RFCTLARR 2013Market valueSolatiumMultiplierReference
AMLEGALS / Construction & Infrastructure / Land Acquisition
RFCTLARR Act 2013

Compulsory acquisition of land is the sovereign\'s most intrusive power over private property — the RFCTLARR Act 2013 demands fair compensation, transparency and rehabilitation

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 (RFCTLARR) replaced the colonial-era Land Acquisition Act 1894 and introduced a comprehensive framework for compulsory acquisition with enhanced compensation, mandatory social-impact assessment and rehabilitation and resettlement entitlements.

Strategic context

Compensation determination and the dispute pathway

Compensation under the RFCTLARR Act 2013 is determined by the Collector under Section 26 based on the market value of the land (higher of the circle rate or average sale price of similar land in the vicinity), plus the value of assets attached to the land. Section 27 adds a solatium of 100% of the market value. Section 28 provides for a multiplier of 1 to 2 (depending on the distance from urban areas) to account for the difference between the market value and the compulsory nature of the acquisition. The cumulative effect is that the compensation payable is typically 2 to 4 times the market value.

AMLEGALS advises landowners on challenging inadequate compensation through references to the Authority (LARR Authority) and appeals, and represents acquiring bodies and project proponents on the validity of the acquisition process, social-impact assessment compliance and rehabilitation obligations.

Workstreams

Advisory workstreams

01

Compensation challenge

Advising landowners on challenging the Collector's award and seeking enhanced compensation through the LARR Authority.

02

Market value determination

Advising on the determination of market value under Section 26 — comparable sales, floor rates, development potential.

03

SIA compliance

Advising acquiring bodies on social-impact assessment requirements and challenging SIA compliance defects.

04

R&R entitlements

Advising on rehabilitation and resettlement entitlements under the Second Schedule to the Act.

05

Urgency acquisition

Advising on and challenging acquisitions under the urgency provisions of Section 40.

06

Lapse and Section 24

Advising on the lapse of acquisition proceedings under Section 24 where land was acquired under the old Act 1894.

Answers

Frequently asked questions

01How is compensation calculated under the RFCTLARR Act 2013?

The Collector determines the market value under Section 26 as the higher of: (a) the minimum value specified in the Indian Stamp Act for registration of sale deeds (circle rate), (b) the average sale price for similar land in the nearest village or nearest vicinity, or (c) the consented amount in case of acquisition for private entities. To this, the value of assets (trees, buildings, wells) is added. Section 27 provides a 100% solatium over the market value, and Section 28 provides a multiplier of 1 to 2 for rural areas.

02Can a landowner challenge the compensation amount?

Yes. A landowner dissatisfied with the Collector's award can file a reference to the LARR Authority (Land Acquisition, Rehabilitation and Resettlement Authority) under Section 64. The Authority re-determines the compensation after hearing both parties. Appeals from the Authority lie to the High Court.

03What is social impact assessment under the RFCTLARR Act?

Section 4 requires a social impact assessment (SIA) study before acquisition, conducted in consultation with gram sabhas in rural areas and municipalities in urban areas. The SIA assesses whether the acquisition serves a public purpose, the number of affected families, the social impact and whether the extent of land proposed is the minimum necessary. The SIA report is reviewed by an expert group, and the findings guide the government's decision on whether to proceed with the acquisition.

04What happened to acquisitions initiated under the old Land Acquisition Act 1894?

Section 24 of the RFCTLARR Act addresses the transition. Where an award under the 1894 Act was made five or more years before the commencement of the 2013 Act and possession was not taken or compensation was not paid, the acquisition proceedings lapse. The Supreme Court in Indore Development Authority v Manoharlal (2020) held that the deemed lapse under Section 24(2) occurs only where both conditions (possession not taken AND compensation not paid) are satisfied.

05Is consent required for land acquisition?

For acquisition for private companies, the consent of 80% of affected families is required under Section 2(2). For acquisition for public-private partnerships, the consent of 70% of affected families is required. For acquisition for government projects, no consent is required, but the SIA process provides a consultative mechanism.

06Does an initial discussion create a lawyer-client relationship?

No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing.

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