Abstract
Acquisition of land to build national highways has indeed been one of the most prevalent causes of forced acquisition of private land in India. There is constant acquisition by the NHAI in Rajasthan, where national highways are long-stretching and being expanded continuously through Bharatmala. In straightforward and practical terms, this guide explains how compensation and rehabilitation is calculated, what the law requires in statutory steps, and what remedies can be taken if the award is not fair or if the process is unlawful. The discussion focuses on how the National Highways Act, 1956 interacts with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act). Case laws, practical experience, and rules applicable to Rajasthan are included so lawyers, advisers, and affected families can comfortably handle every step. Part 1 provides an overview of the legal framework, compensation amount, and rehabilitation.
Introduction
Land acquisition for infrastructure building is undeniably part of the development process of a developing nation like India. However, compulsory acquisition can be disastrous to land owners, farmers, tenants, and families who rely on livelihood. That is why Indian laws regarding land acquisition have gradually developed from the Land Acquisition Act 1894 to the RFCTLARR Act 2013, which tries to ensure just compensation and orderly rehabilitation.
National highway projects create a special interactivity of laws. Historically, national highway acquisition was done under the National Highways Act, 1956 (NH Act). Since 1 January 2015, the Central Government has exercised the enhanced compensation and solatium provisions of the RFCTLARR Act for purchases under the NH Act. As a result, compensation in NHAI projects in Rajasthan is largely determined based on RFCTLARR principles, subject to special notifications and judicial interpretation.
This hybrid legal system can be confusing to lawyers, in-house counsel, policy advisers, and land owners. This guide clarifies not only what the law says but also how it is implemented in Rajasthan. Part 1 addresses the legal framework, valuation process, and rehabilitation tasks.
THE LEGAL ARCHITECTURE: TWO ACTS OF CENTRAL APPLICATION RFCTLARR ACT, 2013
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) is the central legislation governing land acquisition, compensation, and rehabilitation in India. It was enacted to replace the Land Acquisition Act, 1894, which was widely criticized for enabling arbitrary and inequitable compulsory acquisition of land.
The 2013 Act introduced three major structural reforms to ensure fairness and transparency:
1. Scientific Determination of Market Value : The Act prescribes a structured and objective mechanism for assessing market value, supported by statutory guidelines to prevent undervaluation.
2. Mandatory Solatium : A compulsory addition of 100 percent solatium is provided to compensate landowners for the compulsory nature of acquisition and the resulting loss.
3. Comprehensive Rehabilitation and Resettlement (R&R) Framework ; The Act establishes an organized R&R regime to safeguard the livelihood, housing, and social security of affected families.
The key statutory provisions relevant to compensation and R&R include:
- Section 26 – Lays down the procedure for determining market value of the land
- Section 28 – Enumerates the factors to be considered while determining compensation
- Section 30 – Mandates payment of 100 percent solatium over and above the market value
- Second Schedule – Specifies the entitlements for rehabilitation and resettlement
- Third Schedule – Prescribes infrastructural amenities to be provided in resettlement areas
Compensation under the RFCTLARR Act is required to reflect actual prevailing market conditions and cannot be reduced arbitrarily by the acquiring authority.
In Union of India v. Tarsem Singh, the Supreme Court affirmed that solatium and interest under the RFCTLARR Act have universal applicability wherever the Act or its provisions are adopted, reinforcing the mandatory and beneficial nature of these compensation components.
CONFLICT BETWEEN THE NH ACT, 1956 AND THE FOURTH SCHEDULE
Highway projects are governed by the National Highways Act, 1956 (NH Act). The Fourth Schedule of the RFCTLARR Act, 2013 lists certain enactments, including the NH Act, which were not initially intended for direct and automatic application of the RFCTLARR framework.
To address the resulting conflict and ensure uniformity in compensation and rehabilitation, the Central Government introduced corrective measures, namely:
- Removal of Difficulties Orders (2014–2015)
- Notifications issued under Section 113 of the RFCTLARR Act
- Procedural circulars issued by the Ministry of Road Transport and Highways (MoRTH)
Through these measures, the First, Second, and Third Schedules of the RFCTLARR Act, relating to compensation and rehabilitation and resettlement, were made applicable to land acquisitions carried out under the NH Act. This process of statutory harmonization was recognized by the Supreme Court in Union of India v. Shiv Raj2, wherein it was held that beneficial compensation provisions cannot be denied merely because the acquisition is undertaken under a different enactment.
RAJASTHAN RFCTLARR RULES, 2016
The RFCTLARR Act, 2013 mandates State Governments to frame operational rules for effective implementation of the Act. In compliance with this requirement, the State of Rajasthan notified the Rajasthan RFCTLARR Rules, 2016.
