ORDER
R.P. Sethi, C.J.
1. Despite half a century of independence, overthrow of the foreign rule, abolition of monarchial system of Governments and the sea changes brought about in the socio-economic-political system in the Democratic Republic of India, the successors-in-interest of the former ruler of Mysore State have challenged the jurisdiction of the Legislature in enacting laws with the purpose of depriving them of the privileges allegedly conferred upon the ruler in lieu of the surrender of sovereignty in favour 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. 3,000 crores, approximately. It is submitted that the Palace was built in 1915 on the designs of Windsor Palace of England and comparises of 477 acres of land and other buildings meant for the use of the staff and ancillary purposes.
FACTUAL BACK GROUND:
3. In order to set the controversy at rest, it is necessary to take note of some of the facts as incorporated in WP No. 32175/1996. The facts in other Writ Petitions are admitted to be identical.
4. The petitioners claim to be the successors-in-interest of the former rule of the then State of Mysore, or claiming through the legal heirs of the said ruler. Late Sri Krishnaraja Wodeyar IV, the former ruler of Mysore is stated to be owning various properties, induding the palaces at Mysore and Bangalore. After his demise, Sri Jayachamaraja Wodeyar ascended the throne and inherited the properties. It is contended that on account of the Independence Movement in the country and other historical factors, the British Government decided to transfer power to the people of India by June, 1948. Option was given to the Maharajas of various States to relinquish their powers in favour of the Government of India or the newly created State of Pakistan. The Indian Independence Act received the Royal assent on 18.7.1947 provided for two independent dominions of India and Pakistan, with effect from 14.8.1947. It is submited that even before the passing of the Indian Independence Act, Lord Mount Batten, the then Viceroy of India, had suggested a peaceful settlement regarding the Indian rulers, viz., to allow the rulers to retain their titles, extra territorial rights and personal properties, in return for which they were to join any of the dominions with respect to only three subjects, viz., Defence, External Affairs and Communications. In pursuance of the efforts made by the then Viceroy, an Instrument of Accession of the States was prepared, providing for the integration of the States and for transfer of power from the rulers. The rulers are stated to have been guaranteed the privy purses, succession to Gaddi, rights and privileges and full ownership, use and enjoyment of all private properties belonging to them, as distinct from State properties. The Maharaja of Mysore (hereinafter referred to as ‘The Maharaja’) signed the Instrument of Accession (Annexure “C’) on 9.8.1947. A supplementary instrument (Annexure ‘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 immoveable 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 V.P. Menon, the then Secretary of States, intimated the Maharaja that the Government of India had concurred with the Government of Mysore and accepted all the items specified in the inventory, including the palace, as Maharaja’s private property. The Government of Mysore issued a consequential order on 6.2.1951 (Annexure ‘J’). On 6.1.1970, the President of India is stated to have passed orders in respect of each of the rulers of the former Indian States, de-recognising them as rulers of their respective States. The Presidential order was challenged in the Supreme Court and set aside by a majority judgment delivered on 15.12.1970. Thereafter, the 26th Amendment Act, 1971 was passed, abolishing the privy purses and privileges of the former rulers. This amendment was also challenged in the Supreme Court, but the challenge failed and the validity of the amendment was upheld in 1994.
6. With a view to prevent concentration of urban land in the hands of a few persons and for brining about an equitable distribution of the lands in urban agglomerations and sub-serve the common good, the Legislatures of Karnataka and some other States thought it expedient to provide for imposition of a ceiling limit on vacant lands in urban agglomerations and for acquisition of such excess vacant lands. In order to ensure uniformity in approach, 11 State Legislatures passed resolutions in terms of Article 252(1) of the Constitution, authorising the Union Parliament to enact laws for the aforesaid purpose. Consequently, the Union Legislature enacted the Urban Land (Ceilings and Regulations) Act, 1976 (hereinafter referred to as ‘The Ceiling Act. The legal heirs of the ruler filed a return under the Ceiling Act, claiming that the land in the Bangalore Palace was not covered by the definition of the vacant land under Section 2(q) of the Ceiling Act, because the aforesaid land was covered by the Comprehensive Development Plan of Bangalore City and had been classified as open space and park, where no construction was to be raised. This submission was not accepted by the competent authority under the Ceiling Act, who passed an order declaring substantial portion of the land surrounding the palace as excess land. The order of the competent authority was challenged before the Karnataka Appellate Tribunal in appeal, which was dismissed and against the order of such dismissal, 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 dedaration 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 notification and declaration. Thereafter, an ordinance by name, “Bangalore Palace Acquisition and Transfer Ordinance, 1992 (hereinafter called ‘The Ordinance’) was promulgated, which was, however, not assented to by the President.
7. After the arguments of the petitioners were concluded in WP Nos.4284/1988 and others, the case was adjourned to 28.11.1996 for arguments on behalf of the respondents. At that time, the impugned Act, which is stated to have already been passed in the two Legislatures, received the assent of the President on 15.11.1996 and was enforced by a notification in the State Gazette on 21.11.1996.
GROUNDS OF CHALLENGE:
8. It is submitted that the impugned Act is a draconian, confiscatory legislative enactment, which is alleged tyrannical, amounting to seizure of moveable and immoveable properties of the petitioners, thereby negativing all cherished values and norms of democracy, rule of law, fundamental rights, constitutional rights besides the common law of the country. The enforcement of the Act has been termed to be the delegation of the legislative functions to the Government, rendering the Act,- particularly Section 12(2) as ultra vires and unconstitutional. It is alleged that as there is no procedure by which the entire vesting and taking over by transfer of the palace to the State Government and the Board as contemplated by the Act, the entire Act was liable to be rendered ultra vires the Constitution. As earlier noted, the Act has been described to be depriving the petitioners of their property in violation of the provisions of Article 300-A of the Constitution. The fixation of the appointed date has been termed to be arbitrary and contrary to the settled position of law. The consequence of the Act is termed to be subjecting the petitioners not only to double jeopardy, but instead, triple jeopardy. There is no reasonable classification conforming to the standards required under Article 14 of the Constitution of India. The abatement of the proceedings pending in the Courts, in terms of Section 40 of the impugned Act, is alleged to be malafide, intending to deprive the petitioners of due compensation, which they were otherwise entitled to claim and be paid under the Land Acquisition Act, The legislative enactment is stated to be interfering with the jurisdiction of this Court and thereby threatening the independence of the judiciary. 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 unlegislative 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 substance’ of the legislation. The Act is termed to be against the principles of natural justice. The property of the petitioner is stated to have been seized, without having recourse to law and compliance with the principles of natural justice. The payment of Rs. Eleven crores in terms of section 8 of the Act is stated to be not only highly illusory, but virtually amounting to confiscation, without payment of any compensation. The petitioners are stated to be deprived of performing pooja in the private Hanuman Temple, located within the palace, which is stated to be violative of Articles 25 and 26 of the Constitution. It is submitted that is the impugned Act is the outcome of the malafides besides being violative of the fundamental rights and the Constitutional provisions, it is liable to be quashed, particularly when the State Legislature had no legislative competence to enact it. Though not pleaded, yet it was argued that the umbrella of protection of Article 31-C, as incorporated in the declaration contained in Section 3 of the impugned Act, was not available to the impugned Act. It is pointed out that after the judgment in MINERVA MILLS LTD. v. THE UNION OF INDIA and KESHAVANANDA BHARATHI v. STATE OF KERALA, Article 31-C has become inoperative, ineffective and a dead piece of legislation and an unworkable but only decorative provision. It is prayed that a writ of declaration be issued, declaring the Act as unconstitutional, ultra vires and violative of the fundamental rights of the petitioners and pending disposal, injunction be issued against the respondents, restraining them from notifying the appointed date and taking possession of the palace pursuant to the Act.
9. The respondent-State have filed objections to the petitioner’s prayer for interim orders in WP No. 321 75/1996 and prayed that the aforesaid objections be treated as counter on their behalf in all the petitions.
GROUNDS OF DEFENCE:
10. It is submitted on behalf of the respondents that the impugned Act is legally valid and constitutional which cannot be challenged by the petitioners on the grounds detailed in the Writ Petitions. The passing of the Ceiling Act, the filing of the declaration, the decision of the Appellate Tribunal and pendency of the Writ Petitions in the High Court in relation thereto, are not disputed. It is contended that the 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 the requirement of Article 31-C, it is claimed to be immune to challenge oh the ground of infringement of Articles 14 and 19 of the Constitution. Article 39-b encompasses the preservation of the architectural heritage of the State of Karnataka and the development of vacant land to act as lung-space to maintain environmental and ecological balance. The object of the Act is stated to develop the surrounding open space into a botanical museum or horticultural garden and tree park. The
palace, the land appertain and the moveables in the palace are stated to be material resources within the meaning of Article 39-b. The allegations that the State Government had not made any investigation before getting the palace declared as a monument to be preserved has been denied and it is contended that since the palace and its open spaces are unique, the State Legislature, in its wisdom, considered it to be an architectural heritage and passed the impugned Act. It is submitted that the Act is enacted by the State Legislature in exercise of its powers under Article 246(2) read with Entry 42 in List III of the VII Schedule of the Constitution, of India. The acquisition of the property from the petitioners is claimed to be under the provisions of the Act. No fundamental right or constitutionals guarantee is stated to have been violated. It is urged that the principles of natural justice do not apply to the legislative process and the vesting of a property in the State Government by legislation is claimed to be a concept incorporated in many enactments, such as the Land Acquisition Act and Karnataka Land Reforms Act. The method of extinguishing rights on the property vesting in the Government is claimed to be a well-known legislative technique, the validity of which cannot be questioned in judicial review. The various provisions of the Act have been justified and stated to be intro vires of the Constitutional guarantees. It is submitted that the ground urged by the petitioners that the resolution of the State Legislature passed in terms of Article 252 of the Constitution denuded the competence of the State Legislature to deal with the vacant land in the palace, was patently untenable. It is contended that the legislative competence for the Act is derived from Entry 42 of List III, whereas the subject of the land is referred to in Entry 18 of List II. The two fields of legislation 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 constention 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 quilty 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 superintendence, direction, control and management of the palace, for which a Board of Trustees has been provided to be constituted for the purposes of safeguarding the public interest in relation to the property in dispute. The violation of Articles 25 and 26 of the Constitution has vehemently been denied. It is submitted that neither the petitioners’ freedom of conscience nor their right to practice and propagate any religion have been infringed by the acquisition of the palace. It is further submitted that a place of worship is not exempt from acquisition. It has been urged that despite the judgment of the Apex Court in Minerva Mills1 and Keshavananda Bharathi’s2 cases, Article 31-C is alive, effective and enforceable. It is contended that the petitioners are not entitled to the grant of any relief, as prayed for by them in their petitions.
RELEVANT PROVISIONS OF THE ACT:
11. In order to properly appreciate the rival contentions of the parties and to determine the constitutionality of the Act, it is necessary to have a glance into the various important provisions of the Act. The preamble of the Act provides:
“An Act to provide for the acquisition and transfer of the Bangalore Palace and open space around it in the pubic interest and for its preservation and for matters connected therewith:
Whereas, the Palace at Bangalore popularly known as the Bangalore Palace, Karnataka’s unique historical and architectural heritage, is singularly suited with its immediate surroundings, which no other Palace in the City of Bangalore does possess, and thereby deserving in its own majesty, in public interest, to be preserved as a monument with the surrounding open space developed to serve public purpose, into an exclusive Botanical Museum and Horticultural Garden and Tree Park and to serve also the acutely affected ecological needs of Bangalore City which in its course of rapid growth has become highly deficient in lung- space and park areas and therefore to provide for its acquisition and transfer by law.
Whereas the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 has held that the Bangalore Palace and surrounding land came within the Regulation of the said Act and has passed an order declaring substantial portion of the land surrounding Bangalore Palace as surplus land to be surrendered to 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 moveable or immovable and more fully described in Schedule I.” Section 3 reads:
“Declaration ” In pursuance of Article 31-C of the Constitution of India, it is hereby declared that the provisions of this Act are enacted for giving effect to the policy of the State towards securing the principles specified in Clause (b) of Article 39 of the Constitution,”
Section 4 reads:
“Transfer and vesting of the palace in the State Government : On the appointed day, the Bangalore Palace (hereinafter referred to as the ‘Palace’) and the right, title and interest of the legal representatives or heirs or other persons in relation to the Palace, shall, by virtue of this Act stand transferred to, and shall vest absolutely in the State Government.”
Section 5 reads:
“General effect of vesting: (i) The Palace shall be deemed to include all assets, rights, leaseholds, powers, authorities and privileges and all property, moveable and immoveable, including buildings, regalia, painting, art works, sculptures and all other rights and interests in or arising out of such property, as were immediately before the appointed day in the ownership, possession, power or control of the legal representative or heirs or other interested persons and all books of accounts, registers and other documents of whatever nature relating thereto.
(2) All properties aforesaid, which have vested in the State Government under Section 4 shall, by virtue of such vesting be freed and discharged from any trust, obligation, mortgage, lease, charge, lien and all other encumbrances affecting them and attachment, injunction or decree or order of any Court or authority restricting the use of such property, in any manner shall be deemed to have been withdrawn.
(3) Every legal representative, heir or other person who has, on the appointed day, any right, title or interest in relation to the Palace shall have the right to prefer his claim in the prescribed manner before the commissioner for payment of amount out of the amount specified in Section 8 and also out of the amount determined under Section 9,
(4) Every mortgagee of any property which has vested under this Act in the State Government and every person holding any charge, lease, lien or other interest in, or in relation to, any such property shall give, within 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, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the State Government or, where the Palace is directed under Section 7 to vest in the Board by or against the Board.”
Section 7 reads:
“State Government to direct vesting of the Palace in the Board :
(1) Notwithstanding anything contained in Sections 4 and 5, the State Government shall subject to such terms and conditions as it may think fit to impose direct by notification, that the Palace which has vested in the State Government under Section 4, shall instead of continuing to vest in the State Government vest in the Board either on the date of notification or on such earlier or later date (not being a date earlier than the appointed day) as may be specified in the notification.
(2) Where the right, title and interest in relation to the Palace vest in the Board under sub-section (1), the Board shall on and from the date of such vesting, be deemed to have become the owner in relation to such Palace and all the rights and liabilities of the State Government under the Act on and from the date of such vesting be deemed to have become the rights and liabilities of the Board.”
Section 8 reads:
“Amount to be given to legal representatives or heirs or other interested persons : For the transfer to and vesting in the State Government, of the Palace under Section 4 and the right, title and interest in relation to the Palace, the State Government shall pay an amount of rupees eleven crores by depositing the same with the Commissioner and the said amount shall be paid to the legal representatives or heirs or such other persons entitled thereto in the manner specified in Chapter IV.”
Section 9 reads:
“Payment of further amounts: (1) The amount specified in Section 8 shall carry simple interest at the rate of four per cent per annum for the period commencing on the appointed day and ending on the date on which payment of such amount is made by the State Government to the Commissioner.
(2) The amount determined in accordance with the provisiosn of sub-section (1) shall be given by the State Government to the legal representatives or heirs or such other persons entitled thereto, as the case may be, in addition to the amount specified in Section 8. (3) For the removal of doubts, it is hereby declared that the liability of the legal repesentatives 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 persosn, 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 comprises of Sections 13 to 21. Section 13 reads as under:
“Appointment of Commissioner of payments : (1) The State Government shall, for the purpose of disbursing the amount payable under Sections 8 and 9, by notification in the Official Gazette, appoint a Commissioner of payments.
(2) The State Government may appoint such other persons as it may think fit to assist the Commissioner and there upon the Commissioner may authorise one or more of such persons also to exercise all or any of the powers exercisable by him under this Act and different persons may be authorised to exercise different powers.
