STANDING
ORDER No. 28
(Land Acquisition No. 28)
LAND ACQUISITION
1. Original
issue, dated
2. First
reprint, dated
3. Second
reprint, dated
4. Third
reprint, dated
5. Fourth
reprint, dated
6. Fifth
reprint, dated
9. Amended
on
10. Amended on 18th April, 2008
In
connection with this standing order Chapter XIV of the Land Administration
Manual should be consulted.
This
standing order deals with the acquisition of land for public purposes, whether
the land be taken up by private negotiation or in accordance with the
provisions of Act I of 1894 and Amendment Act, 1984 of the Act ibid.
(LAND REVENUE BRANCH)
To
All the Heads of Departments,
Commissioners of Divisions,
Deputy Commissioners and
Sub Divisional Magistrates
in the State of
Dated,
Sub: Amendment
of Financial Commissioner's Standing Order No. 28 relating to Acquisition of Land. - An Explanatory Note.
Sir,
The
question of providing adequate compensation to the landowners for compulsory
acquisition of their lands has been engaging the attention of the Government
for quite some time now. The Land
Acquisition Act, 1894 provides that a landowner should be paid the market value
(plus interest and solatium) for the land compulsorily acquired. It is, however, observed that as per
procedures set forth, what the landowners actually receive in the first
instance is only a fraction of the market price. This is primarily because of the out-dated
and faulty procedures followed in assessing the market value of the land. The Land Acquisition Collectors base their
awards on prices of land worked out by the Deputy Commissioners, who in turn
base these rates on 'Chhant' i.e. the average sale price of one year as per
registration deeds. Even then the sale deeds having unusually high rates are
ignored and the situation is worsened by a tendency amongst the farmers to
undervalue their land to save on stamp duty, and in urban areas, by a
temptation to reduce liability on account of capital gains. The aggrieved
landowners have to wage a long and costly battle in different courts to get
their legitimate dues. After litigation often lasting 10-15 years, what the
landowners manage to get falls far short of the market value. Very often even
after securing favourable verdicts from the courts, the farmers have to wait
for many years to get the price. In the
meantime, land prices soar up and the farmers whose lands are acquired are
altogether unable to purchase any alternative land at reasonable price. In Punjab, particularly, farmers have a great
attachment for land and it is difficult for land owners to get reconciled to
its loss particularly when this is the only way of life they are familiar
with. Therefore, in the type of
situation which presently prevails, acquisition brings in its wake a sense of
physical loss and emotional insecurity.
The money received in instalments is invariably frittered away on
unproductive expenditure.
2. Based on this experience, it was decided that the existing procedures should be streamlined to ensure that in case of compulsory acquisition the owners not only get the full market price but are also assured that this price is paid in lumpsum in the first instance itself, and there should be no need for the landowners to waste time and money in going to courts to get their dues through endless litigation. An assurance was also given by the Chief Minister, Punjab, on the floor of the House making a commitment that procedures would be simplified to ensure payment of correct market price to the landowners. In the background of this commitment, the Revenue Department had presented a Memorandum to the Council of Ministers in June, 1997 making certain recommendations. Based on the decisions taken by the Council of Ministers, two sets of instructions were issued by the Revenue Department on 14th July, 1997, one for setting up of District Land Price Fixation Committees (DLPFCs) for recommending prevailing market rates and the second for raising the powers of the Collectors to sanction the award from the existing limit of Rs. 7.00 lacs to Rs. 30.00 lacs, and for eliminating the level of the Divisional Commissioner in the sanction of the award.
3. The DLPFCs have been in
existence for more than two years now. While the working of these Committees has
generally been welcomed by landowners, it has met with mixed reaction in
official circles. Very often the recommendations of the DLPFCs are sketchy and
non-speaking giving an impression of arbitrariness in price fixation. Fears
have also been expressed at times by the acquiring departments that these
recommendations are too liberal and jeopardize their budgetary estimates. The
non-official members of the Committee explain that although they are generally
aware of the market price in their areas, it is for the official members to
present data necessary for justifying -their decision in a proper manner.
