ORDER
S.N. Variava, J.
1. All these petitions can be disposed off by this common judgment. Facts are by and large common. On behalf of the petitioners, Mr. Zaiwalla and Mr. Chinoy have argued. All the other Advocates have adopted the arguments of these two Counsel.
2. All these petitions challenge the vires of the Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987 (hereinafter for the sake of convenience called the said Impugned Act). Facts briefly stated are as follows:
3. The then Portuguese Government granted various concessions under Decrees dt. 20th September 1906. These were governed by the Portuguese Colonial Mining Laws. The then existing position is very succinctly set out by the Supreme Court in the case of Vinodkumar Shantilal Gosalia v. Gangadhar Narsingdas Agarwal . The relevant portion reads as follows:
“3. During the Portuguese rule, matters relating to grant, transfer and vesting of mining rights in Goa, Daman and Diu were governed by the ‘Portuguese Colonial Mining Laws’. Under those laws a person could, in stated
circumstances, make a ‘declaration’ in writing stating that ‘he has discovered a mineral deposit’. Such a declaration was called a ‘Mining Manifest” and the person making the declaration was called a ‘Manifestor’. The object of making a Mining Manifest was to acquire mining rights from the Government in respect of the area covered by the Manifest. On verification of the facts stated in the Manifest, the concerned authorities would prepare a ‘Notice of Manifest’, by which was meant ‘the record in a special book of prospector’s declaration, which in a fixed term will ensure the exclusive right to ‘concession’ of a manifested mining property when such property contains minerals land the manifested land is free’. The notice of Manifest was thus an acknowledgment by public authorities of the authenticity of the Mining Manifest. It was a step-in-aid to the grant of mining rights, since the particular entry in the special book maintained for keeping the record of mining manifests ensured the exclusive right of the manifestor to mineral concession or rights. The notice of Manifest was followed by the grant of Title of Manifest’ which meant ‘a certificate in terms of the note of manifest, pertaining to the legal right to concession’. The Title of Manifest entitled the manifestor to a ‘Mining Concession’ under which he was permitted ‘to explore a mining property and to enjoy thereon all mining rights’. The mining concession was ‘unlimited in duration as long as the concessionaire complied with the conditions which the law and title of concession imposed on him’. Article 119 of the Portuguese Colonial Mining Laws provided that a ‘prospecting licence’ was not transferable but by Article 120, a Title of Manifest was transferable by simple endorsement on the original title, duly executed in terms of Article 60.”
4. At this stage, the relevant portions of the Portuguese Colonial Mining Law, may also be set out:-
“Section I (c) Each claim comprises of an indefinite depth the mass delimited
by the vertical planes on the lines of its perimeter,
(g) Ordinary Mining Licence. – A document issued by the proper authorities, which during the terms of its validity gives the holder the right to prospect in any part of the territory for which the licence was conceded. This documents is granted to whomsoever demand the same in compliance with the terms of the law;
h) Special Mining Licence,- A mining licence the effect of which is analogous to the foregoing but which the Government alone can grant to such persons as are held to fulfill the necessary recourses for exploiting properly the larger concessions to which such licence entitles the holder;
(i) Prospecting Notice.- A notice placed on a tree post or any other support which makes it plainly visibly, and which displays during the terms of the respective licence the sole right to prospect in an area determined by Law and of which this notice is the centre;
Article 14. The concession of an ore bed does not imply possession of the surface of the ground in which it is found, but involves for the concessionaires and the proprietor of the ground certain rights and reciprocal obligations in accordance with the terms of the law.
Article 129. Mining taxes are of two kinds :
1. A fix tax, corresponding to the total area comprehended in the demarcation;
2. a proportional tax, corresponding to the gross amount of mineral extracted and brought to the surface;
3. These taxes are collected annually, and the fixed tax is due for the whole
period during which the concession exists.”
5. On 19th December 1961 Goa was liberated and annexed. On 5th March 1962 the Goa, Daman and Diu (Administration) Ordinance was passed. This was replaced by the Goa, Daman and Diu (Administration) Act, 1962 which was enacted on 27th March 1962. Section 2(b) provided that the Appointed Date was 20th December 1961. Section 5(1) provided that all laws in force in Goa, immediately before 20th December 1961, shall continue in force until amended or repealed.
6. On 28th November 1962, by the Goa, Daman and Diu (Laws) Regulation, 1962 (No. 12 of 1962) Goa, Daman and Diu were, included as Union Territories under Article 240 of the Constitution of India. Section 3 made various Acts, specified in the Schedule, applicable to Goa, Daman and Diu. One of the Acts, made so applicable was the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter for sake of convenience called the MMRD Act).
7. It would appear that 5 Mining concessions were granted to certain persons in July 1963. On 30th September 1963 the Lt. Governor issued a Notification appointing 1st October 1963 as the date when the MMRD Act (except section 16 thereof) would come in force in Goa. Thus the MMRD Act became applicable to Goa with effect from 1st October 1966. Section 16 of the MMRD Act was made applicable to Goa with effect from 15th January 1966. This by a Notification dt. 4lh January 1966 issued by the Lt. Governor.
8. The petitioners claim that, during the period 1963 to 1968, the Government acted under the various decrees by calling for information about the mining concessions and various other relevant information, collecting levies and taxes and supervising extractions.
9. With effect from 1966 onwards the Controller of Mining Leases, Govt. of India, issued various Notices to various concessionaires for modification of the concessions into leases. The objections of the concessionaires were overruled and the concessions were modified into leases. In 1969 various concessionaires filed Revisions to the Central Government. On 15th May 1975 the Central Government allowed the ‘Revision Applications on the ground that there was no power to modify.
10. In 1972 section 9-A was added to the MMRD Act. On 10th March 1975 the Controller of Mining Leases issued a Notification calling upon all Lessees and sublessees to file Returns in specified forms. This was sent to all concession holders. The Concessionaires filed various writ petitions. Writ Petition No. 151/8 of 1975 was one such writ petition. Writ Petition No. 151/B of 1975 was heard and party allowed by a Judgment dt. 29th September 1983. The Government was restrained from enforcing the Notifications. It is clear from the judgment that the Central Government had contended on Affidavit that they did not recognise the concessions and did not treat them as lessees. It was on the basis of this statement, that the Government was restrained from treating the concessions as leases. As taxes were still sought to be collected another Writ Petition 31 of 1978 was filed. By judgment dt. 22nd November 1983, following the earlier judgment. Government was restrained from recovering royalty and directed to refund royalty illegally collected. As amounts were not refunded some concessionaires filed suits and got decrees against the Government. We are informed that most of the decree holders have chosen not to execute the decrees.
11. On 30th April 1987 the Mining Concession (Abolition and Declaration as Mining Leases) Bill was introduced. It became an Act on 11th May 1987. In July/August 1988, Notices were issued to all the concessionaires to pay a) Dead Rent from 1st October 1963 onwards and b) Royalty from 20th December 1961 to 1st October 1963. Payments under section 6 of the said Impugned Act were also offered. These petitions were thus filed.
12. Mr. Zaiwalla first submitted that an amendment to the Constitution, by way of addition, variation or repeal, could only be by the Parliament exercising powers in the manner laid down in Article 368 of the Constitution. He submitted that Article 368 provides for introduction of a Bill, passing of the Bill and assent of the President. He submitted that only by this method could the Constitution be amended. Mr. Zaiwalla pointed out that Article 31-C was inserted by section 3 of the Constitution (25th Amendment Act) 1971. He pointed out that Article 31-C, as it then stood read as follows:
“31 -C Saving of laws giving effect to certain directive principles.:—
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) or Article 39 shall be deemed to be void on the ground that it is in consistent with, or takes away or abridges any of the rights conferred by Article 14 of Article 19; (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 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.”
13. Mr. Zaiwalla pointed out that in the case of His Holiness Kesavanand Bharati Sripadagalavaru v. State of Kerala the validity of the first part was upheld but the latter part (which has been bracketed above) was struck down. (For the sake of convenience the portion of Article 31-C, held to be valid in Keshavanand Bharati’s case, is hereafter called the unamended Article 31-C).
14. Mr. Zaiwalla pointed out that by section 4 of the Constitution (42nd Amendment) Act the words “the principles specified in Cl. (b) or Cl. (c) of Article. 39″ were deleted and the words” all or any of the principles laid down in Part IV” were substituted. Mr. Zaiwalla submitted that the ambit of Article 31-C was thus enlarged. He submitted that the Constitution (42nd Amendment) Act received the assent of the President on 18th December 1976. He submitted that now on the Statute Book the unamended Article 31-C with the words “the principles specified in Cl. (b) or Cl. (c) of Article 39” stood deleted and no longer existed. He submitted that Article 31-C, as it now stood on the Statute Book contained the words “all or any of the principles laid down in Part IV”. (For the sake of convenience this will, hereafter, be referred to as the new Article 31-C.)
15. Mr. Zaiwalla submitted that the Supreme Court by a majority judgment in the case of Mineral Mills Ltd. v. Union of India declared section 4 of the Constitution (42nd Amendment) Act void on the ground that it damaged the basic and essential feature of the Constitution. He submitted that this declaration was on the footing that the unamended Article 31-C already stood amended in accordance with the terms of the Constitution (42nd Amendment) Act. He submitted that the result thus was that the new Article 31-C was declared void and the unamended Article 31-C no longer stood on the Statute Book. He submitted that the declaration of voidness did not and cannot alter the Constitutional mandate of Article
368. He submitted that if the Parliament wanted to re-introduce unamended Article 31-C, as it stood prior to its amendment, it could only do so by following the procedure under Article 368. He submitted that by Cl. (c) of section 8 of the Constitution (45th Amendment) Bill 1978 an attempt was made to restore Article 31-C to its previous position by adding the words “the principles specified in Cl. (b) or Cl. (c) of Article 39”. He points out that this Clause was defeated in the Rajya Sabha. Mr. Zaiwalla submits that it is thus clear that the unamended Article 31-C no longer stands on the Statute Book. He submits that in such cases there is no question of revival of pre-existing law. Mr. Zaiwalla submits that the new Article 31-C has been declared void by the Supreme Court. He submits that as the unamended Article 31-C does not survive in the Constitution, the benefit thereof is not available to the respondents to exclude attack to the validity of the said Impugned Act.
16. Mr. Zaiwalla relied upon the case of Property Owners Association and others v. State of Maharashtra and others . In this case the Supreme Court has referred the question, whether unamended Article, 31-C still stands in the Statute Book, to a Constitutional Bench. Mr. Zaiwalla submitted that the Supreme Court has opined that this question, in this form, has not arisen for consideration in Minerva Mill’s or Waman Rao’s or Sanjeeva Coke’s cases. He submitted that the Supreme Court has held that all these cases have proceeded on a premise that the unamended Article 31-C stood revived. He submitted that this shows that the Supreme Court is of the opinion that there is substance in this submission.
