The State of Bihar Vs. Maharajadhiraja
Sir Kameshwar Singhof Darbhanga & Ors [1952] INSC 39 (27 May 1952)
GUPTA, A.C.
BEG, M. HAMEEDULLAH CHANDRACHUD, Y.V.
CITATION: 1975 AIR 1083
ACT:
Bihar Land Reforms Act (XXX of 1950)---Law for
abolition of zamindaries--Validity--Necessity to provide for compensation and
of public purpose--Jurisdiction of Court to enquire into validity-Delegation of
legislative powers--Fraud on the Constitution--Constitution of India,
1950--Constitution (First Amendment) Act, 1951 Arts. 31, 31-A, 31-B, 362. 363--Sch.
VII, List II, entries 18, 36 and List III, entry 42 --Construction--Spirit of
the Constitution-Right of eminent domain--"Law",
"Legislature", "Public purpose", meanings of--Covenant of
merger--Compulsory acquisition of private property of Ruler--Acquisition of
arrears of rent paying 50%--Deduction for cost of works--Legality. 115 890
HEADNOTE:
Held per Curiam (MAHAJAN, MUKHERJEA and
CHANDRASEKHARA AIYAR JJ.)--The Bihar Land Reforms Act, XXX of 1950, is not
unconstitutional or void except with regard to the provisions in s. 4 (b) and
s. 23 (f) thereof. The provisions of S. 4 (b) and s, 23 (f) are
unconstitutional. Per PATANJALI SASTRI C.J. and DAS J.--The whole of the Bihar
Land Reforms Act of 1950, including the provisions contained in s. 4 (b) and s.
23(f) is constitutional and valid.
Per PATANJALI SASTRI C. 3., MAHAJAN,
MUKHERJEA, DAS and CHANDRASEKHARA AIYAR JJ.--(i) The Bihar Land Reforms Act,
XXX of 1950, is not a law in respect of a matter mentioned in entry 18 of List
II, viz., "lands and land tenures", but a law in respect of
"acquisition of property", a matter covered by entry 36 of List II.
(ii) The obligation to pay compensation for
property acquired by the State is not an obligation imposed by entry 36 of List
II read by itself or in conjunction with entry 42 of list III or by the spirit
of the Constitution. Consequently, an objection to the validity of a statute in
respect of acquisition of property on the ground that it does not provide for
payment of compensation is an objection on the ground that it contravenes the
provisions of art. 31 (2) and the jurisdiction of the Court to entertain such
an objection in respect of a statute mentioned in the Ninth Schedule to the
Constitution is barred by art. 31 (4), art. 81-A and art. 31-B of the
Constitution. Per DAS J.-Assuming that the obligation to pay compensation is
also implicit in entry 86 of List II, in itself or read with entry 42 of List
III, even then the validity of the Act cannot be questioned by reason of arts.
81 (4), 31-A and 31-B.
(iii) Section 32(2) of the Act which empowers
the State Government to frame rules providing for "the proportion in which
compensation shall be payable in cash and in bonds and the manner of payment of
such compensation" does not involve any delegation of legislative powers
especially as the legislature has itself provided in s. 32(2) that the compensation
shall be payable in cash or in bonds or partly in cash and partly in bonds and
fixed the number of installments in which it should be paid. The words
"subject to" in entry 36 of List II only mean that whenever a law is
made by a State Legislature in exercise of its legislative power under entry
36, that law will be subject to the provisions of a law made by the Parliament
under entry 42 of List III. The words do not mean that when a State makes a law
under entry 36 it must lay down the principles on which compensation payable
for property acquired is to be determined and the form and manner in which it
should be given.
(iv) Entries in the Legislative Lists are
merely of an enabling character. The power conferred there under on the
legislatures is not coupled with any duty on the legislature to exercise 891
such power and the principle laid down in Julius v. Bishop of Oxford [5A.C.214]
has, therefore, no application to the Lists.
Per PATANJALI SASTRI C.J., MUKHERJEA and DAS
JJ.
(MAHAJAN and CHANDRASEKHARA. AIYAR JJ.
dissenting).--The existence of a public purpose as a pre-requisite to the exercise
of the power of compulsory acquisition is an essential and integral part of the
provisions of art.31 (2) and an infringement of such a provision cannot be put
forward as a ground for questioning the validity of an Act providing for
compulsory acquisition: DAS J.--Even assuming that the necessity of a public
purpose is implied in entry 36 of List II and/or entry 42 of List III also,
arts. 31 (4), 31-A and 31-B would still protect the Act from being questioned
on the ground that the acquisition was not for a public purpose. In any case
the impugned Act is supported by a public purpose.
Per MAHAJAN and CHANDRASEKHARA AIYAR jj.--The
scope of art. 31 (4) is limited to the express provisions of art. 31 (2) and
though the courts cannot examine the extent or adequacy of the provisions of
compensation contained in any law dealing with the acquisition of property
compulsorily, yet the provisions of art. 31 (4) do not in any way debar the
court from considering whether the acquisition is for a public purpose. Though
the main object of the Act, viz, the acquisition of estates, is for a public
purpose, the acquisition of arrears of rent due to the zamindars on payment of
50 per cent. of their value cannot be held to be for a public purpose and sec.
4 clause (b) of the Act is therefore unconstitutional and void. Per MUKHERJEA
J.--Assuming that art. 31 (4) relates to everything that is provided for in
art. 31 (2) either in express terms or even impliedly and consequently the
question of the existence of a public purpose is not justiciable, as the real
object of sec. 4, clause (b) is to deprive the man of his money, which is not a
subject-matter for acquisition under the powers of eminent domain, without
giving anything in exchange, under the guise of acting under entry 42 the
legislature has in truth and substance evaded and nullified its provisions
altogether and sec. 4 clause (b) is therefore unconstitutional and void.
PATANJALI SASTRI C.J.--Whatever may be the
position as regards the acquisition of money as such it is not correct to say
that a law made under entry 36 of List II cannot authorise acquisition of
choses in action like arrears of rent due from the tenants which are covered by
the term "property" used in that entry and in art. 31. The view that
a payment in cash or in government bonds of half the amount of such arrears
leaves the zamindar without compensation for the balance is equally fallacious.
Section 4 clause (b) is not therefore ultra vires or unconstitutional.
892 Per MAHAJAN, MUKHERJEA and CHANDRASEKHARA
AIYAR JJ.
(PATANJALI SASTRI C.J, and DAS J.
dissenting)--Section 23 (b) of the Act which provides for a deduction on a
percentage basis out of the gross assets for "costs of works of benefit to
the raiyat", is ostensibly enacted under entry 42 of List III, but it is
merely a colourable piece of legislation, a mere device to reduce the gross
assets, which does not really come under entry 42 and is unconstitutional.
PATANJALI SASTRI C J. and DAS J.-The
zamindars are under an obligation to maintain and repair the minor irrigation
works in their villages which are beneficial to the raiyats and the cost of
such works is therefore a perfectly legitimate deduction in computing the net
assets of the estate and sec. 23 (f) is not unconstitutional. Further, as
payment of compensation is not a justiciable issue in the case of the impugned
statute, having regard to arts. 31 (4), 31-A and 31-B, it is not open to the
Court to enquire whether a deduction which results in reducing the compensation
is unwarranted and therefore a fraud on the Constitution.
Per MAHAJAN J.--The phrase "public
purpose" has to be construed according to the spirit of the times in which
the particular legislation is enacted and so construed, acquisition of estates
for the purpose of preventing the concentration of huge blocks of land in the
hands of a few individuals and to do away with intermediaries is for a public
purpose.
DAS J.--No hard and fast definition can be
laid down as to what is a ,'public purpose" as the concept has been
rapidly changing in all countries, but it is clear that it is the presence of
the element of general interest of the community in an object or an aim that
transforms such object or aim into a public purpose, and whatever furthers the
general interest of the community as opposed to the particular interest of the
individual must be regarded as a public purpose.
APPEALS under article 132 (1) of the
Constitution of India from the judgment and decree dated 12th March, 1951, of
the High Court of Judicature at Patna (Shearer, Reuben and Das JJ.) in Title
Suits Nos. 1 to 3 and Mis. Judicial Cases Nos. 230-234, 237-244, 2-16 to 254,
257, 261 to 264, 266, 262, 270 to 277, 287-290 and 297 of 1951. PETITION No.
612 of 1951, a petition under article 32 of
the Constitution for enforcement of fundamental rights, was also heard along
with these appeals.
The facts that gave rise to these appeals and
petition are stated in the judgment.
893 M.C. Setalvad (Attorney-General for
India) and Mahabir Prasad (Advocate-General of Bihar) with G.N. Joshi, Lal
Narain Singh and Alladi Kuppuswami for the State of Bihar.
P.R. Das (B. Sen, with him) for the
respondents in Cases Nos. 339, 319, 327,330 and 332 of 1951.
Sanjib K. Chowdhury. S.N. Mukherjee, S.K.
Kapur for the respondents in Cases Nos. 309, 328, and a36 of 1951.
Urukramdas Chakravarty for the respondents in
Cases Nos. 326,337 and 344 of 1951.
Raghosaran Lal for the respondents in Cases
Nos. 310.311 and 329 of 1951.
S C. Mazumdar for the respondent in Case No.
313 of 1951.
S. Mustarid and Jagadih Chandra Sinha for the
respondents in Cases Nos. 307, 313, 320, 321, and 322 of 1951.
Ray Parasnath for the respondent in Case No.
331 of 1951.
S.K. Kapur for the petitioner in Petition No.
612 of 1951.
1952. May 2, 5. The Court delivered judgment
as follows :-PATANJALI SASTRI C.J.--These appeals and petitions which fall into
three groups raise the issue of the constitutional validity of three State
enactments called The Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), The
Chief Justice, in his judgment, dealt with the above Cases and Petition and
also Petitions Nos. 166, 228, 237, 245, 246, 257, 268, 280, to 285, 287 to 289,
317, 318 and 487 of 1951 (relating to the Madhya Pradesh Abolition of
Proprietary Rights (Estates Mahals, Alienated Lands) Act, 1950) and Cases Nos.
283 to 295 of 1951 (relating to the Uttar Pradesh Zamindari Abolition and Land
Reforms Act, 1950).
894 The Madhya Pradesh Abolition of
Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (No. I of
1951), and The Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (U.
P. Act No. 1 of 1951) (hereinafter referred to as the Bihar Act, the Madhya
Pradesh Act and the Uttar Pradesh Act, respectively).
The common aim of these statutes, generally
speaking, is to abolish zamindaries and other proprietary estates and tenures
in the three States aforesaid, so as to eliminate the intermediaries by means
of compulsory acquisition of their rights and interests, and to bring the raiyats
and other occupants of lands in those areas into direct relation with the
Government. The constitutionality of these Acts having been challenged in the
respective State High Courts on various grounds, the Bihar Act was declared
unconstitutional and void on the ground that it contravened article 14 of the
Constitution, the other grounds of attack being rejected, while the other two
Acts were adjudged constitutional and valid. The appeals are directed against
these decisions. Petitions have also been filed in this Court under article 32
by certain other zamindars seeking determination of the same issues. The common
question which arises for consideration in all these appeals and petitions is
whether the three State Legislatures, which respectively passed the three
impugned statutes, were constitutionally competent to enact them, though some
special points are also involved in a few of these cases.
As has been stated, various grounds of attack
were put forward in the courts below, and, all of them having been repeated in
the memoranda of appeals and the petitions, they would have required
consideration but for the amendment of the Constitution by the Constitution
(First Amendment) Act, 1951 (hereinafter referred to as the Amendment Act)
which was passed by the provisional Parliament during the pendency of these
proceedings. That Act by inserting the new articles 31-A and 895 31-B purported
to protect, generally, all laws providing for the acquisition of estates or
interests therein, and specifically, certain statutes, including the three
impugned Acts, from attacks based on article 13 read with other relevant
articles of Part III of the Constitution. And the operation of these articles
was made retrospective by providing, in section 4 of the Amendment Act, that
article 3 I-A shall be "deemed always to have been inserted" and. in
article 31B, that none of the specified statutes "shall be deemed ever to
have become void". The validity of the Amendment Act was in turn
challenged in proceedings instituted in this Court under article 32 but was
upheld in Sankari Prasad Singh Deo v. Union of India and Stale of Bihar(1). The
result is that the impugned Acts can no longer be attacked on the ground of
alleged infringement of any of the rights conferred by the provisions of Part
III.
It will be noted, however, that articles 31-A
and 31-B afford only limited protection against one ground of challenge, namely
that the law in question is "inconsistent with, or takes away or abridges
any of the rights conferred by any provisions of this Part". This is made
further clear by the opening' words of article 3 I-A "notwithstanding
anything in the foregoing provisions of this Part". The Amendment Act thus
provides no immunity from attacks based on the lack of legislative competence
under article 246, read with the entries in List II or List III of the Seventh
Schedule to the Constitution to enact the three impugned statutes, as the
Amendment Act did not in any way affect the Lists. Mr. P.R. Das, leading
counsel for the zamindars, accordingly based his main argument in these
proceedings on entry 36 of List Ii and entry 42 of List III which read as
follows:
"36. Acquisition or 'requisitioning of
property, except for the purposes of the Union, subject to the provisions of
entry 42 of List III.
42. Principles on which compensation for
property acquired or requisitioned for the purposes of the Union (1) [1952]
S.C.R. 89.
896 or of a State or for any other public
purpose is to be determined, and the form and the manner in which such compensation
is to be given".
The argument may be summarised thus. Entry 36
of List II read with article 246 (3) was obviously intended to authorise a
State Legislature to exercise the right of eminent domain, that is, the right
of compulsory acquisition of private property. The exercise of such power has
been recognised in the jurisprudence of all civilised countries as conditioned
by public necessity and payment of compensation. All legislation in this
country authorising such acquisition of property from Regulation I of 1824 of
the Bengal Code down to the Land Acquisition Act, 1894, proceeded on that
footing. The existence of a public purpose and an obligation to pay
compensation being thus the necessary concomitants of compulsory acquisition of
private property, the term "acquisition" must be construed as
importing, by necessary implication, the two conditions aforesaid. It is a
recognised rule for the construction of statutes that, unless the words of the
statute clearly 80 demand, a statute is not to be construed so as to take away
the property of a subject without compensation: Attorney-General v. De Keyser's
Royal Hotel(2). The power to take compulsorily raises by implication a right to
payment: Central Control Board v. Cannon Brewery(2). The words "subject to
the provisions of entry 42 of List III" in entry 86 reinforce the
argument, as these words must be taken to mean that the power to make a law
with respect to acquisition of property should be exercised subject to the
condition that such law should also provide for the matters referred to in
entry 42, in other words, a two-fold restriction as to public purpose and
payment of compensation (both of which are referred to in entry 42) is imposed
on the' exercise of the law-making power under entry 36. In any case, the
legislative power conferred under entry 42 is a power coupled with a duty to
exercise it for the benefit of the owners whose properties are compulsorily
acquired (1) [1920] A.C. 508, 542. (2) [1919] A.C. 744.
897 under a law made under entry 36. For all
these reasons the State Legislatures, it was claimed, had no power to make a
law for acquisition of property without fulfilling the two conditions as to
public purpose and payment of compensation.
On the basis of these arguments, counsel
proceeded to examine elaborately various provisions of the impugned Acts with a
view to show that the compensation which they purport to provide has, by
"various shifts and contrivances", been reduced to an illusory figure
as compared with the market value of the properties acquired. The principles
laid down for the computation of compensation operated in reality as
"principles of confiscation", and the enactment of the statutes was
in truth a "fraud on the Constitution", each of them being a
colourable legislative expedient for taking private properties without payment
of compensation in violation of the Constitution, while pretending to comply
with its requirements. Nor were these statutes enacted for any public purpose;
their only purpose and effect was to destroy the class of zamindars and
tenure-holders and make the Government a "super-landlord". While such
an aim might commend itself as a proper policy to be pursued by the political
party in power, it could not, in law, be regarded as a public purpose.
Mr. Somayya, who appeared for some of the
zamindars in the Madhya Pradesh group of cases, while adopting the arguments of
Mr. Das, put forward an additional ground of objection. He argued that the
impugned Acts -were not passed in accordance with the procedure prescribed in
article 31 (3) which provides "No such law as is referred to in clause (2)
made by the Legislature of a State shall have effect unless such law.
having been reserved for the consideration
the President, has received his assent".
Learned counsel stressed the words
"law" and "legislature" and submitted that, inasmuch as the
legislature of a State included the Governor (article 116 898 168) and a bill
could become a law only after the Governor assented to it under article 200,
clause (3) of article 31 must be taken to require that a State law authorising
compulsory acquisition of property should receive the Governor's as well as the
President's assent, the former to make it a law and the latter to give it
"effect". As the relative bills were reserved in each case by the
Governor concerned after they were passed by the House or Houses of
Legislature, as the case may be, without giving his assent under article 200.
the statutes did not satisfy the requirements of article 31 (3) and so could
not have "effect". This ground of attack, it was claimed, was not
excluded by article 31-A or article 31-B as it was not based on infringement of
fundamental rights.
Dr. Ambedkar, who appeared for some of the
zemindars in the Uttar Pradesh batch of cases, advanced a different line of
argument. He placed no reliance upon entry 36 of List II or entry 42 of List
III. He appeared to concede what Mr. Das so strenuously contested, that those
entries, concerned as they were with the grant of power to the State
Legislature to legislate with respect to matters specified therein, could not
be taken, as a matter of construction, to import an obligation to pay
compensation. But he maintained that a constitutional prohibition against compulsory
acquisition of property without public' necessity and payment of compensation
was deducible from what he called the "spirit of the Constitution",
which, according to him, was a valid test for judging the constitutionality of
a statute The Constitution, being avowedly one for establishing liberty,
justice and equality and a government of a free people with only limited
powers, must be held to contain an implied prohibition against taking private
property without just compensation and in the absence of a public purpose. He
relied on certain American decisions and text-books as supporting the view that
a constitutional prohibition can be derived by implication from the spirit of
the Constitution where no express prohibition has been enacted in that behalf.
Articles 31-A and 31-B barred 899 only
objections based on alleged infringements of the fundamental rights conferred
by Part III, but if, from the other provisions thereof, it could be inferred
that there must be a public purpose and payment of compensation before private
property could be compulsorily acquired by the State, there was nothing in the
two articles aforesaid to preclude objection on the ground that the impugned
Acts do not satisfy these requirements and are, therefore, unconstitutional.
In addition to the aforesaid grounds of
attack, which were common to all the three impugned statutes, the validity of
each of them or of some specific provisions thereof was also challenged on some
special grounds. It will be convenient to deal with them after disposing of the
main contentions summarised above which are common to all the three batches of
cases.
These contentions are, in my judgment devoid
of of substance and force and I have no hesitation in rejecting them. The fact
of the matter is the zemindars lost the battle in the last round when this
Court upheld the constitutionality of the Amendment Act which the Provisional
Parliament enacted with the object, among others, of putting an end to this
litigation. And it is no disparagement to their learned counsel to say that
what remained of the campaign has been fought with such weak arguments as
overtaxed ingenuity could suggest.
It will be convenient here to set out the
material provisions of the Constitution on which the arguments before us have
largely turned.
Article 31 (2). No property movable or
immovable ......... shall be acquired for public purposes under any law
authorising ......... such acquisition unless the law provides for compensation
for the property acquired and either. fixes the amount of compensation or
specifies the principles on which and the manner in which the compensation is
to be determined and given.
(3) No such law as is referred to in clause
(2) made by the Legislature of a State shall have effect unless 900 such law,
having been reserved for the consideration of the President, has received his
assent.
(4) If any bill pending at the commencement
of this Constitution in the Legislature of a State has, after it has been
passed by such Legislature, been reserved for the consideration of the
President and has received his assent, then, notwithstanding anything in this
Constitution, the law so assented to shall not be called in question in any
court on the ground that it contravenes the provisions of clause (2).
(5) Nothing in clause (2) shall affect(a) The
provisions of any existing law other than a law to which the provisions of
clause (6) apply, or (b) the provisions of any law which the State may hereafter
make(i) for the purpose of imposing or levying any tax or penalty, or (ii) for
the promotion of public health or the prevention of danger to life or property,
or (iii) in pursuance of any agreement entered into between the Government of
the Dominion of India or the Government of India and the Government of any
other country, or otherwise, with respect to property declared by law to be
evacuee property ......
31-A. Saving of laws providing for
acquisition of estates, etc.--(1) Notwithstanding anything in the foregoing
provisions of this Part no law providing for the acquisition by the State of
any estate or of any rights therein or for the extinguishment or modification
of any such rights 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 any provisions
of this Part: .......
31-B. Validation of certain Acts and
Regulations.Without prejudice to the generality of the provisions contained in
article 31-A none of the Acts and Regulations specified in the Ninth Schedule
nor any of the provisions thereof shall be deemed to be void, or ever to have
become void, on the ground that such Act, 901 Regulation or provision is
inconsistent with, or takes away or abridges any of the rights conferred by any
provisions of this Fart, and notwithstanding any judgment, decree or order of
any court or tribunal to the contrary, each of the said Acts and Regulations
shall, subject to the power of any competent Legislature to repeal or amend it,
continue in force.
It will be seen that the scope of article 31
(4) is at once narrower and wider than that of article 31-A; the former has
application only to statutes which were pending in the legislature at the
commencement of the Constitution, whereas the latter is subject to no such restriction.
Again, article 31 (4) excludes attack only on
the ground of contravention of article 31 (2), while article 3 I-A bars
objections based on contravention of other provisions of Part III as well, such
as articles 14 and 19. This indeed was the reason for the enactment of articles
31-A and 31-B, as the words of exclusion in article 31 (4) were found inapt to
cover objections based on contravention of article 14.
On the other hand, the law referred to in
article 31 (4) covers acquisition of any kind of property, while article 31-A
relates only to the acquisition of a particular kind of property, viz., estates
and rights therein, and what is more important for our present purpose, the non
obstante clause in article 31 (4) overrides all other provisions in the
Constitution including the List of the Seventh Schedule, whereas a law which
falls within the purview of article a 1-A could only prevail over "the
foregoing provisions of this Part". Now, the three impugned statutes fall
within the ambit of both article 31 (4) and articles 31-A and 31-B.
Putting aside the latter articles for the
moment, it is plain that, under article 31 (4), the three impugned statutes are
protected from attack in any court on the ground that they contravene the
provisions of article 31(2). These provisions, so far as they are material
here, are (i) that a law with respect to acquisition of property should
authorize acquisition only for a public purpose and (ii) that such law should
provide for compensation, etc. Mr. Das, while admitting that 902 (ii) was a
"provision" of article 31 (2), submitted that (i) was not. According
to him clause (2)assumed but did not "provide" that acquisition
should be authorised only for a public purpose. I cannot accept that view. In
my opinion, the clause seeks also to impose a limitation in regard to public
purpose. The clause was evidently worded in that form as it was copied (with
minor variations) from section 299 (2) of the Government of India Act, 1935,
which was undoubtedly designed to give effect to the recommendation of the
Joint Parliamentary Committee in para. 369 of their Report that two conditions
should be imposed on expropriation of private property: "We think it (the
provision proposed) should secure that legislation expropriating or authorising
the expropriation of the property of private individuals should be lawful only
if confined to expropriation for public purpose and if compensation is
determined either in the first instance or in appeal by some independent
authority". It is thus clear that section 299 (2) was intended to secure
fulfilment of two conditions subject to which alone legislation authorising
expropriation of private property should be lawful, and it seems reasonable to
conclude that article 31 (2) was also intended to impose the same two
conditions on legislation expropriating private property. In other words,
article 31 (2)must be understood as also providing that legislation authorising
expropriation of private property should be lawful only if it was required for
a public purpose and provision was made for payment of compensation. Indeed if
this were not so, there would be nothing in the Constitution to prevent
acquisition for a non-public or private purpose and without payment of
compensation--an absurd result. It cannot be supposed that the framers of the
Constitution, while expressly enacting one of the two well-established
restrictions on the exercise of the right of eminent domain, left the other to
be imported from the common law. Article 81 (2) must therefore, be taken to
provide for both the limitations in express terms.
An attack on the 903 ground of contravention
of these provisions implies that the law in question authorises acquisition
without reference to a public purpose and without payment of compensation. This
was precisely the objection raised both by Mr. Das and Dr.
Ambedkar to the constitutional validity of
the impugned statutes, and such objection really amounts to calling those laws
in question on the ground that they contravened the provisions of article 31
(2), though learned counsel stoutly denied that they were relying on the
provisions of article 31(2). The denial, however, seems to me to be based on a
quibbling distinction without a difference in substance.
Their main attack was really grounded on the
absence of these two essential prerequisites of valid legislation authorising
acquisition of private property, though Mr. Das would deduce them by
implication from entry 36 of List II and entry 42 of List III, while Dr.
Ambedkar sought to derive them from the spirit of the Constitution. But this is
only a form of stating the objection which, in substance, is that the statutes
are bad because of the absence of a public purpose and the omission to provide
for a just compensation. This, in fact, was the burden of the argument before
us. If, then, these two grounds of attack fall within the purview of article
31(4), the words "notwithstanding anything in this Constitution" are
apt to exclude such grounds howsoever they are derived--whether from the
entries in the legislative Lists or from the spirit of the Constitution-for
both alike are covered by those words. Indeed, if the objection based on the
absence of a public purpose and of a provision for just compensation were still
to be open, clause (4) of article 31 would be meaningless surplusage.
It is obvious that that clause was specially
designed to protect the impugned statutes and other laws similarly enacted from
attack in a court of law on the aforesaid grounds and, if they were nevertheless
to be considered as not being within the protection, it is difficult to see
what the use of article 31 (4) would be. Learned counsel were unable to suggest
any. The fact is that article 31 (4) was 904 designed to bar the jurisdiction
of courts to entertain objections to the validity of a certain class of
enactments on the two-fold ground referred to above, and its whole purpose
would stand defeated if the zemindars' contention were to prevail.