Whatever may be the shortcomings in the working of the District Land Price
Fixation Committees, the fact remains that the official data does not give a clue
to the correct land prices. The information which was collected in this
connection revealed that invariably the land awards are enhanced by the courts
to more than five to six times of the original price fixed by the Land
Acquisition Collector after a period of litigation spreading over ten to
fifteen years. Although these figures contained a substantial element of
solatium and interest on the enhanced price the fact remains that they result
in serious imbalances in budgetary calculations, and non- payment has sometimes
invited strictures and even attachment of government property by Courts. The artificially low prices reflected in the
'chhant' at the initial stage also result in a temptation to acquire more land
than necessary, resulting in unwarranted dislocation of local population.
4. Since compensation has to be
determined on the basis of market price the only guiding
factor can be as to what is the
price on which an owner would be willing
to sell his land and what is the price a buyer would be willing to pay if
acquisition proceedings were not to take
place. Therefore some element of
subjectivity based on individual perception is bound to creep in. It is, therefore, all the more necessary that
the basic guidelines for determining the land
prices should be laid down so that there are no serious imbalances in
the budgetary calculations, the farmers get enough not to indulge in repeated
litigation and at the same time the tendency to acquire more land than necessary is avoided. With this objective in view the matter has
been considered by the Council of Ministers in its meeting dated 12th January,
2000 and detailed procedures have been laid down for the guidance of the DLPFCs
and officers connected with land acquisition.
Part ‘B’ of the Financial Commissioner’s Standing
Order No. 28 has been recast in the
light of the decisions taken by the Council of Ministers. The intention
is to make available detailed data and other information formally so that the
deliberations of the DLPFCs are more meaningful, transparent and
self-speaking. Some consequential
amendments flowing out of these decisions have also been incorporated.
5. The Council of Ministers has also
agreed to streamlining of procedures and elimination of unnecessary levels to
cut down delays. Presently, concerned departments are issuing their own
notifications under Sections 4, 6 and 17 of the Land Acquisition Act and most
of them have their own Land Acquisition Collectors also. Now that the prices are also to be guided by
the DLPFCs, the repeated references to the Financial Commissioner Revenue at
various stages of acquisition proceedings have been dispensed with. Henceforth,
the awards to be announced under Section 11 of the Act shall also be approved
by the Administrative Department concerned.
Thus the Revenue Department will only function as the Nodal Department
for administration of the Act and notify Land Acquisition Collector under the
Act in cases where they are not notified as such ex-officio. It is expected that this will cut down
delays to a very large extent and also make the role of the Administrative
Secretary more meaningful and his supervision more effective.
It may
be seen that in the past the cases used to come to the Revenue Department at
three stages, first at the stage of seeking No Objection Certificate (NOC)
where the FCR presided over the meetings of the State Level Land Acquisition
Board (SLLAB), the second at the time of approval of the Collector’s rates and
the third prior to the announcement of the award. Now, a reference will be made to the Revenue
Department only at the initial stage for placing before the SLLAB and the
matter will come to SLLAB again only if there
is a difference of opinion between the recommendations of the DLPFC and the Administrative
Department concerned.
6. An important
decision which has been taken by the Council of Ministers is that ordinarily,
officers not below PCS shall be appointed as Land Acquisition Collectors and
officers borne on the cadre of the Revenue Department shall be utilized to
render specialized assistance with reference to revenue laws and collection and
compilation of the relevant data/information.
The Council of Ministers has also decided that for purposes of Sections
11 and 15-A of the Land Acquisition Act, the word "Government" shall
mean Government in the concerned
department and the
"authorized
officer" shall imply the Administrative Secretary concerned. As a
corollary to this, no officer below the rank of the Administrative Secretary
shall exercise the powers of the Government. This implies that the powers of
Government presently delegated to the departmental heads e.g. Chief Engineers
in the Irrigation and Drainage departments under sections 4, 6 and 17 of the
Act shall stand withdrawn.
