Krishna Chandra Gangopadhyaya Vs.
Union of India & Ors [1975] INSC 98 (18 April 1975)
KRISHNAIYER, V.R.
KRISHNAIYER, V.R.
RAY, A.N. (CJ) MATHEW, KUTTYIL KURIEN
CITATION: 1975 AIR 1389 1975 SCR 151 1975 SCC
(2) 302
CITATOR INFO :
RF 1975 SC2299 (606) D 1976 SC 714 (74)
ACT:
Constitution of India-Seventh Schedule, List
I Item 54, List II Item 23. Mines and Minerals (Regulation and Development)
Act, 1957-Section 15--Bihar Land Reforms Act 1950 [Section 10(2)]-Bihar Minor Minerals Concession Rules, 1964 [Rule 20(2)].
Interpretation of Statutes-Validation
Act-Retrospective effect-Delegated Legislation-Legislation by incorporation.
HEADNOTE:
This Court in the case of Baij Nath Kedia
declared the second proviso to section 10(2) of the Bihar Land Reforms Act,
1950 unconstitutional on the ground that the Bihar Legislature had no
jurisdiction to enact it and that Parliament alone was competent to legislate.
This Court also held that rule 20(2) framed by the Bihar Government as delegate
of the Parliament under section 15 of the Mines and Minerals (Regulation and
Development) Act of 1957 was unconstitutional since the rule making power
conferred by section 15 of the Central Act did not contemplate alteration of
terms of leases already in existence before the Act was passed.
Second proviso to section 10(2) of the Bihar
Land Reforms Act reads as under "Provided further that the terms and
conditions of the said lease in regard to minor minerals as defined in the
Mines and Minerals (Regulation and Development) Act, 1957 (Act LXVII of 1957)
shall, in so far as they are inconsistent with the rules of that Act, stand
substituted by the corresponding terms and conditions by those rules and if
further ascertainment and settlement of the terms will become necessary then necessary
proceedings for that shall be undertaken by the Collector." Rule 20(2)
authorises the alteration of the term of leases which were in existence before
the Central Act was passed.
After the judgment in Baij Nath Kedia's case
was delivered, the Parliament passed a Validation Act of 1969. Section 2(1) and
(2) of the Validation Act reads as under "21(1). The laws specified in the
Schedule shall be and shall be deemed always to have been, as valid as if the
provisions contained therein had been enacted by Parliament.
2(2). Notwithstanding any judgment, decree or
order of any court, all actions taken, things done, rules made, notifications
issued or purported to have been taken, done, made or issued and rents or
royalties realised under any such laws shall be deemed to have been validly
taken, done, made, issued or realised, as the case may be, as if this section
had been in force at all material times when such notifications, were issued,
or rents or royalties were realised, and no suit or other proceedings shall be
maintained or continued in any court for the refund of rents or royalties
realised under any such laws." In the Schedule to the said Validation Act,
section 10 of the Bihar Land Reforms Act, 1950 and sub-rule (2) of Rule 20 of
the Bihar Minor Mineral Concession Rules, 1964, inter alia, have been set out.
10 SC/75-11 152 In the present petition under
Article 32, validity of the Validition Act has been challenged by the
petitioner on the grounds:
"If a law is void as being passed by an
incompetent Legislature, validation by a subsequent Act passed by a competent
legislature can only be effected by the subsequent law enacting the provisions
of the old Act expressly or by incorporation. It cannot be done by a competent
Legislature, laying down in the subsequent Act that the former Act passed by
the incompetent Legislatam is deemed to be valid.
No liability to levy rent or royalty can be
created retroactively without two clear stages or steps: firstly, a law must be
enacted creating the liability; next, such provision should be made
retrospective. This two-stage procedure is absent in the statute under attack
and fore the purpose, whatever it be, has misfired." The respondent
contended that the Parliament adopted the form of incorporation refrencially to
a State Act and subordinate legislation given in the schedule to the Validation
Act. The Validation Act was a product of the Parliament It was not a case of
Parliament simply validating an invalid law passed by the Bihar Legislation.
The Parliament reenacted the Validation Act with retrospective effect in its
own right adding one Central Act to tin Book.
