Business Today

How much land does the government need?

Rajeev Dhavan        Print Edition: June 12, 2011

While Indian law inherited the statutory law of eminent domain, or EmD, from Britain's Land Acquisition Act, 1894 (LA1894), its constitutional principles came from America. Constitutionally, property could be acquired through EmD for a public purpose on payment of 'just equivalent compensation'; and the power to do so was regulated through the police to protect public health, law and order, and morality.

The right to property and liberty, read with due process, protected large property owners and businessmen and impeded social reform for workers, the poor, women and children. Despite dissenting voices pointing to a direct conflict between liberty, property and social justice, this was the most doubtful period of the American Supreme Court's existence.

Our constitution makers prioritised nationalising the property of landlords on payment of meagre compensation. But there were loose ends. In the first great counter campaign from 1952 to 1964 against the invoking of EmD, the Supreme Court, or SC, and high courts struck down Zamindari legislation, inspiring constitutional amendments. Between 1964 and 1973, the SC fought a rearguard action to protect the right to compensation in matters of corporate property in the Bank Nationalisation case (1970) and the Privy Purses of the Maharajas case (1971). More amendments followed. In the Basic Structure case (1973) the SC ruled that all amendments were subject to the basic structure of the Constitution. The government's stance was that abolishing feudal power and controlling business could not be done by following classical EmD principles. In neighbouring Pakistan feudal property was left untouched to make it a propertied democracy.

Rajeev Dhavan
Rajeev Dhavan
But was the right to property a part of the basic structure? Whom would these judgments protect? The Janata Government in 1977 decided to accept Justice Mohammad Hidayatullah's incorrect advice that property should not be a fundamental right, but just an ordinary right.

Nothing could have been more short sighted. What was overlooked was that property rights were not just for the rich but also for the less well off. The Hidayatullah formula threw the baby out with the bathwater. The result was that the only protection available to the landowner was the LA1894. This old colonial Act froze prices, gave niggardly compensation and gobbled up land for illusory public purposes - for urbanisation, factories, business and infrastructure.

Villages were routed out of existence. In 1984, amendments were brought in to increase compensation and also prevent its long term freezing. But after liberalisation in 1991, business and industry have been continuously hungry for land. They bought land from peasants through the LA1894. The worst hit were the poor, farmers and tribals.

There was little respite for the vulnerable poor. Later, what the government proposed was two-fold: (i) In large river valley and other projects, there should be relief and rehabilitation, or RR, for the displaced. Fighting for equitable formulas is explicated in the Narmada Dam-related cases where the SC gave minimal protection. The latest Omkareshwar Dam judgment passed this month distorts the RR policy with vehemence and rubbishes the Narmada Bachao Andolan's work to help the oustees; (ii) The second strategy seeks to devise new land acquisition laws with an RR package of land-for-land, project sharing and employment.

Farmers of Bhatta village near Noida in Uttar Pradesh protest land acquisition.
Farmers of Bhatta village near Noida in Uttar Pradesh protest land acquisition.
None of this will mitigate the rapacity of land acquisition, the destruction of village community life and the property rights of the poor. Compensation is illusory if you cannot use it for a better life. Earlier, the SC had supported rapacious acquisition on harsh terms. This is to be found in the judgments of K. Ramaswamy, who rewrote the implementation of the LA1894 in the 1990s in favour of state acquisition. But business has stepped in for government on virtually all aspects of infrastructure and development. From 2000 or so it took the judgments of Justices Sinha and Singhvi in succession to build up the due process of acquisition so that at least objections were better heard.

In this decade, the SC has viewed land acquisition with refined but blinkered eyes. The new proposed Land Acquisition (Amendment) Bill, 2011 will help revise compensation into some measures of RR. But neither the court nor various governments have dealt with the rapacity of land acquisition. The key concept here is 'public purpose'. Today, after liberalisation, 'public purpose' includes 'private purpose'. Massive acquisition is taking place for builders, residences, malls, roads, SEZs. What is this new privatised public purpose?

India will supposedly shine if development takes place through the powerful by acquiring land to displace the rural poor. At present under LA1894, apart from statutory protest and compensation, all that a person can do is get his land partially or fully excluded from acquisition. At this, the rich are better than the poor.

Why? They are better organised. They marshal objections better. They have influence. Even after land is acquired, it can be released if possession has not been taken. The influential can get this done. In the Omkareshwar Dam case, oustees in five villages were given back their land, even though paper possession had been taken. All this to avoid a proper RR for the oustees. Ironically, the Narmada Bachao Andolan's role in helping litigants was adversely commented upon for unjust reasons.

The governments of the Union and states support policies for maximising rapacious acquisition for business with increased compensation. But displaced villagers never have enough compensation to buy new lands. Others will sell out to corporate agriculture. The ordinary farmer will disappear as he did in America. Our poor farmers, numbering around 300 million, hovering at poverty levels, have few avenues to join the emerging economy, which will ruthlessly render them landless and vulnerable.

Eminent domain is a colonial concept, rewritten by America to feed the prospects of the rich. Today, it is being used to hand over large tracts of India to business at immense social cost. Adding RR is, to some extent, a gift; but it is the acquisition policy that needs to be examined. Singur and Nandigram are not aberrations. The confused and betrayed farmers will fight at their peril - either way.

The author is an eminent Supreme Court lawyer

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