TaxTMI 
TaxTMI 
1985 (7) TMI 377
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....ons. But, we were running against time, not an unusual predicament, since Krishna Iyer J. was due to retire on November 15, 1980, Tulzarpurkar J. differed from all of us, holding that the impugned Act is not protected under Article 31-C or under Article 31-B since, it did not further the Directive principles contained in clauses (b) and (c) of Article 39 of the Constitution. The learned Judge held further that since Chapter III of the Act, comprising the substratum of the very scheme of the Act was invalid the entire Act had to be struck down as unconstitutional. A.P. Sen J. agreed with us on all the points except that according to him, subsections (1), (2) and (3) of section 23 and the opening words of section 23(4) of the Act are unconstitutional, not being protected by Articles 31-B and 31-C of the Constitution. Krishna Iyer J. concurred with us in holding that the entire Act is valid save and except section 27(1), insofar as that section imposes restrictions on the transfer of any urban or urbanisable land with a building or a portion of such building, which is within the ceiling area. We took the view that the impugned Act was intended to and did in fact implement or achieve t....
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.... wide since it includes "any business, profession, trade, undertaking or manufacture". If sub-section (1) of section 23 were to stand alone, no doubt could have arisen that the Urban Land Ceiling Act is a facade of a social welfare legislation and that its true, though concealed, purpose is to benefit favoured private individuals or associations of individuals. But the preponderating provision governing the disposal of excess vacant land acquired under the Act is the one contained in sub-section (4) of section 23 whereby, all vacant lands deemed to have been acquired by the State Government under the Act "shall be disposed of...to subserve the common good". The provisions of sub-section (4) are "subject to the provisions of sub-sections (1), (2) and (3) "but the provisions of sub-section (1) are enabling and not compulsive and those of sub-sections (2) and (3) are incidental to the provisions of sub-section (1). The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub-section (4) of section 23, subject to this, that in a given case such land may be allotted to any person; for any purpose relating to, or in connection with, any ....
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.... a few emphatic notes of concordance having special regard to the discordance of my learned brother Tulzapurkar, J. I have carefully perused the judgment of Tulzapurkar, J, but must express my deferential disagreement because on a few fundamentals there is sharp divergence between us. I proceed to turn the focus only on three issues, namely, the alleged artificiality of "family' as defined in s. 2 (f) of the Urban Land (Ceiling and Regulation) Act, 1976 (for short, the Act), the invalidity of s. 23 of the Act as discriminatory and, therefore, unconstitutional and the invalidity of s. 11 (6) of the Act on the score that the compensation offered is illusory and, therefore, violative of Art. 31 (2) of the Constitution. The legislation, as its title indicates, is obviously a measure for inhibiting concentration of urban lands in the hands of a few persons and fore quitetable distribution of such land to subserve the common good. Article 39 (b) and (c) of the Constitution are directly attracted and there is no doubt that the fullest exploitation of the material resources of the community undoubtedly requires distribution of urban land geared to the common good. It is als....
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....ble for the reason that right to property armoured by the above two Articles is inviolable unless the taking is for a public purpose in contrast to a private industry and the payment in return, even if not an equivalent, is be fair enough so as not to be castigated as illusory. The various amendments to Art. 31 culminating in the present provision which provides for the payment of an "amount" disclose a determined approach by parliament in exercise of its constituent power to ensure that full compensation or even fair compensation cannot be claimed as a fundamental right by the private owner and that short of paying a 'farthing for a fortune' the question of compensation is out of bounds for the court to investigate. The question is whether in the light of Kesavananda Bharati (especially the observations of Chandrachud, J), a sum of Rs. 2 lakhs in s. 11 (6) is a farthing for a fortune. I repudiate the proposition that payment of a sum of Rs. 2 lakhs, whatever the total value of the property in the market may be is so fictitious and flimsy as to be a farthing. There are no absolutes in law as in life and the compulsions of social realities must unquestionably enter ....
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....ubmission, which registers a kind of glazed pride." In this context we may also read what Rajen Babu stated as a framer of the Constitution: To all we give the assurance that it will be our endeavour to end poverty and squalor and its companions hunger and disease, to a abolish distinctions and exploitation and to ensure decent conditions of living. We may have to remember that a galaxy of Constitution-makers like Sardar Patel and B. Pant and Rajagopalachari, not to speak of Jawahar Lal Nehru, where doubtful about the court being given the power to pronounce upon the question of compensation when the State acquired property. Indeed, it is revealing to read the debates in condensed form given by Granville Austin: Sardar Patel closed the debate with a speech that sounded like a requiem for land-lords....What did 'public use' mean he wondered. Pant then said: Suppose the government acquires zamindari rights and then abolishes them. Or what if the Government takes over Connaught Place (the central shopping and office area of New Delhi) and then redistributes the buildings to the tenants? The first stage is acquisition. Does that co....