(3) Any person authorised by the Commisioner to exercise any of the powers exercisable by the Commissioner may exercise these powers in the same manner and with the same effect, as if they have been conferred on that person directly by this Act and not by way of authorisation,
(4) The salaries and allowances of the Commissioner and other persons appointed under this section, shall be defrayed out of the consolidated fund of the State.”
Section 14 reads:
“Payment by the State Government to the Commissioner : (i) The State Government shall, within thirty days from the appointed day, deposit, in cash, with the Commissioner, for payment, to the legal representative or heirs and other interested persons:
a) an amount equal to the amount specified in Section 8; and
b) an amount equal to the amount payable under Section 9.
(2) A deposit account shall be opened by the State Government in favour of the Commissioner in the public account of the State, and every amount paid under this Act to the Commissioner shall be deposited by him to the credit of the deposit account and the said deposit account shall be operated by the Commissioner.
(3) Records shall be maintained by the Commissioner in respect of the estate in relation to which payments have been made to him under this Act.
(4) The interest accruing on the amount standing to the credit account referred to in sub-section (2) shall enure to the benefit of the legal representatives or heirs and other interested persons.”
Section 15 reads:
Certain powers of the State Government and the Board:
(1) The State Government or the Board as the case may be, shall be entitled to receive upto the appointed day, to the exclusion 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 may be.”
Section 16 reads:
“Claims to be made to the Commissioner : Every person having a claim with regard to any of the matters specified in Schedule II in relation to the Palace before the appointed day shall prefer such claim before the Commissioner within thirty days from the appointed day: Provided that if the Commissioner is satisfied that the claimant was prevented by sufficient cause from preferring the claim within the period of thirty days, be may entertain the claim within a further period of thirty days and not thereafter.”
Section 17 reads:
“Priority of claims : The claims made under Section 16 shall have priority in accordance with the following principles, namely a) Category I shall have precedence over all other categories and Category II shall have precedence over Category III and so on;
b) the claims specified in each of the categories shall rank equally and be paid in full, but if the amount is not sufficient to meet such claims in full, they shall abate in equal proportions and be paid accordingly; and
c) the question of discharging any liability with regard to a matter specified in a lower category shall arise only if surplus is left after meeting all liabilities specified in the immediate higher category.”
Section 18 provides:
“Examination of claims : (1) on receipt of the claims made under Section 16, the Commissioner shall arrange the claims in the order of priority specified in schedule II and examine the same in accordance with such order of priority.
(2) If, on examination of the claims the Commissioner is of the opinion that the amount paid to him under this Act is not sufficient to meet the liabilities specified in any lower category he shall not be required to examine the claims in respect of such category.”
Section 19 reads:
“Admission or rejection of claims:
(1) After examining, the claims with reference to the priorities specified in Schedule II, the Commissioner shall fix a certain date on or before which every claimant shall file the proof of his claim.
(2) Not less than fourteen days notice of the date so fixed shall be given by an advertisement in one issue of a daily newspaper in the English language having wide circuiation in the country and one issue of a daily news paper in the Kannada language having wide circulation in the State 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 reasonsable 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 Commissoner 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.
(5) The Commissioner shall have the power to regulate his own procedure in all matters arising out of the discharge of his functions, and shall, for the purpose of making an investigation under this Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 while trying a suit, in respect of the following matters, namely:
a) summoning and enforcing the attendance of any witness and examining him on oath;
b) the discovery and production of any document;
c) the receiving of evidence by affidavit;
d) the issuing of any commision for the examination of witnesses.
(6) Any investigation before the Commissioner shall be deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the Penal Code, I860 and the Commissioner shall be deemed to be a Civil Court for the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
(7) A claimant, who is aggrieved by the decision of the Commisioner, may prefer an appeal against the decision to the City Civil Court, Bangalore within the local limits of whose jurisdiction the palace is situated.”
Section 20 reads:
“Disbursement of the amount by the Commissioner to the claimants: After admitting a claim under this Act the amount due in respect of such claim shall be paid by the Commissioner to the person or persons to whom such amount is due and on such payment the liability in relation to the Palace in respect of such claims shall stand discharged.”
Section 21 reads:
“Undisbursed or unclaimed amount to be deposited to the General Revenue Account: Any amount paid to the Commissioner which remains undisbursed or unclaimed on the date immediately preceding the date on which the office of the Commissioner is finally wound up, shall be transferred by the Commissioner to the General Revenue Account of the State Government, but a claim to any amount so transferred may be preferred to the State Government by the person entitled to such payment and shall be dealt with as if such transfer had not been made, and the order, if any, for payment of the claim, being treated as an order for the refund of revenue.”
Section 22 provides for the Board of Trustees comprising of the persons mentioned therein. Section 23 deals with the powers and durties for appointment 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 follwing 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 tree growth in the premises of Palace;
iv) for development of Botanical Museum and Horticulture garden in the Palace premises;
v) for payment of salaries and allowances of the Executive officer and other Officers appointed under Section 24;
vi) for any other purpose as may be prescribed.
Section 30 deals with audit and Section 31 with budget. Section 32 provides that the provisions of the Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than the Act or in any decree or order of any Court, Tribunal and other authorities. Section 33 provides:
“Contract to cease to have effect unless ratified by Board : Every contract entered into by the legal representatives or heirs or other persons in relation to the Palace which has vested in the State Government under section 4 and in force immediately before the appointed day, shall on and from the expiry of thirty days from the appointed day, cease to have effect unless such contract is, before the expiry of that period, ratified in writing by the Board and in ratifying such contract, the Board may make such alteration or modification therein, as it may think fit: Provided that the Board shall not omit to ratify a contract and shall not make any alteration or modification in a contract :
a) Unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith or is detrimental to the interest of the Board, and
b) except after giving to the parties to the contract a reasonable opportunity of being heard and except after recording in writing its reasons for refusing to ratify the contract or for making any alteration or modification therein.”
Section 35 provides for penalties for violation of the provisions of the Act. Section 37 authorises the State Government to call for and examine the records of the Board or the Executive Officer in respect of any proceedings to satisfy itself as to the regularity of such proceedings or correctness, legality or propriety of a decision or an order passed therein. Section 38 authorises the State Government to make rules for carrying out all or any of the purposes of the Act, including :
“a) the time within which and 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 brrow 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 immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.”
Section 40 reads :
“Abatement of proceeding under the Land Acquisition Act, 1894: On and from the appointed day all notifications issued under any of the provisions of the Land Acquisition Act, 1894 in respect of the Palace shall stand withdrawn and proceedings if any, taken in pursuance of such notification shall abate.”
REG. RELEVANCE OF ARTICLE 31-C:
12. Sri Narrman, one of the Counsel appearing for the petitioners, submitted that Article 31-C does not survive after the judgment in Minerva Mills’ and Keshavananda Bharathi’s cases. It is submitted that after the words, “all or any of the principles laid down in Part IV” were declared unconstitutional in Minerva Mills1 case and the words, “and no law containing a declaration that it is for giving effect to such policy shall be called in question in any Court on the ground that it does not give effect to such policy” were held unconstitutional in Keshavananda Bharathi’s2 case, Article 31-C has become unworkable, redundant and ineffective, with the result that the protection granted to the Statute for alleged violation of Articles 14 and 19 of the Constitution, is not available. In order to appreciate the submission, it is necessary to have a glance to the history of Article 31-C. This Article, as originally enacted, was inserted in the Constitution of India with effect from 20.04.1972 by Section 3 of the Constitution (25th Amendment) Act, 1971. The Constitutional validity of Article 31-C was examined in Keshavananda Bharathi’s case cited supra, which was decided on 24.04.1973. In that judgment, the second part of Article 31-C, as noted hereinabove, was declared to be invalid, while the rest of Article 31-C was upheld. Vide 42nd Amendment Act, 1976, which was made effective on 3.1.1977, for the words, “the principles specified in Clauses (b) or Clause (c) of Article 39”, the words, “all or any of the principles laid down in 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’ case1 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 declaration that it is for giving effect to such policy shall be called in question in any Court on the ground that it does not give effect to such policy: Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.”” Section 4 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it damages the basic or essential features of the Constitution and destroys its basic structure by a total exclusion of challenge to any law on the ground that it is . inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution, if the law is for giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV of the Constitution.
Section 55 of the Constitution (Forty-second Amendment) Act, 1976, which came into force with effect from January 3, 1977 inserted sub-sections (4) and (5) in Article 368 which read thus:
“No amendment of this Constitution (including the provisions of Part 111) made or purporting to have been made under this Article (whether before or after the commencement of Section 55 of the Constitution (Forty-second Amendment) Act, 1976) shall be called in question in any court on any ground.
For the removal of doubts, it is hereby declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this Article.”
Section 55 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it removed all limitations on the power of the Parliament to amend the Constitution and confers power upon it to amend the Constitution so as to damage or destroy its basic or essential features or its basic structure.”
In this case, Section 4 of the Constitution (42nd Amendment) Act, 1976 was held to be invalid and the decision was rendered on the basis that Article 31-C continued in the form which it existed as a result of the decision in Keshavananda Bharathi’s case2. In WAMAN RAO v. UNION OF INDIA “, it was assumed that Article 31-C as it stood prior to its amendment by the 42nd Amendment, as a result of the decision in eshavananda Bharathi’s case2, stood revived. In SANJEEV COKE COMPANY v. BHARAT COKING COAL LTD. AND ANR. , 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 effect to such policy , shall be called in question in any court on the ground that it does not give effect to such policy” is invalid. Section 3 of the Amendment Act reads as follows:
“After Article 31-B of the Constitution, the following Article shall be inserted, namely:
“31-C : Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing the principles specified in Clause (b) or Clause (c) of Article 39 shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14, Article 19 or Article 31; and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy :
Provided that where such law is made by the Legislature of a State, the provisions of this Article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.”
14. A perusal of Section 3 and the majority judgment of the Apex Court clearly and unambiguously show that Article 31-C with the words and figures, “the principles specified in Clause (b) or Clause (c) of Article 39” were held to be valid and constitutional. In Minerva Mill’s case1, the majority judgment declared that Article 31-C, before its amendment by way of 42nd Amendment of the Constitution, was valid to the extent to which it was upheld in Keshavananda Bharathi’s case2. In the majority order pronounced on 9.5.1980, it was declared that Section 55 of the Constitution 42nd Amendment Act was beyond the amending power of the Parliament and was void since it removed all limitations on the power of the Parliament to amend the Constitution and conferred power upon it to amend the constitution, so as to damage or destroy its basic or essential features or its basic structure.
15. The position of law with respect to the amendment of Article 31-C was further explained in Waman Rao’s case3 cited supra, wherein it was held:
“That leaves for consideration the challenge to the constitutional validity of the unamended Article 31-C. As we have stated at the beginning of this judgment, Article 31-C was introduced by the Constitution (Twenty-fifth Amendment) Act, 1971. Initially, 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 .
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 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 impossible to discern a ratio because different learned Judges gave different reasons in support of the conclusions to which they came. It is well known that six learned Judges who were in minority in Kesavananda Bharati upheld the first part of Article 31-C, which was a logical and inevitable consequence of their view that there were no inherent or implied limitations on the parliament’s power to amend the Constitution. Khanna J. did not subscribe to that view but, all the same, he upheld the first part of Article 31-C for different reasons. The question of validity of the Twenty-fifth Amendment by which the unamended Article 31-C was introduced into the Constitution was specifically raised before the Court and the arguments in that behalf were specifically considered by all the six minority Judges and by Khanna, J. It seems to us difficult, in these circumstances, to hold that no common ratio can be culled out from the decision of the majority of the seven Judges who upheld the validity of Article 31-C. Putting it simply, and there is no reason why simple matters should be made complicated, the ratio of the majority judgments in Kesavananda Bharati is that the first part of Article 31-C is valid.
Apart from this, if we are right in upholding the validity of Article 31-A on its own merits, it must follow logically that the unamended Article 31-C is also valid. The unamended portion of Article 31-C is not like an uncharted sea. It gives protection to a defined and limited category of laws which are passed for giving effect to the policy of the State towards securing the principles specified in Clause (b) or Clause (c) of Article 39. These clauses of Article 39 contain directive principles which are vital to the well-being of the country and the welfare of its people. Whatever we have said in respect of the defined category of laws envisaged by Article 31-A must hold good, perhaps with greater force, in respect of laws passed for the purpose of giving effect to Clauses (b) and (c) of Article 39. It is impossible to conceive that any law passed for such a purpose can at all violate Article 14 or Article 19. Article 31 is now out of harm’s way. In fact, far from damaging the basic structure of the Constitution, laws passed truly and bona fide for giving effect to directive principles contained in Clauses (b) and (c) of Article 39 will fortify that structure. 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 unamended Article 31-C therefore fails.”
16. In Sanjeev Coke Manufacturing Company’s case4 cited supra, the Court referred to its earlier judgment in Minerva Mills’ case1 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 before law may frustrate the broader egalitarianism contemplated by Article 39-B.” The existence of the words and figures “the principles specified in Clause (b) or Clause (c) of Article 39” was held to be an inseparable part of Article 31-C.
17. While considering some provisions of the Maharashtra Housing and Development Act, 1977 (hereinafter referred to as the Maharashtra Act), the Apex Court in the STATE OF MAHARASHTRA AND ANR. v. BASANTIBAl MOHANLAL KHETAN AND ORS. , dealt with the constitutionality of the Maharasthra Act on the touch stone of Article 31-C in the light of its earlier pronouncements and held:
“Even granting for purposes of argument that sub-sections (3) and (4) of Section 44 are violative of Article 14 of the Constitution, we are of the view that the said provisions receive the protection of Article 31-C of the Constitution. We shall proceed to test the validity of argument keeping aside for the time being the observations in Sanjeev Coke Manufacturing Company v. Bharat Coking Coal Ltd., . Let us proceed on the basis that after Keshavananda Bharati Sripadagalavaru v. State of Kerala, ( and Minerva Mills Ltd. v. Union of India . Article 31-C reads as notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing the principles specified in Clause (b) or Clause (c) of Article 39 shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article 14 or Article 19. Clause (b) of Article 39 of the Constitution which is relevant for our purpose states that the State shall, in particular, direct its policy towards securing that the ownership and control of material resources of the community are so distributed as best to subserve common good. The High Court rightly observed at the end of paragraph 14 of its judgment following Sanjeev Coke Manufacturing Company’s case (supra) that the expression, “Material resources” of the community would cover the lands held by private owners also. But it, however, erred thereafter in reaching the conclusion that Article 31-C was not applicable to the case for the reason that (i) the Act did not contain a declaration that it was enacted to give effect to Article 39-B, (ii) by undertaking development of commercial centres 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 inter-alia makes provision for acquisition of private lands for providing sites for building houses or housing accommodation to the community. The title to the land of the private holders which are acquired first vests in the State Government. Later on, the land is developed and then distributed amongst the people as house sites. It also provides for reserving land for providing public amenities without which people cannot live there. Community centres, shopping complexes, parks, roads, drains, playgrounds, are all necessary for civic life and these amenities are enjoyed by all. That is also a kind of distribution. In State of Karnataka v. Ranganatha Reddy dealing with the question whether nationalisation of bus transport was covered by Article 39-B, Justice Krishna lyer has observed thus:
“The next question is whether nationalisation can have nexus with distribution. Should we assign a narrow or spacious sense to this concept? Doubtless, the latter, for reasons so apparent and eloquent. To ‘distribute’ even in its simple dictionary meaning, is to allot, to divide into classes or into groups and distribution’ embraces arrangement, classification, placement, disposition, apportionment, the way in which items, a quantity, or the like, is divided or apportioned; the system of dispersing goods throughout a community’ (See Random House Dictionary). To classify and allocate certain industries or services or utilities or articles between the private and the public sectors of the national economy is to distribute those resources. Socially conscious economists will find little difficulty in treating nationalisation of transport as a distributive process for the goods of the community. You cannot condemn the concept of nationalisation in our plan on the score that Article 39-B does not envelop it. It is a matter of public policy left to legislative wisdom whether a particular scheme of take over should be undertaken.
