Land acquisition is the process by which state acquires private land for the purpose of industrialization, urbanisation, and provides fair compensation to the affected land owners and their rehabilitation and relocation. This is governed by Land Acquisition Act 2013.
Land acquisition is typically done by exercising “Doctrine of Eminent domain” by the state using its “governmental power”, where in the private property is typically taken for town or rural planning, residential purposes for below poverty line communities, planned developments for societal improvements like education, housing, health, slum clearance, and for state corporations, public use by providing the fair compensation to the land owners. Such power is typically given to municipalities, agents of the government, and to some extent to the private companies acting as agents to the state and authorized by legislature.
The doctrine of eminent domain in its general connotation means the supreme power of the King or the Government under which the property of a person can be taken over in the interest of the general public. It is the power of the King or the Government to take over the property of a private person when it is needed for the public purpose.
It is based on two maxims: 1) SALUS POPULI EST SUPREMA LEX which means the welfare of the people is the paramount law, and 2) NECESSITA PUBLIC MAJOR EST QUAM, which means public necessity is greater than the private necessity.
Etymologically, ‘eminent domain’ is a derivative of the Latin term dominiump-eminens which means the supreme Lordship. In the modern sense, ‘eminent domain’ means the supreme power of the State/Government to acquire private immovable property for public purpose.
The doctrine of eminent domain is imbibed in the Constitution of India under Articles 300A and 31A. Besides, there are enactments like the Land Acquisition Act, 1894 for the exercise of the power of eminent domain.
How and where things get derailed…
Not all acquisitions are fair as they are meant to be. Land mafia is very much prevalent in cities and villages across India. This typically consists of corrupted municipal, government officials, politicians who support in acquiring and selling the land in illegal ways for profit/personal interests. There are some instances where government land is acquired for a social cause but are later handed over to real estate parties and being sold in the open market for huge sums with secret approvals of administrative and political officials. The saga is in every city. Low priced subsidized land is being illegally developed and apartments with high prices are being sold to the public. The permits are obtained illegally through a network of mafia style operators that involved the underworld, former Indian Administrative Service officers and even the cops.
In the 1970s, owning a piece of land and protecting it was a difficult task in Hyderabad. Land sharks would put up huts on any vacant piece of land. A former political leader, was alleged to be behind large-scale land grabbing in the posh Banjara Hills and Jubilee Hills areas of Hyderabad.
Hyderabadis are also aware of several other land mafia operators who allegedly had the support of extremists and some top police officials and political leaders.
These activities not only caused harm to society but also a huge loss to the government. Land Mafias have developed in various areas and they try to grab other people’s properties by diverse ways, forging documents, threatening the real owners with the view to restrain them into submission. There are incidents where the land mafia has destroyed the revenue records leaving no clue of evidence and rights. By the way these crimes are committed, these cases are typically not limited to civil nature, but should be tried as a criminal.
In the case of Suraj Lamp & Industries Pvt.Ltd. vs. State of Haryana & Anr. 2009 it was observed that the immovable property transfers are done using GPA (General Power Attorney) to avoid payment of stamp duty and registration charges and deeds of conveyance, to avoid payment of capital gains on transfers, to invested unaccounted money (‘black money’) and to avoid payment of ‘unearned increases’ due to Development Authorities on transfer
The typical procedure of modus operandi in such SA/GPA/WILL transactions is for the vendor or person claiming to be the owner to receive the agreed consideration, deliver possession of the property to the purchaser and execute the following documents or variations thereof:
(a) Vendor executes an Agreement of sale in favour of the purchaser confirming the terms of sale, delivery of possession and payment of full consideration and undertaking to execute any document as and when required in future.
Or An agreement of sale agreeing to sell the property, with a separate affidavit confirming receipt of full price and delivery of possession and undertaking to execute sale deed whenever required.
(b) An Irrevocable General Power of Attorney by the vendor in favour of the purchaser or his nominee authorizing him to manage, deal with and dispose of the property without reference to the vendor.
