Acquisition for Private Companies and PPP Projects: The Consent Requirement

The 2013 Act's boldest innovation is a referendum inside eminent domain: when the State's power is borrowed for private gain, the affected must agree to lend it. Section 2(2) requires the prior consent of 80% of the affected families where land is acquired for private companies and 70% for public private partnership projects. This note covers the thresholds, the consent process, the consequences of failure, and the pressure the requirement has been under ever since.

1. The Two Thresholds

Element	PPP projects	Private companies
Consent required	70% of affected families	80% of affected families
Land ownership	Continues to vest in the appropriate Government	Vests as the acquisition provides
Public purpose	Required: an enumerated Section 2(1) purpose	Required: an enumerated Section 2(1) purpose
Typical projects	Ports, highways, metro and urban infrastructure on concession models	Industrial plants, private-sector projects serving an enumerated purpose

Government acquisition for its own use, its undertakings and public purpose needs no consent (Section 2(1)), which is the design's logic and its standing criticism: the referendum guards against private capture of the State's power, not against the State itself. The denominator is affected families, not landowners, so the landless whose livelihoods the project takes vote alongside the owners whose land it takes.

2. The Consent Process

Timed with the SIA: Section 2(2) directs that the consent process be carried out along with the Social Impact Assessment, so families decide on disclosed facts: the project's purpose, extent, costs and the draft R&R entitlements.
Prescribed procedure: the mechanics come from the RFCTLARR (Social Impact Assessment and Consent) Rules, 2014 (Topic 100): consent is obtained through Gram Sabha or equivalent meetings, in writing, on documents explained in the local language, with the proceedings recorded, the Rules prescribe videography, and consent declarations preserved; a family's consent travels with the land, and the tally is certified before the preliminary notification.
Prior and informed: consent must precede the Section 11 notification; a shortfall cannot be cured by acquiring first and persuading later, and consent procured by misrepresentation is no consent on first principles.
Failure of the threshold: if 80% or 70% is not reached, compulsory acquisition for that private or PPP project simply cannot proceed; the company may still buy by private negotiation, taking Section 46's R&R obligations with it above the limits (Topic 57).

3. Old Law, New Law and the Pressure Since

Under the 1894 Act, Part VII allowed acquisition for companies after a government enquiry into the company's need, a procedure so thin that company acquisitions became the statute's scandal, Singur was one. The 2013 Act abolished the Part VII route and substituted the consent referendum. The requirement has been the first target of every dilution effort since: the 2014 Ordinance and 2015 Amendment Bill would have exempted five project categories (defence, rural infrastructure, affordable housing, industrial corridors and infrastructure including PPP) from consent and SIA, and lapsed (Topics 94 and 95); several State amendments under Article 254(2) enact similar exemptions locally (Topic 96). Where a State amendment operates, the consent requirement applies as modified in that State, which is now the first thing to check in any consent question.

4. Points of Construction

Consent supplements purpose: an acquisition failing public purpose is not saved by unanimous consent, and a purposive acquisition without the threshold is equally bad; the two conditions are cumulative.
The count is of families, per family: each affected family counts once, widows and separated women counting as families of their own (Section 3's family definition).
PPP identified by vesting: the 70% category is marked by land ownership continuing in the Government; a structure that passes title to the private partner is an acquisition for a private company and takes the 80% threshold.
Judicial review: the certified consent is reviewable like any jurisdictional fact: a tally that counted the unaffected, excluded the affected or rested on uninformed signatures goes to the root of the acquisition.

⚠ Key point

Section 2(2): 80% consent of affected families for acquisition for private companies, 70% for PPP projects (land remaining with the Government), obtained prior and along with the SIA under the 2014 Rules' Gram Sabha based, recorded procedure. Consent is additional to public purpose, counted family-wise, and without the threshold compulsory acquisition cannot proceed. The requirement replaced the 1894 Act's Part VII, survived the 2014 to 2015 dilution attempt at the Centre, and is modified in some States by Article 254(2) amendments.

5. Related Topics and Provisions

Application of the Act (Topic 9): the Section 2 gateway
SIA and Consent Rules, 2014 (Topic 100): the procedure in detail
The 2015 Amendment Bill (Topic 95): the exemptions that failed
State amendments (Topic 96): where the thresholds bend