Firstly we need to know, who is a ‘Contract Labour’? ‘Contract Labour’ can be distinguished from ‘direct labour’ in terms of employment relationship with the principal establishment and the method of wage payment. A workman is deemed to be a contract labour when he/she is hired in connection with the work or “contract for service” of an establishment by or through a contractor. They are indirect employees; persons who are hired, supervised and remunerated by a contractor who, in turn is compensated by the establishment. In either form, contract labour is neither borne on pay roll or muster roll or wages paid directly to the labour.

Contract labourers in India are protected by the Contract Labour Regulation and Abolition Act, 1970. A contract labourer is defined in the Act4 as one who is hired in connection with the work of an establishment by a principal employer (who is the firm owner or a manager) through a contractor. The act makes a number of provisions for the welfare of the contract workers including payment of minimum wages, social security benefits and others. The Act also regulates the employment of contract labour in certain establishment and provides for its abolition in certain circumstances.

 

Arrangement between contractor, principal employer and workmen/employees

The Principal Employer did not have any supervisory control over the workmen of the contractor and the method and manner in which the work was being executed will be supervised by the contractor only. Therefore no direct relationship of the employer and employee would emerge between the Principal Employee and the workmen of the contractor.

Maintenance of all types of record in respect of the employees employed by the contractor should be his own responsibility and the Principal Employer should not intervene in such matters.

The Contractors will be required to comply with the provisions of these Acts i.e. the employer welfare legislation as employers and hence you as the Principal Employer don’t have to take the pain of compliance on behalf of your Contractors.

 

Obligations of the Principal Employer

The obligations of an employer under the Contract Labour Act are that of vicarious liability on owners of establishments. The Contract Labour Act provides respite and recourse to contract labour from non-payment of wage by allowing them access to the employer in the occurrence of a default by the contractor.

A “principal employer” as defined under the Act covers any person responsible for the supervision and control of the establishment. In the case of a factory, such person would include the owner or occupier of the factory or a manager under the Factories Act, 1948. Any establishment where there were 20 or more workers employed as contract labour in any day of the preceding 12 months would be covered under the Contract Labour Act.

The primary duty of a principal employer or a contractor covered by the Act is that every principal employer of an establishment to which the Act applies must get his establishment registered under the Act for the purpose of employing contract labour and every contractor to whom the Act applies must obtain a license under the Act for the purpose of undertaking or executing any work through contract labour (Subsection 7 & 12).

 

Procedure for getting an establishment registered

If the Act applicable to an establishment the principal employer of the establishment has to make an application in the prescribed form accompanied by prescribed fees to the Registering Officer for registration of the establishment under the Act. If the application is complete in all respects the Registering Officer will register the establishment and issue a certificate of registration in the prescribed form to the principal employer (Section 7). In cases where the principal employer of an establishment who has not obtained the required registration under section 7 or whose registration has been revoked under section 8 is prohibited from employing any contract labour in his establishment (Section 9)

 

Procedure for obtaining a license

A contractor to whom the act is applicable has to make an application in the prescribed form accompanied by the necessary fees and security deposit to the Licensing Officer for grant of a license under the Act.

The Licensing Officer after making the necessary investigation may issue a license in the prescribed form containing the conditions subject to which the same is granted.

The license will be valid for the period specified therein and will have to be renewed from time to time (Section 13).

The principal employer is under the obligation to ensure that a representative be present while the contractor is making the payment to the contract labour (Section 21(2)). The Act is silent on what is the role of such representative. Subsection 4 of Section 21 provides that in the event of a default on the part of the contractor to make payment of wages to the labour employed, the principal employer may need to step in and make good such payment or deficit.

As a result, it becomes essential that, the representative of the principal employer fully understand the nature of his duties and be authorized to take necessary steps in the event of a default. The representative should be briefed / trained by the concerned department in the organization. Such steps could include issuing notice to the contractor and terminating the relationship, if required. Care should be taken while drafting the agreement with the contractor to ensure the same.

The Contract Labour Act prescribes that the contractor shall provide certain amenities to the labour employed by it. The rules prescribe time periods within which such amenities may be provided. These facilities include:

 

• Canteen provisions;
• Rest-rooms; and
• First aid facilities.

 

In the event that the contractor fails to provide the same, the obligation automatically falls upon the principal employer. The law also provides that it may be recoverable from the contractor.

