Thanks to eminent domain defence, our Constitution has no private property rights - The myLaw Blog 20/08/19, 1)47 PM

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Thanks to eminent domain defence, our

Constitution has no private property
rights
myLaw (http://blog.mylaw.net/author/admin/) ! July 13, 2015 " 17 min read

Since Independence, there have been several special laws that have been used by both Union and state
governments to acquire land (http://blog.mylaw.net/wp-
content/uploads/2014/12/Suhrith_Parthasarathy.jpg)from
private individuals. Many of them continue to exist. But,
for more than a century, the Land Acquisition Act of
1894 (http://megrevenuedm.gov.in/acts/land-aquisition-
act-1894.pdf) has stood as the centrepiece of the Indian
state’s policy of expropriation, used most frequently to
acquire private property.

Viewed broadly, the 1894 statute canonised a power of eminent domain, which was thought to be a facet
intrinsic to a sovereign. The law gave the authority to government to acquire private land for what the state
perceived to be a public purpose, in exchange for a compensation, which, when determined under the
process prescribed by the statute, was almost always grossly derisory.

It also allowed the state the authority to acquire land

The Union Minister for Rural Development in the
UPA government, Jairam Ramesh (left), and Union
Minister for Urban Development in the NDA
(http://blog.mylaw.net/wp-
government, Venkaiah Naidu, addressing press
conferences on the land acquisition law in
content/uploads/2015/07/JairamRamesh_Venk
September, 2013 and March, 2015 respectively.
aiahNaidu_LandAcquisitionLaw.jpg)
unbothered by the economic and social impact that the
acquisition might have on the landowner. The statute did
not prescribe any social or environmental impact
assessment as a precondition for expropriation, and it
also imposed no obligation on the government to
rehabilitate those displaced by the acquisition. The lack
of any safeguards in favour of the landowner effectively
meant that the poor person’s land was viewed as the
sole property of the state, as property that could be
subjected to legally sanctioned fraud and plunder. It was

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Thanks to eminent domain defence, our Constitution has no private property rights - The myLaw Blog 20/08/19, 1)47 PM

in this backdrop that in early 2014, the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (http://indiacode.nic.in/acts-in-pdf/302013.pdf) (“LARR Act”) was
brought into force to replace the 1894 law.

The new act was designed to bring an end to a century-long form of oppression. It sought to define the
public purpose, for which land could be acquired, with particular clarity; in cases where land was to be
acquired for a private project, the consent of at least 80 per cent of the landowners was mandated; the state
was barred from acquiring land for the purposes of establishing private hospitals and private educational
institutions; a detailed social impact assessment (“SIA”) and an environmental impact assessment was
mandated as a precondition to any acquisition; and, most crucially, compensation for lands acquired was to
be fixed at four times the market value of the land, in cases where the property was situated in a rural area,
and at two times the market value for properties situated in an urban area.

In all, the LARR Act, which was enacted on a largely bipartisan platform, was meant to usher an era of a
more participative democratic process, where the people could have a genuine say in how their land is used.
Unfortunately, these changes were far too short-lived.

Immediately upon assuming office, the Narendra Modi-led government criticised the LARR Act as a measure
aimed at thwarting development. The premise of the new government’s argument was that expropriation of
private property through powers of eminent domain stimulates economic growth, and brings about greater
commercial expansion. The LARR Act, as they saw it, was simply antithetical to commonly understood
notions of eminent domain.

Their solution, while awaiting parliamentary approval to amend the law, was to bring forth an ordinance. This
ordinance, which amends the LARR Act, among other things, does the following. One, it removes a previous
bar on acquisitions by the state for the purposes of establishing private hospitals and educational
institutions. Two, it removes the necessity to secure the consent of landowners when property is acquired for
the purposes of redistribution to private entities. Three, it eliminates the requirement for an SIA when land is
acquired for a special category of purposes, including for the purposes of national security and the defence
of India, and for purposes of establishing “industrial corridors,” and “infrastructure” projects.