Two conclusions strike as quintessential. Part IV, especially Article 39-B and C, is a futuristic mandate to the State with a message of transformation of the economic and social order, firstly, such change calls for collaborative effort from all the legal institutions of the system; the legislature, the Judiciary and the Administrative machinery. Secondly and consequentially, loyalty to the high purpose of the Constitution, viz., social and economic justice in the context of material want and utter in equalities 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 judgment in PROPERTY OWNERS’ ASSOCIATION AND ORS. v. STATE OF MAHARASHTRA AND ORS. would not change the settled position of law, unless the larger Bench of the Supreme Court takes a contrary view. Even in the Property Owners Association’s case cited supra, the two-Bench judgment of the Supreme Court has not taken any contrary view. After hearing the rival contentions of the parties, the Judges forming the Bench formed a tentative opinion and recommended for a reference to a larger Bench with the observations:
“Having heard Learned Counsei for sometime, we. have formed the opinion that it would be more appropriate for a Bench of not less than five Judges to consider and decide these questions for an authoritative pronouncement of the same. The decisions in Minerva Mills, Waman Rao and Sanjeev Coke are all by Bench of five Judges. The question in the form it is raised by Sri F.S. Nariman did not arise for consideration in any of those decisions which were rendered on a certain premise as indicated therein, which assumption is now seriously challenged by Sri F.S. Nariman. Even if it is assumed that Article 145(3) of the Constitution is not attracted, it does not appear to us that in order to settle the controversy on this point which is of some significance and to avoid the question being reagitated before another Bench of less than five Judges, the more appropriate course is to refer these matters for being heard and decided by a Bench of not less than five Judges.”
19. There is, therefore, no substance in this contention. In the instant case, the protection of Article 31-C has been availed of by the State Legislature vide Section 3 of the impugned Act, declaring therein that “the provisions of this Act are enacted for giving effect to the policy of the State towards securing the principles specified in Clause (b) of Article 39 of the Constitution.”
APPLICABILITY OF ARTICLE 39(b) :
20. Alternatively, it has been argued that even if Article 31-C is held to be in existence and workable in the form as it existed prior to 42nd amendment, the impugned Act is required to be struck down on the ground that the declared object in Section 3 of the Act is farfetched and not real. It is submitted that the provisions of Article 39-b of the Constitution were not applicable in the instant case, because the State Legislature, while legislating 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 immoveable 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 have been incorporated ensure “dispensation of social justice and economic justice”. H.M. Seervai in Constitutional Law of India referred to the objects sought to be achieved by Articles 38 and 39 and on the basis of various judicial pronouncements observed:
“Article 38 provides that the State shall endeavor to promote the welfare of the people by effectively securing and protecting a social order in which social, economic and political justice shall inform all the institutions of national life. This Article gives content to that part of the preamble of our Constitution which refers to social, economic and political justice. Having laid down the principle which should inform all institutions of national life, Article 39 particularises certain objectives. It provides that the State should direct its policy towards securing the right of citizens, men and women, to an adequate means of livelihood, that the ownership and control of the material resources of the community be so distributed as best to subserve the common good; that the economic system should not result in the concentration of wealth and the means of production to the common detriment; that there should be equal pay for equal work for both men and women; that the State should endeavour to secure the health and strength of workers, men and women, and to ensure that the tender age of children is not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age and strength, and that childhood and youth are protected from exploitation and from moral and material abandonment. These and other directives in Part IV are designed to bring about a “Welfare State”, a phrase lacking in precision, but misleading only if it makes us believe that before the twentieth century, States were not concerned with the welfare of the people. “It can hardly be disputed that a legislation for securing one of the objects of Clauses (b) and (c) of Article 39 must be held to be a legislation in the interests of the general public.” In Assistant Commissioner, Madras v. B & C. Co., the Sup. Ct. rejected the argument that the directive principle embodies in Article 39(c) could only be carried out by laws enacted under entries 86 to 88, List I, and entry 48, List II, Schedule 7. The Court held that directive principles embodied in Article 39(c) apply both to Parliament and State 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 in Article 39(b) & (c) of the Constitution the protective umbrella of Article 31C would shield the such law from the onslaught of the rigour of Articles 14 & 19 of the Constitution. What would be important in this regard is to ascertain as to whether the impugned legislation dealt with the material resources of the community which were intended to be distributed to subserve the common good.
24. Mrs. Chidambaram who led the arguments on behalf of the petitioners submitted that the shield of Article 31C of the Constitution was being used as a sword against her clients. It was submitted that the Palace and the adjoining lands could not be termed to be the material resources of the community within the meaning of Article 39(b) and the scheme of the impugned Act did not reveal that the properties sought to, be acquired under the Act were in any way intended to be distributed for the purposes of the common good of the Society. If it is submitted that the paramount intention in legislating the intended Act was to deprive the petitioners their right of compensation at the market value rates and that the impugned statute was the product of colourable exercise of legislative power. It was further submitted that the Court should take steps to ascertain the bona fides and the legality of the action of the respondents which preceeded the enactment of the impugned statute. In order to properly appreciate the submissions made in this behalf it is necessary to understand the meaning of the word material resources. As earlier noted the expression, material resource of the community, used in Article 39(b) are wide enough to cover not only cultural or physical resources but also moveable or immovable properties.
Black’s Law Dictionary (supra) defined the word ‘resources’ thus:
“Money or any property that can be converted to meet needs; means of raising money or supplies; capabilities of raising wealth or to supply necessary wants.”
In Stroud’s Judicial Dictionary (vol. 3) at page 1634, the word ‘material’ is defined thus:
“Materials, tools, or implements, to be used by such artificer in his trade or occupation, if such artificer be employed in mining; wooden props of “sprags” though neither “tools or implements” were “materials” within these words …….. ‘Material’ includes a painter’s bucket of 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. 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 case4 (supra) the ‘material resources’ were explained as:-
“The next question for consideration is whether the Coking Coal Mines (Nationalisation) Act is a law directing the policy of the State towards securing “that the ownership and control of the material resources of the community are so distributed as best to subserve the common good, Coal is, of course, one of the most important known sources of energy, and, therefore, a vital national resource.
Shri Sen argued that material resources had first to be acquired by the State before they could be distributed. A law providing for acquisition was not a law for distribution. We are unable to appreciate the submission of Shri Sen.”
To the same effect is the judgment of the Apex Court in STATE OF TAMIL NADU v. L.ABU KAVUR BAI.
Land was acknowledged to be a material resource of the community for the common good of the entire community by the Supreme Court in H.S, SRINIVAS RAGHAVACHAR v. STATE OF KARNATAKA AIR 1987 SC 1518.
In State of Maharashtra v. Basantibai, , the Supreme Court while considering the Constitutional validity of Maharashtra Housing and Development Act, which dealt with the acquisition of the land held that as the land was being acquired for the purposes of being developed and distributed amongst the people as house sites, the statute had the protection of Article 39(b) of the Constitution. Regarding ‘distribution’ the Court observed, “it also provides for reserving land for providing public amenities without which people cannot live there. Community centres, shopping complexes, parks, roads, drains, play grounds, are all necessary for civic life and these amenities are enjoyed by all. That is also a kind of distribution.” In Ranganath Roddy’s case7, it was observed, to ‘distribute’ even in its simple dictionary meaning, is to allot, to divided into classes or into groups and distribution embraces arrangement, classification, placement, disposition, apportionment, the way in which items, a quantity or the like is divided or apportioned; the system of dispersing goods throughout a community”. In Sanjeev Coke Manufacturing case (supra) it was held that material resources of the community in the context of re-ordering the national economy embraced all the national wealth not merely the natural resources all the public and prvate resources of meeting material needs, not merely public possession. Everything of value or use in the material world 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. , the Court deal with its earlier pronoucements 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 incorporeai, tangible or intangible properties etc. Private sources or property are part of material resources of the community. All things that produce wealth for the community are material resources. The word “distribution” equally must be construed broadly to include not only allotment of resources to public use but also dispensation of largess 1o the poor to provide access to equal opportunity; In other words it is a broad based concept and it should not be confined within narrow confines. Mines, minerals and quarries embedded in the land are material resources of the community amenable to public use or for distribution.”
26. It was argued that the key and genesis of the Article is the ‘distribution of the material’ resources and in the absence of the intended ‘distribution’ the shield of Article 31C could not be utilized to protect the impugned statute from the vice of the discrimination and violation of provisions of Articles 14 and 19. Distribution as contemplated by Article 39(b) does not mean, ‘to give each a share, to give to several persons or to give something actual and not notional. It would also not mean deal out or allot; to classify; to disperse about a space; to spread out; to separate and put back in compartments. In the parlance of the Constitutional language the word ‘distribution’ has been held to be construed broadly to include dispensation of the largess to the poor by providing them access to equal opportunity. The word is used in wider sense so as to take in all manner and method of distribution such as distribution between ragions, distribution between industries distribution between classes and distribution between public, private and joint sectors. In ‘Sanjeev Coke Manufacturing Company’s case’ (supra), the Court held:
“The distribution envisaged by Article 39(b) necessarily takes within its stride the transformation of wealth from private-ownership into public ownership and is not confined to that which is already public-owned. The submission of Shri Sen are well-answered by the observations of Krishna lyer J. in State of Karnataka v. Rangantha Reddy which we quote below:
The key word is distributed and the genius of the Article, if we may say so, cannot but be given full play as it fulfils the basic purpose of restructuring the economic order. Each word in the Article has a strategic 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 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 Kesavanand 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 examining the constitutionality of the offending enactment is entitled to examine whether the impugned enactment really seeks to give effect to the public policy underlying the Article 39(b) or (c) regardless of any legislation having been made by the legislature which made the enactment. In our country, the rule of law prevails which has been guaranteed by the Constitution. In a State which has a written Constitution and where pattern of government is democratic as we have in our country, the one outstanding feature of it is the supremacy of law in the realm commonly known as rule of law. The term ‘rule of law’ connotes the undisputes supremacy of law and envisages state of things in which everyone respects of law and where a law has to be followed by everyone collectively and individually. The supremacy of law is designed to give security to the rights of individuals, who are the citizens of an independent democratic country. The law has to be followed and cannot be transgressed by anyone whether the State or the individual and if permitted it would destroy the very fabric of the democratic system. The Supreme Court in MOHAMMED RASHID AHMAD v. STATE OF UP referred to its earlier judgment in A.K. Kraipak v. Union of India’s case and held:
“In A.K. Kraipak v. Union of India, there was a reiteration of the principles, albeit in a different form, laid down by this Court in Dr. (Miss) Binapai Dei v. State of Orissa, (1967) 2 SCR 625, AIR 1967 SC 1269 and by the House of Lords in Padfield v. Minister of Agriculture, Fisheries and Food, 1968 AC 997 that the executive should not arbitrarily or capriciously act and that the myth of executive discretion is no longer there. Indeed, in Kraipak’s case (supra) it was observed (at p.154 of AIR 1970):
“The dividing line between an “administrative power and a quasi- judicial power is quide thin and is being gradually obliterated……… Under our Constitution the rule of law pervades over the anti-field of administration. Every organ of the State under our Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of the rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their function in a fair and just manner. The requirement of acting judicially in essense 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 quasijudicial 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 Constitution. If upon analysis it is found that the impugned Act has been enacted in furtherance of the directive principle of the State Policy declared under Article 39(b) the statutes shall be held to be protected for the limited purposes as enshrined in Article 31C but if it is found that the purpose declared in Section 3 of the impugned Act is merely a cloak, such protection may not be granted and the impugned Act, in that event, shall have to be decided on the touch-stone of Articles 14 & 19 of the Constitution. To arrive at the right conclusions the Court shall be entitled to pierce the cloak if needed but would not substitute its opinion for the opinion of the legislature. In other words if the statue is found not to be the result of colorable exercise or malafides or beyond the scope of Article 39(b), this Court would not venture to find out the sufficiency of the material justifying its enactment.
29. The preamble of the Act declares the Palace to be Karnataka’s unique historical and architectural heritage which is singularly suited with its immediate surroundings, which no other Palace in the City of Bangalore possess. Keeping in view its majesty it is intended to be preserved as a monument in public interest. The surrounding open space is intended to be dealt to serve public purpose by converting into an exclusive botanical museum or horticulture garden and a tree park. It is further intended to serve acutely affected ecological needs of Bangalore city which on account of its rapid growth has become highly deficient in lung space and park area. This position and the singular status of the Palace with its immediate surroundings cannot be disputed. The petitioners have themselves declared that Shri Jayachamaraja Wodeyar built the Palace in the year 1915 which was designed like the Windsor Palace of London. It is stated to be comprising of 477 acres of land besides other buildings for use of the staff and other purposes. The historical importance and emotional respect of the common man of Karnataka towards the Palace cannot be disputed. It is also not disputed that the Palace contains many items of regalia. Despite independence of the country and declared social goals in the Constitution, a man has no access to the Palace and the other properties forming part of it. It is also not disputed that the Palaces were built by the Rulers with public money and 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 Antiquie 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 demurrant 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, and the gardens and vineries are kept in order at the royal expense and partly for the royal enjoyment-that is strong evidence that it is stiii a royal palace, but it is insufficient to constitute it a royal residence, which means a palace to which the monarch “could immediately return and reside in his own person, if he were pleased to do so” (per Ellenborough C.J., Winter v. Miles, 10 East 580);”
30. The castles of the feudal lords and the palaces of the monarchs were alleged to be not made of mud and bricks but raised on the human skeletons and built with their flesh and blood. The palaces were stated to be the by-product of the exploitation of the poor and down-trodden people. The wealth acquired by the feudal lords or the monarchs was stated to have been sucked from the veins of the poor and oppressed. The prevalent antagonism in the society between the have’s and have not’s led to various confrontations resulting in blood-shed on account of the insurgency, belligerency and the revolutionary movements carried on to get rid of the exploitation. Whether such allegations were correct or not is not within the ambit of the inquiry which we are holding for the purpose of determining the Constitutionality of the impugned statute. However, the historical truth is that the castles of the feudal lord and the palaces of the monarchs were built out of the public revenues extracted from the people, be it in the form of exploitation as alleged by one section of the society or by voluntary contributions made in the form of taxes levied upon the subjects of the rulers, which unambiguously leads to the conclusion that such palaces, including the palace in dispute were the material resources of the community. The mere fact that the palaces were acknowledged to be the private property of the rulers at the time of accession with the Dominion of India would not change the nature of the palace in relation to and for the purposes of determining its nature and character of being material resources of the community. If in order to avoid blood-shed, the then Government had acknowledged the palaces to be the private property of the rulers, that would not be deemed to be an estoppel against the State in acquiring the said palace, which is nothing but the material resource of the community within the meaning of Article 39(b). There is, therefore no substance in submission 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 botanical museum, horticulture garden, tree park and preservation of the land as lung space and park areas clearly, unambiguously and categorically lead to the conclusion that the property, the subject matter of the Act, is intended to be distributed by providing an access to the common citizen which would admittedly sub-serve the common good. The definition of Bangalore palace in Section 2(2) of the Act also indicates that the palace is nothing but a material resource of the community which comprises of not only the palace and land but includes the buildings, regalia, paintings, sculptures and other pieces of art. Providing access to the common man to the palace which is admittedly the part of history and repository of cultural heritage of State of Karnataka, attracts the provisions of Article 39(b) and thus protected by the protective umbrella and shield provided by Article 31C of the Constitution.
