TaxTMI 
TaxTMI 
2011 (8) TMI 1107
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....f the Acquisition Act and in Part-III, we will deal with the claim for enhanced compensation and the scope of Article 300A of the Constitution. PREFACE 3. Dr. Svetoslav Roerich, a Russian born, was an internationally acclaimed painter, artist and recipient of many national and international awards including Padma Bhushan from the President of India in the year 1961. Smt. Devika Rani Roerich, grand niece of Rabindranath Tagore had made valuable contributions and outstanding services to the Indian Motion Pictures and Film Industry, was known to be the "First Lady of the Indian Screen". She was awarded Padmashri by the President of India in the year 1958 and was the recipient of the first Dada Saheb Phalke Award and the Soviet Land Nehru Award in the year 1989. 4. Dr. Roerich and Mrs. Devika Rani Roerich had owned an Estate called Tatgunni Estate covering 470.19 acres at B.M. Kaval Village of Kengeri Hobli and Manvarthe Kaval Village of Uttarhalli Hobli, Bangalore South Taluk, out of which 100 acres were granted to them by the State Government in the year 1954 for Linaloe cultivation vide G.O. dated 16.3.1954 read with Decree dated 19.4.1954. When the Land Reforms Act came....
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....f the persons who were associated with the couple, had an eye on their properties, including the land used for linaloe cultivation, valuable paintings, jewellery, artefacts etc., and began to create documents to grab those properties. 8. The Chief Secretary of the State of Karnataka noticing the above facts and circumstances convened a meeting on 1.4.92 in the presence of the Director of Archaeology to take effective and proper steps to preserve the paintings, artefacts and other valuables. For that purpose, they met Smt. Devika Rani and Dr. Roerich on 03.04.92 and a letter was handed over to Dr. Roerich on behalf of the State Government expressing the Government's willingness to purchase the paintings and other valuables so as to set up a Roerich Gallery. The State Cabinet in its meeting held on 09.04.92 also discussed about the desirability of acquiring the landed properties of Roerichs and also for setting up an Art Gallery- cum-Museum, in public interest. Following that meeting, the Roerich and Devika Rani Roerich Estate (Acquisition and Transfer) Ordinance, 1992 was drafted, but could not be issued. 9. The Deputy Commissioner, Bangalore Rural District had repor....
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.... sought for. The Cabinet accorded sanction in its meeting held on 04.03.1994 and the Government issued a notification dated 08.03.1994 in exercise of powers conferred by Section 110 of the Land Reforms Act, withdrawing the exemption granted for the lands used for cultivation of Linaloe under clause (vi) of Sub-section 1 of Section 107 of the Act. Notification was published in the Government Gazette on 11.03.1994. 12. The Assistant Commissioner, Bangalore sub- division later issued a notice no.LRF:CR 17:93-94 dated 28.03.94 to the company to show cause why 137.33 acres of land be not forfeited to the Government, since it had purchased the above mentioned lands in violation of Section 80 and 107 of the Land Reforms (Amendment) Act, 1973. An enquiry under Section 83 of the Land Reforms Act was ordered for violation of the provisions of the Act. The Company, aggrieved by the above mentioned notice, filed Writ Petition No.12806/94 before the High Court of Karnataka, which was allowed to be withdrawn giving liberty to the petitioner to take recourse to the remedies under law. Due to the status quo order passed, by this Court in these appeals the proceedings pending before the As....
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....Whether the Roerich and Devika Rani Roerich (Acquisition and Transfer) Act, 1996, (the Acquisition Act), is protected by Article 31C of the Constitution? 3. Whether the true interpretation of Article 300A of the Constitution, the said Act is violative of the said Article in so far as no specific compensation prescribed for the acquisition of 468 acres of Linaloe plantation, and, after deduction of liabilities and payment of compensation for the artefacts, no balance may and/or is likely to exist for payment of such compensation, as a result of which, whether the Act really is expropriatory in nature? 4. Whether on true interpretation of Article 300A of the Constitution, the said Act is violative of Article 300A as the said Article is not, by itself, a source of Legislative power, but such power of the State Legislature being traceable only to Entry 42 of List III of Schedule VII to the Constitution viz., "Acquisition and Requisition of Property", which topic excludes expropriation and confiscation of property? 5. If Article 300A of the Constitution is construed as providing for deprivation of property without any compensation at all, or illusory compensation, and hen....
