TaxTMI 
TaxTMI 
1997 (3) TMI 632
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....of the Dominion of India. Claim to the properties has been sought to be protected under the umbrella stated to have been provided by the Instrument of Accession and Articles 294 and 295 of the Constitution of India. The action of the State Legislature in enacting the laws with respect to the properties of the former ruler of Mysore has also been challenged on the grounds of inherent lack of jurisdiction under Part XI read with Schedule 7 of the Constitution of India. In order to hold that the action of the State Legislature was unconstitutional, reliance is placed upon various provisions of Part III and Article 300-A of the Constitution of India. All these pleas and the contention raised are with respect to the dispute raised regarding the acquisition by legislative action of the Bangalore Palace (hereinafter called 'the Palace'), admittedly the acknowledged private property of the former ruler of Mysore. Controversy raised is with respect to the enactment of The Bangalore Palace (Acquisition and Transfer) Act, 1996 (Karnataka Act No. 18/1996) (hereinafter called 'The Act'). 2. The petitioners have stated that the value of the Palace and the adjoining lands is Rs....
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....nnexure 'D') was signed on 23.6.1949. On 25.11.1949, the Maharaja is stated to have formally made a proclamation to the effect that the Constitution of India, after its adoption by the Constituent Assembly, shall be the Constitution for the State of Mysore (Annexure 'E'), on 23.1.1950, an agreement is stated to have been entered into between the Governor General of India and the Maharaja of Mysore regarding the privy purse, private property and rights and privileges (Annexure 'F'). Article II of the Agreement ensured that the Maharaja shall be entitled to the full ownership, use and enjoyment of all private properties belonging to him on the date of Agreement. Under Article IV, the Government of India is stated to have guaranteed the succession according to law and custom to the Gaddi of the State and to the personal rights, privileges, dignities and titles of the Maharaja. 5. Pursuant to the Agreement, the Maharaja submitted the list of Immovable properties held by him as private properties, on 26.1.1950, which is attached with the petition as Annexure 'G'. The palace was included in the list of private properties. By a letter dated 8.1.1951, Sri....
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....l, Writ Petitions were filed, which are still pending in this Court. It is alleged that not being satisfied with the declaration filed by the heirs of the ruler and in colourable exercise of power vested in it, the State Government initiated proceedings for acquisition of land under the provisions of the Land Acquisition Act, 1894, A notification under Section 4(1) of the Land Acquisition Act was issued on 12.8.1986 (Annexure 'L'). It was stated that the land was intended to be acquired for a public purpose, viz., "Preservation of artistic and historical heritage of the State". Objections are stated to have been filed by the petitioner and others on 17.9.1986 (Annexure 'O'). A declaration under Section 6 of the Land Acquisition Act is stated to have been published on 9.9.1987 and notice for taking possession and passing of the order was given on 5.9.1989 (Annexure 'Q'). Both the notification and the dedication have been challenged in Writ Petition No. 4284/1988 and five other connected Writ Petitions. This Court, while dealing with the aforesaid Writ Petitions, stayed further proceedings vide order dated 15.9.1989, initiated pursuant to the aforesaid notific....
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....udiciary. The impugned Act is stated to be covering the moveable properties, which could not be brought within the Land Acquisition Proceedings. The acquisition of moveables of the palace is alleged to be tantamounting to acquisition without legal authority. The creation of the Board for the purpose of Section 7 and Chapter III of the impugned Act is intended to be used for ulterior purposes and not for the proclaimed purpose for which the Act is stated to have been enacted. As earlier noticed, the action of the respondent is stated to be contrary to the Constitutional guarantees ensured to the former rulers. The Act is stated to be the by-product of un-legislative competence, after surrendering of the State legislative powers in favour of the Union Parliament in terms of Article 252 of the Constitution. It is submitted that after surrendering the legislative power under Entry 18 List II in favour of the Parliament, the State Legislature had no jurisdiction to enact the impugned Act under Article 246(2) of the Constitution of India. It is urged that the subject covered by the impugned Act and the Ceiling Act is the same when examined by applying the principle of 'pith and subst....
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....Act has been enacted for giving effect to the policy of the State towards securing the principles specified and constitutional mandate contained in Clause (b) of Article 39 of the Constitution of India, directing that the ownership and control of the material resources of the community be so distributed as best to subserve the common good. The Act is claimed to be intended to achieve the object of building a welfare state and an egalitarian social order, by fixing certain social and economic goals for immediate attainment by bringing about a social revolution, which it is stated to fulfill the basic need of the common man and change the structure of the society, without which political democracy has no meaning. The Act is made not only for implementing the directive principles, but also to achieve the goals set forth in the preamble to the Constitution, particularly after its amendment by means of the 42nd Constitutional amendment. Article 31-C of the Constitution saves the Act from the attack of being void on the ground of inconsistency with or for allegedly taking away or abridging any of the rights conferred by Articles 14 and 19 of the Constitution. As the impugned Act fulfills....
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....on are submitted to be distinct and separate. The reliance of the petitioners upon Articles 294 and 299 of the Constitution has been seriously contested and it is pointed out that the agreement relied upon by the petitioners being pre-Constitution, could not be relied upon, in view of the specific bar imposed by Article 363 of the Constitution. The contention that once the State exercises its power of eminent domain, that power cannot be again exercised in respect of the same property, is stated to be devoid of any substance, as in prior proceedings under the Land Acquisition Act, the property had not vested in the State Government, as no award had been passed against the petitioners. The reliance of the petitioners on violation of the fundamental rights as guaranteed by Articles 14 and 19 of the Constitution is stated to be misconceived and it is submitted in the alternative that the respondents are not quality of violation of the guarantees of any of the aforesaid Articles. The scope and purport of Section 5(c) and Section 40 of the impugned Act are disparate. It is claimed that by incorporating various provisions in the impugned Act, the Legislature has ensured proper superinten....
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.... the State Government and the said order is upheld in appeal before the Karnataka Appellate Tribunal. Whereas the legal representatives and heirs and transferees of late Jayachamarajendra Wadeyar have in some Writ Petitions questioned the legality of the order passed by the Appellate Authority and these Writ Petitions are pending hearing before the High Court of Karnataka, it has become necessary to pass a law different from the provisions of the Land Acquisition Act, 1894 and to make provision for appointment of a Commissioner of payment to pass appropriate orders in conformity with the final decision in the above Writ Petitions in determining the amount payable in respect of the entire holding, and: Whereas, for the purpose herein before stated it is expedient to provide for the acquisition and transfer of the Bangalore Palace and the open space around it, by legislation." Section 1 deals with the title and commencement of the Act. Subsection 2 of Section 2 defines Bangalore Palace to mean, "the Palace of Bangalore and all the vacant land attached thereto including Buildings : regalia, paintings, sculptures and all other pieces of art, whether mov....
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....n such time and in such manner as may be prescribed, an intimation to the commissioner of such mortgage, lease lien or other interest. (5) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in sub-section (4) or other person holding any charge, lease, lien or other interest in or in relation, to any such property shall be entitled to claim in accordance with his rights or interest, payment of the mortgage money or other dues in whole or in part out of the amount specified in Section 8 and also out of the amount determined under Section 9, but no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the State Government. (6) If, as the appointed day, any suit, appeal or other proceeding of whatever nature, in relation to any property which has vested in the State Government under Section 4, instituted or preferred by or against the legal representatives or heirs or other interested persons, is pending, the same shall not abate, be discontinued, or in any way prejudicially affected by reason of the transfer of the Palace or anything contained in this Act, b....
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.... hereby declared that the liability of the legal representatives or heirs in relation to the Palace which has vested in the State Government under Section 4 shall be discharged from the amount referred to in Section 8, and also from the amounts determined under subsection (1), in accordance with the rights and interests of the creditors of the legal representatives or heirs, or other person as the case may be." Chapter III deals with the management of the Palace. Section 10 provides that the general superintendence, direction, control and management of the Palace, the right, title and interest in relation to the Palace which is vested in the State Government, shall, where a direction has been made by the Government under sub-section (1) of Section 7 vest in the Board and thereupon the Board be entitled to exercise, to the exclusive of all other persons, all such powers and do such things as may be authorised to do in relation to the Palace. Section 11 deals with the duties of the persons incharge of the management of the Palace and Section 12 refers to the duties of persons to account for assets in their possession. Chapter IV deals with the Commissioner of Payments. It comprise....