As is plainly evident, the proposed amendments, which are presently in force through the operation of the Categories
ordinance, seeks to revert us to a slightly modified version of the 1894 law, by virtually removing the spine of
the LARR Act. The changes amount, as G. Sampath, wrote in The Mint, to what the Marxist geographer Litigation 471
David Harvey might have described as “accumulation through dispossession.” The question now is: would
(http://blog.mylaw.net/category/litig
these changes, if ultimately enacted by Parliament, be constitutionally sustainable?
ation/)
Eminent domain and the constitutional right to property
Lounge 810
The Constitution of India, as originally enacted, on the one hand, guaranteed to citizens a right to property,
while, on the other hand, implanted in the state an express authority to take property through an exercise of (http://blog.mylaw.net/category/lou
a power of eminent domain. Article 19(1)(f), subject to reasonable restrictions in the public interest, nge/)
guaranteed to all citizens the right to acquire, hold and dispose off property. Article 31 provided that any
acquisition of property by the state may be done only for a public purpose and upon payment of Corporate 100

compensation, through a validly enacted law. What this meant was that once a person’s privately owned (http://blog.mylaw.net/category/cor
property was acquired by the state in accordance with Article 31, his or her right to hold the property subject porate/)
to reasonable restrictions under Article 19 was rendered otiose.
Skills 61
In the earliest cases that emanated in post-Independence India out of the exercise by the state of its power
to acquire property, the Supreme Court tended to view Article 31 as an embodiment of a power of eminent (http://blog.mylaw.net/category/skil
domain, which inheres in the state as a sovereign. ls/)

The term “eminent domain,” wrote Justice Mahajan in State of Bihar v. Kameshwar Singh
Specialised 160
(http://indiankanoon.org/doc/49043/), (1952) 1 SCR 889, could be traced back to the year 1625 and to the
great jurist Hugo Grotius’s work, De Jure Belli et Pacis. “The property of subjects is under the eminent (http://blog.mylaw.net/category/spe
domain of the State, so that the State or he who acts for it may use and even alienate and destroy such cialised/)
property,” wrote Grotius, “not only in the case of extreme necessity, in which even private persons have a
right over the property of others, but for ends of public utility, to which ends these who founded civil society
must be supposed to have intended that private ends should give way. But it is to be added that when this is
done the State is bound to make good the loss to those who lose their property.”

The meaning of eminent domain, in its irreducible terms, was, therefore, according to Justice Mahajan, (a) a
“power to take” land (b) “without the owner’s consent,” (c) “for the public use,” after payment of
compensation. In the initial years, the power, thus understood, seemed to impede the state in implementing
COURSES socialistically driven policies of expropriating land owned by zamindars moreblog&rp=http://blog.mylaw.net/amendments-to-shield-eminent-domain-from-
its(http://mylaw.net/allcourses?utm_source=blog&utm_medium=mylaw than it benefited it. Yet, as
we have seen in the decades since, the very idea of viewing eminent domain as a power that is intrinsic to a
sovereign has proved problematic. (Usha Ramanathan, “A Word on Eminent Domain”, Displaced by
(http://blog.mylaw.net/)
Development – Confronting Marginalisation the-courts-have-left-the-constitution-without-private-property-rights/)
and Gender Injustice).
! "
Justice Vivian CORPORATE
Bose, however,(http://blog.mylaw.net/category/corporate/)
notably warned against using a “doubtful” term such LITIGATION
as eminent (http://blog.mylaw.net/category/litigation/)
domain to
understand the Indian state’s power to acquire property. Doubtful, not because the term is “devoid of
meaning,” but because it enjoys a different shade of meaning in different countries. “In my opinion, it is
SPECIALISED (http://blog.mylaw.net/category/specialised/) SKILLS (http://blog.mylaw.net/category/skills/) LOUNGE (http://blog.mylaw.net/category/lounge/)
wrong to assume,” he wrote in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning & Weaving Co. Ltd.
(http://indiankanoon.org/doc/1880952/), AIR 1954 SC119, “that these powers are inherent in the State in (https://mylaw.net/corporate/business-english?utm_source=Bl

India and then to see how far the Constitution regulates and fits in with them. We have to interpret the plain
# $ provisions of the Constitution and it is for jurists and students of law, not for Judges to see whether our
Constitution also provides for these powers and it is for them to determine whether the shape which they
take in India resemble any of the varying forms which they assume in other countries.”

