TaxTMI 
TaxTMI 
TaxTMI 
1977 (1) TMI 148
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.... of State Policy contained in clauses (b) and (c) of Art. 39 of the Constitution. It imposed a maximum ceiling on the holding of agricultural land in the State of Maharashtra and provided for the acquisition of land held in excess of the ceiling and for the distribution of such excess land to landless and other persons. During the subsequent years, various amendments were made in the Principal Act from time to time and the Principal Act, as amended upto that date, was included in the Ninth Schedule by the Constitution (Seventeenth Amendment) Act, 1964. Thereafter certain further amendments were made in the Principal Act and the amending Acts were also included in the Ninth Schedule as a result of the Constitution (Thirtyninth Amendment) Act, 1975. Then came three major amending Acts which, according to the appellants, introduced the vice of unconstitutionality in the Principal Act. Maharashtra Act 21 of 1975 effected radical amendments in the Principal Act by lowering ceiling on agricultural holding and creating an artificial family unit for fixing ceiling on holding of agricultural land. This amending Act was followed by Maharashtra Act 47 of 1975 and Maharashtra Act 2 of 1976 whi....
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....s it creates an artificial concept of family unit for fixing ceiling on holding of land by such family unit, is in conflict with the second proviso to clause (1) of Article 31A and if it is, whether it is protected under Article 31-B ? Though logically the first part of the. question as to infraction of the second proviso. to clause (1 ) of Article 31A should receive our consideration earlier in point of time, it would be convenient first to examine the second part of the question, for if we are of the view that Article 31-B immunises the Principal Act against attack on the ground of violation of the second proviso to Article 31A, it would become unnecessary .to consider whether in fact there is any infraction of the second proviso to clause (1) of Article 31A. But before we examine the scope and 'applicability of Article 3lB in the present case, it would be desirable to refer to a few relevant provisions of the Principal Act. The Preamble and the long title of the Principal Act show that it was enacted to impose a maximum ceiling on the holding of agricultural land in the State of Maharashtra and to provide for the acquisition of land held in excess of ceiling and for the dis....
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....chedule provides for different ceilings for different classes of lands in the various districts and talukas of the State and sub-sections (2) and (3) lay down the method of computation of the ceiling area where different classes of lands are held by a person or a family Unit. Then follows section 6 which is in the following terms: "Where a family unit consists of members which exceed five in number, the family unit shall be entitled to hold land exceeding the ceiling area to the extent of one-fifth of the ceiling area for each member in excess of five, so however that the total holding shall not exceed twice the ceiling area, and in such case, in relation to the holding of such family unit, such area shall be deemed to be the ceiling area." This is followed by sections 8 to 11A which deal with restrictions on transfers and acquisitions and consequences of contraventions and sections 12 to 21A which provide inter alia for holding an enquiry for determination of land held in excess of the ceiling area and making of a declaration by the Collector stating his decision on the total area of land which is in excess of the ceiling area and the area, description and full particulars of th....
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....r jointly or separately, are aggregated together and by a fiction of law deemed to be held by the family unit. We have described the family unit as contemplated in the Act as an artificial legal conception because in quite a few cases it would be different from the family as known in ordinary parlance: the latter would include 'even major sons and unmarried daughters which the former by its definition does not. It is clear from the scheme of the Act that for the purpose of determining whether land is held in excess of the ceiling area, a family unit is taken as a unit and the limitation of ceiling area is applied in relation to the land deemed to be held by such family unit and in such a case, each individual member of the family unit is not treated as a separate unit for the purpose of applicability of the limitation of ceiling. The land held by each member of the family unit is fictionally treated as land held by the family unit and to the aggregate of such land which is deemed to be held by the family unit, the limitation of the ceiling area is applied. This feature of clubbing together the land held by each member of family unit for the purpose of applying the limitation of....
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....d added that this step would go a long way "----to afford opportunities to. landless sections of the rural population to gain in social Status and to feel a sense of opportunity equally with other sections of the community." It is emphatic that in the conditions which prevail in rural India, the possession of some land in itself would be an immunity against abject poverty and would ensure for the owner some minimum resources to fall back upon and his economic and social condition would also improve on account of his owning some land which he can call as his own. The Agricultural Labour Enquiry conducted in the 1960s showed that the average of per capita income of an agricultural labourer with land was much more than the average or per capita income of an agricultural labourer without land. The policy of imposing ceiling on agricultural holdings was, therefore, initiated in the country with the twin objectives of changing the skewed distribution of agricultural land ownership in the country and making some land available for distribution among the landless. It was in implementation of this policy that the Principal Act was passed by the Maharashtra Legislature in 1961. The ceiling....