While legal recourse to recover expenses incurred by the principal employer does offer some consolation, it would be prudent to establish and clearly define mutual rights, duties and obligations in an agreement executed with the contractor, within the confines of the law. Conditions may be imposed upon the contractor in the agreement to ensure compliance with the Contract Labour Act. Employers should provide for indemnity provisions that protect the principal employer in cases of default.

In cases of large corporates employing a vast number of persons under the Act (whether it be for housekeeping or security or for any other purpose), it would be cautious to obtain representations, in the nature of those provided below, from the contractor that in the past:

• the contractor has been in compliance with the relevant provisions of the Act;
• has a valid license / registration under the Act; and
• has not been in default of payment to labour provided by him to another principal employer.

 

A certain amount of due diligence may also be done to determine whether or not the contractor has been in default or in violation of the Contract Labour Act.

Due diligence would be of significance where contractual safeguards may not offer sufficient protection to principal employers. The law imposes very strict liabilities on the owners to ensure that the contract labour employed does not suffer in any manner. This needs to be kept in mind while drafting any agreement with a contractor for this purpose.

 

While there are monetary liabilities on corporates, additional liabilities are imposed on directors of companies. The penalty for non-compliance with provisions of the Contract Labour Act while employing contract labour is imprisonment for 3 months or fine or both. Though the quantum of fines imposed is not high, directors, particularly, the independent directors, would not want the dagger of criminal proceedings hanging over their heads. This alone should operate as sufficient thrust to ensure compliance with this Act.

The new Land Acquisition Act, which came into force on first January, 2014 seeks to fundamentally alter the system of land acquisition in India. While the Act has been hailed in many quarters as a benevolent social legislation which, if implemented correctly, will have immensely beneficial social ramifications, it has also been the subject of intense criticism, especially by captains of industry, who argue that the law not only fails to adopt a pragmatic and feasible approach for monitoring land acquisition but is also in sharp conflict with India’s goals of attaining investment-driven economic growth.

While the law was undoubtedly actuated by noble intentions, it is dismaying to note that the Act is predicated upon an understanding of the forces that shape the investment policy of large businesses that is not completely tenable.

As Maitreesh Ghatak and Parikshit Ghosh argue in this article, the Act is an ill-conceived legislation which completely fails to strike a judicious balance between growth and justice.

A closer inspection of the legislative history and pertinent provisions of the Act reveals that the apprehensions of the corporate sector are, to a large extent, justified.

 

Legislative history:

The National Advisory Council (NAC) played an instrumental role in drafting the Land Acquisition Bill in its most rudimentary form. While some minor modifications were subsequently made to the Bill, most key provisions were retained in the final version of the Bill.

While the NAC has played a commendable role in reducing the widespread inequities that exist in our society by championing welfare schemes for the poor, it lacks the ability to fully understand the market forces that govern the relationship between land owners and private businesses who intend to acquire their land. As there are hardly any business leaders or financial experts in the NAC, the NAC often fails to take cognizance of legitimate concerns of corporate houses while framing economic policies.

As one writer has rightly pointed out, NAC members have a peculiar tendency of legislating “with their hearts and not with their brains”.

 

Complex procedure of land acquisition:

Business houses have vehemently criticized the procedure for land acquisition that has been laid down in the Act.

The Act unequivocally states that a detailed report evaluating the socio-economic implications of the acquisition on the residents of that area must be prepared in consultation with the local residents associations in urban areas and village council in rural areas.

Thereafter, the report has to be scrutinized by an expert panel consisting of two social scientists, two rehabilitation experts and a technical expert having knowledge of the project for which

the land is to be acquired.

Moreover, the intention of acquiring the land must be made explicit by way of registration within 12 months of the submission of the report.

Any objections to the proposed acquisition have to be made to the administrative head of the concerned area.

The government can acquire land only after completing the aforementioned formalities.

This procedure can be circumvented only if the government decides to invoke the urgency clause which can only be done in the rarest of rare cases in national interest.

In the views of many business leaders, this procedure is highly infeasible and would make it virtually impossible for any project to properly take off because, they argue, committee clearances in India are inextricably intertwined with red-tapism.

In addition, by the time all the clearances are actually obtained, the project may lose its relevance or the project cost may significantly rise, so many businesses may simply decide to give it up.