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....C 351, Regional Transport Officer, Chittoor and Ors. v. Associated Transport Madras (P) Ltd. and Ors. (1980) 4 SCC 597, Cannanore Spinning and Weaving Mills Ltd. v. Collector of Customs and Central Excise, Cochin and Ors. (1969) 3 SCC 112, Hukam Chand etc. v. Union of India (UOI) and Ors. (1972) 2 SCC 601. 19. Shri Andhyarujina also submitted that the show cause notice dated 28.03.1994 was ex facie illegal and that the prohibition of transfer of land under Section 80 of the Act cannot act retrospectively in respect of lands already stood exempted under Section 107(1)(vi) of the Act. 20. Learned senior counsel also refuted the contention of the State that, under Section 107(2) of the Land Reforms Act, there can be only 10 units of land used for Linaloe cultivation exempted under Section 107(1)(vii) of the Act. Learned senior counsel submitted that it would be anomalous for the Legislature, by amending the Act, on the one hand, to exempt the lands for cultivation of Linaloe from operation of the Land Reforms Act, without any limit of holding and, at the same time, deprive the existing cultivators of Linaloe, except to the extent of 10 units on 1.3.74. Learned counsel subm....
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....fected their title over the properties in question. Further, Mrs. Devika Rani Roerich had also disputed the execution of the sale deed dated 16.02.92 and a suit disputing title is pending consideration before the Civil Court. Learned senior counsel also submitted that the company had illegally acquired 141 acres 25 guntas of land in excess of the ceiling prescribed under Section 107(2) of the Land Reforms Act and the Act mandates that no person shall, which includes a Company also, after the date of commencement of the Land Reforms Act, i.e., 01.03.74, acquire land in any manner for cultivation of Linaloe to an extent which together with the land cultivated by Linaloe, if any, already held by him exceed 10 units notwithstanding anything contained in sub-section (1) of Section 107. 24. Learned senior counsel further submitted that the provisions of Sections 66 to 76 also shall apply mutatis mutandis, in respect of every acquisition contrary to Section 107(2). Learned senior counsel also submitted that in any view Section 110 of the Land Reforms Act does not suffer from the vice of excessive delegation of legislative powers. Learned senior counsel submitted that Section 110 ....
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....f U.P. and Ors. (1981) 2 SCC 600; J. K. Industries & Another v. Union of India & Others (2007) 13 SCC 673. 27. Learned senior counsel also submitted that requirement of placing the notification dated 08.03.94 before the State Assembly is not a mandatory requirement once the State Government publishes the notification in the official gazette. Reference was made to the judgment in Jan Mohammad Noor Mohammad Bagban v. State of Gujarat and Anr., AIR 1966 SC 385. Learned senior counsel submitted that in any view of the matter, as per the order of this Court dated 24.2.2011 the State Govt. have already taken steps for placing the notification before both the Houses of the State Legislature. Consequently, the defect, if any, of non-laying the notification, has been cured. 28. The Land Reforms Act was enacted by the Karnataka State Legislature to have a uniform law relating to land reforms in the State of Karnataka, relating to agrarian relations, conferment of ownership on tenants, ceiling on land holdings etc. Chapter II of the Act deals with general provisions relating to tenancies, Chapter III deals with conferment of ownership on tenants. Ceiling on land holdings is ....
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....med that a land is held by an institution, trust, company, association or body where it is held by an individual on its behalf. Section 80 bars transfer of any land to non-agriculturists, which says that no sale, gift or exchange or lease of any land or interest therein etc. shall be lawful in favour of a person who is disentitled under Section 79A or 79B to acquire or hold any land. 31. The first appellant being a company was, therefore, prohibited from holding any agricultural land after the commencement of the Act. If the company was holding any land with Linaloe cultivation on the date of the commencement of the Act, the same would have vested in the State Government under Section 79B(3) of the Act and an amount as specified in Section 72 would have been paid. Section 104, however, states that the provisions of Section 38, Section 63 other than sub- section (9), thereof, Sections 64, 79-A, 79-B and 80 shall not apply to plantations and is not made subject to the provisions of Section 110. 32. Section 107 states that the provisions of the Act would not apply to certain lands mentioned therein, but made subject to the provisions of Section 110. Section 107, to the ext....