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....hat s. 11 (6) contravenes Art. 31 (2) because the Payment stipulated is a mere mockery. To put a ceiling on the maximum amount payable when property is taken is reasonable and does not spell discrimination unless the maximum itself is a hoax, being trivial. In a Constitution which creates a Socialist Republic egalite is the rule of life and where gross inequalities mar the economic order, a measure of equalization is but one strategy of promoting equality and has to be viewed as part of the dynamics of social justice. Indeed, even in the Income Tax Act, at a certain stage, almost all the income is taken away by a steep rate of tax leaving next to nothing to the income earner. We have to be pragmatic and show empathy with the values of the Constitution. Chief Justice Earl Warren's statement is apposite as a reminder to our judicial conscience: Our judges are not monks or scientists, but participants in the living stream of our national life, steering the law between the dangers of rigidity on the one hand and of formlessness on the other. Our system faces no theoretical dilemma but a single continuous problem: how to apply to ever-changing conditions the....
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....ative of Act 14. It is noteworthy that many agrarion legislations have been upheld by this court in a spate of recent cases where the definition of 'family' is substantially the same. I may permit myself a few observations on s. 23 of the Act and the grounds of invalidation relied on by the challengers. The section has been loosely or ambivalently drafted and runs thus: 23. Disposal of vacant land acquired under the Act. (1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit any vacant land which is deemed to have been acquired by the State Government under this Act or is acquired by the State Government under any other law to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry and it shall be lawful for such person to hold such land in excess of the ceiling limit. Explanation-For the purposes of this section, (a) where any land with a building has been acquired by the State Government under any other law a....
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....od and like criteria. If the power is used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo. To presume as probable graft, nepotism, patronage, political cloth, friendly pressure or corrupt purpose is impermissible. The law will be good, the power will be impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down. We must interpret wide words used in a statute by reading them down to fit into the constitutional mould. The confusion between the power and its oblique exercise is an intellectual fallacy we must guard against. Fanciful possibilities, freak exercise and speculative aberrations are not realistic enough for constitutional invalidation. The legislature cannot be stultified by the suspicious improvidence or worse of the Executive. I wholly agree with the perspective of my learned brother Sen, J. that Part IV which seeks to build a Social Justice Society, is basic to our constitutional order. Any transgression of Art. 39(b) and (c) is beyond the scope of s. 23(1) and disposal of land....
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....islation as distinguished from a constitutional amendment. Kesavananda Bharati cannot be the last refuge of the proprietariat when being legislation takes away their 'excess' for societal weal. Nor, indeed, can every breach of equality spell disaster as a lethal violation of the basic structure. Peripheral inequality is inevitable when large-scale equalisation processes are but into action. If all the judges of the Supreme Court in solemn session sit and deliberate for half a year to produce a legislation for reducing glaring economic inequality their genius will let them down if the essay is to avoid even peripheral inequalities Every large cause claims some martyr, as sociologists will know. Therefore, what is a betrayal of the basic feature is not a mere violation if Art. 14 but a shocking, unconscienable or unscrupulous travesty of the quintessence of equal justice. If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty. But to permit the Bharati ghost to haunt the corridors of the court brandishing fatal writs for every feature of inequality is judicial paralysation of parliamentary function. Nor can the constitutional f....
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....s is my duty to do, TULZAPURKAR, J. By these writ petitions the petitioners, who are holders of vacant land in the urban agglomerations in various States, are seeking to challenge the vires of some of the salient provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) and since, according to them, some of the impugned provisions are pivotal and non-severable, having an impact on its entire scheme, the whole Act is liable to be struck down as being invalid and unconstitutional. The petitioners have, therefore, prayed for an order quashing notices issued to them by the concerned competent authorities under the Act and a mandamus directing the respondents not to implement the provisions thereof against them. The impugned enactment has its genesis in the resolutions passed by eleven sponsoring States under Art. 252 (1) of the Constitution. The State Legislatures of Andhra Pardesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable to have an uniform legislation enacted by Parliament for the imposition of ceiling on urban property for the country as a whole and as requir....
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....ipally with imposition and limits of ceiling on vacant land, acquisition and vesting in the State Government of vacant land in excess of the ceiling limits, payment to be made to the holders for such acquisition, disposal of excess vacant land so acquired and exemptions from the applicability of this Chapter. Chapter IV comprising ss. 25 to 30 deals with regulation of transfer and the use of urban property; while Chapter V which includes ss. 31 to 47, deals with appeals, revisions, offences and punishments and other miscellaneous matters. The primary object and purpose of the Act, as its long title and the Preamble show, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bring about an equitable distribution of land in urban agglomerations to subserve the common good, presumably in furtherance of the Directive Principles of State policy containe....
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....he Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure." Since the impugned Act has been put in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976 i. e. after April 24, 1973, the said Constitutional Amendment would be open to challenge on the ground that the same is beyond the constituent power of the Parliament if it damages the essential features or basic structure of the Constitution; but at the same time the impugned Act has, apparently, received the protective umbrella of Art. 31C as it stood prior to its amendment by 42nd Amendment Act inasmuch as it seems to have been enacted in furtherance of the Directive Principles contained in Art. 39 (b) and (c) with the result that in order to succeed in their challenge the petitioners will have to cross two hurdles. In the first place they will have to establish that the Act is outside the pale of the protective umbrella of Art. 31C which they can do by showing that though purporting to do so, it does not, in fact, further any of the said Directive Principles. A scrutiny of the Directive Principles contained in Art. 39 (b) and (....