17. Mr. Zaiwalla then completed his other arguments. Mr. Chinoy stated at the beginning of his arguments that he was supporting and adopting Mr. Zaiwalla’s arguments. He however stated that he was not sure of the propriety of arguing the above question in view of it having been referred to a Constitutional Bench. He pointed that the Supreme Court has, whilst referring this question, opined that this course was necessary in order to avoid this question being agitated in various matters. He suggested that the hearing of all these petitions be deferred. Mr. Zaiwalla supported him in this application. Mr. Andhyarujina and Mr. Nadkarni opposed. Mr. Andhyarujina submitted that even, without the umbrella of unamended Article 31-C being available to the respondents, the petitioners had no case. He submitted that the petitions were likely to fail on other points also. Mr. Andhyarujina also pointed out that the Supreme Court had not accepted such a submission as correct. He submitted that merely because a question is referred to a larger Bench of the Supreme Court did not mean that all matters all over the Country should be indefinitely adjourned. He submitted that it was for Counsel to decide whether or not they wanted to press this point. To this Mr. Chinoy stated that according to him, in view of this question being referred to a Constitutional Bench, it would be improper for the respondents to contend that they could avail of the benefit of unamended Article 31-C. He submitted that if respondents still chose to rely on unamended Article 31-C then he was bound to and was contending that unamended Article 31-C, no longer stood on the Statute book. He stated that if the Court and Counsel for the Government felt that the petitions could be proceeded with, then he was ready to proceed and that he would then urge this point.
18. Counsel were informed that these were specially fixed matters. Counsel were informed that it was for the Counsel to decide whether or not they wanted to urge a point. Counsel were informed that if a point was urged it would be decided on its merit and in accordance with law as it stands. Mr. Andhyarujina was right when he submitted that as yet the Supreme Court has not upheld this point. Supreme Court
has not stayed all matters where this point arises. Merely because this question is referred to a larger Bench can be no ground for a Court to refuse to consider or decide the point if it is urged. The point would have to be decided according to the law as it stands at present. Application for deferring the hearing of all these petitions was thus rejected. On this Mr. Chinoy proceeded with his submissions.
19. This took place on 16th June 1997. On 17th June 1997 Mr. Zaiwalla presented a written application in Writ Petitions Nos. 275 of 1988 and 10 of 1995. By this application it was prayed that these petitions be deferred for the above mentioned reasons. By a written order that application was rejected.
20. On this aspect Mr. Chinoy adopted Mr. Zaiwalla’s submissions and elaborated further. He submitted that the 42nd Amendment was brought into force on 3rd January 1977. He submitted that with effect from that date the unamended Article 31-C no longer stood on the Statute Book. He submitted as the new Article 31-C was held to be void in Minerva Mill’s case, it also no longer survived. He submitted that on the date when the new Article 31-C was held to be void the unamended Article 31-C was not in existence on the Statute Book. He submitted that unless the Parliament chose to bring back the unamended Article 31-C on the Statute Book, by following the procedure under Article 368 there could be no revival of the unamended Article 31-C. He submitted that there can be no implied re-enactment or revival, particularly of Constitutional provisions. He submitted that this becomes amply clear if it is seen that the Parliament did make an abortive attempt to revive unamended Article 31-C by Cl. (c) of section 8 of the Constitution (45th Amendment), Act. He submitted that this shows that even the Parliament was of the opinion that the unamended Article 31-C does not survive on the Statute Book.
21. In support of his submission Mr. Chinoy relied on the case of Shamrao V. Parulekar v. District Magistrate, Thane . In this case the Supreme Court has held that on an amendment old words ceased to exist and if the amendment is declared to be illegal the old words do not get revived.
22. Mr. Chinoy also relied upon the authority in the case of Firm A.T.B. Mehtab Majid & Co., v. State of Madras . In this case it was held that where a substituted statutory rule is held invalid, the old rule does not get revived. It was held that once the old rule has been substituted by the new rule, it ceases to exist and it does not automatically get revived when the new rule is held to be invalid.
23. Mr. Chinoy also relied upon the case of B.N. Tewari v. Union of India, reported in A.I.R. 1965 S.C. pg. 1480. In this case a carry forward rule of 1955 had been declared invalid by an earlier judgment. The Supreme Court held that merely because the carry forward rule of 1955 was declared invalid did not mean that the carry forward rule of 1952 must be deemed to exist or be revived.
24. Mr. Chinoy also relied upon the case of Yadlapati Venkateswarlu v. State of Andhra Pradesh, . In this case the Supreme Court has held that an Amendment Act must be read as if the words of the amendment had been written into the Act except where that would lead to an inconsistency.
25. Based on these authorities, Mr. Chinoy submitted that by the Constitution (42nd Amendment) Act the words “all or any of the principles laid down in Part IV” must be read into in Article 31-C. He submitted that therefore the words “the principles specified in Clause (b) or Clause (d) of Article 39” stood deleted from Article 31-C and no longer existed. He submitted that therefore when the Supreme Court declared in Minerva Mills case that the Constitution (42nd Amendment) Act was void, the words “all or any of the principles laid down in Part IV” became void. He submitted that the
words “the principles specified in Clause (b) or Clause (d) of Article 39” having stood deleted, do not stand revived unless the Parliament re-introduces them by following the procedure under Article 368. He submitted that therefore at present Article 31-C does not stand in the Statute Book.
26. Mr. Chinoy next submitted that Article 31-C is not retrospective. In support of this, he relied on the authority of the Supreme Court in the case of Excel Wear v. Union of India . In this case the Supreme Court has held that Article 31-C would not save provisions which had been enacted prior to its coming into force.
27. Mr. Chinoy also relied upon the case of Bennett Coleman & Co. v. Union of lndia . In this case it has been held that Article 31-C was inserted by the Constitution (25th Amendment) Act, 1971, and came into operation with effect from April 20, 1977. It has been held that the protective umbrella of Article 31-C was not available to the Impugned Act as it came into force prior to that date. It has been held that if an Act is void, as being violative of the rights conferred by Article 14 or Article 19 on the date of its enactment, then the vice cannot be overlooked by reference to Article 31-C which was not available on the date of enactment of the legislation.
28. Mr. Chinoy also relied upon the authority in the case of Sheo Kumar v. State of U.P. . In this case the Full Bench of the Allahabad High Court has also held that the protective umbrella of Article 31-C would not be available to legislation which was passed prior to Article 31-C having come into force.
29. Mr. Chinoy also relied upon the case of Doctors’ Sahakari Grah Nirman Samiti Ltd., Agra v. Avam Vikas Parishad, Lucknow and V. Ponnusamy v. Government of Tamil Nadu wherein same principles have been reiterated by the Allahabad and Madras High Courts.
30. Based on the above Mr. Chinoy submitted that Article 31-C could not protect any legislation which had been enacted prior to Article 31-C having been brought into force. He submitted that on the same rationale and principle Article 31-C cannot protect a legislation which had a retrospective effect. He admitted that the said Impugned Act came into force in 1987 i.e. subsequent to Article 31-C having come into force. He submitted that the provisions of the said Impugned Act have however been given a retrospective effect to the appointed day i.e. 20th December 1961. He submitted that one therefore had to project oneself to 20th December 1961. He submitted that only those laws or protections which were available on that date should be considered. He submitted that it should be presumed that the said Impugned Act was passed in 1961. He submitted that if the said Impugned Act was passed in 1961 it would not have the protection of Article 31-C. He submitted that if the said Impugned Act was passed in 1961, then the validity of the said Impugned Act would have to be tested on the basis of Articles 14, 19(1)(f) and 19(1)(g). He submitted that as the said Impugned Act is to be deemed to have been enacted in 1961 even the Constitution 44th Amendment would not be available to the respondents.
31. As again this Mr. Andhyarujina submits that Article 31-C was introduced by the Constitution (25th Amendment) Act and came into effect on 20th April 1972. He submitted that the latter portion of the Article was held to be invalid in Keshavanand Bharati’s case (supra). He submitted that at that time the words “the principle specified in Clause (b) or Clause (d) of Article 39” were held to be Constitutionally valid by the Supreme Court. He submitted that by the Constitution (42nd Amendment) Act words
to the effect “all or any of the principles in Para IV” were sought to be brought into. He submitted that in Minerva Mill’s case Supreme Court held that the above words, i.e., “all or any of the principles in Part IV” were beyond the legislative competence as they destroyed the basic structure of the Constitution and that the Constitution (42nd Amendment) Act was void. He submitted that it is clear that in Minerva Milt’s case the Supreme Court dissected these words from Article 31-C. He submitted that the result was that the unamended Article 31-C stood restored.
32. Mr. Andhyarujina submitted that the fact that Article 31-C stood restored to its prior position is clear from the fact that in Minerva Mills’s case itself the Supreme Court notes that the validity of unamended Article 31-C has been upheld in Keshavanand Bharati’s case. He submits that the validity of unamended Article 31-C has also been upheld by the Supreme Court in the case of Wamana Rao v. Union of India .
33. Mr. Andhyarujina submitted that thereafter in a large number of cases the Supreme Court has either upheld the validity of the unamended Article 31-C or applied unamended Article 31-C to uphold the validity of the concerned legislation.
34. In support of this Mr. Andhyarujina showed to Court the cases of State of Tamil Nadu v. Abu Karur Bai ; State of Maharashtra v. Basantibai Mohanlal Khetan ; 2nd case of Minerva Mills Ltd. v. Union of lndia ; Maharashtra State Electricity Board v. Thana Electric Supply Co. ; Tinsukhia Electric Supply Co. Ltd. v. State of Assam ; Vellore Electric Corpn. Ltd. v. State of Tamil Nadu ; Assam Sillimanite v. Union of India and Rashtriya Mill Mazdoor Sangh v. State of Maharashtra .
35. Mr. Andhyarujina points out, from the last mentioned case, that the same Judge, who in Property Owners Association case (supra), had referred this question to the Constitutional Bench, has in spite of such reference considered unamended Article 31-C to be standing in the Statute Book and upheld the validity of the concerned legislation on the basis that it had the protection of unamended Article 31-C. Mr. Andhyarujina submitted that the above mentioned authorities clearly show that the Supreme Court is of the view that unamended Article 31-C still stands in the Statute Book and that its protective umbrella is available to legislation enacted after it came into force. He submitted that this is law as laid down by the Supreme Court. He submitted that it is not open for this Court to come to a conclusion contrary to the law laid down by the Supreme Court.
36. Mr. Andhyarujina relied upon the case of Smt. Somavanti v. State of Punjab . In this case the Supreme Court has held that the binding effect of a decision does not depend on whether a particular argument was considered or not, provided that the point on which the argument was subsequently advanced was actually decided. Mr. Andhyarujina submitted that the point in question, i.e., the existence of unamended Article 31-C has been decided by the Supreme Court in all the cases mentioned above.
37. Mr. Andyarujina also relied upon the case of Ballabhadas Mathuradas Lakhani v. Municipal Committee . In this case the Supreme Court has held that by virtue of Article 141 of Constitution a decision of the Supreme Court is binding on the High Court. The Supreme Court has held that the
High Court cannot ignore a decision of the Supreme Court on the ground that a relevant provision was not brought to the notice of the Supreme Court,
38. Mr. Andyarujina also relied upon the case of M/s. Kesho 8am & Co. v. Union of India . In this case the Supreme Court has held that finality in litigation and public policy both require that a litigant should not be permitted to challenge the validity of an Act or notification at different times on different grounds. The Supreme Court has held that once the validity has been challenged and considered by the Court, it must be presumed that all grounds which could validly be raised were raised and considered by the Court, The Supreme Court negatived the contention that the ground raised in the present proceedings were not raised or considered in the earlier proceedings, and therefore, the validity could again be questioned. The Supreme Court held that such submissions were contrary to the principles of res judicata and ignored the binding effect of the decision under Article 141 of the Constitution. The Supreme Court held that the binding effect of the decision of the Supreme Court did not depend upon whether a particular argument was considered or not, provided the point with reference to which the argument is advanced was actually decided in the earlier decision.
