Right to Property and Eminent Domain

Constitutional Basis of Right to Property

Evolution from Fundamental Right to Legal Right

The Right to Property has undergone a significant transformation in the Indian Constitution since its inception. Originally, it was enshrined as a Fundamental Right, guaranteeing citizens the right to acquire, hold, and dispose of property. However, due to conflicts between this right and the state's objectives of social welfare, land reforms, and development, its status was changed.

Article 31 (Repealed)

Originally, Article 31 of the Indian Constitution dealt with the compulsory acquisition of property. It was part of Part III (Fundamental Rights) and contained provisions that aimed to protect the right to property.

Key Provisions of Original Article 31:

Clause (1): Stated that no person shall be deprived of his property save by authority of law.
Clause (2): Provided that no property shall be compulsorily acquired or requisitioned save for a public purpose and by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given.

This Article, particularly the 'compensation' clause, became a major point of contention between the Parliament and the Judiciary. Parliament, aiming for socialistic goals like land redistribution, passed laws that provided what the owners considered inadequate compensation. The Supreme Court, interpreting 'compensation' as a 'just equivalent' of the market value, often struck down such laws.

Related Original Fundamental Right: Article 19(1)(f) (Repealed)

Alongside Article 31, Article 19(1)(f) also existed in Part III, granting all citizens the right "to acquire, hold and dispose of property". This was a guarantee against unreasonable restrictions by the state on a citizen's right to manage their property.

The Need for Change

The judiciary's interpretation of compensation, combined with the right under Article 19(1)(f), often hampered the government's efforts to implement socio-economic reforms, particularly those related to land ceilings, acquisition for public projects, and nationalization of industries. Several Constitutional Amendments were made to dilute the scope of the Right to Property and shield land reform laws from judicial review (e.g., 1st, 4th, 17th, 25th Amendments, and the inclusion of Article 31A, 31B, 31C, and the Ninth Schedule).

The 44th Constitutional Amendment Act, 1978

This landmark amendment, enacted during the Janata Party government, significantly altered the status of the Right to Property. The key changes were:

Repeal of Article 19(1)(f): The right to acquire, hold, and dispose of property was removed from the list of Fundamental Rights.
Repeal of Article 31: The fundamental right against compulsory acquisition without compensation (interpreted by the court as 'just') was removed.
Insertion of Article 300A: A new provision was added outside Part III (Fundamental Rights), in Part XII (Finance, Property, Contracts and Suits).

Article 300A (Legal Right)

Article 300A reads:

"$ \text{No person shall be deprived of his property save by authority of law.} $"

Meaning and Implications:

Legal Right, Not Fundamental Right: The right to property is now a constitutional legal right. It is still a right guaranteed by the Constitution, but its violation does not allow a person to directly move the Supreme Court under Article 32 (which is available only for the enforcement of Fundamental Rights). One can approach the High Court under Article 226 or resort to ordinary legal remedies.
Deprivation by Law: The State cannot confiscate or acquire property arbitrarily. It must be done strictly in accordance with a law enacted by the Parliament or a State Legislature. This law must be constitutionally valid.
Compensation: Although Article 300A itself does not explicitly mandate compensation, courts have generally held that acquisition under a law usually implies compensation. The LARR Act, 2013 is the primary law governing land acquisition and it comprehensively deals with the determination of compensation and rehabilitation. The state cannot acquire property under Article 300A without following due procedure established by such a law, which typically includes provisions for compensation.

In essence, the state now has the power to acquire private property for public purposes, but it must do so through a valid law, and that law must provide for an amount (compensation) to the owner. The adequacy of this amount is generally not subject to strict judicial scrutiny as it was when property was a fundamental right, but the process and the legislative competence to enact the law can be challenged.

Doctrine of Eminent Domain

The Doctrine of Eminent Domain is an inherent power of the sovereign state to take private property for public use, even if the owner is unwilling, provided that just compensation is paid to the owner. It is considered an attribute of sovereignty, necessary for the functioning and development of the state.