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....irective Principles of Art. 39 (b) and (c) and, there fore, but the entire Act outside the pale of the protective umbrella of Art. 31C of the Constitution. Counsel, therefore, urged that both the 40th Amendment to the extent it inserted the impugned Act in the Ninth Schedule and the impugned Act deserve to be struck down. On the other hand, the learned Attorney General appearing on behalf of the Union of India and counsel for the concerned States of Rajasthan, Andhra Pradesh, Uttar Pradesh and for the concerned competent authorities under the Act, refuted the contentions urged on behalf of the petitioners. It was denied that any provision of the Act runs counter to the Directive Principles of Art. 39 (b) and (c) of the Constitution. It was pointed out that the impugned Act having been put in the Ninth Schedule and having been enacted in further of the Directive Principles of the State policy contained in Art. 39 (b) and (c) of the Constitution was protected both under Art. 31B and 31C of the Constitution. It was disputed that any provision of the Act violated the petitioners' fundamental rights under Arts. 14, 19 and 31 and, it was contended that even if there was a....
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....f ceiling limits prescribed under s. 4(1) it produces discriminatory results because of adoption of double standard for fixing the ceiling limit-one for the artificial family as defined and another for a normal family which includes major children or for Joint Hindu Family governed by Mitakshara Law obtaining in several parts of the country. For instance, in an urban agglomeration falling under category 'A' where the ceiling limit is prescribed at 500 sq. metres, a family of a father, mother and say three minor sons (being in all five) together will be entitled to retain for itself only 500 sq. metres of vacant land whereas a family of a father and four major sons (being in all five) will be entitled to retain for itself 2,500 sq. metres of vacant land (500 sq. metres for father as a person and 500 sq. metres each for four sons as persons). Counsel urged that such discrimination or inequality arises from the classification made between minor children and major children belonging to a family but such classification is not based on any intelligible differentia having any nexus to the object sought to be achieved by the Act, which is to acquire excess vacant land after l....
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....eiling area under s. 4(1) is clearly violative of and strikes at the root of the equality clause contained in Art. 14 of the Constitution. It cannot be disputed that this artificial definition together with the double standard adopted for fixing the ceiling area runs though and forms the basis of Chapter III of the Act and the discriminatory results or inequalities produced thereby are bound to have an impact on the scheme of that Chapter and, therefore, along with it the whole Chapter III must fall as being violative of Art. 14. There is yet one more aspect which needs consideration in connection with this adoption of the artificial definition of 'family' given in s.2 (f) and the double standard for fixing ceiling area. Apart from the discriminatory results which it produces the question is what is its impact in the context of the directive principle contained in Art. 39 (c) of the Constitution? As stated earlier the postulate underlying the said directive principle in that concentration of wealth in the hands of few is deterimental to common interest and as such the State should ensure such economic system which prevents such concentration and the Act has been put on t....
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....ch provision being in teeth of that directive principle must fall outside the pale of protective umbrella of Art. 31C. Re: s.23 relating to disposal of excess vacant land acquired under the Act. It may be stated that under s.6 every person holding vacant land in excess of the ceiling limit at the commencement of the Act is required to file within the period prescribed a statement before the competent authority having jurisdiction giving full particulars there of and also specifying the vacant land within the ceiling limit which he desires to retain. Sections 8 and 9 provide for preparation of draft statement as regards vacant land held in excess of the ceiling limit, holding of an inquiry in that behalf and preparation of final statement and service thereof on the concerned person by the competent authority, Section 10 provides for acquisition of excess vacant land by the concerned State Government and determination of claims of all persons interested in such excess vacant-land and under sub-s.(3) it is provided that upon the publication of a notification in that behalf such excess vacant land as may be specified therein shall be deemed to have been acquired by the State Gove....
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....nt free from all encumbrances. (4) Subject to the provisions of sub-sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose. (5) Notwithstanding anything contained in sub sections (1) to (4), where the State Government is satisfied that it is necessary to retain or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same." Five or six aspects or peculiar features emerge clearly from the provisions contained in s. 23 in the context of the entire Act. In the first place unlike agrarian ceiling which deals with land as means of production, urban ceiling under the impugned Act deals with vacant land in urban agglomerations not as a means of production but as a part of the holder's wealth or capital asset. Secondly, unlike agrarian ceiling which has the objective of distributing surpl....
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....e precedence over public purposes, and this is clear from the fact that disposal under sub-s. (4) is "subject to" the prior disposal under sub-s. (1) for purposes of industry. In fact, disposal of excess vacant land for subserving the common good is last in the priorities Sub. s (5) undoubtedly has an overriding effect over sub-ss. (1) to (4) but that provision deals not with disposal or distribution of excess vacant land but with retention and reservation of such vacant land by State Government for the benefit of the public like social housing and provision for basic arenities etc. Having regard to the aforesaid peculiar features that energe from a consideration of the provisions contained in s.23, counsel for the petitioners contended that the acquisition of excess vacant land in urban agglomerations cannot be said for a public purpose at all and hence the ehactment which is primarily for compulsory acquisition of private property runs counter to a valid exercise of the State's power of 'eminent domain'. He pointed out that no scheme for any industrial development for any urban agglomeration has been indicated in the Act, nor any such scheme seems to have been prepare....