39. Based on these decisions, Mr. Andhyarujina submitted that the opinion of the Supreme Court, to the effect that unamended Article 31-C stands in the Statute Book and that its protection is still available, is binding on this Court. He submits that this Court cannot give a contrary decision.
40. Mr. Andhyarujina further submitted that in Minerva Mills case the entire Article 31-C has been held to be void or invalid. He submitted that in Keshavanand Bharati’s case the unamended Article 31-C was held to be valid. He submitted that In all such cases what one has to look at is the intention of the Legislature. He submitted that whilst promulgating the Constitution (42nd Amendment) Act, the intention of the Legislature was not to remove Article 31-C from the Constitution. He submitted that therefore even though the Constitution (42nd Amendment) Act may be held to be void, it could never mean that the entire Article 31-C stood removed from the Statute Book. He submitted that the bulk of Article 31-C still remains on the Statute Book. He submitted that the bulk of Article 31-C still gives protection to the said Impugned Act.
41. In support of the submission that intention of the Legislature has to be looked at, Mr. Andhyarujina relied on the case of Indian Express News Paper (Bombay) Pvt. Ltd. v. Union of India, reported in 1985(1) S.C.C. pg. 611. In this case one of the questions was whether invalidation of a subsequent Notification revived the earlier Notification. The Supreme Court considered a large number of cases, including some of the cases relied upon by Mr. Chinoy. The Supreme Court held that the effect of an earlier law, when the later law is declared invalid does not depend merely upon the use of words like “substitution’ or ‘supersession’. The Supreme Court held that the question of revival depends upon the totality of circumstances, the context in which the substitution took place, the intention of the Legislature and their competence to enact the subsequent law. It must be mentioned that the Supreme Court noted, in para 106 of this judgment the case of Mohd. Shoukat Hussain Khan v. State of Andhra Pradesh . In that case it has been held that if the subsequent law, which modified the earlier law, was held to be void and could not have been passed by the Legislature at all, then in such a case the earlier law could be deemed to have been never modified or repeated and therefore continued to be in force.
42. Mr. Andhyarujina submitted that it is very clear that the intention of the Legislature was not to remove Article 31-C from the Statute Book. He submitted that in Minerva Mill’s case, the Constitution (42nd Amendment) Act was held to be void and beyond the legislative competence of the Government as it affected the basic structure of the Constitution. Mr. Andyarujina submitted that under these circumstances, the earlier law should be deemed to have been never modified or revived or amended. He submitted that for this reason also the unamended Article 31-C remains on the Statute Book and was applicable.
43. Mr. Andyarujina further submitted that there is no substance in the submission that Article 31-C cannot apply to the said Impugned Act, because it is retrospectively in effect. He submitted that in all such cases what the Court has to see is whether Article 31-C was in force at the time that the concerned Legislation was enacted. He submitted that merely because the Legislation provides for retrospective effect would not mean that protection of Article 31-C is lost. Mr. Andhyarujina pointed out the case of Jilubhai Nanbhai Khachar v. State of Gujarat wherein the Supreme Court has held that the Bombay Land Revenue Code and the Land Tenure Abolition Laws (Gujarat Amendment) Act (8 of 1982) are valid and not ultra vires the Constitution. He pointed out that the Supreme Court has done this on the basis of protection under Article 31-A and 31-C of the Constitution. He points out that in this case also the Legislation had been given retrospective effect and yet the Supreme Court held that it gets protection of Article 31(A).
44. In our view, Mr. Andhyarjina is right on all counts. In Keshavanand Bharati’s case and Minerva Mill’s case, the Supreme Court has held that the unamended Article 31-C is Constitutionally valid. Even after Property Owners Association case, in the large number of cases set out in para 34 above, the Supreme Court has upheld the validity of the Legislation under consideration on the basis of unamended Article 31-C. Mr. Andhyarujina is right when he submits that once the Supreme Court takes the view that the unamended Article 31-C is still on the Statute Book and its protective umbrella is available, that would be law as laid down by the Supreme Court. That law is binding on this Court. Undoubtedly Mr. Zaiwalla and Mr. Chinoy are right that the point urged before us has not been considered in those cases. However it is not open to this Court to come to contrary conclusion on the ground that the point raised in these petitions has not been considered by the Supreme Court. Even an obiter of the Supreme Court is binding on this Court. Also merely because the question is referred to Constitutional Bench does not mean that, in the mean time, the law laid down by the Supreme Court does not apply. That this is the law is absolutely clear from the fact that the same learned Judge who referred this question to the Constitutional Bench has thereafter in Rashtriya Mill’s case held the concerned Act to be valid on the basis that it has the protection of unamended Article 31-C.
45. Even otherwise it does appear to us that to hold contrary would amount to deciding contrary to the majority judgment in Minerva Mill’s case. By the Constitutional (42nd Amendment) Act the words “all or any of the principles in Part IV” were substituted for the words “the principles specified in Clauses (b) or Clause (c) of Article 39”. In Minerva Mill’s case the Supreme Court is not striking down the entire Article 31-C. In fact the Supreme Court is noting that the unamended Article 31-C, except for the later portion which was struck down, was held to be valid in Keshavanand Bharati’s case. The Supreme Court has held as void the Constitution (42nd Amendment) Act on the ground that it was beyond the Legislative competence to enact it. To be doubly sure that there is no misunderstanding the majority judgment held that it is
so void if it is for giving effect to the policy of the State towards securing the principles laid down in Part IV of the Constitution. The Constitution (42nd Amendment) Act is declared void to the extent it is towards securing the principles laid down in Part IV of the Constitution. Thus what is void is words “towards securing
principles laid down is Part IV”. Even presuming Mr. Zaiwalla and Mr. Chinoy were right in submitting that the words “principles specified in Clause (b) or Clause (c) of Article 39” stood deleted and did not stand revived, the effect will be that in the Statute Book there is still Article 31-C which would now read as follows:
“31-C. Saving of laws giving effect to certain directive principles. Notwithstanding anything contained in Article 13, no law giving effect to the policy of the state towards securing 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); 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 the article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.”
Thus the protection which would now be available would be in respect of the policy of the State. The words “policy of the State” would include directive principles. The effect of Mr. Zaiwalla’s and Mr. Chinoy’s arguments would therefore be that Article 31-C as it now undoubtedly stands would be of a very wide nature. If the argument of Mr. Zaiwalla and Mr. Chinoy were to be accepted, then that would amount to negativing the majority judgment in Minerva Mill’s case. It would amount to saying that majority judgment in Minerva Mill’s case held that it was beyond the Legislative competence of the Parliament to destroy the basic structure of the Constitution and yet by declaring the Constitution (42nd Amendment) Act void they brought into effect an Article which destroyed the basic structure of the Constitution. In our view, such an argument must be rejected.
46. Even on merits we see no substance in this argument. As has been set out by the Supreme Court in the Indian Express case (supra) whether the old Act gets revived or not depends on the intention of the Legislature, the competence of the Legislature and totality of the circumstances. In this case it is very clear that it was never the intention of the Legislature to abolish Article 31-C completely. The Supreme Court, in Minerva Milt’s case, has held that it was beyond the Legislative competence to amend in the manner as proposed by the Constitution (42nd Amendment) Act- If that be so, then the unamended Article 31-C never stood substituted nor deleted. It must be deemed that the portion sought to be included by the Constitution (42nd Amendment) Act never came into existence and never modified or repealed on substituted unamended Art 31-C which always continued in force. For this reason also it is not possible to accept the submission.
47. It is also not possible to accept submission that the protection of Article 31-C is not available because the said Impugned Act is retrospective in nature. On the date, the said Impugned Act came into force, i.e. 11th May 1987, Article 31-C was in force. Therefore its protection would be available to the said Impugned Act. It makes no difference that the said Impugned Act is retrospective in nature. If any authority was required for this proposition, then it can be found in Jilubhai’s case (supra). In that
case also the concerned Legislation was retrospective in nature. Yet the Supreme Court upheld its validity on basis of Articles 31-A and 31-C of the Constitution.
48. Mr. Chinoy next submitted that the respondents cannot claim that the said Impugned Act is protected by Article 31-A(1)(c) of the Constitution. Mr. Chinoy submitted that the petitioners had got concession under Decrees of the Portuguese Government. He submitted that in Writ Petition No. 151/B of 1975, a Division Bench of this Court, has held that these concessions are not leases. He submitted that it was clear that these concessions were not Agreements or licences. Mr. Chinoy submitted that the protection of Article 31-A(1)(c) would be available only if the concerned Legislation was for purposes ol extinguishing or modifying Agreements, Leases or Licences. He submitted that if there is no Agreement or. Lease or Licence, then the protection of Article 31-A(1)(c) is not available. He submits that any Legislation which seeks to extinguish or modify “rights not arising from Agreements or Leases or Licencees, would have to stand the test of Article 14 and 19 of the Constitution.
49. As against this Mr. Andhyarujina submits that land, minerals, electricity, water etc. are our Nation’s basic resources and wealth. He submitted that Article 31-A was introduced in 1951, with retrospective effect from date of enactment of our Constitution, in order to protect out Nations basic and natural resources and wealth. He submitted that this Article was enacted to protect Legislations dealing with our basic and natural resources from challenges on grounds that they violate Articles 14, 19 and 31 (as it then stood). Mr. Andhyarujina submitted that the said Impugned Act did not violate any rights under Articles 14 and 19(1)(g). He submitted that, under the concession granted to them, the petitioners were exercising special privileges and rights over our basic and natural resources. He submitted that the Government of India had never recognised those concessions or the rights given under them. He submitted that in the entire country, the petitioners constituted a small pocket with special privileges and rights. He submitted that the said Impugned Act sought to do away with the inequality and to treat all persons, including the petitioners, as equal before the law. He submitted the said Impugned Act sought to do away with this inequality. He submitted that the said Impugned Act is thus in keeping with the Article 14 of the Constitution.
50. Mr. Andhyarujina submitted that the respondent’s right to carry on business has not been affected in any manner by the said Impugned Act. He submits that the respondents are at liberty to carry on their business. He submitted that therefore, there was in fact no violation of Article 19(1)(g).
51. Mr. Andhyarujina submitted that even presuming Articles 14 and 19(1)(g) applied, still the said Impugned Act would be protected by the provision not just of Article 31-C but also by Article 31-A(1)(c).
52. Mr. Andhyarujina submitted that an interpretation must be one which would further the object of the legislation and which would uphold the intention for which that legislation was enacted. He submitted that the purposes of Article 31-A is to give to the legislature power, amongst other things, to modify rights like zamindari rights and/ or concessions which had been granted to various parties and which in essence are outside the purview of the Indian Law. He pointed out that all the Decrees on which the petitioners rely show that they are in effect grants. He submitted that under the Portuguese Law, the definition of a mining concession is a document which has been granted. He submitted that as the concessions are in the nature of a grant, they are either Agreements or Licences or Leases as understood in the Indian Law. Mr. Andhyarujina relied upon section 105 of the Transfer of Property Act which reads as follows :
“Section 105. A lease of immovable property is a transfer of a right to enjoy
such property, made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised, or of money, a
share of crops, service or any other thing of value, to be rendered
periodically or on specified occasions to the transferor by the transferee,
who accepts the transfer on such terms.
The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.”
53. Mr. Andhyarujina submitted that the various concessions have all the ingredient of a “Lease” as defined under section 105 of the Transfer of Property Act. He submitted that this is clear from the various grants which have been annexed to the various petitions. He submits that this is also clear from the fact that those grants show that, not just rights but duties and obligations are also cast on the petitioners. He also pointed out that under the Portuguese Law no proprietary rights in the land has been given to the petitioners. Mr. Andhyarujina submitted that therefore, the construction must be one by which the intention of the legislature is furthered.