7. Another significant decision that has been
taken is that it shall be no longer necessary to obtain an NOC from the DC/SLLAB before the issue of
notification under Section 4 of the Act.
The collection of data for acquisition and preparation of draft
notification is itself a time consuming process. There is also generally a long
time lag between site selection, submission of data to SLLAB, approval by SLLAB
and the notification under section 4 of the Land Acquisition Act. This leads to
land speculation and raises the cost of acquisition in the form of hastily
raised structures, benami transactions and trading by property dealers and middlemen. This leaves both the landowners and the
Government at a disadvantage. Therefore, it has been decided that the practice
of obtaining NOC from the DC/SLLAB before the issue of notification under
section 4 of the Act should be discontinued.
Instead, notification under section 4 shall be issued immediately after
site selection and preparation of detailed data for such notification, and NOC
would be applied for immediately after the notification.
8. As brought out in para 4 above, the guiding factor for determining the
basis of market
price would be what is the price
at which an owner would be willing to sell his land and what is the price a
buyer would be willing to pay, if acquisition proceedings were not to take
place. With increase in urbanization and the land becoming a scarce commodity,
locational factors like proximity to a road, a town, an urban agglomeration or
even the direction in which a city is expanding have assumed far greater
importance than whether a land is ‘chahi’ or 'barani' or even 'Banjar.' Theoretically, two adjacent ‘chahi' and
'barani' 'taks’ may carry different values for compensation purposes on the
basis of 'Chhant’ but there may be hardly any difference in their market
price. Moreover, with development of
sophisticated means of irrigation, and advanced watershed management, in a
large number of cases now whether the land is 'barani’ or 'chahi’ depends
largely on the capital and financial resources at the disposal of the owner or
the size of his holding. A distinction
in pricing on the basis of its quality/class may place a premium on economic
affluence of the land owner and may also leave a lot of discretion in the hands
of the Land Acquisition Collector.
Therefore, the distinction between various classes of land such as
'chahi’ and 'barani' etc. would no longer be considered relevant unless there
are strong reasons to act otherwise. Thus a distinction would have to be made
if the land is rocky or there are steep hills, 'pahar’, deep depressions and
sand dunes, which in the normal course would fetch very little market price as
their land use would be very much restricted and the cost of development would
be high; Shares of khewatdars in
"nadis" would also fall in the same category.
9. To make the meetings of the DLPFC more purposeful its constitution has been made more broad based. The district
level representative of the acquiring Department/Public Sector Undertakings
concerned shall now be associated with every meeting of the DLPFC as also with
the site visit, if conducted. Provision
has also been made to arm these Committees with detailed data for purposes of
meaningful deliberations. Though the S.D.Ms shall be the conveners of these
Committees, the overall guidance and coordination is required to be provided by
the concerned DCs.
It
has come to notice in the past that in a large number of cases a lumpsum amount
is recommended by these Committees for each 'quality’ or class of land. When justification for this figure is sought
the amount is merely split into price, solatium, and interest by backward
calculation. It needs to be reiterated
that as per legal provisions market price is to be computed on the date of
notification under section 4 and not on
the date recommendations are made by DLPFC.
A lumpsum amount should only be proposed if it represents negotiated
price, and even here, it should be ensured that it is not too exorbitant as to make a deal with
just cause. It may, however, be kept in
view that negotiations may turn out to be cheaper in the long run, as there
would be a saving of solatium and interest (unless payment is heavily delayed
after that) as also litigation. It may be noted that there is no bar for such
negotiation at any stage of the proceedings in compulsory acquisition. The
services of DLPFC should be utilised by the Department if there is any
hesitation on its part to attempt negotiations single-handedly. The reasons for
absence of non-official members shall also be clearly brought out in the
proceedings indicating efforts made to ensure their presence.
10.
