Land Acquisition: Procedures, Compensation, And Legal Battles



  1. Introduction 
  2. Procedures And Timeframe For Land Acquisition Awards
  3. Determining Compensation For Acquired Land
  4. Factors Considered In Computing Compensation For Acquired Land
  5. Expert Assessment And Solatium In Land Acquisition
  6. Challenges And Ambiguities In New Land Acquisition Laws
  7. Legal Battles In Land Acquisition
  8. Conclusion 


The Land Acquisition Act is a legislation governing the process of acquiring land for public or private purposes in many countries, including India. Enacted to ensure fair compensation and transparency in land acquisition, it outlines procedures, criteria, and safeguards to protect the rights of landowners and affected individuals. Over time, amendments and judicial interpretations have shaped the Act to address evolving socio-economic needs while balancing the interests of developers and landowners.

Procedures And Timeframe For Land Acquisition Awards

As per Section 23, the collector is obligated to investigate objections raised by interested parties following a notice issued under Section 21. The collector must consider the interests of those requesting compensation, rehabilitation, and resettlement. Subsequently, the collector must issue an award comprising:

  1.  The actual land area involved.
  2. Compensation as per Section 27 and the Rehabilitation and Resettlement Award as per Section 31, deemed appropriate for the land.
  3. The distribution of compensation among all concerned parties, irrespective of individual appearances, based on their known interests or claims.

Under Section 25, the collector must issue an award within one year from the date of declaration publication. Failure to do so leads to the abandonment of the land acquisition process. However, the appropriate government may extend the 12-month period if deemed necessary, provided such a decision is documented, communicated, and published on the concerned authority’s website.

Determining Compensation For Acquired Land

The compensation entitled to the claimant will be determined based on the market value of the land at the time of the preliminary notice. The higher value among the following options will be considered as the market value of the land to be acquired under Section 26:

  1. The minimum land value required as per the Indian Stamp Act of 1899 for registering sale documents in the specific region of the land, if applicable.
  2. The top fifty percent of sale deeds recorded in the past three years in the nearest village or area to the land being acquired, providing an average selling price for similar land types.
  3. The agreed-upon amount if the land is being acquired for private enterprises or public-private partnership projects.

For rural land acquisitions, the market value will be multiplied by a factor of at least one to two times, while for urban areas, the market value will be multiplied by at least one.

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Factors Considered In Computing Compensation For Acquired Land

When determining compensation for land acquired, the collector will calculate the total compensation due to the landowner by including all assets related to the land as per Section 27, following the assessment of the land’s market value to be acquired. Section 28 mandates that the collector must consider the following factors in evaluating the compensation amount for land acquired under this Act:

  1. The compensation amount as per the First and Second Schedules, along with the market value assessed under Section 26.
  2. The loss suffered by the affected party due to the removal of standing crops and trees on the land when it came under the Collector’s control.
  3. Any damage suffered by the affected party due to the disconnection of the acquired land from their other properties.
  4. Any harm suffered by the affected party due to the acquisition affecting their other movable or immovable properties or earnings.
  5. Costs incurred by the affected party in relocating or changing their business location because of the land acquisition, with reasonable moving expenses borne by the affected party.
  6. Actual harm caused by the reduction in land revenues between the publication of the declaration under Section 19 and the Collector taking control of the land.
  7. Any other relevant basis that promotes the welfare of affected families and aligns with principles of fairness and justice.

Expert Assessment And Solatium In Land Acquisition

The collector is empowered to engage the services of qualified engineers or specialists in relevant fields, as deemed necessary, to ascertain the market value of buildings and other immovable assets connected to the land or building slated for acquisition under Section 29. Additionally, the collector may enlist experts in agriculture, forestry, horticulture, sericulture, or other pertinent fields to evaluate the value of trees and plants linked to the acquired property. Similarly, experienced individuals in agriculture may be consulted to determine the value of standing crops affected by the land acquisition process.

Upon determining the total compensation to be disbursed, the collector is mandated to provide a “solatium” equivalent to 100% of the compensation amount as the final award under Section 30. This solatium is in addition to the compensation due to landowners. As per the First Schedule of the Land Acquisition Act, the collector must issue specific awards detailing the compensation and its disbursement. Furthermore, apart from the market value specified in Section 26, the collector is obliged to include an amount calculated at a rate of 12% annually on that market value from the publication of the social impact assessment study until the date of the collector’s award or the actual possession of the land, whichever is earlier.