54. In support of his submission Mr. Andhyanujina relied upon the case of Shri Shri Tarakeshwar Sio Thakur Jiu v. Bar Dass Dey and Co. and others . In this case, the Supreme Court has held that in ascertaining the real character of a document, regard must be had to the substance of the transaction and not merely to the words or the form in which it is dressed. In this case, the Supreme Court held that in India a settlement of the character of a mining lease is regarded as “lease”. The Supreme Court has held that a mining lease may not meticulously and strictly satisfy, in all cases, all the characteristics of a lease as defined in the Transfer of Property Act. The Supreme Court has held that nevertheless, in the legally accepted sense, a mining lease has always been regarded as a “Lease” in this Country. The Supreme Court has held that a right to carry on mining operations in land, to extract a specified mineral and to remove and appropriate that mineral, is a ‘right to enjoy immoveable property’ within the meaning of section 105, more so, when it is coupled with a right to be in its exclusive possession for a specified period. The Supreme Court has held that if the subject-matter of the lease is mineral land or a sand-mine, it could only be enjoyed and occupied by the lessee by working it as indicated in section 108 of the Transfer of Property Act, which regulates the rights and liabilities of lessors and lessees of immoveable property. The Supreme Court also held that the essence of mining operation is that it must be an activity for winning a mineral, whether on surface or below the surface of earth.
55. Mr. Andhyarujina also relied upon the authority in the case of (M/s. Gujarat Pottery Works Private Ltd. v. B.P. Sood and others) . In this case by an Agreement dt. 2nd December 1939, a perpetual right to excavate white clay from a specified area and to take it away, had been granted. The Controller of Mines modified that Agreement by reducing its period. The question was whether this action, which was taken under the Mining Leases (Modification of Terms) Rules as framed under the MMRD Act, could be sustained. This action and the virus of the rules was challenged on the ground that they violated Articles 14 and 31. The question before the Supreme Court was whether this could be considered to be a lease and therefore get protection under Article 31-A(1)(e). The Supreme Court held that Constitutional provision like Article 31-A(1)(e) should be given a wider meaning as the Constitution-makers would be using it to cover cases
which deal with the obtaining of minerals. The Supreme Court held that the object of the Constitutional provision was to make a law providing for the extinguishment or modification of an Agreement, lease or licence in connection with mineral rights immune from the provisions of Articles 14, 19 and 31. The Supreme Court held that the word “winning” in Article 31-A(1)(e) must be construed to mean getting or extracting minerals from mines and other incidental purposes. The Supreme Court held there could be no logical reason for not covering the leases which allowed the working of the mines after the minerals in the mines had been won, in the narrow sense. The Supreme Court held that modification of the leases and governing the working of the mines would be necessary in public interest.
56. Mr. Andhyarujina also relied upon Stroud’s Judicial Dictionary, Fifth Edition, pg. 1119 wherein a grant is defined as under :
GRANT. (1) “This word is taken largely, where any thing is granted or passed from one to another. And in this sense it doth comprehend feoffments, bargains and sales, gifts, leases, charges, and the like; for he that doth give, or sell, doth grant also. And thus it is sometimes in writing or by deed, and sometimes it is by word without writing. But the word being taken more strictly and property, it is the grant, conveyance, or gift, by writing, of such an incorporeal thing as lieth in grant, and not in livery and cannot be given or granted by word only without deed or it is the grant by such persons as cannot pass anything from them but by deed, as the King bodies corporate, etc. And this albeit it may be made by other words, yet it is most commonly made by this word (grant) as being most proper to this purpose”.
57. Mr. Andhyarujina also relied upon the book on Dictionary of Modern Legal Usage by Bryan A. Garner, Second Edition, pg. 391 wherein a grant is defined as under:
Grant —(1) the formal transfer of real property; (2) the document by which such a transfer is effected; or (3) the property transferred. Sense (1) contains a historical AMBIGUITY. Originally, the verb grant was used only when the grantor conveyed a nonfreehold interest- that is, carved out a smaller interest-such as an easement or a lease. But today the verb is commonly used when the grantor’s full interest, such as a fee simple absolute, is being conveyed.
58. Mr. Andhyarujina submitted that Article 31-A(1)(c) safeguards legislation which is meant for the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning any mineral or mineral oil or the premature termination or cancellation of any such agreement, lease or licence. He submits, that even though the concession granted to the petitioners may be termed as “granted”, it is clear that under the Portuguese Law, the petitioners were not conferred any proprietary rights in the lands. He submits that the grants show that whilst certain rights were conferred on the petitioners, there were corresponding duties and obligations which were cast on the petitioners. He submitted that the grants conferred a right on the petitioners to mine and to remove minerals. He submits that, in the words of Supreme Court this amounted to winning minerals. He submitted that in effect the petitioners have rights under the grant which are in the nature of agreements or lease or licence. He submitted that the whole purpose of the said Impugned Act is to extinguish and modify an inequitable situation wherein certain privileged people like the petitioners enjoy special rights and privileges. He submitted.
that the judgment in Writ Petition 151/B of 1975 was based on a concession made by the Central Government that they did not recognise these concessions. He submitted that the Division Bench held that these were not leases under the MMRD Act because they were not recognised by the Central Government. He submitted that that does not detract from position that all these concessions create property rights wherein a right to enjoy certain property in perpetuity and a right to transfer has been conferred. He submitted that all these concessions meet the requirement of a ‘Lease’ as defined in section 105 of the Transfer of Property Act. He submits that they are in effect mining leases as understood in the broad sense of the term. He submitted that as they fall within the definition of an agreement or lease or licence they are covered by the provision of Article 31-A(1)(e). He submitted that in any event the Court must give an interpretation which furthers the intention of the Legislature. He submitted that the intention of the Legislature being to give protection to Acts which seek to modify or extinguish such rights, this intention must not be defeated by a narrow construction.
59. It is correct that in Writ Petition No. 151/B of 1995, it has been held that these concessions are not leases. However, a reading of that judgment makes it very clear that this finding is based upon the stand then taken by the Central Government i.e. that they did not recognise these concessions or grants. As the Government did not recognise these concessions, they obviously could not be leases which could be modified under the provisions of the MMRD Act. In that judgment the true nature of the grant was not considered. The question whether these grants were in the nature of an agreement or a lease or a licence as understood in Indian Law was not considered at all. As seen from the judgment of the Supreme Court in the cases of M/s. Gujarat Pottery Works Private Limited and Shri Shri Tarakeshwar Sio Thakur Jiu (supra), it is the substance and not the form which has to be looked at. Further as stated by the Supreme Court all mining leases in India are in the nature of “Leases” within the meaning of the term Teases” as used in section 105 of the Transfer of Property Act. What the petitioners have been granted under the various grants, is a right to mine and to remove minerals. In the words of the Supreme Court this is a right of “winning” minerals. Even though called “Concessions”, they are in effects “grants”. They have all the characteristic of a “Lease”. The object and intent of the Legislature cannot be defeated by construing the provisions of the Constitution narrowly. In our view, it is very clear that the said Impugned Act is a Legislation which provides for extinguishment and modification of right accruing under the Agreements i.e. grants which, having been granted for the purposes of winning minerals, are in the nature of “Leases’. It that be so, then the said Impugned Act is protected by the provision of Article 31-A(1)(e). The submissions that Article 31-A(1)(e) cannot apply stands rejected.
60. Mr. Zaiwalla took the Court through the facts set out hereinabove. He submitted that this Act is penal and confiscatory in nature. He submitted that this is very clear from the provisions of the said Impugned Act. He pointed out section 2(c), 2(g). 3, 4, 5, 6, 15, 19 and 22. He submitted that under section 6, an amount is ostensibly being paid. He submitted that on a reading of the said Impugned Act, it is clear that this payment is illusory. He submitted that section 15, provided that any person who contravenes the provisions of this Act shall be punishable with imprisonment for a term which may extend to two years or with line which may extend to two thousand rupees or with both. He submitted that the penalty which is imposed, under section 15, is for contravening the provisions of the said Impugned Act. He submitted that the only provision, in the sand Impugned Act, which could be contravened was section 22. Mr. Zaiwalla pointed out that by section 22, with retrospective effect from 20th December
1961, every petitioner had become liable to pay dead rent and/or royalty. He submitted that irrespective of whether or not a petitioner has used the mine or earned anything from it for a number of years a retrospective liability has been imposed. He submitted that under the Portuguese Concession, the maximum that could be held by a person was 10 hectors. He submitted that under the MMRD Act a maximum of 10 sq. kilometers can be covered by way of a mining lease. He submitted that a person holding a mere 10 hectors was being sought to be equated with a person holding 10 sq. kilometers and charged dead rent and/or royalty on the same basis.
61. Mr. Zaiwalla fairly submitted that if Article 31-C is available to the respondents, then Articles 14 and 19 may not be applicable and available to the petitioners. He submitted that even though Article 14 and 19 may not be available, Article 300-A would be applicable to such a case. He submitted that Article 300-A would be applicable because the petitioners were being deprived of their property rights. Mr. Zaiwalla submitted that the wordings of Article 300-A were similar to Article 265. He submitted that under both the Articles the respondents could only act under an authority of law.
62. Mr. Zaiwalla relied upon the authority in the case of Jilubhai Nanbhai Khachar, etc. v. State of Gujarat and another, etc. . In this case, the Constitutional validity of the Bombay Land Revenue Code and the Land Tenure Abolition Laws (Gujarat Amendment) Act was challenged. In this case the appellants were the successors of certain Brakhalidars and Girasdars. The facts were that erstwhile Saurashtra State had consisted of 220 princely States which were ruled by Sovereign Rules in their own rights. The rulers had entered into agreements and created a class of interested persons known as “Barkhalidars or Girasdars”. Various parcels of land together with all rights in or interests over those lands were granted for cultivation on payment of certain revenue. The Impugned Legislation sought to abolish all rights so created with retrospective effect from 1st May 1960 i.e. the date on which the State of Gujarat was formed. To that extent this case if similar to our case. The Supreme Court held that in pith and substance, the predominant purpose of the Amendment Act is to extinguish the pre-existing rights, title and interest in the land which includes the mines, minerals and quaries held by Girasdars or Barkhahdars and vest them in the State for public use. The Supreme Court held that the Impugned Legislation was immune from attack by operation of Art. 31-A and Art. 31-C. The Supreme Court held that a Legislation may be prospective or retrospective. The Supreme Court held that as the Impugned Legislation had been given retrospective effect to the date of formation of State of Gujarat, it was valid. In this case, whilst considering Article 300-A, the Supreme Court held as follows :
“48. “The word “properly” used in Article 300-A must be understood in the context in which the sovereign power of eminent domain is exercised by the State and expropriated the property. No abstract principles could be laid. Each case must be considered in the light of its own facts and setting. The phrase ‘deprivation of the property of a person’ must equally be considered in the fact situation of a case. Deprivation connotes different concepts. Article 300-A gets attracted to an acquisition or taking possession of private property, by necessary implication for public purpose, in accordance with the law made by the Parliament or of a State Legislature, a rule of a statutory order having force of law. It is inherent in every sovereign State by exercising its power of eminent domain to expropriate private property without owner’s consent. Prima facie, State would be the Judge to decide whether a purpose is a public purpose. But it is not the sole Judge. This will be subject to judicial review and it is the duty of the Court to determine whether a particular purpose is a public purpose or not. Public interest has always been considered to be an essential ingredient of public purpose. But every public purpose does not fall under Article 300-A nor exercise of eminent domain an acquisition or taking possession under Article 300-A. Generally speaking preservation of public health or prevention of damage to life and properly are considered to be public purposes. Yet deprivation of property for any such purpose would not amount to acquisition or possession taken under Article 300-A. It would be by exercise of the Police power of the State. In other words, Article 300-A only limits the power of the State that no person shall be deprived of his property save by authority of law. There is no deprivation without any sanction of law. Deprivation of any other mode is not acquisition taking possession under Artical 300-A. In other words, it there is no law, there is no deprivation. Acquisition of mines, minerals and quarries is deprivation under Article 300-A.
