Section 38A and 39 of Land Acquisition Act 1894: Company Acquisition Requirements
Section 38A extended specified provisions relating to acquisition for Companies to certain industrial concerns employing at least one hundred workmen. Section 39 imposed two threshold requirements before the acquisition machinery specified in Part VII could be put into force for a Company: previous consent of the appropriate Government and execution of the agreement contemplated by the Act.
Part VII: acquisition of land for Companies
Sections 38A and 39 appeared in Part VII of the Land Acquisition Act, 1894, which contained special provisions concerning acquisition of land for Companies. These provisions operated with the other requirements of Part VII, including the enquiry, agreement and publication provisions in Sections 40, 41 and 42.
Section 38A: industrial concern deemed Company for certain purposes
Section 38A addressed an industrial concern that was owned by an individual or an association of individuals, was not itself a Company, and ordinarily employed not less than one hundred workmen. Where such a concern desired to acquire land for specified worker-housing or related amenity purposes, the Act deemed it to be a Company for the limited purposes stated in the section.
When did Section 38A apply?
| Requirement | Section 38A position |
|---|---|
| Nature of concern | An industrial concern owned by an individual or an association of individuals and not being a Company. |
| Employment threshold | It ordinarily employed not less than one hundred workmen. |
| Purpose of acquisition | Land was desired for erection of dwelling houses for workmen employed by the concern or for amenities directly connected with those dwelling houses. |
| Legal consequence | For acquisition of that land, the concern was deemed to be a Company for the purposes of Part VII. |
| Specified references | References to a Company in Sections 4, 5A, 6, 7 and 50 were also to be interpreted as references to such an industrial concern. |
Limited statutory deeming
Section 38A did not state that every industrial concern became a Company generally. Its deeming rule applied to a qualifying industrial concern, for acquisition of land for the specified purposes, and for the purposes identified by the provision.
Section 39: previous consent of Government and execution of agreement
Section 39 imposed statutory preconditions on acquisition of land for a Company under Part VII. The provisions of Sections 6 to 16, both inclusive, and Sections 18 to 37, both inclusive, could not be put into force for such an acquisition unless the previous consent of the appropriate Government had been obtained and the Company had executed the agreement contemplated by the succeeding provisions of the Act.
| Section 39 requirement | Meaning in the statutory scheme |
|---|---|
| Previous consent | The appropriate Government had to give its consent before the specified acquisition provisions could be put into force for acquisition of land for a Company under Part VII. |
| Execution of agreement | The Company had to execute the agreement contemplated by Part VII. |
| Provisions restricted | Sections 6 to 16 and Sections 18 to 37 could not be put into force for the Company acquisition unless both statutory requirements were satisfied. |
Why Section 39 was important
Section 39 made acquisition for a Company subject to additional statutory safeguards. The ordinary acquisition machinery specified in the section was not, by itself, sufficient to proceed with a Part VII Company acquisition. The Act additionally required previous Government consent and execution of the prescribed agreement.
Section 40 dealt with the enquiry and Government satisfaction required in cases governed by that provision. Section 41 dealt with the agreement between the Company and the appropriate Government, while Section 42 dealt with publication of that agreement.
Important legal terms and connected provisions
Industrial concern: For Section 38A, the relevant concern was one owned by an individual or association of individuals, not being a Company, and ordinarily employing not less than one hundred workmen.
Company: The expression was defined in Section 3(e) of the 1894 Act. Part VII contained special rules governing acquisition for Companies, while Section 38A created a limited deeming rule for qualifying industrial concerns.
Appropriate Government: The expression was governed by Section 3(ee) of the 1894 Act. Which Government was the appropriate Government depended on the statutory definition and the acquisition concerned.
Previous consent: Under Section 39, consent of the appropriate Government was required before the provisions specified in that section could be put into force for acquisition of land for a Company under Part VII.
Agreement: The agreement referred to in Section 39 was the statutory agreement dealt with in Section 41 and connected provisions of Part VII.
Sections referred to in Section 38A
Section 38A expressly provided that references to a Company in Sections 4, 5A, 6, 7 and 50 were to include the qualifying industrial concern described by that section. Those provisions formed part of the wider acquisition procedure, including preliminary notification, objections, declaration, further acquisition steps and acquisition at the cost of a local authority or Company.
Sections 39 to 42 as a connected scheme
Section 39 established the threshold requirement of previous consent and execution of an agreement. The following provisions addressed the enquiry and Government satisfaction under Section 40, the terms of the agreement under Section 41 and publication under Section 42. They should therefore be read together when examining a Company acquisition under the pre-2013 statutory framework.
Legal position after the 2013 land acquisition law
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 repealed the Land Acquisition Act, 1894 through Section 114. Earlier proceedings may require examination of the transitional and saving provisions of the 2013 Act, Section 6 of the General Clauses Act, 1897, applicable amendments and judicial decisions. The result in a particular acquisition depends on its facts and procedural history.
This article explains the statutory framework under the Land Acquisition Act, 1894 before implementation of the 2013 Act. It is general legal information and not advice for a particular acquisition.