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....lusion of all other persons, any money due in respect of the palace which has vested in the State Government or the Board, and realised after the appointed day, notwithstanding that the realisation pertains to a period prior to the appointed day. (2) The State Government or the Board, as the case may be, may make a claim to the Commissioner with regard to every payment made by the State Government or the Board after the appointed day for discharging any liability of the legal representatives or heirs or other interested persons in relation to the Palace in respect of any period prior to the appointed day. Every such claim shall have priority in accordance with the priorities attached under this Act to the matters in relation to which such liability has been discharged by the State Government or the Board. (3) Save as otherwise provided in this Act, the liabilities of the legal representatives or heirs or other interested persons in relation to the Palace in respect of any transaction prior to the appointed day, which have not been discharged on or before such day shall be the liabilities of legal representatives or heirs or other interested persons, as the case ma....
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....ate and every such notice shall call upon the claimant to file the proof of his claim with the Commissioner within the time specified in the advertisement. (3) Every claimant, who fails to file the proof of his claim within the time specified by the Commissioner, shall be excluded from the disbursement made by the Commissioner. (4) The Commissioner shall after such investigation as may, in his opinion, be necessary and after giving the claimant a reasonable opportunity of being heard, determine the nature and extent of such claims and by order in writing admit or reject the claim in whole or in part and in determining the nature and extent of the claims of the legal representatives, heirs or other persons, the Commissioner shall take into consideration, the effect of the final order passed in the Writ Petitions pending against the orders of the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976, and the rights of the State Government thereunder. The Commissioner shall also decide any dispute as to the person or persons who are entitled to the amount and any dispute as to who are the legal representatives of any deceased claimant. ....
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....tment of Executive Officer and other officers. Section 26 deals with the suits and other legal proceedings by or against the Board. Section 27 provides: "Fund : (1) There shall be a fund called the Board Fund which shall be administered by the Board. The following shall form part of or be paid into the Board fund, namely: i) the income from Palace or proceeds of any property vested in the Board. ii) all fees and charges paid to or levied by or on behalf of the Board under this Act. iii) all grants and contributions made by the State Government or any other authority; iv) all contribution and donations made by any person; v) sums raised by way of loan by the Board with the previous sanction of the State Government; and vi) any other sums. Section 29 deals with the utilisation of the funds and provides: "The fund may be utilised for all or any of the following purposes, namely: i) maintenance, management and administration of the Palace; ii) laying out and maintenance of public park; iii) preservation of....
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....nd the manner in which an intimation referred to in sub-section (4) of Section 5 shall be given; b) the convening of meetings and the transaction of business of the Board under Section 22; c) the restrictions and conditions subject to which the Executive Officer may exercise his powers and perform his duties under Section 25; d) the conditions subject to which the Board may borrow any sum under Section 28; e) other purposes for which the fund may be utilised under Section 29; f) the preparation of the budget estimates for the Board under Section 31; g) the maintenance and custody of the accounts, records and the documents of the Board; h) any other matter which is required to be or may be prescribed." Sub-section 3 of Section 38 provides : "Every rule made by the State Government under this Act shall be laid, as soon as may be, after it is made, 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 or more successive sessions, and if before the expiry of the session i....
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....n Part IV" were substituted. On 15.5.1978, Bill No. 88/1978 was introduced in the Parliament, providing Article 31-C to restore it to the position prior to its amendment by the 42nd amendment, in the form as it stood as a result of the decision in keshavananda Bharathi's case supra. The Bill, however, was not passed. On 9.5.1980, the operative part of the order in Minerva Mills' case was pronounced, wherein it was held: "Section 4 of the Constitution (Forty-second Amendment) Act, . 1976, which came into force with effect from January 3, 1977 amended Article 31-C of the Constitution by substituting the words and figures, "all or any of the principles laid down in Part IV" for the words and figures, "the principles specified in Clause (b) or Clause (c) of Article 39". Article 31-C, as amended reads thus: ""31-C : Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV 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 decla....
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....endment by the 42nd Amendment, as a result of the decision in eshavananda Bharathi's case2, stood revived. In SANJEEV COKE MANUFACTURING COMPANY v. BHARAT COKING COAL LTD. AND ANR.: [1983]1SCR1000 , the judgment proceeded on the basis that Article 31-C stood revived as it existed as a result of the decision in keshavananda Bharathi's case, after the amendment' made to it by the 42nd Constitutional Amendment had been struck down in Minerva Mills' case. The Supreme Court has consistently followed the doctrine of revival in the matter of interpretation of the constitutional provisions, so far as Article 31-C was concerned. 13. The scope of 25th Amendment to the Constitution was considered by a 13-Judges' Bench of the Apex Court in keshavananda gharathi's case. Section 2(a) and 2(b) of the Constitution (25th Amendment) Act, 1971 was held to be valid and constitutional by majority judgment of 9 judges. The majority of the Judges also considered the scope of Section 3 of the Constitution (25th Amendment) Act, 1971 and held that the first part of the aforesaid Section was valid and the second part, viz., "and no law containing a declaration that it is for giving....
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....tially, it sought to give protection to those laws only which gave effect to the policy of the State towards securing the principles specified in Clause (b) and (c) of Article 39 of the Constitution. No such law could be deemed to be void on the ground that it is inconsistent with or takes away or abridges the rights conferred by Articles 14, 19 and 31. The concluding portion of the unamended Article which gave conclusiveness to certain declarations was struck down in keshavananda Bharathi AIR1973SC1461 . Shri M.N. Phadke, who led the argument on behalf of the petitioners, built a formidable attack against the vires of Article 31-C. But, with respect to the Learned Counsel, the effort is fruitless because the question as regards the validity of Article 31-C is no longer res Integra. The opening clause of Article 31-C was upheld by the majority in Kesavananda Bharathi AIR1973SC1461 and we do not quite see how the petitioners can be permitted to go behind that decision. The Learned Counsel addressed to us an interesting argument on the principles governing the theory of precedent, and he argued that, in the welter of judgments delivered in Kesavananda Bharathi, it is impossi....
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....ructure. We do hope that the Parliament will utilise to the maximum its potential to pass laws, genuinely and truly related to the principles contained in Clauses (b) and (c) of Article 39. The challenge made to the validity of the first part of the un-amended Article 31-C therefore fails." 16. In Sanjeev Coke Manufacturing Company's case cited supra, the Court referred to its earlier judgment in Minerva Mills' case and observed that in that case, Section 4 of the Constitution (42nd Amendment Act) was declared invalid and that Article 31-C, as it stood prior to the aforesaid amendment, was valid and constitutional. It was consequently declared that where Article 31-C comes in, Article 14 goes out. Article 14 could not be brought in by a side wing. To insist on nexus between the law for which protection is claimed and the principle of Article 39-B was not insist on fulfilment of the requirement of Article 14. It was declared that, "they are different concepts and in certain circumstances, may even run counter to each other. That is why the need for the immunity afforded by Article 31-C. Indeed there are bound to be innumerable cases where the narrower concept of equality ....
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....tres while providing housing accommodation, the authority was expected to make profits and hence followed that the power to acquire was not conferred with a view to achieving the directive principles in Article 39-B, and iii) the object of enacting the legislation was obviously to provide wholesome civic life to the citizens and not distribution of material resources. We are of the view that each one of these reasons is invalid and erroneous. First Article 31-C does not say that in an Act there should be a declaration by the appropriate Legislature to the effect that it is being enacted to achieve the object contained in Article 39-B. In order to ascertain whether it is protected by Article 31-C, the Court has to satisfy itself about the character of the legislation by studying all parts of it. The question whether an Act is intended to secure the objects contained in Article 39-B or not does not depend upon the declaration by the Legislature but depends on its contents. We have already dealt with the object of the Act, with which we are concerned in this case. In interalia makes provision for acquisition of private lands for providing sites for building houses or housing accommoda....