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Thanks to eminent domain defence, our Constitution has no private property rights - The myLaw Blog 20/08/19, 1)47 PM

The final draft of Article 31, which constitutionalised the power of eminent domain, was arrived at purely
through compromise. There were some in the Constituent Assembly who believed that land had to be
usurped from zamindars, without payment of any compensation (or at any rate, by paying only a minimal, Get Updates
meagre amount) to help herald a more equal and just society, while there were others who argued for a
strong protection of property rights, requiring the fulfilment of elements of due process prior to any Your email address
expropriation. The ultimate provision, contained in Article 31, which was almost literally adopted from
Section 299 of the Government of India Act, 1935, as Namita Wahi has pointed out, pleased neither group. It
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merely transferred the debate on the right to property to the court halls around the country. And, contrary to
popular discourse, barring few instances where the courts have restrained Parliament’s powers, by objecting
to specific acquisition laws, judges have predominantly allowed the state substantial leeway in exercising its
power of eminent domain.

Amending the Constitution, protecting eminent domain from the courts

Yet, it was in fear of intervention by the

Recent Posts
courts that the First Amendment to
India’s Constitution (whose validity was
upheld by the Supreme Court in Sankari Liquidation under the IBC – Order
Prasad Singh Deo v. Union of India of priority signals shift in economic
(http://indiankanoon.org/doc/1706770/), rationale
AIR 1951 SC 458) was introduced in (http://blog.mylaw.net/liquidation-
1951, inserting not only Article 31A, ibc-order-priority-signals-shift-
which immunised land reform laws from economic-rationale/)
challenges against violation of
fundamental rights, but also Article 31B
Stakeholders other than financial
and concomitantly Schedule IX to the
creditors – how are they protected
Constitution, which protected 13
under the insolvency and
particular legislation from challenge
bankruptcy law?
under Part III of the Constitution, with
(http://blog.mylaw.net/stakeholders-
added retrospective effect. By virtue of
financial-creditors-protected-
these amendments, the crux of the
(http://blog.mylaw.net/wp- insolvency-bankruptcy-law/)
challenge to the Bihar Land Reforms
content/uploads/2015/03/SupremeCourtofIndia_blackandwhite
Act, 1950, which had been struck down
_4001.jpg) The Supreme Court of India
by the Patna High Court, prompting the NDPS Act reverses burden of
first amendment, was effectively proof and confers wide
rendered futile. Nonetheless, the Supreme Court, in State of Bihar v. Kameshwar Singh search and seizure powers
(http://indiankanoon.org/doc/49043/), (1952) 1 SCR 889, found that the Act, which sought to redistribute (http://blog.mylaw.net/ndps-
estates in Bihar, was based on a legitimate public purpose, and was therefore in consonance with Article 31. act-reverses-burden-of-
proof-confers-wide-search-
Immediately after Kameshwar Singh’s case, the Supreme Court rendered a judgment, in State of West
seizure-powers/)
Bengal v. Bela Banerjee (http://indiankanoon.org/doc/1890860/), AIR 1954 SC 170, which was significant in
its elaboration of the importance of the right to property (Seervai, Constitutional Law of India), and which
ultimately led to the Constitution’s Fourth Amendment. Here, a provision of the West Bengal Land Resolution plans under the IBC –
Development and Planning Act, 1948 was challenged as violating Article 31, as it limited the compensation who can propose, who is
payable to the market value of the land as on December 31, 1946. affected? Here is what we know
so far
The word “compensation,” as used in Article 31, the Supreme Court ruled, referred to a “just equivalent of
(http://blog.mylaw.net/resolution-
what the owner has been deprived of,” and, therefore it found that the provision offended the Constitution.
plans-ibc-propose-stakeholder/)
As a result of this decision, Parliament introduced the fourth constitutional amendment and altered Article
31(2) to provide that a law under which compensation is determined for acquisition of land could not be
questioned on the ground that such compensation is inadequate. 3 instances of sexism in the
Constituent Assembly
This amendment, as the legendary constitutional law scholar H.M. Seervai wrote, was considered in four
(http://blog.mylaw.net/3-
different cases, P. Vajravelu Mudaliar v. Special Deputy Collector, Madra
instances-sexism-
(http://indiankanoon.org/doc/1634289/)s, AIR 1965 SC 1017, Union of India v. Metal Corporation of India
constituent-assembly/)
(http://indiankanoon.org/doc/602096/), AIR 1967 SC 637, State of Gujarat v. Shantilal Mangaldas
(http://indiankanoon.org/doc/673450/), AIR 1969 SC 634, and RC Cooper v. Union of India
(http://indiankanoon.org/doc/513801/), AIR 1970 SC 564 (“the Bank Nationalisation Case”). Each of these
cases contradicted the other on the issue of compensation under Article 31. Ultimately, it was the decision in
the Bank Nationalisation Case, which was heard by a bench of ten judges, that proved most telling,
rendering the fourth amendment’s purport nugatory, and reverted the law to the position established
previously by the court in Bela Banerjee. The Supreme Court held in the Bank Nationalisation Case that the
word compensation as used in Article 31, even after the fourth amendment, continued to denote a just
equivalent of what the landowner had been deprived of. As had become common by now, when a court’s
ruling tended to affect the ideology of the government in power, what resulted was a constitutional
amendment: in this case, the 25th amendment.