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.... President, has received his assent ; Provided further than where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure stranding thereon or appurtenant thereto, unless the law relating to acquiring of such land, building or structure, provides for payments of compensation at a rate which shall not be less than the market value thereof." Article 31A together with the first proviso was added in the Constitution by the Constitution (First Amendment) Act, 1951, while the (1) Report of the Committee on 'Size of Holdings' set up by the Panel on Land Reforms. second proviso was introduced by the Constitution (Seventeenth Amendment) Act, 1964. Article 31-B was .also introduced in the Constitution at the same time as Article 31A and it reads as follows: "31-B. Without prejudice to. the generality of the provisions contained in article 31A, none of the Acts and Regulations specifie....
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....was being frustrated. Without a dynamic programme of agrarian reform, it was not possible to change the face of rural India and to upgrade the standard of living of the large masses of people living in the villages. In fact the promise of agrarian reform is implicit in the Preamble and the Directive Principles of State Policy and it is one of the economic foundations of the Constitution. It was, therefore felt that laws enacted for the purpose of bringing about agrarian reform in its widest sense-agrarian reform which would be directed against gross inequalities in land ownership, disincentives to production and desparate backwardness of rural life and which would cover not only abolition of intermediary tenures zamindaris and the like but restructuring of village life itself taking in its broad embrace the entire rural population--should be saved from invalidation. It was with this end in view that Article 31-B was introduced in the Constitution along with Article 31A. The object 'and purpose of introducing Articles 31A and 31-B was to protect agrarian reform legislation from invalidation. We shall consider the provisions of Article 31A a little later when we examine the true ....
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....nd an economic mission and every article of the Constitution must. therefore. be construed so as to advance the social purpose and fulfil the economic mission it seeks to accomplish. The Court must place an expansive interpretation on the language of Article 31-B so as to carry out the object and purpose of enacting that article. We must, in the circumstances, hold that Article 31-B is sufficiently wide to protect legislation not only where it takes away or abridges any the fights conferred by any provisions of Part III, but also where it is inconsistent with any such provisions. It must follow a fortiori that even if the second proviso to clause (1) of Article 31A is construed as not conferring any fundamental right but merely imposing a restriction on legislative competence, the Act, in so far as it contravenes or is inconsistent with the second proviso to clause (1) of article 31A would still be saved from invalidation by Article 31-B. But we are clearly of the view that the second proviso to clause(1) of Article 31A does confer a fundamental right. This conclusion is inevitable if we look at the conspectus of the provisions contained in Article 31 and 31A. These provisions occ....
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....se limitations on the power of the State and to declare the corresponding guarantee of the individual to his right to property. Limitation on the power of the State and the guarantee of right are plainly complementary" (Emphasis supplied). Article 31A carves out an exception to the applicability of Article 31--and also Articles 14 and 19--and immunises certain categories of agrarian reform legislation from attack on the ground that they violate any, of these three articles. Even if any agrarian reform legislation falling within the specified categories infringes Articles 14, 19 and 31, it would not be invalid. Having regard to the high objective of bringing about agrarian reform in the country with a view tO improving the life conditions of the common man, such agrarian reform legislation is not required to meet the challenge of any of these three articles. But, in order to earn this immunity, the first proviso requires that such agrarian reform legislation when made by a State must receive the assent of the President. That is a condition for the applicability of the exception contained in Article 31 A. Then follows the second proviso which enacts an exception to this exception. It....
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....e main provision something which would otherwise fall within it. Now, it is true that the proper function of a proviso is to except or qualify something enacted in the substantive clause, which, but for the provision would be within that clause but ultimately, as pointed out by this Court in Ishverlal Thakorelal Almaula v. Motibai Naglibhai( [1966] 1 S.C.R. 367 at 373.) "--the question is one of interpretation of' the proviso: and there is no rule that the proviso must always be restricted to the ambit of the main enactment". Here, the intention of the legislature in enacting the second proviso is very clear and that is to ensure payment of full market value as compensation to a person in personal cultivation of his land where a portion of the land within the ceiling limit applicable to him is acquired by the State Government. But for the second proviso, even if a law authorising acquisition of land within the ceiling limit did not provide for payment of compensation, it would be protected from invalidation under Article 31A. That was not a result which the Parliament favoured. Parliament was anxious to protect the interest of the small holder, the common man who holds land wit....