REG. PROTECTION UNDER ARTICLE 299:
31. Invoking the provisions of part XII Chapter III, particularly Articles 294 and 299 of the Constitution, it has been submitted that the State Legislature lacked legislative competence to deal with Bangalore Palace, which is stated to have been acknowledged to be a private property of the ruler of Mysore on the basis of the agreement executed between the then Maharaja and the Union of India. It is contended that what was declared as private property by the Union of India could not be transformed into a public property by an Act of State Legislature under the cloak of the exercise of powers of eminent domain. In order to succeed on this ground, the petitioners have referred to the facts leading to the merger of the State of Mysore with the Dominion of India on the basis of the Instrument of Accession executed between the then Maharaja and the Union of India. The princely state of Mysore is stated to have a different identity of its own which was classified as a separate group with Hydria and Jammu & Kashmir, as they are stated to be not subject to any merger. The rulers, immediately after independence, were divided into four classes:
(1) those who had signed Instrument of Accession; (2) those who had signed Instrument of Merger; (3) those who had formed themselves into unions and the unions had signed the Instrument of Accession, and (4) Princely states of Hydria, Mysore and Jammu & Kashmir. The merged states were 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, immunity from requisitioning of the private properties of the rulers and their families, etc. Under Section 6 of the Provincial Constitution Order, 1947, the Maharaja of Mysore executed an Instrument of Accession which was followed by supplementary Instrument of Accession on 23.1.1949. On 25.11.1949, the Maharaja promulgated a proclamation, under which he surrendered his sovereign powers and accepted the Constitution of India by adopting it for the State of Mysore. After this proclamation, the Government of India entered into an agreement with the Maharaja on 23.1.1950. This agreement has been termed to be a Quid Pro Quo being in the nature of consideration for the surrender of sovereignty and power to the Dominion of India. The relevant portion of the said agreement, necessary for the purposes of determining the controversy in these petitions are as follows:
“Article 2:-
(1) The Maharaja shall be entitled to the full ownership, use and enjoyment of all private properties (“as distinctive from State properties”) belonging to him on the date of this agreement.
(2) The Maharaja will furnish to the Government of India before the 23rd January 1950 an inventory of all immoveable properties, securities and the cash balance held by him as such private property.
Article 4:
The Government of India guarantees, succession, according to law and custom, to the Gaddi of the State, personal rights, privileges, dignities and titles of the Maharaja.”
32. In pursuance of the said agreement, an inventory of private properties of the Maharaja was submitted to the Government of India which was duly endorsed by the Ministry of State under reference No. F-48 P/50 dated 8.1.1951. The special status given to the private properties and the Maharaja are claimed to have been further accentuated, as the rights were confirmed by the Government of India after the 26th Constitutional amendment. The Government issued a memo to the Chief Secretary to the Government of Karnataka with the caption, “impact of 26th Constitution Amendment Act, 1971” which stated :
“The Government of India is of the view that the 26th Constitution amendment does not affect the properties which were recognised as private properties of the rulers in accordance with the settlement with them. That being so, the properties which are vested with 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 , MAHAVEER AUTO v. INDIAN OIL COMPANY & KASTURI v. STATE OF JAMMU & KASHMIR , 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 various amendments made in the Constitution include the 42nd amendment, by which a revolutionary change by legislative means was made in the preamble of the Constitution, declaring that India was to be a Socialist Republic, besides being a secular, sovereign and a democratic Republic. Socialism has not been defined in the Constitution, but is commonly understood to mean, “from each according to his ability, to each according to his need”. Even if such a definition is not accepted, it can safely be said that by introduction of the word socialism in the preamble of the Constitution the Union Parliament aimed at to eliminate inequality of income and status and standards of life with the object of providing decent standards of life to the working people of the country. The preamble has been termed to be the “flood-light” illuminating the path to be pursued by the State to set up a sovereign, socialist, secular and democratic republic. In the statement of object and Reasons of the 42nd Amendment Act, amongst other things, ushering in of socio-economic revolution was promised. In that revolutionary call, it was declared :
“The question of amending the Constitution for removing the difficulties which have arisen in achieving the objective of socio economic revolution, which would end poverty and ignorance and disease and inequality of opportunity, has been engaging the active attention of Government and the public for some time… It is, therefore, proposed to amend the Constitution to spell out expressly the high ideals of socialism., to make the directive principles more comprehensive…”
35. Dealing with the word ‘socialism’ and the ‘socialist republic’ contemplated under the preamble to the Constitution, the Supreme Court in D.S. NAKARA v. UNION OF INDIA held :
“What does a Socialist Republic imply? Socialism is a much misunderstood word. Values determine contemporary socialism pure and simple. But it is not necessary at this stage to go into all its ramifications. The principal aim of a socialist State is to eliminate inequality in income and status and standards of life. The basic framework of socialism is to provide a decent standard of life to the working people and especially provide security from cradle to grave. This amongst others on economic side envisaged economic equality and equitable 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. There will be equitable distribution of national cake and the worst off shall be treated in such a manner as to push them up the ladder. Then comes the old age in the life of every one, be he a monarch or a mahatma, a worker or a pariah. The old age overtakes each one, death being the fulfilment of life providing freedom from bondage. But here socialism aims at providing an economic security to those who have rendered unto society what they were capable of doing when they were fully equipped with their mental and physical prowess. In the fall of life the State shall ensure to the citizens a reasonably decent standard of life, medical aid, freedom from want, freedom from fear and the enjoyable leisure, relieving the boredom and the humility of dependence in old age. This is what Article 41 aims when it enjoins the State to secure public assistance in old age, sickness and disablement. It was such a socialist State which the Preamble directs the centers of power Legislative, Executive and Judiciary to strive to set up. From a wholly feudal exploited slave society to a vibrant, throbbing socialist welfare society is a long march but during this journey to the fulfilment of goal every State action (illegible) taken must be directed, and must be so interpreted, as to take the society one step towards the goal.”
36. While dealing with the claim for equal pay for equal work on the basis of the preamble to the Constitution, the Apex Court in RANDHIR SINGH v. UNION OF INDIA AND ORS. observed:
“The preamble to the Constitution declares the solemn resolution of the people of India to constitute India into a Sovereign Socialist Democratic Republic. Again the word “Socialist’ must mean something. Even if it does not mean ‘To each according to his need’, it must at least mean “equal pay for equal work’ is expressly recognised by all socialist systems of law, e.g., Section 59 of the Hungarian Labour Code, para 2 of Section 111 of the Czechoslovak Code, Section 67 of the Bulgarian Code, Section 40 of the Code of the German Democratic Republic, para 2 of Section 33 of the Romanian Code. Indeed this principle has been incorporated in several western labour codes too.”
37. The principle was stated to have been evolved for achieving the object of improvement of the conditions for doing away with injustice, hardship and privation 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 , 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 , the case which is popularly known as, “the first privy purses abolition case”. In that case, as per majority, it was held that the recognition of the status of the rulers and their rights was not a temporary measure and was not liable to be varied or repudiated in accordance with “state policy”. The agreements were held to have been recognised and were not political agreements, which could be set at naught by a unilateral act of the Union of India. By the merger agreements, the princes had seized to retain any vestige of sovereign rights or authority quo their former status. The plea of the Union of India that the dispute in respect of the right to privy purses under Article 222(1) of the Constitution was born under Article 363 of the Constitution was not accepted. It was further held that the structure of Article 362 was different from Article 291, which imposed restrictions upon the exercise of legislative and executive functions. Recognition of personal rights and privileges of the rulers, arising out of covenants, was not explicit. The Constitution formed the binding force of the guarantees and assurances under the covenants of personal rights, privileges and dignities. In that case, challenge was made to the Presidential Order dated 6.9.1970, de-recognising rulers of former Indian states. The Court held that the President was not competent to recognise or de-recognise a person as a ruler, who was defined under the Constitution to be, “a former prince, chief or other person recognised as such”. It was held that the power of the President is plainly coupled with a duty, a duty to maintain the Constitutional institution, the Constitutional provisions, the Constitutional scheme and the sanctity of solemn agreements entered into by the predecessors of the Union Government, which are accepted, recognised and incorporated in the Constitution. It was further observed that as the President exercised the executive and non-political powers, he was not empowered to do away with the agreements executed between the rulers and the Dominion of India. The privy purses were held to be the private properties of the rulers within the meaning of Articles 19 and 31.
40. After the judgment in MADHAV RAO SINDIA’S case10, the Parliament passed the Constitution (26th Amendment) Act, 1971, repealing Article 291 of the Constitution, which made a provision of privy purse sums payable to the rulers. The 26th amendment was challenged before the Supreme Court in RAGHUNATH RAO GANPATH RAO v. UNION OF INDIA 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 stabilisation of the new order and ensure organic unity of India. The deletion of Article 291 was stated to be amounting to a gross breach of the principle of political justice enshrined in the preamble to the Constitution. The privy purses and other privileges were claimed to have been conferred upon the former rulers as consideration for surrendering all their sovereign rights and contributing to the unity and integrity of the country. It was further submitted that but for the co-operation of the rulers, Bharath would have been fundamentally different from the Bharath that came into being on account of accession and merger of the states.
41. Appearing for the Maharaja of Mysore, Sri A.K. Ganguly, Senior Counsel, had referred to the history of merger of the states with the Dominion of India and had stated that the privileges granted in lieu thereof, including the privy purses could not be taken away by the Union Parliament. The court, in that case dealt with pre-Constitutional Instrument of Accession, the merger agreement and the covenants which guaranteed the payment of privy purses and the recognition of the personal privileges etc., and which ultimately facilitated the integration of these states with the Dominion of India. The Court held that in a democratic system, the Constitution is the supreme law of the land and all organs of the Government, Executive, Legislative and Judiciary derive their powers and authority from the Constitution. The Courts are entrusted with the constitutional responsibility of upholding the supremacy of the Constitution. While interpreting the law, the Court would declare a law to be unconstitutional, if the same contravenes or transgresses the limitations put on the power of the legislature. The Object and Reasons of the 26th Constitutional Amendment were referred to and it was held :
“The Statement of Objects and Reasons of Twenty-sixth Amendment clearly points out that the retention of the above Articles and continuation of the privileges and privy purses would be incompatible with the egalitarian society assured in the Constitution and, therefore, in order to remove the concept of rulership and terminate the recognition granted to Rulers and abolish the privy purses, this Amendment was brought on being felt necessary.”
The Court further declared :
“Permanent retention of the privy purse and 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 Amendment. We feel that this contention need not detain us any more, and, therefore, we shall pass on to the next point in debate.”
42. Referring to the plea that the ground of privy purses and the privileges was a just quid pro quo of the rulers of the Indian states for surrendering their sovereignty and rights over their territories, the Court declared :
“This argument based on the ground of breaking of solemn pledges and breach of promise cannot stand much scrutiny. To say that without voluntary accession, India, i.e. Bharat would be fundamentally different from that Bharat that came into being prior to the accession is untenable much less inconceivable. We have already dealt with the necessity of the Rulers to accede for the integration of States with the Dominion of India in the earlier part of this judgment and, therefore, it is quite unnecessary to reiterate in this context, except saying that the integration could have been achieved even otherwise. One should not lose sight of the fact that neither because of their antipathy towards the Rulers nor due to any xenophobia, did the Indian Government entertain the idea of integration but because of the will of the people. It was the people of the States who were basically instrumental in the integration of India. It would be apposite to refer to the observation of Bose, J. in Virendra Singh v. State of UP., . The said observation reads as follows :
“Every vestige of sovereignty was abandoned by the Dominion of India and by the States and surrendered to the people of the land who through their representatives in the Constituent Assembly hammered out for themselves a new Constitution in which all were citizens in a new order having but one tie, and owing but one allegiance: devotion, loyalty, fidelity to the Sovereign Democratic Republic that is India.”
It is also worthwhile to take note of the historical process of States integration which is well set out in Chapter 18 under the heading Indian States in “The Framing of Constitution – A Study by B, Shiva Rao. A Perusal of that chapter indicates that the attitude of the princes towards joining a united India was one of resistance, reluctance and high bargain, and it was the peoples of the States who forced them to accede to the new united India. To say in other words, the States were free but not stable because of the stress and strain they underwent both from inside and outside. Though the process of integration and democratization called as “unionisation” 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, , 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 Indian Parliament, it has been seriously opposed by the learned Attorney General that this argument based on immorality has only to be stated to be rejected and that it is an elementary principle of jurisprudence that a law cannot be interpreted on the basis of moral principles. In this connection, reference may be made to the following passage in. Dias’s Jurisprudence, Fifth Edition, at pages 355 and 356. It reads thus:
“As a positivist, Prof. Hart excludes morality from the concept of law, for he says that the positivists are concerned to promote ‘clarity and honesty in the formulation of the theoretical and moral issues raised by the existence of particular laws which were morally iniquitous but were enacted in proper form, clear in meaning, and satisfied all the acknowledged criteria of validity of a system. Their view was that, in thinking about such laws, both the theorist and the unfortunate official or private citizen who was called on to apply or obey them, could only be confused by an invitation to refuse the title of law’ or ‘valid’ to them. They thought that, to confront these problems, simpler, more can did resources were available, which would bring into focus far better, every relevant intellectual and moral consideration: we should say, This is law; but it is too iniquitous to be applied or obeyed.”
It was pointed out at the beginning of this chapter that the principal call for a positivist concept of law is to identify laws precisely for the practical purposes of the present and that, for the limited purpose, it is desirable to separate the ‘is’ from the ‘ought’. To accomplish this no more would appear to be needed than simply those uses of the word ‘law’ by Courts; which is akin to Salmond’s definition alluded to above. Professor Hart’s concept, however, is of ‘legal system’, which is a continuing phenomenon.
When Professor Hart thinks in a continuum, as he does with society, he has to bring in morality; but in order to defend positivism he shifts ground and takes refuge in the present time-frame, for only in this way can he justify the exclusion of morality for the purpose of identifying laws here and now. There would thus appear to be a greater separation between his concept of law and his positivism than ever he alleges between law and morality. For the limited purpose 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 legislation has the same center with morals, but it has not the same circumference.”Reference may also be made to Krishna Kumar v. Union of India .
The above passages remind us of the distinction between law and morality and the line of demarcation which separate morals from legislation. The sum and substance of it is that a moral obligation cannot be converted into a legal obligation.
In the light of the above principle, the Attorney General is right in saying that Courts are seldom concerned with the morality which is the concern of the law makers.
According to him, there is no unreasonableness, unfairness and dishonesty in bringing this amendment in any way injuring the basic feature of the Constitution and this amendment has not caused any damage to the concept of reasonableness and non-arbitrariness pervading the entire Constitutional scheme.
On a deep consideration of the entire scheme and content of the Constitution, we do not see any force in the above submissions. In the present case, there is no question of change of identity on account of the Twenty Sixth Amendment. The removal of Articles 291 and 362 has not made any change in the personality of the Constitution either in its scheme nor in its basic features, nor in its basic form nor in its character. The question of identity will arise only when there is a change in the form, character and content of the Constitution. In fact, in the present case, the identity of the Constitution even on the tests proposed by the counsel of the writ petitioners and intervenes, remains the same and unchanged.