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....on a massive scale, compels the Court to ascribe expansive meaning to the pregnant words used with hopeful foresight, not to circumscribe their connotation into contradiction of the objectives inspiring the provision. To be Pharisaic towards the Constitution through ritualistic construction is to weaken the social spiritual thrust of the founding father's dynamic faith," 18. A perusal of various pronouncements noted hereinabove would clearly establish that the protective umbrella of Article 31-C is available to a legislative enactment, provided the offending Statute is protected in terms of Article 31-C as it existed after 25th Amendment and before 42nd Amendment. In other words, if it can be shown that the offending Statute was enacted for securing the principles specified in Clause (b) or Clause (c) of Article 39, the same shall not be void on the ground of its being inconsistent with, or taking away or abridging any of the rights conferred by Article 14 or Article 19. There is no substance in the argument that Article 31-C is unworkable, non-existent and inoperative. The reliance of the Learned Counsel for the petitioners on an order of reference made by two-Bench judgmen....
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....islating the impugned Act, is not shown to have directed its policy towards securing, "that the ownership and control of the material resources of the community are so distributed as best to subserve the common good." Elaborating the arguments, the Learned Counsel has submitted that the Act does not deal with the material resources and their distribution for the common good. The Act deals with only the acquisition of Immovable property allegedly for ulterior purposes. Material resources which are intended to be made available to the common citizen for the purposes of common good. It is submitted that as after acquisition, the palace or the land adjacent to it is not intended to be distributed to sub-serve the common good, the protective shield sought to be allegedly, wrongly, falsely and malafidely claimed would not be available to save the Act from the challenge on the grounds of violating Articles 14 and 19. 21. The object of Clause (b) and (c) of Article 39 has been declared to be the breaking-up of concentration of wealth and the distribution of material resources with the intention to achieve the building of a Welfare State and an egalitarian Social Order. The provisions ha....
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....ate Legislatures and there was nothing to prevent State legislatures from implementing that directive by enacting a law under entry 49, List II. As to Article 39(e) and (f), see Lakshmi Kant v. Union discussed in para 9.416, Vo. l of this edition." 22. Clause (b) of Article 39 is to be widely construed while considering the issue where the object of the impugned Act is to give effect incorporated therein. What the Court is required to see is whether there is a direct and reasonable nexus between the impugned statute and directive principle enshrined in Article 39(b) or not to arrive to a just conclusion, the Court is required to examine the object, the scheme and the other policies which reflect the policy of the State. 23. In Keshavanand Bharati's case (supra) it was observed that the object of the Clauses (b) & (c) of Article 39 was to fix certain social and economic goals for immediate attainment by bringing about a non-violent social revolution to fulfill the basic need of the common man and to change the structure of the society without which political democracy had no meaning. If the impugned statute is found to be aiming at securing any of the objectives mentioned ....
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....distemper and brush." In Webster's Third New International Dictionary at page 1934 the word 'resources' has been defined thus: "available means (as of a country or business) : computable wealth (as in money, property)". Words and Phrases (Permanent Edition). Vol. 37A, the word "Resources' has been defined at page 16 thus; "Resources included products of farm, forest, manufacture, art, education, etc. The "resources" of a country include its land, timber, coal, crops, improvements, railways, factories and everything that goes to make up its wealth or to render it desirable." In the STATE OF KARNATAKA AND ANR., ETC. v. RANGANATHA REDDY AND ANR., etc., etc. [1978]1SCR641 it was defined as: "And material resources of the community in the context of re-ordering the national economy embraces all the national wealth, not merely natural resources, all the private and public sources of meeting material needs, not merely public possessions." In Sanjeev Coke Manufacturing Co.'s case (supra) the 'material resources' were explained as:- "The next question for consideration is whether the Coking Coal Mi....
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....ld was held to be material resources and the individual being a member of the community his resources were part of those of the community. It was further held that material resources of the community meant all things which were capable of producing the wealth for the community. The expression should not be interpreted in a narrow fashion by confining it to our public owned material resources and excluding private owned material resources. The expression involved no dichotomy. The words were required to be understood in the context of the Constitutional goal of establishing a sovereign, socialist, secular, democratic republic. 25. In JILUBHAI NANBHA1 KHACHAR, ETC. ETC. v. STATE OF GUJARAT and ANR. AIR1995SC142 , the Court deal with its earlier pronouncements with respect to 'resources of the community' and the 'distribution' as contemplated by Article 39(b) of the Constitution and held: "It is, therefore, clear and we so hold that the material resources of community is of wide concept and must be broadly interpreted to bring within its sweep all resources, natural or physical resources, moveable, immovable, corporeal and incorporeal, tangible or int....
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....role and the whole article in a social mission. It embraces the entire material resources of the community. Its task is to distribute such resources. Its goal is so to undertake distribution as best to subserve the common good. It reorganizes by such distribution the ownership and control." 27. All the Learned "Counsel appearing for the petitioners have relied heavily upon the judgment of the Supreme Court in Dr. K.R. LAKSHMANAN v. STATE OF TAMIL NADU: 1996CriLJ1635 and submitted that the declaration made by the legislature that the Act intended to implement directive principles does not debar the Court from examining whether the declaration was a mere cloak to seek protection under Article 31-C or the Act actually had any nexus with those principles. There may not be any dispute to this proposition of law, particularly after the judgment in Kesavananda Bharati's2 case (supra) by which the later part of Article 31-C was held to be invalid. Judicial review has been acknowledged to be the essential feature of the Indian Constitutional system. It is well settled by the Apex Court that when protection of Article 31-C is sought as a shield to a particular statute, the Court exami....
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....harging their function in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly . and fairly and not arbitrarily or capariciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi judicial power." This Court pertinently drew attention to the basic concept of natural justice vis-a-vis administrative and quasi-judicial enquiries, and stated that any decision, whether executive, administrative or judicial or quasi-judicial, is no decision if it cannot be 'just', i.e. an impartial and objective assessment of all the pros and cons of a case, after due hearing of the parties concerned." 28. In the back drop of various pronouncements of the Supreme Court, it has to be ascertained as to whether the impugned statute is entitled to the protective umbrella and the shield provided to it by Article 31C read with 39(b) of the Constit....
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....nd peoples involvement. Before independence and during Monarchial Rule, there did not exist any distinction between the Royal properties and the private properties of the State. The Royal estates were then considered to be the property of the Rulers who claimed to be the dispenser of not only justice but Sovereignty as well. The Antique character of the properties including the Palaces have been considered and acknowledged to be the cultural and social heritage of the Indian Feudal Society. It can also not be denied that the Palaces used to be official residence and house of the sovereigns. Stroud's Judicial Dictionary defines the word Palace to mean: "A royal palace is a "house" belonging to the reigning monarch as a part of the royal possessions (33 Hen.8, c.12); but in order that it may be exempt from the execution of civil process it must be a house where the monarch is "then demur rant or abiding, in his royal person "(s.1, ibid., A-G v Dakin, L.R.4 H.L.338). When a house has been a royal residence and is kept up as Hampton Court Palace is e.g. is provided out of the civil list with a guard of honour and a chaplain, and the monarch has a pew in its chapel, a....
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.... of the Learned Counsel for the petitioners that as the palace was not a material resource of the community, the same would not be protected under the shield and cover of Article 31-C. Similarly, there is no substance in the submissions of the petitioners that as the palace and the land is not intended to distributed for the common good, the protection of Article 39(b) is not available. In view of the fact that the meaning of the word distribution, which has been held to be construed broadly to include the dispensation of largess to the people by providing them access to the material resources of the community, the submission made in this behalf has also to be ignored. In the preamble of the Act it is specifically stated that the palace is to be preserved as a monument and the surrounding open space developed to serve public purpose. An exclusive botanical museum, horticultural garden and a tree park is to be developed for the purposes of serving the acutely affected ecological needs of people of Bangalore. The land adjacent to the palace is intended to be used as the lung space and the park areas. The preservation of the palace as a monument, development of the open space into bot....
