Supreme Court Applies R&R Act 2013 For Mahanadi Coalfields Acquisitions Of 1988; Villagers To Get Employment, Rehabilitation Packages Over Compensation

The Court held that the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 -which introduces more beneficial provisions for compensation and rehabilitation for persons displaced after compulsory land acquisition- will apply to the persons in the four villages whose lands were acquired for the coal fields.

A bench comprising Chief Justice of India UU Lalit, Justices S Ravindra Bhat and Bela M Trivedi directed that the displaced persons of four villages -Tumulia, Jhupuranga, Ratansara, and Kirpsara- have to be paid compensation for the land acquired as per the formula under the R&R Act 2013.  In addition to that, two members of the families should be given employment benefits. If they are not availing employment benefits, the family should be paid a one-time settlement of Rupees 16 lakhs.

Further, the displaced families should be allotted house plots for resettlement. If they are not accepting the house plots, they should be paid one-time rehabilitation package of Rupees 25 lakhs.

These displaced landowners, the Court noted with reproach, have waited for "roughly half the number of years that this republic has existed" to be compensated for the loss of their homes and livelihoods.

"The oft repeated aphorism, "Justice delayed is justice denied" cannot apply with more force than in these proceedings", the Court stated in the beginning of the judgment.

R&R Act for first time created obligations on State to provide resettlement and rehabilitation of displaced persons in addition to providing compensation

The Court that the provisions of R&R Act are more beneficial.

"The provisions of the R&R Act, 2013 which replaced the old Land Acquisition Act, 1894 have for the first time cast obligations upon the State to ensure that resettlement and rehabilitation is provided in addition to compensation. These rehabilitation and resettlement provisions relate not only to a right to employment for at least one member of the displaced family but also other monetary and tangible benefits, such as land for construction of houses, cash assistance for construction; transportation cost; provision for temporary displacement; annuity and/or cash payment in lieu of employment benefits, etc. Furthermore, by provisions of the Third Schedule, elaborate provisions for the kind of public amenities which have to be provided, such as public health benefits, schools, community centres, roads and other basic necessities, have been obligated. All these are in furtherance of the displaced and the larger social justice obligations cast upon the State". 

Background of the matter

A Bench of Chief Justice U.U. Lalit and Justices S. Ravindra Bhat and Bela M. Trivedi was called upon to adjudicate on a number of applications and contempt petitions that arose out of an appeal by special leave petition filed against a 2006 Orissa High Court order. By this order that came to be challenged by the coal producer, the High Court had directed the Central Government and MCL to immediately proceed under provisions of the Coal Bearing Areas (Acquisition and Development) Act, 1957 to determine and disburse compensation payable to landowners "as expeditiously as possible, preferably within six months".

When the matter travelled to the Supreme Court in appeal, the apex court sought the assistance of the then Solicitor-General of India, Gopal Subramanium, who proposed a scheme for the determination and payment of compensation to the landowners which received the imprimatur of the court in Mahanadi Coal Fields Limited & Anr. v. Mathias Oram & Ors. [(2010) 11 SCC 269]. Accordingly, a Claims Commission was appointed that proceeded to determine the compensation and other benefits payable to the displaced persons under the compensation and rehabilitation package. In October 2013, the court held that infrastructure for resettlement was to be in terms of the Odisha Resettlement and Rehabilitation Policy, 2006 and the Third Schedule to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. In 2017, the Court finally disposed of the appeal by directing the disbursement of compensation and other benefits on the basis of the reports prepared by the Claims Commission.

In 2020, it was brought to the court's notice that the resettlement and rehabilitation work in many of the villages had not been completed or was at a primary stage. Several applications and contempt petitions were filed before the Supreme Court, in disposing of which, the present set of directions were issued by the Bench led by Chief Justice Lalit.

R&R Act will apply

The Court noted that on 28.10.2015, the Central Government had issued a notification under Section 105(3) of the R&R Act 2013 to apply its provisions with respect to acquisitions carried out under the enactments specified under the Fourth Schedule, which included the Coal Bearing Areas (Acquisition and Development Act) 1957.

The Court also noted that the earlier order passed in October 2013 (which directed payment of compensation as per third schedule of the R&R Act) at at stage when the R&R Act was only a Bill. It was yet to be passed then. The MCL relied on the October 2013 order to argue that the displaced persons are only entitled to the benefits of the Third Schedule of the R&R Act which relate to provisions for amenities on resettlement. However, the Court rejected this argument and held that the First and Second Schedules of the Act - which deal with compensation and rehabilitation packages - will apply to these four villages.

The Court restricted its order to these four villages as the compensation formula for other villages were approved by the Court earlier before 28.10.2015 (the date on which R&R Act was extended to acquisitions under CBA).