Dismissing the appeal,
HELD : (i) Incorporation of Acts is
permissible in the absence of other disabling factors. The Bihar Act qua the
Bihar Legislature could not be resuscited by Parliament conferring such power
through a law, as far as provisions of second proviso to section 10(2) of the
Bihar Land Reforms Act is concerned. As far as rule 20(2) is concerned, the
position is different since that is a rule framed by Parliament through its
delegate the State Government although rule was ultra vires being in excess of
the power conferred by section 15 of the Central Act. The Parliament had,
therefore, passed a Validation Act to validate the void provisions of Bihar
Land Reforms Act and the ultra vires sub-rule 2 of rule 20 as well as action
taken and things done in connection therewith. The power of a Legislature to
pass a law obviously includes the power to pass it retrospectively. Earlier,
the Bihar Act or Rules framed by the State Government under the Central Acts do
not have to be valid for sustaining the Validation Act made by the Parliament.
[162E-F, 163B] (ii)What is the intention of Parliament is mainly to be gathered
from the language used, tested by approved cannons of construction. Unhappy
wording, infelicitous expression of imperfect or inartistic drafting may not
necessarily defeat for that reason alone the obvious object of the validating
law and its retrospective content. The real question is whether the Court can
speculate on presumed intent of the Parliament and rewrite that object with
implicit sense. We listen largely to the language of the Statute but where, as
here, clearing up of marginal obscurity may make interpretation surer if light
from dependable sources were to beam in, the Court may seek such aid. In the
instant case, we are satisfied that the Parliament desired to validate
retrospectively what the Bihar Legislation had ineffectually attempted. It has
used words plain enough to implement its object and, therefore, the validating
Act as well as the consequential levy are good. Rule 20(2) of the Mineral
Concession Rules stands on an assured footing. This sub-rule has been made by
the Bihar Government purely as a delegate of Parliament Therefore, Parliament
could validate it and has done so.
[166AB, 156H] (iii)Under our scheme of
distribution of the legislative powers, particularly when subjects of national
and provincial concern are involved, an and the States a lesser role, the present
case of mines and minerals being an instance in point. [155CD] (iv)The impugned
legislation, levy and other actions are good. [168B] 153
ORIGINAL JURISDICTION : Writ Petitions Nos.
357 to 359 of 1970.
Petitions under Art. 32 of the Constitution
of India.
A. K. Sen, P. K. Chatteriee and G. S.
Chatterjee for the petitioners.
L. N. Sinha, Solicitor General of India, S.
N. Prasad, R.
N. Sachthey, and M. N. Shroff, for respondent
no. 1.
S.K. Sinha and K. K. Sinha, for respondent
Nos. 2-5 (in W.P. No. 359/70).
L. N. Sinha, Solicitor General of India and
U. P. Singh, for respondent no. 2. (in W.P. No. 357/70.
L.N. Sinha, Solicitor General of India add D.
Goburdhan, for respondent Nos. 2-4.
The Judgment of the Court was delivered by
KRISHNA IYER, J.-The central issue in these petitions deals with the question
whether a statute and a rule earlier declared by the Court unconstitutional or
otherwise invalid, can be retroactive through fresh validating legislation
enacted by the competent Legislature. More pointedly, the constitutionality of.
r. 20(2) framed by the Bihar Government under s. 15 of the Mines and Minerals
(Regulation and Development) Act, 1957 (Act LXVII of 1957) (for short, the
Central Act) and the second proviso to S. 10 (2) of the Bihar Land Reforms Act,
1950 (for brevity, the Bihar Act) has been challenged on various grounds in the
petitions, a validating statute by Parliament transforming them into Central
legislation, as will be presently explained. The subject of the litigation is
minor minerals, and the right of the petitioners adversely affected by the
impugned legislation, is-to quarry stones etc., on the strength of leases
granted to them by erstwhile proprietors whose ownership vested in the State by
virtue of the Bihar Act.
By the combined operation of the second
proviso to S. 10(2) of the Bihar Act and r. 20(2) (framed by the State Government)
of the Bihar Miner Mineral Concession Rules, 1964 (hereinafter called the
Rules) the petitioners were called upon to pay certain rents and royalties in
respect of mining operations, but the power of the State, clothed by these
provisions, was put in issue in the first round of litigation by lessees of
quarries, which culminated disastrously against the State in Baij Nath Kedia v.
State of Bihar(1). This Court, in that case, held that the Bihar Legislature
had no jurisdiction to enact the second proviso to S. 10(2) of the Bihar Act,
because it went further to hold that s. 15 of the Central Act, read with s. 2
thereof, had appropriated the whole field relating to minor minerals for
Parliamentary legislation. This Court proceeded to lay down that the second
sub-rule, added by the Notification dated December 10, 1964 to r. 20 of the
rules did not affect leases in existence prior to the enactment of the rules.
The upshot of the decision was that the (1)
[1970] 2 SCR 100.