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....rest in the property. In Kameshwar Singh's case this position has been clarifie where Mahajan, J., after referring to some authoritative books has summed up the definition of the concept in one sentence thus "Authority is universal in support of the amplified definition of 'eminent domain' as the power of the sovereign to take property for public use without the owner's consent upon making just compensation," The requirement of just compensation under the latter condition is diluted to payment of non-illusory amount under the 25th Amendment of the Constitution and subsequent decisions of this Court. But it is well settled that these two conditions precedent are sine qua non for the exercise of the State's power of eminent domain' and, in my view, represent those aspects of the right to property under Art. 31 which constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any law authorising expropriation of private property in breach of any one of those conditions would damage or destroy the basic structure of our constitution. It is extremely doubtful whether a bald....
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....dustry' simpliciter partakes of the character of a public purpose, what Parliament intended by the said objective has been expressly clarified by cl. (b) of the Explanation where 'industry' has been very widely defined so as to include any business, trade or profession in private sector which makes a mockery of such public purpose. Whatever be the merits or demerits of a wide definition of 'industry' for the purposes of industrial-cum- labour relations, adoption of such wide definition of the concept in the context of eminent domain is clearly suicidal. By adopting such definition for the purposes of s. 23 the State Government has been empowered under sub-s. (1) to allot any extent of such excess vacant land to any businessman, trader or professional man like a lawyer, doctor and astrologer to enable him to carry on his private business, trade or profession. In other words, acquisition of excess vacant land in urban agglomeration would clearly be for private purposes and what is worse is that under the priorities laid down such private purposes are to be catered to first and then comes the disposal or distribution thereof to subserve common good. This clearly sm....
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....hat produce contra results cannot be said to be in furtherance of the directive principle of Art. 39(b) and cannot receive the benefit of the protective umbrella of Art. 31C. Counsel for the respondents, however, relied upon three aspects to counter-act the aforesaid result flowing from the priorities given in s. 23(1) and (4). It was urged that the disposal of excess vacant land acquired by the State under the Act will be guided by the Preamble which says that enactment was put on the Statute Book with a view to bringing about the equitable distribution of land in urban agglomerations to subserve the common good. In the first place, it is well settled that it is only when there is some ambiguity in test of any provision in the enactment that the preamble could be looked at and here there is no ambiguity whatsoever in s.23(1) and (4). Secondly, far from there being any ambiguity there is express provision in s.23(1) and (4) indicating the priorities in the matter of disposal or distribution of excess vacant land, in face of which, the preamble cannot control, guide or direct the disposal or distribution in any other manner. Next, reliance was placed on s. 46(1) which empowers th....
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....sposal or distribution of excess vacant land acquired under the Act run counter to and in a sense operate to negate the directive principle of Art.39(b). It was then faintly argued by counsel for the respondents that the law in order to receive the protection of Art. 31C need not fulfil the objectives of both Art. 39(b) and (c) and even if it fulfils the objective under Art. 39(c) and not under Art. 39(b) it will be protected by Art. 31C. But here s. 23 by no stretch deals with the objective of Art. 39(c) at all but only deals with the objective underlying the directive principle of Art. 39(b) and its provisions as discussed above clearly run counter to that objective and as such the enactment which contains such provisions must forfeit the benefit of the protective umbrella of Art. 31C. Faced with the situation that the constitutional invalidity of s. 23 was likely to have adverse repercussion not only on Chapter III in which it occurs but also on the entire Act, counsel for the respondents made a valiant effort to salvage the said section by indulging in interpretative acrobatics with a view to relieve it from the two vices attaching to it, namely, (i) the adoption of the w....
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....cannot reach the opposite result than is warranted by the plain text of the provision. Further, to say that every disposal of excess vacant land under sub-s.(1) must be for "common good" is to read into that sub-section something which is not there; it amounts to re-writing that sub- section, which cannot be done, the Preamble notwithstanding. It is the conferral of such unrestricted power (not its oblique exercise) that is being attacked and hence the submission to read into sub-s.(1) this kind of limitation. These submissions require the re-structuring of the entire section a function legitimately falling within the domain of the Legislature. Moreover, sub-ss.(1), (2), (3) and (4) of s.23 are integral parts of one whole scheme dealing with disposal of excess vacant land acquired under the Act and as such cannot be severed from one another. The attempt to salvage s.23, either wholly or in part, by seeking to free it from the two vices must, therefore, fail. The next provision challenged by the petitioners as being violative of their fundamental rights is s. 11 (6) which puts the maximum limit of Rs. two lakhs on compensation (called 'amount') payable to the holder of ex....