 

High cost of acquisition:

The new Act seeks to provide compensation up to 4 times the market value of the land in rural areas and twice the market value in urban areas. Many business leaders argue that the level of compensation is so high that it will stultify large investments and have myriad deleterious effects on infrastructural development. As the Confederation of Indian Industry has stated, the new law would raise the cost of land acquisition by 3-3.5 times and the cost of rehabilitation and resettlement by 3 times.

This would, they argue, make it virtually impossible to construct roads, ports and other projects for economic advancement.

What is even more surprising is the fact that no economic rationale has been offered by the government for determining the price of land acquisition. As a matter of fact, the first draft of the Bill sought to provide up to 6 times the market value in rural areas and thrice the market value in urban areas to land owners. The reasons for fixing the final figures at 4 and 2 respectively are not well-documented.

As the land market in India is imperfect on account of power and information asymmetries, it would have been more prudent for the government to develop a robust and flexible mechanism for price determination instead of imposing a rigid rule.

 

Limited role of government:

The Act empowers the government to acquire land for private companies or for public-private partnerships only if the project in question is for a public purpose.

Business leaders argue that, in a complex and diverse nation like India, the government must, of necessity, play the role of a facilitator to enable private sector industries to acquire land.

They argue that the government should facilitate the acquisition of land for the private sector for large-scale projects relating to steel, cement, etc where 75% of the land has already been purchased by the private sector.

When asked about the limited role of the government in the new law, the then Union Rural Development Minister Jairam Ramesh stated that the private sector must look beyond land acquisition by the government and should instead focus on land purchase. He further added that it is not the responsibility of the government to acquire land for rich industrialists whose only motive is to maximize their own profits.

Mr. Ramesh’s argument definitely carries force, but it is essential for the government to realize that it is very difficult for big industrial projects, especially in the manufacturing sector, to materialize without the help of the government.

 

Other concerns:

Following are some of the other concerns that businesses have expressed about the Act:

First, the Act stipulates that consent of affected families and not land owners has to be sought for land acquisition. The term ‘affected families’ has been defined very capaciously, so it would be highly difficult to find all affected families and to obtain their consent for acquiring land.

Second, many stakeholders argue that the strict restrictions on the acquisition of multi-cropped land are unwarranted. Industrialization plays an indispensable role in fostering growth, the argument goes, and, therefore, its importance cannot be undermined for the sake of food security.

Third, as this articlein the Economic Times indicates, the government has still not framed the relevant rules pertaining to the Act even though several months have elapsed since it came into force. As a result, development projects have reached a standstill.

Finally, the government needs to amend 13 acts to bring them in line with the policy outlined in the Land Acquisition Act. The Act cannot be implemented efficaciously until this is done. A lot still needs to be done in pursuance of this goal.

 

Conclusion:

The Land Acquisition Act was enacted in response to the slowdown in economic growth which was, to some extent, attributed to the archaic system of land acquisition laid down in the 1894 Act.

However, it is widely believed that this Act, in its current form, has actually exacerbated problems instead of solving them.

In its admirable haste to prevent the exploitation of land owners, the legislature did not evaluate the viability of the entire mechanism that the new Act seeks to create for land acquisition.

It is necessary for the government to ensure that pro-poor and pro-farmer rhetoric does not get in the way of industrialization which is the most powerful engine of growth and the biggest source of job creation.

The new NDA government needs to suitably alter the law in order to strike the right balance between the interests of poor land owners and the need for industrialization.

The new Land Acquisition Act seeks to create a robust legal and institutional framework to facilitate the acquisition of land for a public purpose.

Even though the Act has received considerable flak from business houses because it makes the process of land acquisition highly complicated, it has also been praised in many quarters as it seeks to make the process of acquisition, which has hitherto lacked any kind of transparency, a lot more transparent and participative.

An important requirement which lies at the heart of this new acquisition system is the requirement of publication of a preliminary notification.

The Act exhaustively enumerates the details of such a preliminary notification.

It states, inter alia, that it is incumbent upon the concerned government to publish a notification within 12 months of the appraisal of the Social Impact Assessment Report, failing which the latter shall lapse.