154 action taken by the Bihar Government, in
modifying the terms and conditions of the leases which were in existence
anterior to the rules and the levy sought to be made on the strength of the
amended Bihar Act and rule were unsustainable. Thereupon the State persuaded
Parliament to enact the validation Act of 1969 with a view to remove the
road-blorks which resulted in the decision in Kedia's Case(1). The preamble and
the short Act (now impugned) provide thus "An Act to validate certain
provisions contained in the Bihar Land Reforms Act, 1950, and the Bihar Minor
Mineral Concession Rules, 1964, and action taken and things done in connection
therewith." Section I gives the title of the Act.
Section 2 of the Act runs thus "2.
Validation of certain Bihar State laws and action taken and things done
connected therewith.
(1)The laws specified in the Schedule shall
be and shall. be deemed' always to have been, as valid as if the provisions ID
contained therein had been enacted by Parliament.
(2)Notwithstanding any judgment, decree or
order of any court, all actions taken, things done, rules made, notifications
issued or purported to have been taken, done, made or issued and rents or royalties
realised under any such laws shall be deemed to have been validly taken, done,
made, issued or realised, as the case may be, as if this section had been in
force at all material times when such action was taken, things were done, rules
were, made, notifications were issued, or rents or royalties were realised, and
no suit or other proceedings shall be maintained or continued in any court for
the refund of rents or royalties realised under any such laws.
(3)For the removal of doubts, it is hereby declared
that nothing in sub-section (2) shall be construed as preventing any person
from claiming refund of any rents or royalties paid by him in excess of the
amount due from him under any such laws." In the Schedule, section 10 of
the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), as amended by the
Bihar Land Reforms (Amendment) Act, 1964 (Bihar Act IV of 1965) and by the
Bihar Land Reforms (Amendment) Act, 1965 (Bihar Act VI of 1965), and two other
sections, namely, sections 10-A and 31, of the Bihar Land Reforms Act, 1950, as
amended by the various amending Acts, are mentioned. Sub-rule (2) of Rule 20 of
the Bihar Minor Mineral Concession Rules, 1964, as inserted by the Bihar Minor
Mineral Concession (First Amendment) Rules, 1964, published under the Bihar
Government Notification No. A/MM-109964 (pt.) 7700/M, dated the 19th December,
1964, in the Gazette of Bihar (Pt. 11), dated the 30th December, 1964 is also
mentioned therein.
(1)[1970] 2 S.C.R. 100.
155 The legal question canvassed before us is
as to whether the Amending Act in question has been an exercise in futility
because of an unconstitutional essay and foggy drafting or has achieved the
purpose I set by Parliament which is transparent from the legislative history
Shri A. K. Sen, counsel for the petitioner, has turned the focus mainly on one
or two deficiencies in the enactment of the Act by Parliament. Shri Sen's
submission is that notwithstanding the validating measure the right claimed by
the State to alter the terms of the lease or to impose a new levy has not
validly acquired.
Case History Mines and minerals, as topics of
legislation, fall under the Union and the State Lists. Under our scheme of
distribution of legislative powers, particularly when subjects of national and
provincial concern ,arc involved, an interlocking arrangement is provided
whereby the Union has a dominant say and the States a lesser role, the present
case of mines and minerals being an instance in point. The relevant entries in
the VII Schedule are item 54 of List I and item 23 of List II. The latter is
expressly made subject to the provisions of List I with respect to regulation
and development under the control of the Union arid the Union's powers extend
to regulation and development of mines and minerals 'to the extent to which
such regulation and development under the control of the Union is declared by
Parliament by law to be expedient in the public interest'. In the exercise of
the above power, the Union Parliament passed the Central Act which covered not
merely the field of major minerals but also occupied the area of minor
minerals, as is evident from ss. 15 and 16 of the Act.
(The necessary declaration visualised in
Entry 54 of List I is made by sec. 2 of the Central Act). Although the
legislation was made by Parliament, 15 conferred power on the State Government
as its delegate to make rules in respect of minor minerals.
The Bihar State which had on its statute book
a land reforms law, sought to acquire control over mines and minerals and in
that behalf added a second proviso to s. 10(2) which reads thus (Bihar Act
4/65) "Provided further that the terms and conditions of the said lease in
regard to minor minerals as defined in the Mines and Minerals (Regulation and
Development) Act, 1957 (Act LXVII of 1957) shall, in so far as they are
inconsistent with the rules of that Act, stand substituted by the corresponding
terms and conditions by those rules and if further ascertainment and settlement
of the terms will become necessary then necessary proceedings for that, purpose
shall be undertaken by the Collector." The apparent legal result was that
the State Government could 'shape the terms and conditions of the leases
granted by the quondam proprietors and this was done by framing rules under s.