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....ctively. Counsel pointed out that a person holding excess vacant land which at the prescribed rates is of the value of Rs. two lakhs and a person holding such excess vacant land which even at the same prescribed rates is of the value of Rs. two crores are treated alike, that is to say, both will get compensation (termed 'amount') of Rs. two lakhs only and is this sense prescribing a limit of maximum of Rs. two lakhs is clearly arbitrary and violates Art. 14. Similarly, for a person who holds excess vacant land which even at the prescribed rates it of the value of Rs. two crores a payment of Rs. two lakhs only (i.e. 1/100th of the value at the prescribed rates) must, by any standard, be regarded as illusory and, therefore, the fixation of maximum limit at Rs. two lakhs under s. 11(6) irrespective of the extent of excess vacant land held by a person violates Art. 31(2) of the Constitution. I find considerable force in both the submissions of counsel for the petitioners. In fact, in my view, this provision which puts the maximum limit of Rs. two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent of such excess vacant....
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....cquired property irrespective of its extent will have to be regarded as confiscatory in nature. An instance in point is available on the record of these writ petitions. In writ petition No. 350 of 1977 the petitioner who happens to be the ex-Ruler of the former Kota State has averred in paragraphs 17 and 20 of the petition that the urban vacant land owned and possessed by him in the city of Kota admeasures 918. 26 acres and that the Assistant Director, Lands and Buildings Tax, Kota in his assessment order dated 20.12. 1976 had valued the same at market rate of Rs. 15.12 per sq. metre at Rs. 3,98,05021.84 (say about Rs. four crores) and inclusive of other items of properties the total value was put down at Rs. 4.12 crores and these averments are substantially admitted in the counter- affidavit filed by S. Mahadeva Iyer on behalf of the Union of India where in para 9 he has stated thus: "In reply to para 20 of the writ petition I submit that the total assessment of the entire property comes to Rs. 4.56 crores." In other words, in the case of this petitioner the fact that he owns urban vacant land of the value of about Rs. four crores in the city of Kota st....
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....itled to retain with himself and under this provision any transfer of such property by way of sale, mortage, gift or lease for ten years or otherwise, is prohibited for the period of ten years from the commencement of the Act except with the previous permission in writing of the competent authority. Under sub-s. (2) if the holder of such property falling within the permissible ceiling area is desirous of effecting a transfer of the type indicated above has to apply in writing for permission from the competent authority and under sub-s.(3) the competent authority has been authorised after making such inquiry as it deems fit to grant the permission or refuse the same, but a refusal has to be accompanied by written reasons, copy whereof is to be furnished to the holder. Sub- s. (4) provides that if within sixty days of the receipt of the application refusal is not communicated, the permission shall be deemed to have been granted by the competent authority. Counsel for the petitioners made two submissions in regard to aforesaid restriction as made applicable to transfers of built-up properties that fall within the limits of ceiling area permitted to be retained by a holder. Firstly,....
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....t. 14 of the Constitution. The contention is that the requirement in the absence of any guidelines governing the exercise of the power on the part of the competent authority in the matter of granting or refusing to grant the permission is highly arbitrary, productive of discriminatory results and, therefore, violates the equality clause of Art. 14. Counsel for the respondents fairly conceded that the section itself does not contain any guidelines but urged that the objectives of "preventing concentration, speculation and profiteering in urban land" recited in the Preamble would afford the requisite guidance for the exercise of the power to grant the permission sought or to refuse the same. Firstly, which of the three objectives mentioned in the Preamble should guide the exercise of power by the competent authority in any given case is not clear and in any case no standard has been laid down for achieving the objectives of preventing concentration, speculation, and profiteering in urban land or urban property and in the absence of any standard being laid down by the Legislature-a purely legislative function, it will be difficult to hold that these broad objectives recited in the ....
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....ble in respect of excess vacant land acquired from a holder irrespective of the extent of area held by him these three provisions flagrantly violate those aspects of Arts. 14 and 31 which constitute the essential and basic features of our Constitution and hence the protective umbrella of Art. 31B is not available to the impugned Act inasmuch as the 40th Constitution Amendment Act 1976 to the extent to which it inserts the impugned Act in the Ninth Schedule is beyond the constituent power of the Parliament as the said Amending Act has the effect of damaging or destroying the basic structure of the Constitution. (3). The artificial definition of 'family' given in s. 2(f) in relation to prescription of ceiling area under s. 4(1) is clearly violative of Art. 14 and as such is ultra vires and unconstitutional. Similarly, s. 23 which authories compulsory acquisition of property for private purposes is in breach of the doctrine of eminent domain and since it flagrantly violates Art. 31(2) is ultra vires and unconstitutional. (4). Since s. 2(f) together with adoption of double standard for fixing ceiling area runs through and forms basis of the whole Chapter III a....
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....arliament to enact such a measure as a first step towards eventual imposition of ceiling on immovable properties of every other description. However, after the introduction of the Bill on the floor of the house on January 28, 1976, the enactment as drafted in its present form seems to have been rushed through the attenuated Parliament during the Emergency in less than seven hours on February 2, 1976. The Lok Sabha debates clearly show: (a) that the Bill was moved and taken up for consideration at 11.17 hours on that day, (b) that a motion moved by a member that the Bill be circulated for the purpose of eliciting opinion thereon by May 15, 1976 was negatived, (c) that another motion supported by quite a few members that the Bill be referred to a Select Committee with a view to improve the same by removing defects, deficiencies and omissions therein with instructions to the Select Committee to report by April 1, 1976, was also negatived, (d) that though over 150 amendments had been moved (some of which were received by the members on the very day as speeches were in progress), an earnest request to postpone the second reading of the Bill to the following day to enable the me....