44. A perusal of various judgments and the development of the Constitutional law would clearly indicate that the agreements executed and the privileges conferred at the time of accession or merger with the Dominion of India cannot come in the way of the Legislature to enact laws for the achievement of goals set forth in the Constitution, opening with its preamble. The Constitution of a country is a living document which reflect the aspirations and the will of the people to shape their destiny in the manner they liked. In a developing democracy like ours, no impediments can be put on the growth of the Constitutional provisions, on the plea of the agreements executed and covenants made in favour of the former rulers. While interpreting the Constitution, the 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 Dominaion of India cannot be termed to be contracts for the purposes of Article 299. Assuming, but not holding that such agreements amounted to contracts, the violation of the terms of such contract may be enforced by way of suit or claim of damages in accordance with law. The fetter of limitation upon the plenary powers of Legislation within the ambit of the legislative heads specified in the VII Schedule of the Constitution could only be imposed by the Constitution itself and not by any obligation which had been undertaken by either the Domination Government or the Provincial or a State Government. Powers conferred upon the State Legislature under Article 226 cannot be subjected to any alleged contractual obligations. In MAHARAJ UMEG SINGH and ORS v. STATE OF BOMBAY AND ORS. , the petitioners, who were the relations of the rulers or Jagirdars of the erstwhile states of Idar, Chhota Udaipur, Devgad Baria, Rajpipla, Bansda, Lunawada, Mohanpur etc., challenged the vires of the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953, Bombay Act XXXIX of 1954, by which the State Legislature of Bombay had abolished the Jagirs, mainly relying upon the agreements of merger entered into by the rulers of the respective states with the Dominion of India and the collateral letters of guarantee passed by the Ministry of State in their favour. It was submitted that enjoyment of the Jagirs had been guaranteed by the Dominion of India and that the said guarantee was binding on the state of Bombay, tt was contended that the state of Bombay had waived the right and legislative competence to enact any legislation depriving the holders of Jagirs of their right to ownership over the same. The impugned Act was termed to be ultra vires on the ground that no legislation could be undertaken, which would have the effect of depriving the holders of the Jagirs of their ownership over the same. The Apex Court, on appreciation of facts of the case, observed that the whole of the petitions were nothing else except the claim to enforce the petitioners’ rights under the letters of guarantee and the disputes therefore, were clearly in respect of the agreements of merger and the letters of guarantee which were covered by Article 363(1) of the Constitution. Repelling the arguments made on behalf of the petitioners therein, the Court held:
“The fetter or limitation upon the legislative power of the 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-legislative power had to be found within the Constitution itself and if there was no such fetter or limitation to be found there, the State Legislature had full competence to enact the impugned Act no matter whether such enactment was contrary to the guarantee given, or the obligation undertaken by the Dominion Government or the Province of Bombay or even the State of Bombay.
The Petitioners would have a legitimate grievance in the matter of the deprivation of their rights of ownership of the jagir lands in so far as the States and their subjects were discriminated against, but they would not be able to have their grievance redressed by this Court for the simple reason that the State Legislature at all events competent to enact the impugned Act not being fettered at all by the terms of Clause 5 of the letters of guarantee. The provisions of Article 294(b) of the Constitution which is said to have transferred the obligations of the Government of the Province to the State of Bombay would not by involving the transference of the obligation undertaken by the Dominion Government in Clause 5 of the letters of guarantee to the State Government impose a fetter or limitation on the legislative competence of the State Legislature to enact legislation on any of the topics enumerated in Lists 2 and 3 of the Seventh Schedule to the Constitution. The remedy of the Petitioners would be elsewhere and not in this forum. The learned Judges of the Federal Court gave an answer to a similar complaint of the Taluqdars of Oudh made by them against the United Provinces Tenancy Act 17 of 1939 in – ‘Jagannath Baksh Singh v. The United Provinces’. AIR 1943 FC 29(D) at page 35:
“We desire, however, to point out that what they are now claiming is that no Legislature in India has any right to alter the arrangements embodied in their sanads nearly a century ago; and, for all we know, they would deny the right of Parliament itself to do so. We hope that no responsible legislature or Government would ever treat as of no account solemn pledges given by their predecessors; but the readjustment of the rights and duties is an inevitable process, and one of the functions of the Legislature in a modern State is to effect that readjustment, where circumstances have made it necessary, with justice to all concerned. It is however, not for this Court to pronounce upon the wisdom or the justice, in the broader 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’, AIR 1946 PC 127 (E) at page 131 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 India or any of its predecessor Government was a party and which is or has been continued in operation after its commencement. The Supreme Court considered the scope of Article 363(1) in the case of STATE OF SERAIKELLA v. UNION OF INDIA (C) and held:
“The plaintiff contends firstly that it had signed the Instrument of Accession through its Ruler. The State next complains that, acting beyond the powers given over under the Instrument of Accession, the Dominion of India and the State of Bihar are making laws which they have no power to make, having regard to the Instrument of Accession, and are wrongfully interfering with the administration of the State beyond the rights given to them under the Instrument of Accession. The whole plaint is nothing else except the claim to enforce the plaintiff’s right under the Instrument of Accession, The dispute therefore in my opinion clearly is in respect of this Instrument of Accession and is covered by Article 363(1) of the Constitution of India. The question of the validity of the different enactments and orders is also based on the rights claimed under the Instrument of Accession so far as the plaintiff is concerned.”
47. In SUDHANSU SEKHAR SINGH DEO & HIRUDAYA CHANDRA DEB BIRABAR’ HARICHANDRAN v. STATE ORISSA , the Court held that the assurances given would not prevent the Parliament or the State Legislature to make laws inconsistent with the personal rights, privileges and dignities of such rulers, as the exercise of the Legislative authority cannot be questioned in any Court, in view of the provisions of Article 363 of the Constitution. To the same effect are the judgments of the Apex Court in STATE OF BIHAR v. RAMESHWAR PRATAP NARAIN SINGH and JILUBHAI NANBHAI KHACHAR v. STATE OF GUJARAT10 . There is, therefore, no substance in this submission of the Learned Counsel appearing for the petitioners and the Act cannot be held to be beyond the scope of the Legislative competence of the State Legislature on this ground.
LEGISLATIVE COMPELENCE OF THE STATE LEGISLATURE:
48. The star point of law upon which all the Learned Counsel for petitioners dwelt their arguments is the forfeiture of the right of the State Legislature to legislate in view of its resolution passed in terms of Clause (1) of Article 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 even if the Act was covered by entry 42 of List-Ill, the same was liable to be queshed to the extent of inconsistency. Inconsistency is alleged to be writ large in the whole of the enactment rendering it to be declared unconstitutional and beyond the competence of the State Legislature.
49. Before adverting to the rival contentions of the parties it is relevant to have a reference to various provisions of the constitution applicable in the case. Part-XI of the Constitution governs the relations between the Union and the States and Chapter-1 thereof deals with the legislative relations. The scheme of the Constitution shows that there is a three-fold distribution of legislative powers between Union and the States made by three legislative lists in the. VII Schedule of the Constitution, The powers of the Parliament and the State Legislature to make Laws are conferred by Article 245, 246 and 248. Article 252 authorises the Parliament to legislate for two or more States by consent and adoption of such legislation by any other State. Article 254 deals with the inconsistency between laws made by the Parliament and laws made by the Legislature of the States. For a ready-reference the relevant Articles are reproduced hereunder”
“Article 245 : Extent of laws made by Parliament and by the Legislatures of States :- (1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.
(2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.
Article 246: Subject-matter of laws made by Parliament and by the Legislatures of States-
(1) Notwithstanding anything in Clauses (2) and (3), Parliament -has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this constitution referred to as the “Union List”).
(2) Notwithstanding anything in Clause(3), Parliament, and, subject to Clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”).
(3) Subject to Clauses(1) and (2), the Legislature of any State has exclusive 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 the Houses of the Legislatures of those States, it shall be lawful for Parliament to pass an Act for regulating that matter accordingly, and any Act so passed shall apply to such States and to any other State by which it is adopted afterwards by resolution passed in that behalf by the House or, where there are two Houses, by each of the Houses of the Legislature of that State.
(2) Any Act so passed by Parliament may be amended or repealed by an Act or Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by an Act of the Legislature of that State.
Article 254: Inconsistency between laws made by Parliament and laws made by the Legislatures of States: (1) If any provisions of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of Clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to the one of the matters enumerated in Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to the matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State;
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State”.
50. The relevant entries for the purposes of the disposal of these petitions are entry No. 18 in List-II and entry No. 42 in List-Ill of the Seventh Schedule.
(a) Entry No. 18 of the List-II reads: "Land, that is to say, rights in or over land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; 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 impositoin of a ceiling on Urban immoveable 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.”
52. It is acknowledged position of law that the State Legislature have plenary powers of Legislation within the field of legislature entrusted to it but subject to certain Constitutional restrictions as specified in part-XI of the Constitution. In the exercise of such a power it will be competent of the Legislature to enact a law which is either prospective or retrospective. Within the frame work or Article 246 the Parliament and State Legislature have respectively exclusive powers to make laws with respect to any matters enumerated in the list in the VII Schedule for which specific provision is made under Part-XI of the Constitution. When a question is raised as to whether a State Legislature was competent to enact a law, the Court is required to find-out whether the topic of legislation is covered by one of the items of the State list relating to the power of the State Legislature to legislate. The scheme of distribution of the legislative powers indicates that the object is only to distribute the legislative powers between Union and the State Legislatures and not to exempt them from any of the limitations which are imposed by the other provisions of the Legislature than their legislative powers. The plenary powers of the Legislature are limited by the fundamental rights, the limitation imposed in the legislative list in the VII schedule, other mandatory provisions of the Constitution imposing limitation upon the powers to legislate such as incorporated in Articles 286, 300-A, 301 and 303, what a legislature cannot do directly it can not be permitted to do indirectly.
53. While interpreting an enactment of the Legislature it has to be kept in mind that there is a general presumption that the legislature does not intend to exceed its jurisdiction and it is a sound principle of construction that the Act of a Sovereign legislation should, if possible, receive such an interpretation as will make it operative and not inoperative. In a Federal Constitution like ours transgression of the legislative powers may be open direct and overt or disguised, indirect and covert. If the exercise is found to be disguised, indirect and covert it shall be described as colourable legislation. Entries in the VII Schedule are required to be construed to avoid the conflict and for this the Court must look to the substance and not merely the form of the Act. The entries in the 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., , 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, AIR 1939 FC-1, THE STATE OF BOMBAY v. NAROTTAMDAS JETHABHAI AND ANR. , the Apex Court in this case held:
“……………it would be useful to notice sorrie of the well settled rulos 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 Legislative heads or fields of egislation; they demarcate the area over which the appropriate Legislatures can operate. It is also well settled that widest amplitude should be given to the language of the entries. But some of the entries in the different Lists or in the same Lists may overlap and sometimes may also appear to be in direct conflict with each other, it is then the duty of this Court to reconcile the entries and bring about harmony between them. When the question arose about reconciling entry 45 of List I, duties of excise, and entry 18 of List II, taxes on the sale of goods, of the Government of India Act, 1935, Gwyer, C.J., in Central Provinces and Berar Sales of Motor Sprit and Lubricants Taxation Act, 1938, In the. matter of, 1939 FCR 18 at pp. 42, 44;(AIR 1939 FC 1 at pp.7,8), observed:
“A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense; but it may be qualified by other express provisions in the same enactment, by the implication of the context, and even by considerations arising out of what appears to be the general scheme of the Act.”
The learned Chief Justice proceeded to state:
“…an endeavour must be made to solve it, as the Judicial Committee have said, by having recourse to the Context and scheme of the Act, and a reconciliation attempted between two apparently conflicting jurisdictions by reading the two entries together and by interpreting, and, where necessary, modifying the language of the one by that of the other. If indeed such a reconciliation should prove impossible, then, and only then, will the non-obstante clause operates and the federal power prevail.”
The Federal Court in that case held that the entry “taxes on the sale of goods’ was not covered by the entry “duties of excise” and in coming to that conclusion, the Learned Chief Justice observed:
“Here are two separate enactments, each in one aspect conferring the power to impose a tax upon goods; and it would accord with sound principles of construction to take the more general power, that which extends to the whole of India, as subject to an exception created by the particular power, that which extends to the province only. It is not perhaps strictly accurate to speak of the provincial power as being excepted out of the federal power, for the two are independent of one another and exist side 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 construction has not been dissented from in any of the subsequent decisions of this Court, It may, therefore, be “taken as a well settled rule of construction that every attempt should be made to harmonize the apparently conflicting entries not only of different Lists but also of the same List and to reject that construction which will rob one of the entries of its entire content and make it nugatory”.
54. In STATE OF BIHAR v. SIR KAMESHWAR SINGH the Apex Court held that the entries in the Lists I, II and III were designed to define and delimit the respective areas of the Legislative competence of the Legislatures and do not impose any implied restriction on the legislative power conferred by Article 246. The entires also do not prescribe any duty to exercise the legislative power in any particular manner. It is settled that in interpreting the various entries, the language of those entires should be given the widest scope of which their meaning is fairly capable. Each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In RAI RAMAKRISHNA AND ORS. ETC., v. STATE OF BIHAR AIR 1952 SC 25, it was held that the entries in the Seventh Schedule of the Constitution conferring legislative power on the Legislature must receive the widest denotation. It has however to be kept in mind that the Court should not be free to stretch or pervert the language of the enactment in the interest of any legal or Constitutional theory or even for the purposes of correcting any supposed errors. Entries in the different lists are required to be read together without giving any narrow meaning to them. When one item is general and anr. specific, the later is to exclude former. In interpreting various entries doctrine of pith and substance may be pressed into service. This doctrine implies that if a statute substantially falls within the powers expressly conferred by the Constitution upon the Legislature which enacted it, it should not be held to be invalid, merely because it incidentally encroaches on the matters assigned to another Legislature. In order to ascertain the true import of the statute regard must be had to the statute as a whole, to its object, the scope and effect of its provisions. The question of invasion into the territory of another legislation 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 tresspass 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 Adovate General of Bengal, 1947 FCR 28: (AIR 1947 PC60) Kerala State Electricity Board v. Indian Aluminum Co The earlier case of this Court reported in A.S. Krishna v. State of Madras, Almost a direct decision on this point is to be found in an unreported decision of this Court in S.K. Pasari v. Abdul Ghafoor, Civil Appeal No. 306 of 1964, D/-4.5.1964(SC). The question for consideration in that case was whether the State Government had power under Section 64A of the Motor Vehicles Act as introduced by the Bihar Amendment to deal with a revision in relation to an Inter-State permit. The High Court had taken the view that it had no such power, as, such a provision falls within Item 42 of List I of the Seventh Schedule to the Constitution, namely, Inter-State trade and Commerce and not Entry 35 of List III, namely, mechanically propelled vehicles. This Court following the principle laid down in the case of Narayanappa v. State of Mysore reversed the view of the High Court and held that the impugned section fell within the legislative power of the State under Entry 20 of List III of Schedule Seven of the Government of India Act, 1935 corresponding to Entry 35 of List III of the Seventh Schedule of the Constitution. The said decision has been followed by this Court in Tansukh Rao Jain’s. Nilratan Prasad Shaw,
Mr. Sen submitted that the portion of the Statute providing for acquisition of contract carriages running on Inter-State routes is in reality legislating on the subject of Inter-State trade and commerce. The State Legislature was not competent to do so. In support of his argument, Learned Counsel referred to some of the American decisions viz. United States of America v. Dan Hill, (1918)63 LEd 337 C.R. Wickard v. R.C. Filburn, (1942)87 LEd 122 The Steamer Daniel Bail, Byron D.Ball and Jessie Canoe v. United States.(1871)19 LEd 999 In Dan Hills case (supra) it was held that the transportation of intoxicating liquour from one state to another was in itself Inter-State commerce, and the Congress in the exercise of the plenary authority to regulate the Inter-State transportation of intoxicating liquors may prohibit such transportation even into a State which permits it. In the case of Claude R. Wickard (supra) the question arose entirely in a different context. A Federal Regulation of the production of wheat not intended in any part of commerce but 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 carriages, the Inter-State permits and other properties situated in the State of Karnataka. In pith and substance it is an Act of that kind. The incidental encroachment on the topic of Inter-State trade and commerce, even assuming there is some, cannot invalidate the Act. The Motor Vehicles Act, 1939 was enacted under Entry 20 of List III of Schedule Seven of the Government of India Act, 1935 corresponding to Entry 35 of List HI of the Seventh Schedule to the Constitution. The subject being in the Concurrent List and the Act having received the assent of the President, even the repugnancy, if any, between the Act and the Motor Vehicles Act stands cured and cannot be a ground to invalidate the Act. Entry 42 of List III deals with acquisition of property. The State has enacted the Act mainly under this entry. It does not in any way violate or militate against the provisions of the Road Transport Corporations Act either, as argued by Mr. Sen.”
