a public purpose	Prior consent of at least 80 per cent of affected families under the proviso to Section 2(2)	Required, and the consent process runs along with the study	Full. Second and Third Schedule entitlements owed to all affected families	Sections 26 to 30, with the consented amount available as a market value input under Section 26
A private company or person purchasing land directly, above the threshold the appropriate government prescribes under Section 46	No statutory consent percentage, because no acquisition under the Act occurs	Not applicable, because no acquisition under the Act occurs	Yes. The rehabilitation and resettlement provisions of the Act apply to the purchase once the prescribed threshold is crossed	Price by negotiation between buyer and seller; the Act regulates rehabilitation, not the price

The fourth row is the one industry learned fastest. Section 46 provides that where a private company purchases land through private negotiations, and the extent of the purchase equals or exceeds limits the appropriate government prescribes, the rehabilitation and resettlement provisions of the Act apply to that purchase. The Centre, for its own purposes, notified limits of twenty hectares in urban areas and forty hectares in rural areas. Below the threshold, a negotiated purchase stands entirely outside the Act; above it, the buyer owes the Second Schedule package to the affected families even though no acquisition proceeding has occurred and no consent percentage applies. The consent requirement, in short, can be avoided altogether by not asking the government to acquire, which is the first piece of evidence for the argument, taken up in the assessment below, that the Act’s strictness redirected transactions rather than disciplining all of them.

A second feature of the consent design draws criticism from the opposite direction, and it should be recorded here rather than in the assessment because it is a feature of the text. The consent electorate, confined by the proviso to the families of sub-clauses (i) and (v) of Section 3(c), excludes the class the Act elsewhere celebrates: the tenants, sharecroppers and agricultural labourers whose livelihood the acquisition destroys are owed the Second Schedule, but their agreement is not counted toward the percentage that decides whether the acquisition may proceed at all. A project can therefore carry its eighty per cent on the votes of recorded landholders while every landless family in the affected area withholds agreement, and the statute registers that outcome as consent obtained. The defence of the design is administrative: a consent process needs a countable electorate, and title and assignment records supply one while livelihood dependence does not. The criticism is that countability was chosen over the Act’s own theory of who is affected, and that the choice was made, as such choices usually are, in favour of the constituency the records already see.

The detailed mechanics of the compensation calculation and the consent process belong to the companion article on the compensation and consent rules, and this pillar states the structure rather than re-deriving every step. What cannot be compressed is the interpretive point. Consent under this Act is a function of who acquires, not of who loses. The landowner whose field sits in the path of a government project for the government’s own use has no statutory right to withhold agreement, and the labourer on that field has neither a vote nor a title. The landowner whose field sits in the path of a private factory acquired through the government holds, with his neighbours, a blocking power of real value. Parliament’s judgment, defensible on its own terms, was that the state’s own projects carry a democratic warrant that private projects must rent. The cost of that judgment is that the Act’s most celebrated safeguard covers a minority of the displacement the Act governs.

The Social Impact Assessment: the Act’s second innovation

The second thing the 2013 Act did that the 1894 Act never attempted was to require the state to study the harm before inflicting it. Chapter II, Sections 4 to 9, builds the Social Impact Assessment, and its content is fixed by Section 4. Whenever the appropriate government intends to acquire land for a public purpose, it must carry out a Social Impact Assessment study in consultation with the Panchayat, Municipality or Municipal Corporation at the village or ward level, and notify and conduct it in the manner the Act prescribes. The study must contain an estimate of the affected families and the extent of displacement, and an assessment of a specified list of questions: whether the proposed acquisition serves a public purpose; the extent of land in absolute and percentage terms; whether the land proposed is the bare minimum required for the project; whether alternative less displacing land has been considered and found not feasible; the social impacts of the project and the nature and costs of addressing them; and the social costs of the project weighed against its benefits. The study must then feed a Social Impact Management Plan listing the ameliorative measures required. The plan is not decorative: it is the document against which the post-implementation social audit under Section 44 is later conducted, so that the promises made to secure the acquisition, the mitigation of lost commons, the replacement of grazing and fuel sources, the timelines for the resettlement colony, exist in a form in which their non-performance can be identified and named. Whether audits of that rigour have been performed is a separate and largely discouraging question, but the audit’s existence in the design marks the distance from the old law, under which no document existed against which a project’s treatment of the displaced could be measured at all.

The procedural chapters around the study matter as much as its content. Under Section 5, a public hearing must be held at the affected area, after adequate publicity, to ascertain the views of the affected families, and those views must be recorded and included in the study. Under Section 6, the study report and the management plan must be published in the affected area, in the local language, in the offices of the Panchayat and the Collector and uploaded on the website of the appropriate government. Under Section 7, the study is appraised by an independent, multi-disciplinary Expert Group, constituted to include non-official social scientists, representatives of the local bodies, experts on rehabilitation and a technical expert in the subject of the project. The Expert Group must record its opinion within the prescribed period, and if it is of the opinion that the project has no demonstrable public purpose, or that the social costs and adverse impacts outweigh and exceed the benefits, it must make a recommendation that the project be abandoned. Under Section 8, the appropriate government then examines the proposals in the light of the study, the appraisal and the Collector’s report, and must ensure that the area recommended for acquisition is the one that will ensure minimum displacement of persons and minimum disturbance to infrastructure, ecology and the affected individuals. Where the government departs from the Expert Group’s recommendation, it must record its reasons in writing. That reason-recording duty is the legal spine of the process: the assessment is not a veto, but a government that overrides it must own the override on paper.

Can a Social Impact Assessment stop a project altogether?

Yes, in effect, though the power is structured as appraisal rather than prohibition. The Expert Group appraising the study under Section 7 may recommend that the project be abandoned where it finds no demonstrable public purpose, or finds that social costs exceed the benefits. The government may depart from that recommendation only by recording its reasons in writing.

The study itself is run under the Social Impact Assessment and Consent Rules, which prescribe the study team’s independence from the requiring body, the use of the affected area’s own records and residents in building the family estimates, and a six month outer period for completing the study from its commencement. The discipline the chapter imposes is less the document than the sequence: because the study must precede the preliminary notification, and because the government’s Section 8 examination must engage with the appraisal, an acquiring government can no longer present the affected population with the acquisition as an accomplished administrative fact and consult them afterwards on the compensation. The questions the study must answer are also, deliberately, the questions a project proponent least wants asked at the start: whether this much land, whether this land at all, and whether the benefits exceed the social costs. The bare minimum question does concrete work when it is honestly answered. A project whose layout requires three hundred acres of plant, colony and facilities, but whose notification proposes five hundred because the acquiring body prefers a buffer and room for a second phase it has not designed, presents the study with a two hundred acre question that the 1894 Act never asked: the excess is not a rounding error but the displacement of the families on those two hundred acres, for a purpose the proponent cannot yet state. A study that forces that answer onto the record, and an appraisal that tests it, convert land banking by notification from an administrative habit into a documented choice the government must defend, which is a discipline the Indian acquisition process had never previously contained. A study that answers them honestly will occasionally answer a project out of existence, which is the point of asking them before the money is spent rather than after.

The assessment has exactly one complete escape hatch, and it is narrow by design. Section 9 provides that where land is proposed to be acquired invoking the urgency provisions under Section 40, the appropriate Government may exempt the undertaking of the Social Impact Assessment study. There is no general power to dispense with the study for projects merely considered important, and no exemption for the large infrastructure categories that dominated acquisition under the old law; the electricity, highway and railway statutes sit outside the Act altogether for a different reason, the Fourth Schedule exemption examined below, rather than inside it with the study waived. The developing litigation on this chapter has concerned whether assessments were genuinely conducted and genuinely considered, whether hearings were real, and whether departures from expert appraisal were reasoned; the courts treat the assessment as a substantive condition of a valid acquisition, not a stationery exercise, though the case law on how searching that review should be is still accumulating and is best described as developing. The closest judicial statement of what an impact assessment is for comes from the neighbouring field of environmental clearance: in Hanuman Laxman Aroskar v Union of India in 2019, a case on the environmental clearance for an airport project rather than on this Act, the Supreme Court treated the assessment process as the mechanism by which a decision-maker confronts the environmental and social costs of a project before committing to it, and faulted a clearance built on suppressed information. The reasoning travels, because the statutory design is the same: an assessment chapter in a development statute is a duty to confront costs on the record, and courts across both fields have been unwilling to treat a defective assessment as a curable irregularity where the defect concealed the very impacts the study existed to reveal. A parallel question, whether assessment can be diluted by exempting whole categories of projects, is precisely what the amendment attempt of 2014 and 2015 proposed, and it is treated with that episode in this cluster rather than here.

The classification question: government projects that end in private hands

The applicability rule’s hardest case is the one the Singur acquisition itself would present if run under the new Act: a State industrial development corporation acquires agricultural land, builds an industrial estate on it, and allots the plots to private companies. Is that acquisition by the government for its own use, hold and control, attracting no consent, or acquisition for private companies, attracting the eighty per cent threshold? The text gives arguments both ways, and the classification has been argued project by project. The government-side argument is that the acquiring body is a public authority acquiring for the public purpose of industrial development, that title vests in the corporation, and that allotment under a published scheme is the ordinary working of every industrial estate in the country, none of which were understood to require the consent of the dispossessed. The affected-side argument is that the route is defined by the destination of the land, that Section 2(2) speaks of acquisition for private companies as a purpose rather than a form, and that a construction under which the interposition of a development corporation dissolves the consent condition would let the condition be structured away in precisely the class of case, the factory estate on farmland, that produced the statute. The question matters beyond its facts because it decides whether the consent chapter governs the standard Indian instrument of industrial land assembly. It remains a live classification dispute rather than a settled one, and a practitioner advising on either side should treat the route characterisation as the first and possibly the decisive issue in the case. The general lesson generalises: under this Act, the parties fight first about which box the acquisition sits in, and the box, more often than the merits, decides the outcome.

