Right to Fair Compensation Act
Interplay with SEZ, Industrial Area and Urban Development Laws
Industry and the city acquire through a third family of statutes: the SEZ Act that famously has no acquisition power of its own, the State industrial area Acts (KIADB, MIDC and their siblings) with machinery older than the 2013 Act, and the urban development laws whose acquisitions produced the Section 24 flood. This note maps how each family meets the 2013 regime.
1. The SEZ Act, 2005: Power Without a Power
- The design: the SEZ Act regulates zones, approvals and fiscal benefits but contains no land acquisition machinery: land for SEZs was assembled by State acquisition under the general law, by State industrial corporations, or by developer purchase, which is exactly why the SEZ land rush of the 2000s (Nandigram its symbol) fed the 2013 reform.
- Under the 2013 Act: acquisition for an SEZ developer is acquisition for a private company (or PPP): an enumerated Section 2(1) purpose must fit, 80% or 70% consent applies, and the exclusions (private hospitals, educational institutions, hotels inside the zone) bind, with the practical consequence that post-2013 SEZ assembly moved overwhelmingly to purchase and pooling, the Act disciplining the market it no longer needed to run.
2. The State Industrial Area Acts
- The family: the Karnataka Industrial Areas Development Act, the Maharashtra Industrial Development Act and their counterparts in most States: pre-2013 statutes with their own notification, objection and vesting machinery, acquiring for industrial boards which then allot to units.
- Why they still operate: they are not in the Fourth Schedule, but as pre-2013 State laws with Presidential assent they occupy their own field; their continued operation beside the central Act rests on that assent-backed footing, and the courts have in general let the machinery run while importing the 2013 compensation standards through the States' own alignment measures and equality reasoning, the Tarsem Singh logic argued inland.
- The live friction: award-stage disputes under these Acts now routinely contend for First Schedule arithmetic, solatium and the Act's premiums, and the States' amendment-era instruments increasingly concede the measure while defending the machinery, the same bargain the Fourth Schedule settled: procedure theirs, money the Act's; the precise position varies by State and should be verified in the State's current law before reliance.
3. The Urban Development Laws
- The pattern: development authorities (Delhi's under the Delhi Development Act the archetype) assembled city land through the general acquisition law, 1894, now 2013, in the authorities' name for planned development, with the State industrial pattern inverted: the machinery was always the general Act's, the authority only the beneficiary.
- The Section 24 epicentre: decades of notified, disputed, half-possessed Delhi acquisitions made the development authorities the principal litigants of Section 24(2): the Pune Municipal-to-Indore war was fought substantially on DDA land, and the post-Indore clean-up, panchnama and tender records against lapse claims, remains these authorities' daily docket (Topic 86).
- The forward path: new urban assembly increasingly runs on town-planning schemes and land pooling (Topic 98) rather than acquisition, with the 2013 Act's 20% developed-land entitlement for urbanisation acquisitions (Topic 48) as the compulsory route's own pooling-flavoured answer.
4. The Family Portrait
Family | Acquisition machinery | Relation to the 2013 Act |
|---|---|---|
SEZ Act, 2005 | None of its own | Acquisition for zones runs on the 2013 Act with consent, or on purchase and pooling; the Act's exclusions bind inside the zone |
State industrial area Acts | Their own notification-to-vesting machinery, pre-2013, assent-backed | Operate beside the Act; the 2013 compensation standards pressed in through State measures and equality reasoning, State by State |
Urban development laws | The general acquisition law, invoked for the authorities | Fully inside the 2013 Act (and Section 24 for the legacy pipeline); new assembly shifting to pooling |
⚠ Key point Three families: the SEZ Act has no acquisition power, so zone land runs on the 2013 Act (consent and exclusions included) or on purchase and pooling; the State industrial area Acts (KIADB, MIDC and kin) keep their own assent-backed machinery while the 2013 measure is pressed in State by State; and the urban development authorities always used the general law, which made them the Section 24 epicentre and now points them toward pooling. Across all three, the series' rule holds: machinery varies, the 2013 arithmetic is the gravitational floor. |
5. Related Topics and Provisions
- Land pooling and purchase (Topics 98 and 99): where zone and city assembly moved
- Section 24's war (Topic 86): the urban authorities' docket
- The consent requirement (Topic 12): what SEZ acquisition must now clear
- State amendments (Topic 96): the industrial exemption categories