Nature and Basis

Eminent Domain is not a power granted by the Constitution, but rather an inherent power that the state possesses as a sovereign entity. Constitutions, like that of India, merely recognize and regulate this power, ensuring safeguards against its arbitrary exercise.

The basis of this doctrine lies in the Latin maxim "Salus populi suprema lex", which means "the welfare of the people is the supreme law". The needs of the community or public good take precedence over the interests of individual property owners.

Essential Elements

For the valid exercise of the power of Eminent Domain, certain conditions must typically be met:

1. Public Purpose:

The property must be acquired for a legitimate public purpose. This is crucial and prevents the state from taking property for private use or out of malice. Public purpose can include building infrastructure (roads, railways, dams), housing projects, industrial development, national security, public health facilities, etc.

2. Just Compensation:

The owner of the property must be compensated for the loss. Historically, the term used was often "just compensation" or "full compensation". In India, the concept has evolved. While the phrase "compensation" in Article 31 led to judicial scrutiny of adequacy, Article 300A requires deprivation only by "authority of law". The current law governing land acquisition, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act, 2013), mandates payment of compensation and provides detailed rules for its determination, aiming for a 'fair' amount, often significantly higher than market value, along with rehabilitation and resettlement benefits.

3. Authority of Law:

The taking must be done through a valid legal process. In India, Article 300A mandates that deprivation of property must be by "authority of law". This means the state must enact a specific law or act under an existing statute that authorizes the acquisition. This prevents the executive from acquiring property without legislative backing.

Eminent Domain in the Indian Context

The power of Eminent Domain is exercised in India through legislation. The primary central law is the LARR Act, 2013, which replaced the older Land Acquisition Act, 1894. This Act provides the legal framework, defining public purpose, outlining the procedure for acquisition, determining compensation, and specifying provisions for rehabilitation and resettlement of affected persons.

While the Right to Property is no longer a Fundamental Right, the doctrine of Eminent Domain is still subject to constitutional and legal limitations. The requirement of 'authority of law' under Article 300A means the acquisition must comply with the LARR Act, 2013 or relevant state laws. The courts can still review the acquisition process, the genuineness of the stated public purpose, and adherence to the procedures laid down in the law, including the principles for determining the amount payable.

In summary, Eminent Domain is the state's power to acquire private property, while the Right to Property (as a legal right under Article 300A in India) is the individual's protection against arbitrary state action regarding their property. The two are intertwined, with the legal right to property serving as a check on the state's power of Eminent Domain, ensuring it is exercised legally, for a public purpose, and with due provisions for compensating the owner.

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

Purpose and Objectives of the Act

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act, 2013) came into effect on January 1, 2014, replacing the archaic Land Acquisition Act, 1894. The previous Act was widely criticized for being colonial in nature, lacking provisions for adequate compensation, transparency, and the welfare of those displaced or affected by land acquisition. The LARR Act, 2013 was enacted to address these shortcomings and provide a more humane, development-friendly, and participatory approach to land acquisition.

Key Objectives of the LARR Act, 2013:

Fair Compensation: To provide a just and fair compensation to land owners and those whose livelihood is dependent on the land being acquired. The Act aims to provide compensation significantly higher than the market value, especially in rural areas.
Transparency and Participation: To ensure transparency in the process of land acquisition and provide clarity on the procedures, thereby reducing disputes and ensuring accountability. It mandates public consultation and social impact assessment.
Rehabilitation and Resettlement (R&R): To make adequate provisions for the rehabilitation and resettlement of persons displaced due to land acquisition. This includes not just monetary compensation but also provisions for housing, livelihood, infrastructure, and social integration.
Minimising Displacement: To encourage acquisition of minimum land required for public purpose and to explore alternatives to avoid or minimise displacement as far as possible.
Protecting Marginalised Sections: To specifically protect the interests of farmers, agricultural labourers, scheduled castes, scheduled tribes, and other vulnerable groups who are often disproportionately affected by land acquisition.
Sustainable Use of Acquired Land: To ensure that land is acquired only for legitimate public purposes and that the acquired land is used efficiently for that purpose.