The administrative machinery the Act builds

The Act creates no new department, but it staffs the proceeding with officers carrying defined statutory duties, and the identity of each matters to anyone trying to work out where a stalled acquisition is stuck. The Collector, who runs the acquisition, is the district Collector or an officer the Act’s definition in Section 3(g) recognises for the purpose, and the Collector’s functions span the enquiry, the award, the payment discipline and the taking of possession. For each project involving displacement, Section 43 requires the appointment of an Administrator for Rehabilitation and Resettlement, an officer not below the rank of Joint Collector, Additional Collector or Deputy Commissioner of the district, charged with formulating, executing and monitoring the rehabilitation scheme for that project. Above the project sits the Commissioner for Rehabilitation and Resettlement under Section 44, appointed for the State or the Union territory as the case may be, responsible for supervising the formulation and implementation of schemes across projects and for the post-implementation social audit that must follow resettlement, conducted in consultation with the Gram Sabha in rural areas and the municipality in urban areas. Section 45 adds a project-level Rehabilitation and Resettlement Committee, constituted where the acquisition involves the involuntary displacement of a large body of families, to monitor and review the scheme’s implementation and to associate the affected community, through its representatives and the local public representatives, with the process. Sections 48 and 50 complete the architecture with a National Monitoring Committee and State Monitoring Committees to review and monitor rehabilitation across projects. On paper this is a four tier structure, project, district, State and national, wrapped around a promise. In operation its effectiveness has depended entirely on whether States appointed the officers and convened the committees, and the record on appointments is the first thing a researcher examining a failed resettlement should check, because a Commissioner never appointed is a supervision that never occurred.

From notification to possession: the acquisition process

Chapter IV converts a studied proposal into an award. Under Section 11, the appropriate government publishes a preliminary notification of the lands likely to be needed, updated on its website, calling on affected persons and notifying the local bodies. The notification has a statutory life of its own: if no declaration under Section 19 follows within twelve months of it, the preliminary notification falls away and the process must begin again, with any period during which the proceeding stood stayed by a court excluded from the count, so a government cannot bank a notification and revive a dormant acquisition years later on its strength. The persons who populate this chapter are defined by the widest standing concept in the Act, the person interested, which extends beyond owners to every person claiming an interest in the compensation, including persons interested in an easement affecting the land, so that mortgagees, lessees and others whose rights the acquisition extinguishes are inside the notice, objection and reference machinery rather than remitted to private suits against the recorded owner. Powers of survey and entry follow, and Section 15 gives any person interested in the notified land sixty days from publication of the preliminary notification to object to the acquisition, with the Collector hearing the objections and reporting to the government. The rehabilitation machinery starts inside this chapter rather than after the award: the Administrator for Rehabilitation and Resettlement prepares a survey and census of affected families and a draft Rehabilitation and Resettlement Scheme, which is made public and discussed in Gram Sabhas or public hearings in the affected areas, before being forwarded through the Collector and the Commissioner for Rehabilitation and Resettlement for approval. Under Section 19, the government, satisfied that the land is needed for a public purpose, publishes a declaration accompanied by a summary of the Rehabilitation and Resettlement Scheme.

The case then moves to valuation and award. The Collector issues public notice and individual notices to the persons interested under Section 21, hears claims to compensation and to the measurement and value of the land, conducts an enquiry, and must make his award within the discipline of Section 25, under which, if the award is not made within twelve months from the date of publication of the declaration under Section 19, the entire acquisition proceedings lapse and fresh proceedings must begin. Sections 26 to 30, examined in the next section, govern the computation the award must perform. Section 38 then sets the conditions of possession, and they invert the practice of the old law: the Collector shall take possession only after ensuring that full payment of compensation is tendered or paid within three months from the date of the award, and that the monetary part of rehabilitation and resettlement entitlements is paid within six months from the date of the award. Displacement after payment, rather than payment after displacement, is the sequence Parliament wrote.

On possession, the legal character of the land changes completely: it vests in the government free from all encumbrances. Mortgages, leases, liens and easements that bound the land are extinguished as rights over the land itself, and their holders are remitted to claims against the compensation, which is the legal reason the apportionment machinery and the Section 77 deposit exist: the fund replaces the land as the subject of every private right the acquisition destroys. Vesting free of encumbrances is what makes acquisition valuable to the acquirer, since the project receives a clean title no private purchase could guarantee, and it is what makes the compensation computation a matter of justice rather than bookkeeping, since the money is the whole of what the extinguished rights will ever receive.

When can the Collector take possession of acquired land?

Only after the money has moved. Section 38 requires the Collector to ensure that compensation is tendered or paid within three months of the award, and the monetary rehabilitation entitlements within six months of it, before possession is taken. The urgency route in Section 40 is the exception, and even there eighty per cent of compensation must first be tendered.

The general position set out in this article is information about the statute, not advice on an individual acquisition, and a person facing a live proceeding should take advice on the facts of that case, because the objection windows and limitation periods in this Act are short and unforgiving.

The urgency power itself is Section 40, and its drafting is the direct answer to Section 17 of the 1894 Act. Under Section 40(1), in cases of urgency the Collector may, on the expiration of thirty days from publication of the Section 21 notice and though no award has been made, take possession of land needed for a public purpose. But Section 40(2) confines that power to the minimum area required for the defence of India or national security, or for emergencies arising out of natural calamities, or any other emergency with the approval of Parliament. Section 40(4) permits the government to direct that some or all of the provisions of Chapters II to VI shall not apply to such an acquisition, which is how the assessment and enquiry machinery is bypassed; Section 40(3) requires that eighty per cent of the estimated compensation be tendered before possession; and Section 40(5) requires an additional compensation of seventy five per cent of the total compensation, except where the project affects the sovereignty and integrity of India, the security and strategic interests of the state or relations with foreign states. Urgency survived, but it was caged: confined to defence, security and calamity, fenced with parliamentary approval for anything beyond them, and priced at a seventy five per cent premium where it is used. Two details of the cage repay notice. The confinement is expressed in terms of area as well as purpose: the power is restricted to the minimum area required for the permitted purpose, which writes a proportionality limit into the emergency power itself and gives a court a textual handle, absent from the 1894 clause, for asking whether the taking exceeded the emergency. And the premium’s exception means the seventy five per cent addition operates principally in the natural calamity class, since defence and security acquisitions are excused it; Parliament’s design prices the emergency the citizen can see, the flood and the earthquake, and declines to price the emergency the state asserts on security grounds, a distribution of the premium that reflects the old clause’s history, in which the routine abuse was never the invasion or the flood but the industrial estate that could not wait.

Compensation: how the number is built

The compensation code sits in Sections 26 to 30 and the First Schedule, and it is a formula rather than a discretion. Section 26 fixes market value as the higher of three measures: the market value specified in the Indian Stamp Act, 1899 for registration of sale deeds in the area; the average sale price for similar land in the nearest village or vicinity, computed from the higher half of the sale deeds recorded in the preceding three years; or, for acquisition for private companies or partnership projects, the consented amount of compensation agreed in the consent process. Section 28 sets the parameters the Collector must weigh in the award, including the damage sustained by the person interested from the taking of standing crops and trees, from severance of the acquired land from his other land, from injurious affection of his other property, and from the reasonable expenses of changing residence or place of business. Where the three measures in Section 26 yield no usable figure, as in areas where sales are rare or unrecorded, the Act does not leave the computation stranded: the appropriate government is to specify a floor price for land of the relevant class drawn from comparable areas, against which the award can be computed, a provision that concedes on the face of the statute that the registered data on which the whole formula rests will sometimes be too thin to use. Section 29 governs the valuation of assets attached to the land or building. Section 30 then performs the two operations that transformed the headline number: the market value so determined is multiplied by the factor the First Schedule prescribes, and a solatium of one hundred per cent is awarded on the resulting compensation amount in consideration of the compulsory nature of the acquisition. Section 30(3) adds an amount calculated at twelve per cent per annum on the market value for the period from the publication of the Social Impact Assessment notification to the date of the award or the taking of possession, whichever is earlier.

The First Schedule states the multiplication factor. In rural areas the factor is between 1.00 and 2.00, based on the distance of the project from an urban area, as notified by the appropriate government; the Centre has notified a factor of 2.00 for its own acquisitions. In urban areas the factor is 1. Applied with the one hundred per cent solatium, the schedule produces the figures that entered popular speech: compensation up to four times the market value in rural areas and up to twice the market value in urban areas. Two cautions protect the reader from the popular version. The multiple applies to the statutorily determined market value, which is anchored in registration and sale deed data, and not necessarily to what a willing buyer would pay in an unregulated bargain for the same parcel. And the factor in rural areas is notified, not automatic, so the four times figure is a ceiling that depends on the notification the relevant government has issued for the relevant area. What is not a matter of notification is the structure itself: multiplier, assets, solatium and the twelve per cent addition are entitlements the Collector must compute, not favours he may grant, and the award must set out the computation.

A worked parcel shows what the formula does and does not do. Take a rural parcel whose market value under Section 26 is determined at ten lakh rupees, in an area where the appropriate government has notified the maximum factor of two. The First Schedule multiplication takes the figure to twenty lakh rupees. The assets attached to the land, a house, a well and standing trees valued under Section 29 at two lakh rupees, are added, giving twenty two lakh rupees. Solatium at one hundred per cent of that amount adds a further twenty two lakh rupees, taking the compensation to forty four lakh rupees, four point four times the determined market value, before the twelve per cent per annum addition for the period between the assessment notification and the award is applied. Under the 1894 Act the same parcel, at the same determined market value, attracted the market value plus thirty per cent solatium: thirteen lakh rupees, and nothing for the tenant family that worked the parcel and nothing for the labourers it employed. The comparison exposes both the achievement and the live dispute. The achievement is that the new figure bears a defensible relation to the cost of replacing the holding. The dispute is that everything depends on the first number: if the circle rate and the registered sale deeds understate what land in the vicinity actually changes hands for, as they do in districts where registration is systematically undervalued, then a multiple of an understated base can still leave the seller short of replacement cost, which is why litigation under the new Act has concentrated on the determination of market value rather than on the multiplier. The urban case runs the same computation at lower amplitude: the factor is one, so the award is the market value, plus assets, doubled by the solatium, and the twelve per cent addition, which is why the shorthand that the Act pays four times the value of land is a rural ceiling and not a description of the Act. It also explains the political geography of the compensation debate: the formula is most generous exactly where land is agricultural, holdings are small and the sellers are organised as farmers, and least generous in the urban periphery where the development pressure and the speculative gains are greatest.