These Rules provide the procedural framework governing land acquisition within the State and specifically lay down provisions relating to:
- Social Impact Assessment (SIA) procedures
- Establishment and functioning of local offices of the Collector and the Administrator
- Issuance of notices, conduct of hearings, and maintenance of records
- Mechanisms for delivery of rehabilitation and resettlement (R&R) benefits
In the context of NHAI projects in Rajasthan, the Central Government retains control over substantive principles of compensation, whereas the State Government administers procedural aspects through the District Collector and the Land Acquisition Officer.
COMPENSATION: HOW MARKET VALUE AND FINAL AMOUNT ARE CALCULATED
Compensation under the RFCTLARR Act, 2013 is multi-component and sequential. Each stage of computation has independent legal significance, and errors at any stage may render the award vulnerable to challenge. Practitioners must therefore scrutinize every component carefully, as compensation awards can be assailed only on recognized statutory and judicial grounds.
Step 1: Market Value (Section 26)
Market value is the base of compensation. The Collector must consider comparable registered sale deeds of the last three years, circle rates, actual transaction evidence, and land potential. Circle rates alone are not decisive. In Chandrashekar v. LAO (2012) 1 SCC 390, the Supreme Court held that genuine sale deeds are the best evidence. In Rajasthan, practitioners should rely on multiple comparable sale deeds and infrastructure evidence.
Step 2: Multiplication Factor (MF)
The First Schedule provides the MF for rural land. As per Notification S.O. 425 dated 9-2-2016, MF may extend up to 2.0. Courts strictly enforce correct MF application (Balram v. Union of India, 2023).
Step 3: Attached Assets (Section 29)
Separate valuation is required for houses, wells, trees, structures, and irrigation systems, based on certified technical assessment.
Step 4: Solatium (Section 30)
A mandatory 100% solatium is payable on (Market Value × MF + asset value) and cannot be reduced (Indore Development Authority v. Manoharlal, 2020).
Step 5: Additional Amount
An additional 12% per annum is payable from notification to award/possession under Sections 30(3) and 32, including NH Act cases.
Final Formula:
(Market Value × MF + Asset Value) + 100% Solatium + 12% Additional Amount
REHABILITATION & RESETTLEMENT: RIGHTS BEYOND MARKET COMPENSATION
The RFCTLARR Act, 2013 ensures structured rehabilitation and resettlement (R&R) assistance in addition to monetary compensation.
Second Schedule: Monetary and Non-Monetary Benefits
The Second Schedule provides for the following entitlements:
- Housing or a housing site
- Subsistence allowance for one year
- Transportation allowance
- Grant for cattle shed and petty shop
- One-time resettlement allowance
- Option between employment, annuity, or lump-sum payment
- Additional benefits for SC/ST families
Courts have consistently enforced R&R entitlements. In State of Kerala v. B. Sixen, the Supreme Court affirmed the mandatory nature of rehabilitation and resettlement benefits under the Act.
THIRD SCHEDULE: FACILITIES IN RESETTLEMENT AREAS
Resettlement colonies must include:
- Roads
- Drainage
- Drinking water
- Sanitation
- Electricity
- School and anganwadi facilities
- Community space
- These are crucial for displaced families.
PROOF REQUIRED FROM LANDOWNERS
Families should provide:
- Identity and family records
- Tenancy or sharecropper evidence
- Proof of livelihood dependence
- Proof of residence for homestead claims
- Without documentation, R&R claims may be rejected or delayed.
ENFORCEMENT: REALITIES OF THE PROCESS IN PRACTICE
Procedural compliance is critical under land acquisition law, as statutory timelines, notifications, and investigative stages directly affect entitlement. In NHAI acquisitions in Rajasthan, the process typically involves the following stages:
- Alignment Survey: Conducted prior to formal notification. Affected persons should compile revenue records, maps, construction and irrigation evidence, and relevant sale deeds.
- Section 3A Notification (NH Act): Expresses the intention to acquire; the notification date becomes the valuation reference point.
- Objections under Section 3C (NH Act): Objections must be submitted in writing and duly considered.
- Social Impact Assessment (RFCTLARR): Public hearings address livelihood impact, land alternatives, and rights of tenants or sharecroppers; accuracy of recorded minutes is essential
- Declaration under Section 11 (RFCTLARR) / Section 3D (NH Act): Results in formal acquisition of the land.
- Valuation Inquiry and Award Preparation: Timely and complete submission of claims is crucial.
Possession of land without prior payment of compensation is unlawful, as held in Bimla Devi v. State of Haryana. Courts in Rajasthan have accordingly granted injunctions restraining possession until full compensation and R&R entitlements are paid.
Conclusion
Compensation and rehabilitation for NHAI acquisitions in Rajasthan combine central laws, state rules, district notifications, and judicial interpretations. RFCTLARR 2013 is the backbone, but special NH Act provisions apply. Effective legal strategies require detailed documentation, timely objections, correct valuation, and strategic use of references, appeals, and writ petitions. Compliance with Rajasthan-specific rules on SIA, multipliers, land classification, and R&R schemes ensures landowners receive fair compensation and rehabilitation.
