Utilisation and conversion of acquired land, and temporary acquisition - Land Law

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1. Why these provisions exist
2. No change of purpose: section 99
3. No change of ownership without permission: section 100
4. Return of unutilised land: section 101
5. Sharing the gain on resale: section 102
6. Lease instead of acquisition, and other rules
7. Conversion of land use
8. Temporary occupation of land: sections 81 to 83
9. Problem
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

The examinable core. Under the 1894 Act, once land vested in the State the owner had no further say: if the project was abandoned, the land could be used for anything else or sold. Chapter XIII of the 2013 Act (sections 93 to 105) ties the land to the purpose for which it was taken. Five rules do the work: no change of purpose (s.99), no change of ownership without permission (s.100), return of unutilised land (s.101), sharing of the gain on resale (s.102), and leasing in place of acquisition (s.104). Temporary occupation (ss.81–83) is the other half of this unit.

1. Why these provisions exist

Section 8(1)(d) and (e) already require the Government, before it acquires, to check that there is no unutilised land previously acquired in the area and, if there is, to use that first. Chapter XIII deals with the other end: land that has been acquired but is not used, or is diverted. The policy is that compulsory acquisition is justified only by the public purpose; once that purpose fails, the justification fails with it, and the former owner, not a later buyer, should benefit.

2. No change of purpose: section 99

No change from the purpose or related purposes for which the land was originally sought to be acquired shall be allowed. There is one exception. If the land is rendered unusable for that purpose because of a fundamental change due to unforeseen circumstances, the Government may use it for another public purpose. It may never be used for a private purpose.

Read with section 19(5), which requires the declaration to state the purpose, this means the declared purpose binds the Government. A road project cannot quietly become a commercial layout.

3. No change of ownership without permission: section 100

No change of ownership of acquired land is allowed without specific permission of the appropriate Government. This prevents a Requiring Body (a company or authority) from selling acquired land on the open market.

4. Return of unutilised land: section 101

Where land acquired under the Act remains unutilised for five years from the date of taking possession, it shall be returned to the original owner or owners or their legal heirs, or to the Land Bank of the appropriate Government, by reversion in the manner prescribed. A Land Bank is a governmental entity that converts vacant, abandoned and unutilised acquired land and tax-delinquent properties into productive use.

Karnataka amendment. Karnataka Act 16 of 2019 substituted, for “a period of five years”, the words “a period specified for setting up of any project or for five years, whichever is later”. In Karnataka, therefore, a project with a longer gestation period keeps the land for that period before section 101 is triggered.

5. Sharing the gain on resale: section 102

Where the ownership of acquired land is transferred to any person for consideration without any development having taken place on it, forty per cent of the appreciated land value must be shared among the persons from whom the land was acquired, or their heirs, in proportion to the value at which their lands were acquired, if the transfer is within five years of the acquisition. The benefit attaches only to the first sale or transfer after the acquisition proceedings conclude.

Section 46(6) has a parallel rule for land bought privately after 5 September 2011 and acquired within three years of the Act: forty per cent of the compensation is shared with the original owners.

6. Lease instead of acquisition, and other rules

Section 104: wherever possible the Government may take the land on lease instead of acquiring it, for any section 2(1) purpose. The owner keeps title and receives rent.
Section 103: the Act is in addition to, not in derogation of, other laws.
Section 105 and the Fourth Schedule: the Act does not apply to acquisitions under thirteen central enactments listed there (for example the National Highways Act, 1956, the Railways Act, 1989 and the Land Acquisition (Mines) Act, 1885), but section 105(3) required the Central Government to extend the First, Second and Third Schedules to them within a year. It did so by the Removal of Difficulties Order, 2015.
Sections 107 and 108: a State may legislate for higher compensation or better R&R, and an affected family may opt for the more beneficial State law or policy.

7. “Conversion” of land use

The syllabus speaks of “conversion”. In the 2013 Act the idea appears in three places:

section 99, which forbids converting acquired land to a purpose other than the one for which it was taken;
section 46(4), under which no land use change is permitted for land bought privately above the notified limit until rehabilitation and resettlement are complied with in full; and
section 101, under which unused land reverts and is not converted to some other use.

Conversion of agricultural land to non-agricultural use by the owner himself is governed by section 95 of the Karnataka Land Revenue Act, 1964 (Unit III note on land and land revenue). Keep the two apart.

8. Temporary occupation of land: sections 81 to 83

Section 81. Where the appropriate Government considers that the temporary occupation and use of any waste or arable land is needed for a public purpose, it may direct the Collector to procure its occupation and use for a term not exceeding three years from the start of occupation. The Collector gives written notice to the persons interested of the purpose, and pays compensation for the use and for any materials taken, either as a gross sum or by monthly or periodical payments, as agreed in writing. If the Collector and the persons interested differ on the sufficiency or apportionment of compensation, he refers the difference to the Authority.

Section 82. On paying compensation, executing the agreement or making a reference, the Collector may enter and take possession. At the end of the term he must compensate for any damage not provided for in the agreement and restore the land. If the land has become permanently unfit for its earlier use, and the persons interested so require, the Government must proceed to acquire it as if it were needed permanently.

Section 83. Disputes about the condition of the land at the end of the term, or about the agreement, are referred to the Authority.

Trap. Temporary occupation does not transfer title. The owner remains owner throughout; what he gets is rent-like compensation, damages for harm to the land, and a right to insist on permanent acquisition if the land is ruined. Do not mix it up with the urgency power in section 40, which does vest the land.

9. Problem

Land was acquired in 2016 for a district hospital in Karnataka. Possession was taken in 2017. No construction has started. In 2025 the Government proposes to allot half the land to a private developer for a shopping complex. The former owner objects.

Issue. Whether the land can be diverted, and whether the owner can claim it back.

Law. Section 99 bars a change of purpose except to another public purpose where the original purpose has become impossible through unforeseen circumstances. Section 100 bars a change of ownership without permission. Section 101 (as amended in Karnataka) returns land unutilised for the period specified for the project or five years, whichever is later.

Application. A shopping complex for a private developer is not a public purpose, so section 99 forbids it whatever the circumstances. The land has been unused for eight years from possession. Unless the project’s specified set-up period is longer, section 101 is triggered.

Conclusion. The diversion is unlawful and can be quashed under Article 226. The owner may seek return of the land under section 101 (or, if it goes to the Land Bank, he has no reversion claim but the allotment remains barred). If the land were sold undeveloped within five years of acquisition, he would instead claim forty per cent of the appreciation under section 102.

How this is examined

“Temporary acquisition of land” was a 6-mark short note in August 2024: write sections 81 to 83. “Utilisation and conversion” questions are answered with sections 99 to 102 and the Karnataka amendment to section 101, and a diversion problem of the kind above is a natural form for it.