The assessment section below takes up the industry objection that these figures made land unaffordable for projects. The structural point belongs here. Under the 1894 Act, the state acquired cheaply because the price was set by understated registration values, the solatium was thirty per cent, and the costs of displacement were transferred to the displaced. The 2013 Act did not invent a new cost; it moved an existing cost, which land losers had always borne, onto the balance sheet of the acquirer, and then multiplied the market value to approximate what a genuine market price for a compulsory seller might look like. Whether the resulting price is fair compensation or a project-killing premium is a value judgment about who should bear the cost of development, and the article returns to it with both sides stated.

Rehabilitation and resettlement: what is owed to people who own nothing

The third innovation is the one the Act’s own title carries and public discussion most neglects. Section 31 requires the Collector to pass a Rehabilitation and Resettlement Award for each affected family, in terms of the entitlements in the Second Schedule, in addition to the compensation award for the land. The entitlements run to affected families as defined in Section 3(c), which is why the definition mattered: the agricultural labourer who loses work when the field he worked is fenced, the tenant whose tenancy the records barely show, the sharecropper, and the forest dweller whose rights under the Forest Rights Act are extinguished by the acquisition are all inside the entitlement, because Parliament defined them inside it. Entitlement under this Act is not confined to titleholders, and stating that proposition accurately is the single most useful service a summary of this statute can perform, since the people it benefits are the people least likely to be told.

The census from which the award is built is prepared inside the acquisition proceeding itself. Under Sections 16 to 18, the Administrator conducts the survey and census of affected families, identifying the families losing land and the families losing livelihood, prepares the draft Rehabilitation and Resettlement Scheme with the particulars of entitlements for each family, publishes the draft and discusses it in the Gram Sabhas and public hearings of the affected area, and the scheme as approved accompanies the declaration of acquisition, so that a family can read, before the declaration is final, the package the administration says it is owed. The award under Section 31 then converts the scheme into individual entitlements family by family. This is the machinery on which the undercounting critique, taken up in the assessment below, fastens: the scheme can only pay the families the census found, and the census is a field exercise conducted by the acquiring administration, in villages where tenancy is oral, migration is seasonal and the record of rights is a generation out of date.

The Second Schedule sets the elements. A house is to be provided to each affected family that is displaced and has no house or has lost its house site, a constructed house in rural areas and a constructed unit in urban areas in accordance with the applicable housing norms, in lieu of which the family may take a one-time financial assistance for house construction. In irrigation or hydel projects, land for land operates as far as possible within the command area: a minimum of one acre in the command area of the project for each affected family owning agricultural land that becomes landless or is reduced to the status of a marginal farmer, with a stronger entitlement for Scheduled Caste and Scheduled Tribe families. Each affected family then faces the choice at the heart of the Schedule: the appropriate government shall ensure employment, after suitable training and skill development, for at least one member of the family at not less than the minimum wage where jobs are created by the project; or a one-time payment of five lakh rupees per affected family; or annuity policies paying not less than two thousand rupees per month per family for twenty years, with appropriate indexation to the Consumer Price Index for Agricultural Labourers. Around that choice sit the recurring allowances: a subsistence grant of three thousand rupees per month for one year from the date of award for each displaced family, with an additional fifty thousand rupees for Scheduled Caste and Scheduled Tribe families displaced from the Scheduled Areas; a one-time transportation cost of fifty thousand rupees for shifting the family, its building materials, its belongings and its cattle; a one-time resettlement allowance of fifty thousand rupees; one-time grants of twenty five thousand rupees for a cattle shed or a petty shop and fifty thousand rupees for artisans, small traders and the self-employed; a one-time grant to each artisan, small trader and other specified family whose livelihood is affected; fishing rights in reservoirs in irrigation and hydel projects; and benefits at par with the Scheduled Tribes for Scheduled Caste families displaced in specified circumstances. The Third Schedule then specifies the infrastructure and amenities that must be provided at the resettlement area itself, and the Act’s monitoring machinery, an Administrator for each project under Section 43, a Commissioner for Rehabilitation and Resettlement under Section 44 charged with supervising formulation and implementation and with post-implementation social audit in consultation with the Gram Sabha or the municipality, a project-level Rehabilitation and Resettlement Committee under Section 45, and National and State Monitoring Committees under Sections 48 and 50, exists to keep those promises administratively alive.

What amenities must a resettlement site provide under the Third Schedule?

The Third Schedule lists twenty five amenities the resettlement area must carry, among them roads and drainage, drinking water, electricity, schools, health care, places of worship, burial and cremation grounds, fair price shops, post offices, transport, irrigation facilities and veterinary services. Resettlement under the Act is the rebuilding of a serviced settlement, not the handing over of an empty plot.

Read element by element, the Schedule discloses its design logic. The housing entitlement answers the loss of shelter, which for a poor family is a larger catastrophe than the loss of a field, and it is owed to displaced families whether or not they owned the house site, because the Schedule’s unit is the affected family and not the title. The land for land entitlement in irrigation projects answers a specific and bitter experience of the dam decades, in which cash compensation paid to cultivating families in a subsistence economy dissolved within years while the reservoir remained; confining it to irrigation and hydel projects, where a command area exists within which replacement land can physically be allotted, is a concession to feasibility: a general land for land promise in a highway or township acquisition would be a promise the acquiring body could not keep, and the Schedule confines the entitlement to the two project types where replacement land can physically be allotted. The choice among employment, the five lakh payment and the twenty year annuity is the Schedule’s most modern feature and its most quietly radical: it prices livelihood restoration as a stream rather than an event, and the annuity’s indexation to the Consumer Price Index for Agricultural Labourers acknowledges what every earlier compensation regime denied, that a fixed sum paid at displacement is consumed by the inflation of the two decades the displacement lasts. The one-time grants for cattle sheds, petty shops and artisans answer the occupational reality that a village economy runs on assets a land valuation never sees. The subsistence grant bridges the year in which the family has lost its land and not yet rebuilt its income. Each element maps to a documented failure of the cash-only regime, and the Schedule is best read as a codified list of the ways displaced families were impoverished under the old law, converted one by one into entitlements.

One provision in this part of the Act deserves its own sentence because it answers a cruelty the old regime tolerated. Section 39 provides that the Collector shall, as far as possible, not displace a family that has already been displaced by the appropriate government under this Act, and that where a family is displaced a second or successive time, an additional compensation equivalent to the compensation determined under the Act shall be paid for that displacement. Repeat displacement, the fate of communities in the path of successive dams and industrial corridors, is at least priced by the new statute, even if it is not prevented.

The two money tracks of the Act run on different principles, and keeping them apart prevents the commonest analytical error in summaries of this statute. Compensation follows interest: it is paid for the land and the assets on it, to the persons interested in proportion to their interests, and it is computed by the formula. Rehabilitation follows affectedness: it is paid to families because of what the acquisition does to their lives, in the Schedule’s fixed elements, and a family can stand high in one track and absent from the other. The recorded owner of a large holding who lives in a distant city takes a very large compensation and, not being displaced and losing no livelihood he personally works, takes little of the Second Schedule beyond what attaches to his family as land losers. The landless labouring family on the same holding takes no compensation at all, having no interest in the land to value, and takes the Schedule entire: the house entitlement if displaced, the employment choice or its alternatives, the subsistence, the transport, the resettlement allowance. Under the 1894 Act the first family was the statute’s only subject and the second was invisible to it. Under the 2013 Act the two tracks together are the statute, and any account of what an acquisition pays that reports only the compensation figure has described the smaller half of the design for the people most affected by it.

The special protections: food security, Scheduled Areas, unused land

Chapter III is one section long and it is one of the most argued provisions in the Act. Section 10(1) provides that, save as provided in sub-section (2), no irrigated multi-cropped land shall be acquired under the Act. Section 10(2) permits such acquisition only under exceptional circumstances, as a demonstrable last resort, and subject to the condition that the aggregate for all projects in a district or State shall in no case exceed the limits the appropriate government notifies; the Centre notified a limit of one per cent of the total irrigated multi-cropped land in a district, measured over a five year block, for its own projects. Section 10(3) attaches the compensating obligation: whenever multi-cropped irrigated land is acquired under that exception, an equivalent area of culturable wasteland shall be developed for agricultural purposes, or an amount equivalent to the value of the land acquired shall be deposited with the appropriate government for investment in agriculture for enhancing food security. Section 10(4) extends the aggregate cap logic to agricultural land generally, measured against the total net sown area of the district or State as notified, with a proviso disapplying the whole section to linear projects such as railways, highways, major district roads, irrigation canals and power lines. The provision is a rationing rule, not a prohibition: it makes fertile irrigated land the last land the state may reach for, and makes the reaching visible in aggregate figures. Its weakness is built into the same design. The caps bite only when the appropriate government notifies limits, and a government that notifies no limit for agricultural land generally, or sets it generously, leaves the section with little to ration; the wasteland development obligation under sub-section (3) depends on the existence of recorded culturable wasteland and on an administration willing to develop it, and it has been far more often recited than performed. Section 10 is therefore the clearest example in the Act of a protection whose strength is a function of executive follow-through, in contrast to the compensation formula, which operates whether or not the administration is enthusiastic, because the Collector must compute it in every award.

