Rehabilitation and Resettlement Where Land Is Purchased through Private Negotiation: Section 46

The Act's boldest reach is Section 46: rehabilitation obligations that follow purchase, not acquisition. Where anyone other than the government buys land through private negotiations at or above the State's prescribed limits, the R&R provisions apply, the buyer files before the Collector, the Commissioner's machinery fixes the entitlements, and non-compliance voids the transaction's onward life. This note works the section, its anti-evasion provisos, and its famous 40% sharing rule.

1. The Trigger and the Procedure

• Who and when: any person other than a "specified person" (the government, government companies, and associations or trusts wholly or substantially aided or controlled by government) purchasing land through private negotiations equal to or more than the limits the appropriate Government prescribes, the threshold is State-set, which is where the section's real reach is decided.
• The filing: such a purchaser files an application with the District Collector notifying the intended purchase, its purpose, and the particulars of the land, before the transaction is carried through the Act's machinery.
• The reference: the Collector refers the matter to the Commissioner for R&R, and the rehabilitation and resettlement obligations are determined under the Act's standards, the Second Schedule's logic applied to a purchase.
• The award: upon the scheme's approval, the Collector passes individual awards covering the rehabilitation and resettlement entitlements, Section 31's method, borrowed for the market transaction.

2. The Teeth

• The land-use lock: no change of land use is permitted if the rehabilitation and resettlement obligations have not been complied with in full, the buyer may hold the land, but cannot turn the farmland into the factory the purchase was for until the families are rehabilitated.
• Voidness: a purchase in contravention of the section's discipline is treated as void, with the appropriate Government empowered to set, for its State, the limits and the manner of the R&R obligations.
• The 40% sharing rule: where land was purchased after 5 September 2011 (the 2011 Bill's introduction date) at or above the prescribed limits, and that land is acquired within three years of the Act's commencement, forty per cent of the compensation is shared with the original land owners, defined as the owners as on 5 September 2011, the provision that strips the gains of speculators who bought cheap from farmers in the window when the new law's generous compensation was foreseeable.
• Interaction with Section 2(3): where a private company buys part and asks the government to acquire the rest, the Act's full package applies as Section 2's scheme provides, assembling a project from purchases does not shed the obligations.

3. The Design and Its Limits

Section 46 answers the obvious flight from the 2013 regime: if acquisition carries SIA, consent and R&R, projects will buy instead, with every asymmetry of information and power that village land markets carry. The section's answer is calibrated, not prohibitive: purchase remains lawful and uncompensated by the State, no SIA, no consent referendum, no First Schedule award, but displacement caused by large assembly is rehabilitated on the Act's standards, and the land's use is locked until it is. The calibration has two honest weaknesses the literature presses. The threshold is the State's to prescribe, and a limit set high enough makes the section ornamental, checking the State's prescribed limit is the first step of any Section 46 question. And the obligations attach to the purchase above the limit, so assembly through multiple below-threshold purchases, by related entities, tests the provision's seams, a structure courts would examine for what it really is. For the examiner, the section pairs with Section 2(3) as the Act's market-facing pincer; for the practitioner, the land-use lock is the lever, because it is the change of use, not the sale deed, that the project cannot do without.

4. Related Topics and Provisions

• The thresholds and quantification (Topic 58): the limits and the money mechanics
• Application of the Act (Topic 9): Section 2(3)'s companion rule
• The R&R award (Topic 47): the method borrowed
• State amendments (Topic 96): where the limits are set in practice