Law and Society

Land Banks: Unsettled Law & Undetermined Rights

Arpitha Kodiveri

Land banks operate in a field of legal uncertainty, and are often used as a mechanism to bypass procedural requirements and rights of the local community


The boundary wall constructed by IDCO in Nuagaon, Odisha, as seen by the author during her field visit in early 2018.

The long yellow boundary wall stretched across the coastal forest landscape in Nuagaon, a village in Jagathsinghpur Odisha. As I investigated it further, I noticed betel vine plantations across the boundary wall. Understanding my confusion, Pradeep (name changed) explained, “They acquired the land forcefully. After POSCO left we started to get our land back but that was not to be. They built this boundary wall. We continue to plant our betel leaves, as a mark of protest and more importantly to secure our livelihood.”[1]The area I visited had witnessed a violent and long drawn protest against the acquisition of land for an integrated steel plant to be run by the South Korean based steel giant POSCO. POSCO had signed an MoU with the government of Odisha in 2005 to establish the integrated steel plant. The struggle against the acquisition of land continued relentlessly for thirteen years until POSCO finally withdrew in 2017, citing land acquisition problems.

The local community celebrated this withdrawal as a triumph against the multinational company. However, in early 2018 news trickled in that the land was now ‘banked’ and to be awarded to JSW for a steel plant to produce 10 mtpa of steel. Land banks are a mechanism where unutilized acquired land or government land is ‘banked’ in an effort to provide such land to industries with immediacy whenever the need arises. In an assertion of this status as a land bank, The Odisha Industrial and Infrastructure Development Corporation (IDCO) began constructing a boundary wall. As I looked at this pale-yellow wall 3 questions emerged: First, how did the land come to be banked? Second, can forest land be banked? And Third, What happens to the landowners?

In this post I will attempt to address these questions and unpack the legal structure that enables land banks. I argue that land banks are a mechanism to bypass the procedural requirements laid down in the Right to Fair Compensation and Transparency in Land Acquisition Act, 2013 (‘LARR’) and the Forest Rights Act, 2006 (‘FRA’), in order to provide land swiftly for industries. The reality of its implementation is extremely complex as it operates on a terrain where land ownership and categorization are unsettled, accompanied with uncertainty on how the two legal regimes, namely the LARR and FRA, interact. This legal uncertainty, I argue, creates an enabling environment for swift land acquisition without mandating the settlement of disputes with local communities which are affected by it. In an effort to create a mechanism which ensures ease of doing business, this process may do more harm in the long run. In any case, conflicts will continue to persist while due process rights are denied, making it difficult for the setting up of industries.

1. How did the land come to be banked?

The narrative of land acquisition for POSCO has been one rife with confusions of categorization of land and lack of clarity on the nature of land ownership. The land was acquired forcefully by IDCO in 2005 to execute the MoU signed between POSCO and the Government of Odisha. The process of land acquisition was staggered as protests continued by the local community. A spate of violent episodes beginning in 2010 and a bomb blast in 2013 where three local community leaders were killed formed the backdrop to the impasse on the question of land acquisition.

Discovery of survey maps from the 1920s showed that the land to be acquired was ‘forest land’. This changed understanding of the land categorization triggered the application of the Forest Rights Act, 2006. A Circular issued in 2009 by the Ministry of Environment and Forests mandates that consent of the Gram Sabha has to be obtained for the diversion of forest land for a non-forest purpose. Thus, the applicability of the FRA required the compliance of two additional legal requirements: first, that the forest rights of Scheduled Tribes and Other Traditional Forest Dwellers were to be recognized; and second, that the consent of the Gram Sabha was to be obtained. The Gram Sabha resolution was filed in 2008 amidst protests against the steel plant rejecting the acquisition of land. Yet, these resolutions were put aside by the Ministry of Environment on a mere technicality and the forest clearance was granted.

As POSCO exited in 2017, the local community began to re-occupy the land that was forcefully acquired from them. As land remained unutilized for the purpose for which it was acquired, there were two possibilities: either the land was to be returned to the landowners, or, it could be banked. Given that the process of land acquisition was so fraught with confusion, the perception of the State Government of Odisha was that the process of land acquisition was completed for POSCO and with the withdrawal of the project the land could now potentially be banked.

In 2018, notice was provided that the land had now come to be banked. Interviews with local community members in Govindpur revealed that there was no consultation or dialogue with the residents about including the land in the land bank. Under Rule 24(1) of The Odisha Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Rules, 2015, the unutilized land which has been acquired can be included in the land bank. The legal validity of this Rule remains to be examined. The Central Legislation, The Right to Fair Compensation and Transparency in Land Acquisition Act, 2013 (LARR) in Section 101 provides for two options: either the land is returned to the landowners, or, it is banked with the appropriate government. The Singhur judgement in 2016[2]stated that unutilized acquired land was to be returned to the original landowners. In the given instance what has to be scrutinized is whether the lack of the option to return the land to the owners is grounds for illegality of the land bank.