In essence, the LARR Act, 2013 shifts the focus from simply acquiring land to ensuring the well-being of the affected population and making the process more inclusive, transparent, and beneficial for all stakeholders involved.

Key Provisions

The LARR Act, 2013 is a comprehensive legislation covering various aspects of land acquisition. Some of its most significant provisions include:

Social Impact Assessment (SIA) Study

A mandatory Social Impact Assessment (SIA) study is required before initiating the land acquisition process for public purpose projects (with some exceptions). The SIA study is a critical step introduced to understand and evaluate the potential impact of the proposed project on the affected population and the environment.

Objectives of SIA:

To identify and assess the nature and extent of social impacts (both positive and negative) of the proposed project.
To determine whether the proposed acquisition serves a public purpose.
To identify the affected families and the number of people who will be displaced.
To assess the impact on livelihood, public infrastructure, resources, and cultural aspects.
To recommend mitigation measures for the adverse impacts and suggest alternative sites or designs if feasible.

SIA Process:

The appropriate government conducts a preliminary social impact assessment study through an expert group.
Public consultations are held in the affected areas to gather views and concerns.
A detailed SIA report is prepared, including a Social Impact Management Plan (SIMP) outlining the proposed mitigation measures.
The SIA report and SIMP are published and made available for public scrutiny.
An Expert Committee examines the SIA report and SIMP and provides recommendations to the government.
Based on the SIA report, SIMP, and recommendations, the government decides whether to proceed with the acquisition.

The SIA ensures that the human cost of development projects is considered upfront and that plans are made to address the negative impacts effectively.

Determination of Fair Compensation

The Act lays down a detailed methodology for calculating compensation, aiming to provide a much fairer amount compared to the previous law. The compensation calculation involves several components:

1. Market Value of Land:

The base for compensation is the market value of the land. This is determined based on:

The average sale price of similar land in the nearest village/area during the last three years.
Or, the minimum land value specified in the Indian Stamp Act, 1899 for the registration of sale deeds in the area, whichever is higher.
Or, the value agreed upon in case of acquisition by consent under Section 2(2) of the Act.

2. Multiplier for Market Value:

The market value is multiplied by a factor, which varies depending on whether the land is located in a rural or urban area:

For land in rural areas: The market value is multiplied by a factor of 1 to 2 times, as specified by the appropriate government. This aims to provide higher compensation in rural areas where land is often the primary source of livelihood and market prices may not reflect its true value to the community.
For land in urban areas: The market value is multiplied by a factor of 1 times.

Let this multiplied market value be $V_{multiplied}$.

3. Solatium:

A mandatory solatium amount is added to the market value component. Solatium is an amount paid to the owner for the compulsory nature of the acquisition and the non-monetary loss suffered.

The solatium is calculated at 100% (one hundred per cent) of the market value (including the multiplier).

Solatium Amount $ = 1 \times V_{multiplied} = V_{multiplied} $

4. Value of Assets Attached to Land/Building:

Compensation is also provided for assets attached to the land or building being acquired, such as:

Value of any building or structure erected thereon (at replacement cost or based on valuation rules).
Value of trees, plants, or standing crops.
Value of immovable property acquired.

Total Compensation Calculation:

The total compensation amount payable to the landowner is the sum of the multiplied market value, the solatium, and the value of assets attached. Let $V_{assets}$ be the value of assets attached.

Total Compensation $ = V_{multiplied} + \text{Solatium Amount} + V_{assets} $

Total Compensation $ = V_{multiplied} + V_{multiplied} + V_{assets} $

Total Compensation $ = 2 \times V_{multiplied} + V_{assets} $

Where $V_{multiplied} = \text{Market Value} \times \text{Multiplier (1-2 for rural, 1 for urban)}$

In addition to this amount, the Act also includes provisions for interest on the compensation amount in case of delayed payment, and additional benefits for affected families under the R&R scheme.