Section 41 carries the Scheduled Areas protection, and it is framed in stronger language than the chapters around it. As far as possible, no acquisition of land shall be made in the Scheduled Areas, and where acquisition does happen it shall be demonstrably a last resort. In all cases of land acquisition in the Scheduled Areas, the prior consent of the concerned Gram Sabha or the Panchayats or the autonomous District Councils at the appropriate level shall be obtained, in accordance with the provisions of the Fifth Schedule; this is consent, not consultation, and it applies to government acquisition for the government’s own purposes as much as to any other route, which makes Section 41 the one place in the Act where the consent principle is not keyed to the identity of the acquirer. The relationship between this consent and the wider regime of Gram Sabha powers in the Scheduled Areas is the subject of the companion article on the PESA Act. Section 41 adds a development plan obligation for displaced Scheduled Tribe and Scheduled Caste families, including settlement of land rights and restoration of titles where land was alienated, provision of alternate fuel, fodder and non-timber forest produce resources, and a rule that at least one third of the compensation due to such families be paid as a first instalment before possession is taken. Section 42 then carries the protections across the resettlement site: the benefits, including reservation benefits, available to the Scheduled Tribes and Scheduled Castes in the affected area shall continue in the resettlement area. The adequacy of Gram Sabha consultation and consent in practice is contested ground, and the jurisprudence on it is developing; what the text unambiguously does is make the consent a condition, and conditions unfulfilled are the raw material of invalidity. The provision did not arrive in a vacuum. In April 2013, months before this Act commenced, the Supreme Court decided Orissa Mining Corporation v Ministry of Environment and Forests, the Niyamgiri case, in which the Dongria Kondh and other forest dwelling communities of the Niyamgiri hills in Odisha claimed religious and community rights over land sought for bauxite mining. The Court held that the Gram Sabhas of the affected villages must themselves determine whether the project affected those rights under the Forest Rights Act, and when the Gram Sabhas were convened they rejected the project village by village, and the mining did not proceed. The case was decided under the forest rights framework rather than under this Act, which was not yet in force, but it established the practical premise on which Section 41 was drafted and would operate: that a Gram Sabha in a Scheduled Area, asked a real question in a process a court will examine, is capable of saying no, and that the no has legal consequences. Section 41 converts that premise into a standing condition of acquisition across the Scheduled Areas.

Two closing provisions answer the recurring public question of what happens to land the state takes and never uses. Section 101 provides that when land acquired under the Act remains unutilised for a period of five years from the date of taking over possession, it shall be returned to the original owner or owners or their legal heirs, or to the Land Bank of the appropriate government, by reversion in the prescribed manner. Section 102 deals with the sharper grievance, land flipped at a profit: whenever ownership of land acquired under the Act is transferred to any person for a consideration, without any development having taken place on the land, forty per cent of the appreciated value shall be shared among the persons from whom the land was acquired or their heirs, in proportion to the value at which their land was acquired, where the transfer occurs within five years of the acquisition, and the benefit accrues only on the first such transfer. Sections 99 and 100 fence the transaction in the meantime: no change from the purposes specified in the land use plan submitted at acquisition, and no change of ownership, is permitted without the specific permission of the appropriate government. The 1894 Act asked none of these questions. The 2013 Act answers all of them, and the answers are among its least-used provisions, because return and value-sharing depend on records, tracking and claims that the administrative system was not built to maintain.

One acquisition, run end to end

The sequence is worth following once as a single movement, because the Act’s protections are distributed across its stages and a reader who sees only the stages separately misses where the protection sits. A requiring body identifies land for a project that falls within the Section 2(1) definition of public purpose. The appropriate government commissions the Social Impact Assessment, which is conducted in consultation with the village or municipal body, examines the bare minimum question and the alternatives, hears the affected families at a public hearing and is published in the local language; if the route is acquisition for a company or a partnership project, the consent process runs with the study and must reach its percentage. The Expert Group appraises the study and may recommend abandonment; the government examines the proposal and, if it proceeds against the appraisal, records reasons. Only then does the preliminary notification under Section 11 issue, the survey follow, and the Administrator’s census fix the affected families and produce the draft rehabilitation scheme, which is itself discussed publicly before approval. Objections under Section 15 are heard; the declaration under Section 19 issues with the scheme summary attached. The Collector issues notices under Section 21, hears claims, enquires and awards: compensation under Sections 26 to 30, and the rehabilitation award under Section 31, within twelve months of the declaration or the proceedings lapse under Section 25. Compensation is tendered within three months and the monetary rehabilitation entitlements paid within six, and possession follows payment under Section 38. In irrigation and hydel projects the same section adds a discipline addressed to the oldest scandal of Indian displacement, the village submerged before its people were resettled: the rehabilitation and resettlement process must be completed six months before the submergence of the land takes place, so that the rising water cannot be used, as it was used in the dam decades, as the argument that resettlement has been overtaken by events. A family that does not accept the award refers it to the Authority under Section 64; a family the census missed petitions to be recorded; a village that says the study was a formality challenges the proceeding on the record the earlier stages created. Each stage leaves a document, and the documents are cumulative, so that by the time possession is taken the file either shows a process that confronted its own costs or shows exactly where it did not. That file, more than any single provision, is the Act’s enforcement theory.

Two adjacent mechanisms complete the procedural picture. The Act retains, from the older law, a power of temporary occupation: where land is needed temporarily, the government may occupy waste or arable land for a term not exceeding three years, paying compensation for the occupation and for damage, with the land restored at the term’s end, a provision designed for works camps, diversions and borrow areas that the urgency clause was once stretched to cover. And where compensation is payable to several persons with competing interests, the Collector apportions the amount among them according to their interests, with disputed apportionment following the money into deposit with the Authority rather than holding the acquisition hostage to the dispute. Both provisions are unglamorous, and both are the kind of working detail whose absence from the 1894 Act’s popular accounts concealed how much of acquisition law is plumbing rather than principle.

Disputes, the Authority, and the enforcement teeth

Chapter VIII creates the forum the Act’s promises are tested in. The appropriate government establishes, under Section 51, one or more Land Acquisition, Rehabilitation and Resettlement Authorities, each presided over by a person qualified in the manner the Act prescribes from the district judiciary. Where a person interested does not accept the Collector’s award, Section 64 entitles him to require the matter to be referred to the Authority, which determines compensation and the rehabilitation entitlements afresh; the Authority’s award, and the Collector’s, are deemed decrees for execution purposes, and Section 74 gives an appeal to the High Court within sixty days. The reference is not confined to the land’s price: the same provision carries disputes about measurement, about the person to whom compensation is payable, about apportionment among the interested, and about the rights of rehabilitation and resettlement themselves, so the Authority is the forum for the Schedule’s entitlements as much as for the formula’s output. In practice the discipline carried over from the old law governs acceptance: compensation taken under recorded protest leaves the reference open, while unqualified acceptance closes it, which is why the endorsement on the receipt has decided more cases than the argument that followed it. The ordinary civil courts are correspondingly displaced from this field, and Section 63 bars their jurisdiction over matters the Authority is empowered to determine. The Authority works with the powers of a civil court for summoning and enforcing the attendance of witnesses, requiring the discovery and production of documents and receiving evidence on affidavit, and its award is executable as a decree. The design intent is speed and specialisation: a single statutory forum for the quantum disputes that under the old Act wandered through reference courts for decades. The intent has been only partly realised, for a structural reason the Act could not cure by drafting: the Authorities exist only where State governments constitute them and staff the Presiding Officer’s post, and in States where constitution lagged, references accumulated in a forum that existed in the statute book and not yet in the district, which is the notification gap in its judicial form.

What happens to compensation that a landowner refuses to accept?

Refusal does not stop the acquisition or strand the money. Where a person entitled to compensation does not consent to receive it, or title or apportionment is disputed, Section 77 requires the Collector to deposit the amount with the Authority, which holds and invests it for whoever is ultimately found entitled, rather than the sum returning to the acquiring body.

The enforcement provisions close the scheme. The Act creates offences with imprisonment running from six months to three years, or fine, or both, including for furnishing false information or false documents in the process and for obstructing it, and it extends liability to companies and to government officials within the procedural safeguards the Act specifies. Penalty provisions of this kind in a welfare statute are partly symbolic, but the symbol has a direction: under the 1894 Act, error and obstruction by the acquiring side carried no comparable statutory price, and the risk of the process lay entirely on the person losing land.

The four schedules read together

The Act’s politics are least mediated in its schedules, where Parliament wrote figures rather than principles, and the four repay reading as a single balance sheet. The First Schedule is the price term: market value, the multiplier, the assets, the solatium, the assembled award. The Second Schedule is the people term: what each affected family, owner and landless alike, is owed in housing, land, livelihood and allowances. The Third Schedule is the place term: the serviced settlement that must exist at the other end of displacement, twenty five amenities that convert resettlement from a plot allotment into the reconstruction of a functioning village or neighbourhood. The Fourth Schedule is the exception term: the thirteen statutes to which the first three schedules originally did not extend. Read together they state the Act’s whole theory in four pages: the price is a formula, the people are enumerated, the place is specified, and the exception is named, so that every departure from the scheme is visible on the face of the Act rather than buried in a rule or a file.

One structural weakness runs through the first three schedules and grows with time. Their rupee figures are fixed in the enacted text: five lakh rupees for the one-time payment, three thousand rupees a month for the subsistence year, fifty thousand for transport, twenty five thousand for the cattle shed. Of the recurring figures, only the annuity carries indexation, to the Consumer Price Index for Agricultural Labourers, across its twenty years. The rest erode at the rate of inflation from the day of enactment, and because the figures sit in a schedule to a central Act, restoring their real value requires Parliament to amend the Schedule, an act of legislative housekeeping no government has treated as urgent. A family displaced in the Act’s first year and a family displaced a decade later are owed the same nominal package, which is to say the later family is owed materially less, and the Act that indexed its annuity understood the problem and solved it for exactly one of its figures. The point is worth stating in a pillar because it is the kind of defect that never appears in debate: the settlement of 2013 is being quietly renegotiated downward by arithmetic, in every year in which the schedules are not revised.