 

Medium of publication:

The notification has to be published in the following:

A. in the Official Gazette of the government;

B. In two daily newspapers circulating in the locality of the concerned area ofwhich one

shall be in the regional language;

C. In the local language in the concerned Panchayat, Municipality or Municipal Corporation;

D. In the offices of the District Collector, the Sub-divisional Magistrate and the Tehsil;

E. It must be uploaded on the website of the concerned government;

F. In the affected areas in the prescribed manner.

 

Contents of notification:

The preliminary notification must, of necessity, include the following details:

1. A detailed account of the nature of the public purpose for which the land is to be acquired;
2. Cogent reasons for which affected families are to be displaced;
3. A brief summary of the Social Impact Assessment Report and;
4. Particulars of the administrator appointed for rehabilitation and resettlement in accordance with Section 43 of the Act.

 

Informing local authorities:

As soon as the notification is issued, the concerned Gram Sabha, Municipality or Autonomous Councils, as the case may be, must be informed about the contents of the notification. A special meeting should be called for this purpose. This provision further goes to show how this Act strives to make various local and regional stakeholders partners in development.

This information will not only allow local bodies to better understand which specific area of land will be acquired in the region, but will also allow them to acquire a more meaningful understanding of the reasons for such acquisition.

 

Objections to acquisition:

Any person who is interested in the land which the government intends to acquire may raise an objection within 60 days of the publication of a preliminary notification. The objection must pertain to the following issues:

A. The area and suitability of land proposed to be acquired;

B. The explanation offered of the public purpose for acquisition;

C. The findings of the Social Impact Assessment Report.

It is pertinent to note that such an objection has to be made by the concerned person in writing to the collector. Thereafter, the collector must either hear the objections raised by the objector personally or must authorize someone to do so on his behalf.

It is then incumbent on the Collector to prepare a comprehensive report containing his recommendations to deal with the objections. He must prepare another report containing details such as the total cost of acquisition, the details of the families that would be affected by the acquisition, etc.

Notably, the decision of the appropriate government with regard to the objections raised by all stakeholders shall be final.

 

Conducting survey and census:

After the issuance of preliminary notification, the rehabilitation and resettlement officer must conduct a survey and census of affected families in the prescribed manner in order to find out the following details:

1. Information about the land and other immovable property which is to be acquired of each and every affected family;
2. Details of those who would be losing their livelihood on account of the acquisition;
3. List of public utilities and government buildings that would be affected by the resettlement of affected families;
4. Details of the amenities or infrastructural facilities that would be affected by the resettlement of families;

E. Common property resources that are to be acquired.

On the basis of the aforementioned information, a rehabilitation and resettlement scheme must be prepared by the R and R officer to address the concerns of affected families. This scheme must be widely distributed and analyzed by all stakeholders.

 

No transaction on concerned land:

The Act unequivocally states that no person is allowed to enter into any transaction involving the land which is mentioned in the preliminary notification from the date of issuance of such notification.

Furthermore, the Act also explicitly prohibits any individual from creating any encumbrance on such land. However, the Collector can, if he deems it necessary to do so, create an exception to this rule in favour of any land owner in writing.

 

Conclusion:

The legal requirements for the publication of preliminary notification have been largely drawn from Section 4 of the 1894 Act and have been suitably modified to bring them in line with the participative and democratic system for land acquisition that this Act seeks to create.

The publication of the notification marks an important stage in the process of acquisition and imposes a duty on a large array of officers to determine the specific details of the acquisition.

After all the formalities that the notification entails are completed, the government must issue a declaration for acquisition and must, thereafter, acquire the land in the prescribed manner. Such a declaration must be issued within 12 months of the issuance of the preliminary notification. Otherwise, the notification shall be deemed to have been rescinded.

Section 24 of the Limited Liability Partnership Act, 2008 talks about the cessation of partnership. Sub-section (1) says thata person may cease to be a partner of a limited liability partnership in accordance with an agreement with the other partners or, in the absence of agreement with the other partners as to cessation of being a partner, by giving a notice in writing of not less than thirty days to the other partners of his intention to resign as partner.So, stepping down of a designated partner will either be in accordance with the LLP agreement signed during the incorporation of the company or by giving a notice, whose specimen is given in Form 13of LLP Rules, 2009, to other partners.

 

However, even after the cessation of the partnership the former partner can be still regarded as a partner and can be held liable for his actions. This matter is dealt in sub-section (2) of Section 25 which states that where a person has ceased to be a partner of a limited liability partnership (hereinafter referred to as “former partner”), the former partner is to be regarded (in relation to any person dealing with the limited liability partnership) as still being a partner of the limited liability partnership unless-

1.      the person has notice that the former partner has ceased to be a partner of the limited liability partnership; or
2.     notice that the former partner has ceased to be a partner of the limited liability partnership has been delivered to the Registrar

According to Limited Liability Partnership Rules, 2009 every limited liability partnership shall file information with regarding any change made in the limited liability partnership agreement shall be filed in Form 3 within thirty days of such change along with the fee as provided in Annexure ‘A’.

