VALUATION UNDER LAND ACQUISITION ACT 2013

Submitted by; A. MOHAMMED IBRAHIM  ARCHITECT

(Valuation with reference to THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT 2013 – (herein after called as “RTFCT LARR Act 2013).

 (Key words: I:  Land Act Brief and history, Retrospective operation of LA ACT 1894, II: Public Purpose and Consent of land owners, III: Time limit for AWARD, IV:, Special provisions to safeguard food security V: Urgency Clause, VI & VII deals with minimum compensation payable in the Principal Act and VIII: deals with amendments passed in Lok Sabha on 10/3/2015).

(Quote) The land acquisition process is carried out under the provisions of the Land Acquisition Act, 1894 which came into force w.e.f. 2 February, 1899. This Act has been amended from time to time (in pre-independence and post-independence). So far, the Act has been amended 17 times. Since 1960's large scale acquisition is also being done for companies and private sector. Various sections of the Act have also been amended from time to time by the State Governments to meet their specific requirements. (Unquote) Source: 31^st Lok Sabha Report May, 2012/Vaisakha, 1934 (Saka).

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

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

II: Public purpose & Consent Clauses:

When the appropriate government acquires land for public purposes u/s 2(1) LA, compensation, R&R shall apply. S: 2 (1). .	When the appropriate government acquires land for public purposes for PPP projects, Private companies LA, compensation, R&R shall apply. S: 2(2) (a) & (b).	Where private companies purchase through private negotiation or appropriate government acquires for private companies a part of area. S: 2 (3). R & R only shall be applicable
Public Purpose Activities: S: 3(za) read with S: 2(1). (a) for strategic purposes, (b) for infrastructure projects, (c) project for project affected families, (d) project for housing for such income groups to be specified by the appropriate government, (e) project for planned development or the improvement of village sites or any site in the urban areas or provision of land for residential purposes for the weaker sections in rural and urban areas, and (f) project for residential purposes to the poor or landless or Io persons residing  in areas affected by natural calamities, or to persons displaced or affected by reason of the implementation of any scheme undertaken by the Government, any local authority or a corporation owned or controlled by the State.	(a)         For public private partnership projects, where the ownership of the land continues to vest with the Government, for public purpose as defined u/s 2(1). (b)         For private companies for public purpose as defined u/s 2 (1).	(a) A private company purchases land,equal to or more than such limits in rural areas or urban areas, as may be prescribed by the appropriate Government through private negotiations with the owner of the land in accordance with the provisions of section 46, (b) a private company requests the appropriate Government for acquisition of a part of an area so prescribed for a public purpose, provided that where a private company requests the appropriate Government for partial acquisition of land for public purpose, then, the rehabilitation and resettlement entitlements under the Second Schedule shall be applicable for the entire area which includes the land purchased by the private company and acquired by the Government for the project as a whole.
No consent of people is required	Consent of 70% for PPP / 80% for Private Companies of affected people is required. . It includes consent for amount of compensation vides section 26 (1) (c).	Not available (N/A)
R & R: Second and Third Schedules shall be applicable.	R&R: Second and Third Schedules shall be applicable.	R&R: Second Schedule for private purchase.
Affected families: S: 3 (c) I to vi.	Affected families S;3 ( c )  I and v.	Affected families: N/A
Appropriate Government = specified person: State governments, and the government of Puduchery, Central government in case of Union Territories except Puduchery and where land acquisition involving more than one state government. Any person other than appropriate government is “any person other than a specified person”.
Social Impact Assessment (SIA) study is mandatory		SIA Study is not known.

III. Time Limit for award assuming no extension:

Social Impact Assessment (SIA) Notification u/s 4 (2)	Expert Group Appraisal (EIA) u/s 7 (4) & 7(5)	PN (Preliminary Notification u/s 11	Declaration u/s 19 (4)	Notification to Indivuduals u/s 21	Award u/s 25	Possession u/s 38 (1)	Total time (Assuming no extesion) for compensation
6 months	2 months	12 months	12 months	12 months	12 months	3 to 18 months (see below Note)	59 months. (See note below)

Note: After payment within 3 months for compensation; within 6 months for monetary part of R & R and within 18 months for infrastructure entitlement of Schedule II & III

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

V. Section. 40. Urgency Clause in the Principal LARR ACT 2013;

S (40) (1) Urgency clause can be invoked for a public purpose for the Defense of lndia or National Security or for any emergencies arising out of natural calamities or any other emergency after expiration of 30 days from publication of S. 21 Notification (Notice to persons interested) with prior approval Parliament; though no compensation is paid.