55. While agreeing with the majority judgment Krishna Iyer, J., observed that tegalism has to yield when spacious issues arise. Where the Administration is found to be sliding back from the progressive Constitutional values to protect the private interest, then the Court is required to activate the “welfare jurisprudence” of the Constitution by appropriate commands.
56. The Learned Counsel for the petitioners have relied upon the decision in UNION OF INDIA V. VALLURI BASAVAIAH CHOUWDHARY AND ORS. ETC., ETC., to impress that the purpose and object of the Act was the same as that of Urban Land (Ceiling and Regulation) Act, 1976, which provided the imposition of a ceiling on vacant land in Urban agglomeration. In that case the Apex Court found that the subject matter of Entry 18 List II of the Seventh Schedule would necessarily include vacant lands, The expression ‘Urban immoveable property’ may mean land and buildings or building or land. The lands would include agricultural land, urban land or any other kind of vacant land. It was held:
“It is but axiomatic that once the Legislatures of two or more States, by a resolution in terms of Article 252(1), abdicate or surrender the area, i.e., their power of legislation on a State subject, the Parliament is competent to make a law relating to the subject. It could indeed be contrary to terms of Article 252(1) to read the resolution passed by 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 crystal-clear that what the State Legislature had intended to surrender in favour of the Union Parliament was with respect to the subject covered by Entry 18 of the II List and not by Entry 42 of the III List. The law made by the Legislature in pursuance to Entry-42 of List III of the Constitution would be valid unless it is shown to be inconsistent with any such law made by the Union Parliament. The reliance of the petitioners on this Judgment is therefore of no help to them. Similarly, the reliance of the Learned Counsel for the petitioners on MAHARAO SAHEB SHRi BHIM SINGHJI, ANANTALAKSHMI PATHABI-RAMASHARMA YETHURI AND ORS.; ETC., ETC., V. UNION OF INDIA, , is of no help to them in as much as in that case the Court examined the Constitutional validity of the Urban land (Ceiling & Regulation) Act, 1976 and held that the entire Act was valid save and except Section 27(1) in so far as it imposed restriction on transfer of any urban or urbanisable land with a building or of a portion of such building, within the ceiling area. It was observed that taking over of the large conglomeration of the vacant land was a National necessity if the Article 39 was the Constitutional reality, It was held that law can never be higher than the economic order and the cultural development of the society brought to pass by that economic order.
58. In KRISHNA BHIMARAO DESHPANDE v. LAND TRIBUNAL, DHARWAD AND ORS. , the Apex Court considered legislative competence of the State legislature with respect to Karnataka Land Reforms in the light of the resolution of the State Legislature passed under Article 252 of the Constitution surrendering its power to the Parliament to legislate in respect of one of its matters enumerated in Entry-18 of List II in consequence of which Urban Land (Ceiling & Regulation) Act was passed. Dealing with the scope of Article 245, 246, 252 and referring to its various earlier judgments the Court held that the resolution did not amount to transfer of the entire power to legislate in respect of several matters falling under the wide scope of Entry-18 List II of the VII Schedule. The power transferred was only in respect of imposition of ceiling on urban immovable property. The Supreme Court further held:
“There can be several topics in respect of the subject-matters of regulatory legislations governing the lands or other immovable 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 Karnataka Land Reforms Act are outside the legislative competence of the State Legislature.
In Calcutta Gas Company (Proprietory) Ltd. v. State of West Bengal this Court observed as under:
“The entries in the three Lists are only legislative heads or fields of legislation; they demarcate the area over which the appropriate Legislatures can operate, it is. also well settled that widest amplitude should be given to the language of the entires. But some of the entries in the different Lists or in the same Lists may overlap and sometimes may also appear to be in direct conflict with each other. It is then the duty of this Court to reconcile the entries and bring about harmony between them”
8. It is well settled that the legislative power of the State has to be reconciled with that of the Parliament and that in their respective fields each is supreme. Even assuming that the state enactment has same effect on the subject-matter falling within the Parliament’s legislative competence, that by itself will not render such law invalid or inoperative. In Kannan Devan Hills Produce Company Ltd. v. State of Kerala this Court held as under: (SCC p.229, para 28).
“It seems to us clear that the State has legislative competence to legislate on Entry 18, List II and Entry 42, List III. This power cannot be denied on the ground that it has some effect on an industry controlled under Entry 52, List I. Effect is not the same thing as subject-matter. If a State Act, otherwise valid, has effect on a matter in List I it does not cease to be a legislation with respect to an entry in List II or List III.”
Examining the impugned Statute the Court held that:
“We are clearly of the view that there is no conflict. The imposition of ceiling on urban immovable property is an independent topic and cannot be construed as to nullify the other subject left in the domain of the State Legislature under Entry 18 in as much as imposition of ceiling is a distinct and separately identifiable subject and does not cover the other measures such as Regulation of relationship of landlord and tenant in respect of which the State Legislature has competence to legislate. Thus the one topic that is transferred in the resolution passed under Article 252 is distinct and separately identifiable and does not include the remaining topics under Entry 18 in respect of which 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. is wholly misplaced and of no help to them. Reliance of the petitioners on Baijnath Kedia etc. v. The State of Bihar and ors., , 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 legislation to the extent laid down came within the exclusive subject for legislation by the Parliament and any legislation made by the State after such declaration which trenched upon the field disclosed in the declaration was to be held unconstitutional because the field was held to have been abstracted from the legislative competence of the State Legislature. In the instant case there is no such conflict between the field of legislations covered by List I and II of the VII Schedule. The effect of the State Legislation will have to be examined in the light of the provisions of Articles 246, and 252 r/w 254.
60. The mere fact that the Urban Land Ceiling Act and the impugned Act deal with the lands and buildings cannot be made a basis to urge that there existed a conflict and for that reason the State Legislature has to yield before the law made by the Union Legislature. The use of the words ‘land’ and ‘building’ in the two enactmen’ts is not the determining factor for the purposes of ascertaining inconsistency. It is the subject and the filed of legislation for which the Act has been enacted which would decide its fate on the touchstone of the alleged inconsistency. The entries in the Lists of VII Schedule of Constitution demarcate the area overwhich appropriate Legislature can operate. Widest amplitude should be given to the language of the entries. Some of the Entries in different Lists or in the same List may overlap and some times may also appear to be in direct conflict with each other. Under such circumstances, it is the duty of the Court to find-out its true intent and. purpose to examine a particular legislation in its pith and substance to determine whether it fits any one or the other of the Lists which are designed to define and delimit the respective areas of the respective competence of the Union and the State. The language of the Entries is required to be given widest scope to find-out which of the meanings is fairly capable. Each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting any Entry it would not be reasonable to import any limitation by compelling or contrasting that Entry with any other one in the same List. We are fortified in our view by the decisions of the Apex Court in CALCUTTA GAS CO. v. STATE OF WEST BENGAL , H.R. BANTHIA v. UNION OF INDIA , UNION OF INDIA v. H.S. DHILLON , D. C. RATARIA v. BHUWALKA BROTHERS LTD. , 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. Scuh surrender cannot be absolute and irrevocable. Accepting the plea that once the surrender is made, the State Legislature cannot dealwith 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 the legislative power in favour of the Parliament would be that a law made by the Parliament pursuant to such surrender would prevail over a State Law and the provisions of the State Law to the extent of the repugnancy would be void. Though Article 254 may not be applicable to a Law made by the Parliament under Article 252, yet the principle underlying Article 254 would be applicable, by reason of the words, “any such Act so passed shall apply to such State” in Article 252(1) and the bar of its amendment are repelled by any State Legislature under Article 252(2). Dealing with such a situation a Full Bench of Andhra Pradesh in TUMATI RANGAYYA ETC. v. THE STATE OF ANDHRA PRADESH AND ORS. , held:
“If Article 254 does not apply, we must look to Article 252 to resolve the problem, for we cannot assume a lacuna in the Constitution. In fact, the language of the Article, ‘any Act so passed shall apply to such States’, is peremptory enough to suggest that the Act so passed shall prevail over any other State law. The position is further clarified by the 2nd clause of Article 252 which bars the amendment or repeal of the Act by any Act of a State Legislature. Even Parliament is not empowered to amend or repeal the Act except after following, again, the procedure prescribed by Article 252(1). Thus a law made by Parliament pursuant to the power surrendered to it by the Legislatures of two or more States holds a very special position under the Constitution and must be held to prevail over any other State Law. The matter may be looked at from another angle. The law having been made pursuant to the authority given by the Legislatures of States may be treated as if it is a law made by a State Legislature. If so, it must be held to repeal by implication whatever State law prescribed it to the extent of the conflicting provisions. There can, of course, be no later State law containing provisions repugnant to it because of the bar in Article 252(2). We, therefore, hold that a law made by Parliament pursuant to the power surrendered to it under Article 252 prevails over a State law and the provisions of a State law to the extent that they conflict with the Central law are void.”
It further held “that if the provisions of the State Act were repugnant to the provisions of the Central Act the State law would be void to the extent of repugnancy. 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 liquidation) v. R.K. SHUKLA AND ORS . In that case while determining Section 6-R (2) of U.P. Act 1 of 1957 it was held that as the Act had received the assent of the President, the said Section was to prevail over Section 25-J(2) of the Industrial Disputes Act 1947 by virtue of Article 254(2) of the Constitution. The provisions were held applicable in determining the rights and obligations of the parties in respect of retrenchment compensation.
We are of the firm belief that the field of legislation covered by the Act pertains to a matter regarding which no resolution was passed in terms of Article 252 of the Constitution. As the Act deals with a distinct field of legislation, there is no question of looking at the alleged repugnancy or overlapping, as argued on behalf of the petitioners. To come to this conclusion, we have perused the various provisions of the Ceiling Act purported to have been passed by the Union Parliament in consequence of the resolution of the State Legislature, in terms of Article 252 of the Constitution and the impugned Act passed in pursuance of the legislative powers vesting in the State under Article 246 read with Schedule VII of the Constitution. The preamble of the Ceiling Act indicates the purpose for which the Act was enacted by the Parliament. The said Act is shown to have been passed 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 profiterring therein and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good, whereas the impugned Act has been legislated for the purposes of acquisition and transfer of the Bangalore Palace and open space around it in the public interest and for its preservation for matters connected therewith. In the preamble of the impugned Act, it is declared that the Palace and the open space surrounding it was being acquired for preserving it as a monument with the surrounding open space developed to serve public purpose, into an exclusive botanical museum, horticulture garden and a tree park, to serve the acutely affected ecological needs of 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 service of the final statement on the person concerned, the competent authority is required to cause a notification giving the particulars of the vacant land held by him in excess of the ceiling limit, to be published for the information of the general public in the official gazette of the State concerned. After considering the claims of the persons interested in the vacant land, the competent authority is required to determine the nature and extent of such claims and pass such orders as it deems fit. Under Section 11, payment of the amount for vacant land acquired has to be made to the person or persons having interest in the land, which is deemed to have been acquired in terms of Section 11 of the Act. Under Section 12, the constitution of the Urban Land Tribunal for the purposes of hearing the appeals is dealt with. Second appeals are maintainable in the High Court. Section 14 deals with the mode of payment of the amount and Section 17 provides that the competent authority or any person acting under the orders of the competent authority may, enter upon any vacant land or any other land on which there is a building with such assistance as the competent authority or such person considering it necessary and make survey to take measurements thereof and do any other act that the competent authority or such person considers necessary for the purpose of carrying out the Act. Penalties for concealment of particulars of any vacant land are provided under Section 18 of the Act. Sections 23 and 24 deal with the disposal of the vacant land acquired under the Act. Chapter IV of the Aot makes provisions for Regulation of transfer and use of urban properties. Section 46 authorises the Central Government to make rules for carrying out the provisions of the Act with respect to all or any of the matters specified under sub-section (2). The Act, however, deals with different situations with respect to the Bangalore Palace and open space surrounding it by the modes specified under the Act, as noted in the earlier parts of this judgment. There is no similarity between any of the provisions of the two enactments. There is no overlapping or transgression in the two fields of legislation. The object of the Act, the property dealt with, the persons concerned and the method of settlement of the dispute with respect to the property sought to be acquired are all distinct and distinguishable from those covered by the Ceiljng 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 slaid 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:
“Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.”
Article 254(1) is subject to the provisions of Clause (2) and if a statute passed the test of Clause (2), it will make Clause (1) inapplicable to it. Clause (2) is intended to cure the repugnancy which would otherwise invalidate the State law, which is shown to be inconsistent with a law made by the Parliament. The Supreme Court in M. KARUNANIDHI v. UNION OF INDIA, while dealing with the scope of Clauses 1 and 2 of Article 254 of the Constitution held that where both the State Legislature and Parliament occupy the field contemplated by the Concurrent List, the Act passed by the Parliament being prior in point of time will prevail and the State Act will have to yield to the Central Act, The scheme of the Constitution was held to be scientific which envisaged equitable distribution of legislative powers between the Parliament and the State Legislature. It was found that while legislating upon matters covered by various lists of VII Schedule, the repugnancy between the laws made by the State Legislature and the Parliament may arise from the following circumstances:
“1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
2. Where however, a law passed by the State Comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) of Article 254.
3. 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.”
65. The obtaining of the President’s asset to the State law cures the repugnancy of the State law with reference to an earlier Central law. In order to satisfy ourselves, we have also perused the records shown by the Advocate General, from which it transpired that the Presidential assent in terms of proviso to Clause (2) to Article 254 had been obtained. The records reveal that after the Bangalore Palace (Acquisition and Transfer) Ordinance, 1992 was approved by the. Cabinet, it was sent to the Ministry of Home Affairs, New Delhi on 13.5.1992 to obtain the previous instructions of the President. When the matter was under consideration, in the Ministry of Home Affairs, Sri Srikantadatta Wadeyar, one of the petitioners, made a representation to the President of India to withhold the consideration of the proposed Ordinance on several grounds. The Home Ministry, vide its DO letter dated 17.11.1983 requested the State Government to send its comments in respect of various points raised by Sri Srikantadatta Wadeyar. The State Government, vide its letter dated 26.5.1995, sent its reply with respect to all the contentions raised against the accord of assent. Almost all the pleas raised before us were taken before the President in the objections filed by one of the petitioners. Again on 16.4.1996, 21.5.1996, 21.6.1996, 20.7.1996 and 26.8.1996, the Ministry of Home Affairs was requested to obtain and communicate the assent of the President to the Bangalore Palace (Acquisition and Transfer) Bill, 1996. On 26.9.1996, the Director (Judicial), Ministry of Home Affairs, sought further information from the State Government, which are shown to have been communicated vide letter dated 10.10.1996. Ultimately, the President gave his assent on 15.11.1996. In view of such an assent, the repugnancy, if any, would not affect the constitutional validity of the impugned Act.