The passage record: a cross-party statute

The bill that became this Act was introduced in the Lok Sabha on 7 September 2011 as the Land Acquisition, Rehabilitation and Resettlement Bill, 2011, and referred on 13 September 2011 to the Standing Committee on Rural Development. It had been preceded by an unusually public gestation: the Rural Development Ministry released the draft bill for public comment in July 2011 before introducing it, and the National Advisory Council, which had deliberated on the design, had recommended that the state should not acquire land for private companies at all and that the protection of agricultural land and the rehabilitation of the landless should be the statute’s centre. The introduced bill departed from the Council on the first point, permitting acquisition for companies behind the consent threshold, and the departure set the terms of the two year argument that followed, in which the government defended a middle position, acquisition for private purposes but at a price and behind a majority, against a committee and a movement that wanted the door closed and an industry that wanted it open. The committee reported on 17 May 2012 after extensive consultation, and its report is the best single evidence of how contested the design was even among supporters of replacement: the committee recommended, among other things, that land should not be acquired for use by private companies and public private partnerships at all, that the role of the Gram Sabhas should move from consultation toward consent at different stages, and that the thresholds for rehabilitation in private purchases should be fixed by the States rather than the Centre. The government did not accept the first of those recommendations, and the Act as passed permits acquisition for companies and partnerships behind the consent thresholds; the committee’s imprint is visible instead in the architecture, in the assessment study, the food security chapter and the local body consultation the final text carries. During passage the bill acquired its longer name, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, which is itself a statement of the argument its sponsors wanted to win. The text that emerged was layered: the standing committee’s recommendations, a set of amendments worked out through a Group of Ministers constituted to reconcile the ministries whose projects the bill would govern, and amendments moved on the floor, two of which came from the Leader of the Opposition in the Lok Sabha, Sushma Swaraj, and were accepted. That layering explains the Act’s internal tensions better than any theory of drafting carelessness. The consent threshold was lowered for partnership projects because the infrastructure ministries argued the higher figure would strand joint projects; the Fourth Schedule exemptions survived because the sectoral ministries would not surrender their own acquisition statutes to a general code in the same session that created it; the food security chapter carries a linear projects exception because a ration on irrigated land that applied to a railway line or a canal in the same way as to a factory estate was unworkable. The Act is a negotiated instrument among interests that all accepted replacement in principle, and its seams are the map of where each interest stopped conceding.

The Lok Sabha passed the bill on 29 August 2013, with 216 members voting in favour and 19 against in the division forced at the close of debate; the Rajya Sabha passed it on 4 September 2013. Jairam Ramesh, the Rural Development Minister who piloted the bill, presented it as a consensus product, recording that he had received written suggestions from ten political parties and had tried to take the States, industry, non-governmental organisations and farmers’ groups along together. Rajnath Singh, opening the debate for the Bharatiya Janata Party, said the bill contained grey areas, yet the opposition’s amendments were not carried and the bill passed with support that crossed the aisle. The significance of that record is prospective. A statute enacted on a contested party vote can be amended on one. A statute enacted as this one was, with the principal opposition voting for the framework while criticising its edges, presents an amending government with the problem that the text it wants to dilute is partly its own side’s handiwork, which is one reason the amendment attempt of 2014 and 2015, examined next in outline, failed of its object.

One passage detail repays attention because it states the statute’s self-image. The Bill introduced in 2011 carried the plainer title of the Land Acquisition, Rehabilitation and Resettlement Bill; the enacted title prefixes that name with the words the Right to Fair Compensation and Transparency in, and the prefix was added during the Bill’s passage rather than present in the introduced text. The addition is the compression of the Act’s argument into its own name: compensation characterised as a matter of right and fairness rather than of administrative grace, and transparency elevated from a procedural virtue to a titled promise. Readers of the pillar should treat the long title as the standard the body of the Act then has to meet, which is how the assessment below reads it.

The transition from the old Act: Section 24 and the repeal

Section 114 is the repeal and saving provision: the Land Acquisition Act, 1894 stands repealed. Section 24 governs the live border between the two statutes, and it does so in two moves. Under Section 24(1)(a), where proceedings under the 1894 Act had begun but no award had been made by 1 January 2014, there is no lapse of the proceedings, but compensation is determined under the 2013 Act. Under Section 24(1)(b), where an award had been made, the proceedings continue under the 1894 Act as if it had not been repealed. Section 24(2) then adds the lapse doctrine: where an award under the old Act had been made five years or more before the commencement of the new one, but physical possession of the land had not been taken or compensation had not been paid, the proceedings are deemed to have lapsed, and the government may initiate acquisition afresh under the new Act; a proviso preserves enhanced compensation for the majority of landholders where compensation was not deposited in the manner the provision specifies.

The litigation Section 24 generated is the subject of its own article later in this cluster, and this pillar states the outcome only. The provision was first read generously to landowners in 2014, when Pune Municipal Corporation v Harakchand Misrimal Solanki held that a deposit of compensation in the government treasury was not payment for this purpose and that proceedings could lapse where payment had not been made in the statutory sense; a three-judge bench in 2018 doubted that reading and took the contrary view, and the conflict was referred to a Constitution Bench. After those conflicting decisions, a five-judge Constitution Bench of the Supreme Court settled the construction in Indore Development Authority v Manoharlal in 2020. The Court read the word “or” in Section 24(2) as “nor” or “and”, so that proceedings lapse only where, through official inaction over five years or more, possession has not been taken and compensation has not been paid; if either possession was taken or compensation was paid, there is no lapse. The Court held that a deposit of the compensation amount in the government treasury satisfies the payment limb, overruling the contrary view taken in Pune Municipal Corporation v Harakchand Misrimal Solanki in 2014, and that the period during which an interim court order operated is excluded from the five year computation. The practical consequence is that the lapse door, which landowners had read as wide, was held to be narrow, and most concluded acquisitions under the old law stand. The proviso to Section 24(2) deserves its own explanation because it decided the money in many cases where lapse failed. Where an award was made five years or more before commencement and the compensation was not deposited in the manner the provision contemplates for the majority of land holdings in the notified area, the landowners do not get their land back, but every beneficiary is entitled to compensation computed under the 2013 Act instead of the old one. The structure is characteristic of the transition Parliament built: concluded acquisitions are protected from unwinding, because third parties and public works stand on them, but the price of the state’s delay is recalculated at the new Act’s rates. Between Section 24(1)(a), which applies the new compensation code to every old proceeding in which no award had been made by commencement, and the proviso, which applies it where the majority went unpaid, the financial reach of the 2013 Act into 1894 Act proceedings turned out to be far wider than its procedural reach, and the largest single body of litigation the new Act produced in its first decade was fought over which side of those lines a given acquisition fell.

Where the Act does not reach: the Fourth Schedule, Section 105 and the difficulty power

No account of this statute’s real scope is complete without its largest exception. Section 105(1) provides that, subject to sub-section (3), the provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule. The Fourth Schedule lists thirteen central enactments, including the Railways Act, 1989, the National Highways Act, 1956, the Electricity Act, 2003, the Atomic Energy Act, 1962, the Coal Bearing Areas Acquisition and Development Act, 1957, the Petroleum and Minerals Pipelines Act, 1962, the Metro Railways Act, 1978, the Damodar Valley Corporation Act, 1948, the Land Acquisition (Mines) Act, 1885, the Indian Tramways Act, 1886, the Requisitioning and Acquisition of Immovable Property Act, 1952, the Ancient Monuments and Archaeological Sites and Remains Act, 1958 and the Resettlement of Displaced Persons (Land Acquisition) Act, 1948. These are, between them, the statutes under which a very large share of India’s land acquisition for infrastructure, energy and transport actually occurs, and acquisition under them proceeds under their own procedures, without the consent thresholds, the assessment chapter or the rehabilitation code of this Act. The National Highways Act illustrates what the exemption means in practice, because highway building is among the largest continuing consumers of acquired land in the country. Under the highways statute, acquisition runs on that Act’s own compressed track: a notification of intention, a hearing of objections confined to the use of the land for the stated purpose, a declaration, vesting, and determination of compensation by the competent authority that Act appoints, with disputes over the amount going to an arbitrator rather than to a reference court. There is no impact assessment, no consent stage, no rehabilitation schedule and no solatium structure of the 2013 kind; the landowner’s protections are the objection hearing and the arbitration. For the first twenty months of the 2013 Act’s life, a family displaced by a national highway received that package while a family displaced by a State road a few kilometres away, acquired under the general Act, received the multiplied compensation, the solatium and the Second Schedule, a disparity between neighbours that the Removal of Difficulties Order later narrowed on the money side while leaving the procedural disparity untouched. The exemption architecture and the extension provision are owned by the earlier specialist article in this cluster, and the treatment here is the compressed version a pillar owes its reader.

Section 105(3) was Parliament’s bridge back. It obliges the Central Government, by notification within one year from the commencement of the Act, to direct that the provisions of the Act relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement in accordance with the Second and Third Schedules shall apply to acquisition under the Fourth Schedule enactments, or shall apply with exceptions or modifications that do not reduce compensation or dilute the entitlements. The one year deadline expired at the end of 2014 without the notification having been issued under Section 105(3) itself; the same result was reached by a second route. First an ordinance route was taken in December 2014, which belongs to the amendment episode; then, when that route was let go, the Central Government issued the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015, by notification S.O. 2368(E) dated 28 August 2015 and effective from 1 September 2015, under Section 113. Section 113 is the power to remove difficulties: if a difficulty arises in giving effect to the provisions of the Act, the Central Government may, by order laid before Parliament, make provisions or give directions not inconsistent with the Act, provided the power is exercised within two years of commencement. The 2015 Order applied the compensation provisions of the First Schedule and the rehabilitation provisions of the Second and Third Schedules to acquisition under the thirteen Fourth Schedule enactments. What the Order could not and did not extend is the procedural heart of the Act: the consent thresholds and the Social Impact Assessment do not travel with the money schedules, so a highway acquisition after September 2015 pays LARR compensation and owes LARR rehabilitation while following the National Highways Act’s own procedure for taking the land. The missed deadline also produced a judicial answer worth recording. Section 105(3) is framed as a duty, the Central Government shall direct the extension within one year, and when the year passed without the direction, the Madras High Court reasoned, in litigation over acquisitions under sectoral statutes, that the failure could not be visited on the affected families: since the sub-section exists for their benefit and the extension it commands is of provisions that do not reduce compensation or dilute rehabilitation, the consequence of the government’s omission is that the compensation and rehabilitation provisions apply to Fourth Schedule acquisitions even in the absence of the notification, rather than that the benefit is lost. Other courts approached the gap through the 2015 Order instead. Either way, the practical floor for money under the exempt statutes was judicially and executively raised to the 2013 level, while the procedural floor stayed where the sectoral statutes had put it.