Before taking possession of any land, eighty percent of compensation is payable to the persons interested entitled thereto.

The appropriate Government also can waive from application of any one or many provisions from chapter II to VI.  I.e. Determination of social impact and public purpose, Irrigated land, Notification and acquisition, R&R Awards and procedures and, if it does so direct, a declaration may be made under section 19 (Publication ol' declaration and summary of Rehabilitation [and Resettlement) in respect of the land at any time after the date of the publication of the preliminary notification under section 11 (1).

An additional compensation of seventy-five per cent. of the total compensation as determined under section 27. Shall be paid by the Collector in respect of land and property for acquisition of which proceedings have been initiated under sub-section (/) of this section:

Provided that no additional compensation will be required to be paid in case the project is one that affects the sovereignty and integrity of lndia, the security and strategic interests of the State or relations with foreign States.

Say Compensation Payable is assessed @ INR       2,00,00,000/= Say “C”

Additional compensation @ 75% of “C”.                    1,50,00,000 Say “D”

Total compensation payable C+D                              3,50,00,000

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Before taking possession payable @ 80% of “C”      1,60,00,000 Say “AC”

Additional compensation payable @ 80% of “D”       1,12,50,000Say “AD”

Compensation Stage I (AC + AD)                          2,72,50,000/=

(INR Two Crore and Seventy Two Lac and Fifty Thousand only).

VI: Valuation: URBAN AREA:

The following components shall constitute the minimum compensation package to be given to those whose land is acquired and to tenants referred to in clause (c) of section 3 in a proportion to be decided by the appropriate Government:

Section of Bill	Description	Amount INR
S. 26, 27 and 30 (1) & Schedule I	The value of land: Extent of land 35,000 sf @ INR 7,000 / sq.ft. (Say “P”)	24,50,00,000
	Multiplier 1 (P x 1): Market value of land “MVL”	24,50,00,000
	Market value of land. Say “MVL”	24,50,00,000
	Assets attached to land Say “B”	0
	Market value of acquired property Say  “MVAP” (MVL+B)	24,50,00,000
	Add Solatium @ 100% of MVAP. Say “S”	24,50,00,000
	Compensation  MVAP + S	49,00,00,000
(INR Forty Nine Crore only)

Urban area compensation is @ 100 percentages increase of land value assessed (P) or 2.00 times.

VII: Rural AREA:

Section of Bill	Description	Amount INR
S. 26, 27 and 30 (1) & Schedule I	The value of land: Extent of land 35,000 sf @ INR 7,000 / sf (Say “P”) The value of land: Extent of land 35,000 sf @ INR 7,000 / sf (Say “P”)	24,50,00,000
	Multiplier Say 2 (P x 2): Market value of land “MVL”	49,00,00,000
	Market value of land. Say “MVL”	49,00,00,000
	Assets attached to land Say “B”	0
	Market value of acquired property Say  “MVAP” (MVL+B)	49,00,00,000
	Add Solatium @ 100% of MVAP. Say “S”	49,00,00,000
	Compensation  MVAP + S	98,00,00,000
(INR Ninety Eight Crore only)

(Please note: The land value in rural area is not like urban area; the above is only for illustration). Rural area compensation is @ 300 percentages increase of land value assessed (P) or 4.00 times.

Note: The land value (Say “P”) thus calculated shall be multiplied by a factor 1 for urban area and regarding rural area, the Act only provides the baseline for compensation and has devised a sliding scale which allows state Governments to fix the multiplier from 1 to 2 when moved from urban to rural area. The precise slabs shall be left to respective state governments.