Sub-section (2) (a) of Section 25 says that a LLP shall file a notice with the Registrar when a person becomes or ceases to be a partner within thirty days from the date he becomes or ceases to be a partner. In pursuance with this provision,where a person becomes or ceases to be a partner or where there is any change in the name or address of a partner, the limited liability partnership shall file with the Registrar, a notice in Form 4.

 

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Service tax in India began with the taxation of three services in 1994 based on the recommendations of the Dr. Raja Chelliah Committee on tax reform. From a very modest collection of Rs.407 Crore to a contribution of Rs.97, 444 Crore during 2011-12, it was still felt that the potential of service tax remained huge and untapped. To capture the same, Budget 2012 ushered in a new system of taxation of services; popularly known as Negative List, whereby all services, except those specified in the negative list[contained in Section 66D of the Finance Act,1994(“the Act”)], will be subject to taxation. This list comprises of motley of services ranging from services of the RBI to even mortuary services. Legal consultancy, however, does not figure in this list.

 

Up until 2012, lawyers were not asked to pay service tax for their activities. Back in 2011, when the scope of service tax was extended to individual lawyers, there was litigation all around and courts also granted a stay on operation of such provisions. The government, already tentative about bringing lawyers into the service tax net, in a manner that can at best be described as appeasing, sidestepped and brought the service rendered by lawyers under the reverse charge mechanism.[1] Under and by virtue of the amended Service Tax Rules, the recipient of legal services rendered by an arbitral tribunal, or an individual advocate, or a firm of advocates by way of legal services, if such recipient is a business entity located in the taxable territory, shall be liable for paying service tax to the Government. Therefore, the incidence of service tax payment for availing legal services had been shifted from the service provider upon the recipient, provided that the recipient is a business entity with a turnover exceeding Rs.10 lakhs in the preceding financial year.

 

Cases where lawyers can be exempted from paying service tax

The government vide its mega exemption notification no. 25/2012 exempted the legal service[2] by an individual advocate[3] or a partnership firm of advocates  from the whole of the service tax that can be levied thereon under section 66B the Act, when rendered to-

 

i) an advocate or partnership firm of advocates providing legal services(i.e same class of persons);

ii) any person other than a business entity; or

iii) a business entity with a turnover upto Rs.10 Lakhs in the preceding financial year.

Thus, the individual advocates or a partnership firm of advocates providing legal service are not liable to pay service tax under any circumstance and in case of service provided to the business entities having turnover above Rs.10 Lakhs in the preceding financial year, such business entities are only liable to pay tax.

 

Also, service provided by an arbitral tribunal is also exempt under the mega exemption. An arbitral comprising more than one arbitrator will constitute an entity by itself. Thus, services of individual arbitrator when represented on such an arbitral tribunal will be exempted from imposition of service tax. Also exempted are services provided by an arbitral tribunal to-

(i) any person other than a business entity or

(ii) a business entity with a turnover up toRs.10 Lakhs in the preceding financial year

 

Cases where lawyers cannot be exempted from paying service tax

For legal services provided or agreed to be provided to business entities located outside India where place of provision of service is within the taxable territory, the advocate or firm of advocates is liable to pay tax. Such services include services relating to mergers and acquisitions, due diligence etc.

 

Also, in respect of services provided to business entities, with a turnover exceeding

Rs. 10 Lakhs in the preceding financial year, tax is required to be paid on reverse chargeby the business entities.

In a way, it is quite convenient for lawyers who do not have to maintain any service tax record for depositing it since the entire liability is of the client to deposit it. But it also might increase legal proceedings on this aspect since the client might default in payment of service tax. To ensure such thing does not happen, a lawyer, who is not covered under the exemption, should refer about this for clarity to the clients in the invoice given for the service. Also, the client needs to register themselves for the service tax as per the provisions of Finance Act, 1994 (the procedure can be referred to here)

Essentials that one needs to know about Service Tax

 

Registration

A service provider is required to get himself registered under the law as his turnover crosses a threshold limit of Rs. 9 Lakhs and is compulsorily required to charge service tax on services provided once the turnover crosses Rs. 10 Lakhs.