Or A General Power of Attorney by the vendor in favour of the purchaser or his nominee authorizing the attorney holder to sell or transfer the property and a Special Power of Attorney to manage the property.
Or A will bequeathing the property to the purchaser (as a safeguard against the consequences of death of the vendor before transfer is affected).
These transactions are not to be confused or equated with genuine transactions where the owner of a property grants a power of Attorney in favour of a family member or friend to manage or sell his property, as he is not able to manage the property or execute the sale, personally. These are transactions, where a purchaser pays the full price, but instead of getting a deed of conveyance gets a SA/GPA/WILL as a mode of transfer, either at the instance of the vendor or at his own instance.
It was observed that the ill-effects of such SA/GPA/WILL transactions lead to generation of black money, growth of land mafia and criminalization of civil disputes as under:
“Recourse to `SA/GPA/WILL’ transactions is taken in regard to freehold properties, even when there is no bar or prohibition regarding transfer or conveyance of such property, by the following categories of persons:
(a) Vendors with imperfect title who cannot or do not want to execute registered deeds of conveyance.
(b) Purchasers who want to invest undisclosed wealth/income in immovable properties without any public record of the transactions. The process enables them to hold any number of properties without disclosing them as assets held.
(c ) Purchasers who want to avoid the payment of stamp duty and registration charges either deliberately or on wrong advice. Persons who deal in real estate resort to these methods to avoid multiple stamp duties/registration fees so as to increase their profit margin.
Whatever be the intention, the consequences are disturbing and far reaching, adversely affecting the economy, civil society and law and order. Firstly, it enables large scale evasion of income tax, wealth tax, stamp duty and registration fees thereby denying the benefit of such revenue to the government and the public. Secondly, such transactions enable persons with undisclosed wealth/income to invest their black money and also earn profit/income, thereby encouraging circulation of black money and corruption.
This kind of transactions has disastrous collateral effects also. For example, when the market value increases, many vendors (who effected power of attorney sales without registration) are tempted to resell the property taking advantage of the fact that there is no registered instrument or record in any public office thereby cheating the purchaser. When the purchaser under such `power of attorney sales’ comes to know about the vendors action, he invariably tries to take the help of musclemen to `sort out’ the issue and protect his rights. On the other hand, real estate mafia many a time purchase property which are already subject to power of attorney sale and then threaten the previous `Power of Attorney Sale’ purchasers from asserting their rights. Either way, such power of attorney sales indirectly lead to growth of real estate mafia and criminalization of real estate transactions.”
It also makes title verification and certification of title, which is an integral part of orderly conduct of transactions relating to immovable property, difficult, if not impossible, giving nightmares to bona fide purchasers wanting to own a property with an assurance of good and marketable title.
Below are few of the Legal remedies available to counter such situations:
Section 5: Recovery of specific immovable property.
Section 6: Suit by person dispossessed of immovable property.
Section 145: Procedure where dispute concerning land or water is likely to cause a breach of peace.
A victim who realizes trespassing or illegal dispossession can file a written complaint with the Station House Officer (SHO). In addition, a written complaint can be sent to the Superintendent of Police (S.P) of the district where the property is situated by way of registered post or by visiting the concerned police station. In case the Superintendent of Police fails to acknowledge the complaint, a personal complaint in the concerned court can be filed through an advocate and the case can then be followed through a Special Power of Attorney when the owner cannot make his presence in the court. But the mere existence of a dispute between private parties will not invoke jurisdiction under Section 145 unless the Magistrate is satisfied that such private dispute is also likely to cause disturbance of peace and public tranquillity.
Avoid further transfer of ownership on the property
Section 52: During the pendency in any court having authority within the limits of India [excluding the State of Jammu and Kashmir] Government or established beyond such limits by the Central Government of any suit or proceedings which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose.
Suraj Lamp & Industries (P) … vs State Of Haryana & Anr on 11 October, 2011 Judgement