Two more perimeter provisions complete the map. Section 103 provides that the Act is in addition to and not in derogation of any other law in force, and Section 107 leaves State legislatures free to enact law providing compensation and rehabilitation higher than this Act provides; several States have since used the assent route for land legislation to vary the Act’s application within their territory, which is the federal seam along which the uniform national floor has since been renegotiated State by State. Tamil Nadu moved first and most instructively: by an amendment Act of 2015, assented to by the President and deemed in force from 1 January 2014, it inserted Section 105A into the central Act, taking three of its own acquisition statutes, its industrial purposes Act, its highways Act and its Act for acquisition for welfare schemes, outside the central Act’s application in the same manner as the Fourth Schedule. The provision survived challenge because Section 107 and the constitutional assent mechanism for State legislation on a concurrent subject made room for it, but its direction was the opposite of the one Section 107 advertised: the freedom Parliament framed as a power to give the affected family more became, in State hands, a power to give the project its old procedure back. The perimeter, taken whole, is the Act’s honest limitation: a statute of general application whose largest categories of public acquisition were carved out at birth, partially bought back for compensation purposes by executive order, and progressively varied by the States.

The constitutional and federal setting

The Act legislates on ground the Constitution rearranged in 1978. The Forty-fourth Amendment deleted the fundamental right to property from Part III, and Article 300A provides that no person shall be deprived of his property save by authority of law. The consequence is often misunderstood. A taking under this Act is not measured against a fundamental right to compensation, because no such right survives; it is measured against the statute Parliament enacted, against the equality guarantee in Article 14, and against the requirement that the depriving law be a valid, non-arbitrary law. That is precisely why the content of this statute matters so much: the compensation formula, the consent condition and the rehabilitation schedule are not constitutional minimums a court will supply if Parliament omits them, they are the whole of what stands between the landholder and uncompensated taking, and their reduction by amendment engages politics and Article 14 rather than a property clause. Legislative competence sits in Entry 42 of the Concurrent List, acquisition and requisitioning of property, which is why both Parliament and the State legislatures can legislate in the field, why the central Act needed a mechanism like Section 107 to manage State variation, and why State amendments repugnant to the central Act require the President’s assent to prevail within the State. Land itself, as a subject, sits in the State List, and the administration of acquisition, the Collector, the revenue record, the rules under the Act, is State machinery from top to bottom. The Act is therefore a central statute executed almost entirely by State governments that did not write it, a structural fact that explains more of its uneven performance than any defect in its drafting.

The comparison with the American takings clause, which Indian debates reach for instinctively, clarifies what is distinctive in the Indian settlement. The Fifth Amendment to the United States Constitution permits taking private property for public use on payment of just compensation, and the Supreme Court of the United States held in Kelo v City of New London in 2005 that economic development is a public use within that clause, permitting acquisition of homes for transfer to private development. The American argument after Kelo was conducted in State legislatures, many of which narrowed the power by statute. The Indian statute answers the same anxiety in the opposite institutional direction and with a different instrument: rather than narrowing the definition of public purpose, which Section 2(1) leaves wide enough to include industrial corridors and mines, it attaches a consent price to the private destination of the land. Where the American response distrusts the stated purpose, the Indian response distrusts the beneficiary. A reader comparing the two systems should notice that India’s consent mechanism has no counterpart in American takings law, and that India’s compensation formula, with its statutory multiplier and hundred per cent solatium, is far more prescriptive than the American standard of fair market value judicially determined. The 2013 Act is, in comparative terms, an unusually legislative answer to questions other systems leave to courts.

What the Act did not attempt: titles, records and the substrate problem

One silence in the Act explains a large share of its litigation. The statute presupposes, at every stage, a functioning record of who owns and works the land: the census builds on the record of rights, the market value computation builds on registered sale deeds, the award is apportioned among the persons the record shows, and the consent percentage is counted over families the record identifies. India does not operate conclusive titling. Its land records are presumptive, frequently outdated, and silent about the informal arrangements, unregistered partitions, inherited shares never mutated, tenancies never recorded, under which much rural land is actually held and worked. The 2013 Act did not attempt to reform that substrate, and the consequences run through its operation: compensation deposited with the Authority under Section 77 because title is disputed; apportionment contests between recorded owners and actual possessors; market value depressed by the same under-registration the formula takes as its data; affected families missed because the census inherits the record’s silences. A statute can multiply an unreliable base value and enumerate an incomplete census with perfect internal consistency, and the result will still be a precisely computed answer to the wrong facts. Readers who wonder why a generous formula produces so much litigation about quantum and entitlement will usually find the answer in the record room rather than in the Act.

The checkpoints that decide real cases

For the advocate and the affected family, the Act operates in practice as a sequence of checkpoints, each with a document that must exist and a clock that runs. The first checkpoint is the census. Before any notification, the affected family’s presence in the Administrator’s survey and census of affected families determines whether the rehabilitation machinery will ever find it, and a family omitted from the census, the undocumented tenant, the labourer absent on seasonal migration during the survey, begins the proceeding already outside its protections; the remedy of later representation exists, but the burden of correction sits on the person least equipped to carry it. The second checkpoint is the study: the Social Impact Assessment report, the record of the public hearing under Section 5 and the Expert Group’s appraisal under Section 7 must exist and must address the statutory questions, and the government’s decision under Section 8 must show the minimum-displacement examination and, where it departs from the appraisal, reasons in writing. The third is consent ascertainment on the two routes where consent applies, where the recorded figure against the threshold is either made out or is not. The fourth is time: objections within sixty days of the preliminary notification under Section 15, an award within twelve months of the declaration under Section 25 or the proceedings lapse, compensation tendered within three months of the award and monetary rehabilitation within six under Section 38, possession only after those payments. The fifth is the reference: a person interested who does not accept the award may require reference to the Authority under Section 64, but the application must move within six weeks where the applicant was present or represented when the award was made, and within the outer limit the same provision prescribes where he was not, and applicants who miss the window are remitted to the award as made.

For the project developer and the requiring body, the same statute reads as a sequence of route decisions taken before any land is touched. The first decision is the route itself: acquisition under this Act, acquisition under one of the Fourth Schedule statutes where the project fits one, or negotiated purchase with the Section 46 thresholds in view, and each route carries a different consent burden, a different assessment burden and a different rehabilitation exposure. The second is the factor notification and the circle rate reality in the project district, which between them fix most of the compensation bill before the first notice issues. The third is the rehabilitation exposure, which scales not with the area acquired but with the number of affected families the census finds, so that a small parcel densely lived from can carry a larger rehabilitation bill than a large parcel thinly held. The fourth is the programme: the assessment study, the hearing, the appraisal, the consent process where it applies, the declaration, the enquiry and the award consume time that must be planned as a statutory minimum, and a project schedule that treats the Act’s stages as compressible discovers, usually at the hearing or the appraisal, that they are not. None of this is an argument against the statute; it is the description of the discipline the statute imposes, which is the discipline its drafters intended to impose, and projects that internalise it complete acquisitions while projects that resent it litigate them.

The second statute book: the rules beneath the Act

A substantial part of the Act’s operation is delegated. The Centre notified the Social Impact Assessment and Consent Rules in August 2014, which prescribe how the study is commissioned and conducted, how the public hearing is held, how the Expert Group is constituted and how consent of the Gram Sabha and of affected families is sought and recorded for acquisition for companies and partnership projects. The Centre followed with the Compensation, Rehabilitation and Resettlement and Development Plan Rules in December 2015, governing the content and approval of rehabilitation schemes and development plans. Each State, as the administering government for acquisitions within it, was required to frame its own rules under the Act for the same subjects, and the pace and quality of that rule-making became an early measure of the Act’s real commencement: the Act was in force everywhere from 1 January 2014, but in a State that had not notified its rules, constituted its Authority or prescribed its forms, the proceeding it commanded could not be run as designed, and acquisitions in several States waited on the subordinate legislation long after the parent statute had commenced. The pattern is the familiar one this series records across statutes: Parliament enacts a floor and a framework, and the distance between the two is travelled, or not travelled, in the rules.

One floor, many statutes: the Act in the States

Because the Act is a central statute on a concurrent subject executed by State governments, its lived content varies by State in ways the text anticipates and in ways it does not. The anticipated variation is the notified rural multiplier: a State that notifies a factor of one for its rural areas delivers half the land compensation of a State that notifies two, on identical parcels, under the same central Act, and the affected family’s remedy is political rather than legal, since the Schedule commits the choice to notification. The second anticipated variation is the rule book: each State’s rules on the study, the consent process, the scheme and the Authority’s procedure set the working detail, and they were notified at very different speeds. The unanticipated variation came through the assent route. Gujarat’s amendment of 2016, enacted with the President’s assent, disapplied the assessment and consent chapters to specified categories of projects within the State, and other States moved in the same direction in the years that followed, so that the consent map of India under a single central Act became a patchwork in which the route analysis a developer or a family must run begins with the State, proceeds to the statute, and only then reaches the section. The development is the federal counterpoint to the Act’s centralising design: Parliament built a national floor in a field where the Constitution had already distributed the bricks, and the States, which administer acquisition and answer for its local costs, have spent the years since enactment renegotiating the floor State by State. Whether that renegotiation is healthy federalism or the quiet repeal of a national promise is the live argument about the Act, and it is an argument the text of Sections 103 and 107 made inevitable by leaving both doors open. The quietest form of renegotiation needs no amendment at all. A State that notifies the rural multiplier at the bottom of the Schedule’s band halves its compensation bill by notification; a State that delays constituting its Authority, appointing its Commissioner or notifying its rules slows the Act without touching it; a State that prescribes a generous threshold under Section 46 brings negotiated purchases inside the rehabilitation code, and a State that prescribes a minimal one leaves them outside it. The Act’s central text is uniform, but its operative settings are State settings, and two families displaced in the same year by materially identical projects on opposite sides of a State border can be owed measurably different packages under the same section of the same Act. That is not a drafting accident. It is the price Parliament paid, in a concurrent field, for a national statute at all, and the pillar reader should hold both halves of the proposition: the floor is national, and everything that decides what the floor is worth is local.