"it is held that the First Schedule of the R&R Act, 2013 is applicable to the acquisition in question, made by the Central Government in favour of MCL, in respect of the villages, the reports of which were not approved prior to 28.10.2015. Accordingly, the compensation based upon the market value for the four villages i.e., Tumulia, Jhupuranga, Ratansara, and Kirpsara have to be re-determined in accordance with the provisions of the First Schedule to the R&R Act, 2013", the Court ordered.

Court Directions

With respect to these villages, the Court issued the following directions :

The benefits of the R&R Act will apply to displaced families and land owners of Kiripsira, Ratansara, Jhupuranga and Tumulia villages.

Allot house plots to displaced persons or one-time cash settlement of Rs 25 lakhs

The State and MCL are under an obligation to develop house plots for allotment to the displaced families. In case any individual land owner(s) are not interested for allotment of the plots, it is open for them to state so. The Collector shall in such event record their disclaimer expressly in writing and issue a certificate. In that event the displaced family would be entitled to a one-time cash settlement of ₹25 lakhs.

After ascertaining the number of displaced families' entitlements, and having regard to the availability of plots, the Collector shall conduct a draw of lots, and if needed, more than one draw of lots, whereby plots are allotted to the concerned displaced families. In case, for any reason such plot or plots cannot be handed over within two years, or are not available, the leftover families so to say would be entitled to the one-time compensation of ₹25 lakhs with interest @ 7% per annum, for two years.

The State shall ensure that all facilities and amenities are developed in accordance with the Third Schedule to the R&R Act, 2013 within three years in which plots are handed over to the displaced families or in any event within three years from the date of this judgment.

Displaced SC/ST members entitled to protect their status

The members of the SC/ST communities shall be entitled to the preservation and protection of their status in view of Section 42 of the R&R Act, 2013. Consequently, the concerned Collectors shall ensure that appropriate caste certificates are issued in this regard, given that land owners have been moved involuntarily and would have to migrate to other areas.

Employment benefits

The R&R Policy 2006 as amended by the 2013 policy applies for the purpose of employment benefits. 

A family unit would comprise of head of family or father, a major son, and an unmarried daughter having regard to the definition and the note appended thereof. In case, for some reason, the major son cannot be given employment, and there exists a major grandson, he would then be eligible for consideration. In other words, two members (father and son or father and grandson) would be eligible for employment and not three, in addition to the unmarried daughter who is also to be treated as separate unit.

Other Directions

In addition to answering the aforementioned questions, the court also issued other directions while disposing of the petitions and applications, some of which are mentioned below:

1. Compensation determination in any event must be completed and payments made, wherever not already made, within six months. This would include finalising the reports for two villages and completing the task of redetermining compensation for two others. The second task would have to be completed within three months.
2. MCL must ensure that employment benefits are granted and extended and offers are made in accordance with the 2013 policy in all cases where the lists of those who opted for employment has not been finalised. However, cases where employment was provided would not be reopened. Likewise, employment entitlements in villages, the reports for which had already been accepted by the court, would not be reopened.
3. In the event any family opts out of employment, after verifying that the move is voluntary, a one-time compensation indicated in the 2006 policy or under the 2013 Act or the one-time offer of Rs 16 lakhs by MCL (whichever is more beneficial), must be paid to the family concerned.
4. The Claims Commission should complete its task and prepare the requisite reports, which would be the basis for disbursement of compensation, one-time rehabilitation package of Rs. 25 lakhs per family, and employment offer, within one year from today.
5. Any fresh dispute, on account of calculation of compensation, disbursement of benefits etc., would be adjudicated by the High Court.

Advocates Prashant Bhushan, Kawalpreet Kaur, KR Shiyas etc. represented the villagers.

Case Title

Mahanadi Coal Fields Ltd. & Anr. v. Mathias Oram & Ors. [MA No. 231 of 2019 in SLP (C) No. 6933 of 2007] and other connected matters.

Citation : 2022 LiveLaw (SC) 916

Summary - Supreme Court holds that persons in four villages which were acquired for Mahanadi coalfields in 1988 are entitled to compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013- Directions issued for providing employment and resettlement packages in addition to land compensation.

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 -The provisions of the R&R Act, 2013 which replaced the old Land Acquisition Act, 1894 have for the first time cast obligations upon the State to ensure that resettlement and rehabilitation is provided in addition to compensation. These rehabilitation and resettlement provisions relate not only to a right to employment for at least one member of the displaced family but also other monetary and tangible benefits, such as land for construction of houses, cash assistance for construction; transportation cost; provision for temporary displacement; annuity and/or cash payment in lieu of employment benefits, etc. Furthermore, by provisions of the Third Schedule, elaborate provisions for the kind of public amenities which have to be provided, such as public health benefits, schools, community centres, roads and other basic necessities, have been obligated. All these are in furtherance of the displaced and the larger social justice obligations cast upon the State - Para 43

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 - Section 108- Wherever there are existing provisions that are more beneficial or provide better benefits to displaced persons, such families and individuals have the choice or option to prefer either such policy or local law or the provisions of the R&R Act - Para 42

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