Understanding Fair Compensation

The sovereignty of the state to acq­uire land can be traced back to the ubiquitous principle of “eminent domain.” This doctrine imposes two restrictions on the sovereign power of the state. It necessitates that there should be a well-defined “public purpose” for which the land is acquired and those dispossessed of their property should be paid “just compensation.” These two limitations set by the doctrine are follo­wed by the United States, Australia, New Zealand, and Thailand who follow the “due process of law.” In contrast to this, India follows the principle of “procedure established by law,” which states that public purpose of land acquisition cannot be challenged in the court of law. Therefore, the award of compensation remains the sole ground to challenge this exercise of power by the state, by those affected by the land acquisition.

In light of the above arguments, the focus of this article will be to critically examine the recent amendments to the land acquisition law and how far the inser­tion of the term “right to fair compensation” in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR), 2013 ensures just compensation for those affected by the land acquisition. It also studies the extent to which an increase in the compensation level reveals the true market value of the land. The article delves into the conceptualisation of “fairness” as elucidated by John Rawls and examines the inadequacies of the land acquisition laws. It further analyses the basis of fair compensation and the different methodologies adopted by the legislature and the judiciary to define its tenets. It concludes with the arguments and aims to provide a workable solution to eff­ectively deal with the incongruousness of the legislature and judiciary to reform land markets.