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....and while doing so, the parliament added the second proviso to clause (1) of Article 31A. The Ninth Schedule was also amended by including certain State enactments relating to agrarian reform in order to remove any uncertainty or doubt that may arise in regard to their validity. One of the State enactments included in the Ninth Schedule by this amendment was the' Rajasthan Tenancy Act, 1955 which was added as Entry 55. Section 3 which amended the Ninth Schedule carried the following Explanation: "Explanation.--Any acquisition made under the Rajasthan Tenancy Act, 1955 (Rajasthan Act 111 of 1955), in contravention of the second proviso to clause (1) of article 31A shall, to the extent of the contravention, be void." This Explanation, contended the appellants, explained the scope and effect of the inclusion of an enactment in the Ninth Schedule vis-a-vis contravention of the second proviso to clause (1) of Article 31A and indicated the parliamentary intent that such inclusion is not intended to save the enactment from the invalidating consequence of the contravention. It was urged that, by taking the illustration of the Rajasthan Tenancy Act., 1955, the Explanation sought to ex....
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....acquisition made under it in contravention of the second proviso to clause ( 1 ) of Article 31A shall be void. The Explanation, in our view, far from supporting the construction contended for on behalf of the appellants, militates against it. We may also in the passing refer to the view taken by the Allahabad High Court in regard to the true meaning and effect of Article 31-B in relation to the second proviso to clause (1 ) of Article 31A. The Allahabad High Court took the view in a decision given on 14th November, 1975 which is the subject-matter of Civil Appeal No. 1307 of 1976 in this Court that the second proviso to clause (1) of Article 31A places restriction only on executive action and not on legislative action and since Article 31-B validates merely enactments specified in the Ninth Schedule: and not the executive action taken under those enactments, the placing of the Act in the Ninth Schedule does not dispense with the requirement that executive action taken by the State in the shape of acquisition under the Act should conform to. the restriction set out in the second proviso to clause (1) of Article 31A. This view taken by the Allahabad High Court is a little difficult t....
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....tracted. One is that land must be. held by a person under his personal cultivation and the other is that there must be a ceiling limit applicable to such person. Where these two conditions are satisfied, the State is prohibited from acquiring any portion of the land within the ceiling limit unless the law authorising such acquisition provides for payment of compensation at a rate not less than the market value. Now in the present case, the Act has created an artificial concept of a family unit and aggregated the land held by each member of the family unit for the purpose of applying the limitation of ceiling areas. It could not be disputed by the appellants that the State Legislature had legislative competence to do so. The only argument advanced on behalf of the appellants was that this device adopted by the State Legislature of clubbing together the land held by each member of the family unit and supplying the limitation of ceiling area to the aggregation of such land, would in many cases have the effect of taking away without payment of full market value as compensation the land held by the wife or minor son minor unmarried daughter, even though it is within the ceiling area app....
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....suffer, some women and minors may lose the land legitimately belonging to them, but that is inevitable when major schemes of agrarian reform are adopted for wiping out socio-economic injustice. It must be remembered that the legislature can only deal with the generality of cases and it cannot possibly make provision for every kind of exceptional situation. Otherwise the law would be as loaded with qualifications and exceptions that it will cases to be intelligible and become of fertile source of mischief. Moreover, it is entirely for the legislature to decide what policy to adopt for the purpose of restructuring the agrarian system and the Court cannot assume the role of an economic adviser or censor competent to pronounce upon the wisdom of such policy. That would be a matter outside the orbit of judicial review, being a blend of policy, politics and economics ordinarily beyond the expertise and proper function of the Court. We must accordingly hold that the Act does not conflict with the second proviso to clause (1) of Article 31A and cannot be held to be bad on that account. The result is that the appeals fail and are dismissed with costs. There is to be only one set of costs. ....
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....ub-section (6.) of the amended U.P. Imposition of Ceiling of Land Holdings Act is violative of the second proviso to clause (1 ) of Article 31A of the Constitution, inasmuch as it provides for ignoring all transfers of land made after 24th January, 1971 save those excepted under the proviso to that sub-section and thereby authorises acquisition of land held by a person under personal cultivation within the ceiling limit applicable to him. The High Court also answered the third .question against the State on the view that Art. 31-B does not dispense with the requirement that an acquisition made by the State even if it be under an enactment specified in the Ninth Schedule, should conform with the second proviso to clause (1) of Article 31A and if the acquisition is violative of that proviso, it would be void, notwithstanding that the enactment under which it is made is included in the Ninth Schedule. The fourth question was also answered in the same way by holding that the protection given under Article 31C of the Constitution does not extend to violation of the second proviso to clause (1) of Article 31A. The answer given by the High Court to the fourth question is not challenged in....