49. The question then is whether the owner of the property is entitled to compensation i.e. just equivalent or indemnification to the owner of the property expropriated. It is common knowledge that when the State exercises its executive power to acquire private property, it is under the Land Acquisition Act. 1894 or similar State laws. Acquisition thereunder though is for public purpose, payment of compensation at the prevailing market value as on the date of the relevant notification published in the official gazette is sine qua non. The State when exercises 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 300-A per force brings it in operation? Since Article 30(2) itself provided payment of compensation, when property was acquired preceding 251h 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 arise whether payment of compensation is a sine qua non for deprivation of property under Article 300-A? In any democracy governed by rule of law, Constitution is the supreme law of the land…..
50. All modern constitutions of democratic character provide payment of compensation as the condition to exercise the right of expropriation. Common wealth of Australia Act, a French Civil Code (Article 545), the 5th Amendment of the Constitution of U.S.A. and the Italian Constitution provided principles of ‘just terms’ ‘just indemnity’, ‘just compensation’ as reimbursement for the property taken, have been provided for. As pointed out in Halsbury’s laws of England that “when Parliament has authorised the compulsory acquisition of land it is almost invariably provided for payment of a money compensation to the person deprived of his interest in it.” Exception 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 of judicial scrutiny.”
63. Mr, Zaiwalla submitted that this authority shows that acquisition must be for a public purpose. He submitted that even though adequate compensation need not be paid, there must be some payments. He submitted that this authority shows that the payment could not be illusory. He submitted that this authority shows that the relevance of the principles on which property is sought to be acquired are amenable to judicial review.
64. Mr. Zaiwalla then relied upon the authority in the case of Basantibai Fakirchand Khetan and others v. State of Maharashtra and another . In this case, a Division Bench of this Court whilst, considering the provision of Article 300-A of the Constitution, held that the words “Authority of Law” means the rule of law in other words the law providing for deprivation of property must be just, fair and reasonable. It was held that the entire democratic structure of the Country was based upon the concept of rule of law and it was not possible to imagine that a legislation would provide for acquisition of private property for a purpose which was not a public purpose. It was also held that even though the Article 31 was deleted from the Chapter of fundamental rights, the Parliament did not confer absolute right on the legislature to deprive the citizen of his property by merely passing of a legislation without complying with the requirement that the deprivation is for a public purpose and on payment of an amount which is not illusory. It was held that in spite of the deletion of Article 31, the Constitutional obligation to pay adequate money to the expropriated owner was not taken away. It was further held that even under Article 300-A, the legislation providing for deprivation of property must be just, reasonable and fair, Mr. Zaiwalla submitted that even though this decision is overruled by the Supreme Court these principles have’ been accepted by the Supreme Court.
65. At this stage itself paragraph 15 of the judgment of Supreme Court may be noted. It reads as follows ;
“15. We next proceed to consider a contention lacking in merit which has unfortunately been accepted by the High Court namely that the Act infringes Article 300-A of the Constitution. Article 300-A was not in force when the Act was enacted. Article 31(1) of the Constitution which was couched in the same language was however in force. Article 31-C gave protection to the Act even if it infringed Article 31. Let us assume that the action of acquiring private properties should satisfy new Article 300-A also because the proceedings to acquire the land started in the instant case after Article 300-A came into force. Let us also assume that a law should be fair and reasonable and not arbitrary and that a law should also satisfy the principle of fairness in order to be effective and let us also assume that the said principle of fairness lies outside Article 14. We are assuming all these without
deciding these questions, since the action can be upheld even if all these assumptions are well founded. What is it that is being done now in the instant case? Certain vacant lands lying inside a municipal area are being acquired for providing housing accommodation after paying all amount which is computed in accordance with a method considered to be a fair one by courts. The purpose for which the lands are acquired is a public purpose. The owners are given opportunity to make their representations before the notification is issued. All the requirements of a valid exercise of the power of eminent domain even in the sense in which it is understood in the United States of America where property rights are given greater protection than what is required to be done in our country are fulfilled by the Act. Yet the High Court, with respect, grievously erred in holding that even assuming that the provisions of Chapter V of the Act are protected from challenge under Articles 14, 19 and 31 of the Constitution due to the applicability of Article 31-C of the Constitution still the impugned provisions of the Act are required to be struck down as the said provisions are neither just nor fair or reasonable”.
In our view , the above paragraph does not show that the Supreme Court is accepting the principles laid down by the Division Bench. In our view, the Supreme Court is critical of the decision of this Court. The other authorities of the Supreme Court clearly show that under Article 300-A, it is not necessary that the law should be just, fair and reasonable or that there should be adequate compensation.
66. Mr. Zaiwalla also relied upon the authority in the case of Lakshmimoni Das and others v. State of West Bengal and others . In this case, Full Bench of the Calcutta High Court held that Article 300-A does not expressly provide that no compensation need be paid for acquisition of property. The Full Bench held that the decision of the Supreme Court and the consequential amendments of the Article 31 of the Constitution and the ultimate abolition of the same from Part III of the Constitution and introduction of Article 300-A show that it is no longer an intention of the legislature that the right to get compensation for acquisition of property is a fundamental right. The Full Bench held that if no compensation is provided for in a legislation for acquisition of the property then the same may in effect amount to confiscation. The Full Bench held that the legislature should not lose sight of this aspect in enacting the legislation for acquisition of property.
67. Mr. Zaiwalla also relied upon the case of Kunnathat Thathunni Moopil Nair etc. v. State of Kerala and another . Mr. Zaiwala fairly pointed out that this was a case under Article 265 of the Constitution. He submitted that this authority shows what is meant by “authority of law”. Mr. Zaiwalla submitted that this shows that a legislation cannot be confiscatory and penal in nature. In this case, the Supreme Court held that the concerned legislation, in so far as it seeks to recover amounts far in excess of the income, had the effect that the person may not be in a position to pay. The Supreme Court held that legal consequences of making a default in the payment of the sum of money would be that the money would be realised by the coercive process of law. The Supreme Court held that the property would be sold at an auction and may not fetch even the amount for the realisation of which it was being sold by public auction. The Supreme Court held that in the absence of a bidder forthcoming to bid the State ordinarily becomes the auction purchaser for
the realisation of the outstanding taxes. The Supreme Court held that it is clear that apart from being discriminatory and imposing unreasonable restrictions on holding property, the Act is clearly confiscatory and penal in nature. The Supreme Court held that for this reason the concerned Act was unconstitutional.
68. Mr. Zaiwalla submitted that in this case also non-payment of dead rent and/or royalty for the past over 20 years may result in confiscation and cancellation of rights of the petitioners. He submitted that in this case it could also result in a penal consequence of a sentence of two years or a fine of two thousand rupees or both. He submitted that paltry amounts which have been given to each petitioners under section 6, become illusory in view of huge claims which have been made against each petitioners under section 22. He submitted that in the guise of payment of paltry amounts, recovery is sought of huge amounts. He submitted that the Act and the scheme of the Act being one, the said Impugned Act should be held to be unconstitutional and struck down. Mr. Zaiwalla submitted that in the event of the Court not accepting the submission that the said Impugned Act is unconstitutional, then in any event section 22 of the said Impugned Act should be struck down as being unconstitutional in as much as it is confiscatory and penal in nature.
69. Mr. Zaiwalla further submitted that the provisions of section 22, in so far as it has been given a retrospective effect, cannot be said to be in furtherance of the ownership and control of the material resources of the community for distribution to subserve the common good. He submitted that section 22, in so far as it has been given a retrospective effect cannot be said to be towards prevention of concentration of wealth and means of production to the common detriment. He submitted that from 1961 till 1987, the mines were either left idle or excavated, the Minervas removed and sold or not removed. He submitted that retrospectively these factual events could not be set back and/or remedied. He submitted that retrospectively levying a dead rent and/or royalty cannot be said to be towards securing the principles specified in Article 39(b) or (c) Mr. Zaiwaila also pointed out that all petitioners had been paying royalty and taxes, as due under their respective concessions, and that even after 1961 these were accepted by the respondents.
70. In support of his submission that it is open to a Court to hold a portion of an Act to be ultra vires and /or to be not protected by Art 31-A or 31-C Mr. Zaiwalla relied upon the cases of Minerva Mills Ltd. and others v. Union of India and others. (supra) and Tinsukhia Electric Supply Co. Ltd. v. State of Assam and others .
71. Mr. Zaiwalla submitted that levying of dead rent from 1961 is also unreasonable and discriminatory. He submitted that even if the MMRD Act had been applicable from 1961 onwards still till 1972 there was no provision for payment of dead rent under the MMRD Act. He submitted that therefore all persons who were covered by MMRD Act would not have paid any dead rent during the period 1961 to 1972. He submitted that now by giving retrospective effect, the petitioners are being coerced to pay dead rent for the period 1961 to 1972.
72. Mr. Zaiwalla further pointed out that under the MMRD Act there was no penal liability for non-payment of dead rent and/or royalty. He submitted that therefore under the MMRD Act, even though the dead rent or royalty was no paid, a person could not be imprisoned and/or fined. He submitted that for the first time by section 15 of the said impugned Act, a penal liability is imposed. He submitted that a penal liability is being imposed for a retrospective liability now being laid down under section 22. He submitted that all these clearly show that the law is confiscatory and penal in nature, apart
from being unreasonable. He submitted that the said Impugned Act or at least section 22 should be struck down. He submitted that in any event section 22 should be struck down to the extent that it provides for retrospective levy of dead rent and/or royalty.
73. Mr. Chinoy supported Mr. Zaiwalla and adopted the arguments made by Mr. Zaiwalla. He submitted that a declaration that the Act is for giving effect to the policy of the State towards securing the principles specified in Clauses (b) and (c) of Article 39 of the Constitution is not sufficient. He submitted that the Court must be satisfied that the Legislation is for the purposes of giving effect to the policy of the State towards securing the principles specified in Clause (b) and (c) of Article 39 of the Constitution.
74. He submitted that if the Court came to the conclusion that the Legislation was not for the purposes of giving effect to the policy of the State towards securing principles specified in Clauses (b) and (c) of Article 39 of the Constitution, then the protection given under Article 31-C would not apply. He submitted that there must be a real and rational connection between what is sought to be achieved by the said Impugned Act and the policy of the State towards securing the principles specified in Clauses (b) and (c) of Article 39 of the Constitution.
75. In this behalf he relied upon the case of Assam Sillimanite Ltd. and another v.
Union of India and others . In this case,
the Supreme Court has held as follows:
“25. As concluded by Chandrachud, J., in Kesavananda Bharati (supra), though the Court has no power to invalidate a law described in Article 31(2) on the ground that the amount fixed or determined for compulsory acquisition is not adequate, such a law can be questioned if the amount fixed is illusory or the principles stated for determining the amount are wholly irrelevant for fixing or if the power of compulsory acquisition is exercised for a collateral purposes or the law offends other principles of Constitution or the law is in the nature of a fraud on the Constitution.