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....l legislative functions which consists in the determination of the legislative policy and of formally enacting that policy into a binding rule of conduct. In Maharashtra State Board of Secondary and Higher Secondary Education and Anr. v. Paritosh Bhupeshkumar Sheth and Others (1984) 4 SCC 27, this Court declared that while examining whether a particular piece of delegated legislation - whether in the form of a rule or regulation or any other type of statutory instrument - was in excess of the power of subordinate legislation conferred on the delegate, has to be determined with reference only to the specific provisions contained in the relevant statute conferring the power to make the rule, regulation etc. and the object and purpose of the Act as can be gathered from the various provisions of the enactment. It was held that the Court cannot substitute its own opinion for that of the legislature or its delegate as to what principle or policy would best serve the objects and purpose of the Act or sit in judgment over the wisdom and effectiveness or otherwise of the policy laid down by the regulation making body and declare a regulation to be ultra vires merely on the ground that....
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....tional District Judge and Ors. (1989) 1 SCC 561 this Court held that the Parliament decided as a matter of policy that the cantonment areas in a State should be subject to the same legislation relating to control of rent and regulation of housing accommodation as in force in other areas of the State and this policy was given effect to by empowering the Central Government to extend to a cantonment area in a State the tenancy legislation as in force as in other areas of the State including future amendments and that there was no abdication of legislative functions by Parliament. 38. Chapter VIII of the Land Reforms Act deals with exemption provisions. Section 104 of the Act deals with plantations, which says, that the provisions of Section 38, Section 63, other than sub-section (9), thereof, Sections 64, 79-A, 79-B and 80 shall not apply to plantations, but the power to withdraw the exemption in respect of the plantations, has not been conferred on the State Government, but evidently retained by the Legislature. Legislative policy is therefore clearly discernible from the provision of the Statute itself, that, whenever the Legislature wanted to confer the power to withdraw t....
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....can claim exemption as a matter of right. The legislative will was to make Section 107 subject to Section 110 and not the will of the delegate, hence, overriding effect has to be given to Section 110. Further, the Land Reforms Act including Section 110 was placed in IXth Schedule in the year 1965 and, hence, immune from challenge in a court of law. 41. Dr. Roerich and Mrs. Devika had got only the conditional exemption from the provisions of the Land Reforms Act for the lands used for Linaloe cultivation and, hence, they also would have lost ownership and possession of the lands once the exemption had been withdrawn and the land would have vested in the State. The land was purchased by the Company with that statutory condition from Roerichs and, hence, was bound by that condition. We, therefore, reject the contention that Section 110 is void due to excessive delegation of legislative powers. 42. The State Government issued the notification dated 8.3.1994 in exercise of the powers conferred by Section 110 of the Land Reforms Act which was published in the official gazette on 11.3.94. Section 2(22) of the Act defines `Notification' to mean a notification published i....
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....gislative powers on the State Government and we may now examine whether the failure to follow the procedure laid down under Section 140 of the Act has affected the legal validity of the notification. Facts would indicate that, in the instant case, the notification has not been laid before the Legislature, but looking at the language of Section 140, it has not affected the validity or the effect of the notification. For easy reference Section 140 is extracted hereunder: "Section 140. Rules and notifications to be laid before the State Legislature.- Every rule made under this Act and every notification issued under Sections 109, 110 and 139 shall be laid as soon as may be after it is made or issued before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and, if, before the expiry of the session in which it is so laid or the session immediately following both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made, the rule or notification shall thereafter have effect only in such modifi....
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....e State Legislature to give its approval for bringing into effect the notification, but a positive act by the Legislature has been contemplated in Section 140 to make the notification effective, that does not mean that failure to lay the notification has affected the legal validity, its effect or the action taken precedent to that notification. We, therefore, hold that non-laying of the notification dated 08.03.1994 before the State Legislature has not affected its validity or the action taken precedent to that notification. We have now, vide our order dated 24.02.2011, directed the State Government to place the notification before both the Houses of the State Legislature following the judgment in Quarry Owners' case (supra). Therefore, the defect, if any, of not placing the notification has been cured. 51. We may also consider the effect of Section 80 of the Land Reforms Act on Section 79-B. Section 80 prohibits transfer of any land to non- agriculturalist. Section 80(1)(iv), states that it shall not be lawful to sell, gift, exchange or lease of any land, in favour of a person, who is disentitled under Section 79-B, to acquire or hold any land. The expression "land" h....