15 of the Central Act as the delegate of Parliament. Faced with a demand for
156 higher levyput forward by the State which had been armed by the amendmentof
the Land Reforms law and the rules under s. 15 of the CentralAct, mineral
prospectors and quarries moved petitions under Art. 226 of the Constitution in
the Patna High Court, Although those petitions were dismissed, appeals were
carried to this Court which, as earlier stated, ended in success. It is
important to note the reasons which weighed with this Court in striking down
the two pieces of legislation, one amending the Bihar Act and the other, adding
a sub-rule under the Central Act, so that an insight into the infirmities of
the said legislations may be gained and the need and object of the validation
appreciated.
Hidayatullah, C. J. in Baij Nath Kedia(1),
speaking for the Court, pointed out that the declaration contemplated by Entry
54 of List I was contained in s. 2 of Act 67/57 and thus the Central Government
assumed control over regulation of mines and mineral development to the extent
provided in the Central Act. Since s. 15 of the Central Act went on to state
that the State Government may make rules for regulating the grant of
prospecting licences and mining leases in respect of minor minerals and for
purposes connected therewith, the whole subject of legislation regarding minor
mineral was also covered by the Central Act and, to that extent, the powers of
the State Legislature stood excluded. No scope was therefore left for the
enactment of the second proviso to s. 10(2) of the Bihar Act which related to
mining and minerals and was for that reason ultra vires. The fate of sub-rule
20(2) was no better, according to the learned Chief Justice. Vested interests
cannot be taken away except by law made by a competent Legislature. Since the
Bihar Legislature had lost power to legislate about minor minerals, Parliament
was the sole source of power in this behalf. Rule 20(2) of the Bihar Minor
Minerals Concession Rules, 1964 was ineffective for modifying leases granted
earlier. It could not derive sustenance on the second proviso to s. 10(2) of
the Bihar Act which had been held ultra vires not could legislative support be
derived from s. 15 of the Central Act since the rulemaking power conferred by
that provision did not contemplate alteration of terms of leases already in
existence before the Act was passed.
The direct lessons from Kedia(1) were drawn
by Parliament and suitable legislative action taken, according to the Solicitor
General, resulting in the present validation Act.
So much so the purpose of the enactment was
obvious, the law laid down by this Court was obeyed and the resultant
referential legislation must therefore be interpreted to further and fulfil-not
to frustrate or foil-the intendment of retroactive validation of earlier
inoperative legislative and executive action taken by the Bihar State.
Statutory conspectus and meaning
Substantially this history of the impugned Act is not under serious challenge.
The vital conflict is as to whether, whatever may have been in the mind of
Parliament, the Court can speculate on presumed intent (1) [1970] 2 S.C.R.100.
157 and read that object with implicit sense,
According to Sri Sen, what has been legislated has to be judged on the language
used which, in his view, was hardy adequate to create power to vary the leases
or cast liability to pay largr and royalties retrospectively.
We listen largely to the language of the
statute but where, as here,, clearing up of marginal obscurity may make
interpretation surer if light from dependable sources were to beam in, the
Court may seek such aid. What has been described as the sound system of
construction, excluding all but the language of the text and the dictionary ad
the key, hardly holds the field especially if the enactment has a fiscal or
other mission, its surrounding circumstances speak and its history unfolds the
mischief to be remedied. The Court, in its comings with the Legislature,
strives reasonably to give meaningful life and avoid cadaverous consequence We
have set out the story of the rebirth, as it were, of the law of minor mineral
royalty levy to drive home, the propriety of this method of approach. No doubt,
there is some remissness in the drawing up of what professes to be a validating
law and the neglected art of drafting bills is in part the reason for subtle
length of submissions where better skill could have make the sense of the
statute luscious and its validity above-board. Informed by a realistic idea of
shortfalls in legislative drafting and of the social perspective of the statute
but guided primarily by what the Act has said explicitly or by necessary
implication we will examine the meaning and its impact on counsel's
contentions.
The main Propositions of law Kedia's Case(1)
has held void both proviso 2 to s. 10 of the Bihar Act and Rule 20 (2) made
under the Central Act. Shri A. K. Sen did not dispute the legislative
competence of Parliament, by specific enactment, to validate retroactively
otherwise invalid legislation or incorporate into a Central Act a void State
legislation since mines and minerals, minor and major, had been taken over by
the Centre. His chief submission was that the well-known legislative mechanics
to resurrect statutorily earlier Acts or rules declared dead by Court had not been
adopted here, so much so the fiction introduced by the deeming provision has
failed to achieve what is being claimed by the State as the legislative object.