Even if it were open to the court to consider
these grounds of objection, they are, in my opinion, unsustainable. As pointed
out already, article 31-A operates as an exception to article 31 (2) read with
article 13, only in respect of laws authorising acquisition of
"estates" and rights therein, and this exception is to be deemed to
have been part of the Constitution from its commencement. But it has no
application to laws authorising acquisition of other kinds of property and, as
regards these, the requirements as to public purpose and payment of compensation
are still enforced by the express provisions of article 31 (2). In the face of
the limitations on the State's power of compulsory acquisition thus
incorporated in the body of the Constitution, from which "estates"
alone are excluded, it would, in my opinion, be contrary to elementary canons
of statutory construction to read, by implication, those very limitations into
entry 36 of List II. alone or in conjunction with entry 42 of List III of the
Seventh Schedule, or to deduce them from "the spirit of the
Constitution", and that, too, in respect of the very properties excluded.
It is true that under the common law of
eminent domain as recognised in the jurisprudence of all civilized countries,
the State cannot take 'the property of its subject unless such property is
required for a public purpose and without compensating the owner for its loss
But, when these limitations are expressly provided for and it is further
enacted that no law shall be made which takes away or abridges these
safeguards, and any such law, if made, shall be void, there can be no room for
implication, and the words "acquisition of property" must be
understood in their natural sense of the act of acquiring property, without
importing into the phrase an obligation to pay 905 compensation or a condition
as to the existence of a public purpose. The entries in the Lists of the
Seventh Schedule are designed to define and delimit the respective areas of
legislative competence of the Union and State Legislatures, and such context is
hardly appropriate for the imposition of implied restrictions on the exercise
of legislative powers, which are ordinarily matters for positive enactment in
the body of the Constitution.
There are indications in article 31 itself to
show that the expression "acquisition of property in entry 36 of List II
does not in itself carry any obligation to pay compensation. Clause (4) of that
article postulates a "law" authorising acquisition of property but
contravening the provisions of clause (2), that is without a public purpose or
payment of compensation.' Similarly, clause (5)(b), which excepts certain
categories of "laws" from the operation of clause (2), contemplates
laws being made without a public purpose or payment of compensation. Such laws can
be made by a State Legislature only under entry 36 which must, therefore, be
taken to confer a legislative power unfettered by any implied restrictions. It
was suggested that the laws referred to in sub-clause (b) of clause (5) are
laws made in exercise of the taxing power or the police power of the State as
the case may be, and that the sub-clause was inserted only by way of abundant
caution. This is hardly a satisfactory answer. Whatever may be the position as
to a taxing law, in regard to the source of legislative power, laws under heads
(2) and (3) of subclause (b) must necessarily be referable to, and derive their
competence from the legislative power under entry 36 of List II, in so far as
they purport to authorise acquisition of any property, for the police power of
the State is only the general power to regulate and control the exercise of
private rights and liberties in the interests of the community and does not
represent any specific head of legislative power. And even that answer is not
available to Mr. Das in regard to clause (4).
117 906 Nor is the position improved for the
zemindars by reading entry 36 of List II and entry 42of List III together.
It was said that the words "subject to
the provisions of entry 42 in List III" must be taken to mean that the lawmaking
power under entry 36 could only be exercised subject to the two conditions as
to public purpose and payment of compensation, both of which are referred to in
entry 42.
Those words, in my opinion, mean no more than
that any law made under entry 36 by a State Legislature can be displaced or
overridden by the Union Legislature making a law under entry 42 of List III.
That they cannot bear the interpretation sought to be put upon them by Mr. Das
is clear from the fact that similar words do not occur in entry 33 of List I
which confers on Parliament the power of making laws with respect to
acquisition or requisitioning of property for the purposes of the Union. For,
if the restrictive conditions as to public purpose and payment of compensation
are to be derived only from those words, then it must follow that in the
absence of those words in entry 33, Parliament can make laws authorising
acquisition or requisitioning of property without a public purpose and a
provision for compensation.
No reason was suggested why parliamentary
legislation with respect to acquisition or requisitioning of property is to be
free from such restrictive conditions while State legislation should be subject
to them. The fact is that the law-making power of both Parliament and State
Legislatures can be exercised only subject to the aforesaid two restrictions,
not by reason of anything contained in the entries themselves, but by reason of
the positive provisions of article 31 (2), and, as laws falling under article
31 (4)or under articles 31-A and 31-B cannot be called in question in a court
of law for non-compliance with those provisions, such laws cannot be struck
down as unconstitutional and void.
It was further contended that the power to
make a law under entry 42 of List III was a power coupled with a duty, because
such law was obviously intended.
907 for the benefit of the expropriated
owners, and where the Legislature has authorised such expropriation, it was
also bound to exercise the power of making a law laying down the principles on
which such owners should be compensated for their loss. Reliance was placed in
support of this somewhat novel contention on the well-known case of Julius v.
Bishop of Oxford.(1) That case, however, has no application here.
While certain powers may be granted in order
to be exercised in favour of certain persons who are intended to be benefited
by their exercise, and on that account may well be regarded as coupled with a
duty to exercise them when an appropriate occasion for their exercise arises,
the power granted to a legislature to make a law with respect to any matter
cannot be brought under that category, It cannot possibly have been intended
that the legislature should be under an obligation to make a law in exercise of
that power, for no obligation of that kind can be enforced by the court against
a legislative body.
Mr. Somayya's argument based on clause (3) of
article 31, to which reference has been made earlier, is equally untenable. It
is true that the "Legislature" of a State includes the Governor and
that a bill passed by such Legislature cannot become a law until it receives
the Governor's assent. Article 200, however, contemplates one of three courses
being adopted by the Governor when a bill is presented to him after it is
passed by the House or Houses of Legislature: (1) to give his assent, or (2) to
withhold assent, or (3) to reserve the bill for the consideration of the
President. The first proviso, to that article deals with a situation where the
Governor is bound to give his assent and has no relevance here. The second
proviso makes reservation compulsory where the bill would, "if it became
law", derogate from the powers of the High Court, but such reservation, it
is important to note, should be made without the Governor himself giving his
assent to the bill. It is significant that the article does not contemplate the
(1) L.R. 5 H.L. 214.
908 Governor giving his assent and
thereafter, when the bill has become a full-fledged law, reserving it for the
consideration of the President. Indeed, the Governor is prohibited from giving
his assent where such reservation by him is made compulsory. The Constitution
would thus seem to contemplate only "bills" passed by the House or
Houses of Legislature being reserved for the consideration of the President and
not "laws" to which the Governor has already given his assent. It was
said that article 31 (3) provides a special safeguard which, in order to ensure
that no hasty or unjust expropriatory legislation is passed by a State
Legislature, requires for such legislation the assent of both the Governor and
the President, and, to make this clear, the words, 'law" and
"legislature" were deliberately used in clause (a). I am unable to
agree with this view. The term "legislature" is not always used in
the Constitution as including the Governor, though article 168 makes him a
component part of the State Legislature. In article 173, for instance, the word
is clearly used in the sense of the ,,Houses of legislature" and excludes
the Governor. There are other provisions also where the word is used in
contexts which exclude the Governor. Similarly the word "law" is
sometimes loosely used in referring to a bill. Article 31 (4), for instance,
speaks of a ''bill" being reserved for the President's assent "after
it has been passed" by the "legislature of a State" and of
"the law so assented to." If the expression "passed by the
legislature" were taken to mean "passed by the Houses of the
legislature and assented to by the Governor" as Mr. Somayya would have it
understood, then, it would cease to be a "bill" and could no longer
be reserved as such. Nor is the phrase "law so assented to" strictly
accurate, as the previous portion of the clause makes it clear that what is
reserved for the President's assent and what he assents to is a
"bill" and not a law. The phrase obviously refers to what has become
a law after receiving the assent of the President. Similarly, article 31 (3)
must, in any judgment, be understood as 909 having reference to what, in
historical sequence, having been passed by the House or Houses of the State
Legislature and reserved by the Governor for the consideration of the President
and assented to by the latter, has thus become a law. If it was intended that such
a law should have the assent of both the Governor and the President, one would
expect to find not only a more clear or explicit provision to that effect, but
also some reference in article 200 to the Governor's power to reserve a measure
for the consideration of the President after himself assenting to it. On the
other hand, as we have seen, where reservation by the Governor is made
obligatory, he is prohibited from giving his assent.
In the view I have expressed above that the
objections based on the-lack of a public purpose and the failure to provide for
payment of just compensation are barred under article 31 (4) and are also
devoid of merits, it becomes unnecessary to consider what is a public purpose
and whether the acquisition authorised by the impugned statutes subserves any
public purpose. Nor is it necessary to examine whether the scheme of
compensation provided for by the statutes is so illusory as to leave the
expropriated owners without any real compensation for loss of their property.
Turning now to the special points arising in
particular cases, it was urged by Mr. Das that section 4 (b) of the Bihar Act,
which provides that all arrears of rent, royalties and cesses due for any
period prior to the date of the vesting of the estates in Government
"shall vest and be recoverable by the State" was unconstitutional and
void. In the first place, there was no public purpose to be served by the
acquisition of such property. The Government evidently lacked funds for the
payment of even the illusory compensation provided for in the Act, and
accordingly, hit upon the device of acquiring these arrears on payment of only
50 per cent. of their value as provided in section 24. Raising funds 910 for
augmenting the Treasury could not be regarded as a public purpose such as would
justify expropriation of private property Secondly, it was said that these
'arrears' would represent so much money when realised, and money could not be
the subject of compulsory acquisition as the obligation to pay compensation
would practically turn such acquisition into a forced loan. Nor could the
payment of 50 per cent of the face value of the arrears be regarded as compensation
for the loss of the total arrears, for, refund of one half of a sum of money
taken away could never make good the loss of the. balance. The argument
proceeds on a misconception. Whatever may be the position as regards the
acquisition of money as such, it is not correct to say that a law made under
entry 36 of List II cannot authorise acquisition of choses in action like
arrears of rent due from the tenants which are covered by the term
"property" used in that entry and in article 31. It is equally
fallacious to argue that a payment in cash or 'in Government bonds of half the
amount of such arrears leaves the zemindar without compensation for the
balance. It is unrealistic to assume that arrears which had remained
uncollected over a period of years during which the zemindar as landlord had
the advantage of summary remedies and other facilities for collection,
represented so much money or money's worth in his hands when he was to cease to
be a landlord and to have no longer those remedies and facilities. When
allowance is made for doubtful and irrecoverable arrears and the trouble and
expense involved in the collection of the rest of them the payment of 50 per
cent. of the face value of the entire arrears must, as it seems to me, be
considered reasonable and fair compensation for taking them over. Indeed, the
contention leaves one almost wondering what advantage the zemindars would gain
by seeking to overthrow a provision in the Act which may well prove beneficial
to them. However that may be, for the reasons already indicated, article 31 (4)
bars a challenge on these two grounds, and the objections to section 4 (b)
cannot be entertained.
911 An attack was also directed against
section 28 (1) (f) which provides for a deduction on a percentage basis out of
the gross assets as "cost of works of benefit to the raiyats of such
estate or tenure", in ascertaining the net assets on which compensation is
to be based. It was said that there was no evidence to show that it was usual
for the zemindars to incur such expenditure, and that the deduction was a mere
contrivance to reduce the compensation payable for the acquisition of their
estates. The provision for such deduction was therefore a fraud on the
Constitution. The argument, however, overlooks the well-established obligation
of the Zemindars to maintain and repair the irrigation tanks and channels in
the villages comprised in their estates. As the Privy Council pointed out in
The Madras Railway Co. v.
Zemindar of Carvatenagaram(1) "the
zemindars have no power to do away with these tanks in the maintenance of which
large numbers of people are interested, but are charged, under Indian law, by
reason of their tenure, with the duty of preserving and repairing them".
These are, obviously, the works of benefit to the raiyats of the estate, and
their cost, which the zemindars are thus under an obligation to bear, is a
perfectly legitimate deduction in computing the net assets of the estate. If
the zemindars had, in the past, neglected this duty, that does not affect the
propriety of the deduction before determining the compensation payable to them.
It is, therefore, idle to say that it is a mere contrivance for reducing the
compensation. This apart, if, as I have endeavoured to show, payment of
compensation is not a justiciable issue in the case of the impugned statutes,
having regard to articles 31 (4),31-A and 3 1-B, it is not open to the court to
inquire whether a deduction which results in reducing the compensation is
unwarranted and therefore a fraud on the Constitution.
LastLy, Mr. Das turned his attack on section
32 (2) read with section 43 (2) (p). Under the former provision compensation
was payable in cash or in bonds or partly in cash and partly in bonds. The
bonds (1) (1874) 1 I.A, 364, 912 were to be either negotiable or non-negotiable
and nontransferable and were payable in forty equal installments. Power was
given to the State Government under section 43 (2)(p) to frame rules providing
for "the proportion in which compensation shall be payable in cash and in
bonds and the manner of payment of such compensation". It was argued that,
while the Constitution conferred power on the legislatures under entry 42 of
List III to make laws with respect to the principles on which compensation for
property acquired was to be determined and the form and the manner in which
such compensation was to be given, it was not competent for the Bihar
Legislature to delegate this essential legislative power to the executive
government. Section 43 (2)(p) being thus void and inoperative, section 32 (2)
must also fall to the ground, being vague and incapable by itself of being
given effect to, and, as payment of compensation was an inextricable part of
the scheme of acquisition under the Act, the entire Act must go. I see no force
in this argument. The legislature has applied its mind to the form in which
compensation has to be paid and has fixed the number of equal installments in
which it should be paid. It, has also provided for payment of interest on the
compensation amount in the meantime. The proportion in which the compensation
could be paid in cash and in bonds and the intervals between the installments
have been left to be determined by the executive government as those must
necessarily depend on the financial resources of the State and the availability
of funds in regard to which the executive government alone can have special
means of knowledge. By no standard of permissible delegation can the vesting of
such limited discretion by a legislature in an administrative body be held
incompetent. The same remark applies to the delegation of rulemaking powers in
regard to payment of compensation under the other two Acts.
It was contended by Mr. Somayya that the
Madhya Pradesh Act was not duly passed as no question was put by the Speaker,
at the third reading of the bill 913 on the motion that it be passed into law,
as required by the provisions of rule "20 (1) of the rules governing
legislative business then in force, and that the omission was not a mere
"irregularity of procedure" which the court is barred from enquiring
into under article 212 (1)of the Constitution. Rule 20 (1) reads as follows:
"A matter requiring the decision of the
Assembly shall be decided by means of a question put by the Speaker on a motion
made by a member".
What appears to have happened is this. One of
the Ministers moved that "The C.P. and Berar Abolition of Proprietary
Rights (Estates, Mahals, Alienated Lands) Bill, 1949, (No. 64 of 1949) as
considered by the House be passed into law". Thereupon the Speaker read
the motion to the House, and this was followed by several speeches welcoming
the measure, amid general acclamation in the House, as a great boon to the
tillers of the soil. The official report of the proceedings prepared by the
Secretary under rule 115(1), however, did not record that the Speaker put the
question in the usual form: "The question is etc." and that the
motion was carried. It was argued that the official report being the only
"authentic record of the proceedings of the Assembly" under rule
115(2), it must be taken to be conclusively established that the motion was not
put to the House and carried by it. There is, in my opinion, no substance in
the objection. The original Bill signed and authenticated by the Speaker was
produced before us, and it contains an endorsement by the speaker that the Bill
was passed by the Assembly on 5th April, 1950. The endorsement was signed by
the Speaker on 10th May, 1950. The official report of the proceedings appears
to have been prepared on 21st June, 1950, and was signed by the Speaker on 1st
October, 1950. When he signed the report the Speaker did not apparently notice
the omission as to the motion having been put and carried. Such omission
cannot, in the face of the explicit statement by the Speaker endorsed on the
Bill, be taken 118 914 to establish that the Bill was not put to the House and
carried by it. In any case, the omission to put the motion formally to the
House, even if true, was, in the circumstances, no more than a mere
irregularity of procedure, as it is not disputed that the overwhelming majority
of the members present and voting were in favour of carrying the motion and no
dissentient voice was actually raised.
Mr. Somayya raised a further contention that
in regard to the malguzari lands covered by the Madhya Pradesh Act, articles
31-A and 31-B could be of no assistance to the Government, as such lands are
not "estates" within the meaning of clause (2) of article 31-A with
the result that .the objection based on article 14 as to discrimination in the
matter of payment of compensation must prevail. It will be recalled that the
High Court of Patna held the Bihar Act unconstitutional as being discriminatory
in providing for payment of compensation, and it was to overcome that
difficulty that articles 31-A and a1-B were inserted in the Constitution. It
was conceded by the learned AdvocateGeneral of Madhya Pradesh that these
malguzari lands could not be regarded as estates within the meaning of article
31-A read with the Tenancy Acts in force in Madhya Pradesh, but he contended
that, inasmuch as article 31-B purported to validate specifically the Madhya
Pradesh Act among others, and as that article was not limited in its
application to estates, the objection could not prevail. Mr. Somayya, however,
submitted that the opening words of article 31-B, namely, "Without
prejudice to the generality of the provisions contained in article 31-A"
showed that the mention of particular statutes in article 31-B read with the
Ninth Schedule was only illustrative, and that, accordingly, article 31-B could
not be wider in scope. Reliance was placed in support of this argument upon the
decision of the Privy Council in Sibnath Banerji's case(1). I cannot agree with
that view. There is nothing in article 31-B to indicate that the specific
mention of (1) [1945] F.C.R. 195 (P.C.) 915 certain statutes was only intended
to illustrate the application of the general words of article 31-A. The opening
words of article 31-B are only intended to make clear that article 31-A should
not be restricted in its application by reason of anything contained in article
31-B and are in no way calculated to restrict the application of the latter
article or of the enactments referred to therein to acquisition of
"estates." The decision cited affords no useful analogy.
In some of the cases the estates sought to be
acquired are situated in what was previously the territory of Indian States and
belong to their former rulers. On the merger of those States in Madhya Pradesh
or Uttar Pradesh, as the case may be, by virtue of the "covenant of
merger" entered into between the rulers and the Government of India the
properties in question were recognised to be the "private property"
of the Rulers. In these eases it was urged that that estates sought to be
acquired formed part of the Rulers' "personal rights" guaranteed to
them under the instrument of merger, and that neither the impugned statutes nor
the notifications issued thereunder could deprive the Ruler of such properties
in contravention of article 362. The Attorney-General had several answers to
this argument, including the bar under article 363 to interference by courts in
disputes arising out of agreements, covenants, etc., by Rulers of Indian States
to which the Government of India was a party. But a short and obvious answer is
that there was no contravention of any guarantee or assurance given by the
Government under the covenant of merger, as the estates in question are sought
to be acquired only as the "private property" of the Rulers and not
otherwise. The compensation provided for, such as it is, is in recognition of
their 'private proprietorship, as in the case of any other owner. There is,
therefore, no force in this objection. In Appeal No. 285 of 1951 preferred by
the Raja of Kapurthala, where a similar objection was raised, it was further
alleged that the privy purse of the Ruler was fixed at a low figure in
consideration of the Oudh 916 Estate being left to be enjoyed by him as his
private property, and that its compulsory taking over would deprive him of the
means of discharging his liability to maintain the members of his family. In
the absence of any material to establish the facts, the allegation calls for no
consideration.
Certain other minor points were also raised
in some of the cases but they are not worth mentioning as they proceeded either
on a misapprehension or were palpably unsound.
Thus all the objections raised to the
constitutional validity of the Bihar Act, the Madhya Pradesh Act and the Uttar
Pradesh Act or any part thereof fail and are overruled, MAHAJAN J.--This is an
appeal under article 132 (3) of the Constitution of India from a judgment of
the Full Bench of the High Court of Judicature at Patna, dated the 12th March,
1951, whereby the High Court declared the Bihar Land Reforms Act, 1950, ultra
vires on the ground of its infringement of article 14 of the Constitution, but
decided against the respondent on all other points.
On the 30th December, 1949, a Bill instituted
the Bihar Land Reforms Bill was introduced in the Legislative Assembly of Bihar
and was passed by both the Houses of Legislature, and after having been
reserved for the consideration of the President of India, received his assent
on the 11th September, 1950. The Act was published in The Bihar Government
Gazette on the 25th September, 1950, and on the same day a notification under
section 1 (3) of the Act was published declaring that the Act would come into
force immediately. On the same day, a notification under section 3 of the Act
was published stating that the estates and tenures belonging to the respondent
and two others passed to and became vested in the State of Bihar under the
provisions of the Act. The respondent filed a petition in the High Court of
Judicature at Patna under article 226 of the Constitution, challenging the
constitutionality of the 917 said Bihar Land Reforms Act and praying for a writ
in the nature of mandamus to be issued on the State of Bihar restraining it
from acting in any manner by virtue of, or under the provisions of, the said
Act. This application was heard along with three title suits and other similar
applications filed by various zemindars of Bihar by a Special Bench of the High
Court. By three separate but concurring judgments, the Court declared the Act
to be unconstitutional and void on the ground of its infringement of
fundamental right under article 14 of the Constitution.
The validity of the Act was attacked before
the High Court on the following grounds:
1. That the Bihar Legislature had no
competence to pass it.
2. That it contravened clause (1) of article
81 of the Constitution.
3. That the vesting of the estates in the
State of Bihar under the Act being in effect an acquisition of the estates, it
was invalid as that acquisition was not for a public purpose and the provision
for compensation was illusory.
4. That it contravened article 19 (1) (f) of
the Constitution.
5. That some of its provisions were invalid
on the ground of delegation of legislative powers.
6. That it was a fraud on the Constitution.
7. That it was unconstitutional as it
contravened article 14 of the Constitution.
The Court held as follows :-
1. That the Bihar Legislature was competent
to enact the legislation.
2. That the Act did not contravene article 31
(1) of the Constitution.
3. That the acquisition of the estates and
tenures was for a public purpose.
4. That the subject-matter of the Act fell
under article 31 (4) of the Constitution.
918 5. That article 19 (1) (f) had no
application.
6. That whatever powers were delegated to the
executive were permissible.
7. That the Act was not a fraud on the
Constitution.
8. That the Act was unconstitutional as it
contravened article 14 of the Constitution.
During the pendency of the appeal against the
decision of the High Court the Union Government with a view to put an end to
the litigation of the zamindars brought forward a Bill to amend the
Constitution and this was passed by the requisite majority as the Constitution
(First Amendment) Act, 1951. The zamindars brought petitions under article 32
of the Constitution impugning the Amendment Act itself as unconstitutional and
void. All these petitions were disallowed. by this Court on the 5th October,
1051, and it was held that the Constitution (First Amendment) Act, 1051, had
been validly enacted. In view of the Amendment Act any argument regarding the
unconstitutionality of the Bihar Act based on the ground that the provisions of
that Act contravened articles 14, 19 or 31 of the Constitution does not survive
and the Act is not open to challenge. on any such ground. As the Act has been
held invalid by the High Court solely on the ground that it violated the
provisions of article 14 of the Constitution, the basis of the judgment
declaring the Act to be unconstitutional is no longer tenable and it has
therefore to be reversed in case this Court agrees with the decision of the
High Court on the points decided against the respondent.
Mr. P.R. Das for the respondent frankly
conceded that no objection to the validity of the Act at this stage could be
raised on the ground that it contravened any of the provisions of Part III of
the Constitution. He, however, supported the decision of the Court on grounds
decided against him by that Court and urged the following points 919
1. That it was not within the competence of
the Bihar State Legislature to enact the impugned Act.
2. That the acquisition of the estates not
being for public purpose, the Act was unconstitutional.
3. That the legislative power in various
sections of the Act has been abdicated in favour of the executive and such
abdication of power was unconstitutional.
4. That the Act was a fraud on the
Constitution and that certain parts of the Act were unenforceable on account of
vagueness and indefiniteness.
The foundation of Mr. P.R. Das's attack on
the vires of the Act mainly rests on the contention that it is implicit within
the language of entry 36 of List II of the Seventh Schedule of the Constitution
that property could not be acquired without payment of compensation, the only
effect of a compulsory power of acquisition against the individual being that
there is the power to oblige him to sell and convey property when the public
necessities require it, but that the power to take compulsorily raises by
implication a right to payment; in other words, there is a concomitant
obligation to pay and the power to acquire is inseparable from the obligation
to pay compensation and as the provisions of the statute in respect of payment
of compensation are illusory, it is unconstitutional.
As regards article 31 (2) of the
Constitution, it is said that it deals with the fundamental right regarding
property which is expressed in the clause in negative language. In entry 36 it
is expressed in an affirmative form.
The provisions of articles 31 (4) and 31-A
and 31-B, though they deprive the expropriated proprietor of his rights
provided in Part III of the Constitution, do not in any way affect the ambit of
entry 36 and empower the State Legislature to make a law for compulsory acquisition
of property without payment of compensation in the true sense of that term.
Emphasis is laid on the words "subject to the provisions of entry 42"
contained in entry 36 and it is contended that the exercise of legislative
power under 920 entry 36 is conditional on exercise of power under entry 42,
that one could not be exercised without the other and that the power conferred
by the two entries had to be construed on the assumption that the acquisition
was to be paid for.
It is further contended that the legislative
power in entry 42 is a power coupled with duty which the legislature was bound
to exercise for the benefit of the person whose property was taken in exercise
of the legislative power under entry 36. It is also said that the Bihar Legislature
had legislated both under entry 36 and entry 42 and intended to take the
property conditional on payment of compensation but if it transpires that the
provisions it has made about payment of compensation are illusory, then that
part of the Act would be void and as it could not have been intended by the
legislature to pass the Act in any truncated form in which it would remain if
the provisions regarding compensation are taken out of it, the whole Act should
be held unconstitutional.
To appreciate the contentions raised by Mr.
Das on the question of the competence of the Bihar Legislature to enact the
Bihar Land Reforms Act, 1950, it is necessary to refer to its provisions and to
see on what subjects the legislature has purported to enact the law.