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.... included in the IXth Schedule. PART-II Constitutional Validity of the Acquisition Act 54. The State Government after withdrawing the exemption granted to the lands used for Linaloe cultivation, felt the necessity to take effective and proper steps to manage the estate, its tree growth, preserve paintings, artefact and other valuables of Roerichs' and their transferees and to establish an Art Gallery-cum-Museum. For the said purpose initially the State issued an ordinance, namely, the Roerich and Devika Rani Roerich Estate (Acquisition and Transfer) Ordinance 1992, which was sent for the approval of the President of India. In the meanwhile Roerich couple passed away and the ordinance was returned to make sufficient amendments. After necessary amendments ordinance of 1995 was issued. However, the ordinance was returned by the Government of India informing that it had no objection to introduce legislation as a bill and hence the same with requisite amendments was placed before the Legislative Assembly and the Legislative Council. The Acquisition Act was then passed and subsequently got the assent of the President on 15.11.96 and was brought into force on 21.11.1996. ....
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....contrary to each other and hence the impugned Act can be saved only if Presidential assent is obtained under Article 254(2) of the constitution. Learned Counsel submitted that the Acquisition Act is in pith and substance a law on acquisition and presidential assent under Article 254(2), was warranted to save that Legislation. 58. Shri K.N. Bhat, learned senior counsel appearing for the appellants in CA No.6521-6537 of 2003 submitted that Article 300A is almost a replica of Article 31(1), hence, all the judicial pronouncements rendered by this Court on Article 31(1) would equally apply when we interpret Article 300A. Learned counsel also referred to the view expressed by Justice Subba Rao in P. Vajravelu Mudaliar's case (supra) and also referred to Subodh Gopal Bose v. Bejoy Kumar Addya and Others (1973) 2 SCC 105 and few other decisions. Learned counsel submitted that the concept of eminent domain has to be read into Article 300A, which is an over-arching principle. Learned counsel also submitted that the concept of reasonableness, could be the touchstone while interpreting a statute enacted to deprive a person of his property under Article 300A. Learned counsel also r....
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....he valuable tree growth, paintings, art objects, carvings and for the establishment of an art gallery-cum-museum. Learned counsel submitted that general scheme of the Acquisition Act is for the preservation of Linaloe cultivation and other tree growth hence constitutes a measure of agrarian reforms and in any view Act does not violate Article 14 or 19 of the Constitution of India. 62. Learned senior counsel also submitted that Acquisition Act was never challenged by the appellants before the High Court on the ground of repugnancy or on the ground of absence of Presidential assent under Article 254(2) of the Constitution. Learned counsel submitted that such a plea cannot be raised for the first time before this Court since the same raises questions of facts. Reference was made to the decisions of this Court in Engineering Kamgar Union v. Electro Steels Castings Ltd. and Another (2004) 6 SCC 36; Bhuwalka Steel Industries Ltd. v. Bombay Iron and Steel Labour Board and Another (2010) 2 SCC 273. Learned counsel submitted that in any view assent of the President was sought for and obtained which satisfies the requirements of Article 254(2) as well as the proviso to Article 31A o....
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....The subject matter of the Bill falls under Entry 18 of List II and Entry 42 of List III of the 7th Schedule to the Constitution of India. Therefore, the State Legislature is competent to enact the measure. Since the provisions of the Bill would attract sub-clause (a) of Clause (1) of Article 31A of the Constitution, the Bill has to be reserved for the assent of the President in accordance with the proviso to Clause (1) thereof in order to get the protection of that Article. Accordingly, the Governor has reserved the Bill under Article 200 of the Constitution of India for the consideration of the President." Later, the assent of the President was obtained on 15.11.96. 65. The plea of repugnancy can be urged only if both the legislations fall under the Concurrent List. Under Article 254 of the Constitution, a State law passed in respect of a subject matter comprised in List III would be invalid if its provisions are repugnant to a law passed on the same subject by Parliament and that too only if both the laws cannot exist together. The question of repugnancy under Article 254 of the Constitution arises when the provisions of both laws are fully inconsistent or are abso....
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....Act, in this case, as rightly contended by the State, primarily falls under Entry 18 List II, since the dominant intention of the legislature was to preserve and protect Roerichs' Estate covered by the provisions of the Land Reforms Act, on the State Government withdrawing the exemption in respect of the land used for linaloe cultivation. The Acquisition Act, though primarily falls under Entry 18 List II incidentally also deals with the acquisition of paintings, artefacts and other valuable belongings of Roerichs' and, hence, the Act partly falls under Entry 42 List III as well. Since the dominant purpose of the Act was to preserve and protect Roerichs' Estate as part of agrarian reforms, the inclusion of ancillary measures would not throw the law out of the protection of Article 31A(1)(a). On the other hand, the Land Acquisition Act, 1894 is an act which fell exclusively under Entry 42 List III and enacted for the purpose of acquisition of land needed for public purposes for companies and for determining the amount of compensation to be made on account of such acquisition, which is substantially and materially different from the impugned Act whose dominant ....