Through this, Article 31(2) was altered, and the word “compensation” was replaced with the word “amount”;
acquisitions under Article 31 were expressly removed from being subject to the right guaranteed under
Article 19(1)(f), as was held in the Bank Nationalisation case; and laws giving effect to the directive principles
contained in clauses (b) and (c) of Article 39 could no longer be questioned on the ground that they violated
the rights guaranteed in Articles 14, 19 or 31.

Eventually, the Supreme Court in Kesavananda Bharati v. State of Kerala

(http://indiankanoon.org/doc/257876/), AIR 1973 SC 1461, struck down the last limb of the 25th amendment
alone. Here, a 13-judge-bench famously held that constitutional amendments could not be used as a tool to

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abrogate the basic structure of the Constitution: in this case, the power of the courts to judicially review
Parliamentary law.

For the purposes of the right to property, though, it was Justice Khanna, whose opinion in Kesavananda
proved the most decisive, that continues to resonate. He held that the right to property was not a part of the
basic structure in his efforts to illustrate the fact that fundamental rights could, in limited circumstances, be
annulled through constitutional amendment.

The jagged hole left by the 44th amendment

The decision in Kesavananda heralded an era of a battle between the government and the court over who
holds the ultimate authority to interpret the Constitution. The give and take between Parliament and the
Supreme Court may not quite have completely thwarted the state’s program to bring forth land reforms—if
anything, the courts sought to place the odd impediment that they found was mandated under the
Constitution.

But governments, impatient as they were, thought it necessary to bring forth a plethora of constitutional
amendments aimed at placing land laws completely beyond the scope of judicial review. Ultimately, in 1978,
the Janata Party, which had come into power following the Indira Gandhi-enforced Emergency, through the
44th constitutional amendment, removed altogether the guarantee of the right to property as a fundamental
right. Both Article 19(1)(f) and Article 31 were completely obliterated. In their place, Article 300A was
introduced, according the right to property the mere non-fundamental status of a legal right. These
amendments, as Seervai argued, failed to grasp that Articles 19(1)(f) and 31 “were so closely interwoven with
the whole fabric of our Constitution that those rights cannot be torn out without leaving a jagged hole…”

In the short run, the 44th amendment might have even helped in bringing forth more equivalence in land
ownership, as desired by the government at the time. But, during the decades that followed, with an
atmosphere of neo-liberalism taking over the Indian polity, the amendment has only contributed towards
increasing discrimination. The power of eminent domain has been regularly abused to serve private interests.
As Namita Wahi has pointed out, a number of measures have been introduced to place property at the hand
of select institutions and corporations, often transcending constraints of public purpose contained in the
original doctrine of eminent domain. (Namita Wahi, “State, Private Property and the Supreme Court”,
Frontline).