The title of the Act indicates that the law
provides for some kind of land reform in Bihar. Its preamble gives no
indication as to the nature of these reforms except that it provides for the
constitution of a Land Commission to advise the State Government on the
agrarian policy, whatever that expression may mean. The dominant purpose of the
Act is that of transference to the State of the interests of proprietors and
tenure-holders in land and of the mortgagees and lessees of such interests
including the interests in trees, forests, fisheries, jalkars, ferries, huts,
bazars, mines and minerals. Section 3 provides that the Government may, from
time to time, by notification declare the estates or tenures mentioned therein
to have passed and become vested in the State. Section 4 mentions ,the
consequences of such vesting. It enacts that the 921 interests of the
proprietor or tenure-holder in any building or part of a building comprised in
such estate or tenure and used primarily as office or cutchery for the collection
of rent of such estate or tenure, and his interests in trees, forests,
fisheries, jalkars, huts, bazars and ferries and all other sairati interests as
also his interest in the subsoil including any rights in mines and minerals,
whether discovered or undiscovered, or whether being worked or not, inclusive
of such rights of lessee of mines and minerals, comprised in such estate or
tenure (other than the interests of raiyats or under raiyats) shall vest
absolutely in the State free from all incumbrances. Clause (b) provides that
all arrears of rents, including royalties and all cesses together with
interest, if any, due thereon for any period prior to the date of vesting,
which were recoverable in respect of the estates or tenures of the proprietor
or tenure-holder and the recovery of which was not barred by any law of
limitation shall vest in, and be recoverable by, the State. The expression
"arrears of rent" includes arrears in respect of which suits were
pending on the date of vesting or in respect of which decrees whether having
the effect of rent decree or money decree were obtained before the date of such
vesting and had not been satisfied and were not barred by limitation and also
includes the costs allowed by such decrees. In other words, all outstanding in
the nature of rents and rent decrees that were due to the proprietors or
tenure-holders before the date of vesting and before the State had any right,
title or interest in the estate would also pass to it. This seems to be a
peculiar and rather extraordinary consequence of the vesting of an estate.
Normally it has no relation to and cannot be regarded as an incident of the
transference of the estates.
The clause is in effect,an independent
provision laying down that monies due to the proprietor or tenure-holder during
the period antecedent to the vesting and not realized by him but which were in
the course of realization, whether by private effort or by means of pending
suits or decrees including the costs of those 119 922 suits and decrees will
stand forfeited to the State. In clause (c) the liability of the proprietors or
tenureholders for payment of arrears of revenue and cesses to the Government
prior to the date of vesting is kept alive. The other consequences of vesting
are that no suit can be maintained for recovery of any money from a proprietor
or tenure-holder which is secured by a mortgage or charge on the estate and no
such estate or tenure covered by the Act is liable to.
attachment. The Collector is entitled to take
charge of the estate and to inspect the documents and accounts which he thinks
necessary to do for the management of the estate or tenure. Section 5 permits
the proprietors and tenure-holders to retain their homesteads but only in the
capacity of tenants free from the obligation to pay rent. Section 6 allows them
to retain possession of lands in their khas possession or in the possession of
lessees under them, on payment of rent as raiyats to the State in the status of
occupancy tenants. Section 7 provides that buildings together with lands on
which such buildings stand and in the possession of proprietors and
tenure-holders and used as golas, factories or mills shall be retained by them
on payment of rent. Section 8 gives a right of appeal to a party aggrieved against
the Collector's order. In section0 it is provided that all mines comprised in
the estate or tenure as were in operation at the commencement of this Act and
were being worked directly by the proprietor or tenureholder shall be deemed to
have been leased by the State Government to the proprietor of tenure-holder.
This section does not include within its scope mines on which considerable
money might have been spent but which are actually not in Operation. An
artificial definition has been given in section (2) sub-clause (m) to the
expression "mines in operation" as meaning mines regarding the
working of which notice has been served on Government under the Indian Mines
Act. Section 10 keeps alive subsisting lease of mines and minerals, the lessee
being deemed to be a lessee under the Government. Buildings and lands
appurtenant to a mine stand transferred 923 to the State under the provisions
of section 11 and they are to be deemed' to be leased by the State to the
lessee with effect from the date of vesting. Section 12 lays down the
constitution of a Mines Tribunal. Section 13 provides for the management of the
estates and tenures that vest in the State. Sections 14, 15, 16, 17 and 18 make
provisions relating to the investigation of debts of proprietors and
tenure-holders and lay down the procedure for payment of those debts. In
section 19 provision is made for the appointment of compensation officer.
Certain directions are given in sections 20 and 21 regarding the procedure to
be adopted by the compensation officer when the proprietor has only a certain
share in an estate and where certain trusts have been created by the
tenure-holder or proprietor.
Section 22 defines "previous
agricultural year" and the phrase "gross assets" with reference
to a proprietor or tenure-holder. "GroSs assets" in the Act means the
aggregate of the rents including all cesses, which were payable in respect of
the estates or tenures of such proprietor or tenureholder for the previous
agricultural year, whether payable by a subordinate tenant or the raiyats.those
rents.
In the expression "gross assets" is
also included the gross income of the previous agricultural year from
fisheries, trees, jalkars, ferries, huts, bazars and sairati interests.
Gross income from forests has to be
calculated on the basis of the average gross annual income of twenty-five
agricultural years preceding the agricultural year in which the date of vesting
falls, which in the opinion of a forest officer, the forests would have yielded
if they had been placed during the said period of twenty-five years under the
management of the State.
Section 23 lays down the method of
computation of net income. It provides that the net income of a proprietor or
tenure-holder shall be computed by deducting from the gross asset of such
proprietor or tenure-holder, as the case may be, the following :
(a) any sum payable as land revenue or rent;
924 (b) any sum payable by such proprietor as
agricultural income-tax in respect of any agricultural income derived from such
estate or tenure for the previous agricultural year;
(c) any sum payable by such proprietor or
tenure holder as income-tax in respect of any income derived from such estate
or tenure, other than royalties for the previous agricultural year;
(d) any sum payable as chaukidari tax or
municipal tax, (e) cost of management of such estate or tenure at rates varying
from five to twenty per cent. according to the amount of the gross asset. The
lowest limit fixed is at Rs.
2,000, and the highest at any amount
exceeding Rs. 15,000.
These rates appear to have been fixed in an
arbitrary manner bearing no relation whatsoever to the actual cost of
management. To illustrate, in the case of the Maharaja of Darbhanga whose
estate has a gross income of nearly fortyeight lakhs, the cost of management,
according to this calculation, would work' out to a sum of nine and a half
lakhs, which on the face of it looks startling; it can hardly have any relation
to the costs actually incurred.
The expense ratio under the head
"management would ordinarily be lowest for the highest gross income. It
goes up in proportion to the reduction in the amount of gross income.
The Act has, however, reversed this rule of
economics with the result that part of the money that on the principles stated
for determining compensation would be payable by way of compensation to the
proprietor or tenure-holder stands forfeited by this artificial reduction of
the net income.
Clause (f) provides for deduction from the
gross assets of cost of works of benefit to the raiyats of such estates or
tenures at rates varying from four to twelve and a half per cent., the rate of
four per cent. being applicable where the gross asset does not exceed Rs.
5,000, and the rate of twelve and a half per cent being applicable if the gross
asset exceeds Rs. 25,000. It is obvious 925 that the calculation of the cost of
works of benefit to the raiyats at a fiat rate without any reference to the
actual expenses that might have been incurred is a provision of a confiscatory
character. It artificially reduces the net income which is the basis of the
assessment of compensation.
The last clause(g) of this section allows
deduction of any other tax or legal imposition, payable in respect of such
estate or tenure not expressly mentioned in the earlier clauses. Section 24
provides the manner of determination of the compensation payable to the
proprietor or tenureholder.
It lays down a sliding scale for the
assessment of compensation. Where the net income does not exceed Rs. 500, the
compensation payable is twenty times the net income and where the net income
computed exceeds Rs. 1,00,000, it is payable at three times the amount. The
compensation in such cases is merely nominal. In the case of the Maharaja of
Darbhanga, the estate acquired also comprised and purchased by him by spending
about a crore of rupees and also comprised mortgages, to the tune of half a
crore. All these vest in the Bihar State along with the inherited zemindaris of
the Maharaja and arrears of rent amounting to Rs.
30,00,000, while the total compensation
payable is nearly a sum of Rs. 9,00,000. This section further provides that to
the amount thus payable shall be added the amount of fifty per cent. of the
arrears of rent referred to in clause (b) of section 4 along with the amount of
compensation Payable in respect of mines and minerals as determined under
section
25. The section also lays down the method of
assessment of compensation in the case of persons who have only a share in the
zamindari or have other minor interests in the tenures or estates where the
estate or tenure is held in trust etc., or where they are of an impartible
nature. In the case of mines and minerals the method of assessment is laid down
in section 25. It has either to be fixed by agreement or by a tribunal
appointed for the purpose. The subsequent sections provide lot the preparation
of compensation roll and for hearing of appeals etc, Section 32 926 lays down
the method and manner of payment of compensation.
Sub-section (2) of this section enacts that
the amount of compensation shall be paid in cash or in bonds or partly in cash
and partly in bonds. The bonds shall be either negotiable or non-negotiable and
non-transferable and be payable in forty equal installments to the person named
therein and shall carry interest at two and a half per cent. per annum with
effect from the date of issue. Any disputes about compensation between the
proprietors or tenure holders have to be determined by a tribunal appointed by
the State Government. Section 34 provides for the constitution of a commission
called the Bihar Land Commission. The other provisions of the Act are of a
miscellaneous character and require no special mention. The last section
authorizes the State Government to make rules for carrying out the provisions
of the Act.
From this survey of the Act it appears that
the law enacted might be taken to relate to several items in the legislative
lists. ie., rights in or over land and land tenures, forests, fisheries, mines
and minerals, acquisition of property and also principles on which compensation
for property acquired is to be determined. The pith and substance of the
legislation however, in my opinion, is the transference of ownership of estates
to the State Government and falls within the ambit of legislative head entry 36
of List II. There is no scheme of land reform within the framework of the
statute except that a pious hope is expressed that the commission may produce
one. The Bihar Legislature was certainly competent to make the law on the
subject of transference of estates and the Act as regards such transfers is
constitutional.
The Act further deals with the realization of
arrears of rents due before the date of vesting of the estates to the zemindars
and forfeits fifty per cent. of such realization to the State exchequer. It
also in an indirect manner forfeits the State exchequer part of the
compensation money which would have been payable 927 to the proprietors or
tenure holders if the net income was not reduced by deduction from the gross
income of items of artificial nature which have no relation to any actual
expenses. Both these provisions will be separately dealt with hereinafter as,
in my opinion, the enactment of these provisions is unconstitutional Having
held that the Bihar Act is constitutional as regards transfer of estates to the
State and that this is mainly an enactment under legislative head 36 of List
II, it is convenient now to examine the contention of Mr. Das to the effect
that in the contents of the power conferred on the legislature by this entry
their exists a concomitant obligation to pay compensation and that as the
provisions regarding payment of compensation are illusory, the Act is
unconstitutional and that article 31 (4) of the Constitution does not afford
any protection against this attack.
For a proper appreciation and appraisal of
the proposition of Mr. P. R. Das that the obligation to pay compensation is
implicit in the language of entry :36 of List II of the Seventh Schedule and
that the power to take compulsorily raises by implication a right to payment,
the power to acquire being inseparable from the obligation to pay compensation,
it is necessary to examine briefly the origin of the power of the State on the
subject of compulsory acquisition of property. This power is a sovereign power
of the State.
Power to take property for public use has
been exercised since olden times. Kent speaks of it as an inherent sovereign
power. As an incident to this power of the State is the requirement that
property shall not be taken for public use without just compensation. Mr. Broom
in his work on Constitutional Law says, "Next in degree to the right of
personal liberty is that of enjoying private property without undue
interference or molestation, and the requirement that property shall not be
taken for public use without just compensation is but an affirmance of the
great doctrine established by the common law for the protection of private
property. It is founded in natural equity and is 928 laid down as a principle
of universal law." In the words of Lord Atkinson in Central Control Board
v. Cannon Brewery Co.
Ltd.(1), the power to take compulsorily
raises by implication a right to payment.
On the continent the power of compulsory
acquisition is described by the term "eminent domain". This term
seems to have been originated in 1625 by Hugo Grotius. who wrote of this power
in his work "De Jure Belli et Pacis" as follows:
"The property of subjects is under the
eminent domain of the State, so that the State or he who acts for it may use
and even alienate and destroy such property, not only in the case of extreme
necessity, in which even private persons have a right over the property of
others, but for ends of public utility, to which ends those who founded civil
society must be supposed to have intended that private ends should give way.
But it is to be added that when this is done the State is bound to make good
the loss to those who lose their property." The relationship between the
individual's right to compensation and the sovereign's power to condemn is discussed
in Thayer's Cases on Constitutional Law (Vol. I, p.
953) (mentioned on page 3 of Nichols on
Eminent Domain) in these words :-"But while this obligation (to make
compensation) is thus well established and clear, let it be particularly
noticed upon what ground it stands, viz., upon the natural rights of the
individual. On the other hand, the right of the State to take springs from a
different source, viz., a necessity of government. These two, therefore, have
not the same origin; they do not come, for instance, from any implied contract
between the State and the individual, that the former shall have the property,
if it will make compensation; the right is no mere right of pre-emption, and it
has no condition of compensation annexed to it, either precedent or subsequent;
but there is a right to take, (1) [1919] A.C. 744.
929 and attached to it as an incident, an
obligation to make compensation; this latter, morally speaking, follows the
other, indeed like a shadow but it is yet distinct from it, and flows from
another source." Shorn of all its incidents, the simple definition of the
power to acquire compulsorily or of the term "eminent domain" is the
power of the sovereign to take property for public use without the owner's
consent. The meaning of the power in its irreducible terms is. (a) power to
take, (b) without the owner's consent, (c) for the public use. The concept of
the public use has been inextricably related to an appropriate exercise of the
power and is considered essential in any statement of its meaning. Payment of
compensation, though not an essential ingredient of the connotation of the
term, is an essential element of the valid exercise of such power. Courts have
defined "eminent domain" so as to include this universal limitation
as an essential constituent of its meaning. Authority is universal in support
of the amplified definition of "eminent domain" as the power of the
sovereign to take property for public use without the owner's consent upon
making just compensation.
It is clear, therefore, that the obligation
for payment of just compensation is a necessary incident of the power of
compulsory acquisition of property, both under the doctrine of the English Common
Law as well as under the continental doctrine of eminent domain, subsequently
adopted in America.
The question for consideration is whether
this obligation to pay compensation for compulsory acquisition of property has
been impliedly laid down by the constitution makers in our Constitution under
legislative head in entry 36 of List II and entry 33 of List I, or whether this
all important obligation which follows compulsory acquisition as a shadow has
been put in express and clear terms somewhere else in the Constitution. To my
mind, our Constitution has raised this obligation to pay compensation for the
120 930 compulsory acquisition of property to the status of a fundamental right
and it has declared that a law that does not make provision for payment of
compensation shall be void. It did not leave the matter to be discovered and
spelt out by learned arguments at the Bar from out of the contents of entry 36;
they explicitly provided for it in. article 31 (2) of the Constitution. As the
obligation to pay has been made a compulsory part of a statute that purports to
legislate under entry 33 of List I and entry 36 of List II, it is not possible
to accede to the contention of Mr. P.R. Das that the duty to pay compensation
is a thing inherent in the language of entry 36. I agree with the learned
Attorney General that the concept of acquisition and that of compensation are
two different notions having their origin in different sources. One is founded
on the sovereign power of the State to take, the other is based on the natural
right of the person who is deprived of property to be compensated for his loss.
One is the power to take, the other is the condition for the exercise of that
power. Power to take was mentioned in entry 36, while the condition for the
exercise of that power was embodied in article 31 (2) and there was no duty to
pay compensation implicit in the content of the entry itself.
Reference in this connection may be made to
the Government of India Act, 1935. By section 299 of that statute a fetter was
imposed on the power of legislation itself. The Constitution, however, declared
laws not providing for compensation as void and it not only placed a fetter on
the power of legislation but it guaranteed the expropriated proprietor a remedy
in article 32 of the Constitution for enforcement of his fundamental right. I
am therefore of the opinion that Mr. Das is not right in his contention that
unless adequate provision is made by a law enacted under legislative power
conferred by entry 36 of List I for compensation, the law is unconstitutional
as entry 36 itself does not authorize the making of such a law without providing
for compensation. Then 931 it was said that entry 36 of List II was linked up
with entry 42 of the Concurrent List by the words "subject to"
occurring therein and that the validity of any law made in exercise of
legislative power under entry 36 was conditional on the simultaneous exercise
of the legislative power under entry 42 and because there has been no valid
exercise of this power (the provisions of the impugned Act regarding the
determination of compensation being illusory), the legislation under entry 36
fails. In my opinion, this contention is unsound. The two entries referred to
above are merely heads of legislation and are neither interdependent nor
complementary to one another. It is by force of the provisions of article 31
(2) that it becomes obligatory to legislate providing for compensation under
entry 42 of the Concurrent List in order to give validity to a law enacted
under entry 36 and not by reason of the use of the wards "subject to"
in the wording of the entry. No such words occur in entry 33 of the Union List.
It cannot reasonably be argued that Parliament could make a law for compulsory
acquisition of property for its purposes with out fulfilling the condition of
making a law under entry42 of the Concurrent List, but a State Legislature in
this respect is in a different situation. Such a contention, in my opinion, is
untenable. The only purpose of the words "subject to" occurring in
entry 36 is to indicate that legislation under entry 36 would be subject to any
law made by Parliament in exercise of its legislative power under entry 42 of
the Concurrent List.
Both legislatures can legislate under entry
42 but the Parliamentary statute made in exercise of powers under this entry
would have preference over a State law in case of repugnancy and it was for
this reason that reference was made to entry 42 in the head of legislation
mentioned in the State List under entry 36. In other words, it only means that
whenever a law is made by a State Legislature in exercise of its legislative
power under entry 36, that law will be subject to the provisions of a
Parliamentary statute made in exercise of its legislative powers under entry 42
of the Concurrent List.
932 Lastly it was urged that the legislative
power conferred in entry 42 of the Concurrent List is a power conferred for the
benefit of the expropriated owner and that the legislature is bound to exercise
this power for his benefit whenever it takes property under its compulsory
powers,. in other words, it was said that the power conferred by the entry was
coupled ,. with a duty to exercise it. Reference was made in this connection to
the observations of Lord Cairns in Julius v. Bishop of Oxford(1). The principle
of that decision is that where power is conferred in the nature of a trust
there is an obligation to exercise it for the benefit of the cestui que trust.
These observations do not have any apposite application to the case of
legislative powers conferred by a constitution. The entries in the lists are
merely legislative heads and are of an enabling character.
Duty to exercise legislative power and in. a
particular manner cannot be read into a mere head of legislation. If the
argument of the learned counsel was sound, then it would be open to this Court
to issue a mandamus to the legislature to exercise its power of legislation
under entry 42, if it failed to do so. Mr. Das. when faced with this question,
had to admit that he could not seriously contend that a legislature could be
directed to enact a statute if it did not wish to do so. Failure to make a law
under entry 42 cannot make a law made under entry 36 bad. In my opinion, the
decision in the case of Julius v. Bishop of Oxford (1) has no relevancy to the
matter before us.
The crucial point for determination in these
appeals is to discover the extent to which article 31 (4)of the Constitution or
the new articles 31-A and a1-B have deprived the expropriated proprietor of his
rights or remedies in respect of this matter and of the guaranteed right to get
compensation for property acquired. Article 31 (4) is in these terms :"If
any Bill pending at the commencement of this Constitution in the legislature of
a State has, after it has been passed by such Legislature, been (1) (1880) 5
App. Cas. 214.
933 reserved for the consideration of the
President and has received his assent, then, notwithstanding anything in this
Constitution, the law so assented to shall not be called in question in any
court on the ground that it contravenes the provisions of clause (2)."
Articles 31-A and 31-B are in these terms :-"31-A. (1) Notwithstanding
anything in the foregoing provisions of this Part, no law providing for the
acquisition by the State of any estate or of any rights therein or for the
extinguishment or modification of any such rights 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 any provisions of this Part:
Provided that where such law is a law 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 the
President has received his assent.
(2) In this article (a) the expression '
estate' shall in relation to any local area have the same meaning as that
expression or its local equivalent has in the existing law relating to land
tenures in force in that area, and shall also include any jagir, inam or musafi
or other similar grant.
(b) the expression 'rights', in relation to
an estate, shall include any rights vesting in a proprietor, sub-proprietor,
under proprietor, tenure-holder or other intermediary and any rights or privileges
in respect of land revenue.
31-B. Without prejudice to the generality of
the provisions contained in article 31-A, none of the Acts and Regulations
specified in the Ninth Schedule nor any of the provisions thereof shall be
deemed to be void, or even to have become void, on the ground that such Act,
Regulation or provision is inconsistent with or takes away or abridges any of
the rights conferred by, any provisions of this Part, and notwithstanding any
judgment, decree or order of any court or tribunal 934 to the contrary, each of
the said Acts and Regulations shall, subject to the power of any competent
legislature to repeal or amend it, continue in force.
The language of article 31(4) is unequivocal
in its terms and states that when a Bill has received the assent of the
President according to the procedure prescribed in article 31(3) and (4) then,
notwithstanding anything in this Constitution, the law so assented to shall not
be called in question in any court on the ground that it contravenes the
provisions of clause (2).
In order to determine the scope of this
clause, it is necessary to determine what are the specific provisions of clause
(2) which clause (4) makes unjusticiable. A strict construction has to be
placed on the language of this clause, it being in the nature of a debarring
provision. In my opinion, the provisions of sub-clause (2) made unjusticiable
by clause (4), relate to the determination and payment of compensation. The
whole purpose of the clause is to make the obligation to pay compensation a
condition precedent to the compulsory acquisition of property. The words of the
clause preceding the word "unless" are merely descriptive of the law,
the validity of which would be questionable if there was no provision for
determination and for payment of compensation for the property taken in its contents.
The use of the word "such" fully supports this interpretation. The
mandate of the clause is that such a law must contain a provision for payment
of compensation to the expropriated proprietor. According to the Oxford
Dictionary, (Vol. 8, p. 1526) the expression provision" when used in
statutes, has reference to what is expressly provided therein. What article 31
(4) really says is that the contravention of the express provisions of article
31 (2) relating to payment of compensation will not be a justiciable issue. It
has no reference to anything that may be implied within the language of that
clause. The existence of a "public purpose" is undoubtedly an implied
condition of the exercise of compulsory powers of acquisition by the State, but
the language of article 31 (2) does not 935 expressly make it a condition
precedent to acquisition. It assumes that compulsory acquisition can be for a
"public purpose" only, which is thus inherent in such acquisition.
Hence article 31(4), in my opinion, does not
bar the jurisdiction of the court from inquiring whether the law relating to
compulsory acquisition of property is not valid because the acquisition is not
being made for a public purpose. This is also the view taken by the learned
Judges of the Patna High Court. The sovereign power to acquire property compulsorily
is a power to acquire it only for a public purpose.
There is no power in the sovereign to acquire
private property in order to give it to private persons. Public purpose is a
content of the power itself. Reference in this connection may be made to
Willoughby's Constitutional Law (page 795). Therein it is stated, "As
between individuals, no necessity, however great, no exigency, however
imminent, no improvement, however valuable, no refusal, however unneighbourly,
no obstinacy, however unreasonable, no offers of compensation, however
extravagant, can compel or require any man to part with an inch of his
estate." Public purpose is an essential ingredient in the very definition
of the expression "eminent domain" as given by Nichols and other
constitutional writers, even though obligation to pay compensation is not a
content of the definition but has been added to it by judicial interpretation.
The exercise of the power to acquire
compulsorily is conditional on the existence of a public purpose and that being
so this condition is not an express provision of article 31 (2) but exists
aliunde in the content of the power itself and that in fact is the assumption
upon which this clause of the article proceeds.
The result of this discussion is that the
scope of article 31(4) is limited to the express provisions of article 31 (2)
and courts cannot examine either the extent or the adequacy of the provisions
of compensation contained in any law dealing with the 936 acquisition of
property compulsorily for public purpose but the barring provisions of article
31 (4) do not in any way touch the powers of the court to see whether the
acquisition has been made for public purpose. The provisions of this clause
also do not take away the court's power to examine whether the legislature that
made the law has acted in exercise of its law making power within the lists or
has merely made some other law though it has ostensibly exercised its powers
under a certain legislative head which cannot be used to support the
legislation.
As regards the new articles 31-A and 31-B,
they merely place beyond the reach of the court any enactment dealing with
compulsory acquisition of property which may infringe any of the provisions of
Part III of the Constitution; in other words, article 13 (2) of the
Constitution cannot be called in aid to impugn the validity of such statutes.
Having determined the scope of article 31
(4), it is now convenient to examine the extent of the protection given by
article: 31 (4) to the impugned statute.
Mr. Das is to a great extent right in his
contention --the point was not seriously challenged by the learned Attorney-General.--that
the law under challenge in the matter of compensation is highly unjust or
inequitable to certain persons and in certain matters, and compensation in some
cases is purely illusory. Be that as it may, the Constitution in express terms prohibits
an enquiry in a court of law into those matters. The same Constituent Assembly
that provided the guarantees in article 31 (2) in respect of payment of
compensation and provided the remedy in article 32 for enforcing the guaranteed
right. took away that remedy in the case of the Bihar and other zamindari
estates and substituted for it the procedure of article 31 (3) and (4),
compliance with which would be sufficient to make the laws valid and effective.
However repugnant the impugned law may be to our sense of justice, it is not
possible 937 for us to examine its contents on the question of quantum of
compensation. It is for the appropriate legislature to see if it can revise
some of its unjust provisions which are repugnant to all notions of justice and
are of an illusory nature. The courts' hands are tied by the provisions of
article 31(4) and that which has been declared by the Constitution in clear
terms not to be justiciable, cannot be made justiciable in an indirect manner
by holding that the same subject matter which is expressly barred is contained
implicitly in some other entry and therefore open to examination. None of these
provisions, however, fetter the power of the court to inquire into any other
matters the cognizance of which is not expressly taken away by the provisions
of clause (4) and articles 31-A and 31-B.
Therefore, the material point for
determination is whether the acquisition of the estates is for any-public
purpose and if it be not so, the law can certainly be held to be unconstitutional.