 

Returns

Service tax returns are due half-yearly shown whereby for the period ofAprilto September, the last date to file returns is 25th October and for the period of OctobertoMarch, it is 25th April.

 

Rate

The present rate is 12.36%.

 

Point of Taxation or Chargeability

Chargeability arises when services are rendered, while the rate is determined at the time of payment by service receiver. So, if the service is rendered when the service tax rate is X% and at the time of payment it is Y%, the prevailing rate will be Y%. Another case may arise when services are rendered; the service was under exempt category. However, when the receiver makes payment, the rate is Y%. In that case, the applicable rate is Nil, since chargeability did not arise at the time of rendering services, the services being exempt at that time.

 

Time of payment

Individual, Sole Proprietorship or Partnerships have to make quarterly payments and all others have to make payments monthly.

 

Valuation Method

Service Tax can be levied on the value of services rendered. Such value will be calculated under the following situations in the manner prescribed below:

Where provision of service is for a consideration in money- Gross amount charged by the service provider for such services

 

Where provision of service is for a consideration partly consisting of money-Estimated monetary value of services under prevalent market conditions where provision of service is for a consideration which is unascertainable-Service Tax (Determination of Value) Rules, 2006. 

 

[1]Reverse change is a system where the responsibility for payment of service tax is fixed on the service receiver, as opposed to the general principle of the service provider charging the service receiver through an invoice for the service plus the service tax, and remitting the same to Government. So, the responsibility of paying the service tax ultimately falls on the client, and the lawyer’s inclusion in the scheme of events is as good as non-existent.

[2]Legal service means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.

[3]Advocate has the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Advocates

Act, 1961 (25 of 1961);“advocate means an advocate entered in any roll under the provisions of this Act.”

The new Land Acquisition Act, 2013 rejects the facile notion that the private sector always acts in private interest.

Despite stiff opposition from certain political parties, the Act contains special provisions for the acquisition of land by the government on behalf of the private sector.

That being said, the Act clearly delineates the goals and limits of such acquisition in a bid to prevent the exploitation of land owners for the promotion of parochial interests of private sector entities.

While the primary focus of the Act is to adequately address the genuine concerns of those who were treated cavalierly in accordance with the 1894 Act, it also makes it abundantly clear that the government must work towards promoting industrialization and infrastructural development – a goal which cannot be realized sans the private sector.

With the ever-increasing expansion of rural and urban areas through construction of, inter alia, new roads, railway lines and airports, it has become all the more necessary for the government to facilitate the acquisition of land by the private sector for ensuring robust growth across the socio-economic spectrum.

The right of the government to obtain private land for public purposes is known as eminent domain.

Let us now examine the specific circumstances in which the government can acquire land for the private sector.

Acquisition for public purpose

The Act unequivocally states that the government can acquire land for the private sector only for projects that are designed to serve a public purpose.

The term ‘public purpose’ has been defined very capaciously, and the following types of projects would be included within its ambit:

1. Projects for strategic purposes relating to naval, military, air force, and armed forces of the Union, including central paramilitary forces or any work vital

to national security or defence of India or State police or to the safety of the people;

1. Infrastructure projects including:
2. All activities or items listed in the notification of the Government of India in the Department of Economic Affairs (infrastructure section) dated 27th March 2012. Notably, private hospitals, private educational institutions and private hotels do not fall within the ambit of public purpose;

2. Projects involving agro-processing, supply of inputs to agriculture, warehousing, cold storage facilities, marketing infrastructure for agriculture and

allied activities such as dairy, fisheries, and meat processing owned by the appropriate Government or by a farmers’ cooperative or by a statutory institution;

3. Projects relating to industrial corridors or mining activities, national investment and manufacturing zones, as designated in the National Manufacturing Policy;

4. Projects for water harvesting and water conservation structures and sanitation;

5. Projects for Government administered and Government aided educational and research schemes or institutions;

6. Projects for sports, health care, tourism, transportation or space programmes;

7. Any other infrastructure facility as may be notified in this regard by the Central Government and tabled in Parliament.

C. Projects for project affected families;

D. Projects for housingfor such income groups, as may be specified from time to time by the appropriate Government;

E. Projects for planned development or the improvement of village sites or any site in urban areas or provision of land for residential purposes for

the weaker sections in rural and urban areas;

F. Projects for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities, or to persons displaced or affected

by reason of the implementation of any scheme undertaken by the Government.