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....either directly administered by the Dominion Government, as the Chief Commissioner' provinces or were handed over to the neighbouring provinces. 216 states merged in the adjoining provinces, 61 states were converted into centrally administered areas and 275 states formed unions. Only three states, viz., Hyderabad, Mysore and Jammu & Kashmir retained their integrity. However, when the Constitution came into force, they also became part of the Union of India on later dates. On the merger or integration of the states with the Union of India, the rulers were left with privy purses and other privileges and properties. The privileges of the rulers included many items, regarding which a memorandum was issued by the Ministry of States in the year 1949. The list was not exhusitlve, but was drawn up to inform provincial and Union Governments about their status. It contained 34 privileges, which included several exemptions from the operation of the Indian laws, the enjoyment of Jagirs and personal property of the rulers and members of their families, the payment by the states of the marriage expenses of the brothers and sisters of the rulers, immunity from some processes of Courts of law,....
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....the rulers in accordance with settlement to continue to remain with them." 33. On the basis of the facts stated herein above, the petitioners submit that there was a guarantee given to them by the Government of India regarding the private properties of the Maharaja of Mysore and the same being a contractual obligation, is covered under Article 299(i) of the Constitution. Relying upon the decisions rendered in UNION OF INDIA v. SYNDICATE [1976]3SCR504 , MAHAVEER AUTO v. INDIAN OIL COMPANY [1990]1SCR818 & KASTURI v. STATE OF JAMMU & KASHMIR [1980]3SCR1338 , it is urged that the terms of contract executed between the Maharaja of Mysore and the Union of India cannot be unilaterally altered by an Act of the State Legislature. 34. In order to properly adjudicate this plea, it is necessary to have a bird's eye view of the development of the Constitution of India in the present form. The evolutionary process initiated on 26th of January, 1950 has been continued by various amendments made from time to time. The Constitution of a developing country cannot remain stagnant. The Constitutional law has to develop according to the needs of the Society and the mandate of the people. The ....
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....distribution of income. This is a blend of Marxism and Gandhism leaning heavily towards Gandhian socialism. During the formative years, socialism aims at providing all opportunities for pursuing the educational activity. For want of wherewithal or financial equipment the opportunity to be fully educated shall not be denied. Ordinarily, therefore, a socialist State provides for free education from primary to Ph.D. but the pursuit must be by those who have the necessary intelligent quotient and not as in our society where a brainy young man coming from a poor family will not be able to prosecute the education for want of wherewithal while the ill equipped son or daughter of a well-to-do father will enter the portals of higher education and contribute to national wastage. After the education is completed, socialism aims at equality in pursuit of excellence in the chosen avocation without let or hindrance of caste, colour, sex or religion and with full opportunity to reach the top not thwarted by any considerations of status, social or otherwise. But even here the less equipped person shall be assured a decent minimum standard of life and exploitation in any form shall be eschewed. The....
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....to large numbers of people as to produce unrest so grave that the peace and harmony of the world was apprehended to be imperilled. 38. In ATAM PRAKASH v. STATE OF HARYANA [1986]1SCR399 , it was declared: "The world 'socialist' was introduced into the Preamble to the Constitution. The implication of the introduction of the word 'socialist', which has now become the center of the hopes and the aspirations of the people - a beacon to guide and inspire all that is enshrined in the articles of the Constitution, is clearly to set up a "vibrant throbbing socialist welfare society" in the place of a "Feudal exploited society". Whatever article of the Constitution it is that we seek to interpret, whatever statute it is whose constitutional validity is sought to be questioned, we must strive to give such an interpretation as will promote the march and progress towards a Socialistic Democratic State." 39. All the learned Counsel appearing for the petitioners have heavily relied upon the judgment of the Apex Court in MADHAVA RAO SINDIA v. UNION OF INDIA [1971]3SCR9 , the case which is popularly known as, "the first privy purses abolition case". In that case....
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....H RAO GANPATH RAO v. UNION OF INDIA AIR1993SC1267 on the ground that it violated the basic structure of the essential features of the Constitution and was thus outside the scope and ambit of the Constituent powers of the Parliament to amend the Constitution, as provided under Article 368. It was prayed that the Union of India should continue to recognise the personal rights, amenities and privileges of the former rulers and continue to pay privy purses to them. The petitioner in that case was the former ruler of the Indian state of Kurundwad, which was a sovereign state prior to August 15th, 1947. The ruler had merged with the Dominion of India on the basis of merger agreement and in lieu thereof, was promised to be paid the privy purse and assured of the protection of his properties. The 26th Amendment Act was termed to be, "an ugly epitome of immorality perpetuated by the Indian Parliament." It was stated to be an unholy assault on the spirit which was impermissible, being against the principle of justice, fairness and reasonableness. The repealed Articles were stated to be integral part of the Constitutional scheme as their underlying purpose was claimed to be to facilitate stab....
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.... the privileges of rights would be incompatible with the sovereign and republican form of Government. Such a retention will also be incompatible with the egalitarian form of our Constitution. That is the opinion of the Parliament which acted to repeal the aforesaid provisions in exercise of its constituent power. The repudiation of the right to privy purse privileges, dignities etc. by the deletion of Articles 291 and 362, inserting of Article 363A and amendment of Clause 22 of Article 366 by which the recognition of the Rulers and payment of privy purse are withdrawn cannot be said to have offended Article 14 or 19(g) and we do not find any logic in such a submission. No principle of justice, either economic, political or social is violated by the Twenty-sixth Amendment. Political justice relates to the principle of rights of the people, i.e., right to universal suffrage, right to democratic form of Government and right to participation in political affairs. Economic justice is enshrined in Article 39 of the Constitution. Social justice is enshrined in Article 38. Both are in the Directive Principles of the Constitution. None of these rights are abridged or modified by this Amendm....
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....ress and strain they underwent both from inside and outside. Though the process of integration and democratization called as "unionization" in the words of Sardar Patel, was undertaken step by step at various stages, multiple forces, such as political, economic and geographic, more so the democratic movement within the States accelerated the process of integration, Therefore, it is a misnomer to say that the Rulers made their sacrifices for which they were given just compensation and assured permanent payment of privy purses. What was given to the Rulers was a political pension as rightly pointed out in Usman Mis case [1965]3SCR201 , on consideration of their past position. Hence there is no question of breaking of solemn pledges or breach of promises etc. given to the Rulers. Therefore, the repudiation of the same cannot be said to have amounted to any breach of those guarantees and promises resulting in alteration of the basic structure of the Constitution. 43. Dealing with the other submissions made on behalf of the petitioners, as noted earlier herein, the Court held: "As regards the submission that the amendment is an ugly epitome of immorality perpetrated by the I....
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....pose of identifying 'laws' his concept seeks to accomplish more than is necessary; for the purpose of portraying law in a continuum it does not go far enough"? Bentham in his Theory of Legislation, Chapter XII at page 60 said thus: "Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good. Legislation ought to have precisely the same object. But although these two arts, or rather sciences, have the same end, they differ greatly in extent. All actions, whether public or private, fall under the jurisdiction of morals. It is a guide which leads the individual, as it were, by the hand through all the details of his life, all his relations with his fellows. Legislation cannot do this; and, if it could, it ought not to exercise a continual interference and dictation over the conduct of men. Morality commands each individual to do all that is advantageous to the community, his own personal advantage included. But there are many acts useful to the community which legislation ought not to command. There are also many injurious actions which it ought not to forbid, although" morality does so. In a word le....