Mr. Das contended, and in my opinion rightly, that jurisdiction to acquire
private property by legislation can only be exercised for a public purpose. It
may be the purpose of the Union, or the purpose of the State or any other
public purpose. Private property cannot be acquired for a private purpose. 'the
right to legislate under entry 36 postulates the existence of a public purpose
and the contention is that there was no public purpose behind the Act. The
learned Judges of the High Court negatived this contention on the ground that
the question whether there was a public purpose in support of the acquisition
of the estates had been by implication decided by the Constituent Assembly and
therefore the Court could not go into this matter. Shearer J. said as follows
;-"We are in my opinion, estopped from saying that the acquisition of
estates and tenures is not an acquisition for such a purpose. That it is, has
been decided by the Constituent Assembly itself." 121 938 This decision was
reached in view of the provisions of clauses (4) and (6) of article 31 which
were interpreted to mean that the Constituent Assembly gave their express approval
to this legislation. Reuben J. observed as follows :-"From article 31,
clause (2), it is clear that the Constituent Assembly considered two
requirements as essential for compulsory acquisition, namely a public purpose
and provision for compensation. The protection which the Constituent Assembly
gave under clauses (4)and (6) was confined to the latter requirement.
Evidently, therefore, the Constituent Assembly thought that protection was not
required under the other head, that is to say, the Constituent Assembly
regarded the nationalization of land as itself constituting a public purpose.
I would, therefore, hold that there is a
public purpose for the impugned Act within the meaning of clause (2) of article
31." Das J. said as follows :-"There is, I think, clear indication in
the Constitution of India itself that the expression 'public purpose' is to be
understood in a wide and comprehensive sense. Furthermore, there is indication
that the Constituent Assembly, representing the people of India which made the
Constitution, was itself aware of the existence of legislation of the nature of
impugned Act. This is clear from clause (4) of article 31. As a matter of fact,
the Land Reforms Bill was pending at the commencement of the 'Constitution
.........
If the legislation then pending was not for a
public purpose, it was, indeed, surprising that the Constituent Assembly tried
to save such legislation by means of the provisions of clause (4) of article
31. One may, I think, say that there was an implied declaration by the
Constituent Assembly that such legislation was for a public purpose and such
declaration will be given deference by the courts until it is shown to involve
an impossibility.
939 For the reasons given above, I hold that
the impugned Act does not fail for want of a public purpose " Learned
counsel challenged this view of the High Court and contended that article 31(4)
of the Constitution is no answer on this point and that the Act was bad as it
was silent on the question as to why the zamindaris were being acquired; that
it only provided for the interception of rents which instead of being realized
by the zamindars would go into the coffers of the Government without any
benefit being derived by the tenants; that private property could not be
acquired for merely augmenting the revenues of the State; and that the only
purpose that could be gathered from this Act was the ruination of a large class
of persons without any corresponding benefit to any section of the community.
It is said that there are 13,35,000 land-owners and tenure-holders in Bihar and
if an average family be taken to consist of four persons, five and a half
million people will be ruined by this legislation, while the ryots will not
benefit in any manner because all the lands excepting the waste lands sought to
be transferred are in the possession and cultivation of the ryots and no part
of the rent realisable from them is being commuted for their benefit. It is
pointed out that the waste lands were sufficient to meet the requirements of
villagers for grazing cattle and for pasture and that in effect the acquisition
of the estates was for the purpose of creating one machine-ridden and
red-tapist super-landlord by depriving a substantial portion of the public of
their means of livelihood.
The learned counsel proceeded to say that
nationalization of land may be the policy of the party in power but this is not
a public purpose which involves benefit to the community. Reference in this
connection was made to the decision in Harnabai Pramjee Petit v. Secretary of
State for India(1), where it was observed that the phrase "public
purpose" whatever it may (1)(1915) 42 I.A. 44.
940 mean, must include a purpose, that is, an
object or aim, in which the general interest of the community as opposed to the
particular interest of individuals is directly and vitally concerned. The
impugned Act, it was contended, did not fall within this definition of
"public purpose". Reference was also made to Vol. II of Cooley's
Constitutional Limitations, at page 744, wherein it is said as follows:-"The
purpose must be public, and must have reference to the needs or convenience of
the public, and no reason of general public policy will be sufficient to
validate other transfers when they concern existing vested rights."
Finally, it was urged that there was nothing definite or tangible in the Act or
in the views of the legislatures which gave any indication of the public
purpose for which the estates were being acquired and all that could be gathered
was that the legislature did not know its own mind at all and on a vague notion
of some future policy directed the acquisition of the estates.
In my opinion, it will not serve any useful
purpose to examine each and every argument that was addressed to us by the
learned counsel. There can be no manner of doubt that acquisition of private property
by legislation under entries 33, 36 and 42 can only be made either for purposes
of the Union or for purposes of the State or for a public purpose and that it
is unnecessary to state in express terms in the statute itself the precise
purpose for which property is being taken, provided from the whole tenor and
intendment of the Act it could be gathered that the property was being acquired
either for purposes of the State or for purposes of the public and that the
intention was to benefit the community at large. It may be conceded that the
present statute does not disclose the legislature's mind as to what it would
ultimately do after the estates are vested in the State Government. Perhaps the
State Government has not yet made up its mind how and for what purposes the
lands and the tenures acquired will be utilized. The statute 941 provides in
section 34 for the establishment of a land commission whose function it will be
to advise the Government as to its agrarian policy. Be that as it may, it seems
to me that in spite of the criticism levelled against the Act by the learned
counsel, it cannot be said that the Act would fall because it fails to
postulate a public purpose.
The Act is intituled "The Bihar Land
Reforms Act, 1950". The preamble of the Constitution says that India has
been constituted into a Sovereign Democratic Republic to secure to all its
citizens justice, social, economic and political.
Article 39 of the Directive Principles of
State Policy states as follows :"The State shall, in particular, direct
its policy towards securing that the ownership and control of the material
resources of the community are so distributed as best to subserve the common
good; and that the operation of the economic system does not result in the
concentration of wealth and means of production to the common detriment."
Now it is obvious that concentration of big blocks of land in the hands of a
few individuals is contrary to the principle on which the Constitution of India
is based. The purpose of the acquisition contemplated by the impugned Act
therefore is to do away with the concentration of big blocks of land and means
of production in the hands of a few individuals and to so distribute the
ownership and control of the material resources which come in the hands of the
State as to subserve the common good as best as possible. In other words,
shortly put, the purpose behind the Act is to bring about a reform in the land
distribution system of Bihar for the general benefit of the community as
advised.
The legislature is the best judge of what is
good for the community, by whose suffrage it comes into existence and it is not
possible for this Court to say that there was no public purpose behind the
acquisition contemplated by the impugned statute. The purpose of the statute
certainly is in accordance with the letter and spirit of the Constitution of
India. It is fallacious to contend that the object of the Act is 942 to ruin
five and a half million people in Bihar. All lands in khas possession of all
these persons have not been made the subject-matter of acquisition. Their
homesteads, their mineral wealth except mines not in operation have not been
seriously touched by the provisions of the Act. Various other exemptions have
also been made in their favour in the Act, apart from the provisions as to
compensation which in the case of small zamindaris can by no means be said to
be of an illusory character. It is difficult to hold in the present day
conditions of the world that measures adopted for the welfare of the community
and sought to be achieved by process of legislation so far as the carrying out
of the policy of nationalization of land is concerned can fall on the ground of
want of public purpose. The phrase "public purpose" has to be
construed according to the spirit of the times in which particular legislation
is enacted and so construed, the acquisition of the estates has to be held to
have been made for a public purpose These observations, however, have no
application to the acquisition of arrears of rent. On the face of the statute,
acquisition of fifty per cent. of these arrears was for the private purpose of
the zemindars and the other fifty per cent. was either for supplementing the
revenues of the State or for securing means for payment of compensation to the
zemindars. The purpose is to discharge the obligation of the acquirer to pay
the price. The same observations apply to clause 23 (f) of the statute. That
provision has been made for the purpose of negativing partially the provisions
of the Act regarding payment of compensation. Clause (4)of article 31 affords
no protection against the invalidity of these clauses.
The learned Attorney-General contended that
the acquisition of arrears was an acquisition of choses in action and that the
compensation paid for it was fifty per cent. of the amount of arrears. I regret
I am unable to accept this suggestion. It is a well accepted 943 proposition of
law that property of individuals cannot be appropriated by the State -under the
power of compulsory acquisition for the mere purpose of adding to the revenues
of the State. "The principle of compulsory acquisition of property,"
says Cooley (in Vol. II at p. 113, Constitutional Limitations) "is founded
on the superior claims of the whole community over an individual citizen but is
applicable only in those cases where private property is wanted for public use,
or demanded by the public welfare and that no instance is known in which it has
been taken for the mere purpose of raising a revenue by sale or otherwise and
the exercise of such a power is utterly destructive of individual right.
Taking money under the right of eminent
domain, when 'it must be compensated in money afterwards is nothing more or
less than a forced loan. Money or that which in ordinary use passes as such and
which the Government may reach by taxation, and also rights in action which can
only be available when made to produce money, cannot be taken under this power.
Willis in his Constitutional Law, at page
816, offers the same opinion. Nichols on "Eminent Domain" (Vol. 1, at
page 97) has expressed a contrary opinion and reference has been made to the
decision in Cincinnati v. Louisville etc., R. Co. C). An examination of this
case, however, does not disclose that any such proposition was stated therein.
It was held in that case that a Bill to restrain the enforcement of a State
statute regulating fire insurance rights was a valid law in the State of
Kansas. It was not necessary to decide in this case whether under the
compulsory acquisition power the State has the power to acquire choses in
action or money, but it cannot be seriously disputed that such an acquisition
amounts to a forced loan and that the desired result can be more appositely
obtained in exercise of the police power of the State than of the power of
eminent domain or compulsory acquisition of property and that compensation in
such a ease is the same amount of money (1)223 U.S. 390.
944 that is being taken and in the case of a
chose in action the amount of money that it would produce. In this situation it
cannot be held that fifty per cent. of the outstanding arrears was compensation
in any sense of that expression for this acquisition. The true position is that
the State took over all the arrears and decided to refund fifty per cent.
of them and forfeit the rest. The validity of
this acquisition has to be decided independently of the acquisition of the
estates. It has no connection with land reform or with any public purpose. It
stands on the same footing as other debts due to zamindars or their other
movable properties, which it was not the object of the Act to acquire. As already
stated, the only purpose to support this acquisition is to raise revenue to pay
compensation to some of the zamindars whose estates are being taken. This
purpose does not fall within any definition, however wide, of the phrase
"public purpose" and the law therefore to this extent is
unconstitutional.
One or two illustrations of the public
purpose involved in this provision will bring out its true character. In Appeal
No. 299 of 1951, the arrears of Darbhanga Raj on 26th September, 1950, was a
sum of Rs. 30,81,967. Half of this amount is payable to the Raj and the other
half stands forfeited. In the case or Raja P.C. LaI (Appeal No. 330 of 1951),
the rents due were Rs. 10,26,103, and in Appeal No.
339 of 1951, the amount is Rs. 9,52,937.
Next it was contended that the impugned Act
is a fraud on the Constitution and therefore void. It was said that the Act,
while pretending to comply with the Constitution, evades and invades it; that
the Act merely pretends to comply with the Constitution when it says that it
provides for payment of compensation but in effect it has produced a scheme for
non-payment of compensation by shift and contrivance. Reference was made to
certain provisions of the Act of a confiscatory nature, already noticed in this
judgment.
Section 9 was mentioned under which mines in
the course of development and fetching no income yet 945 vest in the State
without payment Of compensation. No compensation has been made payable in
respect of forests or trees which were not fetching any income at the date of
vesting. In a nutshell, it was contended that the object of the Act was to
acquire properties of the zemindars by payment of compensation (so-called) out
of the moneys belonging to the zemindars themselves and that in some cases they
had not only to give up their estates for nothing but would have to pay
something, in addition, to the State, if the principles specified in the Act
were to apply. It was pointed out in the case of the Maharaja of Darbhanga that
his zemindari would be acquired by the State Government without paying anything
but that the Maharaja would have to pay out of his own money six lakhs to the
Government. In Case No. 330 of 1951 (Raja P.C. Lall), it was said that
Government would get the zemindari free, while in Case iNTo. 339 of 1951 the
State will get the zemindari and two and half lakhs out of the arrears, while
in Case No. 331 of 1951, (Chota Nagpur appeal) the zemindari will be acquired
on payment of a small sum of Rs. 14,000 only. Nothing will be payable to the
zamindars out of the public exchequer. Attention was drawn to the observations
of Shearer J. in the following passage :"The legislature, it is clear, are
optimistic enough to hope that this reform may conceivably be effected without
raising any great loan. The conclusion, to my mind, is irresistible that the
intention is to take over the great estates in the province, paying no
compensation or the most inadequate compensation, and out of the considerable
profits which are likely to be derived from them, to take over, in course of
time, the remaining estates and tenures. In other words, a comparatively small
minority belonging to this particular class are to be expropriated without
compensation or with the most inadequate compensation in order that, when the
great majority are expropriated, they receive compensation which will not be
inadequate and may, quite possibly, in many cases, be more then adequate"
122 946 Mr. Das vehemently contended that the statute was a fraud on republican
Constitution which promised to deprive no one of his property without payment
of compensation;that it pretended to make elaborate provisions for paying it but
that by shift and contrivance it has provided for the evasion of its payment.
Reference was made to a passage in Moran Proprietary Ltd. v. Dy. Commissioner
of Taxation for New South Wales (1), which is in these terms :"Cases may
be imagined in which a purported exercise of the power to grant financial
assistance under section 96 would be merely colourable. Under the guise or
pretence of assisting a State with money, the real substance and purpose of the
Act might simply be to effect discrimination in regard to taxation. Such an Act
might well be ultra vires the Commonwealth Parliament. Their Lordships are
using the language of caution because such a case may never arise, and also
because it is their usual practice in a case dealing with constitutional matters
to decide no more than their duty requires. They will add only that, in the
view they take of the matter, some of the legislative expedients--objected to
as ultra vires by Evatt J. in his forcible dissenting judgment may well be
colourable, and such acts are not receiving the approval of their
Lordships." It was urged that a statute could be declared to be a fraud on
the Constitution on the same principles ,that are applicable to cases of
corporations or of executive bodies, whenever they act in excess or in abuse of
their statutory powers. Reliance was placed in this connection on the
observations of Abbott C.J. in Fox v. Bishop of Chester (2), which are in these
terms :-"Our judgment is founded upon the language of the Statute 31 Eliz.
c. 6, and the well-known principle of law, that the provisions of an Act of
Parliament shall not be evaded by shift or contrivance," (1) [1940] A.C.
838, at p. 858.
(2)107 E.R. 520 at p. 527.
947 In Fox v. Bishop of Chester(1), it was
said that there may be fraud on the law, an insult roan Act of Parliament,
though in the language and text of the law no such fraud may have been
mentioned. In Westminsyter Corporation v. London & North Western
Railway(2), it was observed: "It is well settled that a public body invested
with statutory powers such as those conferred upon the corporation must take
care not to exceed or abuse its powers. It must keep within the limits of the
authority committed to it. It must act in good faith. And it must act
reasonably.
The last proposition is involved in the
second, if not in the first." In Maharaja Luchmeswar Singh v. Chairman of
the Darbhanga Municipality (3), it was pointed out that the offer and
acceptance of one rupee was a colourable attempt to obtain a title under the
Land Acquisition Act without paying for the land. In Alexander v. Brame(4), it
was observed that if it had appeared that sufficient ground existed for holding
that the deed in question was a device on the part of Mr. Brame for the purpose
of evading and eluding the statute, by keeping seemingly and colourably clear
of 1t, while meaning substantially to infringe it, a view might have been taken
favourable to the appellants.
All these principles are well-settled. But
the question is whether they have any application to the present case.
It is by no means easy to impute a dishonest
motive to the legislature of a State and hold that it acted main fide and
maliciously in passing the Bihar Land Reforms Act or that it perpetrated a
fraud on the Constitution by enacting this law. It may be that some of the
provisions of the Act may operate harshly on certain persons or a few of the
zamindars and may be bad if they are in excess of the legislative power of the
Bihar Legislature but from that circumstance it-does not follow that the-whole
enactment is a fraud on the Constitution. From the premises that the estates of
half a dozen zemindars may be expropriated (1)6 E.R. 581 (3) 17 I.A. 90.
(2) [1905] A.C. 426 at p. 430. (4) 44 E.R.
205.
948 without payment of compensation, one
cannot jump to the conclusion that the whole of the enactment is a fraud on the
Constitution or that all the provisions aS to payment of compensation are
illusory. At best they are illusory only in the case of some only of the large
body of persons affected by it.
Section 23 (f), however, in my opinion, is a
colourable piece of legislation. It has been enacted under power conferred by
legislative entry 42 of List III.It is well-settled that Parliament with
limited powers cannot do indirectly what it cannot do directly. (Vide South
Australia v. The Commonwealth(1) and Madden v. Nelson & Port Sheppard R.W.
Co.(2). In Deputy Federal Commissioner of
Taxation (N.
S.W.) v.W.R. Moran Proprietary Ltd. (3), it,
was observed as follows :-"Where the law-making authority is of a limited
or qualified character, obviously it may be necessary to examine with some
strictness the substance of the legislation lot the purpose of determining what
it is that the legislature is really doing. In such cases the court is not to
be over persuaded by the appearance of the challenged legislation ...... In
that case, this court applied the well known principle that in relation to
constitutional prohibitions binding a legislature,that legislature cannot
disobey the prohibition merely by employing an indirect method of achieving
exactly the same result ......... The same issue may be whether legislation
which at first sight appears to conform to constitutional requirements is
colourable or disguised. In such cases the court may have to look behind names,
forms and appearances to determine whether or not the legislation is colourable
or disguised." The provision herein impeached has not been arrived at by
laying down any principles of paying compensation but in truth, is designed to
deprive a number of people of their property without payment of compensation.
The State legislature is authorised to pass an Act in the interests of persons
deprived of (1) 65 C.L.R. 373. (3) 61 C.L.R. 735 at p. 793.
(2) [1899] A.C. 626.
949 property under entry 42. They could not
be permitted under that power to pass a law that operates to the detriment of
those persons and the object of which provision is to deprive them of the right
of compensation to a certain extent.
In this connection it is now convenient to
examine the contention of the learned Attorney-General as to the interpretation
of legislative head entry 42 of List III. He contended that under this head it
was open to the Parliament or the State Legislature to make a law laying down
the principles which may result in non-payment of compensation or which may
result in not paying any compensation whatsoever. I cannot possibly assent to
any such construction of this entry The entry reads thus :-"Principles on
which compensation for property acquired or requisitioned for purposes of the
Union or of a State or for any other public purpose is to be determined, and
the form and manner in which-such compensation is to be given." This head
of legislation seems to have been expressly mentioned in the Concurrent List
not only in view of the accepted principle of law that in cases of compulsory
acquisition of property compensation has to be made, but also in view of the
clear and mandatory provisions of article 31(2) which require that a law
authorising the taking or acquisition of property will be void if it does not
provide for payment of compensation for the property acquired or does not
either fix the amount of compensation or specify the principles on which and
the manner in which the compensation is to be determined and given. The power
of legislation in entry 42 is for enacting the principles of determining such
compensation and for paying it. The principles to be enacted are for
determining such compensation and for paying it.
The principles to be enacted are for
determining the equivalent price of the property taken away. It may be that the
determination of the equivalent may be 'left for ascertainment on the basis of
certain uniform rules;
950 for instance, it may be laid down that
the principles lot determining compensation will be the rental basis or the
market value of the property etc. But it is difficult to imagine that there can
be any principles for nonpayment of compensation or for negativing the payment
of compensation.
No principles are required to be stated for
non-payment of compensation. A simple statement that no compensation will be
paid is quite enough to attain the object. I know of no principles for
determination of compensation which result in its nonpayment except in the Act
under notice. All legislative heads have to be reasonably construed and the
power given under entry 42 is a positive power given to bring about the result
of payment of compensation and not nonpayment of the same. The key words in the
entry are "compensation" and "given". Anything that is
unrelated to compensation or the giving of it cannot be justified by legislation
under entry 42. Reference was made in this connection to the United Provinces
v. Atiqa Begum (1) in which it was held that the descriptive words under the
legislative,head ' 'collection of rents" are wide enough to permit
legislation in respect of remission of rents and that under item 22. of the
Government of India Act, 1935, the legislative head "forests" include
the power to legislate with respect not only to afforestation but also to
disafforestation and that the legislative head "fisheries" would
include the power to legislate on the prohibition of fishing altogether. In my
opinion, these analogies have no application to the construction of the
language employed in entry 42. These entries are not in pari materia to entry
42. Perhaps a more analogous case on the point is the decision in AttorneyGeneral
for Ontario v. Attorney-General for the Dominion (2) The question there was
whether the legislative head "Regulation of Trade and Commerce"
included the power to abolish it also. Their Lordships of the Privy Council
made the following observations which appear at page 363 of the report :-(1)
[1940] F.C.R. 110 at p. 135. (2) [1896] A.C. 348.
951 "A power to regulate assumes the
conservation of the thing which is to be made the subject of regulation. In
that view, their Lordships are unable to regard the prohibitive enactments of
the Canadian statute as regulations of trade and commerce .... there is marked
distinction between the prohibition or prevention of a trade and the regulation
or governance of it." An entry concerning payment of compensation in no
sense includes legislative power of non-payment of compensation.
The whole purpose of this head of legislation
is to provide payment of compensation and not the confiscation of property.
The provision that four per cent. to twelve
and a half per cent. has to be deducted out of the net income on account of
costs of works for the benefit of raiyats etc. has no relation to real facts.
Even the earlier provision in clause (d) that costs of management have to be
deducted up to twenty per cent. has in its entirety no real relation to actual
state of affairs. As already pointed out, it is partially of a confiscatory
character in sufficient number of cases. The deduction under clause (f) from
the gross income is merely a deduction of an artificial character, the whole
object being to inflate the deductions and thus bring about non-payment of
compensation. Such legislation, in my opinion, is not permitted by entry 42 of
List III. Suppose, for instance, instead of a twelve and a half per cent.
it declared that a deduction of seventy per
cent. be made on that account. Could it be said by any reasonable person that
such a piece of legislation was legislation on principles of determining
compensation or of making payment of compensation, This provision, therefore,
in my opinion has been inserted in the Act as a colourable exercise of legislative
power under entry 42 and is unconstitutional on that ground. The power has not
been exercised under any other legislative head authorizing the State
legislature to pass such a law. Legislation ostensibly under one or other of
the powers conferred by the Constitution but in truth and fact not falling
within the content of that 952 power is merely colourably constitutional but is
really not so. (Vide Quebec v. Queen Insurance Co. (D; Russell v. The
Queen(2).] Reference in this connection may also be made to the decision of the
Privy Council in Madden v. Nelson & Fort Sheppard R.W. Co. (3). This clause
therefore is unconstitutional legislation made colourably valid under exercise
of legislative power under entry 42 of List II.
It was contended by Mr. Das that if some
provisions in the Act are ultra vires, the statute as a whole must be
pronounced to be ultra vires and that it could not be presumed that the
legislature intended to pass it in what may prove to be a truncated form. The
real question to decide in all such cases is whether what remains is so
inextricably bound up with the part declared invalid that what remains cannot
independently survive, or, as it has sometimes been put, whether on a fair review
of the whole matter it can be assumed that the legislature would have enacted
at all that which survives without enacting the part that is ultra vires.
Looking at the Act as a whole, it seems to me that the offending provisions of
the Act are not so inextricably bound up with the part that is valid as to hit
or kill the remainder also. In this case a presumption cannot be drawn that the
legislature would not have enacted the Act leaving out the two or three
provisions which have to be declared to be invalid.
Mr. Das also raised a minor point that the
Bihar. Act was unenforceable. Reference was made to section 32(2) of the Act
which runs as follows :-"The amount of compensation so payable in terms of
a compensation Assessment-roll as finally published shall be paid in cash or in
bonds or partly in cash and partly in bonds. The bonds shall be either
negotiable or non-negotiable and non-transferable and be payable in forty equal
installments to the person named therein and shall carry interest at two and a
half per centum per annum with effect from the date of issue," (1) (1878)
3 App. Cas. 1090. (3) [1899] A.C. 626, (1) 7 (1882) App. Can. 841.
953 It was contended that as no date has been
mentioned for payment of compensation and no interval has been stated between
the installments mentioned therein and it has not been mentioned how much would
be payable in cash and how much in bonds, the Act could not be enforced.
Section 43 of the Act empowers the State Government to make rules for carrying
out the purposes of the Act. Clause (p) is in these terms :-"The
proportion in which compensation shall be payable in cash and in bonds and the
manner of payment of such compensation under sub-sections (2) and (3) of
section 32." It seems clear that the Act has made sufficient provision for
enforcing its provisions if section 32(2) is read with the provisions contained
in section 43 and it cannot be said that the Act is unenforceable for this
reason.
The last point urged by M. Das was that
section 32 (2) of the Act was void as in it legislative functions had been
abdicated by the legislature in favour of the executive. A two-fold attack was
levelled against this provision. Firstly, it was said that the Constitution
having in entry 42 of List III of the Seventh Schedule vested authority in the
legislature to make laws on the question of the principles as to the payment of
compensation and the manner and form of its payment, in other words, it having
trusted these matters to the care, judgment and wisdom of the legislature, it
had no power to delegate these matters to the executive. Secondly, it was
contended that section 32 (2) delegated essential legislative power to the
executive which it was incompetent to do. Reference was made to the opinion of
this Court in Special Reference No. 1 of 1950.
The matters alleged to have been delegated
are these :-
1. The determination of the proportion of the
cash payment to the payment by giving bonds, negotiable or nonnegotiable.
123 954
2. The determination of the period of
redemption of these bonds.
3. The period of interval between the several
installments.
The section enacts that the compensation
payable shall be paid in cash or in bonds or partly in cash and partly in
bonds. It therefore determines the principle that the payment of compensation
will be in these two forms. It further enacts that bonds shall be either
negotiable or non-negotiable and non-transferable. It therefore also determines
the nature of the bonds that would be issued. It further enacts that the
payment, if made in bonds, will be paid in forty equal installments. It is
obvious that the time of redemption of the bonds will be co-terminous with the
period of the installments. It has further enacted that the bonds will carry
interest at the rate of two and a half per cent. What has been left to the
executive is the question of the determination of the proportion in which
compensation is to be paid in cash or in bonds and the fixation of the interval
of the installments. It seems to me that the delegation to this extent is
permissible in view of the decision of this Court in The State of Bombay v.
