LARR Act 2013: Sector-wise Implementation and Special Provisions in India

Introduction

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act) [1] represents a paradigmatic shift in India’s approach to land acquisition, replacing the colonial-era Land Acquisition Act of 1894. This legislation embodies a human rights-based approach to development, ensuring that affected families become partners in development rather than victims of displacement. The Act’s sector-specific applications and special provisions demonstrate the legislature’s recognition that different types of projects require nuanced regulatory frameworks while maintaining the core principles of fair compensation, transparency, and rehabilitation.

Legislative Framework and Constitutional Basis

The LARR Act 2013 derives its constitutional authority from Article 300-A of the Constitution, which provides that “no person shall be deprived of his property save by authority of law” [2]. The Supreme Court has consistently held that while the right to property ceased to be a fundamental right after the 44th Amendment in 1978, it remains a constitutional and human right requiring scrupulous adherence to legal procedures [3].

Section 2 of the LARR Act 2013 delineates the scope of application, establishing two distinct categories of land acquisition. Subsection (1) applies when the government acquires land for its own use, including Public Sector Undertakings and public purposes. Subsection (2) extends the Act’s provisions to acquisitions for public-private partnerships and private companies, with mandatory consent requirements of 70% and 80% respectively [4].

Sector-wise Implementation Framework

Infrastructure Projects and Linear Developments

The LARR Act 2013 Act provides comprehensive coverage for infrastructure projects under Section 2(1)(b), which encompasses all activities listed in the Government of India’s Infrastructure Notification of March 27, 2012 [5]. This includes railways, highways, power lines, irrigation canals, and telecommunications infrastructure. The special significance of linear infrastructure projects is recognized through specific exemptions under Section 10(4), which excludes linear projects from the restrictions on acquisition of irrigated multi-cropped land [6].

For railways specifically, the Act maintains the existing framework under the Railways Act, 1989, which is listed in the Fourth Schedule as an exempted legislation. However, the compensation, rehabilitation, and resettlement provisions must be harmonized with the LARR Act within the prescribed timeframe. The Supreme Court’s interpretation in various cases has clarified that while procedural provisions of specific acts remain applicable, compensation standards must align with the enhanced provisions of the LARR Act.

Defence and National Security Projects

Section 2(1)(a) accords special status to acquisitions for “strategic purposes relating to naval, military, air force, and armed forces of the Union, including central paramilitary forces or any work vital to national security or defence of India or State police, safety of the people” [7]. This provision recognizes the sovereign imperative of national security while ensuring that even defence-related acquisitions are subject to fair compensation principles.

The urgency provisions under Section 40 permit expedited acquisition for defence purposes, allowing the Collector to take possession within thirty days of publication of notice under Section 21. However, the Act mandates payment of 80% of estimated compensation before taking possession and provides for additional compensation of 75% of the total compensation amount, except where the project affects sovereignty and integrity of India [8].

Mining and Mineral Development

Mining activities fall under the infrastructure category as specified in Section 2(1)(b)(iii), which includes “project for industrial corridors or mining activities” [9]. The Act’s application to mining represents a significant departure from earlier regimes, bringing mining operations under the comprehensive rehabilitation and resettlement framework.

The Coal Bearing Areas (Acquisition and Development) Act, 1957, and the Land Acquisition (Mines) Act, 1885, are included in the Fourth Schedule, indicating that specific mining legislation continues to govern procedural aspects while compensation provisions must align with the LARR Act [10]. This dual framework ensures specialized treatment for mining operations while guaranteeing enhanced compensation to affected communities.

Atomic Energy and Special Economic Zones

The Atomic Energy Act, 1962, occupies a unique position in the LARR framework, being specifically exempted under Section 105 and listed in the Fourth Schedule. This exemption acknowledges the specialized nature of atomic energy projects and the need for maintaining the existing statutory framework under the Department of Atomic Energy [11]. Similarly, the Special Economic Zones Act, 2005, maintains its distinct procedural framework while ensuring that compensation standards remain consistent with the LARR Act.

Industrial Corridors and Manufacturing Zones

Section 2(1)(b)(iii) specifically addresses “project for industrial corridors or mining activities, national investment and manufacturing zones, as designated in the National Manufacturing Policy” [12]. This provision reflects the government’s focus on developing industrial infrastructure while ensuring that such development does not compromise the rights of affected communities.

State governments have utilized their legislative powers under Article 254(2) to create specialized frameworks for industrial projects. The Andhra Pradesh Land Acquisition Laws (Revival of Operation, Amendment, and Validation) Act, 2019, exemplifies this approach, though its constitutional validity was upheld by the Supreme Court [13].

Special Provisions and Exemptions

Scheduled Areas and Tribal Rights

Chapter VI of the LARR Act 2013 contains detailed provisions for Scheduled Castes and Scheduled Tribes, recognizing their special vulnerability to displacement. Section 41 mandates that “as far as possible, no acquisition of land shall be made in the Scheduled Areas” and requires prior consent of Gram Sabha or Panchayats in all cases of acquisition in Scheduled Areas [14].

The Act requires preparation of a Development Plan for projects involving displacement of Scheduled Castes or Scheduled Tribes, including procedures for settling land rights and restoring titles. Section 42 ensures continuity of reservation benefits and statutory safeguards in resettlement areas, regardless of whether the resettlement area falls within Scheduled Areas [15].