Rehabilitation and Resettlement (R&R) Scheme

A significant improvement over the old Act is the comprehensive R&R package mandated by the LARR Act, 2013. The Act ensures that affected families are not just compensated for their land but are also assisted in rebuilding their lives and livelihoods.

Key Components of R&R Scheme:

Residential Housing: Provision of house sites or built-up houses for displaced families.
Livelihood Assistance: Support for restoring or establishing new livelihoods, such as assistance for agricultural labourers, artisans, small traders, etc. This might include training, preference in jobs related to the project, or one-time financial assistance.
Infrastructure & Amenities: Provision of basic infrastructure in resettlement areas, such as schools, health centres, roads, drinking water, electricity, etc.
Financial Assistance: Various allowances like shifting allowance, subsistence allowance during transition, and one-time support for artisans and small traders.
Preferential Rights: Affected families may be given preferential rights in employment in the project or in the sale of plots/flats developed on acquired land.
Protection for Vulnerable Groups: Special provisions for Scheduled Castes, Scheduled Tribes, and other vulnerable groups, including land for land in certain cases for ST families and preservation of their cultural identity.

R&R Plan:

A detailed R&R plan is prepared for all affected families. This plan is developed based on the SIA study and through consultation with the affected people. The R&R plan is an integral part of the acquisition process and must be approved by the Commissioner for Rehabilitation and Resettlement.

The Act mandates that R&R entitlements must be provided in addition to the compensation for land and assets.

Consent Clause

For acquisition of land for private companies or for public-private partnership (PPP) projects (where the government holds less than 50% of the equity), the Act originally required the consent of a certain percentage of affected landowners:

For private companies: Consent of 80% of the affected families is required.
For PPP projects: Consent of 70% of the affected families is required.

This consent clause was aimed at making the process more democratic and giving affected communities a say in whether their land should be acquired for such projects. However, certain amendments proposed later sought to remove or modify this clause for specific types of projects.

Return of Unutilised Land

The Act stipulates that if the land acquired remains unutilised for a period of five years from the date of taking physical possession, the land shall be returned to the original owners or the Land Bank, as the case may be. This provision aims to prevent the arbitrary acquisition of land and ensure that land is used for the stated public purpose within a reasonable timeframe.

Exemptions and Special Provisions

The Act contains provisions for exemption of certain projects or categories from specific requirements (like SIA or consent) under certain circumstances, although the core requirements of compensation and R&R generally apply. The Act also includes special provisions for urgency clauses, but these are subject to strict conditions and judicial scrutiny.

Procedure for Acquisition

The LARR Act, 2013 lays down a detailed, multi-stage procedure for the compulsory acquisition of land. This procedure is designed to be more transparent and consultative than the previous law.

Key Steps in the Acquisition Procedure:

1. Notification of Intent (Section 11):

The process begins with the appropriate government issuing a Preliminary Notification in the Official Gazette, two daily newspapers (one in the regional language), and uploading it online. This notification signifies the government's intention to acquire land in a specified area for a stated public purpose. It also authorises government officers to enter the land for survey and investigation.

2. Social Impact Assessment (SIA) and Plan (Section 4-9):

Simultaneously or after the notification of intent, the SIA study is conducted. This involves public consultations, preparation of the SIA report and Social Impact Management Plan (SIMP), examination by an Expert Committee, and submission of recommendations to the government. This step must be completed within a specified timeframe (usually six months).

3. Review of SIA Report and Decision (Section 7-8):

The appropriate government reviews the SIA report, SIMP, and the Expert Committee's recommendations. Based on this, the government decides whether the acquisition is justified and serves a public purpose, and if so, issues a declaration to that effect.