Narottamdas Jethabai (1) and the decision of their Lordships of the Privy
Council in Queen v. Burah (2). The legislature applied its mind to the question
of the method and manner of payment of compensation. It settled its policy and
the broad principles. It gave the State Government the power to determine
matters of detail after having settled vital matters of policy. It cannot be
said that the legislature did not apply its mind to the subjectmatter of the
legislation and did not lay down a policy. The proportion in which compensation
was payable in cash or in bonds or whether the whole of it was to be paid in
cash is a matter which only the State Government could fix and similarly, the
interval of installments and the period of redeemability of the bonds were also
matters of detail which the executive could (1) [1951] S.C.R. 51. (2) (1877) 5
I.A. 178, 955 more appositely determine in exercise of its rule-making power.
It cannot be said in this case that any essential legislative power has been
delegated to the executive or that the legislature did not discharge the trust
which the Constitution had reposed in it. If the rule-making authority abuses
its power or makes any attempt to make the payment illusory, the expropriated
proprietor will not be without a remedy.
For the reasons given above, I am of the
opinion that section 32(2) of the Act cannot be held bad on the ground that it
is a piece of unregulated delegation of legislative power.
Mr. Das's contention in Cases Nos. 319, 327,
330 and 332 of 1951 and in the other cases in which he appeared were the same.
Mr. Choudhury appearing in Cases Nos. 309 and
328 of 1951 raised a large number of points, some of which are covered by the
arguments of Mr. P.R. Das, which I have discussed already. The rest seem to me
to be unsubstantial but it is necessary to notice a few of them upon which
great stress was laid by the learned counsel. Mr. Choudhury contended that the
field of legislation on the question of principles of determination of
compensation and the mode and manner of payment of such compensation was
already occupied by the Land Acquisition Act which was an existing law of
Parliament and, therefore, the State Legislature could not enter on this field
and legislate on the principles of payment of compensation. This argument
really has no force, because the provisions as to assessment of compensation
enacted in the Land Acquisition Act only apply to acquisitions that are made by
notification under that Act. Its provisions have no application to acquisitions
made under either local or central laws unless they are specifically made
applicable by the provisions of these statutes.
Another point put forward by him, that
articles 31-A and 31-B of the Constitution cannot affect pending cases cannot
be seriously entertained because retrospectivity is writ large on the face of
those 956 articles. Similarly, I cannot but regard as unsubstantial his
contention that transference of estates of zamindars to the State under the
provisions of a statute requires registration. The only other point seriously
pressed by him is that the Bihar Legislature had no power to issue bonds
without complying with the procedure laid down in article 293 of the
Constitution. It is enough to state with regard to this point that the stage
for issuing bonds has not arrived as yet. When the State legislature issues
bonds which are unenforceable or which it is not competent to issue, the contention
can possibly be raised.
Mr. Chakravarty who appeared in three cases,
Nos. 326, 337, and 344 of 1951, urged that as regards trust properties, the
Bihar legislature had no power to acquire them without payment of full
compensation as certain educational and charitable institutions would thereby
be seriously affected. He was, however, unable to point out how the Bihar
Legislature had no power to acquire trust properties.
Mr. Raghav Saran who appeared in Cases Nos.
310, 311 and 329of 1951, raised a novel point that the Act not being reasonable
and just, the Supreme Court had jurisdiction to declare it void on that ground.
He was unable to support his argument on any reasonable basis. The
constitutionality of a statute passed by a competent legislature cannot be
challenged on the ground that the law made is not reasonable or just.
Counsel who appeared in Cases Nos. 807, 313,
815, 320, 321, 822 and-331 and Petition No, 612 of 1951 merely adopted the
points urged by Mr. P.R. Das.
The result is that the provisions of the
Bihar Land Reforms Act contained in sections 4 (b) and 23 (f) are held not
constitutional. The rest of the Act is good. The appeals are therefore allowed
except to the extent indicated above. A writ of mandamus will issue to the
State Government not to give effect to the two provisions mentioned above and
held unconstitutional.
957 Petition No. 612 of 1951 under article 32
is dismissed as it is not maintainable; no infringement of any fundamental
right has been alleged therein. There was no appearance for the respondents in
Cases Nos. 18 of 1950 and 299 of 1951 and no opposition to the appeals being
allowed. They are accordingly allowed. I will make no order as to costs in any
of these appeals and petition.
MUKHERJEA J.--I had the advantage of going
carefully through the judgment of my learned brother Mahajan J. and I concur
entirely in the conclusions arrived at by him. In my opinion, the Bihar Land
Reforms Act of 1950 is not unconstitutional, with the exception of the
provisions contained in section 4 (b) and 23(f) of the Act and these provisions
alone must be held to be void and inoperative.
As regards section 23(f) of the Bihar Land
Reforms Act, my learned brother has based his decision on the ground that the
provision of this clause constitutes a fraud on the Constitution, and although
in enacting the provision, the legislature purported to exercise its powers
under entry 42 of the Legislative List III in Schedule VII of the Constitution,.
in reality it is a clourable exercise of that power under which a thing has
been done which is not contemplated by that entry at all and lies outside its
ambit. I agree with the line of reasoning adopted by my learned brother in this
connection and there is nothing further which I can usefully add.
As regards section 4 (b)it has been held by
my learned brother that the provision of this clause is unconstitutional as it
does not disclose any public purpose at all. The requirement of public purpose
is implicit in compulsory acquisition of property by the State or, what is
called, the exercise of its power of eminent domain. This condition is implied
in the provision of article 31 (2) of the Constitution and although the
enactment in the present case fulfills the requirements of clause (3) of article
31 and as 958 such attracts the operation of clause (4) of that article, my
learned brother has taken the view that the bar created by clause (4) is
confined to the question of compensation only and does not extend to the
existence or necessity of a public purpose which, though implicit in, has not
been expressly provided for by clause (2)of the article. For my part I would be
prepared to assume that clause (4)of article 31 relates to everything that is
provided for in clause (2) either in express terms or even impliedly and
consequently the question of the existence of a public purpose does not come
within the purview of our enquiry in the present case.
Even then I would hold that the same reasons,
which have weighed with my learned brother in declaring section 23 (f) of the
impugned Act to be unconstitutional, apply with equal, if not greater, force to
section 4 (b) of the Act and I have no hesitation in agreeing with him as
regards his decision on the constitutionality of this provision of the Act
though I would prefer to adopt a different line of reasoning in support of the
same.
Section 4 (b) of the Bihar Land Reforms Act
lays down, as one of the results of the publication of a notification under
section 3 (1)of the Act that "all arrears of rents .......... and all
cesses together with interest, if any, due thereon for any period prior to the
date of vesting which were recoverable in respect of the estate or tenure by
the proprietor or tenure holder and the recovery of which was not barred by any
law of limitation shall vest in and be recoverable by the State". The
explanation attached to the clause further provides that for purposes of the
clause the expression "arrears of rent" shall include arrears in respect
of which suits were pending on the, date of vesting or in respect of which
decrees were obtained before that date together with costs allowed by such
decrees.
Under section 24 of the Act, 50% of these
arrears of rent are directed to be added to the amount of compensation money
payable lot the estate or interest calculated in accordance with the provisions
of the Act.
959 The arrears of rent whether merged in
decrees or not, which were due to the landlord for a period anterior to the
date of notification under section 3(1) of the Act, were undoubtedly the
property of the landlord, irrespective of his interest in the estate or tenure
which is the subjectmatter of acquisition. Such arrears could not vest in the
State as a normal result of acquisition of any estate or interest therein, and
it is conceded by the learned Attorney-General that article 31-A of the
Constitution has no application so far as these arrears of rent are concerned.
The arrears of rent, therefore, are the subjectmatter of separate and
indipendent acquisition under the Bihar Land Reforms Act, if the word
"acquisition" can at all be appropriate to cases of this description.
It cannot be disputed that in every
Government there is inherent authority to appropriate the property of the
citizens for the necessities of the State and constitutional provisions do not
confer this power though they generally surround it with safeguards. The
restraints invariably are that when private property is taken, a pecuniary
compensation must be paid(1). Thus eminent domain is an attribute of sovereign
power supposed to be tempered by a principle of natural law which connects its
exercise with a duty of compensation Possibly under the impression that the
sacredness of private property should not be confided to the uncertain virtues
of the party in power for the time being, the Constitution-makers of our
country have declared it as one of the fundamental rights that no property
shall be taken possession of or acquired for public purpose unless the law
directing its appropriation makes provision for compensation in the manner laid
down in article 31 (2). Clause (4) of article 31 does not do away with the
obligation to pay compensation; it merely lays down that laws which are referred
to in clause (3) of the article would be immune from judicial scrutiny on the
ground of inadequacy of the (1)Vide Cooley on Constitutional Limitations, Vol.
II, p, 1110 (2)Vide Encyclopaedia of Social Science, Vol. V, p. 493.
960 amount of compensation or the impropriety
of the principle for assessing the same as provided for in the enactment. The
clause presupposes however that the enactment is the result of a valid exercise
of a legislative power conferred on the legislature by the appropriate entries
in the Legislative Lists and if the legislature acts outside these entries or,
under the pretence of acting within them, does something which is in flat
contradiction with its contents, clause (4) of article 31 could not be invoked
to afford any protection to such legislation.
Clause (4) (b) of the impugned Act read with
the provision of section 24 of the same, empowers the State Government to
appropriate all the arrears of rent due to a landlord at a particular time and
the only obligation it casts on the Government in this respect is to allow 50%
of the amount thus appropriated as solatium for the so-called acquisition. On
the face of it the legislative provision purports to have been made in exercise
of the powers conferred on the State legislature under entry 30 of List II and
entry 42 of List III of Schedule VII of the Constitution. In my opinion, this
is a mere device or pretence and the real object which the legislation intended
to accomplish is to deprive a man of his money which is not ordinarily a
subject-matter of acquisition, in exercise of what are known as powers of
eminent domain by the State, without giving him anything in exchange; and under
the guise of acting under entry 42 of List III, the legislature has in truth
and substance evaded and nullified its provisions altogether.
The general principles, which distinguish the
powers of eminent domain from other powers of the State under which the
sacrifice of the proprietary interest of a citizen could be demanded or
imposed, are fairly well-known. As has been observed by Cooley in his Constitutional
Limitations "every species of property which the public needs may require
and which the Government cannot lawfully appropriate under any other right, is
subject to be seized and 961 appropriated under the right of eminent domain
(1). Money as such and also rights in action are ordinarily excluded from this
List by American jurists and for good reasons(2). There could be no possible
necessity for taking either of them under the power of eminent domain. Money in
the hands of a citizen can be reached by the exercise of the power of taxation,
it may be confiscated as a penalty under judicial order and we can even
conceive of cases where the State seizes or confiscates money belonging to or
in the hands of a citizen under the exercise of its 'police' powers on the
ground that such fund may be used for unlawful purposes to the detriment of the
interest of the community. But, as Cooley has pointed out (3), taking money
under the right of eminent domain when it must be compensated by money
afterwards could be nothing more or less than a forced loan and it is difficult
to say that it comes under the head of acquisition or requisitioning of
property as described in entry 36 of List II and is embraced within its
ordinary connotation.
It is said by the learned Attorney-General
that the subject matter of acquisition in the present case is. not money but
choses in action. It seems to me that there is no difference in principle
between them because a chose in action can be available to the acquiring
authority only when it is made to produce money; Otherwise it is useless altogether
(3).
Assuming however that entry 36 of List II is
wide enough to include acquisition of money or a right of action, I have no
hesitation in holding that in providing for compensation in respect of such
acquisition the legislature has made a colourable use of entry 42 of List III
and has thereby defeated the purpose of that entry altogether. Entry 42 of List
III speaks of "principles on which compensation for property acquired or
requisitioned for the purposes of the Union or of a State or any other public
purpose is to be (1) See Cooley on Constitutional Limitations. Vol. II, p.
1113.
(2) Cooley, Vol. 11, p. 1118; Willis on
Constitutional law, p 816.
(3) Vide Cooley on Constitutional
Limitations, Vol. 11, p.
1118, F.N.
124 962 determined, and the form and the
manner in which such compensation is to be given". This is a description
of legislative head and I agree with the learned Attorney-General that in
deciding the competency of the legislation under this entry, we are not
concerned with the justice or propriety of the principles upon which the
assessment of compensation is to be made under a particular legislation nor are
we concerned with the justice or otherwise of the form or manner in which such
compensation is to be given. I do not, however, agree with the learned
Attorney-General for the reasons already given by my learned brother in his
judgment that legislation under this head need not provide for any compensation
at all and that a legislative provision which declares that no compensation is
to be given comes within the ambit of this legislative head. Such construction
is repelled by the very language of the entry which speaks of giving
compensation and not of denying or witholding it.
Stripped of all disguise, the net result of
the impugned provision is that it would be open to the State Government to
appropriate to itself half of the arrears of rent due to the landlord prior to
the date of the acquisition without giving him any compensation whatsoever.
Taking of the whole and returning a half means nothing more or less than taking
half without any return and this is naked confiscation, no matter in whatever
specious form it may be clothed or disguised. The impugned provision,
therefore, in reality does not lay down any principle for determining the
compensation to be paid /or acquiring the arrears of rent, nor does it say
anything relating to the form of payment, though apparently it purports to
determine both. This, in my opinion, is a fraud on the Constitution and makes
the legislation, which is a colourable one, void and inoperative. The learned
Attorney-General has contended that it is beyond the competency of the Court to
enter into a question of bona fides or mala fides of the legislature. In a
sense this is true. If the legislature is omnipotent, the motives, which impel
it to enact a particular law, are absolutely irrelevant; and 963 on the other
hand, if it tacks competence the question of motives does not at all arise. But
when a legislature has a limited or qualified power and has got to act within a
sphere circumscribed by legislative entries. the question, whether in
purporting to act under these entries, it has, in substance, gone beyond them
and has done certain things which cannot be accomplished within the scope of
these entries, is really a question affecting the competency of the
legislature. In such cases, although the legislation purports to have been
enacted under a particular entry, if it is really outside it, it would be void
(1). It has been suggested in course of the argument on behalf of the State
that in the present case the Government in the exercise of its powers of
acquisition could acquire the arrears of rent and as the arrears were still
unrealised, it was quite legitimate and proper for the Government to deduct
half of the gross amount as consideration for the trouble and expense that it
would have to undergo in the matter of realising these arrears. This would mean
that what the legislature intended is simply to enable the Government to help
the zamindars in realising the arrears of rent and as a return for the help
which it is to render, the Government is given the right to retain half of the
arrears that were actually due. This could not possibly have been the real
intention of the legislature and I do not think that there is any item in the
long legislative lists framed by the Constitution which empowers the
legislature to interfere with the legal rights of the landlord in this manner
apart from special circumstances like indebtedness or otherwise and impose upon
him an onerous obligation to which he is not a consenting party. A legislation
of this character is a complete novelty, the like of which has seldom been
witnessed before. The result is that I concur in the order which has been made
by my learned brother Mahajan J. in this case and I allow the appeals subject
to the two modifications indicated above.
There would be no order as to costs.
(1) See Lefroy on Canadian Constitution. pp.
79-80.
964 DAS J.--The proceedings out of which
these appeals have arisen were initiated by different proprietors of estates in
Bihar challenging the constitutional validity of the Bihar Land Reforms Act,
1950 (Bihar Act XXX of 1950) which will hereafter in this judgment be referred
to as "The Act".
On January 26, 1950, when our Constitution
came into force, the Bill which eventually became the Act was pending before
the Legislature of the State of Bihar. After the Bill had been passed by the
State Legislature, it was reserved for the consideration of the President. On
September 11, 1950, that Bill received the assent of the President and became
the Act. The provisions of the Act have been analysed and summarised in the
judgment just delivered by Mahajan J.
and it is not necessary for me to burden this
judgment by recapitulating the same. On September 25, 1950, the text of the Act
was published in the Official Gazette with a notification under section 1 (3)
dated September 24, 1951), bringing the Act into operation. A notification
under section :3 of the Act dated September 25, 1950 vesting the estates of
certain named proprietors was published in the Official Gazette on the next
day. This notification having been published in the Official Gazette, some of
the proprietors affected thereby instituted suits in the Subordinate Courts in
Bihar after giving the requisite notice under section 80 of the Code of Civil
Procedure and prayed for a declaration that the Act was unconstitutional and void
and that their title to the properties remained unaffected. Some of the other
proprietors filed applications in the High Court at Patna under article 226 of
the Constitution praying for the issue of appropriate writs, directions or
orders. The State of Bihar filed its written statements in the suits which were
transferred to the High Court for disposal in exercise of its extraordinary
Original Civil Jurisdiction, The suits and the applications were heard
together. As the issues involved grave questions of interpretation of the
Constitution, the suits and applications were placed before a Special Bench 965
of the Patna High Court and were disposed of on March 12, 1951. All the learned
Judges, for one reason or another, repelled all the main contentions of the
proprietors but held that the Act was unconstitutional in that it denied to the
proprietors equal protection of the laws guaranteed by article 14 of the
Constitution. The High Court rejected the plea of the State that article 31 (4)
of the Constitution by reason of the words "notwithstanding anything in
this Constitution" excluded article 14 at least in its application to the
alleged inequality of compensation. Article 31 (4) is in these terms :"If
any Bill pending at the commencement of this Constitution in the Legislature of
a State has, after it has been passed by such Legislature, been reserved for
the consideration of the President and has received his assent, then,
notwithstanding anything in this Constitution, the law so assented to shall not
be called in question in any court on the ground that it contravenes the
provisions of clause (2)." The State of Bihar obtained leave of the Patna
High Court under article 132 (1) of the Constitution to appeal to this Court
and preferred these appeals before us.
It may be mentioned here that the States of
Uttar Pradesh and Madhya Pradesh also passed legislation for the abolition of
zamindaries in their respective States and the validity of those legislations
was also contested by the proprietors affected thereby. The respective High
Courts of those States, however, upheld the validity of the respective State
legislations and the aggrieved proprietors came up to this Court either on
appeal or on substantive application under article 32. It was at that stage
that the Constituent Assembly passed the Constitution (First Amendment) Act,
1951. Sections4 and 5 of the Act which are material for our purpose are as
follows :Insertion of new 4. After article 31 of the Constitution article 3I-A.
the following article shall be inserted, and shall be deemed always to have
been inserted, namely :-966 31-A. (1)Notwithstanding anything in the foresaving
of laws going provisions of this Part, no law providing for acprovidlng for the
acquisition by the quisition of estates, State of any estate or of any rights
etc. therein or for the extinguishment or modification of any such rights 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 any provisions of this Part:
Provided that where such law is a law 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.
(2) In this article,-(a) the expression
"estate" shall, in relation to any local area, have the same meaning
as that expression or its local equivalent has in the existing law relating to
land tenures in force in that area, and shall also include any jagir, inam or
muafi or other similar grant;
(b) the expression "rights", in
relation to an estate, shall include any rights vesting in a proprietor,
sub-proprietor, under-proprietor, tenure-holder or other intermediary and any
rights or privileges in respect of land revenue.
5. After article 31-A of the constitution as
inserted by section 4, the following arti cle shall be inserted namely :Insertion
of new article 3I-B, 31-B. Without prejudice to the Validation of generality of
the provisions concertain Acts and tained in article 31-A, none of the
Regulations Acts and Regulations specified in the Ninth Schedule or any of the
provisions thereof shall be deemed to be void, or ever to have become void, on
the ground that such Act, Regulation or provision is inconsistent with, or
takes away or abridges any of the rights conferred by, any provisions of this
Part, 967 and notwithstanding any judgment, decree or order of any court or
tribunal to the contrary each of the said Acts and Regulations shall, subject
to the power of any competent legislature to repeal or amend it, continue in
force." A new Schedule called the Ninth Schedule specifying thirteen
several Acts and Regulations of which the Bihar Land Reforms Act, 1950. was the
first was added to the Constitution. The legal validity of the Constitution
(First Amendment) Act, 1951, has been recently upheld by this Court and all
Courts must give effect to the two new articles which are now substantive parts
of our Constitution. Article 31-A relates back to the date of the Constitution
and article 31-B to the respective dates of the Acts and Regulations specified
in the Ninth Schedule. It has not been disputed that the provisions of the
above two newly added articles_ have to be taken into consideration in
disposing of these appeals.
Learned counsel appearing for the respondents
accept the position that as a result of the constitutional amendments the
impugned Act has been removed from the operation of the provisions of Part III
of the Constitution including article 14 and that the respondents cannot, therefore,
complain of the breach of the equal protection of the laws under article 14
which was the only ground on which the respondents succeeded in the High Court.
Learned counsel, however, maintain that although they cannot now challenge the
constitutionality of the Act on the ground that it contravenes or is
inconsistent with or takes away or abridges any of the rights conferred by any
of the provisions of Part III of the Constitution; it is, nevertheless, open to
them to call the Act into question on other grounds founded on other parts of
the Constitution or on general principles of law. Accordingly Mr. P. R. Das
formulates the following five principal grounds of attack against the Act,
namely:
A, On a proper interpretation of articles 245
and 246 read with entry 36 in List II and entry 42 in 968 List III the Bihar
Legislature had no power to enact the said Act inasmuch as it makes no
provision for the payment of just compensation for the proposed acquisition of
the zamindaries and tenures.
B. Even if the Court does not accept the
correctness of the arguments based on entry 36 in List II and entry 42 in List
III and holds the respondents barred from going into the question of compensation
by reason of articles 31(4), 31-A and 31-B the respondents are still entitled
to challenge the Act on the ground that the proposed acquisition is not for a
public purpose.
C. The Act constitutes a fraud on the
Constitution.
that is to say, while it purports to be in
conformity with the Constitution it in fact, constitutes a defiance of it.
D. The Act is unenforceable in that section
32(2) provides for payment of compensation in 40 equal installments without
specifying the period of interval between the installments.
E. The Act delegated essential legislative
functions to the executive Government.
The heads of objections thus formulated by
Mr. P.R.
Das apparently look formidable and it is
necessary, therefore, to consider with close attention the arguments advanced
by him in support of each of them.
Re Ground A: That article 31 ('2) imposes
upon a law for the compulsory acquisition of private property the obligation to
provide for compensation and that such obligation is, therefore, a provision of
article 31 (2) is not challenged. Nor is it claimed, in view of articles 31
(4), 31-A and 31-B, that it is still open to the respondents to call in
question the validity of the impugned Act on the ground that it contravenes or
is inconsistent with or takes away or abridges the provision for compensation
made in article 31 (2). What is urged is that the obligation to provide for
compensation is not a provision to be found exclusively in article a 1 (2) but
that it is also provided for in other parts of the Constitution and 969 that,
in so far as such obligation is found provided elsewhere, the impugned Act can
well be challenged on the ground that it contravenes or is inconsistent with or
takes away or abridges the provisions of those other parts of the Constitution,
for that ground of challenge has not been taken away by articles 31 (4), 31-A
and 31-B, by reason of the delimiting words used therein. The argument is
developed in the following way. The State's power to acquire private property is,
in essence, a power to compel the owner to sell his property when the public
interest requires it. Authority for this proposition is to be found in
Blackstone's Commentary (Broom's Edn.) p. 165 and in Cooley's Constitutional
Limitations, 8th Edn., Vol. II, p. 1201, Footnote (8).
Indeed, in some of the English statutes for
compulsory acquisition of lands and hereditaments (e.g., 5 & 6 Vic. C.
94 and 8 & 9 Vic. C. 18) the word
"purchase" was used to denote acquisition. As there can be no sale
without a price, there can be no compulsory acquisition of private property
without a provision for payment of just compensation, i.e., its equivalent
value in money. That the obligation to pay just compensation for compulsory
acquisition of private property is a principle of natural equity recognised by
all temperate and civilized governments, that the right to compensation is an
incident to the exercise of the power of eminent domain and that the one is so
inseparably connected with the other that they may be said to exist, not as
separate and distinct principles but, as parts of one and the same principle
are well-established by a series of decisions of the American courts quoted by
Harlan J. in Chicago, Burlington and Quincy Railroad Company v.
Chicago(1). In England Lord Dunedin in
Attorney-General v. De Keyser's Royal Hotel Ltd.(2), described the obligation
to pay compensation as "a necessary concomitant to taking". It
follows, therefore, that the obligation to pay compensation is inseparable from
and is implicit in the power of acquisition. This obli(1) 166 U.S. 216; 4r L.
Ed. 979, (2) [1920] A.C. 508.
970 gation flows from the mere use of the
word ,'acquisition" in entry 36 in List II, as in entry 33 in List I. That
word, by itself, according to Mr. P.R. Das, connotes a compound concept,
namely, the concept of a power of taking on just terms and confines the very
legislative competency under those entries within the limits of that compound
concept.
If, however, the word "acquisition"
in entry 36 in List II and entry 33 in List I does not by itself imply the
obligation to pay just compensation, then, urges Mr. P.R. Das in the
alternative, the words "subject to the provisions of entry 42 of List
III" occurring at the end of entry 36 in List II certainly brings in that
obligation. On a plain reading of entry 36 in List II the power to make law
with respect to matters specified therein is "subject to", that is to
say, "conditional upon" the exercise of legislative power under entry
42 in List III.Those concluding words, Mr.
P.R. Das says, import the obligation to
provide for compensation as provided in entry 42 in List Iii into entry 36 in
List II and thereby enlarge the content of the last mentioned entry so as to
make it a legislative head comprising the compound concept referred to above.
The third alternative position is that if the word "acquisition" in
entry 36 in List II does not, by itself, imply the obligation to provide for.
compensation and if the words "subject to the provisions of entry 42 of
List III" do not import that obligation as stated above, entry 42 in List
Iii should, nevertheless, be construed as conferring a power coupled with a
duty, so that if the law-making power under entry 33 in List I or entry 36 in
List II is at all exercised, the lawmaking power under entry 42 in List III
must, on the principle laid down by the House of Lords in Julius v.
Lord Bishop of Oxford(1) and adopted by this
Court in Chief Controlling Revenue Authority v. Maharashtra Sugar Mills
Ltd.(2), also be exercised. It is urged that the Bihar Legislature having
purported to exercise its power to make a law for compulsory acquisition of
property under entry-36 in (1) L.R. 5 App. Cas. 214. (2) [1950] S.C.R.