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....carvings and other valuables and to establish an Art-Gallery-cum-Museum are merely ancillary to the main purpose. The dominant purpose of the Act is to protect and preserve the land used for Linaloe cultivation, a part of agrarian reforms. The Act is, therefore, saved by the provisions of Art.31A(1)(a). 72. We, therefore, hold that Roerich's estate falls within the expression "estate" under clause (2) of Article 31A of the Constitution and the Act has obtained the assent of the President, hence, is protected from the challenge under Articles 14 and 19 of the Constitution of India. No arguments have been raised on the applicability or otherwise of Article 31C and hence it is unnecessary to examine whether the Act is protected by Article 31C of the Constitution or not. Part-III Article 300A of the Constitution and the Acquisition Act 73. We will now examine the validity of the Acquisition Act on the touchstone of Article 300A of the Constitution and examine whether the concept of eminent domain be read into Art.300A and in the statute enacted to deprive a person of his property. 74. Shri Andhyarujina, learned senior counsel submitted that Art.300A and the statut....
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....pect of Articles 19(1)(f), 31(1) and 31(2) and submitted that those are useful guides while interpreting Article 300A and the impugned Act. Reference was made to the judgments of this Court in State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Ors. (1952) 1 SCR 889; State of West Bengal v. Union of India (1964) 1 SCR 371; Sub-Committee of Judicial Accountability v. Union of India & Others (1991) 4 SCC 699; I.R. Coelho(Dead) by LRs. v. State of Tamil Nadu (2007) 2 SCC 1; D.C. Wadhwa & Others v. State of Bihar & Others (1987) 1 SCC 378 and Glanrock Estate Private Limited. v. State of Tamil Nadu (2010) 10 SCC 96. 77. Learned counsel further submitted that the action depriving a person of just and fair compensation is also amenable to judicial review under Articles 32 and 226 of the Constitution of India, which is the quintessence of the rule of law, otherwise the Constitution would be conferring arbitrary and unbridled powers on the Legislature, to deprive a person of his property. Reference was made to the provisions of the Constitutions of Australia and Republic of South Africa. 78. Mr. Patil, on the other hand, contended that, having regard to the ex....
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....hout the other. Of late, right to property parted company with the other two rights under the Indian Constitution and took the position of a statutory right. Since ancient times, debates are going on as to whether the right to property is a "natural" right or merely a creation of `social convention' and `positive law' which reflects the centrality and uniqueness of this right. Property rights at times compared to right to life which determine access to the basic means of sustenance and considered as prerequisite to the meaningful exercise of other rights guaranteed under Article 21. 83. Eminent thinkers like Hugo Grotius, Pufendorf, John Locke, Rousseau and William Blackstone had expressed their own views on the right to property. Lockean rhetoric of property as a natural and absolute right but conventional in civil society has, its roots in Aristotle and Aquinas, for Grotius and Pufendorf property was both natural and conventional. Pufendrof, like Grotius, never recognised that the rights of property on its owners are absolute but involve definite social responsibilities, and also held the view that the private property was not established merely for the purpose "....
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....n Australia, Section 51 (xxxi) of the Constitution permits the federal government to make laws with respect to "the acquisition of property on just terms from any State or persons for any purpose in respect of which the Parliament has powers to make laws." 87. Protocol to the European Convention on Human Rights and Fundamental Freedom, Article 1 provides that every natural or legal person is entitled to the peaceful enjoyment of his possession and no one shall be deprived of his possessions except in public interest and subject to the conditions provided by law and by the several principles of International law. 88. Fifth Amendment of the U.S. Constitution says that the government shall not take private property for public use without paying just compensation. This provision referred to as the eminent domain, or taking clause has generated an enormous amount of case laws in the United States of America. 89. The US Supreme Court in Hawaii Housing Authority v. Midkiff, 467 US 229 (1984) allowed the use of eminent domain to transfer land from lesser to lessees. In that ruling the court held the government does not itself have the use the property to legitimate taking, i....
