The Land Acquisition Act, 1894 is a law of acquiring private land by the government in India and Pakistan. The literal meaning of “Land Acquisition” is acquiring land for some public purpose by government from individual landowners after the payment of a minimum compensation. The land acquisition act was first enacted by the British government in the year 1824. The rules empowered the government to acquire immovable property at a fair and reasonable price for construction of roads, canals or other public purposes. The word “public purpose” is defined as the acquisition of land for constructing educational institutions or schemes such as health or slum clearance, housing and for projects concerned with rural planning or formation of sites. Even after independence, Indian government adopted the 1894 Land Acquisition Act and since then various amendments have been made from time to time but the administrative procedures have remained same.


Purpose: –

LARR 2011 seeks to repeal and replace India’s Land Acquisition Act, 1894. The Bill proposes for a law that will provide fair rehabilitation of land owners to those directly affected from loss of livelihoods and fair compensation of land when private land is acquired for public use.


Need for the new bill:-

Acquisition of land refers to the process by which government forcibly acquires private property for public purpose.

  • Exposure

The Land Acquisition Act, 1894 governs all such acquisitions. There are 16 Acts with provisions for acquisition of land in specific sectors such as national highways, railways, special economic zones, etc. The 1894 Act does not provide Rehabilitation and Resettlement (R&R) facility for those affected by land acquisition. The R&R process is governed by the National R&R Policy of 2007.  Two bills were introduced in the Lok Sabha: one to amend the Land Acquisition Act of 1894, and the other to provide statutory status to the R&R policy. With the dissolution of the 14th Lok Sabha in 2009 all these Bills lapsed.

The National Advisory Council recommended combining the provisions of land acquisition and R&R within a single Bill in May 2011. In July, 2011, the draft Land Acquisition, Rehabilitation and Resettlement (LARR) Bill was published by the Ministry of Rural Development for public comments. The government introduced the LARR Bill in the Lok Sabha in September 2011. This Bill will replace the 1894 Act.

  • The Base

LARR Bill, 2011 seeks to repeal and replace India’s Land Acquisition Act of 1894. The Bill seeks to enact a law that will apply when:

  1. Government acquires holds and controls land for its own use.
  2. Government acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose. The Bill includes public-private-partnership projects, but excludes land acquired for state or national highway projects.
  3. Government acquires land for immediate and declared use by private companies for public purpose.

LARR Bill, 2011 aims to establish the law on acquisition of land, as well as the R&R of those directly affected by the land acquisition. The scope of the Bill comprises of all land acquisition whether it is done by the Central government or any State government except the state of J& K.

The Government of India believes that a combined law is necessary – that legally requires rehabilitation and resettlement necessarily and simultaneously follow government acquisition of land for public purposes. Transparency in the process is needed.

44th Amendment Act of 1978 omitted Art 19(1) (f) with the net result being:-

Art 31(2) in the original Constitution embodied the principle that if the Government makes a compulsory requisitioning of private property, the following measures must be taken:-

a) Make a law

b) Such law must be for public purpose

c) Compensation should be paid to the property owner

First, the 25th Amendment Act, 1971 replaced the requirement of ‘compensation’ by ‘an amount’, the adequacy of which cannot be challenged in any court. The 44th Amendment Act, 1978 came and omitted the Article 31 along with Article 19(1) (f). Thus right to compensation for loss of property was also lost.

In recent times, there have been multiple incidents where farmers were protesting against the Government as it took away the land from them without paying the adequate compensation, against the wishes of many farmers. The debate about Right to Property needs to be re-initiated. The Right to Property as Fundamental Right should be re-instated by voiding the changes made by 44th Amendment Act of 1978 in this respect.


Content of the Bill:-

Definition of public purpose in Clauses 2 and 3 of LARR Bill 2011 define the following as public purpose for land acquisition within India:

  • Acquisition of land for purposes relating to the national security or defence, armed forces of India, police, safety of the people;
  • Acquisition of land for ports, railways, highways, power and irrigation purposes for use by government or by government controlled corporations (also known as public sector companies);
  • Land acquisition for planned development or improvement of village or urban sites or for residential purpose to weaker sections of society in rural or urban areas;
  • Land acquisition for government administered agricultural, educational, health and research schemes or institutions;
  • Land acquisition for persons residing in areas affected by natural calamities;
  • Land acquisition for resettlement of affected people for any of the above government projects;
  • Land acquisition by the government for public-private-partnership projects for the production of public goods or the provision of public services;
  • Land acquisition for private companies for the production of public goods or provision of public services

The acquired land is not used in five years the land should be back to original land owners when government declares public purpose and shall control the land directly, consent from the owner of the land won’t be required. When the government acquires the land on behalf of private sector companies or for public companies, LARR 2011 proposes that the consent of at least 80% of the project affected families shall be obtained through a prior informed process before government uses its power under LARR 2011 to acquire the remaining land for public good.

LARR 2011 includes an urgency clause for expedited acquisition of land. The urgency clause may only be invoked for security, national defense and in the event of rehabilitation of affected people from natural disasters or emergencies.