971 List II but not having made any law
laying down any principle for determining what may, in the eye of the law, be
regarded as just compensation at all, the Act is ultra vires and void. The
arguments thus developed by Mr. P.R. Das undoubtedly have the merit of
attractive ingenuity and apparent cogency and certainly call for very careful
consideration, To cut at the root of the above argument the learned
Attorney-General appearing for the appellant State contends that the impugned
Act is a law made with respect to matters mentioned in entry 18 in List II and
not under entry 36 in List II. The contention is that it is essentially a
legislation for land reforms and alteration of land tenures. It is pointed out
that the Act eliminates the interests of all zemindars and intermediate
tenure-holders so that the State and the actual tiller of the soil may be
brought into direct relationship. Incidental to this primary object is the
acquisition of the various interests in the land. Reference is made to the
cases of The United Provinces v. Mst. Atiqa Begum and Others(1), Thakur
Jagannath Baksh Singh v. The United Provinces(2) and Megh Raj and Another v.
Allah Rakhia and Others(s) in support of the proposition that each entry in the
list, which is a category or head of the subjectmatter of legislation, must be
construed as widely as possible so as to inelude all ancillary matters. This
line of reasoning found favour with Shearer J. but was rejected by Reuben J.
and S.K. Das J. There is no doubt that "land" in entry 18 in List II
has been construed in a very wide way but if "land" or "land
tenures" in that entry is held to cover acquisition of land also, then
entry 36 in List II will have to be held as wholly redundant, so far as acquistion
of land is concerned, a conclusion to which I am not prepared tO assent. In my
opinion, to give a meaning and content to each of the two legislative heads
under entry 18 and entry 36 in List II the former should be read as a
legislative (1) [1940] F.C.R. IIO at p. 134(3) [1947] F.C.R. 77.
(2) [1946] F.C.R. III at p. 119.
972 category or head comprising land and land
tenures and all matters connected therewith other than acquisition of land
which should be read as covered by entry 36 in List II.
Further, the impugned Act purports to acquire
all arrears of rent and a law for acquisition of the arrears of rent cannot
possibly be said to be a law with respect to matters specified in entry 18 in
List II for it cannot be supposed to be a law relating to the collection of
rent within the meaning of that entry. On this point I find myself in agreement
with Reuben J. and S.K. Das J. and I cannot accept the arguments of the learned
Attorney-General to the contrary.
Therefore, the arguments of Mr. P.R. Das
founded on entry 36 in List II and entry 42 in List III cannot be rejected in
limine but have to be considered and I proceed to do so immediately.
That the obligation to pay compensation is
concomitant to, that is to say, accompanies, the power of compulsory taking of
private property by the State cannot be disputed.
The first important question is whether this
obligation is implicit in the term "acquisition" as used in entry 36
in List II, or in other words whether this obligation is to be inferred simply
from the use of that term as a part of the content or meaning thereof. In
Attorney-General v. De Keyser's Royal Hotel Limited (supra) Lord Dunedin
pointed out that the power of acquisition was. in its origin, derived from the
prerogative of the Crown and that the payment of compensation was originally a
matter of negotiation and bargain between the Crown and the subject, but came
to be determined later on by statutes of local application and finally by
statutes of general application and that, therefore, the Crown, which is an
assenting party to every statute, must, in effect, be regarded as having
consented to the exercise of its prerogative being made subject to payment of
compensation regulated by statutes. In that case, however, it was not disputed
in arguments that the taking itself was a matter of prerogative right. In the
United States of America the power of eminent domain was not originally, in
terms, conferred on 973 the United States by any provision of the Federal
Constitution, but this power has always been recognised to exist as an inherent
attribute of the sovereignty of the State.
So far as the United States are concerned,
the Fifth Amendment by providing that private property shall not be taken for
public use without just compensation gave a constitutional recognition to the
right of eminent domain and, to protect the subjects, imposed a limitation on
the exercise of that right by the State. This indicates that the power of
acquisition and the obligation to pay compensation are two separate and
distinct concepts although the second follows the first. If the obligation to
pay compensation were an integral part of the concept or the meaning of
"taking" itself, then this part of the Fifth Amendment was wholly
unnecessary. It follows, therefore, that the expression "acquisition"
does not, by itself and without more, import any obligation to pay
compensation. It is urged by Mr. P.R. Das that entry 42 in List III really
implements the obligation implicit in entry 36 in List II and the two entries
are complementary to each other. If this obligation were not implicit in entry
33 in List II then where else, it is asked, is the obligation to pay
compensation to be found ? The obvious answer is that obligation is to be found
in article 31 (2) in Part III of our Constitution. The obligation to pay
compensation may be introduced as a part of the legislative power itself, in
which case it becomes a composite power, namely, a power to make law with
respect to acquisition circumscribed by the obligation to provide for
compensation. Thus in section 31 (XXXI) of the Commonwealth of Australia
Constitution Act the acquisition of property on just terms has been made a head
or category of legislative power of the Commonwealth Parliament. There the
power is not to make a law for the acquisition of property simpliciter but is
to make a law for the acquisition of property on just terms which connotes that
the legislative power itself is circumscribed by the necessity for providing
just terms.
But there is no overriding 974 necessity of
constitutional law that I know of, or that has been brought to our notice,
which requires that the obligation to pay compensation for the acquisition of
property must be made part and parcel of the very legislative power to make a
law with respect to the compulsory acquisition of private property. It must
depend on the provisions of the particular constitution under consideration.
What do we find in our Constitution ? We find that under article 246 Parliament
has exclusive power to make laws with respect, inter alia, to matters specified
in entry 33 in List I, namely, "acquisition or requisitioning of property
lot the purposes of the Union, that the State Legislatures have exclusive power
to make laws with respect, inter alia, to matters specified in entry a6 in List
II, namely, the ,acquisition or requisitioning of property except lot the
purposes of the Union subject to the provision of entry 42 of List III"
and that both Parliament and the State Legislatures may make laws with respect
to matters set forth in entry 42 in List III, namely, the principles for
determining the compensation and the form and manner of giving such
compensation. This legislative power of Parliament or of the State Legislatures
is, by article 245, made "subject to the provisions of this
Constitution." One of the provisions of the Constitution is article 31 (2)
under which no property can be "taken possession of or acquired for public
purposes under any law authorising the taking of such possession or such
acquisition unless the law provides for compensation for the property and
either fixes the amount of compensation or specifies the principles on which,
and the manner in which, the compensation is to. be determined and given."
The scheme of our Constitution obviously is to provide the three things separately,
namely, the power of making a law for acquisition of property in article 246
read with entry 33 in List I and entry 36 in List II, the obligation of such
law to provide for compensation in article 31(2) and the power of making a law
laying down the principles for determining such compensation in article 246
read with entry 42 in List III.
975 According to this scheme it is not
necessary at all to regard entry a3 in List I and entry 36 in List, II, which
are mere heads of legislative power, as containing within themselves any
obligation to provide for the payment of compensation. In other words, it is
not necessary to treat the obligation to pay compensation as implicit in or as
a part or parcel of these legislative heads themselves, for it is separately
and expressly provided for in article 31 (2). The well-known maxim expressum
facit cessare tacitum is, indeed, a principle of logic and common sense and not
merely a technical rule of construction (See Broom's Legal Maxims, 10th Edn, p.
443 at p. 452). The express provision in article 31 (2) that a law of
acquisition, in order to be valid, must provide for compensation, will,
therefore, necessarily exclude all suggestion of an implied obligation to
provide for compensation sought to be imported into the meaning of the word
"acquisition" in entry 36 in List II. In the face of the express
provision of article 31 (2) there remains no room for reading any such
implication in the legislative heads.
Mr. P.R. Das suggests, in the alternative,
that if the obligation to provide for compensation is not implicit in the word
"acquisition" itself as used in entry 36 in List II that obligation
is attracted and made a part and parcel of that entry by reason of the words
"subject to the provisions of entry 42 of List III". The last
mentioned words are, however. not to be found in entry 33 in List I and this
part of Mr. P.R. Das's argument would lead to this anomalous result that while
the obligation to provide for compensation is made a part of the legislative
power under entry 36 in List II by virtue of its last few words quoted above,
no such obligation is attracted and made part of the legislative power under
entry33 in List I, and that, therefore, in making a law with respect to
acquisition of property under entry 33 in List I Parliament, unlike the State
Legislatures, will not be bound to provide for any compensation at all. This
cannot possibly be the intention of the framers 976 of our Constitution.
Further, Mr. P.R. Das reads the words "subject to" as meaning
"conditional upon" the exercise of the legislative power under entry
42 in List III, that is to say, conditional upon fulfilling the obligation to
provide for compensation and the form and the manner in which such compensation
is to be given. I agree with S.K. Das J. that the words "subject to"
have not the meaning sought to be given to them by Mr. P.R. Das but that they
mean "but not" so as to indicate that the scope of entry 36 in List
II is restricted, that is to say, that the subjectmatter of entry 42 in List
III is not within the content of entry 36 in List II. If entry 42 in List III
were, by reason of the words "subject to the provisions of entry 42 of
List III" occurring in entry 36 in List II, to be read as having been made
a part of the content of entry 36 in List II then it may well be argued that,
in view of article 246, Parliament will not be competent to maintain law with
respect to principles on which compensation is to be determined. It is in order
to prevent this argument and out of abundant caution that the subjectmatter of
entry 42 in List III has been excluded from the content of entry 36 in List II
by the words "subject to" et cetera and Parliament may, therefore,
freely make a law with respect to the matters thus excluded from entry 36 in
List II and set forth as a separate and independent item in entry 42 in List
III. This consideration was not material in connection with entry 33 in List I
which explains the omission of the words "subject to" et cetera from
that entry.
Mr. P.R. Das finally urges that if the
obligation to provide for compensation is not implicit in the word
"acquisition" in entry 36 in List II and if that obligation is not to
be read into that entry even in view of the words "subject to
................ "at the end of it, even then if the State exercises its
power to make a law with respect to acquisition of property under entry 36 in
List II it is the duty of the State Legislature to make a law also with respect
to matters specified in entry 42 in List III on the principle that as 977 entry
42 in List III confers a power on the Legislature for the protection of the
interest of persons whose property is compulsorily acquired, such power must.
therefore, be regarded as coupled with a duty to exercise it. No authority has
been brought to our notice establishing or even suggesting that the principle
laid down by the House of Lords in Julius v. Lord Bishop of Oxford (supra) has
been extended to the exercise of legislative power and I am not prepared to
assent to the proposition. Article 246 does not make it obligatory for
Parliament or the State Legislatures to make a law under any of the entries in
any of the Lists in the Seventh Schedule. Entry 42 in List III does not,
therefore, impose any duty upon Parliament or the State Legislatures to make
any law for payment of compensation. What requires Parliament or State
Legislatures, when making a law for compulsory acquisition of private property,
to provide for compensation and either to fix the amount thereof or specify the
principles on which and the-manner in which the compensation is to be
determined and given is the provision of article 31 (2). Entry 42 in List 111
only constitutes a legislative head under which Parliament or the State Legislatures
may make a law so as to give effect to the obligation expressly imposed on them
by article 31 (2). In view of the clear provision of that article it is wholly
unnecessary to read entry 42 in List III as imposing an implied duty on the
Legislature on the principle referred to in the House of Lords case.
That the obligation to provide for
compensation is not included in the content of the legislative power under
entry 36 in List II, by itself or read with entry 42 in List III, will be made
further clear when we come to consider closely clauses (4) and (5) of article
31 and article 31-A. Article 31(4) protects a law of the description mentioned
therein against the provisions of article 31(2). It follows, therefore, that
what is sought to be protected by article 31(4) is a law for the acquisition or
taking possession of property which does not, amongst other things, provide for
compensation or 978 does not fix the amount or specify the principles on which
and the manner in which the compensation is to be determined and given, for
otherwise there would be no necessity for any protection. The question at once
arises as to whether there is any legislative entry in List 11 under which a
law for acquisition or taking possession of property without compensation can
be made by a State Legislature. To test the validity of Mr. P.R. Das's argument
and to avoid the complication arising out of the residuary powers of Parliament
under article 248 and entry 97 of List II I have taken the case of a law of
acquisition made by the legislatures of a State which also come within article
31 (4). Is there, then, any entry in List II under which a State Legislature
can make a law for acquisition without compensation or public purpose ?
Obviously there is none, except entry 36 in List II. If that entry by itself or
read with entry 42 in List III has any implication as suggested, namely, that a
law for acquisition of property-made under entry 36 in List II without a
provision for compensation will be beyond the legislative competency of the State
Legislatures, then there is no other entry under which such a law can be made
by a State Legislature and there can, therefore, be no point in making a
provision in article 81(4) for protecting, against article 31(2), a law which,
on this hypothesis.
cannot be made at all. Article 81(4)
postulates a law which offends against 31 (2) and so far as the State
Legislatures are concerned there is no entry in List II except entry 36 under
which such an offending law may be made by the State Legislatures. This circumstance
unmistakably establishes that entry 36 in List II, by itself or read with-entry
42 in List III, has not any such implication as is imputed to it.
Likewise take article 81 (5) (b) (ii) which
protects the provisions of any law which the State may hereafter make for the
promotion of public health or the prevention of danger to life or property. The
law which is thus sought to be protected must also involve acquisition of
property without any provision for compensation, for otherwise there can be no
occasion or necessity for 979 any protection against article 31 (2). A law of
this kind, in so far as such law provides for acquisition of property, must
necessarily be made by a State Legislature. if at all, under entry 36 in List
II. If Mr. P.R. Das's contentions were correct, a law for the promotion of
health or the prevention of danger to life or property involving the
acquisition of property without a provision for compensation, which is what is
sought to be protected from article 31 (2), can never be made, for the
obligation to provide for compensation is, according to him, implicit in
entry36 in List II, by itself or read with entry 42 in List III, and there is
no other entry under which a law may be made by a State Legislature with
respect to acquisition of property.
It is futile to attempt to get over this
anomaly by suggesting that clauses (4) and (5) (b) (ii) of article 31 have been
inserted in the Constitution ex abundanti cautela, for, if Mr. P.R. Das were
correct in his submission, no amount of caution was necessary for protecting a
law that, ex hypothesi, cannot be made at all. Similar arguments may as well be
founded on article 31-A, for that article also protects a law from article 31
(2) which is in Part III of the Constitution. It is suggested that article 31-A
postulates a valid law made by a competent legislature within the ambit of its
legislative powers. If a State Legislature in making a law for the acquisition
of property for a public purpose under entry 36 in List II must provide for
compensation then a law made conformably with this supposed requirement of that
entry by a State Legislature will require no protection at all against article
31 (2), and article 31-A must be regarded as meaningless and unnecessary.
Surely, that conclusion is manifestly untenable. In my opinion clauses (4) and
(5)(b) (ii) of article 31 and article 31-A clearly negative Mr. P.R. Das's
proposition. In my judgment, for the reasons stated above, the major premise in
the arguments advanced by Mr. P.R. Das under 'the first head, namely, that the
obligation to pay compensation is implicit in entry 36 in Lis II by itself or
read with entry 42 in List III is unsound.
980 The obligation to provide for
compensation being, as I hold, a provision of article 31(2) and not being
implicit in or a part and parcel of the legislative power itself under entry 36
in List II read by itself or in conjunction with entry 42 in List III, the
impugned Act cannot, by virtue of articles 31(4), 31-A and 31-B, be called in question
on the ground that it contravenes or is inconsistent with or takes away or
abridges any of the rights conferred by the provisions of clause (2) of article
31, that is to say, that it does not provide for compensation.
Assuming that the obligation to pay
compensation which is expressly provided in article 31(2) is also implicit in
entry 36 in List II by itself or read with entry 42 in List III, the
respondents cannot. even then, be permitted to call in question the validity of
the impugned Act on the ground that it does not provide for compensation, for
then they will be doing exactly what they are forbidden to do by article 31 (4)
and the newly added articles. Article31(4) and the added articles debar the
respondents from questioning the validity of the Act on the ground, inter alia,
that it contravenes or is inconsistent with or takes away or abridges any of
the rights conferred by the provisions of clause (2) of article 31. The
emphasis in those articles is rather on the "provisions" than on the
number of the article or the Part of the Constitution. It is obvious that the
real substance of the matter is that articles 31(4), 31-A and 31-B expressly
seek to prevent a challenge to the validity of the Act based on the ground,
inter alia, that it does not provide for compensation. This obligation to
provide for compensation is no doubt one of the provisions of article 31 (2)
but if as contended by Mr. P.R. Das, the self same provision be found elsewhere
in the same Constitution, e.g., entry 36 in List II or entry 42 in List III,
then that "provision" must also be regarded as having been covered by
article 31(4) and the two added articles, for otherwise those articles will be
rendered nugatory. In my opinion, if two constructions are possible, the Court
should adopt that which 981 will implement and discard that which will stultify
the apparent intention of the makers of the Constitution.
Further, it must be borne in mind that
article 31 (4) which applies "notwithstanding anything in this
Constitution", will, by force of the very words, protect the Act against
even legislative incompetency, if any, arising out of the alleged noncompliance
with the suggested implied provisions, if any, of entry 36 in List II and entry
42 in List III. In my judgment the respondents are not, by reason of articles
31(4), 31-A and 31-B, entitled to call the Act in question on the ground that
it does not provide for compensation, whether the ground is formulated as a
breach of article 31 (2) or of the implied provision, if any, of the
legislative heads mentioned above.
It will be noticed that the argument that the
Act is unconstitutional is founded on the assumption that it has not laid down
any principle for determining compensation as required by entry 42 in List III
and that the provision for compensation is wholly illusory. Chapter V of the
Act deals with assessment of compensation. Shortly put, the scheme is to start
with the gross assets which are taken to be synonymous with the gross income
and then to make certain deductions therefrom and to arrive at the net assets.
Then the compensation is to be calculated at a sliding scale of rates varying
from 20 to 3 times of the net income. To the amount thus determined is to be
added a moiety of the accumulated arrrears of rent etc. and the compensation
for the mines and minerals as determined under section 25. Ex facie, it cannot
be disputed that the Act does prescribe some principles for determining the
compensation payable to the proprietor or tenure-holder. It is, however, pointed
out that the deduction of 5 to 20 per cent. of the gross assets as and by way
of cost of management is quite arbitrary. It is said that although it is well
known that the percentage of cost of management in relation to the income of a
small estate is greater than that of a larger estate, yet the Act provides for
deducting 20 percent. of the gross assets in the case of proprietors 982 of the
larger estates but only 5 per cent. in the case of the smaller estates.
Objection is next taken to the deduction of any amount under the head of works
of benefit to raiyats the and also to the scale of such deduction. These
arguments, to my mind, do not on close scrutiny, amount to saying that the Act
does not lay down any principle for determining the compensation. The real
underlying implication of these arguments, as I understand them, is that the
principles are not good enough in that they do not produce fair compensation. I
do not think the Court can go into the policy of the legislation. All that the
Court is concerned with is to see whether any principle has been laid down as
mentioned in entry 42 in List III. It is true that the percentage of costs of
management calculated on the basis of the income of a big estate is less than
that of a smaller estate, but it is quite clear that the Act has fixed the
scale of deduction under this head and under the head of works of benefit
according to the capacity of the proprietor or tenureholder to bear it. It is
impossible to say that the provision for deduction for works of benefit to the
raiyats is not supported by any principle. A landlord is expected to spend
money on works of benefit to his raiyats, e.g., providing tanks and wells,
irrigation, charitable dispensary, schools and so forth and be it said to the
credit of some of the landlords that in practice they do spend money on this
account. Therefore, there is nothing wrong, when calculating the net income of
a landlord, to deduct something which the' landlords should and some of them
often do, in practice, spend under this head. I see no absence of principle in
this provision. The rate of deduction, I have said, has been fixed according to
the capacity of the proprietors or tenure-holders. It has been shown.
and it is not denied that in many cases a
calculation of the net income on the basis of the principles laid down in the
Act operates to reduce the gross income to a very small net income. To take
only one instance, the gross annual income of the Darbhanga estate is about Rs.
47,85,069, the deduction 983 allowed by the Act is about Rs. 44.88,585 and the
net income computed according to the principles laid down in the Act comes to
about Rs. 2,96,484 or say Rs. 3 lacs and the compensation payable to the
Maharajadhiraj of Darbhanga will be only rupees 9 lacs. It has also been shown
that at least in one case, e.g., in the case of the Raja of Purnea the
compensation calculated according to the principle laid down in the Act works
out at a deficit figure. The fact that in one isolated case the calculation may
work out in this way, does not, however, prove that no principle has been laid
down. Indeed, in all other cases the principle laid down in the Act actually
produces compensation, however inadequate it may be said to be in some cases.
If a principle has been laid down, then the provisions of entry 42 in List III
are amply satisfied and no question of legislative incompetency can arise. If a
principle has been laid down in the Act but that principle does not in fact
produce any compensation in any rare case or adequate compensation in some
cases then the real complaint should be, not that no principle has been laid
down but, that the principle laid down does not produce what may be called just
compensation. That result may offend against the provisions of article 31 (2)
but certainly not against entry 42 in List III and in view of articles 31 (4),
31-A and 31-B the Act cannot be challenged for noncompliance with article 31
(2). On the other hand, even if it is held that no principle has, in fact, been
laid down by the Act, as contended, then that fact not only amounts to a breach
of the provisions of entry 42 in List III but also constitues a breach of the
provisions of article 31 (2) which clearly and emphatically requires the law to
either fix the compensation or lay down the principles on which and the manner
in which the compensation is to be given and a breach of this
"provision", call it a provision of article 31(2) or one of entry 42
in List III. cannot. for reasons already stated, be questioned in view of
articles 31(4), 31.A and 31-B. It should also be remembered that article 31(4):
by reason of the words "notwithstanding 984 anything in this
Constitution" occurring therein will also protect the Act even against the
alleged legislative incompetency arising out of the noncompliance with all
provisions of the Constitution relating to the payment of compensation or the
existence of a public purpose including the supposed requirement of producing
actual compensation said to be implicit in the provisions of entry 42 in List
III. In my judgment, the Act cannot be called in question on the ground of
legislative incompetence of the Bihar Legislature to enact it under entry 36 in
List II or entry 42 in List III.
What I have stated above is sufficient to
repel the first ground of attack levelled against the Act by Mr. P.R.
Das. But before passing on to the second main
ground of attack I think it right to deal with a few subsidiary points
canvassed before us.
It is said that section 3 of the Act, which
is its main operative section, does not contemplate or authorise the
acquisition of arrears of rent at all, for the notification under that section
only refers to the vesting of the estates or tenures in the State. It is,
however, to be noticed that the consequence of issuing that notification is
that the arrears of rent including all that are mentioned in clause (b) of
section 4 are also to vest in, and be recoverable by, the State. This vesting
of the arrears of rent in the State necessarily implies the transfer of the
rights of the proprietors or tenureholders to the State and this process must,
therefore, amount to the acquisition of that right by the State. Therefore, in
effect, the Act does contemplate the acquisition of the arrears of rent by the
State.
On the authority of a passage in Willis'
Constitutional Law, p. 816, it is argued that the power of eminent domain
cannot be exercised with respect to money and choses in action besides certain
other unusual forms of property.
This passage is founded on certain earlier
decisions of the American Courts. It is, however, clear from Nichols on Eminent
Domain, Vol. I, p. 99, paragraph 2, and the case of Cincinnati 985 v.
Louisville & N.R. Co.(1) cited therein that the modern view is that the
right of eminent domain can be exercised on choses in action. In any case, we
are t0 consider whether arrears of rent are "property" in the sense
in which that expression is used in our Constitution and understood in our law.
What are the arrears of rent but rents that have fallen due but have not been
paid ? It is not at all money in the till of the landlord but it is a debt due
by the tenants. It is, therefore, nothing but an actionable claim against the
tenants which is undoubtedly a species of "pro.
perry" which is assignable. Therefore,
it can equally be acquired by the State as a species of "property. '' It
is finally urged that the Act makes no provision for payment of compensation
for taking this item of property.
It is true that in section 24 the word
"compensation" is used in connection with the taking of the estates
or tenures and also the taking of mines and minerals but not in connection with
the fifty per cent. of the arrears of rent which are directed to be added to
the compensation. But this provision for adding the fifty per cent. of the
arrears also appears in the chapter headed "Assessment of Compensation"
and, therefore, the fifty per cent. of the arrears is added in the process of
the assessment of the compensation.
Further, why is this fifty per cent. given to
the proprietors or tenure-holders at all unless it were for compensation ? It
is pointed out that when the State takes away a lac of rupees and returns
50,000 rupees, it, in reality, pays no compensation but by this shift and
contrivance only takes away the other 50,000 rupees for nothing. This argument
sounds plausible at first but is not founded on any good principle. This
argument arises only because a moiety is paid back, as it were, in the same
coin. If compensation for money were made, say, by giving some land of the
value of a moiety of the money taken, the same argument would not have been
available and all that could be said (1) 223 U.S. 390, 50 L.Ed. 481. 127 986
would have been that the land so given, not being equivalent in value to the
money compulsorily taken away, could not be said to be a just compensation.
That argument, in view of articles 31 (4), 31-A and 31-B, would, of course,
have been futile. But I see no difference in principle or law when compensation
for acquisition of arrears is made in money. In such a case if only a moiety of
the amount of arrears is returned the obvious complaint will be that the return
of 50,000 rupees is not fair or adequate compensation for taking away Rs.
1,00,000 and that complaint may have prevailed had there been no provision like
those we have in articles 31(4), 31-A and 31-B. Apart from this, the argument
completely overlooks the fact that the arrears of rent are not really cash in
the till of the proprietor or tenureholder but is only a debt due by the
tenants. What is the market value of this book debt ? This debt will have to be
realised, possibly by suit followed by execution proceedings involving time and
money in costs. Part of it, quite conceivably, may not be realised at all.
Therefore, the State takes the risk of realising or not realising the arrears
of rent but irrespective of the results of its efforts for their realisation
the fifty per cent. of the arrears is in a lump added to the compensation.
This, to my mind, indicates clearly that compensation is in fact paid for the
arrears of rent and I am not prepared to say that the payment of a moiety of
the book debts as compensation is so illusory as to amount to nothing, as
contended by Mr. P.R. Das. Even if it be inadequate, the grievance will be, not
that no principle has been laid down in the Act as required by entry 42 in List
III but, that the principle so laid down does not produce adequate compensation
and there is, therefore, a contravention of the provisions of article 31 (2).
That defect cannot, however, be made a ground of attack in view of articles
31(4), 31-A and 31-B for reasons explained above.
Re Ground B: The second point urged by Mr.