For instance, “with the enactment of the Special Economic Zones Act in 2005,” wrote Wahi, “the acquisition
of land by government to hand over to private industry which had happened in an ad hoc manner in previous
decades became official government policy.” The meaning of “public purpose” has been expanded to
absurd lengths, and different governments have overseen the most arbitrary expropriation of land,
particularly from farmers, through the archaic, and draconian, Land Acquisition Act of 1894. These
acquisitions have been rarely, if ever, disturbed by the courts, and even the compensation paid to individual
landowners has been seldom enhanced.

What’s more, state governments also enacted their own special legislation to acquire land, bypassing, in the
process, even the minimal safeguards contained in the central law.

Thus far, the Supreme Court has not ruled on the merits of the validity of the 44th constitutional amendment.
It has only occasionally taken the pains to point out that the removal of the right to property from Part III has
accorded substantial leeway to the state in expropriating land. (See for example, KT Plantation Pvt Ltd. v.
State of Karnataka (http://indiankanoon.org/doc/49043/), (2011) 9 SCC 1.) Most of the Supreme Court’s
decisions seem to indicate that it too has been equally buoyed by the supposed joys of liberalisation.

When viewed in this context, the LARR Act of 2013 represented a substantial breakthrough. It sought to
realign the nature of property in India, by guaranteeing to citizens a right to own and hold land, which ought
to ideally enjoy fundamental status. To the extent that it provided not only for an enhanced and more just
compensation, but also for a social and environmental impact assessment, and for a voice to landowners,
the LARR Act was a decidedly successful piece of legislation. It is therefore that the present ordinance,
which seeks to remove many of the integral facets of the LARR Act, has to be considered as an anathema.
To make things worse, by virtue of the 44th amendment, the state can today argue convincingly that the
ordinance is legally valid and that it stands on substantial constitutional bedrock.

None of the diktats of the LARR Act, which have been removed by the ordinance, can be considered as
constitutionally mandated, if we were to assume that the 44th amendment has accorded the state a carte
blanche over private property, as some Supreme Court decisions seem to suggest. (See for example,
Jilubhai Nanbhai Khachar v. State of Gujarat (http://indiankanoon.org/doc/1515136/), AIR 1995 SC 142).

A historic re-interpretation of the Constitution is required

The state, unless convinced by the abiding public sentiment on the matter, would argue in the case of the
proposed amendments: firstly, that the consent of landowners and the conduct of an SIA are simply not
required as a matter of constitutional guarantee, and secondly that in the absence of an express prohibition
of acquisition by the state for private purposes, the argument that the ordinance violates traditional notions
of eminent domain, in allowing acquisition of land for private educational institutions and private hospitals,
does not pass muster.

To negate such submissions, we would require the Supreme Court to shed its apathy, and to interpret the
Constitution in its right spirit. The court will have to reconsider the understanding of eminent domain that has
pervaded its jurisprudence, over the years. The removal of the fundamental right to property, by the 44th
amendment, cannot be considered as a final nail in the coffin of rights over land.

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To rebut the notion that eminent domain inheres in a sovereign, we might require an intervention that
transcends mere judicial review, an intervention that is democratically justifiable. But what the courts can do
is to examine Article 14, and the basic guarantee to the people of equal protection of the laws. Interpreted in
its finest light, the right to equality ought to impose a superior obligation on the state to protect private
property, and to give people a genuine say in how their land is used. To not hold so would negate the very
idea of citizenship.

(Suhrith Parthasarathy is an advocate practising at the Madras High Court.)

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v.sundararajan
July 18, 2015 at 5:36 am (http://blog.mylaw.net/amendments-to-shield-eminent-domain-from-the-courts-have-left-
the-constitution-without-private-property-rights/#comment-34083)

i wish the law makers study this thoughtful contribution which summarises the various attempts to
thwart the constitutional guarantees of the citizen’s rights

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