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Challenges And Ambiguities In New Land Acquisition Laws

The discussed legislation signifies a shift in perspective, now encompassing a broader spectrum of activities under the term “public purpose” as per Section 2(l). This expansion raises concerns about potential exploitation due to the widened definition, posing a threat to the primary objective of industrialization-led economic progress.

A notable change in the new law is the inclusion of private enterprise acquisitions, subject to stringent conditions. For instance, a private company requires 80% permission, while a public company needs 70% consent from affected families, as mandated by the statute. Despite the introduction of an SIA (Social Impact Assessment) evaluation framework, crucial aspects such as the methodology and responsible authority remain unclear, leaving room for potential misuse by private entities. Interestingly, governmental acquisitions under specific circumstances, outlined in Section 2(l), do not necessitate approval from affected individuals, contradicting the principles of participatory, transparent, and informed land acquisition.

Furthermore, the legislation introduces a “Rehabilitation and Resettlement” clause, aiming to provide support to impacted parties, including landowners and affected families. However, the method of calculating “rehabilitation and resettlement cost” based on Sections 26 and 30, which deal with market value and solatium, raises questions regarding its practicality and dependency on market dynamics, highlighting a significant ambiguity within the law.

Legal Battles In Land Acquisition

In the Land Acquisition Officer, A.P v. Ravi Santosh Reddy case of 2016, the Andhra Pradesh Government engaged in a prolonged legal battle over a Rs. 50,000 claim made by a landowner dating back to 1987. Despite the claimant’s demise during this protracted legal process, the state government continued its pursuit through various court levels, culminating in an appeal to the Supreme Court. However, the Supreme Court rebuked the state government for abusing the legal system, citing the lack of substantial grounds for the appeal. The Court criticised the state’s failure to address the landowner’s genuine claim promptly, characterising the entire episode as an abuse of process.

In the Balakrishnan v. UOI case of 2017, the Kerala State Government acquired agricultural land for a technopark expansion. Discontent with the compensation initially offered, the landowner negotiated for better terms but eventually sold the land to the state to avoid prolonged legal battles. However, the state revenue agency imposed capital gains tax on the transaction, arguing it was a voluntary sale, not a compelled acquisition. The landowner contested this in court, leading to a Supreme Court ruling that sided with the landowner. The Court deemed the transaction as a compelled acquisition due to the measures taken by the government, thus exempting it from capital gains tax under Section 10 of the Income-Tax Act.

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In the case of G. Padmanabhan and Others v. Tamil Nadu State and Others (2015), the lands in question were acquired by the government for the Tamil Nadu Housing Board’s Krishnagiri Scheme. A Notification under Section 4(1) of the Land Acquisition Act was issued on May 9, 1991, followed by a declaration under Section 6 of the Act on July 31, 1992. In 1994, the petitioners filed a writ petition challenging the acquisition. During the proceedings, this Court granted a stay against their dispossession on May 18, 1994, which remains in effect to date. Although an award was made on August 3, 1994, the petitioners argue that the awarded amount has not been deposited with the Civil Court. The writ petition was ultimately rejected by this Court on July 10, 2001, leading to the lifting of the stay order. However, despite the stay being lifted, the petitioners claim they have not been evicted.

The crux of the issue was whether the land acquisition proceedings had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. The judgement ruled in favour of the petitioners, noting that they remained in possession of the land without being evicted, and the compensation had not been deposited through the civil court. Consequently, the acquisition proceedings were deemed to have lapsed in accordance with Section 24(2) of the Act of 2013, leading to the allowance of the petition.


In conclusion, the Land Acquisition Act plays a crucial role in regulating land acquisition activities, striking a delicate balance between development imperatives and the rights of landowners and affected communities. As society progresses, it is imperative to continually assess and update the Act to ensure that it remains relevant, fair, and aligned with principles of social justice and sustainable development. Ultimately, a well-functioning land acquisition framework is essential for promoting economic growth while safeguarding the interests and well-being of all stakeholders involved.


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