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....d (Ceiling and Regulation) Act, 1976. In the first instance, the Act, came into force on the date of its introduction in the Lok Sabha that is, January 28, 1976 and covered Union Territories and the eleven States which had already passed the requisite Resolution under Article 252(1) of the Constitution. Subsequently, the Act was adopted, after passing resolutions under Article 252(1) of the Constitution by the State of Assam on March 25, 1976, and those of Bihar on April 1, 1976, Madhya Pradesh on September 9, 1976, Manipur on March 12, 1976, Meghalaya on April 7, 1976 and Rajasthan on March 9, 1976. Thus, the Act is in force in seventeen States and all the Union Territories in the country. The legislative competence of Parliament to enact the Urban Land (Ceiling and Regulation) Act, 1976 having been upheld by this Court in Union of India etc- v. Valluri Basavaiah Chaudhary,(1) there remains the question of its constitutional validity. Schedule I to the Act lists out all States, irrespective of whether or not they have passed a resolution under Art. 252(1) authorizing the Parliament to enact a law imposing a ceiling on urban immovable property, and the urban agglomerations in....
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....ding speculative transactions relating to land in urban agglomerations. With a view to ensuring uniformity in approach Government of India addressed the State Governments in this regard, eleven States have so far passed resolutions under Art. 252(1) of the Constitution empowering Parliament to undertake legislation in this behalf." The Act consists of five Chapters. Chapter I contains the short title and the extant clause and Chapter II contains section 2, which is the definition section. Chapter III deals with 'Ceiling on vacant Land Chapter IV deals with 'Regulation of transfer and use of urban land' and Chapter V contains miscellaneous provisions, There can be no doubt that the legislative intent and object of the impugned Act was to secure the socialisation of vacant land in urban agglomerations with a view to preventing the concentration of urban lands in the hands of a few persons, speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve to common good, in furtherance of the Directive Principles of State Policy under Art. 39 (b) and (c). The Act mainly provides for the followin....
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....ides the urban agglomerations into four broad categories, categories A, B, C and D, and fixes the ceiling limits varying from five hundred sq. metres in Category A to two thousand sq. metres in Category D thereof. The word 'person' is defined in s.2(i) as: "2(i) "person" includes an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not." The definition of the word 'family' in s.2(f) is in the following terms: "2(f) "family" in relation to a person, means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children." In order that the burden of compensation, that is, the amount payable for such excess vacant lands by the Government, may not be high, the Act incorporates a specific provision, namely, sub-section (1) of s.11 which fixes the amount broadly on the following basis: (1) eight and one- third of the annual net income from the land during the last five years or where such annual income is not being derived, at rates not exceeding Rs. 10 per sq. metre or Rs. 5 per sq. metre in Categories A and B, and C and....
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....rior to its amendment by Section 4 of the Constitution (42nd Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in Kesavananda Bharati Article 31-C, as it stood prior to the Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure." The validity of the impugned Act is challenged on four grounds Namely the inclusion of an artificial definition of 'family' in s.2 (f) results in total exclusion of a joint Hindu family from the purview of the Act and also in adoption of double standard between a family with major sons, each of whom is a separate unit by himself, and a family with minor children, which constitutes a family unit for fixing a ceiling and thus s.3 of the impugned Act offends against the equal protection clause in Art.14, as persons similarly situate are differentially treated without any rational basis; (2) the impugned Act is inconsistent with, takes away and abridges the fundamental right guaranteed under Art. 31 (2) inasmuch as the fixation of the maximum amount payable under sub-s. (6) of Sec 11, makes the Act confiscatory or at any rate, the ....
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....tes where the law is applicable for purposes of ceiling limits. In other words, persons holding vacant lands or vacant and other built-up property with dwelling units therein in different urban agglomerations throughout the country will have to make a choice of retaining only one piece of vacant land within the ceiling limit and surrender excess vacant lands else-where. Since the Act applies to firms, companies, and undertakings, future construction of industrial or commercial premises requiring large areas cannot take place in the notified urban agglomerations without obtaining the requisite land from the Government. This enables Government to regulate and canalise the location of industries and thus serve the broad policy approach in dispersal of economic activity. Hoarding of land by industrialists based on prospects for expansion in the distant future, is thus sought to be avoided. The fundamental issue is: Whether s. 23 of the impugned Act impairs the basic structure or framework of the Constitution being violative of Art. 39 (b) and (c) and Art, 31 (2) of the Constitution and is, therefore, not protected under Arts. 31-B and 31-C. The impugned Act is designed as a la....
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.... to such further period or periods as it may deem fit. (3) Where any condition imposed in an order of allotment is not complied with by the allottee, the State Government shall, after giving an opportunity to the allottee to be heard in the matter, cancel the allotment with effect from the date of the non- compliance of such condition and the land allotted shall revest in the State Government free from all encumbrances. Subject to the provisions of sub-sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose. (5) Notwithstanding anything contained in sub- sections (1) to (4), where the State Government is satisfied that it is necessary to retain or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same." The submission is that though the impugned Act is designe....