VIII: AMENDMENT TO THE PRINCIPAL ACT 2013: An amendment to the Principal Act 2013 was passed in the Lok Sabha on 10/3/2015 which is summarized as below: (Source: ^  The RFCTLARR_AmendmentBIll_Passed by Lok_Sabha (1)pdf).

VIII: Substitution of certain expression throughout the ACT RTFCT LARR 2013: (30 of 2013): For the words “PRIVATE COMPANY” wherever they occur, the words “PRIVATE ENTITY” shall be substituted”.

VIII (a): New Insertion in Section 3 (ii) (yy) as: “PRIVATE ENTITY” means any entity other than Government Entity or Undertakings and includes PROPRIETORYSHIP, PARTNERSHIP COMPANY, CORPORATION, NON-PROFIT MAKING ORGANISATION or OTHER ENTITY under any law for the time being in force.

VIII (ii): New Insertion Section 10 (A) Food Security: 10A (1). Exemption from Social Impact & Special Provision to safeguard food security: The appropriate Government may, in the public interest, by notification, exempt any of the following projects from the application of the provisions of Chapter II and Chapter III of this Act, namely:—

(a) Such projects vital to national security or defence of India and every part thereof, including preparation for defence or defence production;

(b) Rural infrastructure including electrification;

(c) Affordable housing and housing for the poor people;

(d) industrial corridors set up by the appropriate Government and its undertakings (in which case the land shall be acquired up to one kilometer on both sides of designated railway line or roads for such industrial corridor); and

(e) Infrastructure projects include projects under public-private partnership where the ownership of land continues to vest with the Government.": Provided that the appropriate Government shall, before the issue of notification, ensure the extent of land for the proposed acquisition keeping in view the bare minimum land required for such project.

(2) The appropriate Government shall undertake a survey of its wasteland including arid land and maintain a record containing details of such land, in such manner as may be prescribed by the appropriate Government.

VIII (iii): Section 24 deals with Land acquisition process under Act No. I of 1894 shall be deemed to have lapsed in certain cases & Remedy in the Principle Act; The amendment is the delay due to court/tribunal proceedings shall not be counted.

Amendment to Section 31: In the principal Act, in section 31, in sub-section (2), in clause (h), after the words ‘affected families’, the words ‘including compulsory employment to at least one member of such affected family of a farm laborer' shall be inserted.

 In the author’s view, in addition to employment to one member in the family, the Government to ensure the rest of family members to continue in agricultural sectors with necessary support.

VIII (iv): Section 67A (New Insertion) Hearing to be held by Authority in district or districts to decide grievances: ‘ The Authority shall, after receiving reference under section 64 and after giving notice of such reference to all parties concerned, hold the hearing in the district where the land acquisition takes place for settlement of the objections raised in the reference.’

VIII (v): Section 87 deals with Government Servants Accountability and the amendment protects Government Servants thus: Where an offence under this Act has been committed by any person who is or was employed in the Central Government or the State Government, as the case may be, at the time of commission of such alleged offence, no court shall take cognizance of such offence except with the previous sanction of the appropriate Government, in the manner provided in section 197 of the Code of Criminal Procedure, 1973.".

VIII (VI): Section 101: Return of unutilized land after 5 years is amended as “A period for setting up of any project or five years whichever is later.

VIII (vii): S(105) and the Fourth Schedule (1) Subject sub section 3 (1), the provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule.(2) Subject to sub-section (2) of section 106. the Central Government may, by notification. omit or add to any of the enactments specified in the Fourth Schedule.; THE FOURTH SCHEDULE (See section 105). LIST OF ENACTMENTS REGULATING LAND ACQUISITION AND REHABILITATION AND RESETTLEMENT (13 Laws) were exempted from R & R Provisions is mended as The Bill brings the compensation, rehabilitation, and resettlement provisions of these 13 laws in consonance with the LARR Act, 2013.

VIII (viii):  (S (113) (1) Power to remove difficulties: (i) for the words "the provisions of this Part", the words "the provision of this Act" shall be substituted; (ii) in the proviso, for the words "a period of two years", the words "a period of five years" shall be substituted.

Collective legislative decision of upper houses is awaited.