26. However, in a case where Article 31-C is attracted the Court cannot interfere even if no compensation has been provided or what has been provided for is illusory. When Article 31-C is attracted, the challenge on the basis of the alleged illusory nature of the amount does not survive at all. The purpose of Article 31-C is , amongst others, to exclude Article 31, as it then stood. Article 31-C was inserted by the Constitution (Twenty-fifth) Amendment Act, 1971 with the object of getting over the difficulties placed in the way of giving effect to the Directive Principles in Part IV, by judicial decisions. As it originally stood, it shielded from any challenge, law enacted for implementing the directives in Clauses (b) and (c) of Article 39 on the ground of violation of Articles 14, 19 and 31.
27. Notwithstanding the declaration of the Legislature that any particular Act has been made to implement the directives specified in Article 39, it would be open to the Court to ignore such declaration and to examine the constitutionality of the same. The declaration cannot be relied on as a cloak to protect the law bearing no relationship with the objectives mentioned in Article 39.
“28. The extent and scope of judicial review of Legislation where there is a declaration under Article 31-C of the Constitution which enjoins that no law containing a declaration that it is for giving effect to such a policy
shall be called in question in any Court on the plea that it does not give effect to such a policy has been considered in Kesavananda Bharati, (supra). On a analysis of the majority judgment therein Sabyasachi Mukharji, J., (as he then was) observed in Tinsukhia Electric Supply Company case, (supra) that the declaration in Article 31-C does not exclude the jurisdiction of the Court to determine whether the law is for giving, effect to the policy of the State towards securing the principles specified in Article 39(b) and (c). Mathew, J., had observed in Kesavananda Bharati (supra) that in order to decide whether a law gives effect to the policy of the State towards securing the directive principles specified in Article 39(b) or (c), a Court will have to examine the pith and substance, the true nature and character of the law as also its design and the subject matter dealt with by it together with its object and scope. If a law passed ostensibly to give effect to the policy of the State is, in truth and substance, one for accomplishing an unauthorised object, the Court would be entitled to tear the veil created by the declaration and decide according to the real nature of the law.
29. It is, therefore, necessary notwithstanding the declaration contained in section 30 of the Act, to consider whether there is a nexus between the Act and the policy of the State declared in Article 39(b) or (c). The test to determine whether the law is enacted for giving effect to a directive is to determine whether there is real and rational connection between the law and Directive Principle.”
76. Mr. Chinoy submitted that the said Impugned Act was one whole Act which was not divisible. He submitted that by the said Impugned Act, what is sought to be done is to make a declaration effecting the rights of the petitioners and to collect monies retrospectively with effect from 1961. He submitted that there is no real or rational connection between the provisions of the said Impugned Act and the policy of the State as contained in Article 39(b) and/or (c). He submitted that the sole and the only purpose of the said Impugned Act is to make a levy and to validate that levy;
77. Mr. Chinoy further submitted that generally an Act is given a retrospective effect in order to validate something which has been done earlier but which the Court declared as invalid or illegal. He submits that those sorts of retrospective legislations are accepted by the Court. He submitted that this is not one such retrospective legislation. He submitted that this legislation has been given a retrospective effect with the sole intention of making a levy and validating that levy with a retrospective effect.
78. Mr. Chinoy submitted that the petitioners have for the past 20 years arranged their affairs on the basis that under their concessions there was no necessity to work the mines. He submitted that as there was no obligation to work the mines or to pay dead rent, many of the petitioners may not have worked the mines and earned anything from it. He submitted that even when the mines have been worked, the entire area may not be worked. He submitted that large areas may be left unworked as there was no obligation to work the mines and pay dead rent. He submitted that the petitioners had arranged their affairs on the footing that their rights are governed by the concessions. He submitted that the petitioners had paid all rates and taxes under the concessions. He submitted that the petitioners cannot now be retrospectively affected by the levy of dead rent and/or royalty for the past over 20 years. He submitted that the de facto position cannot now be altered. He submitted that for all these years, the petitioner had remained in possession and had either mined or not
mined the areas in possession. He submitted that for all these years the Minervas were removed or not removed. He submitted that the factual possession could not be retrospectively altered now. He submitted that therefore this does not now serve the purpose of ownership and control of material resources for purposes of distributing to subserve the common good. He submitted that distribution for common good cannot now be served by a retrospective legislation seeking to levy only dead rent and/or royalty. He submitted that similarly de facto possession for the last over 20 years does not get changed and the retrospective levy of dead rent and or royalty cannot prevent a concentration of wealth or means of production for the last over 20 years. He submitted that it is therefore, very clear that the purpose and effect of the said Impugned Act is not towards securing the principles laid down in Article 39(b) and/or (c). He submitted that the real purpose is merely to lay down a levy and to validate that levy. He submitted that there is no real or rational connection with Article 39(b) and/or (c).
79. Mr. Chinoy submitted that the said Impugned Act places unreasonable restrictions on the right to carry on trade and business. He submitted that the petitioners rights under Article 19(1)(g) are thereby affected. He submitted that the principles which govern such situation are set out by the Supreme Court in the case of The State of Madras v. V.G. Row, the Union of India and the State of Travancore-Cochin, Interveners . In this case, the Supreme Court has held that the Court should consider factors such as the duration and the extent of the restrictions and also the circumstances under which and the manner in which their imposition has been authorised. The Supreme Court has held that the nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should also be considered. The Supreme Court has held that in evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the Judges participating in the decision should play an important part. Mr. Chinoy submitted that this case shows that the nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing circumstances must all be considered.
80. Mr. Chinoy also relied upon the authority of the Supreme Court in the case of Chintamanrao and another v. The State of Madhya Pradesh . In this case, the Supreme Court has held that the restriction must be a reasonable restriction. The Supreme Court has held the phrase “reasonable restriction” connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The Supreme Court has held that the word ‘reasonable’ implies intelligent care and deliberation, that is the choice of a course which reason dictates. The Supreme Court has held that the legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and the social control permitted by Clause (6) of Article 19, must be held to be wanting in that quality.
81. Mr. Chinoy also relied upon the authority of Supreme Court in the case of Saghir Ahmad and another v. State of U.P. and others . In this case, the Supreme Court has held that the question
whether the restrictions are reasonable or not would depend on the nature of the trade and the conditions prevalent in it. The Supreme Court has held that when an enactment on the face of it is found to violate a fundamental right guaranteed under Article 19(1)(g) of the Constitution, it must be held to be invalid unless those who support the legislation can bring it within the purview of the exception laid down in Clause (6) of the article. The Supreme Court has held that the if the respondents have any material before the Court to establish that legislation comes within the permissible limits of Clause (6), it is not for the appellants to prove negatively that the legislation was not reasonable and was not conducive to the welfare of the community.
82. Based on the above authorities Mr. Chinoy submitted that in every case, the Court has to consider the effect which a legislation has on the rights of a party, the nature of those rights, the underlying purpose of the restriction, the extent and urgency of the evil sought to be remedied. He submitted that the Court must also take into account the effect on the citizen and the disproportion of the imposition, if any. He submitted that it is the substance and practical results which must be looked at. He submitted that in such cases, the burden is on the respondents to show that the legislation is reasonable. He submitted that in this case, no principles have been shown as to how compensation payable has been worked out. He submitted that the reasonableness of the said Impugned Act has not been shown to the Court. He submits that none of the above requirements have been met. He submitted that as no material has been placed before this Court, the Court must strike down the said Impugned Act.
83. Mr. Andhyarujina submitted that the said Impugned Act must be looked at in the back ground then prevailing, and mischief sought to be avoided. Mr. Andhyarujina pointed out the above mentioned facts. He submitted that Goa had been liberated on 19th December 1961. He submitted that the mining concessions had been granted by the Portuguese Government in 1906. He submitted that these were in perpetuity and were transferable. He submitted that in the rest of India, the MMRD Act came into force with effect from 1957. He submitted that at no stage, the Central Government recognised these concessions or grants. He fairly stated that by virtue of the Ordinance 2 of 1962 and Act 1 of 1961, the existing law continued to apply. He submitted that merely because the existing law continued to apply did not mean that all rights of all private citizens were also recognised. He submitted that the territories of Goa, Daman and Diu became Union Territories with effect from 28th November 1962. He submitted that it became absolutely essential that the privileged position, enjoyed by persons like the petitioners, be no longer continued. He submitted that every body had to be brought on a par with citizens in the rest of India. He submitted that it is with a view to (a) bring equality; (b) control and regulate the material resources of this Country and (c) regulate the operation of our economic system in a manner which did noi result in a concentration of wealth and means of production to the common detriment, that the said Impugned Act was enacted. He submitted that the intention was to make the provisions of the MMRD Act applicable to the petitioners. He pointed out that earlier notifications had been issued and actions taken under the MMRD Act. He submitted that those resulted in writ petitions including Writ Petition Mo. 151-B of 1975 being filed and the judgment dated 29th August 1983 being passed. He submitted that that judgment came to be passed only on the stand taken by the Central Government that they did not recognise these concessions. He submitted that because of this stand it was held that these were not leases within the meaning of term as defined in the MMRD Act. He submits that the judgment dated
29th August 1983 establishes that the Central Government never recognised the concessions. He submitted that the petitioners must also be deemed to have accepted this position. He submitted that this did not mean that these were not leases within the meaning of term as defined under the Transfer of Property Act.
84. Mr. Andhyarujina pointed out that each of the Portuguese Decree, on which the petitioners relied, showed that it was a grant. He submitted that under Article 14 of the Portuguese Law, the concession of an ore bed did not imply possession of the surface. He submitted that certain rights and reciprocal obligations had been created. He pointed out that under Article 129 of the Portuguese Law, mining taxes were two kinds; one being a fixed tax and the second being a proportional tax. He submitted that these provisions were analogous to the provisions under the MMRD Act, 1957. He submitted that section 2 of the MMRD Act provided that it was in public interest that the Union should take under its control the regulation of mines and the development of Mineral. He submitted that under section 3-A of the MMRD Act, the term “minerals” included all minerals except mineral oils. He submitted that under section 4 of the MMRD Act any prospecting licence and/or a mining lease had to be applied for and granted. He submitted that under section 4-A of the MMRD Act the Government had power to terminate the lease. He submitted that the prospecting licence or mining lease could only be held by Indian citizens by virtue of section 5 of the MMRD Act. He pointed out that sections 7 and 8 of the MMRD Act laid down the period for which a prospecting licence or a mining lease could be granted. He submitted that under the Portuguese Law, the concession had been created in perpetuity. Mr. Andhyarujina pointed out that under section 9 of the MMRD Act, royalty had to be paid. He submitted that this royalty was like a proportional tax which was payable under the Portuguese Law. He submitted that dead rent was also payable by virtue of section 9-A of the MMRD Act. He submitted that section 16 of the MMRD Act provided that all mining leases granted before commencement of the MMRD Act, if in force at such commencement, were to be brought in conformity with the provisions of the MMRD Act. He submitted that section 16 could have been applied and should have been used as this section was for the purpose of bringing unity in the whole of India. He submitted that this was attempted to be done earlier but because the Central Government did not recognise the concessions the provisions of the MMRD Act could not be applied. He submitted that it was necessary as a matter of policy that all these rights be now brought under the Indian Law.