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....oncept of eminent domain springs from the necessity of the state, while the obligation to reimburse rests upon the natural rights of individuals. Right to claim compensation, some eminent authors expressed the view, is thus not a component part of the powers to deprive a person of his property but may arise, but it is not as if, the former cannot exist without the other. Relationship between Public Purpose and Compensation is that of "substance and shadow". Above theoretical aspects of the doctrine have been highlighted only to show the reasons, for the inclusion of the principle of eminent domain in the deleted Article 31(2) and in the present Article 30(1A) and in the 2nd proviso of Article 31A of our Constitution and its apparent exclusion from Article 300A. 92. Our Constitution makers were greatly influenced by the Western doctrine of eminent domain when they drafted the Indian Constitution and incorporated the right to property as a Fundamental Right in Article 19(1)(f), and the element of public purpose and compensation in Articles 31(2). Of late, it was felt that some of the principles laid down in the Directive Principles of State Policy, which had its influence in....
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....er clause (2) a person must be deemed to be deprived of his property if he was "substantially dispossessed" or his right to use and enjoy the property was "seriously impaired" by the impugned law. The Court held that under Article 31(1) the State could not make a law depriving a person of his property without complying with the provisions of Article 31(2). In Bella Banerjee's case (supra), this Court held that the legislature has the freedom to lay down principles which govern the determination of the amount to be given to the owners of the property appropriated, but the Court can always, while interpreting Article 31(1) and Article 31(2), examine whether the amount of compensation paid is just equivalent to what the owner had been deprived of. 96. The Parliament, following the above judgment, brought in the Fourth Amendment Act of 1955 and amended clause (2) of Article 31 and inserted clause (2-A) to Article 31. The effect of the amendment is that clause (2) deals with acquisition or requisition as defined in clause (2-A) and clause (1) covers deprivation of a person's property by the state otherwise than by acquisition or requisition. The amendment enabled the St....
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.... by providing for an illusory compensation or by indicating the principles for ascertaining the compensation which do not relate to the property acquired or to the value of such property at or within a reasonable proximity of the date of acquisition or the principles are so designed and so arbitrary that they do not provide for compensation at all, one can easily hold that the legislature made the law in fraud of its powers." Justice Subha Rao reiterated his view in Union of India v. Metal Corporation of India Ltd. & Another AIR 1967 SC 637. 100. In Shantilal Mangaldas's case (supra), the validity of Bombay Town Planning Act 1958 was challenged before this Court on the ground that the owner was to be given market value of land at date of declaration of scheme, which was not the just equivalent of the property acquired, the Court held that after the Fourth Amendment resulting in the changes to Article 31(2) the question of `adequacy of compensation' could not be entertained. Justice Hidayatullah stated that the stance taken in the previous case by Justice Subha Rao as "obiter and not binding". The validity of the Banking Companies (Acquisition and Transfer of Undert....
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....ng effect to the policy of the State towards acquiring the principles specified in clause (b) or clause (c) of Article 39 shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14, Article 19 or Article 31; and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy. 104. The constitutionality of the above amendments was also the subject matter in His Holiness Kesavananda Bharati Sripadagalvaru v. State of Kerala & Another (1973) 4 SCC 225, which overruled the principles laid down in Gokalnath's case (supra) and held that a Constitutional amendment could not alter the basic structure of the Constitution, and hence Article 19(1)(f) was not considered to be the basic structure of the Constitution, as later explained in Indira Nehru Gandhi v. Raj Narain (1975) Supp. SCC 1. 105. We are in these cases, primarily concerned with the scope of the Forty Fourth Amendment 1978, which deleted Article 19(1)(f) and Article 31 from the Constitution of India and introduced Article 300A....
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....d, would reveal the following changes: 1. Right to acquire, hold and dispose of property has ceased to be a fundamental right under the Constitution of India. 2. Legislature can deprive a person of his property only by authority of law. 3. Right to acquire, hold and dispose of property is not a basic feature of the Constitution, but only a Constitutional right. 4. Right to Property, since no more a fundamental right, the jurisdiction of the Supreme Court under Article 32 cannot be generally invoked, aggrieved person has to approach the High Court under Article 226 of the Constitution. 109. Arguments have been advanced before us stating that the concept of eminent domain and its key components be read into Article 300A and if a statute deprives a person of his property unauthorizedly, without adequate compensation, then the statute is liable to be challenged as violative of Articles 14, 19 and 21 and on the principle of rule of law, which is the basic structure of our Constitution. Further it was also contended that the interpretation given by this Court on the scope of Article 31(1) and (2) in various judgments be not ignored while examining the meaning a....