As the aforementioned definition is very wide, a private sector enterprise can ask for the assistance of the government in acquiring private land across a range of sectors.

Such transactions can be structured in the following 2 ways:

1. After acquisition, the land can be transferred to a private company for a public purpose; or
2. It can be acquired on the request of a private company for immediate use for a public purpose.

 

Requirement of consent

As the acquisition of land for the private sector is a highly contentious issue, the new Act carves out special provisions for regulating such acquisition.

Specifically, it stipulates that prior consent of 80% of affected families is mandatory for acquiring land for a private company. Similarly, consent of 70% of affected families must be obtained when land is to be acquired for a public-private partnership project.

This consent must be acquired in the prescribed manner.

While other requirements such as social impact assessment report, preliminary notification, issuance of public notice by the Collector, etc apply with equal force to land acquisition for government use or for use by the private sector, the requirement of consent comes into play only in the 2 aforementioned cases. The pro-poor and pro-farmer nature of this legislation finds expression in the strongest possible manner in this consent requirement.

Payment of rehabilitation and resettlement costs

When land is purchased by the private sector through private negotiations, rehabilitation and resettlement costs must be paid if the area of land acquired exceeds the limits set by the concerned state government. Such limits are to be determined by the state government after taking into consideration all relevant factors and circumstances that the state government deems worthy of consideration.

Moreover, Section 46 of the Act also imposes a duty on the entity purchasing the land to file an application with the District Collector containing the following information:

1. Intent to purchase land;

2. Purpose for which such purchase is being made;

3. Particulars of land to be purchased.

Interestingly, if a private entity purchases a portion of the land for a public purpose which exceeds the limits set by the concerned state government and asks the government to acquire the remaining portion of the land, the private entity will be required to pay rehabilitation and resettlement costs for the entire area i.e. the portion of the land purchased and the portion of the land acquired as a whole.

Advantages of this model

This new model, in accordance with which the government can acquire land for the private sector, seeks to streamline the process of land acquisition. In the 1894 Act, there were no separate provisions to regulate the acquisition of land for the private sector. As a result, the provisions in that act were often grossly misused by the government to promote the interests of the private sector.

This model has the following advantages:

First, it recognizes that it is the prerogative of the government to work closely with the private sector to usher in greater investment which is the sine qua non of infrastructural development.

Second, it legitimizes the role of the government as a facilitator for the acquisition of land for the private sector in pursuance of public objectives. It is hoped that this new model, with clearly defined goals and limits, will assuage the unease of those who have always frowned upon government assistance for the acquisition of land for the private sector.

Thirdly, and more fundamentally, this new model will make it easier for the private sector to circumvent the problems that India’s shoddy land record system poses. More specifically, it will allow the private sector to request the government to step in and acquire land on its behalf wherever the private sector determines that the title of any piece of land is unclear.

Finally, the Act unequivocally recognizes that it is simply impossible for a single company to negotiate with hundreds of farmers and collate the land and that the government is in the best position to do so when a public purpose is involved. This power of the government becomes all the more important when a specific piece of land is involved for purposes such as mineral extraction.

Disadvantages of this model

First, captains of industry have vehemently argued that the percentage of consent that is to be obtained for projects involving the private sector is unrealistically high. The new Act creates a framework, the argument goes, which allows individuals with vested interests to hold the process of acquisition hostage. These individuals can simply refuse to part with their land for no concrete reason and thereby create serious impediments in the path of industrialization.

Second, some thinkers believe that even though the term ‘public purpose’ has been defined capaciously, its validity has to be determined by multiple authorities on a case-to-case basis, and, therefore, many private sector projects may not receive government support for acquisition. They also argue that government intervention is indispensable, especially in the manufacturing sector, for ensuring proper acquisition of land. The absence of said intervention would have a negative impact on both land owners and industrialists.

At the opposite end of the spectrum, many social activists vociferously argue against any kind of acquisition of land for the private sector by the government. Viewed through this lens, land acquisition represents a desire of the government to help the rich at the expense of poor land owners.

Proponents of this line of reasoning cite the example of Singur where the government agreed, in July 2006, to acquire 1,000 acres of land for the Tata Nano Project against the wishes of farmers and other land owners in that area.