P.R. Das is that even if the Court does not accept the argument as to the
necessity for providing for compensation 987 being implicit in entry 36 in List
II and entry 42 in List III and holds that the respondents are, by reason of
the provisions of articles 31 (4), 31-A and 31-B, debarred from questioning the
validity of the Act on the ground that it does not provide for compensation the
respondents are, nevertheless, entitled to challenge the Act on the ground of
the absence of a public purpose. That the existence of a public purpose is an
essential prerequisite to the exercise of the power of compulsory acquisition
has not been disputed by the learned Attorney-General. The contention put
forward on behalf of the respondents is that the necessity for the existence of
a public purpose as a condition precedent to compulsory acquisition of private
property is not a "provision" of article 31 (2) but is a requirement
of entry 36 in List II or entry 42 in List III. The words "for public
purposes" do occur in article31(2) but it is said that there is a
distinction between a "provision" and an assumption. It is urged that
article 31(2) assumes a law authorising the taking of possession or the
acquisition of property for a public purpose and provides that the property
shall not be taken possession of or acquired even for that public purpose unless
the law also provides for compensation. It is, therefore, concluded that the
only "provision" of article 31 (2) is that the law authorising the
taking of possession or the acquisition of property for a public purpose must
provide for compensation and it is this "provision" only that cannot
be made a ground of attack on the Act by reason of articles 31 (4), 31-A and
31-B of the Constitution. This argument has found favour with Reuben J. and
S.K. Das J.
The latter learned judge, after referring to
a passage in his own judgment in the earlier case of Sir Kameswar Singh v. The
Province of Bihar (1) concludes as follows :-"Clause (2), strictly
speaking, does not, in express words, make" public purposes" a
condition precedent to compulsory acquisition but rather assumes that such
acquisition can be for public purposes only; it does so by necessary
implication." (1) A.I.R. 1950 Pat. 392.
988 The learned Judge then refers to the
following passage in the judgment of my learned brotherMukherjea J. in Chiranjit
Lal Choudhury v. The Union of India & Others (1):__ "Article 31(2) of
the Constitution prescribes a twofold limit within which such superior right of
the State should be exercised. One limitation imposed upon the acquisition or
taking possession of private property which is implied in the clause is that
such taking away must be for public purpose. 'the other condition is that no
property can be taken unless the law which authorises such appropriation
contains a provision for payment of compensation in the manner laid down in the
clause." ' I do not, however, see how the above observations of Mukherjea
J. in any way support the arguments of Mr. P.R.
Das that the existence of a public purpose is
not a provision of article31 (2) but is an inherent condition of any
legislation for compulsory acquisition of private property.
It is significant that Mukherjea J.
recognises that article 31(2) "prescribes" a two-fold limit. Surely,
a limit which is "prescribed" by the articles must be a provision
thereof.
In any case, what is implied in the clause
must, nevertheless, be a provision of the clause, for the expression
"provision" is certainly wide enough to include an implied as well as
an express provision. Be that as it may, I am prepared to go further and say,
for reasons I shall presently explain, that the requirement of a public purpose
as an essential prerequisite to compulsory acquisition is, if anything,
essentially a provision of that clause and an integral part of it.
Article 31 is one of a group of articles
included in Part III of the Constitution under the heading "Fundamental
Rights". It confers a fundamental right in so far as it protects private
property from State action. Clause (1) of the article protects the owner from
being deprived of his property save by authority of law. A Close examination of
the language of clause (1)will (2) [1950] S.C.R. 869.
989 show that this immunity is a limited one
and this will at once be clearly perceived if we convert the negative language
of clause (1) into positive language. In its positive form clause (1) will read
:"Any person may be deprived of his property by authority of law".
The only limitation put upon the State action
is the requirement that the authority of law is a prerequisite for the exercise
of its power to deprive a person of his property. This confers some protection
on the owner in that he will not be deprived of his property save by authority
of law and this protection is the measure of the fundamental right. It is to
emphasise this immunity from State action as a fundamental right that the
clause has been worded in negative language. Likewise, clause (9.) is worded in
negative language in order to emphasise the fundamental right contained
therein. The enunciation of this fundamental right necessarily requires a
statement of the ambit and scope of the State action and to fix the ambit and
scope of the State action it is necessary to specify the limitations on the
State action, for that limitation alone is the measure of the fundamental right.
Clause (2) of the article, in its positive form, omitting words unnecessary for
our present purpose, will read as follows:-"Any Property
..................................may be taken possession of or acquired for
public purposes under any law authorising the taking of such possession or such
acquisition if the law provides for compensation for the property taken
possession of or acquired ........................................" Put in
the above form, the clause makes it clear at once and beyond any shadow of
doubt that there are three limitations imposed upon the power of the State,
namely, (1) that the taking of possession or acquisition of property must be
for a public purpose, (2) that such taking of possession or acquisition must be
under a law authorising such taking of possession or acquisition and (8) that
the law must provide for compensation 990 for the property so taken or
acquired. These three limitations constitute the protection granted to the
owner of the property and is the measure of his fundamental right under this
clause. Unless these limitations were provisions of the article, the article
would have afforded no immunity at all.
I am, therefore, clearly of opinion that the
existence of a public purpose as a prerequisite to the exercise of the power of
compulsory acquisition is an essential and integral part of the
"provisions" of clause (2). If the requirement of a public purpose
were not a provision of article 31(2), then it will obviously lead us to the
untenable conclusion that Parliament will be free under its residuary powers
under article 248 and entry 97 of List I of the Seventh Schedule to make a law
for acquiring private property without any public purpose at all and to the
still more absurd result that while Parliament will have to provide for compensation
under article 31(2) in a law made by it for acquisition of property for a
public purpose it will not have to make any provision for compensation in a law
made for acquisition of property to be made without a public purpose. Such
could never have been the intention of the framers of our Constitution. The
existence of a public purpose as a condition precedent to the exercise of the
power of compulsory acquisition being then, as I hold, a "provision"
of article 31 (2), an infringement of such a provision cannot, under articles31
(4), 31-A and 3 I-B, be put forward as a ground for questioning the validity of
the Act.
Mr. P.R. Das's second line of argument on
this main head is that the necessity for the existence of a public purpose is
implicit in entry 36 in List II and that the existence of a public purpose is
also a requirement of entry 42 in List III which is made a part of entry 36 in
List. II by virtue of the words "subject to" etc., appearing at the
end of that entry and his conclusion is that in the absence of a public purpose
the Bihar Legislature had no legislative competency under those two entries to
enact the impugned Act and that this ground of attack is still available 991 to
him notwithstanding the provisions of articles 31(4), 31-A and 31-B. He does
not rely on any other part of the Constitution as insisting on the existence of
a public purpose as a prerequisite for compulsory acquisition of private
property. Entry 36 covers any purpose except the purpose of the Union and is
not, in terms,limited to public purpose. Secondly,the argument based on the
words "subject to" etc. at the end of entry 36 in List II which are
supposed to import the provisions of entry 42 in List III into entry 36 in List
II is not well-founded and it becomes obvious when we look at entry 33 in List
I. There are no words at the end of that entry as "subject to" etc.
and, therefore, the alleged requirement of a
public purpose under entry 42 in List III cannot be said to be incorporated in
entry 33 in List III would, therefore, follow that whereas under entry36 in
List II which is to be read with entry 42 in List III by reason of the words
"subject to" etc. in entry 36 in List II the Legislature of a State
can only make a law for compulsory acquisition of property for a public
purpose, Parliament may, under entry 33 in List I which does not attract entry
42 in List Iii, make a law for compulsory acquisition of property without a
public purpose. Such a result could never have been intended by the
Constitution.
Besides, turning to entry 42 in List III, I
find nothing in support of Mr. P.R. Das's contention. The words "acquired
or requisitioned for the purposes of the Union or of a State or for any other
public purpose" in that entry are merely words descriptive of the
preceding word "property". The matters comprised in entry 42 in List
III, as a legislative head, are the principles for the determination of
compensation and the form and manner of giving the compensation for property which
is described as having been acquired or requisitioned for the stated purposes.
That entry cannot possibly be regarded as a legislative head for acquisition of
property and much less is the purpose or province of that entry to lay down any
requirement of a public purpose as a condition precedent for the 992
acquisition of any property. In my opinion entry 42 in List III is of no
assistance to Mr. P.R. Das for this part of his argument. Further, the reasons
for which I have discarded his arguments as to the obligation to provide for
compensation being implied in entry 36 in List 11 by itself or read with entry
42 in List III will also apply to this contention mutatis mutandis and they
need not be restated here. To put it shortly, the provisions of article31(2)
which, as I have explained, require the existence of a public purpose, will
exclude the implication sought to be read into entry 36 in List 11 and entry 42
in List III. Secondly, what articles 31(4), 31-A and 31-B exclude is a
challenge to the Act on the ground of contravention of the
"provision" of clause (2). If the "provision" of clause (2)
of article 31 as to the necessity for the existence of a public purpose as a
prerequisite to compulsory acquisition of property is also to be regarded as
implicit in those two legislative entries, surely articles 31 (4), 31-A and
31-B and in particular article31(4) which contain the words "not withstanding
anything in this Constitution" will protect the Act from such implied
provision, for reasons I have already explained. Mr. P.R. Das's second main
point must accordingly be rejected as untenable.
Assuming that the necessity for the existence
of a public purpose is not a provision of article 31(2) but is a provision only
of entry 36 in List 11 and/or of entry 42 in List III and that consequently
articles 31 (4), 31-A and 31-B do not preclude the respondents from challenging
the validity of the Act on the ground of the legislative incompetency arising
out of the absence of a public purpose, the question still remains whether
there is in fact a public purpose within the meaning of our Constitution to
support the Act. It is to be noted that there is no recital of any public
purpose in the Act itself, but it is conceded that this circumstance is not
fatal to the validity of the Act.
It is, however, urged that this circumstance,
nevertheless, shows that the Legislature had, at the time of the passing of the
Act, no public purpose in its view. It is claimed 993 that, apart from the
absence of any such recital, there is no indication whatever as to the
existence of any public purpose in any of the operative provisions of the Act.
It is not disputed that as a result of this enactment a very large sum of money
now payable by the tenants as and by way of current rent and arrears of rent to
their respective landlords will be intercepted by the State but it is urged, on
the authority of certain passages in Cooley's Constitutional Limitations, 8th
Edn., Vol. II, p. 1118 (Footnote 1) and in Professor Willis' Constitutional
Law, p. 817, that the exercise of the power of taxation and not that of the
power of eminent domain is the legitimate means for swelling the public
revenue. That the Act has no public purpose to support it is sought to be
established by saying that in Bihar the recorded proprietors are about
13,35,919 in number and that assuming that there are four persons in a family,
nearly five and a half million people will be ruined as a result of this
legislation, although the actual tillers of the soil will derive no benefit
whatever therefrom, for they will remain where they are and will have to
continue, as heretofore, to pay their rent, instead of to their present
landlords, to the State which, they will find, is no better than a ruthless
machine unsusceptible to any humane feeling.
The contention is that the public purpose
must be something definite, something tangible and something immediate and that
there must be some indication of its existence in the Act itself and that the
State cannot take private property to-day and say that it will think of the
public purpose at its leisure. This leads me to a consideration of what is a
public purpose within the meaning of our Constitution.
We have been referred to some American
authorities for ascertaining the meaning and implication of "public
use", an expression which obviously is of a more limited import than the
expression "public purpose" used in our Constitution.
Apart from this, a perusal of the text books,
e.g., Constitutional Law by Professor Willis, p. 817 et seq., will immediately
make it clear 128 994 that the notion as to what is a "public use" is
rapidly changing in America. Formerly "public use" meant a use by the
public. According to the modern view "public use" means useful to the
public. The passage in Cooley's Constitutional Limitations, Vol. II, pp.
1139-40 quoted by S.K. Das J. of the Patna High Court summarises the position
thus :-"No satisfactory definition of the term" public use" has
ever been achieved by the Courts. Two different theories are presented by the
judicial attempts to describe the subjects to which the expression would apply.
One theory of "public use" limits the application to
"employment"--"occupation". A more liberal and more
flexible meaning makes it synonymous with "public advantage",
"public benefit". A little investigation will show that any
definition attempted would exclude some subjects that properly should be
included in, and include some subjects that must be excluded from, the
operation of the words "public use". As might be expected, the more
limited application of the principle appears in the earlier cases, and the more
liberal application has been rendered necessary by complex conditions due to
recent developments of civilization and the increasing density of population.
In the very nature of the case, modern conditions and the increasing
inter-dependence of the different human factors in the progressive complexity
of a community make it necessary for the Government to touch upon and limit
individual activities at more points than formerly".
To the like effect are the following
observations to be found in Corpus Juris, Vol. XX, article 39, at pp. 552 and
553 under the caption "What is a public use" :-"No general
definition of what degrees of public good will meet the constitutional
requirements for a "public use" can be framed, as it is in every case
a question of public policy. The meaning of the term is flexible and is not
confined to what may constitute a public use at any given time, but in general
it may be said to cover 995 a use affecting the public generally, or any number
thereof, as distinguished from particular individuals. Some Courts have gone so
far in the direction of a liberal construction as to hold that "public
use" is synonymous with "public benefit", "public
utility", or "public advantage", and to authorise the exercise
of the power of eminent domain to promote such public benefit, etc., especially
where the interests involved are of considerable magnitude, and it is sought to
use the power in order that the natural resources and advantages of a locality
may receive the fullest development in view of the general welfare".
The learned author thereupon proceeds to
discuss the more restricted meaning given to that expression. Mr. P.R.
Das has drawn our attention to the decision
of the Judicial Committee in Hamabai Framjee Petit v. Secretary of State for
India(1). It should be borne in mind that the Judicial Committee in that case
had to consider the meaning of the words "public purposes" occurring
in a lease of the 19th century. Even in 1914 the Judicial Committee did not
think fit to attempt a precise definition of the expression "public
purpose" and was content to quote with approval the following passage from
the judgment of Batchclor J.:"General definitions are, I think, rather to
be avoided where the avoidance is possible, and I make no attempt to define
precisely the extent of the phrase 'public purposes' in the lease; it is enough
to say that, in my opinion, the phrase, whatever else it may mean, must include
a purpose, that is, an object or aim, in which the general interest of the
community, as opposed 'to the particular interest of individuals, is directly
and vitally concerned".
And it is well that no hard and fast
definition was laid down, for the concept of" public purpose" has
been rapidly changing in all countries of the world. The reference in the above
quotation to "the general (1) (1915) L.R. 42 I.A. 44.
996 interest of the community", however,
clearly indicates that it is the presence of this element in an object or aim
which transforms such object or aim into a public purpose.
From what I have stated so far it follows
that whatever furthers the general interests of the community as opposed to the
particular interest of the individual must be regarded as a public purpose.
With the onward march of civilization our notions as to the scope of the
general interest of the community are fast changing and widening with the
result that our Old and narrower notions as to the sanctity of the private
interest of the individual can no longer stem the forward flowing tide of time
and must necessarily give way to the broader notions of the general interest of
the community. The emphasis is unmistakably shifting from the individual to the
community. This modern trend in the social and political philosophy is well
reflected and given expression to in our Constitution. Our Constitution, as I
understand it, has not ignored the individual but has endeavoured to harmonise
the individual interest with the paramount interest of the community. As I
explained in Gopalan's case (1) and again in Chiranjit Lal's case (supra) our
Constitution protects the freedom of the citizen by article 19(I)(a). to (e)
and (g) but empowers the State, even while those freedoms last, to impose
reasonable restrictions on them in 'the interest of the State or of public
order or morality or of the general public as mentioned in clauses (2) to (6).
Further, the moment even this regulated freedom of the individual becomes
incompatible with and threatens the freedom of the community the State is given
power by article 21, to deprive the individual of his life and personal liberty
in accordance with procedure established by law, subject, of course, to the
provisions of article 22.
Likewise, our Constitution gives protection
to the right of private property by article 19 (1) (f) not absolutely but
subject to reasonable restrictions to be imposed by law in the interest of the
general public (1) [1950] S.C.R. 88.
997 under clause (5) and, what is more
important as soon as the interest of the community so requires, the State may,
under article 31, deprive the owner of his property by authority of law subject
to payment of compensation if the deprivation is by way of acquisition or
requisition of the property by the State. It is thus quite clear that a fresh
outlook which places the general interest of the community above the interest
of the individual pervades our Constitution.
Indeed, what sounded like idealistic slogans
only in the recent past are now enshrined in the glorious preamble to our
Constitution proclaiming the solemn resolve of the people of this country to
secure to all citizens justice, social, economic and political, and equality of
status and of opportunity. What were regarded only yesterday, so to say, as
fantastic formulae have now been accepted as directive principles of State
policy prominently set out in Part IV of the Constitution. The ideal We have
set before us in article 38 is to evolve a State which must constantly strive
to promote the welfare of the people by securing and making as effectively as
it may be a social order in which social, economic and political justice shall
inform all the institutions of the national life. Under article 39 the State is
enjoined to direct its policy towards securing, inter alia, that the ownership
and control of the material resources of the community are so distributed as to
subserve the common good and that the operation of the economic system does not
result in the concentration of wealth and means of production to the common
detriment. The words "public purposes" used in article 23 (2)
indicate that the Constitution uses those words in a very large sense. In the
neverending race the law must keep pace with the realities of the social and
political evolution of the country as reflected in the Constitution. If,
therefore, the State is to give effect to these avowed purposes of our
Constitution we must regard as a public purpose all that will be calculated to
promote the welfare of the people as envisaged in these directive principles of
State policy whatever else that expression may mean. In 998 the light of this
new outlook what, I ask, is the purpose of the State in adopting measures for
the acquisition of the zamindaries and the interests of the intermediaries ?
Surely, it is to subserve the common good by bringing the land, which feeds and
sustains the community and also produces wealth by its forest, mineral and
other resources, under State ownership or control. This State ownership or
control over land is a necessary preliminary step towards the implementation of
the directive principles of State policy and it cannot but be a public purpose.
It cannot be overlooked that the directive principles set forth in Part IV of
Constitution are not merely the policy of any particular political party but
are intended to be principles fixed by the Constitution for directing the State
policy whatever party may come into power. Further, it must always be borne in
mind that the object of the impugned Act is not to authorise the stray
acquisition of a particular propery for a limited and narrow public purpose but
that its purpose is to bring the bulk of the land producing wealth under State
ownership or control by the abolition of the system of land tenure which has
been found to be archaic and non-conducive to the general interest of the
community. The Act also sets up a Land Commission to advise the State
Government generally with regard to the agrarian policy which it may from time
to time follow. It is impossible to say that there is no public purpose to
support the Act. This very Bihar Act was before the Constituent Assembly when
it passed article 31 (4) and again when it took the trouble of amending the
Constitution for saving this very Act. Would the Constituent Assembly have
thought fit to protect these Acts unless it were convinced that this Act was
necessary in the general interest of the community ? I find myself in agreement
with Reuben J.
and S.K. Das J. that these circumstances also
clearly indicate that the Constituent Assembly regarded this Act as well
supported by a public purpose. To put a narrow construction on the expression
"public purpose" will, to my mind, be to 999 defeat the general
purpose of our Constitution and the particular and immediate purpose of the
recent amendments.
We must not read a measure implementing our
mid-twentieth century Constitution through spectacles tinted with early
nineteenth century notions as to the sanctity or inviolability of individual
rights. I, therefore, agree with the High Court that the impugned Act was
enacted for a public purpose.
Mr. P.R. Das then puts up a narrow argument.
Assuming, says he, that, there is in the Act a general public purpose for compulsory
acquisition of zamindaries and tenures, there cannot conceivably be any public
purpose in support of the Act in so far as it authorises the taking of the
arrears of rent or the taking away of 4 to 12 1/2 per cent. of the gross assets
on the specious plea that the landlords must be supposed to spend that
percentage of their gross income on works of benefit to the rayats of the
estates and, therefore, that part of the Act is beyond the legislative competence
of the Bihar Legislature. I regard this argument as unsound for more reasons
than one. In the first place the existence of a public purpose being, as I
hold, a provision of article 31 (2), its absence, if any, in relation to the
arrears of rent cannot, by reason of articles 31 (4), 31-A and 31-B be made a
ground of attack against the Act.Secondly, it is an entirely wrong approach to
pick out an item out of a scheme of land reforms and say that item is not
supported by a public purpose. One may just as well say that there is no public
purpose in the acquisition of forests or of mines and particularly of
undeveloped mines, for such acquisition has no bearing on a scheme of agrarian
reforms in that it does not improve or affect the conditions of the tillers of
the surface of the soil. This, I apprehend, is not the right way of looking at
things. The proper approach is to take the scheme as a whole and than examine
whether the entire scheme of acquisition is for a public purpose. Thirdly, I do
not regard the deduction of 4 to 121/2 per cent. of the gross assets as
acquisition or confiscation 1000 at all, but I regard it, for reasons stated
above, as a part of a principle laid down by the Act for the purpose of
determining the amount of compensation as required by article 31 (2) and entry
42 in List III. Finally, I do not see why the taking over of the arrears of
rent, in the context of the acquisition of zamindaries, is not for a public
purpose. As I have said, the acquisition of zamindaries and tenures is a scheme
for bringing about agrarian reforms and ameliorating the conditions of the
tenants. The object is, inter alia, to bring the tillers of the soil in direct
contact with the States so as to free them from the clutches of rapacious
landlords and make them the masters of their holdings subject to payments of
the dues to the State. It is well-known that the bulk of the tenants are in
arrears with their rents and once the rents fall into arrear the tenants find
it difficult to pay the current rent after liquidating a part of the arrears so
that while they clear part of the old arrears the current rent falls into
arrear.
According to annexure B (2) to-the affidavit
of Lakshman Nidhi affirmed on January 22, 1951, the total amount of Raiyati
rent payable by the various tenants in the different circles of the Darbhanga
Estate alone will exceed rupees three lacs. It is not quite clear whether all
these arrears are due from the actual rayats in the sense of actual tillers of
the soil. But leaving out from consideration for the present purposes the arrears
of rent due by the tenureholders to their immediate superior tenureholder or to
the zamindar it can safely be taken that the bulk, if not all, of the actual
rayats or tillers of the soil are habitually and perpetually in arrear with the
rent of their holdings on account of financial stringency resulting from their
chronic indebtedness. In these circumstances if the zamindaries and the tenures
only are acquired under the Act leaving the zamindars and the tenure-holders
free to realise the huge arrears of rent due by the actual cultivating tenants
by legal process it will eventually result in the sale of the holdings of the
actual tenants or, at any rate, of their right, title and 1001 interest therein
and the possible purchase thereof by the zamindars or tenure-holders themselves
at Court sales in execution of decrees or by private sales forced upon the
tenants. The bulk of the actual tillers of the soil will then become landless
labourers and the entire scheme of land reforms envisaged in the Act will be
rendered wholly nugatory. If the acquisition of the zamindaries and the tenures
is, as I hold, dictated or inspired by the sound public purpose of ameliorating
the economic and political conditions of the actual tenants, the self same
public purpose may well require the acquisition of the arrears of rent so as to
avert the undesirable but inevitable consequences I have mentioned. The Bihar
Legislature obviously thought that the tenants in arrears will have better
treatment and a more reasonable accommodation, in the matter of the liquidation
of the-huge arrears, from the State which will act uNder the guidance of the
Land Commission than from the expropriated landlords whose sole surviving
interest in their erstwhile tenants will only be to realise as much of the
arrears as they can from the tenants and within the shortest possible time
without any mercy or accommodation, The same remarks apply to the acquisition
of decrees for arrears of rent. The overriding public purpose of ameliorating
the conditions of the cultivating rayats may well have induced the Legislature
to treat the arrears of rent and the decrees for rent differently from the
other ordinary moveable properties of the zamindars or tenure-holders, e.g.,
their money in the bank or their jewellery or ornaments with which the rayats
have no concern and to provide for the acquisition of the arrears and the
decrees. In the premises, the second main ground of attack levelled by Mr. P.R.
Das against the Act must be rejected. I am, however, free to confess that if I
could agree with Mr.
P.R. Das that these provisions of the
impugned Act are bad for want of a public purpose, I am not at all sure that I
would not have found it extremely difficult to resist his further argument that
the entire Act was bad, for it might 1002 not have been very easy to presume
that if the Bihar Legislature had known that these provisions of the Act might
be held bad it would nevertheless have passed the other parts of the Act in
that truncated form. The acquisition of the arrears of rent appears to me to be
an integral part of the scheme and inextricably interwoven with it. Indeed, it
may well have been that the scheme of agrarian reform was not considered by the
Bihar Legislature to be at all capable of easy implementation by the State
without the acquisition of the arrears of rent. As, however, I have taken the
view that no part of the Act is bad for want of a public purpose, I need not
pursue any further the question of the severability of the Act or to refer to
the judicial decisions relied on by learned counsel on both sides.
Ground C: Mr. P.R. Das's third point is that
the Act constitutes a fraud on the Constitution, that is to say, while it
purports to be in conformity with the Constitution, it, in effect, constitutes
a defiance of it. The Act, according to him, pretends to comply with the
constitutional requirements in that it sets out to lay down certain principles
on which compensation is to be determined and the form and the manner in which
such compensation is to be given but, in effect, makes out a scheme for
non-payment of compensation. The Act, he urges, purports to pay back fifty per
cent. of the arrears of rent as compensation but in reality confiscates the
other fifty per cent. without any compensation. Further, under the guise of
deducting 4 to 121 1/2 per cent of the gross income the State is in reality
appropriating a large sum under this head. All this, he concludes, is nothing
but pretence or a mere shift and contrivance for confiscating private property.
The argument, when properly understood, will be found to resolve itself into an
attack on the legislative competency of the Bihar Legislature to pass this Act.
On ultimate analysis it amounts to nothing more than saying that while
pretending to give compensation the Act does not really give it. It is the
absence of a provision 1003 for just and adequate compensation that makes the
Act bad, because, according to Mr. P.R.Das, the legislative power under entry
36 in List II and entry 42 in List III requires the making of such a provision.