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....ently, the law taking private property for a public purpose without compensation would fall outside Entry 42 List III and cannot be supported by another Entry in List III. Requirements of a public purpose and the payment of compensation according to the learned author be read into Entry 42 List III. Further the learned author has also opined that the repeal of Article 19(1)(f) and 31(2) could have repercussions on other fundamental rights or other provisions which are to be regarded as part of the basic structure and also stated that notwithstanding the repeal of Article 31(2), the word "compensation" or the concept thereof is still retained in Article 30(1A) and in the second proviso to Article 31A(1) meaning thereby that payment of compensation is a condition of legislative power in Entry 42 List III. 112. Learned senior counsel Shri T.R. Andhyarujina, also referred to the opinion expressed by another learned author Prof. P.K. Tripathi, in his article "Right to Property after 44th Amendment - Better Protected than Ever Before" (reported in AIR 1980 J pg. 49-52). Learned author expressed the opinion and the right of the individual to receive compensation when his property....
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.... in the 2nd proviso to Article 31A(1) though we can infer those principles in Article 300A. Provision for payment of compensation has been specifically incorporated in Article 30(1A) as well as in the 2nd proviso to Article 31A(1) for achieving specific objectives. Constitution's 44th Amendment Act, 1978 while omitting Article 31 brought in a substantive provision Clause (1A) to Article 30. Resultantly, though no individual or even educational institution belonging to majority community shall have any fundamental right to compensation in case of compulsory acquisition of his property by the State, an educational institution belonging to a minority community shall have such fundamental right to claim compensation in case State enacts a law providing for compulsory acquisition of any property of an educational institution established and administered by a minority community. Further, the second proviso to Article 31A(1) prohibits the Legislature from making a law which does not contain a provision for payment of compensation at a rate not less than the market value which follows that a law which does not contain such provision shall be invalid and the acquisition proceeding....
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....ion, as a matter of right, in the absence of any stipulation in the statute, depriving him of his property. 119. Before answering those questions, let us examine whether the right to claim compensation on deprivation of one's property can be traced to Entry 42 List III. The 7th Constitutional Amendment Act, 1956 deleted Entry 33 List I, Entry 36 List II and reworded Entry 42 List III relating to "acquisition and requisitioning of property". It was urged that the above words be read with the requirements of public purpose and compensation. Reference was placed on the following judgment of this Court in support of that contention. In State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. (1959) SCR 379 at 413), this Court considered Entry 48 List II of the Government of India Act, 1935, "tax on sales of goods", in accordance with the established legal sense of the word "sale", which had acquired a definite precise sense and held that the legislature must have intended the "sale", should be understood in that sense. But we fail to see why we trace the meaning of a constitutional provision when the only safe and correct way of construing the statute is to apply the plain ....
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....e, may call for lesser compensation and such a limitation by itself will not make legislation invalid or unconstitutional or confiscatory. In other words, the right to claim compensation or the obligation to pay, though not expressly included in Article 300A, it can be inferred in that Article and it is for the State to justify its stand on justifiable grounds which may depend upon the legislative policy, object and purpose of the statute and host of other factors. 122. Article 300A would be equally violated if the provisions of law authorizing deprivation of property have not been complied with. While enacting Article 300A Parliament has only borrowed Article 31(1) [the "Rule of law" doctrine] and not Article 31(2) [which had embodied the doctrine of Eminent Domain]. Article 300A enables the State to put restrictions on the right to property by law. That law has to be reasonable. It must comply with other provisions of the Constitution. The limitation or restriction should not be arbitrary or excessive or what is beyond what is required in public interest. The limitation or restriction must not be disproportionate to the situation or excessive. The legislation providing f....
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....includes reference under Article 21 read with Articles 14, 15 etc. Article 14 as a ground would also be available to challenge a law if made in contravention of Article 30(1)(A). 125. Article 265 states that no tax shall be levied or collected except by authority of law, then the essential characteristics of tax is that it is imposed under statute power, without tax payer's consent and the payment is enforced by law. A Constitution Bench of this Court in Kunnathat Thathunni Moopil Nair's case (supra) held that Sections 4, 5-A and 7 of the Travancore-Cochin Land Tax Act are unconstitutional as being violative of Article 14 and was held to be in violation of Article 19(1)(f). Of course, this decision was rendered when the right to property was a fundamental right. Article 300A, unlike Articles 31A(1) and 31C, has not made the legislation depriving a person of his property immune from challenge on the ground of violation of Article 14 or Article 21 of the Constitution of India, but let us first examine whether Article 21 as such is available to challenge a statute providing for no or illusory compensation and, hence, expropriatory. 126. A Constitution Bench of this Court....