REG. APPLICABILITY OF ARTICLE 300-A. ITS SCOPE AND EFFECT UPON THE ACT
66. Invoking the provisions of Article 300-A, it has been argued on behalf of the petitioners that the Act was liable to be quashed, as they were allegedly being deprived of their property, save by authority of law. It is contended that the word ‘authority of law’ used in the Article means law, which is reasonable, just and fair. It is submitted that the Act was not reasonable, just and fair because it allegedly deprives the petitioners 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 priorities specified therein. It is contended that after payment of the claims of such authorities and the institutions, no amount would be left payable to the petitioners, which means that they will be deprived of the property without payment of any compensation.
68. Prior to the insertion of Article 300-A, the right to property of a citizen was guaranteed by Article 31, which was included in Part III of the Constitution. Article 31 essentially comprised of two parts. While Clause (1) dealt with the guarantee of the right of property save by authority of law, Clause (2) dealt with compulsory acquisition of the property. Vide Constitution (44th Amendment) Act, 1978, Article 31 was omitted. Clause (1) of the said Article was taken away from the Chapter of the Part III of the Constitution and inserted a Article 300-A in Chapter VI. Clause (2) dealing with the compulsory acquisition of the property along with sub-clause(f) of Clause (1) of Article 19 was omitted. The effect of 44th. Amendment is that the right to hold the property has ceased to be a fundamental right and it has been left to the Legislature to deprive a citizen of his property by a legislative action. The mere fact that a person has not been paid adequate compensation would not render the law unconstitutionaf, even if it deprives a person of his property it has been held by the Supreme Court in JILUBHAl NANBHAI KHACHAR’S10 case supra, that right to property under Article 300-A is not a basic feature or structure of the Constitution; it is only a Constitutional right. A citizen can be deprived of his property by the authority of law. The word ‘law’ used in Article 300-A means an Act of Parliament or of State Legislature, or a rule or statutory order having the force of law. Deprivation of the property can be only by the authority of law and not by executive fiat or an order. Deprivation of property is by acquisition or requisition, or taking possession of for a public purpose. Payment of compensation to the deprived owner of his property cannot be held to be as an inherent incident of acquisition under law. The right of eminent domain is the right of the Sovereign State of reassert, either temporarily or permanently, its dominion over any portion of the soil of the State including private property without its owner’s consent on account of public exigency and for the public good. 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 quanbn. 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 the same yardstick of payment of just equivalent or indemnification to the owner of the property expropriated should be applicable or Article 300A per force brings it in operation? Since Article 30(2) itself provided payment of compensation, when property was acquired preceding 25th Constitution Amendment Act, 1971, this Court interpreted the word “compensation” as aforesaid, but when Article 30(2) itself was omitted from the Constitution, the question arises whether payment of compensation is a sine qua non for deprivation of property under Article 300A? In any democracy governed by rule of law, Constitution is the Supreme Law of the land. Rescoe Pound, a sociological jurist whose writings have virtually opened new vistas in the sphere of justice, stated that ‘the justice meant not as an individual or ideal relations among men but a regime in which the adjustment of human relations and ordering of the human conduct for peaceful existence.’ According to him, ‘the means of satisfying human claims to have things and to do things should go around, as far as possible, with least friction and waste. In his “A Survey of Social Interests”, 57th, Harvard Law Review, 1 at 39(1943), he elaborated thus : “Looked at functionally, the law is an attempt to satisfy, to reconcile, to harmonize, to adjust these overlapping and often conflicting claims and demands, either through securing them directly and immediately, or through securing certain individual interests or through delimitations or compromises of individual interests, so as to give effect to the greatest total of interests or to the interests that weigh more in our civilisation with the least sacrifice of the scheme of interests as a whole.” In his ‘theory of justice’, 1951 Edition, at page 31, “the law means to balance the competing interests of an individual along with the social interests of the society”. In this work, “Justice According to Law”, he observed : “We come to an idea of maximum satisfaction of human wants or expectations. What we have to do in social control and so in law is to reconcile and adjust these desires or wants or expectations, so far as we can, so as to secure as much of the totality of them as we can”.
According to him, therefore, that the claims or interests, namely, individual, physical, social, or public interest should harmoniously be reconciled “to the balancing of social interests through the instrument of social control; a task assigned to public law for that matter”.
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“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 amenable to judicial scrutiny.”
69. Even prior to the 44th Amendment, the Apex Court in B.SHANKARA RAO. v. STATE OF MYSORE held that under the common law of eminent domain as recognised in Anglo Saxon jurisprudence the State cannot take the property of its subject unless such property is required for a public purpose and without compensating the owner for its loss. But in view of the limitations provided for under Article 31(2) enacting that no law shall be made which takes away or abridges these safeguards, and any such law, if made, shall be void, there can be no room for implication and the words “acquisition of property” are required to be understood in their natural sense of the act of acquiring property, without importing into the phrase an obligation to pay compensation or a condition as to the existence of a public purpose. The express provisions in Article 31(3) provided for compensation which necessarily excluded all suggestions of an implied obligation to provide for compensation. . However, after the 44th Amendment and in the absence of express provisions for payment of compensation, no law can be held to be unconstitutional, only because adequate compensation has not been intended to be paid to the owner of the property. After referring to various judgments, the Apex Court in Kesavananda Bharati’s case supra has held:
“The article as amended provides no norm for the Court to test the adequacy of the amount or the relevancy of the principle. Whereas the word ‘compensation’, even after the Fourth Amendment, was thought to give such a norm, namely, the just equivalent in money of the property acquired or full indemnification of the owner, the word ‘amount’ conveys no idea of any norm. It supplies no yard stick. It furnishes no measuring rod. The neutral word ‘amount’ was deliberately chosen for the purpose. I am unable to understand the purpose in substituting the word ‘amount’ for the word ‘compensation’ in the sub-article unless it be to deprive the Court of any yardstick or norm for determining the adequacy of the amount and the relevancy of the principles fixed by law. I should have thought that this coupled with the express provision precluding the Court from going into the adequacy of the amount fixed or determined should put it beyond any doubt that fixation of the amount 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,
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71. In MAHARASHTRA STATE ELECTRICITY BOARD v. THANA ELECTRIC SUPPLY COMPANY and ORS. , 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 of India’ (12th Edition) states,
“After the amendments made by the 44th Amendment Act, 1978, nobody shall have any right to compensation under the Constitution, unless the law which expropriates his. property offers any compensation.”
This view was affirmed by the Supreme Court in Jilubhai Nanbhai Khachar’s case10 supra. Basu further states:
“We have, therefore, to examine whether the condition to pay compensation inherent in the doctrine of Eminent Domain, can be imported into Entry 42 even after the vortex of constitutional amendments which have taken place since that Doctrine had been applied in Kameswar’s case.
But before that, we should realise that this present argument involves a patent legal fallacy : It assumes that the extra-constitutional principle of ‘Eminent Domain’ subsisted in India even after the adoption of provisions to the same effect in the Constitution itself, and after repeal of those provisions.
If we examine the authorities in Eminent Domain together with the observations of Mahajan, J. in Kameswar’s case, it would be clear that the doctrine of Eminent Domain is, primarily, a source of power of the State, such as the power of taxation or the ‘police power’. The power of Eminent Domain means “the power of the Sovereign to take the subject’s property, without his consent”, for the purposes of the State or public purposes. Even after all the Amendments, that power is contained in Entry 42 of List III, so that it is not necessary for the State, in India, to rely on anything extra-constitutional, to assert this right against its subjects.”
72. On the basis of various pronouncements of the Apex Court and in view of the opinions expressed by the eminent jurists, it can be said that if the property of an individual is taken away in exercise of the principle of Eminent Domain vesting in the State, the aggrieved person cannot have any grievance on the ground of non-payment of compensation alone. If the compensation has been determined by the Legislature itself, the Court would not substitute its opinion. It is not necessary that the compensation should be adequate or reasonable. At the most, it can be said that the compensation should not the illusory. As earlier noted, even the plea of the compensation being illusory may not be available where the Legislature itself 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 is presumed that the Legislature must have had some material evidence before it to come to the conclusion regarding the amount of compensation. The mere escalation of the prices of the properties in recent times cannot be made a basis for ascertaining the market value as stated by the petitioners. Keeping in view the purpose and object for which the Palace and the lands surrounding it are being acquired, the recorse to the provisions of Article 39(b) and Article 31-C and the deliberated efforts of the Legislature, we are satisfied that the Act cannot be quashed on the alleged ground that some sums of money are liable to be paid out of the compensation amount to the persons and authorities mentioned in Schedule II of the Act, would not be sufficient to conclude that the petitioners have been deprived of the property without any compensation. Liquidation of debts and loans is the statutory obligation of the petitioners and if, in order to avoid litigation, the State itself has made a provision for the appointment of a Commissioner and for payment of the loans, it cannot be said that the petitioners would be deprived of their property without payment of compensation because the liquidation of the loans would be for and on behalf of the petitioners. The petitioners cannot be permitted to say that they may choose not to make the payment to the authorities like the Central Government and the State Government, banks and public finance institutions. There is no substance in the argument of the petitioners that as the Act intends to deprive them of the property without payment of compensation, the same is liable to be quashed.
REG. VIOLATION OF ARTICLES 14 AND 19 OF THE CONSTITUTION
73. In view of our finding that the Act has been enacted for the purposes of Article 39(b) and is entitled to the protective umbrella of Article 31-C, the argument of the Learned Counsel for the petitioners that there is violation of the provisions of Articles 14 and 19 of the Constitution has no relevance in the case. Otherwise also, what is guaranteed by Article 14 of the Constitution is equality before law and equal protection of laws and the prohibition is against unreasonable classification. Article 19 guarantees specified fundamental rights, subject to the imposition of reasonable restriction on the exercise of those rights. Prohibition is on the class legislation and not reasonable 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 which distinguishes persons or things that are grouped together from others who are left out of the group; and (2) that the differentia must have a rational relation to the object sought to be achieved by the Act. So long as the classification is shown to be based on a rational basis and all persons falling under the same class are treated alike, there can be no question of violating the equality clause. The Supreme Court in JYOTI PERSHAD and ORS. v. ADMINISTRATOR FOR THE UNION TERRITORY OF DELHI AND ORS. held that a statute or rule made thereunder applying inequally to persons or things similarly situated would be a direct violation of Article 14. A classification may be reasonable, even though a single individual is treated as a class by himself, provided there are special circumstances of reasons applicable to him alone and not applicable to others. The basis of classification may be geographical, historical, according to different in time and may be based on the difference in the nature of persons, trade, dwelling or occupation which is sought to be regulated by the legislation.
74. In BUDHAN CHOUDHRY v. THE STATE OF BIHAR , it was held :
“The provisions of Article 14 of the Constitution have come up for discussion before this Court in a number of cases, namely, Chiranjit Lal v. Union of India, (A), State of Bombay v. F.N. Balsara, 1951 SCR 682 : (AIR1951 SC 318) (B), State of West Bengal v. Anwar Ali Sarkar, (C), Kathi Raning Rawat v. State of Saurashtra, (D), Lachmandas Kewalram v. State of Bombay, (E), and – ‘Qasim Razvi v. State of Hyderabad’, (F) and – ‘Habeeb Mohamad v. State of Hyderabad’, (G). It is, therefore, not necessary to enter upon any lengthy discussion as to the
meaning, scope and effect of the Article in question. It is now well established that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that differentia must have a rational relation to the object 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. 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 and correctly appreciates the need of its own people, that its iaws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a Legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the Court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation.
The above principles will have to be constantly borne in mind by the Court when it is called upon to adjudge the constitutionality of any particular law attacked as discriminatory and violative of the equal protection of the laws.
A close perusal of the decisions of this Court in which the above principles have been enunciated and applied by this Court will also show that a statute which may come up for consideration on a question of its validity under Article 14 of the Constitution may be placed in one or the other of the following five clauses :
(1) A statute may itself indicate the persons or things to whom its provisions are intended to apply and the basis of the classification of such persons or things may appear of such persons or things may appear on the face of the statute or may be gathered from the surrounding circumstances known to or brought to the notice of the Court. In determining the validity or otherwise of such a statute, the Court has to examine whether such classification is or can be reasonably regarded as based upon some differentia which distinguishes such persons or things grouped together from those left out of the group and whether such differentia has a reasonable relation to the 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 (I) V.M. Syed Mohamad & Co. v. State of Andhra, (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, (K) and Ramprasad Narain Sahi v. State of Bihar, (L).
A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of Government to select and classify persons or things to whom its provisions are to apply, In determining the question of the validity or otherwise of such a statute, the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and assertion if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. After such scrutiny, the Court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situated and that, therefore, the discrimination is inherent in the statute itself. In such a case, the Court will strike down both the law as well as the executive action taken under such law, as it did in State of West Bengal v. Anwar Ali Sarkar (D) (supra), Dwarka Prasad v. State of Uttar Pradesh, (M) and Dhirendra Kumar Mondal v. Superintendent & Remembrancer of Legal Affaris, 1955-1 SCR 2241 : (AIR 1954 SC 424) (N).
A statute may not make a classification of the persons or things for the purpose of applying its provisions and may leave it to the discretion of the Government to select and classify the persons or things to whom its provisions are to apply but may at the same time, lay down a policy or principle for the guidance of the exercise of discretion by the Government in the matter of such selection or classification; the Court will uphold the law as constitutional, as it did in Kathi Raning Rawat v. State of Saurashtra (E) (supra).
A statute may not. make a classification of the persons or things to whom their provisions are intended to apply and leave it to the discretion of the Government to select or classify the persons or things for applying those provisions according to the policy or the principle laid down by the statute itself for guidance of the exercise of discretion by the Government in the matter of such selection or 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. 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. 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, . In that case, the Central Government in exercise of its power under Section 3 of the Commissions of Enquiry Act, 1952, issued a notification dated December 11, 1956 appointing a Commission of Enquiry to enquire into and report in respect of certain companies mentioned in the schedule attached to the notification and in respect of the nature and extent of the control and interest which certain persons named in the notification exercised over these companies. Das, C.J., speaking for the Court, observed that it was not established that the petitioners and their companies had been arbitrarily singled out for the purpose of hostile and discriminatory treatment and subjected to a harassing and oppressive enquiry. It was further observed that nowhere in the petitions was there even an averment that there were other persons or companies similarly situated as the petitioners and their companies. Certain principles of law have been laid down in that decision. These principles still hold the field and are helpful in considering the constitutionality of a statute. One of these principles is 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 reated as a class by himself.”
76. In the instant case, it is alleged that as the impugned Act discriminates the legal heirs of the Maharaja of Mysore from other citizens, the same was liable to be quashed on the ground of violation of Article 14 of the Constitution. The facts noted hereinabove would clearly show that the petitioners herein constitute a class in themselves and no discrimination has been made amongst them. Some effort was made to show that there existed similar people having palaces in the State of Karnataka, who were deserved to be treated along with the petitioners as forming one class. It was submitted that as some of those forming the class have been left out from the purview of the Act, the provisions of Article 14 would be applicable in the case. At the conclusion of the arguments, the petitioners furnished a list of palaces in Bangalore, without furnishing any other particulars. The list furnished includes :
1. Sandur House of Sandur Maharaj
2. Jaymahal Palace of Gindar Maharaj
3. Tipusultan Palace
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 , NAGPUR IMPROVEMENT TRUST and ANR. v. VITTAL RAO AND ORS. , BALAMMAL AND ORS. v. STATE OF MADRAS AND ORS. is misplaced.