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....nal on the ground that they violate the second proviso to clause (1 ) of Article 31A of the Constitution. The constitutional validity of the whole Act was challenged in the writ petitions giving rise to these two appeals, but the High Court negatived the challenge and upheld the constitutional validity of the Act save in regard to those provisions which create an artificial concept of a family and provide for clubbing together of land held by each member of the family for the purpose of applying the limitation of permissible area. We will briefly refer to these provisions which have been struck down by the High Court as constitutionally invalid. Section 3 is the definition section and clause (10) of that section define 'person' to include inter alia a family. The expression 'family' is defined in clause (4) of section 3 by saying that 'family' in relation to a person means the person, the wife or husband, as the case may be, of such person and his or her minor children, other than a married minor daughter. It is obviously an artificial definition of family because family, as known in ordinary parlance, would include not only minor children but also major son....
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....Ninth Schedule and hence it was not possible for the State to invoke the protection of Article 31-B. But subsequently the Act has been included in the Ninth Schedule as Entry 78 by the Constitution (Thirty-fourth Amendment) Act, 1974 and hence it is now entitled to the immunity conferred by Article 31-B. We had occasion to consider a similar question arising under the Maharashtra Agricultural Lands' (Ceiling of Holdings) Act, 1961 where also an artificial concept of a family unit is created and lands held by each member of the family unit are aggregated together for the purpose of applying the limitation of ceiling area. The relevant provisions of the Maharashtra Agricultural Lands (Ceiling of Holdings) Act, 1961 are in fact almost identical with the impugned provisions of the Punjab Land Reforms Act, 1972 While dealing with the constitutional validity of the Maharashtra Agricultural Lands (Ceiling of Holdings) Act, 1961 in Civil Appeals Nos. 1132-1164 of 1976, we have pointed out in a judgment delivered today that these provisions introducing the concept of a family unit and clubbing together lands held by each member of the family unit and applying the limitation of ceiling a....
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.... The recurrence of attacks on the vires of land reform laws, even.after being impregnably barricaded by the Ninth Schedule, constrains me to set out at some length the broad perspective which courts must possess in such confrontation situations. Our Constitution is tryst with destiny, preambled with Inscent solemnity in the words 'Justice--social, economic and political'. The three great branches of Government, as creatures of the Constitution, must remember this promise in their functional role and forget it at their peril, for to do so will be a betrayal of those high values and goals which this nation set for itself in its objectives Resolution and whose elaborate summation is in Part IV of the paramount parchment. The history of our country's struggle for independence was the story of a battle between the forces of socio-economic exploitation and the masses of deprived people of varying degrees and the Constitution sets the new sights of the nation. To miss the burning economics and imperative politics of the Fundamental Law and to focus fatuously on legal logomachy and pettifogging casuistry is to play truant with its messiahnism and to defeat the sweep of its huma....
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.... have been studied by cultural anthropologists, sociologists and economists and, in consequence, the Constitution has included agrarian reform as a crucial component of the New Order. In a recent publication by the Institute of Economic Growth, the inter-connection between land reform, class structure and the powerelite has been high-lighted: "The significance of land reform is obvious if one keeps in view the predominantly agrarian character of most Asian Countries. The majority of populations in the Asian region live in villages where land constitutes not only the main source of livelihood but also the basis of social stratification power 'structure, family organisation and belief systems. Land reform which is intended to promote changes in inland relations is bound to exercise a far-reaching influence not only on the pattern of agricultural transformation but of rural transformation as a whole. It should be borne in mind that changes in land relations are not only propellers of socio-economic change, they are also reciprocally influenced by changes in the economic, technological, social, political and ideological spheres. Analysis of the impact of land reforms, therefore,....
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....emes of social engineering, not petty reforms but of big schemes. like that ..... Even in the last three years or so some very important measures passed by State Assemblies and the rest have been held up. No doubt, as I said, the interpretation of the Court must be accepted as right but you, I and the country has to wait with social and economic conditions--social and economic upheavals-and we are responsible for them. How are we to meet them ? How are we to meet this challenge of the times ? Therefore, we have to think in terms of these big changes, land changes and the like and therefore we thought it best to propose additional articles 31A and 3lB and' in addition to that there is a Schedule attached of a number of Acts passed by State Legislatures, same of which have been challenged or might be challenged and we thought it best to save them from long delays and these difficulties, so that this process of change which has been initiated by the States should go ahead." (Constitution First Amendment Bill Debates, d/16-5-51). We now know the high seriousness and wide sweep of the constitutional provisions falling for construction. The purpose of Art. 3lB is conferment of tota....
