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Madhya Pradesh: 3000 houses built in two months to siphon off compensation from NHAI for the Singrauli-Prayagraj Highway. How the forgery unfolded

These “compensation houses” have 4-foot high brick boundary walls and tin sheds appearing to be “pucca” houses, however, no one resides here. The sole purpose of these houses is to satisfy the avaricious financial desires of the fraudsters involved. It is essential to note here that these plots are not owned by outsiders but by local poor farmers.

“India is not for beginners”, this is commonly said to boast the sometimes unique and otherwise absurd things Indians do. In one such incident in Madhya Pradesh, in just two months, nearly 3000 houses were constructed along the land area marked for acquisition for the construction of the Singrauli-Prayagraj Highway. These houses were allegedly constructed near the highway route by individuals aiming to siphon off compensation payouts when the government acquired the land for the project. This ‘fraud’ was orchestrated by land brokers in collusion with local officials.

Who built these houses on land where the highway project will pass?

While there are 2000 to 3000 houses constructed within a short span of time, these houses have been built by people from Uttar Pradesh, Chhattisgarh and Jharkhand. A Bhaskar report says that these non-MP residents have constructed 32 houses each with one sole motive—Muavza [compensation].

Source: Bhaskar

These “compensation houses” have 4-foot high brick boundary walls and tin sheds appearing to be “pucca” houses, however, no one resides here. The sole purpose of these houses is to satisfy the avaricious financial desires of the fraudsters involved. It is essential to note here that these plots are not owned by outsiders but by local poor farmers.

In March this year, a notification was issued by the authorities for land acquisition to construct 70 70-kilometre highway in Madhya Pradesh. Subsequently, the sale and purchase of land in the affected 33 villages of Chitrangi and Dudhmaniya tehsils in Singrauli was prohibited.

Notably, when a highway project is approved, the sale and purchase of land in the affected area are often prohibited to prevent speculation and inflated compensation claims. This process is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act, 2013). The Act ensures fair compensation and rehabilitation for those whose land is acquired for public purposes, including infrastructure projects like highways​.

Under the LARR Act, once a notification for land acquisition is issued, the transfer of land in the affected area is restricted to prevent people from constructing buildings or making other improvements solely to increase the compensation amount. This measure is crucial to ensure that the compensation process remains fair and that government funds are not unduly exploited.

The 80:20 formula to grab compensation

Since there was a prohibition imposed on the transfer and registry of land in the landmarked during the survey, the land brokers made the local poor farmers who own these plots to sign a stamp paper which stated that if compensation is provided by the National Highway Authority of India (NHAI), then its 80% amount will go to the builder, while the remaining 20% will go to the land owner. The land brokers identified people from UP, Chhattisgarh and other states to become part of this ‘deal’.

In Badkudu village, locals told Bhaskar that the patwari has constructed houses by getting them in the name of his brother and other relatives. Interestingly, entering into the 80-20 formula-based agreement is beneficial for farmers in two ways. If the land plot is acquired by NHAI then the farmer will get compensation Meanwhile, when the stamp paper signatory constructs rooms on the farmer’s land then in that also the farmer will also get 20% money while the lion’s share will go to the builder. In simple words, this means that the farmer will get compensation for the acquired land and a separate compensation for the construction on it.

How land is acquired for highway construction projects

The National Highways Act, of 1956 allows the government to acquire land for the construction, development, and maintenance of national highways. Under this Act, compensation is determined based on the value of the land at the time of notification, and it includes any improvements made to the land.

For the purpose of land acquisition for any highway project, a notification is issued as per section 3a [Power to acquire land, etc] of the National Highway Act. “Where the Central Government is satisfied that for a public purpose any land is required for the building, maintenance, management or operation of a national highway or part thereof, it may, by notification in the Official Gazette, declare its intention to acquire such land,” it states.

Under section 3b [Power to enter for survey etc] of the NHA (1956), a competent official is appointed to conduct a survey of the land area in question. For this usually, the District Collector or SDM is appointed as the  Competent Authority of Land Acquisition (CALA).

Under section 3c [Hearing of objections] of this Act, the findings of the SIA are discussed in a public hearing, allowing affected individuals to voice their concerns/objections.

Under section 3d, the Central government makes an official declaration regarding the land acquisition Section 3e of this Act allows the Central government to take possession of the land in question for the designated purpose. Section 3g lays rules for the determination of the compensation amount the Central government will pay to the owners of the acquired land.

As stated by Union Road and Transport Minister Nitin Gadkari in August last year, while land acquisition for highway projects is done under NHA 1956, the compensation of land is decided as per the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 or simply LARR Act 2013,  which is 2 to 4 times of the determined market value of the land.

Notably, the compensation is calculated based on market value, including a solatium (an additional amount) of 100% of the market value for rural areas and 50% for urban areas. This compensation amount is usually paid directly to the landowners through bank transfers to ensure transparency and prevent fraud.

Parameters to be considered by the Collector while determining compensation as per LARR Act 2013

Compensation racket operating in collusion with Revenue officials

Since there was a ban on the sale and purchase of land in the affected area after NHAI’s survey, if houses were suddenly constructed in one to two months, it is clear that some government officials are involved in this fraud. If houses have been built after the land survey, then it is not possible without the connivance of the revenue department officials since compensation is decided on the basis of the report submitted by the SDM.

Notably, while houses may be constructed recently, if the village patwari has mentioned in the official record that the house was built a few years ago, then the NHAI will be bound to give compensation to the land owner as per the rules. It is pertinent to note that once the land acquisition notification is issued under NHA section 3A, the land use in the affected area cannot be changed. This means that if a land patch was farmland before the 3A notification, then it cannot be used for residential or commercial purposes.  

The NHAI has received several complaints regarding this alleged fraud. PWD’s Executive Engineer Shankar Lal has confirmed this and said that necessary action will be taken. Meanwhile, Chitrangi SDM Suresh Jadhav has said that only those houses which were built before the 3A notification will get compensation. He added that the authorities will investigate as to which houses were constructed after the issuance of land acquisition notification and for this, satellite map will also be checked.

Sidhi Singrauli Railway Land Scam

It is interesting to note that a similar fraud was uncovered by the Ministry of Railways last year in the 541-kilometre Lalitpur–Singrauli railway track construction project worth Rs 6672 crore. In this case, several fake landowners siphoned off heavy compensation for the land acquired by the Railways. Investigations reveal that inflated compensation amounts were granted based on fabricated land records. Much like it is emerging in the above-discussed highway case, in this case as well, some revenue officials worked in collusion with the fraudsters. Similar frauds have been reported in Singrauli for NHAI’s road construction and widening projects as well.  

People deliberately constructing houses near the Singrauli-Prayagraj highway project to exploit compensation payouts, is both alarming and deeply troubling. This brazen act of fraud, allegedly carried out by individuals in collusion with corrupt government officials raises eyebrows. Such acts of deceit exploit the very mechanisms designed to ensure fair compensation and rehabilitation for those genuinely affected by land acquisition projects. It diverts crucial resources away from their intended purpose and slows down the progress of essential infrastructure developments​. The fraudulent actions erode the trust between the government and its citizens, making it more difficult to implement future projects effectively​.

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