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.... Court is required to gather the general spirit of the Constitution, by applying various well recognised methods of interpretation of statutes. If the offending statute does not contravene the constitutional guarantees, the same has to be upheld. The provision of a statute violating or taking away some rights incorporated in the Constitution cannot be made a basis for striking it down. On the alleged grounds of violation of the provisions of Articles 294 and 299, the impugned Act cannot be declared ultra vires or without jurisdiction. 45. To attract the provisions of Article 299 of the Constitution, it has to be established that there existed a contract expressed to be made and executed in the name of the President or the Governor, or such person specially authorised in that behalf and in the manner specifically prescribed. In the absence of a valid contract, there is no corresponding obligation of its enforcement by or against the Government, except by way of a suit. Article 299 would not be applicable to contracts executed in exercise of statutory powers. Strictly speaking, the agreements executed between the former ruler and the Domination of India cannot be termed to be cont....
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....he State Legislature which had plenary powers of legislation within the ambit of the Legislative heads specified in the Lists 2 and 3 of the Seventh Schedule to the Constitution could only be imposed by the Constitution itself and not by any obligation which had been undertaken by either the Dominion Government or the Province of Bombay or even the State of Bombay. Under Article 246 the State Legislature was invested with the power to legislate on the topics enumerated in Lists II and III of the Seventh Schedule to the Constitution and this power was by virtue of Article 245(1) subject to the provisions of the Constitution. The Constitution itself laid down the fetters or limitations on this power, e.g. in Article 303 or Article 286(2). But unless and until the Court came to the conclusion that the Constitution itself had expressly prohibited legislation on the subject either absolutely or conditionally the power of the State Legislature to enact legislation within its legislative competence was plenary. Once the topic of legislation was comprised within any of the entries in the Lists 2 and 3 of the Seventh Schedule to the Constitution the fetter or limitation on such-leg....
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....der sense, of legislative acts; it can only say whether they were validly enacted,....." These observations were quoted with approval by their Lordships of the Privy Council in - 'Jaganath Baksh Singh v. United Provinces MANU/PR/0010/1946MANU/PR/0010/1946 and we also would observe in the same strain that we are not concerned with the policy of State Legislature in enacting the impugned Act for abolition of Jagirs but we are only concerned with the question whether the impugned Act was validly enacted. No argument has been advanced before us which would enable us to hold that the impugned Act was 'ultra vires' the State Legislature, the only ground of attack being that it was in contravention of the guarantee given in Clause 5 of the letters of guarantee. But that position is of no avail to the petitioners." 46. There is yet another aspect of the matter which is required to be taken note of and that is the bar of interference by Courts in disputes arising out of the treaties and agreements entered into or executed before the commencement of the Constitution by any ruler or against an Indian State to which the Government of the Dominion of....
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....le 252 of the Constitution by which powers of legislation are alleged to have been surrendered in favour of the Union Parliament. It is submitted that once the Karnataka Legislature surrendered the power for the purposes of entry 18 of List-II in favour of the Parliament it is denuded of its power to legislate under Article 246 in any matter relating to Urban Law and Acquisition thereof to achieve the objects enshrined in Article 39(b). The impugned Act is alleged to be a legislation with respect to an entry regarding which the legislative powers were surrendered in favour of the Union Parliament. It is submitted as the pith and substance of the Act was acquisition of the land, it cannot be termed to be the result of exercise of the legislative power in terms of entry 42 of List-Ill of the VII Schedule. It is submitted that a perusal of preamble of the Act would clearly and unambiguously lead to the conclusion that the impugned Act was legislation with respect to a matter covered by entry 18 of List-II of the VII Schedule regarding which the legislative powers had been absolutely surrendered by the State Assembly along with some other States of the Country. It is contended that eve....
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....e power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the "State List"). (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. Article 248: Residuary powers of legislation:- (1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List. (2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists. Article 252: Power of Parliament to legislate two or more States by consent and adoption of such legislation by any other State:- (1) If it appears to the Legislatures of two or more States to be desirable that any of the matters with respect to which the Parliament has no power to make laws for the States except as provided in Articles 249 and 250 should be regulated in such States by Parliament by law, and if resolutions to that effect are passed by all ....
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....; land improvement and agricultural loans; colonization." (b) Entry No. 42 of the List-Ill reads: "Acquisition and requisitioning of property." 51. The relevant resolution passed by the Karnataka Assembly and relied upon by the petitioners reads as under:- "Whereas this assembly considers that there should be a ceiling on Urban immovable property; And whereas the imposition of such ceiling and acquisition. of Urban immovable property in excess of that ceiling are matters in respect to which Parliament has no power to make law for the State, except as provided in Article 249 and 250 of the Constitution of India; And whereas, it appears the Karnataka Legislative Assembly to be desirable that the afore said matters should be regulated in the State of Karnataka by the Parliament by Law. Now therefore in pursuance of Clause (i) of Article 252 of the Constitution this assembly hereby resolves that the imposition of a ceiling on Urban Immovable property and acquisition of such property in excess of a ceiling in all matters connected thereto, or ancillary and incidental thereto should be regulated in the State of Karnataka by Parliament by law." ....
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....Lists of the VII Schedule are not "powers" of legislation but "fields" of Legislation. Powers are conferred by the Part-XI of the Constitution subject to the restriction . imposed by the Constitution itself with respect to the fields of legislation specified under three lists of the 7th Schedule. The Supreme Court in CALCUTTA GAS COMPANY (PROPRIETARY) LTD. v. STATE OF BENGAL AND ORS.,: AIR1962SC1044 , dealt with the interpretation of the legislative entries, conflict of jurisdiction and rules of interpretation in such cases and held that attempt should be made to harmonise apparently conflicting; entries. Referring to its earlier judgments in the matter of The Central Provinces And Bearer Sales of Motor Spirit And Lubricants Taxation, Act 1938, THE STATE OF BOMBAY v. NAROTTAMDAS JETHABHAI AND ANR. [1951]2SCR51 , the Apex Court in this case held: "...............it would be useful to notice sorrier of the well settled rules of interpretation laid down by the Federal Court and this Court in the matter of construing the entries. The power to legislate is given to the appropriate Legislatures by Article 246 of the Constitution. The entries in the three Lists are only Leg....
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....by side. But the underlying principle in the two cases must be the same, that a general power ought not to be so construed as to make a nullity of a particular power conferred by the same Act and operating in the same filed, when by reading the former in a more restricted sense effect can be given to the latter in its ordinary and natural meaning." The rule of construction adopted by that decision for the purpose of harmonizing the two apparently conflicting entries in the two Lists would equally apply to an apparent conflict between two entries in the same List. Patanjali Sastri, J., as he then was, held in STATE OF BOMBAY v. NAROTHAMDAS JETHABHAI26, that the words "administration of justice" and "constitution and organization of all courts" in item one of List II of the Seventh Schedule to the Government of India Act, 1935 must be understood in a restricted sense excluding from their scope "jurisdiction and powers of Courts" specifically dealt with in item 2 of List II. In the words of the learned Judge, if such a construction was not given "the wider construction of entry 1 would deprive entry 2 of all its content and reduce it to useless lumber." This rule of construct....
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....tion has to be determined not by degree but by substance. The doctrine of pith and substance may be applied not only in cases of apparent conflict between powers of 2 Legislatures but in cases where the question is raised as to whether a legislation is covered by a particular legislative power in exercise of which it is declared to have been made. In State of Karnataka and anr. v. Ranganatha Reddy and anr., etc., etc., it was observed that "the pith and substance of the Act has to be looked into and incidental tress pass would not invalidate the law. While determining the legislative competence of the State Legislature to enact Karnataka Contract Carriages Acquisition) Act, 1976 the Apex Court examined the fields of legislation of the respective legislatures and made the observations noted herein under: "There are numerous decisions of the Privy Council, the Federal Court and the Supreme Court in support of the proposition that the pith and substance of the Act has to be looked into and an incidental trespass would not invalidate the law, vide for example Prafulla Kumar Mukherjee v. Bank of Commerce Ltd., Khulna and Advocate General of Bengal 1947 FCR 28: (AIR 1947 P....