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....constitutional invasion on the legislative provisions. The appellants have arrived in three batches. The first set of appeals is by landlords from Maharashtra whose challenge of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 (Act No. 27 of 1961 ) as amended, (especially ss. 4 and 5) proved ineffectual in the High Court and they seek better fortune by urging some of the same arguments more sharply in this Court. The next bunch of appeals is by the State of Punjab which complains about the High Court's conclusion of unconstitutionality of s. 5(1) of the Punjab Land Reforms Act, 1972. The third group is by the State of U.P. some of the provision's of whose land. reform law have been declared ultra vires by the High Court, and the aggrieved State contests that ratiocination as horrendously wrong. For easy reference hereafter, I will abbreviate the three statutes as the Maharashtra Act, the Punjab Act and the U.P. Act. The provisions under attack are substantially similar in nature, and the arguments before us likewise have been more or less identical. One common feature of all the three enactments is that they are all included in the Ninth Schedule to the Co....
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....rt. 3lB. One such infirmity, legislative incompetency, is the foundation of hiss argument. Before critically appraising a contention, one must sympathise with the submission. So we may read Art. 31A(1) to the extent relevant: "31A. Saving of laws providing for acquisition of estates, etc :-- (1) Notwithstanding anything contained in article 13, no law providing for-- (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or (b)the taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property, or (c) the amalgamation of two or more corporations either in the public interest or in order to secure the proper management of any of the corporation, or (d) the extinguishment or modification of any rights of managing agents, secretaries and treasurers, managing directors, directors or managers of corporations, or of any voting fights of shareholders thereof, or (e) the extinguishment or modifications of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or....
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.... Art. 31A (Second Proviso) must bear the meaning assigned to it by s. 2(12) of the General Clauses Act. Counsel states that the Acts in question define 'family' and 'family unit' in a bizarre manner, by providing for ceiling limit for 'family unit' incongruously with the natural concept of family but fabricated in the foundry of the statutes, the laws have violated the ceiling for the individuals comprising the family. By reading ss. 4(1) and 5 of the Maharashtra Act and s. 4(1) and s. 5 read with r. 5(4) of the Punjab Act, counsel tried to make good his contention that there was a flagrant departure from the concept of 'person' as defined in s. 2(12) of the General Clauses Act. By doing this, the legislature treated one person's separate land as land of the family unit and deprived the wife and minor child of the right to hold lands within the ceiling limit. By this recondite reasoning, Shri Tarkunde urged that the legislature had transgressed the limits of their competency which rendered the legislations void, not because any fundamental right in Part III had been flouted but because the limitation on legislative competency written into the sec....
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....rojects of agrarian reform. To argue more is to labour the obvious and to interpret liberally is an obligation to the Constitution. Assuming that the legislations in question are measures of agrarian reform--and they are-We have to dissect and discover the nature of the objection based on the 2nd proviso to Art. 31 (1) and decide whether the protective wings of Art. 3lB are wide enough to take in these legislations and repel the imputed infirmity. Art. 3lB categorically states that' none of the Acts specified in the Ninth Schedule nor any of the provisions thereof, shall be deemed to be void on any conceivable ground rooted in Part III. Even if such Act or provision is inconsistent with any provision of Part 111 it shall not be invalidated. Even if such Act or provision takes away or abridges any of the rights conferred by any provisions of Part III it shah continue in force. In short, no matter what the grounds are, if they are traceable to Part Iii in whatever form, they fail in the presence of Art. 3lB. No master of English legal diction could have used, so tersely, such protean words which in their potent totality bang, bar and bolt the door against every possible invalid....
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.... in the concrete case before us there is a clearly enunciated fundamental right, garbed as an exception to an exception or as a proviso carved cut of a general saving provision. It needs no subtlety to see that under the rubric 'Right to Property' a skein of rights and limitations on rights has been wound in Arts. 31 to 31C. Together they are the measure of the fundamental right to property in its macro form and micro notes. So understood, the scheme is plain. A large right to property protected by law against deprivation, compulsory acquisition only on constitutional conditions, saving of agrarian and some other laws from these constitutional constraints, followed by creation, through a proviso, of an oasis where acquisition can be made only by payment of compensation at or above market value-such is the pattern woven by the complex of clauses. A great right is created in favour of owners to get compensation at not less than the market value if lands within the ceiling limit and in personal cultivation are acquired by the State. This is a fundamental right and is a creature of the 2nd proviso to Art. 31A(1). An independent provision may occasionally incarnate as a humble p....