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....of all the urban agglomerations in India in the public sector. In fact, faced with this difficulty, the learned Attorney General attempted to justify the provisions contained in s.23 by submitting that the opening words in s. 23(4) "subject to the provisions of sub-sections (1), (2) and (3)" must, in the context of the preamble and the Directive Principles under Art 39(b) and (c), be construed to mean "notwithstanding anything to the contrary contained in subsections (1), (2) and (3)" According to him, the "brooding spirit', of the Preamble permeates through the entire section, and, therefore-the provisions of s.23 of the Act should be read in the light of the preamble. The contention cannot be accepted. When the language of the section is clear and explicit, its meaning cannot be controlled by the preamble. It is not for the Court to re- structure the section. The re-structuring of a statute is obviously a legislative function. The matter is essentially of political expediency, and as such it is the concern of the statesmen and, therefore, the domain of the legislature and not the judiciary. It was, however, urged that s.23(1) of the Act is only an enabling provision, an....
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....ay, a purpose, an object or aim in which the general interest of the community as opposed to the particular interest of the individual, is directly and vitally concerned. The concept of 'public purpose' necessarily implies that it should be a law for the acquisition or requisition of property in the interest of the general public, and the purpose of such a law directly and vitally subserves public interest. If in reality the object of the acquisition under the Act is to set up industries in the private sector as is permissible from the provisions of s. 23(1) of the Act, nothing prevents the State from taking recourse to s. 40 of the Land Acquisition Act, 1894, for which there must be quid pro quo, that is, payment of compensation according to the market value. Our attention was drawn to the Guidelines issued by the Government of India, Ministry of Works and Housing clarifying the intent and purpose of the provisions of the Act. It may be stated here that these Guidelines cannot supersede or alter any of the provisions of the Act or the rules made thereunder. The Guidelines issued under s. 23 are in these terms: "Section 23 of the Urban Land (C....
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....; (iv) below. (iv) Allot for the purpose of industry, viz., any business, profession, trade, undertaking of non- polluting manufacture; cottage and small scale and wherever possible ancillary industry, manufacture." It is significant to notice that there was an attempt made in these aforesaid Guidelines to alter the 'priorities' laid down in s. 23. The Guidelines cannot alter the 'priorities' laid down in the section. The Guidelines are nothing but in the nature of Executive Instructions and cannot obviously control the plain meaning of the section. Where the language of the Act is clear and explicit, we must give effect to it, whatever may be the consequences, for in that case the words of the statute speak the intention of the legislature. The Court cannot be called upon to interpret the provisions of s. 23 of the Act in the light of the Guidelines issued by the Government of India, Ministry of Works and Housing. I am, therefore, constrained to hold that the provisions of sub-ss. (1), (2) and (3) of s. 23 and the opening words "subject to the provisions of sub-sections (1), (2) and (3)" in s. 23(4) which make the setting up of ind....
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....aterial resources of the community are so distributed as best to subserve the common good. Article 39(c) mandates that the State shall direct its policy towards securing that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. Dr. P.B. Gajendragadkar in 'Law, Liberty and Social Justice', observes: "These directive principles very briefly, but eloquently, lay down a policy of action for the different State Governments and the Central Government, and in a sense, they embody solemnly and recognize the validity of the charter of demands which the weaker sections of the citizens suffering from social-economic injustice would present to the respective governments for immediate relief." Chandrachud J. (as he then was) in Smt. Indira Gandhi v. Raj Narain(1) after observing that the ratio of the majority in Kesevananda Bharti's case were merely illustrative of what constitutes the basic structure and are not intended to be exhaustive, observes: I consider it beyond the pale of reasonable controversy that if there be any unamendable features of the of th....
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....e expression of the national will. The provisions of sub-ss. (1), (2) and (3) of s 23 and the opening words "subject to the provisions of sub-sections (1), (2) and (3)" in s. 23(4), which are, in my view, invalid, cannot effect the validity of the Act as a whole. The test to be applied when an argument like the one addressed in this case is raised, has been summed up by the Privy Council in Attorney-General for Alberta v. Attorney-General for Canada in these words: "The real question is whether what remains is so inextricably bound up with the part declared invalid that what remains cannot independently survive or, as it has sometimes been put, whether on a fair review of the whole matter it can be assumed that the legislature would have enacted what survives without enacting the part that is ultra vires at all." It is quite clear that the provisions of sub-ss. (1), (2) and (3) of s. 23 and the opening words "subject to the provisions of sub-sections (1), (2) and (3)" in s. 23(4) struck down by me are not inextricably bound up with the remaining provisions of the Act, and it is difficult to hold that the legislature would not have enacted the Act at all wit....