Conclusion

As the land market in India is fraught with imperfections and complexities, the government has to play a constructive and meaningful role for ensuring smoother acquisition of land.

Reducing the role of the government in the process of acquisition will not serve the interests of any stakeholder; it will only exacerbate existing problems.

As many industrialists have argued, the role of the government as per the new Act has to be assiduously reviewed. If such a review is to be effective, it must take into consideration the fact that large industrial projects in India cannot properly take off without active government support and encouragement.

This article is written by Tanay Khanna of NULO, Cuttack.

Affidavits are used commonly and for various reasons, but it is not same as an agreement or a contract. Generally, people don’t have a good handle on the definition of an affidavit. There are many occasions when a person comes across an affidavit without his knowledge.

What is an affidavit?

An affidavit is a willingly made declaration in writing, signed by the deponent (person making the affidavit) and accompanied by an oath (vis-à-vis the authenticity of the contents). “Affidavit” has its roots from a Latin word which literally means to “pledge ones faith.” It is to be signed and witnessed (vis-à-vis the genuineness of the affiant’s signature or his identity) by a notary authority. It is also signed without any cross-examination by the affiant. The difference between an affidavit and a deposition is that the former is voluntary but the latter is not.

Another way to think of an affidavit is as a sort of written court testimony. Where, in a court of law, you are required to place your hand on a Holy Book and swear that you’re telling the truth and nothing but the truth, similarly on an affidavit, you do this in writing. You’re under oath, but you’re testimony is on paper. They are important in a way that the oral submission/evidence/testimony is only admissible before a judge but an affidavit can be used as an alternative to this.

However, misleading information in an affidavit can lead to perjury charge against the affiant but if the affiant forgets to include something or omits something then he cannot be penalized for such omission. If the affiant mentions something in the affidavit which is not an established fact or is not backed up by some evidence, then he will have to mention that it is his ‘opinion’.

The law on affidavits in India is governed by Section 139, Order XIX of the Code of Civil Procedure and Order XI of the Supreme Court Rules. Judiciary at many instances have upheld the importance of the veracity of an affidavit by the virtue of the aforementioned rules and sections.

In 1910, Calcutta High Court in the case of Padmabati Dasi v. Rasik Lal Dhar [1]adhered strictly to Order XIX Rule 3 of the CPC and laid down that every affidavit should clearly express how much is a statement of the affiant’s knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to judge whether it will be correct to rely on such belief. 

In another case, M/s Sukhwinder Pal Bipan Kumar and others v. State of Punjab and other [2], this Court reiterated the aforementioned principle and held that under Order XIX, Rule 3 of the Code of Civil Procedure it was mandatory for the affiant to disclose the nature and source of his knowledge and information with sufficient particulars. The Court also held that in a petition where allegations are not affirmed, as aforesaid, it cannot be regarded as supported by an affidavit as required by law.

Mode of attestation of an Affidavit

The Court, Magistrate, or other officer as aforesaid, before whom an affidavit is made, shall certify at the foot of the affidavit the fact of the making of such affidavit before him, and shall enter the date and subscribe his signature to such certificate, and shall, for the purpose of identification, mark, date, and initial every exhibit referred to in the affidavit. The name of the verifying authority must be signed in full, and care must be taken that his proper designation as a Civil Court or Magistrate is added.

Contents of an affidavit

Every affidavit containing any statement of facts shall be divided into paragraphs and each paragraph need to be numbered. It will be more convenient if each paragraph shall be confined to a distinct portion of the subject.

Every person, other than a plaintiff or defendant in a suit in which the application is made, making any affidavit, shall be described in such manner as will serve to identify him clearly that is to  say, by the statement of his full name, the name of his father, his profession or trade, and the place of his residence.

When the affiant in any affidavit speaks to any facts within his own knowledge, he must do so positively and directly, using the words ‘I affirm’.

When any particular fact is not within the declarant’s own knowledge, but is specified from information procured from others, the affiant must use the words ‘I am informed’,—and, if such be the case, should add ‘and verily believe it to be true’ – or he may mention the source from which he procured such information. When the statement rests on facts disclosed in documents, or copies of documents procured from any Court of Justice or other source, the affiant shall mention the source from which they were procured, and state his information or belief as to the truth of the facts disclosed in such documents. A sample affidavit can be accessed here.

 

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[1] (1910) Indian Law Reporter 37 Calcutta 259

[2] (1982) 1 SCC 31