85. Mr. Andhyarujina relied upon Gosalia’s case (supra). He pointed out that in this case the Supreme Court had considered the position then existing in Goa. In this case the Supreme Court has held as follows :
“17. Before considering the merits of the respective contentions bearing on the effect of the provisions of the Administration Act and the Regulation, it is necessary to reiterate a well-settled legal position that when a new territory is acquired in any manner – be it by conquest, annexation or cession following upon a treaty – the new “sovereign” is not bound by the rights which the residents of the conquered territory had against their sovereign or by the obligations of the old sovereign towards his subjects. The rights of the residents of a territory against their State or sovereign come to an end with the conquest, annexation or cession of that territory and do not pass on to the new environment. The inhabitants of the acquired territory bring with them no rights which they can enforce
against the new State of which they become inhabitants. The new State is not required, by any positive assertion or declaration, to repudiate its obligation by disowning such rights. The new State is not required, by any positive assertion or declaration, to repudiate its obligation by disowning such rights. The new state may recognise the old rights by regranting them which, in the majority of cases, would be a matter of contract or of executive action; or alternatively, the recognition of old rights may be made by an appropriate statutory provision whereby rights which were in force immediately before an appointed date are saved. Whether the new State has accepted new obligations by recognising old rights, is a question of fact depending upon whether one or the other course has been adopted by it. And, whenever it is alleged that old rights are saved by a statutory provision, it becomes necessary Jo determine the kind of rights which are saved and the extent to which they are saved.
18. In Vajesingji Joravarsingji v. Secretary of State, 51 Ind. App 357 : A.I.R. 1924 P.C. 216 Lord Dunedin said in an oft-cited passage :
… when a territory is acquired by a sovereign State for the first time that is an act of State. It matters not how the acquisition has been brought about. It may be by conquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognised ruler. In all cases the result is the same. Any inhabitant of the territory can make good in the municipal Courts established by the new sovereign only such rights as that sovereign has through his officers, recognised. Such rights as he had under the rule of predecessors avail him nothing…..”
The decision of the Privy Council in Vajesingji, A.I.R. 1924 P.C. 216 and the decisions in similar other cases like Secretary of State v. Rustam Khan, 68 Ind. App 109 : A.I.R. 1941 PC. 64 were followed by this Court in Dalmia Dadri Cement Co. Ltd. v. C.I.T. ; State of Saurashtra v. Memon Haji Ismail Haji ; Jagannath Agarwala v. State of Orissa ; State of Saurashtra v. Jamadar Mohamad Abdulla ; Pramod Chandra v. State of Orissa. , . A discordant note was struck by Bose, J., who spoke for the Court in Virendar Singh v. The State of Uttar Pradesh ; but a 7-Judge Bench held by a majority, Subba Rao, J., dissenting in State of Gujarat v. Vora Fiddali that Virendra Singh’s case was decided wrongly. Five considered judgments were delivered in that case, four of which, on behalf of six learned Judges, affirmed the view of the Privy Council. Mudholkar, J., who delivered a separate judgment concurring with the majority on the point at issue before us, said :
“The rule of international law on which the several Privy Council decisions as to the effect of conquest or cession on the private rights of the inhabitants of the conquered or ceded territory are founded has become a part of the common law of this country, (page 590).”
19. We must accordingly proceed on the basis that the right, if any, which respondent 1 had against the Portuguese Government to obtain a mineral concession or a mining tease came to an end with the conquest of Goa by the Government of India on December 20, 1961. In the absence of any allegation that the right was re-granted either by a private agreement or by executive fiat, the sole question for our consideration is whether the Government of India is under an obligation to recognise the right, if any, of respondent 1 by reason of a statutory provision which saves that right.
26. These decisions on which Shri Sanghi relies may be considered as authority for the proposition that, as a general rule, laws which are in force in the annexed or conquered territory continue to remain in force after the conquest or annexation until they are altered or repealed. But the real question which will determine the controversy in these proceedings is whether the continuance, ipso facto of old laws after the conquest or annexation is tantamount to a recognition, without more, of the rights and privileges accruing under those laws. Secondly, the general rule is naturally subject to any specific provision to the contrary which the new Government may make. These questions are directly covered by the decision of this Court in Pema Chibar v. Union of India. and are no longer res integra.
27. In Pema Chibar the petitioner who was a resident of Daman, a former Portuguese territory, had obtained licence between October 9 and December 4, 1961 for the import of various goods. Those licences were valid for a period of 180 days. On December 20, 1961 the Portuguese territories of Goa, Daman and Diu were conquered by the Government of India, whereupon on December 30, 1961 the Military Governor of the conquered territory issued a proclamation recognising only certain kinds of import licences, amongst which were not included the licences granted to the petitioner. Having failed to obtain recognition for his import licences, the petitioner filed a petition in this Court under Article 32 contending firstly that under the Administration Act, the previous laws in the Portuguese territories continued in force from March 5, 1962, which amounted to recognition by the Government of India of all rights flowing from the previous laws which were in force in the Portuguese territories; and secondly, that section 4(2) of the Regulation preserved all rights and privileges acquired or accrued under the Portuguese law, as a result of which his right under the import licences which were issued to him under the Portuguese law stood preserved. These contentions were rejected by a Constitution Bench of this Court consisting of Gajendragadkar, C.J., and Wanchoo, Hidayathullah, Shah and Sikri, JJ. It was held by the Court that the mere fact that the old laws were continued did not mean that the rights under those laws were recognised by the Government of India and, therefore, the petitioner was not entitled to seek recognition of his import licences from the Government of India. Having held that in the fact of the proclamation issued by the Military Governor on December 30, 1961, it was impossible to hold that the Government of India had adopted the laws of the Portuguese Government the Court, speaking through Wanchoo, J., observed (at pp. 115, 116):
“But this is not all. The Ordinance and the Act of 1962 on which the petitioner
relies came into force from March 5, 1962. It is true that they provided
for the continuance of old laws but that could only be from the date from
which they came into force i.e., from March 5, 1962. There was a period
between December 20, 1961 and March 5, 1962 during which it cannot
be said that the old laws necessarily continued so far as the rights and
liabilities between the new subjects and the new sovereign were concerned. So far as such rights and liabilities are concerned, (we say nothing
here as to the rights and liabilities between subjects and subjects under
the old laws), the old laws were apparently not in force during this
interregnum. That is why we find in section 7(1) of the Ordinance, a
provision to the effect that all things done and all action taken (including
any acts of executive authority, proceedings, decrees and sentences) in
or with respect to Goa, Daman and Diu on or after the appointed day
and before the commencement of this Ordinance, by the Administrator
or any other officer of Government, whether civil or military or by any
other person acting under the orders of the Administrator or such officer, which have been done or taken in good faith and in a reasonable
belief that they were necessary for the peace and good Government of
Goa, Daman and Diu, shall be as valid and operative as if they had
been done or taken in accordance with law. Similarly we have a provision in section 9(1) of the Act, which is in exactly the same terms. These
provisions in our opinion show that as between the subjects and the
new sovereign, the old laws did not continue during this interregnum
and that is why things done and action taken by various authorities during this period were validated as if they had been done or taken in accordance with law.”
The argument based on the saving clause contained in sub-section (2) of
section 4 of the Regulation was repelled by the Court thus (at p. 446):
“As for Regulation No. XII of 1962, that is also of no help to the petitioner. The
laws repealed thereby (as between the sovereign and the subjects) were
in force only form March 5, 1962. Section 4(2) on which reliance is placed
would have helped the petitioner if his licences had been granted on
March 5, 1962 or thereafter. But as his licences are of a date even anterior to the acquisition of the Portuguese territories, section 4(2) of the
Regulation cannot help him. The contention under this head must also
be rejected.”
28. The decision in Pema Chibar, is an authority for four distinct and important propositions : (1) The fact that laws which were in force in the conquered territory are continued by the new Government after the conquest is not by itself enough to show that the new sovereign has recognised the rights under the old laws; (2) The rights which arose out of the old laws prior to the conquest or annexation can be enforced against the new sovereign only if he has chosen to recognise those rights; (3) Neither section 5 of the Administration Act nor section 4(2) of the Regulation amounts to recognition by the new sovereign of old rights which arose prior to December 20, 1961 under the laws which were in force in the conquered territory, the only rights protected under section 4(2) aforesaid being those which accrued subsequent to the date of enforcement of the Administration Act namely, March 5, 1962; and (4)
The period between December 20, 1961 when the territories comprised in ‘Goa, Daman and Diu were annexed by the Government of India, and March 5, 1962 when the Administration Act came into force, was a period of interregnum. These propositions afford a complete answer to the contentions raised by Shri Sanghi. The judgment in Pema Chibar was brought to the attention of the High Court and was argued upon but surprisingly, it has not referred to the judgment at all. We have no doubt that if the High Court were alive to the position laid down in Pema Chibar, it could not have possibly come to the conclusion to which it did.
29. The true position then is that in cases of acquisition of a territory by conquest, rights which had accrued under the old laws do not survive and cannot be enforced against the new Government unless it chooses to recognise those rights. In order to recognise the old rights, it is not necessary for the new Government to continue the old law under which those rights had accrued because old rights can be recognised without continuing the old laws as, for example, by contract or executive action. On the one hand, old rights can be recognised by the new Government without continuing the old laws; on the other, the mere continuance of old laws does not imply the recognition of old rights which had accrued under those laws. Something more than the continuance of old laws is necessary in order to support the claim that old rights have been recognised by the new Government. That ‘something more’ can be found in a statutory provision where the old laws are saved. In so far as the continuance of old laws is concerned, as a general rule, they continue in operation after the conquest, which means that the new Government is at liberty not to adopt them at all or to adopt them without a break in their continuity or else to adopt them from a date subsequent to the date of conquest.”
86. Mr. Andhyarujina submitted that it is in the background and context that one has to see the said Impugned Act. He submitted that there was no acquisition at all. He submitted that there was only a modification of pre existing colonial rights. He submitted that the purpose and object was not to allow a pocket to have colonial rights different from the rest of India.
87. Mr. Andyarujina submitted that, as no acquisition was involved, submissions made on compensation are irrelevant. He submitted that even under the concessions the petitioners had no proprietory rights. He submitted that the said Impugned Act was not providing for acquisition but for extinguishment or modification of rights accruing by virtue of agreements, lease or licence for purpose of searching for a mining minerals. He submitted that this was with a view to ensure that the ownership and control of our material resources, i.e., mines and minerals are distributed to subserve the common good and to secure the operation of the economic system in such a manner that it does not result in concentration of wealth and means of production to the common detriment.
88. Mr. Andhyarujina submitted that by 1987, Article 19(1)(f) and 31 had been deleted from Part III of the Constitution. He submitted that now the only question was whether the said Impugned Act complied with the requirement of Article 300-A. He submitted that now all that was required was Legislative competence. He submitted that after deletion of Article 19(1)(f) and 31 from Part III, question of compensation and/or adequacy of compensation can no longer be agitated. He submitted that now the only question is whether it was done under authority of law.