Social Impact Assessment and Environmental Safeguards

The mandatory Social Impact Assessment under Section 4 represents a fundamental innovation in land acquisition law. The assessment must evaluate whether the proposed acquisition serves public purpose, estimate affected families, assess the extent of displacement, and determine if the proposed land area is the absolute minimum required [16].

Section 6 provides for simultaneous Environmental Impact Assessment, ensuring comprehensive evaluation of project impacts. However, for irrigation projects where Environmental Impact Assessment is mandatory under other laws, the Social Impact Assessment provisions do not apply [17].

Food Security Safeguards

Section 10 establishes comprehensive safeguards for food security, prohibiting acquisition of irrigated multi-cropped land except under exceptional circumstances as demonstrable last resort. The Act requires that aggregate acquisition of such land for all projects in a district or state shall not exceed limits notified by the appropriate government [18].

The provision for developing equivalent culturable wasteland or depositing equivalent value for agricultural enhancement demonstrates the legislature’s commitment to maintaining agricultural productivity while permitting necessary development.

Judicial Interpretation and Case Law

Section 24 and Transitional Provisions

The Supreme Court’s Constitution Bench judgment in Indore Development Authority v. Manoharlal (2020) 8 SCC 129 settled the interpretation of Section 24, which governs the transition from the 1894 Act to the 2013 Act [19]. The Court clarified that land acquisition proceedings under the 1894 Act are deemed to have lapsed if an award was made five years or more prior to the commencement of the 2013 Act, but physical possession was not taken and compensation was not paid.

The judgment overruled the earlier decision in Pune Municipal Corporation v. Harakchand Misrimal Solanki (2014) 3 SCC 183, holding that compensation is considered “paid” even if deposited in government treasury, not necessarily requiring court deposit [20]. This interpretation significantly impacts the number of lapsed acquisitions and the subsequent application of enhanced compensation under the 2013 Act.

Consent Requirements and Public Purpose

The Supreme Court has consistently upheld the consent requirements for private company acquisitions, recognizing them as essential safeguards against arbitrary acquisition. The Court’s approach to interpreting “public purpose” has evolved to ensure that private benefit does not masquerade as public purpose, particularly in the context of acquisitions for subsequent transfer to private entities [21].

Compensation Mechanisms and Rehabilitation Framework

Enhanced Compensation Structure

The Act establishes a comprehensive compensation framework under Sections 26-30, requiring market value determination based on stamp duty values, average sale prices, or consented amounts, whichever is higher. The compensation is then multiplied by factors specified in the First Schedule – four times market value for rural areas and twice for urban areas [22].

Additionally, Section 30 mandates solatium equivalent to 100% of compensation amount, and Section 69 provides for 12% annual interest from the date of notification until award or possession, whichever is earlier [23].

Rehabilitation and Resettlement Entitlements

The Second Schedule provides detailed rehabilitation and resettlement entitlements, including employment for one member of each affected family, residential plots, transportation allowance, and various monetary benefits. The Third Schedule mandates provision of infrastructural amenities in resettlement areas, ensuring that displaced communities have access to basic services [24].

State Amendments and Regional Variations

Several states have enacted amendments to address local requirements while maintaining the Act’s core principles. The Maharashtra Act 37 of 2018 and Andhra Pradesh Act 22 of 2018 introduce provisions for lump sum payments in lieu of detailed rehabilitation and resettlement for certain categories of projects [25].

These amendments demonstrate the federal structure’s flexibility in allowing states to adapt the central framework to local conditions while ensuring that fundamental rights of affected persons are not compromised.

Contemporary Challenges and Future Directions

The implementation of the LARR Act 2013 aces several challenges, including delays in Social Impact Assessment completion, consent procurement difficulties, and inadequate rehabilitation infrastructure. The recent Supreme Court observations in various cases indicate the need for balancing development imperatives with individual rights protection.

The Act’s emphasis on making affected persons “partners in development” through enhanced compensation and comprehensive rehabilitation represents a progressive approach that could serve as a model for other developing countries facing similar development-displacement dilemmas.

Conclusion

The LARR Act, 2013, through its sector-specific provisions and special safeguards, represents a comprehensive attempt to balance development needs with human rights protection. The Act’s recognition of different sectoral requirements while maintaining universal principles of fair compensation and rehabilitation demonstrates sophisticated legislative drafting adapted to India’s diverse development landscape.

The judicial interpretation of key provisions, particularly Section 24, has provided necessary clarity while highlighting the ongoing tension between development imperatives and individual rights. As India continues its infrastructure development trajectory, the LARR Act’s framework provides both the flexibility for sectoral adaptation and the rigidity necessary for rights protection.

The success of the Act ultimately depends on effective implementation, adequate budgetary allocation for rehabilitation, and continued judicial oversight to ensure that the legislative intent of making affected persons partners in development is realized in practice.

References

[1] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Act No. 30 of 2013. Available at: https://www.indiacode.nic.in/handle/123456789/2121 

[2] Constitution of India, Article 300-A. Available at: https://www.indiacode.nic.in/constitution/ 

[3] Haryana State Industrial and Infrastructure Development Corporation v. Deepak Aggarwal, 2022 SCC OnLine SC 644

[4] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 2

[5] Government of India, Department of Economic Affairs Notification No. 13/6/2009-INF, dated March 27, 2012 

[6] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 10(4)

[7] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 2(1)(a)

[8] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 40

[9] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 2(1)(b)(iii)

[10] The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Fourth Schedule