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....wholly for consumption on the farm was held to be within the power conferred by the commerce clause where the purpose of such Regulation was to control the market price of wheat in Inter-State commerce. In the case of The Steamer Daniel Bail (supra) the question was whether the impugned Act applicable to a steamer engaged as a common carrier to carry goods in a navigable river between places in the same State when a portion of the merchandise transported by her is destined to places in other States could control such a steamer under the authority of the Congress to regulate an agency employed in commerce between the States. It was held that it could be so done. In our judgment it is difficult to apply the principles of any of the cases aforesaid to the facts and the provisions of the Act. It is not an Act which deals with any Inter-State trade of commerce. Even assuming for the sake of argument that carriage of passengers from one State to the other in one sense a part of the inter-State trade and commerce, the impugned Act is not one which seeks to legislate in regard to the said topic. Primarily and almost wholly it is an Act to provide for the acquisition of contract ca....
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....y State Legislature subject to any restriction. The resolution contemplated under Article 252(1) is not hedged in with conditions. In making such a law, the Parliament was not bound to exhaust the whole field of legislation. It could make a law, like the Urban Ceiling Act, with respect to ceiling on vacant land in an urban agglomeration, as a first step towards the eventual imposition of ceiling on immovable property of every other description." 57. The Supreme Court nowhere stated that the Urban Land (Ceiling and Regulation) Act, 1976, was covered by Entry No. 42 of List III of the Seventh Schedule. If the matter of Urban Land Ceiling was covered by Entry 42 of List III, there was no necessity of the State Legislature to pass resolution in terms of Article 252(1) of the Constitution, in view of the provisions of Article 246(2) of the Constitution which otherwise authorise the Union Parliament to make law with respect to any of the matters enumerated in List-Ill in the Seventh Schedule of the Constitution. In that event the law made by the Parliament was to prevail and the law made by the State Legislature had to yield under Article 254 of the Constitution. It is therefore cryst....
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....movable properties. The imposition of ceiling on owning property is one such topic and there can be laws regulating ceiling on owning the property, relationship of lesser and lessee, payment of rent, manner of granting the lease, conferment of ownership on the lessee etc. It is the concept of a welfare State which is the underlying object in such welfare legislations. When viewed from that angle it is axiomatic that imposition of ceiling on urban land is a distinct and independent subject as compared to imposition of ceiling on owning or holding agricultural land or any other kind of property which do not attract the Urban Ceiling Act. Likewise it cannot be said that the pith and substance of the law governing the conferment of ownership of land on the tenant is a law regulating the imposition of ceiling on land holding. Equally it cannot be said that the pith and substance of the law imposing the ceiling on land holding covers the subject of conferring ownership of land on the tenant. There are two distinct powers and therefore the law-making competence can be in two different legislative bodies. Consequently it is difficult to hold that the provisions of Chapter III of the Karnat....
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....ich the State alone has the power to legislate." The reliance of the Learned Counsel for the petitioner on this case is therefore of no help to them. It cannot be said that after the resolution the State Legislature had surrendered all its powers with respect to any of the matter covered by the subject within the ambit of Entry 18 of List-II. 59. The reliance of the petitioners on M/s. T. KHANDE RAO AND SONS AND ETC. v. STATE OF KARNATAKA AND ORS. AIR1979Kant71 is wholly misplaced and of no help to them. Reliance of the petitioners on Baijnath Kedia etc. v. The State of Bihar and ors., [1970]2SCR100 , is also of no help to them because in that case while considering the scope of Entry 54 of the Union List and Entry 23 of the State List the Court held that the Entry of the State List was subject to the Entry of Union List and it was open for the parliament to declare that it was expedient in the public interest that the control should vest in the Central Government. It was for the Parliament to determine the extent of the declaration which was to be commensurate with the public interest. Once such a declaration was made and the extent specified, the subject of legislatio....
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....4 , H.R. BANTHIA v. UNION OF INDIA [1970]1SCR479 , UNION OF INDIA v. H.S. DHILLON [1972]83ITR582(SC) , D. C. RATARIA v. BHUWALKA BROTHERS LTD. [1955]1SCR1071 , and INDIAN CEMENT LTD. v. STATE OF TAMIL NADU . 61. The submission made on behalf of the petitioners that after the surrender of power to legislate under Article 252, the State Legislature ceases to have any legislative competence with respect to the field of legislation surrendered cannot be accepted in general terms. The surrender of the legislative power is intended to confer the legislative competence upon the Union Parliament to also legislate upon the subject Which otherwise is within the domain of the State Legislature. Such surrender cannot be absolute and irrevocable. Accepting the plea that once the surrender is made, the State Legislature cannot deal with that field of legislation would amount to holding that the Constitution of India can be amended by a resolution of the State Assembly without recourse to the provisions of Article 368 of the Constitution. No State Legislature has the power to amend the Constitution by surrendering or usurping the power of legislature. The effect of the surrender of t....
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.... It further held that in considering the extent of repugnancy the doctrine of severability was perforce applicable." A State law may be held to be repugnant when there is a direct conflict between the two provisions or where there is no direct conflict between the Union and the State Legislature, but it is shown that the Union Parliament intended its legislation to be complete and exhaustive code relating to the subject. Even where the Central Act is not exhaustive, repugnancy may be found if the Act occupies the same field of the State Act. The repugnancy contemplated must be shown to be existing in fact and not merely apprehended or possible repugnancy. Even when repugnancy has to be shown to be in existence, every effort should be made to reconcile the two Statutes by construing them so as to avoid them being repugnant to each other. While considering the extent of repugnancy provisions of Clause 2 of Article 254 has to be kept in mind. If the President assents to a State law, it will prevail notwithstanding repugnancy to an earlier law of the Union on a subject covered by the Concurrent List, as was held by the Apex Court in U.P. ELECTRIC SUPPLY CO. LTD. (In Voluntary liquidati....
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....f Bangalore City. The Statement of Object and Reasons of both the enactments clearly and unambiguously indicate that both the legislations have been enacted for different purposes and do not cover the same field of legislation. 62. Under the Ceiling Act, a ceiling limit has been prescribed under Section 4 and persons have been held not entitled to hold vacant land in excess of the ceiling limit (under Section 3). Persons holding vacant land in excess of the ceiling limit are required to file a statement in terms of Sections 6 and 7. On the basis of the statement filed under Section 6 and after enquiry, the competent authority is required to prepare a draft statement in respect of the person who has filed the statement under Section 6. Such a draft statement is required to be served on the person concerned together with a notice stating that any objection to the draft statement be preferred within thirty days of the service thereof. The competent authority thereafter has to consider the objections received within the time specified and after giving the object or a reasonable opportunity of being heard, should pass such orders as it may deem fit. As soon as may be after the servic....
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....ble from those covered by the Calling Act. 63. Assuming that both the enactments deal with the same subject matter and the provisions of Article 254 of the Constitution are applicable, it has to be held that as there is no overlapping, the provisions of the impugned Act cannot be held to be unconstitutional on the ground of alleged repugnancy. Applying the test said down by the Apex Court as noted hereinabove, we are of the opinion that as the impugned Act has not directly or indirectly transgressed into the field of legislation of the Union Parliament and that the two enactments deal With different situations, there is no necessity of declaring the impugned Act to be unconstitutional on the ground of alleged inconsistency. 64. Again assuming that the impugned Act made by the State Legislature deals with respect to one of the matters enumerated in the concurrent list and contains some provisions which are repugnant to the provisions of the law made by the Parliament, the Act Would not be held unconstitutional on that account, in view of the fact that it was reserved for consideration of the President and has received his assent. Article 254(2) of the Constitution provides: ....
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.... Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential. 4. Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with the repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254." 6....