It has been decided to delete pare 87 of the Standing Order No. 28. The provision was probably inserted in a
situation where Government surrendered land voluntarily and that too soon after
compulsory acquisition. This provision would be misplaced in a situation where
prices have steeply escalated with the passage of time or the original owners
have encroached upon the acquired land just because it has not been fully
utilised. Even if this land is to be surrendered to the original owners, as per Rules of Business of the Government
of Punjab, approval of the Council of
Ministers would be required in each case after
consultation with Finance Department
as alienation of public land is involved. In this connection paras
493, 494, 495 and
495-A of the Land Administration
Manual which are essentially in the form of guidelines shall be
separately amended being archaic.
A
number of other paras of Standing Order
No. 28 have also been deleted being irrelevant in the changed context. A copy of amended Standing Order No.28 is
enclosed.
11. The Council of Ministers has
decided that the Revenue Department will only function as nodal department for
the administration of Land Acquisition Act, 1894. Further, with a view to improve the content
and quality of the Awards the Financial Commissioner Revenue would get the
important verdicts given by various Courts compiled through some agency for the
guidance of the Land Acquisition Collectors. The feed back from the
Administrative Departments as well as from the field officers in this
connection would be very much welcome !
Yours faithfully,
Sd/-
(RAJINDER SINGH)
Under Secretary Revenue, Punjab.
(Land Acquisition No. 28)
A.
A.
Cases of Acquisition to
which the provisions of Act I of 1894 are not applicable
1. Proceedings
under the Land Acquisition Act I of 1894 inappropriate - When it is
proposed to transfer land in possession of Government, from one Government to
another, or from one department to another, proceedings under Act I of 1894 are
inappropriate.
Land
of this description may fall under the following categories :-
(1) Land
in possession of the Government of India;
(2) Land
in possession of the State Government :-
(a)
(a)
Nazul land;
(b)
(b)
Inferior evacuee land;
(c)
(c)
Other surplus evacuee
land;
(d)
(d)
State Government lands
(recorded generally in revenue record as
Provincial Government lands);
Land under the
possession of various departments such as Irrigation, Forests, etc.
2. Rules
regulating transfer
of State lands and buildings between Central and State Governments, Government
of India, Finance Department resolution No.D-3428-A, dated the 10th
December, 1925 - Where
some land under the ownership of the Central Government is surplus to its
requirements and the same is required for any public purpose by the State
Government, necessary reference for the purpose will have to be made to the
Central Government in the Ministry concerned.
Such lands are normally transferred by the Central Government at market
price. A reference for the purpose may
be made by the Collector or the Department requiring the land to the Revenue
Department indicating the area of land which is required to be transferred
alongwith relevant extract from the Jamabandi, the purpose for which it is
required, and whether the scheme for which it is required has been sanctioned
and included in the Plan or the budget.
It should also be accompanied by an estimate of the market price from
the District Collector.
2.1 Certain surplus camping sites under the Ministry of Defence are available at some places which the Ministry of Defence may be prepared to transfer to the State Government at the market price. The District Collectors while examining the proposals for land acquisition at those places should specifically examine whether the surplus camping sites cannot be utilized for the purpose. This will save available agricultural land being acquired land also save the Government payment of 30% solatiums charges payable in the case of compulsory acquisition.
2.2 The
proposals for transfer of surplus State Government land to the Central
Government are normally received from the concerned Ministry in the Central
Government. Where a Collector or the
Department of the State Government takes up the case for such transfer as the
Central Project would be in the interest of the State, the proposal for the
same should also be sent by the Administrative Department concerned or the Collector
as the case may be, to the Revenue Department indicating the area of land
proposed to be transferred, with copy of the relevant extracts from the
Jamabandi and the purpose for which it is to be transferred. The proposals should also be accompanied by
an estimate of market price of the land from the District Collector. Normally such transfers are to be made at the
market price. Where the Collector or the
Administrative Department considers that the land should be transferred free or at a concessional rate,
the detailed justification for the same may be indicated in their proposal
alongwith the assessment of the market price so that the financial implication
of the proposal is available with Government while taking the decision. These proposals should also include a report
from the District Collector that the land is not required for any purpose by a
Department of the State Government and its transfer will not adversely affect
the utilization of other land under the ownership of the State Government where
only a part of a compact area is proposed to be transferred.