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....(supra) took the view that the principle of unfairness of procedure attracting Article 21 does not apply to the acquisition or deprivation of property under Article 300A. 128. Acquisition of property for a public purpose may meet with lot of contingencies, like deprivation of livelihood, leading to violation of Art.21, but that per se is not a ground to strike down a statute or its provisions. But at the same time, is it the law that a Constitutional Court is powerless when it confronts with a situation where a person is deprived of his property, by law, for a private purpose with or without providing compensation? For example, a political party in power with a massive mandate enact a law to acquire the property of the political party in opposition not for public purpose, with or without compensation, is it the law, that such a statute is immune from challenge in a Constitutional Court? Can such a challenge be rejected on the ground that statute does not violate the Fundamental Rights (due to deletion of Art.19(1)(f)) and that the legislation does not lack legislative competence? In such a situation, is non-availability of a third ground as propounded in State of A.P....
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....cdowell's case (supra), Khoday Distilleries Ltd. & Others v. State of Karnataka & Others (1996) 10 SCC 304, Ajay Hasia & Others v. Khalid Mujib Sehravardi & Others (1981) 1 SCC 722, Mardia Chemicals Ltd. & Others v. Union of India & Others (2004) 4 SCC 311, Malpe Vishwanath Achraya & Others v. State of Maharashtra & Another (1998) 2 SCC 1 etc. felt that the question whether arbitrariness and unreasonableness or manifest arbitrariness and unreasonableness being facets of Article 14 of the Constitution are available or not as grounds to invalidate a legislation, is a matter requiring examination by a larger Bench and accordingly, referred the matter for consideration by a Larger Bench. 132. Later, it is pertinent to note that a five- judges Bench of this Court in Ashok Kumar Thakur v. Union of India & Others (2008) 6 SCC 1 while examining the validity of the Central Educational Institutions (Reservation in Admission) Act, 2006 held as follows: 219. A legislation passed by Parliament can be challenged only on constitutionally recognised grounds. Ordinarily, grounds of attack of a legislation is whether the legislature has legislative competence or whether the legislation is ....
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....immune from challenge under Article 32 and Article 226 of the Constitution of India? 136. Rule of law as a concept finds no place in our Constitution, but has been characterized as a basic feature of our Constitution which cannot be abrogated or destroyed even by the Parliament and in fact binds the Parliament. In Kesavanda Bharati's case (supra), this Court enunciated rule of law as one of the most important aspects of the doctrine of basic structure. Rule of law affirms parliament's supremacy while at the same time denying it sovereignty over the Constitution. 137. Rule of law can be traced back to Aristotle and has been championed by Roman jurists; medieval natural law thinkers; Enlightenment philosophers such as Hobbes, Locke, Rousseau, Montesquieu, Dicey etc. Rule of law has also been accepted as the basic principle of Canadian Constitution order. Rule of law has been considered to be as an implied limitation on Parliament's powers to legislate. In Reference Re Manitoba Language Rights (1985) 1 SCR 721, the Supreme Court of Canada described the constitutional status of the rule of law as follows: "The Constitution Act, 1982 ... is explicit recognitio....
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....gislature nor Parliament itself can "abrogate this right of discussion and debate." Speaking more generally, I hold that neither Parliament nor the provincial legislatures may enact legislation the effect of which would be to substantially interfere with the operation of this basic constitutional structure." 139. The Canadian Constitution and Courts have, therefore, considered the rule of law as one of the "basic structural imperatives" of the Constitution. Courts in Canada have exclusively rejected the notion that only "provisions" of the Constitution can be used to strike down legislation and comes down squarely in favour of the proposition that the rule of law binds legislatures as well as governments. 140. Rule of law as a principle contains no explicit substantive component like eminent domain but has many shades and colours. Violation of principle of natural justice may undermine rule of law so also at times arbitrariness, proportionality, unreasonableness etc., but such violations may not undermine rule of law so as to invalidate a statute. Violation must be of such a serious nature which undermines the very basic structure of our Constitution and our democratic ....