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....itioners of their property without reasonable compensation. It is further submitted that the compensation awarded was not only unjust and unfair, but illusory, intended only to put a veil of legality on the Act. The property is claimed to be worth about Rs. 3,000 crores, whereas the compensation awarded is stated to be only eleven crores. It is argued that keeping in view the scheme of the Act, the petitioners do not expect the payment of even this alleged meagre amount of eleven crores. 67. Under Section 8 of the Act, the State is liable to pay an amount of Rs. Eleven crores, by depositing the same with the Commissioner, which shall be paid to the legal representatives of the heirs or such other persons entitled thereto, in the manner specified in Chapter IV. Under Section 16, every person having a claim with regard to any of the matters specified in Schedule II in relation to the Palace is entitled to prefer claim before the Commissioner, within the time specified and under Section 17, such claims made shall have priority in accordance with the principles enumerated under Section 17. Schedule II of the Act specifies the categories to whom claims are to be paid in order of the ....
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..... Eminent domain has been held to be the highest and most exact idea of property remaining in the Government, or in the aggregate body of the people in their sovereign capacity. After referring to various eminent authors and its own judgments, the Supreme Court, in that case, dealt with the right of compensation and the extent to which the compensation can be restricted and held: The question then is whether the owner of the property is entitled to compensation i.e. just equivalent or indemnification to the owner of the property expropriated. It is common knowledge that when the State exercises its executive power to acquire private property, it is under the Land Acquisition Act, 1894 or similar State laws. Acquisition thereunder though is for public purpose, payment of compensation at the prevailing market value as on the date of the relevant notification published in the official gazette is sine qua non. The State when exercise the power of eminent domain under Article 300-A and acquires or requisition or taken possession of the property of a citizen to give effect to any of the directive principles envisaged in Part IV of the Constitution the question emerges whether th....
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.... of social interests through the instrument of social control; a task assigned to public law for that matter". ....................... ....................... "It would thus be clear that acquisition of the property by law laid in furtherance of the directive principles of State policy was to distribute the material resources of the community including acquisition and taking possession of private property for public purpose. It does not require payment of just compensation or indemnification to the owner of the property expropriated. It is the very negation of the effectuating the public purpose. Payment of market value in lieu of acquired property is not sine qua non for acquisition. Acquisition and payment of amount are part of the scheme and they cannot be dissected. However, fixation of the amount or specification of the principles and the manner in which the amount is to be determined must be relevant to the fixation of amount. The amount determined need not bear reasonable relationship. In other words, it is not illusory. The adequacy of the resultant amount cannot be questioned in a court of law. However, the validity of irrelevant principles are a....
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....nt or determination of the principle for fixing it is a matter for the Parliament alone and that the Court has no say in the matter." 70. In a case where the provisions of Article 31-C are invoked, the question of compensation becomes irrelevant and otiose. In STATE OF TAMIL NADU ETC. v. L. ABU KAVUR BAl and ORS.,8 the Apex Court held: ".....if Article 31C is taken, as it must be, to exclude Article 31(2), the question of compensation becomes irrelevant and otiose, .................. .................." 71. In MAHARASHTRA STATE ELECTRICITY BOARD v. THANA ELECTRIC SUPPLY COMPANY and ORS. AIR1990SC153 , the Apex Court held that on matters of economic policy, the Court must advert to legislative judgment, as conditioned by time and circumstances. The wisdom of social change being dependent, in some degree, upon trial and error, should not be substituted. The community's economic burden for social and economic reforms being the ethos of the Constitution be kept in mind while dealing with the legislation enacted for the purposes of achieving the objects of Article 39(b) with the protective umbrella of Article 31-C. Basu, in his "Shorter Constitution ....
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....elf has determined the compensation. In the instant case, the compensation payable for the acquisition and transfer of Bangalore Palace has been determined by the Legislature itself, vide Section 8 of the impugned Act. Payment of eleven crores of rupees as compensation cannot be termed to be illusory. The records produced by the Advocate General showed that the Special Land Acquisition Officer (Railways), Bangalore in his letter No. LAC(C) 1/86-87 dated 13.11.1989 had reported that the approximate cost of acquisition of Bangalore Palace would be about Rs. Eleven crores under the Land Acquisition Act. The petitioners have not placed anything on the record to show that the value of the property was Rs. 3,000 crores, as proclaimed by them. In the absence of any prima facie proof, such averments made, which have been specifically denied, cannot be made the basis for determining as to whether the compensation directed to be paid was illusory or not. At the cost of repetition, it is stated that because the Legislature, in its wisdom, has determined the compensation at an amount of Rs. Eleven crores, we are not in a position to substitute our opinion for the wisdom of the Legislature. It ....
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....sonable classification. A classification would be justified if it is not arbitrary. Persons forming a class cannot be discriminated, but different provisions for different classes are permissible. Equality before law is a negative concept and equal protection of laws is a positive one. Everyone is equal before law and no one can claim special privilege and all classes are subjected to the ordinary law of the land. Equal protection is ensured to all alike in the same situation and under like circumstance. Equality before law does not mean that things which are different should be treated as though they were the same. The State, which has to deal with diverse problems, have the power of making special laws to attain specified objects and for that purpose, it has the power of selection or classification of persons or things upon which such laws are to operate. Mere differentiation or inequality of treatment does not, perse, amount to discrimination within the inhibition of the equal protection clause. In order to pass the test of permissible classification, two conditions are required to be fulfilled, viz., (1) that the classification must be founded on an intelligible differentia whi....
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....bject sought to be achieved by the statute . in question. The classification may be founded on different bases; namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law, but also by a law of procedure." Relying upon this judgment, the Apex Court in SHRI RAM KRISHNA DALMIA v. SHRI JUSTICE S.R. TENDOLKAR AND ORS. [1959]1SCR279 held : "The decisions of this Court further establish - (a) that a law may be constitutional even though it relates to a single individual, if, on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the Legislature understands a....
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.... object sought to be achieved by the statute, no matter whether the provisions of the statute are intended to apply only to a particular person or thing or only to a certain class of persons or things. Where the Court finds that the classification satisfies the tests, the Court will uphold the validity of the law, as it did in Chiranjitlal v. Union of India (B) supra, State of Bombay v. F.N. Balsara (C) (supra), Kedarnath Bajoria v. State of West Bengal 1953CriLJ1621 (I) V.M. Syed Mohamad & Co. v. State of Andhra, [1954]1SCR1117 (J) and Budhan Choudhry v. State of Bihar (A) (supra). A statute may direct its provisions against one individual person or thing or to several individuals, persons or things but no reasonable basis of classification may appear on the face of it or be deducible from the surrounding circumstances, or matters of common knowledge. In such a case, the Court will strike down the law as an instance of naked discrimination, as it did in Amirunnisa Begum v. Mahboob Begum, [1953]4SCR404 (K) and Ramprasad Narain Sahi v. State of Bihar, [1953]4SCR1129 (L). A statute may not make any classification of the persons or things for the purpose of applying its provi....
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....classification. If the Government in making the selection or classification does not proceed on or follow such policy or principle, it has been held by this Court, e.g., in Kathi Raning Rawat v. State of Saurashtra (E) (supra) that in such a case, the executive action but not the statute should be condemned as unconstitutional." 75. In S.P. MITTAL v. UNION OF INDIA and ORS. : [1983]1SCR729 it was held that even a single institution may be taken as a class. In that case, while considering the Auroville (Emergency Provisions) Act (59 of 1980) which took over the management of Auroville society by the Government, the Court held that the situation prevailing in Auroville necessitated the taking of action which could not be termed to be violative of Article 14 on the ground of discrimination. Again in LALIT NARAYAN MISHHRA INSTITUTE OF ECONOMIC DEVELOPMENT AND SOCIAL CHANGE, PATNA ETC. v. STATE OF BIHAR AND ORS. [1988]3SCR311 the Supreme Court reiterated the legal position and held : "Much reliance has been placed by the Learned Counsel for the petitioner on the decision of this Court in Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar, [1959]1SCR279 . In that ca....