2. Can Forest Land be Banked?

The areas in Dhinkia, Nuagaon, and Govindpur are categorized as forest land. Local community members have applied for rights under the Forest Rights Act, 2006. These rights are yet to be recognized. A case was filed by Bhramarbar Das, a resident of Govindpur before the National Green Tribunal (‘NGT’)[3]claiming that the boundary wall was constructed in violation of the FRA and the Forest Conservation Act, 1980 (‘FCA’). The claim made in the petition was that the construction of the boundary wall was an illegal diversion of forest land which requires forest clearance. Such forest clearance was not obtained, thus there is a need to stop the construction of the boundary wall. This petition resulted in a favourable judgment, where the construction of the boundary wall was ordered to be stopped. Yet, the boundary wall has not been broken down.

The procedure to be followed for the banking of forest land is unclear. There is a conflation of the two legal regimes, namely the LARR and the FRA. The categorization of land as ‘forest land’ attracts the legal regime under the FRA and FCA that govern the diversion of forest land. On the other hand, the legal structures that govern land banks are located in land laws like the LARR, which typically used to govern issues like land acquisition of revenue land. The two sets of legal regimes interact as seen in this case and need to be read together.

The LARR allows for land to be banked, while the FRA requires that forest rights need to be recognized on forest land and consent of the Gram Sabha needs to be obtained. In interviews conducted with the local community, it was revealed that neither was consent taken nor was any consultation conducted with the community prior to the construction of the boundary wall. Thus, it seems that only the enabling provision of land banks have been applied in the given instance without compliance with the requirements of the FRA. The lack of due process is shocking, and guidelines to ensure participation of the local community affected by the banking of land is imperative.

The forest clearance previously provided to POSCO will now be transferred to JSW. In an effort to ease the transfer to JSW, they will not be required to obtain a fresh forest clearance for the proposed project but the one granted to POSCO will be handed over to JSW as being in compliance with the FCA. One of the conditions mentioned in the forest clearance letter provided to POSCO is the need for the recognition of rights under the FRA. As the process of recognition of forest rights is ongoing and claims continue to be filed, how this condition will be met by JSW is yet to be seen. The process of incorporating forest land into the land bank requires careful consideration given the impact it has on the existing forest rights of local communities. The inclusion of the forest land in the land bank in the present case is likely to create more conflict on the ground. Rights have been claimed and the process of recognition is underway.

3. What happens to the landowners?

Land ownership in these areas is undefined and many local community members who were interviewed stated that they do not have legal documentation in support of their ownership. This is the situation of land ownership in forest areas across different parts of India. Indeterminacy of land ownership in the present case has made it easier for IDCO to include the area in the Land Bank.

We must note that as per the definition in LARR, ‘landowners’ includes those whose rights under the FRA have been recognized. With the recognition of forest rights in limbo, the local community impacted by the land bank occupies a legal grey zone where rights exist but they are not recognized. This lack of recognition invisibilizes their valid legal claim.

Till these rights are recognized, the local community will continue to resist the inclusion of this land in the land bank. Will the community affected by the banking of land be compensated is another aspect of this process that has no legal certainty.


Land banks are a mechanism to provide large parcels of land to industries without the administrative hassle of complying with the LARR. The LARR imposes an administrative burden in its demand for due process through mechanisms like the Social Impact Assessment and requirement of consent. These processes can be bypassed if land from the land bank is provided. This effort to reduce the administrative burden for businesses through land banks will compromise on due process requirements instilled in both the LARR and the FRA. The situation in these areas is such that a battle raging for thirteen years may conclude in land being transferred to JSW, perhaps even without compensation to the landowners. The thriving local economy dependent on betel leaves will be quashed for a large steel plant.

“They tried to take our land away once and they are trying again, we will continue to fight”, said a brave resident of Govindpur.[4]The struggle to protect their land will continue.

[1]Based on an Interview conducted in August,2018.

[2]Kedar Nath Yadav v. State of West Bengal & Others, Civil Appeal No. 8438 of 2016.

[3]Bhramarbar Das & Anr. Vs. Union of India & Ors,Original Application No. 191 of 2018 (M.A. No. 516 of 2018)

[4]Based on an Interview conducted in August,2018.

The author is a legal researcher focusing on environmental justice issues. She is a doctoral researcher at the European University Institute, where she studies the intersection of free, prior, and informed consent, business, and human rights in India. She has previously worked on the conflcit on laws in forest areas. 

Categories: Law and Society