The failure to comply with this constitutional condition for the exercise of
legislative power may be overt or it may be covert. When it is overt, we say
the law is obviously bad for non-compliance with the requirements of the
Constitution, that is to say, the law is ultra vires. When, however, the
noncompliance is covert, we say that it is a fraud on the Constitution, the
fraud complained of being that the Legislature pretends to act within its power
while in fact it is not so doing. Therefore, the charge of fraud on the
Constitution is, on ultimate analysis, nothing but a picturesque and
epigrammatic way of expressing the idea of non-compliance with the terms of the
Constitution. Take the case of the acquisition of the arrears of rent. It is
said that the provision in the Act for the acquisition of arrears of rent is a
fraud on the legislative power given by the Constitution. I ask myself as to
why must it be characterised as a fraud? I find nothing in the Constitution
which says that the arrears of rent must not be acquired and. therefore, there
is no necessity for any covert attempt to do what is not prohibited. I have
already explained that in a scheme of land reforms such as is envisaged in the
Act the acquisition of the arrears of rent may properly accompany the acquisition
of the zamindaries and the tenures. Where. then, does this theory of fraud come
in ? The answer must eventually be that a moiety of arrears are taken away
without compensation. Again, take the case of the acquisition of non-income-yielding
properties. Why, I ask, is it called a fraud on the Constitution to take such
property ? Does the Constitution prohibit the acquisition of such property ?
Obviously it does not. Where, then, is the fraud? The answer that comes to my
mind is that it is fraud because the Act provides for compensation only on the
basis of income and, therefore, properties which are at present non-incomeyielding
but which have very rich 1004 potentialities are acquired without any
compensation at all.
Similar answer becomes obvious in connection
with the deduction of 4 to 12 1/2 per cent. of the gross assets under the head
"Works of Benefit to the Rayats". On ultimate analysis, therefore,
the Act is really attacked on the ground that it fails to do what is required
by the Constitution to do, namely, to provide for compensation for the
acquisition of the properties and is, therefore, ultra rites. This, to my mind,
is the same argument as to the absence of just compensation in a different form
and expressed in a picturesque and attractive language. I have already dealt
with the question of absence of a provision for just compensation while dealing
with Mr. P.R. Das's first point and I repeat that the obligation to provide for
compensation is not implicit in entry 36 in List II by itself or read with
entry 42 in List III but is to be found only in article 31 (2), that under
entry 42 in List III the Act has laid down a principle for determining compensation
and, therefore, there can be no question as to legislative incompetency for any
alleged non-compliance with any supposed requirement said to be implicit in
these entries. If the principles so laid down in the Act do not in any rare
case produce any compensation or do not produce adequate compensation in some
cases, such absence of compensation may be a contravention of article 31 (2)
but in view of articles 31 (4), 31-A and 31-B and particularly due to the words
"notwithstanding anything in this Constitution" occurring in article
31 (4) it cannot be made a ground of attack on the Act, even though such ground
is formulated in a different but attractive language, namely, as a fraud on the
Constitution. Accordingly, this point must also be rejected. I, however, repeat
that ii I took a different view I would still have the same difficulty as to
the inseverability of the different provisions of the Act as I have hereinbefore
indicated.
Re. Ground D: Mr. P.R. Das's fourth point is
that the Act is unenforceable in that section 32 (2) 1005 provides for
compensation in forty equal installments without specifying the period of
interval between the installments.
In course of arguments, however, Mr. P. R.
Das has thought fit not to press this point and accordingly it does not require
any refutation.
Re. Ground E: Mr. P.R. Das's last main point
is that the Act has delegated essential legislative functions to the Executive
Government and is, therefore, invalid. Article 31 (2) requires that the law
authorising the taking possession or the acquisition of land for public purpose
should provide for compensation for the property taken possession of or
acquired and should either fix the amount or specify the principles on which,
and the manner in which the compensation is to be determined and given. Entry
42 in List III talks of principles on which compensation is to be determined
and the form and the manner in which such compensation is to be given. The
argument is that the Constitution has left to Parliament or the State
Legislature the duty of specifying the principles on which, and the form and
manner in which the compensation is to be determined and given but the Bihar
Legislature by sections (22)of the Act has simply provided that the amount of
compensation shall be paid in cash or in bonds or partly in cash and partly in
bonds and that the bonds shall be either negotiable or non-negotiable and
non-transferable and be payable in forty equal installments and has not laid
down any decisive provision but has left the matter to the State Government to
decide. It has, therefore, failed to discharge the duty which was expressly
left to its knowledge, wisdom and patriotism. Mr. P.R. Das complains that the
Legislature has shirked its responsibility and delegated this essential
legislative power to the State Government to be exercised under rules made by
itself under its rulemaking power under section 43 (2) (p). The question of the
propriety and legality of the delegation of legislative power has recently been
considered by this Court in re The Delhi Laws Act, 1912 etc.(1). If I (1)
[1951] S.C.R. 747.
1006 were to deal with this matter according
to my own notions, I would have dismissed this argument in limine, for here the
Legislature has not abdicated or effaced itself in the sense I have explained
in my opinion in that case. When I look at the matter on the basis of the
principles laid down in that case by the late Chief Justice and my learned
brothers to which Mr. P.R. Das has referred, I have to overrule his contention
all the same. Here section 32 clearly indicates that the Legislature has
applied its mind to the problem and it has laid down the principle that the
compensation may be paid in cash or in bonds or partly in cash and partly in
bonds and that ii a payment is to be made either wholly or partly in bonds,
these bonds may be either negotiable or non-negotiable and non-transferable.
Having laid down the principle, the Legislature has, by a rule made under
section 43 (3) (p), left it to the Executive to determine the proportion in
which the compensation shall be payable in cash and-in bonds and the manner of
such payment of compensation. These details, it will be observed, depend on
special circumstances, e.g., the extent of the ability, of Government to pay,
the extent of the necessities of the proprietors and many other considerations,
with which the Executive Government would be more familiar than the Legislature
itself. I am unable to accept Mr. P.R. Das's contention that this amounts to a
delegation of an essential legislative function within the meaning of the
decision of my learned brothers.
Mr. Sanjiva Chowdhuri has urged that the Land
Acquisition Act, 1894 being continued by the Constitution and that Act which is
a Central Act having been extended by notification in 1899 to Ramgarh State for
which he appears, the Central Act must apply to Ramgarh until the notification
is withdrawn and the impugned Act cannot apply for determining the
compensation, for the field is already occupied by the Central Act of 1894. It
may, however, be noticed that the provision for compensation in that Act 1007
applies only to lands acquired under that Act. It has no application to lands
acquired under other statutes and, therefore, the provision for compensation of
the Land Acquisition Act cannot apply to acquisitions under the Bihar Act and,
therefore,the doctrine of occupied field can have no application. In my opinion
there is no substance in this contention.
For reasons stated above, I allow these
appeals.
CHANDRASEKHARA AIYAR J.--The facts which have
given rise to these cases have been fully set out in the judgment just now
delivered by my learned brother Mahajan J. and need not be repeated. The
conclusions reached by him and Mukherjea J. have my concurrence. Ordinarily, I
would have stopped with the expression of my agreement, but having regard to
the importance of the question argued and the stakes involved, I desire to add a
few words of my own on some of the points discussed.
Article 31 (1) of our Constitution provides
"No person shall be deprived of his property save by authority of
law".
There are three modes of deprivation--(a)
destruction,(b) acquisition and (c) requisition. Destruction may take place in
the interests of public health or the prevention of danger to life or property
but with this we are not now concerned. In the case of "acquisition",
there is an element of permanency, and in the case of "requisition" there
is an element of temporariness. Except for this distinction, both modes stand
on the same footing, as regards the rights of the State vis-a-vis the rights of
the private citizens.
Under the Constitution, when property is
requisitioned or acquired, it may be for a Union purpose or a State purpose, or
for any other public purpose. Entry 33 in List I (Union List) of the Seventh
Schedule to the Constitution speaks of acquisition or requisitioning of
property for the purposes of the Union. When we come to entry 42 of List 111
(Concurrent List), we find these words: "Principles on which compensation
for property acquired or requisitioned for the purposes 1008 of the Union or of
a State or for any other public purpose is to be determined, and the form and the
manner in which such compensation is to be given." From very early times,
law has recognized the right of Government compulsorily to acquire private
properties of individuals for a public purpose and this has come to be known as
the law of eminent domain. But it is a principle of universal law that the
acquisition can only be on payment of just compensation. Story on the
Constitution, Vol. 2, page 534, paragraph 1790, has the following passage in
discussing the concluding clause of the Fifth Amendment of the American
Constitution:
"The concluding clause is that private
property shall not be taken for public use without just compensation. This is
an affirmance of a great doctrine established by the common law for the
protection of private property. It is founded in natural equity, and is laid
down by jurists as a principle of universal law. Indeed, in a free government,
almost all other rights would become utterly worthless, if the Government
possessed an uncontrollable power over the private fortune of every citizen.
One of the fundamental objects of every good government must be the due
administration of justice; and how vain it would be to speak of such an
administration, when all property is subject to the will or caprice of the
legislature and the rulers." The payment of compensation is an essential
element of the valid exercise of the power to take. In the leading case of
Attorney-General v. De Keyser's Royal Hotel, Ltd (1) Lord Dunedin spoke of the
payment of compensation as a necessary concomitant to the taking of property.
Bowen L.J. said in London and North Western Ry. Co. v. Evans (2):' "The
Legislature cannot fairly be supposed to intend. in the absence of clear words
showing such intention, that one man's property shall be confiscated for the benefit
of others, or of the public. without any (1) [1920] A.C.p. 508. (2) [1893] I
Ch. pp. 16 & 28.
1009 compensation being provided for him in
respect of what is taken compulsorily from him. Parliament in its omnipotence
can, of course. override or disregard this ordinary principle ...... if it sees
fit to do so, but it is not likely that it will be found disregarding it,
without plain expressions of such a purpose ." This principle is embodied
in article 31(2)of our Constitution in these terms :No property, movable or
immovable, including any interest in, or in any company owning, any commercial
or industrial undertaking, shall be taken possession of or acquired for public
purposes under any law authorising the taking of such possession or such
acquisition, unless the law provides for compensation for the property taken
possession of or acquired and either fixes the amount of the compensation, or
specifies the principles on which, and the manner in which,' the compensation
is to be determined and given." We shall not here trouble ourselves with
sub-clauses (3) and (4) of the article and with articles 31-A and 31-B which
were introduced by way of amendment under the Constitution First Amendment Act,
1951, dated 18-6-1951. They will be considered later.
The argument of Shri P.R. Das that the
payment of compensation is a concomitant obligation to the compulsory
acquisition of properties by the State can be accepted as sound; but when he
went further and urged that it was found in an implicit form in entry 42 of the
Concurrent List, he was by no means on sure ground. The entries give us the
bare heads of legislation. For ascertaining the scope or extent or ambit of the
legislation and the rights and the duties created thereby, we must examine the legislation
itself or must have resort to general and well-recognized principles of law of
jurisprudence. No resort can be had to anything implicit or hidden when the
statute makes an express provision on the same subject. As just compensation
has to be paid when property is acquired for a public purpose, the legislation
has to 1010 formulate the principles for determining the compensation and the
form and the manner in which it is to be given.
Entry 42 means nothing more than a power
conferred on the Legislature for achieving this end. The power is conferred but
there is no duty cast to provide for compensation. For any statement that the
payment of compensation is a primary condition for acquisition of property for
a public purpose, we have to look at the provisions of the Constitution itself
and this we find in article 31 (2)as stated already. Mr. Das was obliged to
take up the untenable position that entry 42 of its own force implies an
obligation to pay compensation, as he could not otherwise jump over the hurdles
created in his way by sub-sections (3) and (4) of article 31 and the new
articles 31-A and 31-B.
The learned Attorney-General contended in
dealing with entry 42 that legislation under entry 42 can also lay down
principles that would lead to the non-payment of any compensation and he cited
Atiqa Begurn's case(1) as an authority in his support. This contention appears
to me to be as unsound as Mr. Das's argument that the obligation to pay or give
compensation wasimplicit in the said entry. As there can be no acquisition
without compensation, the terms of entry 42enable the legislature to lay down
the principles and provide further for the form and manner of payment. If the
principles are so formulated as to result in non-payment altogether, then the
legislature would be evading the law not only covertly but flagrantly. There is
nothing in Atiqa Begum's case that supports the argument. It was there held
that under the head "payment of rent" there could be legislation
providing for remission of rent. Payment of rent is not a legal obligation of
every tenureand the legislature can enact that under certain circumstances or
conditions there shall be remission of rent. But as regards compensation for
State acquisition, its payment is a primary requisite universally recognized by
law. This is the essential distinction to remember (1) [1940] F.C.R, 110.
1011 when we seek to apply the case quoted.
The last words in entry 42 "form and the manner in which such compensation
is to be given" clearly mean that the principles determining compensation
must lead to the giving or payment of some compensation. To negate compensation
altogether by the enunciation of principles leading to such a result would be
to contradict the very terms of the entry and such a meaning could not be
attributed to the framers of the Lists.
This, however, does not carry Shri P.R. Das
anywhere near success. Article 31(4) is the first stumbling block in his way.
It provides :-"If any Bill pending at the commencement of this Constitution
in the Legislature of a State has, after it has been passed by such
Legislature, been reserved for ,.he consideration of the President and has
received his assent, then, notwithstanding anything in this Constitution, the
law so assented to shall not be called in question in any court on the ground
that it contravenes the provisions of clause (2)." The Bill which
subsequently became "The Bihar Land Reforms Act, 1950" was pending at
the commencement of the Constitution in the legislature of the State, and after
it was passed by the legislature, it was reserved for the consideration of the
President and received his assent.
Therefore the bar that it shall not be called
in question in any court on the ground that it contravenes the provisions of
clause (2) becomes applicable. True, compensation has to be provided for, by
reason of sub-clause (2) of the article, but sub-clause (4) postulates an
exception and the right to challenge the validity of the Act on the ground that
no compensation has been provided for or that the compensation is really
illusory or inadequate is taken away. As if this were not enough, two more
stiles have been erected in his way and they are the new articles 31-A and 31-B
brought in by way of amendment. Article 31-A, sub-clause (1) is in these terms
:-"Notwithstanding anything in the foregoing provisions.
of this Part, no law providing for the 1012
acquisition by the State of any estate or of any rights therein or for the
extinguishment or modification of any such rights 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 any provisions of this Part:
Provided that where such law is a law 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.
Article 31-B provides :
"Validation of certain Acts and
Regulations :--Without prejudice to the generality of the provisions contained
in article 31-A none of the Acts and Regulations specified in the Ninth
Schedule nor any of the provisions thereof shall be deemed to be void, or even
to have become void, on the ground that such Act, Regulation or provision is
inconsistent with, or takes away or abridges any of the rights conferred by,
any provisions of this Part, and notwithstanding any judgment, decree or order
of any court or tribunal to the contrary each of the said Acts and Regulations
shall, subject to the power of any competent Legislature to repeal or amend it,
continue in force." When we look at the Ninth Schedule to the Amending
Act, the very first item mentioned is "The Bihar Land Reforms Act,
1950." In the face of these almost insuperable obstacles, Shri P.R.
Das candidly admitted that he could urge
nothing as regards the adequacy or the illusory nature of the compensation
provided in the Act, if he was not able to convince the Court on his main point
that he could challenge the offending Act on grounds other than those mentioned
in Part III of the Constitution, and that there was something in entries No. 36
of the State List and No. 42 of the Concurrent List read together which imposed
on the State Legislature an obligation to provide lot the payment of just or
proper compensation and that the non-observance of this 1013 obligation
entitles him to challenge the validity of the Act as unconstitutional.
The acquisition of property can only be for a
public purpose. Under the Land Acquisition Act, I of 1894, a declaration by the
Government that land is needed for a public purpose shall be conclusive
evidence that the land is so needed and Courts cannot go into the question
whether the public purpose has been made out or not. There is no such provision
in any article of the Constitution with which we have to deal. It is true that
sub-clause (2) of article 31 speaks of property being acquired for public
purposes. The bar created by sub-clause (4) of article 31 relates to the
contravention of the provisions of clause (2). The provision of clause (2) is
only as regards compensation as can be gathered from its latter part:"Unless
the law provides for compensation for the property taken possession of or
acquired and either fixes the amount of the compensation, or specifies the
principles on which, and the manner in which, the compensation is to be
determined and given." It is assumed, rightly, that the existence of a
public purpose is part and parcel of the law and is inherent in it.
The existence of a public purpose is not a
provision or condition imposed by article 31 (2) as a limitation on the
exercise of the power of acquisition. The condition prescribed is only as
regards compensation. Article 31 (4) debars the challenge of the
constitutionality of an Act on this ground but no other. Whether there is any
public purpose at all, or whether the purpose stated is such a purpose is open,
in my opinion, to judicial scrutiny or review.
When the legislature declares that there is a
public purpose behind the legislation, we have of course to respect its words.
The object of the Act in question is to extinguish the interests of
intermediaries like zamindars, proprietors, and estate and tenure-holders etc.,
and to bring the actual cultivators into direct relations with the State
Government. To achieve this end, several provisions have been enacted for the
1014 transfer and the vesting of such interests in the State as regards various
items of properties. It is impossible to deny that the Act is inspired and
dominated by a public purpose, but the question still remains whether the
taking over of particular items can be said to be for a public purpose. It is
in this connection that the two items of "arrears of rent" and
"cost of works of benefit to the raiyats" dealt with in section 4,
clause (b), and section 23, clause (f) respectively of the Act, have to be
considered.
The taking over of "arrears of
rent" does not seem to have even a remote connection with any question of
land reform. It stands on no better footing than if the Act sought to take over
the cash on hand or in the banks of the zamindars, proprietors or
tenureholders. It is only an accident that the rents in question were not
realised before the passing of the Act. Whether realised or not, they are his moneys
due and payable to him by the ryots. The consequences of vesting of estates
must have some relation to the tenures themselves and have some connection,
remote though it may be, with the agrarian reforms undertaken or contemplated.
Supposing that we have a legislation stating that as it is necessary to
eliminate rent collectors and farmers of revenue and to apportion and
distribute land on an equitable basis amongst the tillers of the land and
confer on them rights of permanent occupancy and also to bring them directly
into contact with the State, all moneys which the proprietors had collected as
and by way of rent from their estates for three years prior to the commencement
of the Act, shall vest in and be payable to the State, could it be said by any
stretch of reason that any public purpose had been established for the taking
of the moneys ? Arrears of rent stand on no better footing. Any public purpose
in taking them over is conspicuous by its absence. It is fairly obvious that
resort was had to the arrears either for augmenting the financial resources of
the State or for paying compensation to the smaller proprietors out of this
particular item of acquisition. Property of individuals 1015 cannot be
appropriated by the State under the power of eminent domain for the mere
purpose of adding to its revenues; taxation is the recognised mode to secure
this end.
If the latter was the real object, it must be
observed that to take one man's property compulsorily for giving it away to
another in discharge of Government's obligations is not a legitimate and
permissible exercise of the power of acquisition.
Sub-clause (1) of section 21 no doubt
provides that 50 per cent. of the arrears of rents shall be added to the amount
of compensation. This means one of two things (a) either the other 50% is taken
without payment of any compensation, which is confiscation virtually or (b) 50
per cent.
is taken as the consolidated value of the
arrears of rent--a lump sum payment for the acquisition of choses in action or
actionable claims. Taken either way, it is difficult to see wherein the public
purpose consists. Whether moneys could be compulsorily acquired at all by a
State is a moot question. Willis says in his Constitutional Law at page 816
:--"While, as stated above, any and all property is in general subject to
the exercise of the power of eminent domain, there are certain rather unusual
forms of private property which cannot thus be taken. These are corpses, money,
choses in action, property used by the government in its governmental capacity,
property to be used for a mere substituted ownership unless such substituted
ownership is a more necessary use, and perhaps trust property dedicated to a
State, mortgage liens, and suits to quiet title." under the heading
"what property is subject to the right", Cooley observes in Vol. II
of his book on Constitutional Limitations, at page 1117 :"From this
statement, however, must be excepted money, or that which in ordinary use
passes as such, and which the Government may reach by taxation, and also rights
in action, which can only be available when made to produce money; neither of
which can it be needful to take under this power." In the footnote he
points out :-1016 "Taking money under the right of eminent domain, when it
must be compensated in money afterwards, could be nothing more or less than a
forced loan, only to be justified as a last resort in a time of extreme peril,
where neither the credit of the government nor the power of taxation could be
made available." Nicols in his work on "Eminent Domain" does not
disagree with this view; on the other hand, he says at page 100 of Vol. I,
paragraph 2. 1 (3) :-"The question has arisen whether money can be taken
by eminent domain and it has been held or intimated, at least in so far as a
state or. a private corporation is concerned, that it is not subject to such
taking. The objection is not based on an implied inherent limitation upon the
power of government, but upon the difficulty of effecting a taking of money
that would be of any service to the public without violating the Constitution.
The use for which it was needed might well be public. but, as compensation must
be paid in money, and, if not in advance, at least with such expedition as
conveniently may be had, the seizure of money without compensation, or with an
offer of payment in notes, bonds or merchandise,--in other words, a forced sale
or loan--however it might be justified by dire necessity would not be a
constitutional exercise of the power of eminent domain." The learned
Attorney-General sought to justify this acquisition on the ground that it was a
compulsory taking of choses in action. Even so, they stand on the same footing
as money, of less value no doubt than if they were coin or currency notes. It
seems that choses in action too cannot be so acquired; reference has been made
already to Cooley's observations.
The two cases Long Island Water Supply
Company v. City of Brooklyn (1) and City of Cincinnati v.' Louisville &
Nashville Railroad Company(2) do not support the contrary view. In the former
ease, (1) 166 U.S. 685 ; 41 I.. Ed. pp. 1, 165.
(2) 223 U.S. 389; 56 L. Ed. 481.
1017 a Water Supply Company was under a
contract to supply water to the town of New Lots (which subsequently became merged
in the city of Brooklyn) in consideration the town paying for hydrants to be
furnished and supplied as provided in the contract. The contract was for a term
of 25 years. When the merger took place, the city of Brooklyn was given power
to purchase or to condemn the property of the company within 2 years but it did
neither. In 1892, the legislature passed another Act authorising the City of
Brooklyn to condemn the property of the company, provided the necessary
proceedings were commenced within one year after the passing of the Act.
The procedure for the acquisition was
prescribed in the Act itself. The power was exercised by the city and the
compensation payable was determined by the Commissioners at a particular
figure. The company objected to the acquisition on the strength of article 1,
Paragraph 10, of the U.S.
Constitution which forbids any State to pass
a law impairing the obligation of contracts and was not "due process of
law" as required' by the 14th Amendment. On error, the Supreme Court confirmed
the condemnation and rejected the argument that there was any impairment of the
contract. Mr.
Justice Brewer points out that the contract
is a mere incident to the tangible property and that it is the latter which,
being fitted for public uses, is condemned. The contract is not the thing which
is sought to be condemned and its impairment, if impairment there be, is a mere
consequence of the appropriation of the tangible property. In the present
cases, it is untenable to state that the taking over of arrears of rent is a
natural consequence of the acquisition of the estates.
In the latter case, a railroad company filed
a suit to condemn a right of way for an elevated railroad track across the
public landing at Cincinnati. The city objected on the ground that the public
landing had become property dedicated to the public under an earlier contract
and to allow the condemnation under a 131 1018 statute of Ohio was an
impairment of the contract, forbidden by the 10th section of the first article
of the Constitution of the United States. The court through Mr. Justice Lurton
held: The constitutional inhibition upon any state law impairing the obligation
of contracts is not a limitation upon the power of eminent domain. The
obligation of a contract is not impaired when it is appropriated to a public
use and compensation made therefor. Such an exertion of power neither
challenges its validity nor impairs its obligation. Both are recognised for it
is appropriated as an existing enforceable contract. It is a taking, not an impairment
of its obligation. If compensation be made, no constitutional right is
violated." It would thus be evident that they were not cases of the
compulsory acquisition of choses in action. Choses in action unrelated to any
tangible property can be useful for a public purpose only when converted into
money. Arrears of money are particularly so. When it is said that money and
choses in action are exempt from compulsory acquisition, it is not on the
ground that they are movable property but on the ground that generally speaking
there could be no public purpose in their acquisition.
The provisions in section 23, sub-clause (f)
that 4 to 12 1/2 per cent. of the gross assets can be deducted from the amount
as representing "cost of works of benefit to the raiyats". This is an
obvious device to reduce the gross assets and bring it down to as low a level
as possible. The Act does not say that this charge represents the expenditure
on works of benefit, or improvements which the zamindars and proprietors were
under any legal obligation to carry out and which they failed to discharge. Nor
are we told anything about the future destination of this deducted sum. It is
an arbitrary figure which the legislature has said must be deducted from the
gross assets. The deduction is a mere contrivance to reduce the compensation
and it is a colourable or fraudulent exercise of legislative power to subtract
a fanciful sum from the calculation of gross assets.
1019 Stripped of their veils or vestments, the
provisions in the act about "arrears of rent" and the "cost of
works of benefit" amount to naked confiscation. Where the legislative
action is arbitrary in the sense that it has no reasonable relation to the
purpose in view, there is a transgression by the legislature of the limits of
its power. Under. the guise of legislating for acquisition, the legislature
cannot enable the State to perpetrate confiscation; and if it does so, the Act
to that extent has to be declared unconstitutional and void. If the part that
is void is so inextricably interwoven into the texture of the rest, the whole
Act has to be struck down. Such, however, is not the case here.
It is gratifying to note that the Madhya
Pradesh Abolition of Proprietory Rights Act of 1950 and the Uttar Pradesh
Zamindari Abolition and Land Reforms Act of 1950 which are also in question are
free from this blemish of reaching at arrears of rent due for any period
anterior to the date of vesting.
Appeals allowed: Petition No. 612 dismissed.
Agent for the appellant (State of Bihar): P.
A Mehta.
Agent for the respondents in Cases Nos.
339,319,327,330,332 of 1951: J.N.Shroff. " " in Cases Nos. 309, 326,
328, 336, 337,344 of 1951 Ganpat Rai " " in Cases Nos. 310, 311, and
329 of of 1951 : R.C. Prasad.
" " in Case No. 315 of 1951 :
P.K.Chattargy " " in Cases Nos.
307,313,320,321, and 322 of 1951: Sukumar Ghose.
" " in Case No. 331 of 1951:
S.P.Varma Agent for the petitioner in Petition No. 612 of 1951:
Ganpat Rai.
Agent for respondent No. 2 in Petition No.
612 of 1951:
P.A. Mehta.
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