89. Mr. Andhyarujina fairly stated that to the extent that perenial and transferable rights of petitioners were being taken away, property rights were being affected. He submitted that the petitioners had enjoyed pre-Constitutional rights like Zamindari rights which had to be brought within the Indian Law. He submitted that to do this protection of Article 31-A and 31-C was not necessary after the 44th Amendment wherein Articles 19(1)(f) and 31 were deleted from Part III of the Constitution. In support of this submission Mr. Andhyarujina relied on Jilubhai Nanabhai’s case (supra). He submitted that this case showed that an Article can be retrospective and that after deletion of Arts. 19(1)(f) and 31 from Part III property rights were not a basic structure or feature of the Constitution. Mr. Andhyarujina submitted that now a person can be deprived of his property rights without any compensation. Mr. Andhyarujina submitted that in cases of modifications of mining rights questions of payment of compensation do not arise. He submitted that now questions of adequacy or otherwise of compensation cannot be agitated. He submitted that in Jilubhai Khachars’ case the Supreme Court has also held that the word “law” as used in Article 300-A must be an Article of Parliament or of State Legislature, a rule of Statutory Order having force of law. Mr. Andhyarujina submitted that the principles sought to be laid down by the Division Bench of this Court in Basantibai Khetans’ case (supra) were frowned upon by the Supreme Court. He submitted that, in any case, they could no longer be considered to be good law in view of decisions of the Supreme Court including the decision in Jilubhai Khachars’ case.
90. Mr. Andhyarujina relied upon the authority in the case of State of Bombay v. Pandurang Vinayak and others . In this case, the Supreme Court has held that when a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion Mr. Andhyarujina submitted that section 22 is part and parcel of the said Impugned Act. He submitted that section 22 was part of the economic reforms and was necessary for the control of our resources. He submitted that section 22 become necessary because the petitioners could not be allowed to benefit from the material resources of our country. He submitted that the individual cannot be allowed not to pay for the material resources of our country. He submitted that the Act had been given retrospective effect from 20th December 1961 because this was the date on which Goa became a part of the Indian territory. Mr. Andhyarujina submitted that all Legislations of a retrospective nature particularly Legislations pertaining to taxation involved hardship. He submitted that in all such cases an argument that the party would now have to bear a retrospective burden has never been accepted by any Court including the Supreme Court. He submitted that the whole aim is that the mine owners cannot be permitted to use our material resources and not pay for such use. He submitted that from the date they became Indian citizen i.e. the date when Goa became liberated, they became subject to our laws and became liable to pay our taxes. Mr. Andhyarujina submitted that section 22 has integral relationship with the rest of the said Impugned Act. He submitted that as the Act is made retrospective all the incidences would flow as if the Act was applied from 1961.
91. In support of this last submission, Mr. Andhyarujina relied upon the authority in the case of Rai Ramkrishna and others etc. v. State of Bihar . In this case, the Supreme Court has held that the legislative power conferred on the appropriate Legislature to enact law in respect of
topics covered by the several entries in the three lists can be exercised both prospectively and retrospectively. The Supreme Court has held that when the Legislature can make a valid law, it may also provide not just for prospective operations of the material provisions of the law, but also for retrospective operations of the provisions. The Supreme Court has held that merely because a retrospective operation has been given the character does not change so as to make the retrospective operations outside the legislative competence of the Legislature.
92. Mr. Andhyarujina also relied upon the authority in the case of State of T.N. v. Arooran Sugars Ltd. . In this case the Supreme Court has held that when a Statute creates a legal fiction saying that something shall be deemed to have been done which in fact and truth has not been done, the Court has to examine and ascertain as to for what purpose and between what persons such a statutory fiction is to be resorted to. The Supreme Court has held that thereafter the courts have to give full effect to the statutory fiction and carry it to its logical conclusion.
93. Mr. Andhyarujina submitted that it is settled law that Legislature can affect rights retrospectively. He submitted that the only question is whether section 22 can be said to be for purpose of furthering the directive principles or whether it is remote or tenuous. Mr. Andhyarujina also relied upon the authority in the case of Tinsukhia Electric Supply Co. Ltd. v. State of Assam and others . In this case, the Constitutional validity of the Indian Electricity (Assam Amendment) Ordinance, 1972 and the Tinsukhia and Dibrugarh Electricity Supply Undertakings (Acquisition) Ordinance, 1972 were challenged. The Supreme Court whilst considering the nexus between the legislation and principles envisaged in Article 39 held that the idea of distribution of the material resources of the community is not limited to the idea of what is taken over for distribution amongst the intended beneficiaries. The Supreme Court held that that is one of the modes of “distribution”. The Supreme Court has held that the word” distribution” does not mean taking property of one and distributing it to others. The Supreme Court has held that the economic cost of social and economic reform are amongst the most vexed problems of social and economic change and constitute the core element in nationalisation. The Supreme Court held that the need for constitutional immunities for such legislative efforts at social and economic change recognise the otherwise unaffordable economic burden of reforms. The Supreme Court has held that it is not possible to divorce the economic considerations or components from the scheme of nationalisation with which the former are inextricably integrated. The Supreme Court has held that the financial cost of a scheme of nationalisation lies at its very heart and cannot be isolated. The Supreme Court has held that the provisions relating to the vestiture of the undertaking in the State and those pertaining to the quantification of the ‘amount’ are integral and inseparable parts of the integral scheme of nationalisation and do not admit of being considered as distinct provisions independent of each other.
94. Mr. Andhyarujina also relied upon the authority in the case of Assam Sillimanite Ltd. and another v. Union of India and others . In this case the Supreme Court held that the amounts fixed for being paid under the Impugned Law is beyond challenge on the ground that it is inadequate. Mr. Andhyarujina further submitted that this Impugned Act is for the purpose of bringing social equality to all people in India. He submitted that the vestiges of the old system cannot be allowed to continue. He submitted that the petitioners have already enjoyed
these properties for all these years and must therefore pay dead rent and/or compensation.
95. We have heard the Parties. In our view the said Impugned Act does not violate either Article 14 or Article 19(1)(g) of the Constitution of India. As has been seen, the petitioners are enjoying rights under various concessions granted to them by the then Portuguese Government. As a result of these concessions, the petitioners are enjoying special rights and privileges in as much as they have the concessions in perpetuity. The concessions are also transferable and there is in fact no control by any of the governing bodies under the Indian Law. We are not going into the question as to whether or not the Government has recognised these concessions. It may be noted that in Writ Petition 151/B of 1975 the arguments of the Central Government had been that they had not recognised these concessions. The various petitioners accepted that argument and invited the judgment on the basis of that argument. As set out in Narendra Gosalia’s case when a new territory is acquired the new sovereign is not bound by the rights which the residents of the conquered territory had against their sovereign or by the obligations of the old sovereign. As held by the Supreme Court merely because existing laws are continued does not mean that existing rights are recognised. The question whether the Central Government had recognised the rights created by the concessions is a question of fact. In our view it is not necessary to decide this question of fact for the purposes of these petitions. For the purposes of these petitions we will proceed on the footing that the Government has recognised these concessions. Still the fact remains that in one pocket of India a special class of persons existed. They continued to enjoy special rights in perpetuity over our basic and natural resources under Colonial Laws. This was an inequitable situation which was required to be cured. It was to bring about equality with the rest of the India that the said Impugned Act was enacted. Thus far from violating Article 14, the said Impugned Act is in consonance with Article 14 of the Constitution.
96. No right to business has been affected by the said Impugned Act. It is not possible to accept Mr. Chinoy’s submission that rights to business have been affected. It is open for the petitioners to carry on their business. They are not prevented from carrying on mining business. A right to carry on business does not include a right to claim special privileges and special rights granted under some Colonial law. Therefore, none of the principles laid down in the authorities cited by Mr. Chinoy, on Article 19 have any application to this case.
97. Even presuming that Article 14 and 19(1)(g) apply, still in our view the said Impugned Act is protected by Article 31-A(1)(c) as well as Article 31-C. In our view, all that the said Impugned Act does is to extinguish or modify rights accruing under the various concessions which are in effect agreements and/or leases for the purpose of searching for, or winning minerals. The said Impugned Act is in consonance with the policy of securing ownership and control of material resources of our community so as to best subserve the common both and towards securing operations of our economic system in a manner which does not result in concentration of wealth and means of production to the common detriment. Thus the said Impugned Act has nexus with the principles set out in Clauses (b) and (c) of Article 39.
98. However, to the extent that rights in perpetuity and transferable rights are modified and extinguished, property rights are affected. Thus Article 300-A would become applicable. Mr. Andhyarujina very fairly conceded this. In our view, the law on Article 300-A is as set out by the Supreme Court in Jilubhai Khachar’s case (supra) (set out in para 62 above). As has been set out by the Supreme Court, under Article
300-A, all that is necessary is that the deprivation of property must be for a public purpose and must be with the sanction of law. Now Article 19(1)(f) and Article 31 have been removed from Part-III of the Constitution. The right to property in not a basic feature of the Constitution. As laid down by the Supreme Court, the acquisition does not require payment of just compensation or indemnification to the owner of the property expropriated. Payment of market value in view of acquired property is no longer a sine qua non for acquisition. However, fixation of an amount must be there. The adequacy of amounts however, cannot be questioned in a Court of Law. In this case, the said Impugned Act provides for a payment of an amount under section 6. Thus the Act could not be open to challenge on the ground that no amount has been paid or on the ground that quantum of the amount which has been fixed is inadequate.
99. Under Article 300-A, what has to be seen is whether the Parliament has authorised the compulsory acquisition and weather it has legislative competence to do so. However, acquisition under an authority of law necessarily implies that the provisions should not be penal and confiscatory in nature. There could be no dispute with the proposition that a legislature is empowered to legislate prospectively as well as retrospectively. There can be no dispute with the proposition that if a retrospective effect has been given then all incidences must follow as if the Act applied from the appointed date. However, in the guise of giving retrospective effect a liability, and that to with penal consequences, which would not have arisen even if the Act had been applicable at the relevant time, cannot be imposed. Under the various concessions, the petitioners have been paying what they were bound to pay. Even if the MMRD Act was applicable to the territory of Goa with effect from 24th December 1961, the petitioners would not have been liable to pay dead rent till 1977. Thus the petitioners are put in a worst position, by the retrospective effect given under section 22, then they would have been if the MMRD Act had been applicable with effect from 24th December 1961. The consequence of lying down such a provision is that the petitioners become liable to pay large amounts. If these are not paid, then in the words of Supreme Court the licence grants would be cancelled, the properties would be taken back. The petitioners would also become liable for penal consequences under section 15 of the sard Impugned Act. Thus penal liability under section 15 has also been introduced for the first time by the said Impugned Act.
100. Also in our view, to the extent that section 22 is retrospective in effect, it cannot also said to be for the purposes of securing ownership or control of material resources of community or operations of the economic system. The petitioners have or have not mined these areas for the past 22 years. Therefore, merely levying the dead rent and/or royalty retrospectively, does not achieve the object of securing ownership or control of material resources for the last 20 years. To that extent section 22 appears to be penal and confiscatory in nature and thus ultra-virus the Constitution. However in our view, section 22 would have nexus with the principles under section 39(b) and (c) so long as it is prospective in nature. It is settled law that a Court can always water down a provision to save it from challenge of vires. In our view if section 22 is restricted in its effect prospectively, then it is not susceptible to any challenge and would then be towards securing the principles laid down in Article 39(b) and (c) of the Constitution. It would then also be protected by Article 31-A(1)(c). We thus hold that section 22 shall have effect prospectively only.
101. Accordingly, we hold that the challenge to the vires of the Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987 fails. As set out above section 22(1)(a) of the said Act can and shall operate prospectively only, i.e. from the date the said Act came into force. Thus respondents by themselves or
through their officers, subordinates, servants and agents will not be entitled to recover dead rent and or royalty for a period prior to the coming into force of the said Act.
102. All these petitions stand disposed all accordingly. In the circumstances of these cases, there will be no order as to costs.
103. All Ad-Interim Orders to continue to operate for six weeks from today.
104. Order accordingly.