The amendment attempt, in outline

The attempt to rewrite substantial parts of this Act within two years of its commencement is the subject of the next article in this cluster, the account of the land acquisition ordinance of 2015, and this pillar records only what a reader of the statute needs. The Central Government promulgated an amendment ordinance on 31 December 2014, re-promulgated it in April and May 2015, and introduced a replacement bill that proposed, among other changes, to exempt five categories of project from the consent thresholds and the assessment chapter, to substitute Section 105(3) so that the money schedules would apply to the Fourth Schedule enactments by force of the Act itself, to extend the difficulty-removal window in Section 113 from two years to five, and to alter the return rule in Section 101. The bill passed the Lok Sabha, was referred in the Rajya Sabha to a Joint Committee of the Houses, and was not enacted; the ordinances were allowed to lapse at the end of August 2015, and the executive achieved the Fourth Schedule extension by the Removal of Difficulties Order described above instead. The episode’s consequence for the statute is that the enacted text survived its first revision attempt essentially intact, and the contest moved thereafter to state legislatures and to implementation. It also left a durable lesson about the statute’s political foundations. The amending government commanded the Lok Sabha, issued three successive ordinances, and still could not carry the amendment through Parliament, because the text it proposed to dilute had been enacted with the support of parties whose votes it needed in the Rajya Sabha and whose State governments were administering the original. A cross-party enactment is, in this precise sense, a form of entrenchment that the Constitution does not supply for ordinary legislation: the Act could not be protected by any manner and form requirement, so its drafters protected it the only other way available, by making it the product of a consensus wide enough that unmaking it required a consensus of the same width, which the politics of 2015 did not produce.

Assessment: a fairer statute with a shrinking field

The industry case against the Act was made at passage and has not changed its shape. Kris Gopalakrishnan, then President of the Confederation of Indian Industry, warned on the day the Lok Sabha passed the bill that the cost of land acquisition was likely to increase three to three and a half times, making industrial projects unviable and raising costs across the economy. In its developed form the case runs: the multiplication of an administratively determined market value, the hundred per cent solatium, the assessment study, the consent thresholds and the rehabilitation package together convert land assembly from a public function into a multi-year negotiation with statutory vetoes at every stage, and the rational developer responds by avoiding the Act, through private purchase, through the exempted sectoral statutes, or by not building. The evidence offered for the redirection half of that case is strong, because the escape routes are visible in the text itself: the Fourth Schedule exemptions were in the Act from its first day, the private purchase route outside acquisition is expressly contemplated by Section 46, and state amendments followed. A statute drafted to make acquisition harder in order to make it fairer may simply redirect acquisition to routes with fewer protections, and that is substantially what the exemption schedule and the growth of negotiated purchase suggest occurred. Against the industry figure itself, one accounting distinction should be kept in view, because the passage debate persistently blurred it. A higher compensation bill is, in the main, a transfer: money that leaves the project’s accounts enters the accounts of the families whose land built the project, and an economy does not become poorer because the price of an input is paid to its owners rather than extracted from them below value. The genuine social cost the Act imposes is not the transfer but the time: the study, the hearing, the appraisal, the consent process and the award discipline consume months and years during which capital waits and prices move, and delay, unlike compensation, is destroyed value rather than redistributed value. The strongest form of the industry case is therefore the case about time, and it is notable that the amendment attempt of 2014 and 2015 was directed overwhelmingly at the time-consuming chapters, consent and assessment, rather than at the compensation formula, which the amending government largely left standing even while it described the Act as unworkable. The formula, it turned out, was the part of the settlement even the industry voices ranged against the Act were prepared to pay.

The affected-persons case cuts the opposite way and is equally structural. It begins from the identification problem: every entitlement in the Second Schedule is owed to a family the administration has first found, counted and recorded, and the finding is done through the survey and census of affected families that the Administrator prepares. Titleholders are findable from the record of rights. Tenants without written leases, sharecroppers whose arrangements are oral, labourers attached to no single field, and families whose claim rests on use of commons rather than occupation of a plot are findable only insofar as the survey looks for them, and the critique is that such surveys, conducted by the acquiring administration under project timelines, systematically undercount the landless. A rehabilitation entitlement delivered to a family the census missed is worth nothing to that family, and an entitlement delivered years after displacement, in a resettlement colony whose Third Schedule amenities exist on the scheme paper, is worth less than the Schedule promises. The Act’s beneficiaries are, by construction, the people with the least capacity to police its performance.

The implementation record supports a narrower set of observations that neither side’s rhetoric fully owns. The direction of the record is not seriously in dispute: proceedings run under the new Act have been slower and fewer relative to the volume of land changing hands for projects, and a larger share of that movement has travelled by negotiated purchase and under the sectoral statutes than the drafters of a general acquisition code intended. The assessment study, designed as the Act’s conscience, has in too many proceedings been produced as a compliance document, commissioned late, templated in content and thin on the alternatives analysis that is its statutory core, because the study is paid for within the project it examines and delivered to the administration that wants the project; the Act guards the study’s independence in form, through the appraisal of an Expert Group, more effectively than in the economics of its production. And the litigation the Act generates has concentrated where the substrate problem predicts, on the determination of market value, on the census of affected families and on the Section 24 border, rather than on the consent percentages that dominated the public argument, because those are the points at which money and entitlement actually turn. None of this makes the Act a failure. It makes it a statute whose strongest provisions are the self-executing ones, the formula and the schedules, and whose weakest are the ones that depend on the acquiring administration performing against its own interest, the study, the census and the return of unused land.

Between those two cases the article’s verdict is this. The Act’s three innovations are genuine and were overdue: a consent condition, however keyed; an impact assessment with reasons recorded for departures; and rehabilitation as a right of the landless as well as the landed together amount to a different theory of what acquisition is, from a purchase of title at an administered price to a public act that must justify itself and repair the lives it displaces. The design flaw is equally genuine, and it is the applicability rule: by keying consent to the identity of the acquirer and carving the largest acquiring statutes out of the Act altogether, Parliament protected people against a kind of purchaser rather than against displacement, and left the typical acquisition, the state’s own, governed by a statute whose most famous protection does not apply to it. The text promises. The applicability rule delivers, and it delivers less than the text promises.

For the reader who works with this statute rather than merely about it, the operational conclusion is that the first question in any acquisition matter is never what the Act says but whether the Act governs: which statute the acquisition proceeds under, which route within this Act if it is this Act, which government is acquiring and for whom, and whether the land sits in a Scheduled Area or under a multi-cropped irrigation command. Those classification questions decide, before any argument about quantum begins, whether consent must be sought, whether a study must precede the taking, and which schedule of money the family will see. Practitioners and affected families who keep papers across years of proceedings, the census record, the study, the consent documents, the award and the correspondence, learn quickly that the case is won or lost on the file; keeping that whole record together in one private file is the habit that a private VaultBook workspace for the acquisition record is built to serve, and it is the cheapest insurance an affected family or its adviser can hold.

The statute that emerged from this process is best judged by the standard its own long title sets. It promised a humane, participative, informed and transparent process, just and fair compensation, and adequate rehabilitation, and it built real machinery for each promise: participation through the hearing, the Sabha consultation and the two consent instruments; information through the study, its publication and the recorded reasons; fairness in price through a formula that multiplies rather than discounts; rehabilitation through schedules that name the landless as beneficiaries. It then limited the field on which that machinery runs, by the acquirer-keyed consent rule, by the Fourth Schedule, and by the State variation it licensed, and the history of the Act since enactment is the history of contests fought on that perimeter rather than against the machinery itself. A reader who understands the perimeter understands the Act; a reader who knows only the machinery will keep being surprised by it, in the way the public argument, which repeats the consent percentages without asking to whom they apply, is surprised by it every time the question is examined.

Frequently Asked Questions

Q: What does the LARR Act 2013 require before land can be acquired?

Before land can be acquired under the Act, several conditions must be satisfied in sequence. The acquisition must be for a public purpose within the definition in Section 2(1). A Social Impact Assessment study must be carried out under Sections 4 to 6 and appraised by an Expert Group under Section 7, unless the urgency provisions of Section 40 are invoked. Where the land is sought for a private company or a public private partnership project, the prior consent of 80 per cent or 70 per cent of affected families respectively must be obtained under Section 2(2). The appropriate government must issue a preliminary notification, hear objections, prepare a rehabilitation and resettlement scheme, and the Collector must make an award determining compensation and entitlements before possession can be taken.

Q: What is a Social Impact Assessment and when is it required?

A Social Impact Assessment is the study Chapter II of the Act requires whenever land is proposed to be acquired. Conducted under Sections 4 to 6, it estimates the families affected and displaced, examines whether the land sought is the bare minimum the project needs and whether alternatives were considered, assesses the social costs of the acquisition against its benefits, and prepares a Social Impact Management Plan. It involves a public hearing in the affected area and publication of the report, and an independent Expert Group appraises it under Section 7 and may recommend that the project be abandoned. It is required for acquisitions under the Act generally, and is dispensed with only where the urgency provisions of Section 40 are invoked.

Q: Which projects need the consent of landowners?

The consent requirement in the proviso to Section 2(2) is keyed to the acquirer and the purpose, not to the project type alone. Land acquired for a private company requires the prior consent of at least 80 per cent of affected families. Land acquired for a public private partnership project, where ownership of the land continues to vest with the government, requires the prior consent of at least 70 per cent of affected families. No consent percentage applies where the government acquires land for its own use, hold and control, which includes acquisition for public sector undertakings and the listed public purposes, although a Social Impact Assessment, a rehabilitation and resettlement scheme and consultation with the Gram Sabha where it applies are still required on that route.

Q: What rehabilitation and resettlement must be provided?

Where families are displaced or their livelihoods affected, the Collector prepares a rehabilitation and resettlement scheme under sections 16 to 18, and its entitlements are those in the Second Schedule: a house for a displaced family that loses its dwelling, land for land in irrigation and hydel projects, a choice between employment at not less than the minimum wage, a one time payment of five lakh rupees, or an annuity of two thousand rupees a month for twenty years indexed to the Consumer Price Index for Agricultural Labourers, a subsistence grant of three thousand rupees a month for twelve months, a transportation grant of fifty thousand rupees, a resettlement allowance of fifty thousand rupees, and further grants for cattle sheds, petty shops and artisans, together with the Third Schedule amenities in the resettlement area.

Q: Does LARR limit acquisition of irrigated multi-cropped land?