4. Publication of Declaration (Section 19):

If the government decides to proceed, a Declaration that the land is required for a public purpose is published. This declaration must be made within 12 months from the date of the preliminary notification (this timeline can be extended in certain cases). The declaration is published in the Official Gazette and newspapers.

5. Identification of Affected Families and R&R Plan (Section 16-18):

After the declaration, the Collector makes efforts to identify all affected families, including those whose livelihood depends on the land. A draft Rehabilitation and Resettlement (R&R) scheme is prepared by the Administrator for R&R, which is then reviewed and approved by the Commissioner for R&R.

6. Notice to Interested Persons (Section 21):

The Collector gives public notice and individual notices to all persons interested in the land, asking them to submit their claims for compensation and R&R entitlements.

7. Enquiry and Award (Section 23-30):

The Collector holds an enquiry into the claims, investigates the value of the land and assets, determines the persons entitled to compensation and R&R, and finally makes an Award. The Award details the compensation amount for each claimant and their R&R entitlements. The Award must be made within 12 months from the date of the Declaration (this timeline can be extended).

8. Payment of Compensation (Section 37-38):

The compensation amount as per the Award must be paid to the affected persons or deposited in court if there are disputes, within a specified period after making the Award (usually three months). If payment is delayed, interest is payable.

9. Taking Possession (Section 38):

Once the compensation is paid or deposited, the Collector can take physical possession of the land. The land then vests absolutely in the government, free from all encumbrances.

10. Rehabilitation and Resettlement (Section 39-42):

Simultaneously with the compensation payment and taking possession, the R&R benefits must be provided to the affected families as per the approved R&R plan. Infrastructure amenities in the resettlement area must also be provided.

This detailed procedure, with specific timelines and emphasis on SIA, R&R, and consultation, makes the land acquisition process under the LARR Act, 2013 significantly different and more complex than under the old Act, aiming for greater fairness and transparency.

Land Requisition

While the LARR Act, 2013 primarily deals with land acquisition, which involves the compulsory transfer of ownership of private land to the state for a public purpose, the concept of land requisition is different.

Land Requisition refers to the compulsory taking possession of private property by the state for a temporary period, for a public purpose. Ownership is not transferred; only the right to possess and use the property is transferred to the state for a limited time. The owner retains ownership and is entitled to compensation for the use of the property and any damage caused.

Legal Basis for Requisition

In India, the power of land requisition is typically governed by separate state or central Acts specifically dealing with requisitioning of property. Examples include the Requisitioning and Acquisition of Immovable Property Act, 1952 (a central act) and similar state-level legislations.

These Acts lay down the conditions under which property can be requisitioned, the procedure to be followed, the duration for which it can be requisitioned, and the principles for determining the compensation payable for such temporary use. Common purposes for requisitioning include housing for government officials, temporary office space, or use during emergencies.

Distinction from Acquisition under LARR Act, 2013

It is crucial to understand the key differences between Requisition and Acquisition:

Feature	Land Requisition	Land Acquisition (LARR Act, 2013)
Nature of Taking	Temporary possession and use	Permanent transfer of ownership
Duration	Limited period	Indefinite (Permanent ownership with the state)
Effect on Ownership	Owner retains ownership	Ownership transfers to the state
Compensation	Payable for temporary use and damage	Payable for the market value, solatium, and R&R benefits
Governing Law	Specific Requisition Acts (Central/State)	LARR Act, 2013 (primarily)
Return of Property	Generally, property is returned to the owner after the requisition period ends	Property vests permanently with the state (unless unutilised for 5 years under LARR Act, 2013)

While the LARR Act, 2013 is primarily focused on the permanent acquisition of land and its associated procedures, compensation, and R&R, the concept of temporary requisition is governed by separate legal frameworks. The LARR Act, 2013 does not supersede or repeal the laws governing land requisition unless specifically stated in relation to a particular provision or context. Therefore, the legal framework for land requisition exists independently of the LARR Act, 2013.