Agencies and Authorities Involved:-

  • Union Government
  • State Government
  • Public agencies/authorities like DDA, CIDCO, NOIDA
  • Companies like RelianceTata (for SEZs)

The procedure involved for acquisition of land for companies are dealt with under chapter VII of the act, which states an agreement to be entered into by the company with the appropriate government and the same has to be published in the official gazette. Government cannot initiate acquisition proceedings without issuing proper notice to the owners in any of the prescribed mode of service provided under the act and provide them ample opportunity. If any of the provisions envisaged in the act is violated or mandatory procedures are not followed, the entire acquisition proceedings would become void.


Highlights of the New Bill:-

  • The compensation is 4 times the market value in rural areas and 2 times in the urban areas.
  • This is the first law that links land acquisition and the accompanying obligation for R&R.
  • With the provision of the act, the land acquired 5 years ago which has not received any compensation will be started afresh.
  • Monitoring Committees at the State and National Level to ensure so that R&R obligations are met.
  • Special safeguards for SC’s and ST’s.
  • The law provides that no one shall be disposed unless and until all payments are made.
  • Compensation for livelihood losers is provided according to the Bill.
  • Consent of minimum (70 – 80) % are needed for PPP projects so that there are no forcible acquisition.
  • The Bill directs States to impose limits on acquisition of agricultural land to ensure food security.
  • Stamp Duty and Income Tax exemption.
  • If land is sold to a Third Party in a higher price, 40% of the profit will be shared with original owners.


Objectives of the New Bill:-

  1. Rehabilitation and Resettlement Provision for Farmers, Landless and Livelihood Losers are :
  • Reduced the time from 5 years to 3 years.
  • Houses for all affected families.
  • The affected families are given a choice between employment and annuity, either a grant of Rs. 5lakh per family or an annuity payment of Rs. 2,000 per month to per family for 20 years.
  • All the affected families which are displaced from the land acquired shall be given a monthly subsistence allowance equivalent to Rs. 3,000 per month for a period of 1 year from the date of award.
  • All the affected families are also given training and skill development while being offered employment.
  • A transport and resettlement allowance of Rs. 50,000 would be provided.
  • One – time financial assistance of a minimum of Rs. 25,000 would be given to the small trader or self – employed person.
  • Rehabilitation and Resettlement to be completed in all aspects for irrigation project.
  • Possession shall be acquired upon fulfillment of conditions as full payment of compensations, payment for R&R etc.
  • Time limit for provision of R&R shall be provided within a period of 18 months from the date of grant. 


  1. Scheduled Casts and Schedule Tribes Interests and Concerns are protected as:
  • If any acquisitions are to be taken in the Scheduled Areas, it has to be done with approval or consent of the local institution of the self-governance.
  • A development plan has to be prepared and in case of land being acquired from members, at least 1/3rd of the compensation amount shall be paid to the affected families and the rest to be paid during the possession of land.
  • The Schedule Tribes are to be resettled in the same area so that they can retain their culture.
  • The Scheduled tribes shall be given fishing rights in the reservoir area of hydel or irrigation projects.
  • The affected families would receive an additional Rs. 3,000 per month.
  1. Interests and Concerns of Panchayati Raj are protected as:
  • The Social Impact Assessment (SIA) has to be carried out in consultation with the representatives of Panchayati Raj Institutions (PRI).
  • SIA reports are to be shared with the PRI’s in the local dialect along with a summary.
  • Hearing in all Gram Sabhas where more than 25% of land belonging to Gram Sabha has been acquired.
  • The R&R Committee at Project Level has to have a chairperson.
  1. States Interests and Concerns are Protected as:
  • The Bill provided a baseline for compensation which allows the state to determine the final amount.
  • When the unutilized land is returned, state will decide whether it goes to the original owner or bank.
  • Threshold for Private Purchase left to Government.
  • The procedure related to the function of the R&R Committee at project-level less to the State Government.
  • State Government are free to enact other laws.


Reference to Court:-

  • A written application to the court can be submitted by any person interested to whom the award is not satisfactory.
  • Application should be made within 6 weeks from the date of declaration of the award.


The Closure:-

The fact& fight:-

We have long heard tales of breathtaking conflicts between developers, farmers and government regarding acquisition of land for development purposes. The reflections of these stories are so profound that no one can simply ignore. Farmers sell their land to the developers, developers create resources for development and subsequently government intervenes and creates a scope of growth within the defined parameters. However, the situation is totally contrasting than it sounds; also the repercussions of this process are very extensive leading to its impact being multidimensional. No one has been able to stream away from the discrepancies in this system.


According to Mr. Ramesh Menon of Certes Realty, acquiring land is a complex procedure and the archaic 1894 Act has been for a long time in addressing the complexities of acquisition and settlement. The recent disputes in Uttar Pradesh, Andhra Pradesh, Orissa, Karnataka and West Bengal, exemplify the outcomes of disharmony among various stakeholders. With this new bill the interests and concerns of farmers are also protected.



© 2020 Certes Realty | All Right Reserved
Contact # 9015-330-330 | Powered by: Catabatic Automation Technology
Protected by Copyscape Online Copyright Protection