Yes. Section 10 protects food security by providing that no irrigated multi cropped land shall be acquired under the Act except in exceptional circumstances as a demonstrable last resort, and that where such land is acquired, an equivalent area of cultivable wasteland must be developed for agriculture, or an amount equivalent to the value of the land acquired must be deposited with the appropriate government for investment in agriculture. The aggregate of such acquisitions is subject to limits notified by the appropriate government, and the Central Government notified a limit of one per cent of the total irrigated multi cropped land of a district over a five year period. The restriction does not apply to linear projects such as railways, highways and power lines.

Q: What happens to land acquired under LARR that is never used?

Section 101 provides that land acquired under the Act which remains unutilised for a period of five years from the date of taking possession shall be returned to the original land owner or owners, or their legal heirs, or to the Land Bank of the appropriate government, as the government specifies. The provision changes the acquiring body’s incentives, because land taken and left idle does not remain with it indefinitely. Section 102 adds a related rule for land that is transferred for consideration without development within five years: forty per cent of the appreciated value of the land is shared with the original owners or their heirs, though the sharing applies only to the first such transfer.

Q: Does LARR apply to acquisition under other central laws?

Not in full. Section 105 and the Fourth Schedule exempt acquisition under thirteen other central enactments, including the National Highways Act 1956, the Railways Act 1989, the Coal Bearing Areas (Acquisition and Development) Act 1957 and the Electricity Act 2003, from the Act’s provisions, so acquisitions under those statutes follow their own procedures without the consent thresholds or the Social Impact Assessment. Section 105(3) contemplated a notification extending the Act’s compensation and rehabilitation provisions to those enactments, and after the one year period in that sub-section passed, the Central Government’s Removal of Difficulties Order of 2015, effective from 1 September 2015, extended the First, Second and Third Schedules to acquisition under the thirteen enactments, but not the consent or assessment chapters.

Q: What special protection do Scheduled Areas get in land acquisition?

Section 41 gives Scheduled Areas a distinct regime. As far as possible, no acquisition shall be made in the Scheduled Areas, and where it does proceed it must be shown to be a demonstrable last resort. The prior consent of the concerned Gram Sabha, Panchayat or autonomous district council must be obtained in all cases of acquisition in Scheduled Areas, including urgency cases, a consent condition stricter than the percentage thresholds elsewhere in the Act. Where a development plan is prepared for displaced Scheduled Tribe and Scheduled Caste families, it must provide land to be allotted and a programme for development of alternate fuel, fodder and non-timber forest produce, and at least one third of the compensation due to such families must be paid as a first instalment. Section 42 continues the reservation benefits the family enjoyed.

Q: Who counts as an affected family under the LARR Act?

Section 3(c) defines an affected family in deliberately wide terms. It includes a family whose land or other immovable property is acquired; landless agricultural labourers, tenants, sharecroppers and artisans who have worked in the affected area for three years before the acquisition and whose primary livelihood is affected; Scheduled Tribe and other traditional forest dwellers who lose forest rights; families whose primary livelihood for three years has depended on forests or water bodies, including gatherers, hunters and fisher folk; and families assigned land by the government whose holdings are acquired. The definition is the gateway to the consent thresholds, the census and the Second Schedule entitlements, which is why families without title to the acquired land still count.

Q: What counts as public purpose under the LARR Act 2013?

Section 2(1) defines public purpose by enumeration rather than by a general formula. The list covers strategic and defence purposes and national security; infrastructure projects including electricity, housing for the poor, educational, medical and sports facilities, tourism, industrial corridors and mining; projects for project affected people and for planned development; and the residuary holding of land by the government itself. Acquisition for private companies for a public purpose, and for public private partnership projects, is brought within the Act by Section 2(2), subject to the consent conditions in that provision. Because the definition is a closed list applied through the Social Impact Assessment’s examination of the stated purpose, the purpose claimed for an acquisition is tested at the study stage rather than left to the acquiring body’s assertion alone.

Q: When can the urgency clause be used under the LARR Act?

Section 40 permits urgency only in confined circumstances: where the land is needed for the defence of India or national security, where it is needed for an emergency arising from a natural calamity, or for another emergency with the prior approval of Parliament. The clause is limited to the minimum area required, and possession may be taken thirty days after the publication of the notice under Section 21, with forty eight hours notice before a building is entered. The Collector may also disapply the assessment, consent and rehabilitation chapters where urgency is invoked, but an additional compensation of seventy five per cent of the market value is then payable, except in projects affecting sovereignty, security or foreign relations.

Q: How is solatium calculated under the LARR Act?

Solatium is the addition the Act makes to compensation in consideration of the compulsory nature of the acquisition. Under Section 30, it is calculated at 100 per cent of the compensation amount, which is the value reached after the market value has been multiplied by the First Schedule factor and the value of assets attached to the land, such as buildings, trees and standing crops, has been added. The solatium therefore doubles the compensation figure before the separate twelve per cent per annum addition under Section 30(3) is applied for the period from the Social Impact Assessment notification to the award or possession. It replaces the 30 per cent solatium of the 1894 Act and is one of the two provisions, with the multiplier, that produce the higher totals associated with the 2013 formula.

Q: Why is rural compensation higher than urban compensation under LARR?

The difference is built into the First Schedule multiplier. Compensation begins with the market value determined under Section 26, and that value is then multiplied by a factor that is one for urban land, and for rural land is a distance based factor between 1.00 and 2.00, notified by the appropriate government according to the distance of the land from an urban area. The policy is that recorded rural market values systematically understate what a rural owner loses, because rural land markets are thin, recorded prices are depressed, and the land carries livelihood functions that its sale price does not capture. Urban values, being better evidenced by comparable sales, are taken as stated. The multiplier, followed by 100 per cent solatium, is why the same market value can yield roughly twice the compensation in a rural acquisition as in an urban one.

Q: What happens when a private company buys land directly instead of using acquisition?

A private company may always purchase land by negotiation outside the Act, and most private land assembly proceeds that way. Section 46 disciplines the route: where a private company purchases land above a threshold area specified by the appropriate government, twenty hectares in urban areas and forty hectares in rural areas under the central notification, the rehabilitation and resettlement provisions of the Act apply to that purchase as if it were an acquisition, and the Collector must satisfy himself that the purchase is not defeating the Act and must refer the matter for inquiry where he suspects it is. Purchases in smaller parcels below the threshold stay outside the Act entirely, which is why the aggregation of parcel by parcel purchases by a single buyer became an early subject of scrutiny under this section.

Q: What does a family get if it is displaced twice by acquisition?

Section 39 provides that where a person is displaced a second time, or successively, by acquisitions under the Act, an additional compensation equal to the compensation payable under the Act for that displacement is also payable. The family therefore receives twice the ordinary package for the second displacement: the compensation computed by the formula for the land then taken, the rehabilitation and resettlement entitlements for that displacement, and an additional amount equal to the compensation, in recognition that repeated displacement destroys the recovery the first package was meant to fund. The provision is one of the few places where the Act prices cumulative harm rather than treating each acquisition as an isolated event, and it applies however far apart the successive displacements occur.

Q: Which body hears disputes under the LARR Act?

Disputes go to the Land Acquisition, Rehabilitation and Resettlement Authority established under Chapter VIII. Under Section 64, a person interested who does not accept the Collector’s award may require the matter to be referred to the Authority, which determines compensation afresh and also hears disputes about measurement, the person to whom compensation is payable, apportionment among those interested, and rehabilitation and resettlement rights. The Authority is presided over by a Presiding Officer of district judge rank or a qualified legal practitioner, and its award is deemed a decree of a civil court. Section 63 bars the civil courts from entertaining disputes the Act assigns to the Authority or the Collector, and Section 74 provides an appeal from the Authority’s award to the High Court within sixty days.

Q: What does the Collector do under the LARR Act?

The Collector is the officer who runs the acquisition on the ground. Under the Act, the Collector causes the public notice of the Social Impact Assessment, conducts the census of affected families under Section 16, prepares the draft rehabilitation and resettlement scheme with the Administrator, hears objections to the extent of land and the resettlement area, conducts the inquiry under Section 23 into measurements, values and claims, determines market value under Section 26 and asset value under Section 29, and makes the awards of compensation and of rehabilitation and resettlement under Sections 30 and 31. The Collector also takes possession under Section 38 once compensation is tendered and entitlements paid, deposits refused or disputed compensation with the Authority under Section 77, and makes references to the Authority under Section 64.

Q: How long does the LARR acquisition process take?

The Act builds the timetable from fixed clocks rather than a single overall period. The Social Impact Assessment study is to be completed within the period the 2014 Rules prescribe, which is six months from its commencement, and the preliminary notification must follow the government’s decision on the study. The Collector’s award carries its own deadline: Section 25 requires the award within twelve months of the declaration under Section 19, failing which the proceedings lapse. Rehabilitation entitlements must be in place before displacement, compensation must be tendered within three months of the award and monetary entitlements paid within six months, and in irrigation and hydel projects the rehabilitation process must be completed six months before submergence. Objections, references and appeals run on their own shorter clocks at each stage.

Q: Do original owners share the gain if acquired land is resold?

Yes, in one defined case. Section 102 provides that where land acquired under the Act is transferred for consideration, without any development having taken place on it, at any time within five years of the date of acquisition, forty per cent of the appreciated value of the land is to be shared with the original owners of the land, or their legal heirs. The rule is aimed at the grievance of land taken cheaply for a stated project and then sold on at a profit by the acquiring party; by making the original owners participants in the appreciation, it reduces the incentive to acquire in excess of need. The sharing applies to the first transfer for consideration only, and not to later dealings in the land.

Q: What penalties does the LARR Act impose for breaking it?

Chapter XIII provides offences and procedures. A person who obstructs the acquisition process, or furnishes false information or produces false documents to obtain compensation or rehabilitation benefits, commits an offence punishable with imprisonment of between six months and three years, or fine, or both, and a person who re-enters acquired land in unauthorised possession faces a prescribed penalty. Companies can be guilty of offences under the Act, with liability extending to persons in charge of the company’s business, and offences by government departments are addressed by deeming the head of the department liable unless due diligence is shown. Beyond the offences, Section 84 withholds the benefits of the Act from a requiring body that contravenes its provisions, so breach carries both criminal and civil consequences within the statute.