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....4. Pashupathi Raj Palace of Pashupathi Raj Maharaj 5. Rana of Nepal having Paradise Estate 6. Dharmapur Maharaj having land of 400 acres. It is not shown as to how the owners of these palaces are similarly situated with the petitioners. It is not even known as to whether any of these palaces are owned by the legal heirs of the deceased rulers or whether such palaces are still in existence in the form of private property. The argument regarding violation of Article 14 is far-fetched and not in any way close to the realities. Violation of Article 19 has also not been substantiated, so as to persuade us to accept the arguments addressed in this behalf. Reliance of the Learned Counsel for the petitioners on the decisions rendered in DEPUTY COMMISSIONER & COLLECTOR, KAMRUP AND ORS. v. DURGANATH SHARMA [1968]1SCR561 , NAGPUR IMPROVEMENT TRUST and ANR. v. VITTAL RAO AND ORS. [1973]3SCR39 , BALAMMAL AND ORS. v. STATE OF MADRAS AND ORS. [1969]1SCR90 is misplaced. REG. MALAFIDES : 77. Relying upon Dr. K.R. LAKSHMANAN v. STATE OF TAMIL NADU 1996CriLJ1635 Learned Counsel for the petitioners have submitted that the Act being the result of colourable exerci....
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....ms and objects and in Section 2 of the said Act was nothing but a mechanical reproduction of constitutional provisions in a totally inappropriate context. There was no nexus so far as the provisions of the Act were concerned with the objectives contained in Article 39(b) and (c) of the Constitution. As the protective umbrella of Article 31-C was held not to be applicable in that case, the Court examined the legality of the Act on the touch-stone of Article 14 of the Constitution and found that as the Act was discriminatory and arbitrary, the same was liable to be quashed. The Court observed that the main object of the Horse Race Club was to carry on the business of race, in particular the running of horse race, steeple chases or races of any other kind and for any kind of athletic sports and for playing their own games of cricket, bowls, golf, lawn tennis, polo or any other kind of games or amusement, recreation, sport or entertainment etc. The Club was found to be not owning or controlling any material resources of the community, which were to be distributed in terms of Article 39(b) of the Constitution. In that case, the Court found : "Horse racing is a game of ski....
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.... common good. The Act has direct nexus with the objects set forth in Article 39(b) of the Constitution and has rightly been protected by the declaration made under Article 31-C and the assent of the President received in terms of Article 254 of the Constitution. REG. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE : 80. Similarly, the argument that the principles of natural justice had been violated is devoid of force. The principles of natural justice may not be directly applied to the legislative process of the Legislature, if otherwise the Legislature had the jurisdiction to enact the law under the scheme of the Constitution, as detailed in Part XI Chapter I of the Constitution. 81. It has been contended that as in the present case, powers have been delegated to the State Government under Section 4 of the Act, for the purpose of "appointed date" to vest the property in the State, there was every likelihood of the same being used malafidely and with ulterior purposes. It is submitted that the delegation of the powers is excessive and its exercise has been the result of extraneous considerations. It is alleged that the date has been appointed with retrospective effect, which w....
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....ment Act, particularly Sections 45 to 49 and 64 and 54-A when they speak of a certain building or street or square or other land vesting in a municipality or other local body or in a trust do not necessarily mean that ownership has passed to any of them." To the same effect is the pronouncement of the Apex Court in MUNICIPAL CORPORATION OF HYDERABAD v. P.N. MURTHY [1987]167ITR204(SC) . 82. The power to appoint a date for the purpose of Section 4 cannot be termed to be a case of delegated legislation, but can be said to be a case of conditional legislation. In SARDAR INDER S1NGH v. THE STATE OF RAJASTHAN AND ORS. [1957]1SCR605 , it was held: "When an appropriate Legislature enacts a law and authorises an outside authority to bring it into force in such area or at such time as it may decide, that is conditional and not delegated legislation, and that such legislation is valid." "After referring to the observation of Lord Selborne in her Majesty, the Queen v. Buran 1877 8 IA 178 Venkatarama Ayyar, J. concluded thus: "This is clear authority that a provision in a statute conferring a power on an outside authority to bring it into force at such time a....
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.... it is perfectly valid." 84. Only because the Act was enforced with effect from 21.11.1996 in terms of sub-section (2) of Section 1 of the Act, it cannot be said that as the zero hour started on the intervening night of 20th and 21st of November 1996, the same would be deemed to be retrospective, as the notification is presumed to have been issued at any time after the office hours on 21.11.1996. The Act had to be enforced with effect from a particular date and not a particular hour. The hypertechnical plea raised in this behalf is without any legal value worth consideration. As a consequence, the enforcing of the Act could not be held to be either malafide or the result of excessive delegated legislation. REG. THE ACT LEGISLATED TO OVER-RIDE JUDICIAL PROCEEDINGS 85. Pointing out to Section 40 of the impugned Act, it is submitted that as the Act declares for the abatement of the proceedings pending under the Land Acquisition Act, the same was liable to be quashed, being an interference with the judicial process, particularly when the varies proceedings are pending in this Court. The argument is also without any legal substance, inasmuch as it is acknowledge that the Legisl....
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....d out by Ray, C.J., in Indira Nehru Gandhi V. Raj Narain [1976]2SCR347 the rendering ineffective of judgments or orders of competent Courts and Tribunals by changing their basis by legislative enactments is a well known pattern of all validating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidity of actions or proceedings is not an encroachment of judicial power. In Hari Singh V. Military Estate Officer [1973]1SCR515 a Bench of seven learned Judges of this Court laid down that the validity of a validating law is to be judged by two tests. Firstly, whether the legislature possesses competence over the subject matter and secondly, whether by validation the Legislature has removed the defects which the Court had found in the previous law. To these we may add a third : Whether it is consistent with the provisions of Part III of the Constitution." The Legislature, however, cannot declare any pending judicial proceedings to be invalid or directly over-rule a judicial decision. It can only render ineffective the judgment of a competent Court by changing the basis of legislative enactment upon which that judgment had been founded. ....
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....tionalisation) Act of 1974 and even if its effect is the same, no legal ground has been shown for quashing the Act on his plea. REG. W.P. NO. 3383 OF 1997 87. Feeling aggrieved by the passing of the Act, the petitioners, viz., M/s. Chamundi Hotel Pvt. Ltd., have challenged the vires of the Act on the grounds upon which the other Writ Petitions have been filed, It is submitted that the petitioner-Company was incorporated under the Indian Companies Act, 1956, with His Highness the late Sri Jayachamaraja Wadeyar, former Maharaja of Mysore, as Chairman and late Sri A. Chamaraju, a leading Civil Contractor of Bangalore, as Managing Director, with the object of utilising and developing some lands of the Bangalore Palace Property, on shareholding basis. The Maharaja group had 60% of the shareholding and the Chamaraju group, 40% of the shareholding in the Company. The late Maharaja is stated to have handed over 110 acres of the Palace land to the petitioner-Company on 30.11.1970. In 1974, Sri S.D.N.R. Wadeyar, the son of late Maharaja filed a suit in O.S. No. 145/1974, questioning the above arrangement. The late Maharaja died on 23.9.1974 and after his death, a settlement was arrived....
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....ssued on 25.1.1996 and further proceeding stayed. The Government is also alleged to have initiated proceedings under the Land Acquisition Act, by issuing a notification dated 12.8.1996, regarding which the Writ Petitions filed by the aggrieved are pending in this Court. During the pendency of those proceedings, the impugned Act is stated to have been passed, which is held to be unconstitutional, beyond the scope of legislative competence of the State Legislature, arbitrary, discriminatory, malafide and against the principles of natural justice. 89. The reliance of the Learned Counsel on C.B. GOUTAM v. UNION OF INDIA, in this regard is misconceived, because in that case, while determining the scope of Section 269-UD of the income Tax Act, 1961, the Court held that opportunity to show cause must be afforded to intending purchaser and seller of property, before making an order of compulsory purchase of the property under the Income Tax Act and that reasons recorded in the order would not be substituted of the opportunity of being heard. Keeping in view the revision of Section 269-UD(1) of the Income Tax Act, the Court found that in a case where a presumption of an attempt to evade ....