REG. MALAFIDES :
77. Relying upon Dr. K.R. LAKSHMANAN v. STATE OF TAMIL NADU Learned Counsel for the petitioners have submitted that the Act being the result of colourable exercise of power, the Court can ascertain the legality of the action and that mere reference to the provisions of Article 31-C would not deprive the Court from lifting the veil to see the real intention. It is contended that the persistent efforts made by the State to take possession of the property leads to then conclusion that the action of the respondents was malafide and on that ground as well, the Act was liable to be quashed. This argument is also without any substance, inasmuch as the allegations of alleged malafides are vague and ambiguous and do not refer to any specific instance. It also does not refer to the cause of alleged colourable exercise of power and jurisdiction against the petitioners. In order to succeed on the ground of malafides, a petitioner is required to place before the Court circumstances, which, if not controverted, would lead to the conclusion that the action taken was not in public interest, but was for extraneous considerations. The malafides or ulterior motives attributed to a State Legislature in making a law otherwise in its competence can never make such law unconstitutional. In K. NAGARAJ v. STATE OF ANDHRA PRADESH it was held :
“The Legislature, as a body, cannot be accused of having passed a law for an extraneous purpose. If no reasons are so stated as appears from the provisions enacted by it. Its reasons for passing a law or those that are stated in the Objects and Reasons. Even assuming that the executive, in a given case, has an ulterior motive in moving a legislation, that motive cannot render the passing of the law mala fide. This kind of ‘transferred malice’ is unknown in the field of legislation.”
The same position was reiterated by the Apex Court in G.C. KANUNGO v. STATE OF ORISSA .
78. Reliance of the petitioners on K.R. Lakshmanan’s49 case supra is also of no help to them. In that case, the Court, while dealing with the constitutionality of Madras Race Club (Acquisition and Transfer of Undertakings) Act, 1986, held that the horse racing was a sport which was primarily dependent on the special ability acquired by training, which could not be termed as either gaming or gambling as defined under the Madras Gaming Act, 1930 and Madras City Police Act, 1888. In the. context of the case, the Court found that reference to Articles 39(b) and (c) in the aims 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 skill, the horse which wins the race is given a prize by the Club. It is a simple game of horse racingwhere the winning horses are given prizes. Neither the “material resources of the community” nor “to subserve the common good” has any relevance to the twin functioning of the Club. Similarly, the operation of the Club has no relation or effect on the “operation of the economic system”. There is no question whatsoever of attracting the directive principles contained in Article 39(b) and (c) of the Constitution. The declaration in Section 2 of the Act and the recital containing aims and objectives totally betray the scope and purpose of Article 39(b) and (c) of the Constitution. While Article 39(b) refers to “material resources of the community”, the aims and objects of the Act refer to the “material resources of the Madras Race Club”. It is difficult to understand what exactly are the material resources of the race-club which are sought to be distributed so as to subserve the common good within the meaning of the Directive Principles. Equally, the reference to Article 39(c) is wholly misplaced. While Article 39(c) relates to “the operation of the economic system… to the common detriment”, the aims and objects of the Act refer to “the economic system of the Madras Race Club”. What is meant by the economic system of the Madras Race Club is not known. Even if it is assumed that betting by the punters at the totalizator and with the bookmakers is part of the economic system of the Madras Race Club, it has no relevance to the objectives specified in Article 39 (b) and (c). We are, therefore, of the view that reference to Article 39(b) and (c) in the aims and objects and in Section 2 of the Act is nothing but a mechanical reproduction of constitutional provisions in a totally inappropriate context. There is no nexus so far as the provisions of the 1986 Act are concerned with the objectives contained in Article 39(b) and (c) of the Constitution. We, therefore, hold that the protection under Article 31-C of the Constitution cannot be extended to the 1986 Act.”
79. In the instant case, the position is totally different. After critically examining the facts and circumstances of the case, we have held that the subject matter of the Act. viz., the Palace and the lands surrounding it are the material resources of the community, which were being acquired to subserve the 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 was not warranted under the law. The vesting of the property within the meaning of Section 4 of the Act is only for the purposes of executing the scheme of the Act and not with a view to clothing it with any extra-ordinary power, the exercise of which could be termed to be malafide. The term “vesting” has a variety of meanings, which have to be gathered from the context in which it is used. It may mean full, ownership or only possession for a particular purpose or clothing the authority with power to deal with the property as the agent of another person or authority: The vesting does not necessarily mean the passing over of the ownership. The Supreme Court in THE FRUIT and VEGETABLE MERCHANTS UNION v. THE DELHI IMPROVEMENT TRUST held :
“That the word “vest” is a word of variable import is shown by provisions of India statutes also. For example, Section 56 of the Provincial Insolvency Act (5 of 1920) empowers the Court at the time of the making of the order of adjudication or thereafter to appoint a Receiver for the property of the insolvent and further provides that “such property shall thereupon vest in such Receiver”. The property vests in the Receiver for the purpose of administering the estate of the insolvent for the payment of his debts after realising his assets. The property of the insolvent vests in the Receiver not for all purposes but only for the purpose vency Act and the Receiver has no interest of his own in the property. On the other hand, Sections 16 and 17 of the Land Acquisition Act (Act 1 of 1894), provide that the property so acquired, upon the happening of certain events, shall “vest absolutely in the Government free from all encumbrances”. In the cases contemplated by Sections 16 and 17, the property acquired becomes the property of Government without any conditions or limitations either as to title or possession. The Legislature has made it clear that the vesting of the property is not for any limited purpose or limited duration. It would thus appear that the word “vest” has not got a fixed connotation, meaning in all cases that the property is owned by the person or the authority in whom it vests. It may vest in title, or it may vest in possession, or it may vest in a limited sense, as indicated in the context in which it may have been used in a particular piece of legislation. The provisions of the Improvement 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 .
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. , 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) 4 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 as it might, in its own discretion, determine, is conditional and not delegated legislation, and that it will be valid, unless there is
in the Constitution Act any limitation on its power to enact such a legislation.”
83. The Supreme Court, in ORIENT PAPER AND INDUSTRIES LIMITED and ANR. ETC. v. STATE OF ORISSA AND ORS. again considered this aspect of the matter and held :
“We may, in this connection, set out the words of Lord Selborne in Her Majesty the Queen v. Burah ((1877-8)5 IA 178, 194-195) to which Venkatarama Ayyar J. referred :
“The Legislature determined that, so far, a certain change to take place; but that it was expedient to leave the time, and the manner, of carrying it into effect to the discretion of the Lieutenant Governor… the proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legislation is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an imperial or in a provincial Legislature, they may (In their Lordship’s judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many circumstances, it may be highly convenient….”
Venkatarama Ayyar, J. further stated ibid, pp. 618-619:
“…. The reason for upholding a legislative provision authorising an outside authority to bring an Act into force at such time as it may determine is that it must depend on the facts as they may exist at a given point of time whether the law should then be made to operate, and that the decision of such an issue is best left to an executive authority. Such legislation is termed conditional, because the Legislature has itself made the law in all its completeness as regards ‘place, person, laws, powers’, leaving nothing for, an outside authority to legislate on, the only function assigned to it being to bring the law into operation at such time as it might decide….” These observations show that Section 1(3) is a true, example of conditional legislation, and not delegated legislation, and 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 Legislature is competent to put an end to the finality of a judicial decision and pass a validating Act to declare to be valid, a law which has been pronounced to be void by the Court. The Supreme Court, in I.N. SAKSENA v. STATE OF MADHYA PRADESH AIR 1976 6C 2250, referred to the distinction between a “legislative” Act and a “judicial” Act and held that in some specific cases, the line which separates the two categories may not be easily discernible. Adjudication of the rights of the parties according to law enacted by the Legislature is a judicial function in the performance of which, the Court interprets and gives effect to the intent and mandate of the Legislature as embodied in the statute. It is, however, for the Legislature to lay down the law, prescribing norms of conduct which will govern the parties and transactions and require the Court to give effect to that law. The Legislature, however, cannot by a bare declaration, without more, directly overrule, revers or over-ride a judicial decision. It may, however, at any time, in exercise of the preliminary powers under Article 245 and 246 of the Constitution, render a judicial decision ineffective by enacting a valid law on a topic within its legislative field fundamentally altering or changing with retrospective, curative or neutralising effect the conditions on which such decision is based. In SMT. INDIRA NEHRU GANDHI v. SIR RAJ NARAIN , it was held that rendering ineffective of judgments or orders of competent Courts and Tribunals by changing their basis of legislative enactment is a well known pattern of all validating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidate all actions or proceedings is not an encroachment of judicial power. In I.N. Saksena’s case56 supra, the Court held :
“While, in view of this distinction between legislative and judicial functions, the Legislature cannot be a bare declaration, without more, directly over-rule, reverse or over-ride a judicial decision, it may, at any time in exercise of plenary powers conferred on it by Articles 245 and 246 of the Constitution render a judicial decision ineffective by enacting a valid law on a topic within its legislative field fundamentally altering or changing with retrospective curative or neutralising effect the conditions on which such decision is based. As pointed out by Ray, C.J., in Indira Nehru Gandhi V. Raj Narain 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 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. If, without altering the legal basis of the pronounced judgment of a Court of law, the Legislature only declares the earlier judicial decision as invalid or not binding, it would be unconstitutional. The Legislature cannot encroach upon the judicial powers of the Court to adjudicate future disputes relating to any subject. In the instant case, it is found that the Act passed by the said Legislature is within the legislative competence in terms of Article 246 of the Constitution, not any particular defect which the Court had found in relation to the petitioners has been removed and the Act is not inconsistent with the provisions of Part III of the Constitution. No right of the petitioners, which was allegedly adjudicated in their favour is intended to be taken away by the Act. All the authorities have so far decided the cases against the petitioners. The mere pendency of the Writ Petitions in the Courts against the orders passed detrimental to the petitioners could not be termed to be adjudication of any right in their favour. Legislation with respect to the acquisition and transfer of the Palace cannot be termed to be intended to over-ride a judicial decision allegedly made in favour of the petitioners. What is stated under Section 40 is that as the Palace has been acquired under the Act, all notification issued under any of the provisions of the Land Acquisition Act in respect of the Palace shall stand withdrawn and proceedings, if any, taken in pursuance of such notification shall abate. The notification issued under the Acquisition Act which was challenged by the petitioners has been declared to have been abated for which the petitioners cannot have any grievance. The impugned Act, therefore, does not, in any way, interfere with the judicial process of the Court. Rather, the Act demonstrates the sincerity of the respondents of their intention to acquire a unique, historical and architectural heritage of the State of Karnataka in public interest and to preserve it as a monument.
REG. OTHER PLEAS
86. It is submitted that as the impugned Act was virtually a copy of the Act No. 57/1974, the same was liable to be quashed on the ground that the Legislature had not applied its mind while passing the Act. On facts, it cannot be said that the present Act is on the same subject which is covered by the Nationalisation of Sick Industries (Textile Undertaking Nationalisation) 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 at between the parties to the suit, which was withdrawn on 30.1.1979. Despite the settlement, differences again arose between the two families which were settled vide another settlement arrived at on 29.1.1982. Two company petitions filed by Sri S.D.N.R. Wadeyar against the petitioner-Company were dismissed on 20.4.1989, against the Original Side Appeal No. 10 to 13 of 1989 were filed in this Court. At the stage of final hearing of the appeals, the parties again agreed to give effect to the settlement arrived at between them on 29.1.1982 with some modified terms. The application in terms of Order 23 Rule 3 of the Code of Civil Procedure was filed on 19.5.1994. The Division Bench made an order on 6.6.1994 that the compromise be recorded. The parties thereafter filed a joint memo, reporting compliance. Under the compromise, the Chamaraju group was separated from the Maharaja group in the holdings of the petitioner-Company and in lieu thereof, they were held entitled to retain 45 acres of the Palace property and returned the balance 65 acres of land to the Maharaja group. The property, which is in possession of the petitioner-Company since 11.11.1974, was assessed to property tax and katha was registered in its name, which was revoked by the City Corporation in the year 1985. After the compromise on 6.6.1994, this Court directed the Bangalore City Corporation to pass appropriate orders on the basis of the compromise as to the bifurcation of the katha.
88. After the enforcement of the Ceiling Act, the petitioner-Company is stated to have filed statements under Section 6(1) of the Ceiling Act, before the Additional Deputy Commissioner and Competent Authority, Urban Land Ceiling, Bangalore in 1976. The competent authority clubbed all the matters pertaining to Bangalore Palace property and passed a consolidated order on 27.7.1989. Aggrieved by the aforesaid order, the petitioner-Company preferred an Appeal No. 106/1989 before the Karnataka Appellate Tribunal, along with the legal heirs of the former ruler of Mysore. All the appeals were dismissed by the Tribunal by a common order passed on 11.5.1992, whereafter the competent authority issued a final statement under Section 9 of the Ceiling Act to the petitioner-Company. Aggrieved by the said order, the legal heirs of the former ruler of Mysore and the petitioner-Company filed Writ Petitions, in which rule was issued 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 INDIA1993(1) SCO 78, 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 rovisions, 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 tax may be raised by the appropriate authority concerned, such a presumption should not be drawn. The very fact that an imputation of tax evasion arises where an order of compulsory purchase is made and such an imputation casts a slur on the parties to the agreement to sell lead to the conclusions that before such an imputation can be made against the parties concerned, they must be given an opportunity to show cause that the undervaluation in the agreement for sale was not with a view to evade tax. The observance of principles of natural justice was held to be the pragmatic requirement of fair play in action. The Court, while dealing with the relevant section of the Act, held :
“Section 269-UD, in express terminology, provides that the appropriate authority may make an order for the purchase of the property “for reasons to be recorded in writing”. Section 269-UD(2) casts an obligation on the authority that it “shall cause a copy of its order under sub-section (1) in respect of any immovable property to be served on the transferor”, tt is, therefore, inconceivalbe that the order which is required to be served by the appropriate authority under sub-section (2) would be the one which does not contain the reasons for the passing of the order or is not accompanied by the reasons recorded in writing. It may be permissible to record reasons separately that the order would be an incomplete order, unless either the reasons are incorporated therein or are served separately along with order on the affected party. We are, of the view, that reasons for the order must be communicated to the affected party.”
90. Under the facts and circumstances of the present case, no such statutory obligation is shown to be existing against the State for providing an opportunity of being heard. As already held, the principles of natural justice would not be applicable to a legislative action, as has been done vide the impugned Act. In C.B. Gautam’s case supra, the Court was dealing with a case of tax evasion and in the present case, we are concerned with the legislative competence of the State Legislature under the provisions of the Constitution. The petitioner-Company is not shown to have acquired any independent right in the property and are allegedly in occupation on account of the agreements claimed to have been executed with the owner of the property viz., the former rulers of the State of Mysore. No individual legal right, muchless a Constitutional or fundamental right, of the petitioners has been violated requiring interference by this Court.
91. The petitioners who claim through the former ruler of Mysore should see the change in the socio-economic and political system in the country and may appreciate the desirability of submitting to the will of the people expressed through their elected representatives. We are told that the former rulers of Mysore are revered, respected and remembered for their commitment to the cause of the people. They are also stated to have left no stone unturned for preservation of the identity and culture of this renowned southern State of the Country. Each individual is expected to bow before the will of the people. The good gesture shown by the petitioners definitely would revive the cherished memories of their predecessors.
92. Keeping in view the legal position as discussed hereinabove, we find there is no merit in any of these Writ Petitions which are dismissed with costs assessed at Rs. 5,000/- per Writ Petition.
93. We would tike to place on record our appreciation of the assistance and co-operation rendered by all the advocates appearing in the case.