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....should be guided by the real needs of the country. Hence a paradoxical situation should be avoided by refusing to perpetuate the existing inequality among the social classes and maintain that gap to the same extent as before by intending to pay to the rich compensation at the same full rates as in the case of the poorer sections of the community. The impugned Act is meant to remove inequalities with a view to promote 'the greatest happiness of the greatest number'. During the last thirty years much has been done to implement the State's policy of socialisation of agricultural land by imposition of a ceiling on agricultural holding. There is much that still remains to be done. There is need for prevention of concentration of wealth in a few hands in the urban areas and to provide for equitable distribution of vacant land among others. The great disparity between the rich and the poor is more visible in the urban areas particularly in the great cities. A majority of the people in the urban areas are living in abject poverty. They do not even have a roof over their heads. Concentration of wealth in a few hands is not conducive to the national well-being. The challeng....
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....Mohamedans and Christian alike. By the exclusion of a joint Hindu family the members of a joint Hindu family, whether governed by the Mitakshara School or the Dayabhaga School, were brought at par with others. The contention that the impugned Act offends against Art.14 must, therefore, fail. The contention that the amount fixed by sub-s.(6) of s.11 of the impugned Act is totally arbitrary and illusory since there is no nexus between the value of the property and the amount fixed and, therefore, the maximum amount fixed under sub-s.(6) makes the Act confiscatory in total abrogation of the fundamental right guaranteed under Art.31(2) cannot be accepted. The Constitution (25th Amendment) Act, 1971, which came into force on April 20, 1972, by s.2(a) substituted the word 'amount' for the word 'compensation' in the new Art.31(2), which reads: "31(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in s....
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...., an amount calculated at a rate not exceeding- (i) ten rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category, A or category B specified in Schedule 1; and (ii) five rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category C or category D specified in that schedule." In order that the burden of compensation, that is, the amount payable under Art.31(2) for taking over vacant land in excess of the ceiling limit in sub-s. (3) of s.10 by the government may not be high, the Act incorporates a specific provision in sub-s. (6) of s.11 to fix a ceiling on the maximum amount payable in any single case. The sub-section reads: "11(6) Notwithstanding anything contained in sub- section (1) or sub-section (5), the amount payable under either of the said sub-sections shall, in no case, exceed two lakhs of rupees." It is not suggested that sub-s.(1) of s. 11 does not lay down any principles for determination of the amount payable for the taking of excess vacant lands in an urban agglomeration or that the principles laid down in sub-s.(1) a....
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....matters, laws etc., they are aiming to bring about a certain structure of society different from what it is at present. In that different structure among other things that will change is this, the big, difference between the have's and the havenot's. Now, if we are giving full compensation, the have's remain the have's and the have-not's, have-not's. It does not change in shape or form if compensation takes place. Therefore, in any scheme of social engineering, if I may say so, you cannot give full compensation-apart from the patent fact that you are not in a position-nobody has the resources-to give it." There can be no scheme for nationalisation of any industry, there can be no socioeconomic measures enacted if the concept of 'just equivalent' were to be introduced even after the 25th Amendment. To emphasise the point that the amount of Rs. 2 lacs fixed under sub-s.(6) of s.11 makes the Act confiscatory, our attention was drawn to the fact that the petitioner in writ Petition No. 350 of 1977, Maharao Saheb shri Bhim Singhji, the former Maharana of Kotah owns 971.50 acres of vacant land appurtenant to and covered under his Umed Bhawan Palace in t....
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....nswer'. The legislature considers a maximum amount of Rs. 2 lacs to be a fair and just recompense for the acquisition of excess vacant land in an urban agglomeration. By no standard can an amount of Rs. 2 lacs be considered to illusory. The 25th Amendment has placed the matter of adequacy of compensation beyond the pale of controversy by substituting the word 'amount' for the word 'compensation' in Art.31(2) and made the adequacy of the amount payable for acquisition or requisition of property nonjusticiable. In Kesavananda Bharti's case, the Court upheld the constitutional validity of the 25th Amendment. The impact of the new Article 31(2) was also considered as well as the content and meaning of the word 'amount'. According to the majority, the amount fixed or determined to be paid cannot be illusory. But one thing is clear the meaning which the Court placed on the word 'compensation' in R. C, Cooper's case of adequacy of compensation and on relevant principles has been held to have been nullified by the 25th Amendment. The two decisions directly in point are the State of Kerala & Anr. v. The Gwalior Rayon Silk Mfg. Co. a....
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....ater, except with the previous permission in writing of the competent authority." It is urged that sub-s. (1) of s. 27 confers arbitrary and uncontrolled powers on the competent authority to grant or refuse permission for transfer and that the conferral of such uncontrolled and uncanalised power without any guidelines renders the provision illegal and void and unenforceable being an unreasonable restriction on the right to acquire, hold and dispose of property guaranteed under Art. 19(1(f). It is said that the matter is left to the whim and fancy of the competent authority, and the power so conferred is capable of misuse and thus be an instrument of great oppression. The learned Attorney General tried to meet the contention by urging that there was no reason to think that the competent authority would refuse to grant permission where the transaction is bona fide. According to him, the competent authority would be justified in refusing to grant permission where the transaction is calculated to defeat the provisions of the Act. It is said that the whole object of freezing of the transactions was to hold the price line of urban land. He drew our attention to the guidelines issued b....