SC verdict clears air on retro clause in land law

In an interpretation of a much-debated clause in last year’s landmark overhaul of the national land acquisition law, the Supreme Court recently ordered return of title of a land lot to its original owners, almost 19 years after compensation was awarded for its compulsory acquisition.

The verdict, says Union rural development minister Jairam Ramesh, provides a needed clarity on a contentious area.

This case was between a Bimla Devi and the state of Haryana; the land owners had never accepted the compensation or parted with their land. The compensation order had been issued in 1995.

The new law says the government can initiate proceedings, including a restart of the process of acquisition, five years or more prior to the commencement of the Act in all acquisitions done under the old law of 1894 but where physical possession has not been taken by the buyer or the compensation paid to the holders.

This particular provision, also termed the ‘retrospective clause’, caused much heartburn among businesses, as they felt it would open a can of worms, especially where the acquisition process had not been completed. Ramesh asked Union solicitor-general Mohan Parasaran for advice. And, the SG agreed with the ministry that in cases where compensation had not been accepted or physical possession given, for a period less than five years, the new law will apply only if pendency continues unchanged for five or more years.

Also, in cases where compensation has not been paid or possession taken because the acquisition process has been challenged in court, the period spent under litigation would also be taken into account to determine the five-year period. The SC judgement affirmed the view.