Mr. Sen's proposition, shortly stated, is "If a law is void as being
passed by an incompetent Legislature, validation by a subsequent Act passed by
a competent Legislature can only be effected by the subsequent law enacting the
provisions of the old Act expressly or by incorporation. It cannot be done by a
competent Legislature laying down in the subsequent Act that the former Act
passed by the incompetent Legislature is deemed to be What is moot is not the
proposition but its application to our legislative situation.
(1)[1970] 2 S.C.R. 100.
158 Relaince for this proposition was placed,
inter alia on Jaora Sugar Mills v. State(1) ; Jawaharmal v. State of
Rajasthan(2) ; Shama Rao v. Pandicherry(3) and Gwalior Rayon Mills v. Asstt.
Commissioner, S.T.(1). To take the last case first, we may state that the
problem tackled there related to excessive delegation and abdication of legislative
power and did not bear upon the issue of legislation by reference or
incorporation. Of course, there is consideration of Shama Rao(3) in the
judgment of Mathew J., but it is difficult to make out how the observations to
which our attention was invited bear upon the issue before us.
The learned Judge's containment of the
principle in Shama Rao(:') with which we respectfully concur, may be set out
here (p. 1679) "We think that the principle of the ruling in [1967] 2 SCR
650 (viz., Shama Rao) must be confined to the facts of the case., It is
doubtful whether there is any general principle which precludes either
Parliament or a State legislature from adopting a law and the future amendments
to the law passed respectively by a State legislature or Parliament and
incorporating them in its legislation. At any rate, there can be no such
prohibition when the adoption is not of the entire corpus of law on a subject
but only of a provision and its future amendments and that for a special reason
or purpose.
The kernel of Gwalior Rayon (4) is the ambit
of delegation by Legislatures, and the reference to legislation by adoption or
incorporation supports the competence and does not contradict the vires of such
a process-not an unusual phenomenon in legislative systems nor counter to the
plenitude of powers constitutional law has in many jurisdictions conceded to
such instrumentalities clothed with plenary authority. The Indian legislatures
and courts have never accepted any inhibition against or limitation upon
enactment by incorporation, as such.
The dispute is not whether Parliament can
legislate into validity State Act which is outside the State List.
If s. 2 of the impugned Act merely validates
invalid State law by Parliament's action, it is doomed to fail.
It is for the Constitution, not Parliament,
to confer competence on State Legislatures. The observations in Jaora Sugar
Mills(1) on which Shri A. K. Sen laid great stress, silence the question
"... . . . If it is shown that the impugned Act purports to do nothing
more than validate the invalid State statutes', then of course, such a
validating Act would be outside the legis(1) [1966] 1 S.C.R. 523, 531.
(2)[1966] 1 S.C.R. 890, 901, 904.
(3)[1967] 2 S.C.R. 650, 662.
(4)A.I.R. 1974 S.C. 1660, 1681.
159 lative competence of Parliament itself
Where a topic is not included within the relevant List dealing with the
legislative competence of the State Legislatures, Parliament, by making a law,
cannot attempt to confer such legislative competence on the State
Legislatures." It is a far constitutional cry from this position to the
other proposition that where Parliament has power to enact on a topic actually
legislates within its competence but, as an abbreviation of drafting, borrows
into the statute by reference the words of a State Act not qua State Act but as
a convenient shorthand, as against a longhand writing of all the sections into
the Central Act, such legislation stands or falls on Parliament's legislative
power, vis -a-vis the subject viz., mines and minerals. The distinction between
the two legal lines may sometimes be fine but always is real. Jaora Sugar Mills
(supra) illumined this basic difference with reference to s. 3 of the Act
challenged there, by observing :
"...... What Parliament has done by
enacting the said section is not to validate the invalid State statutes, but to
make a law concerning the cess covered by the said Statutes and to provide that
the said law shall come into operation retrospectively. There is a radical
difference between the two positions. Where the Legislature wants to validate
an earlier Act which has been declared to be invalid for one reason or another,
it proceeds to remove the infirmity from the said Act and validates its
provisions which are free from any infirmity. That is not what Parliament has
done in enacting the present Act. Parliament knew that the relevant Statutes
were invalid, because the State Legislatures did not possess legislative
competence to enact them. Parliament also knew that it was fully competent to
make an Act in respect of the subject-matter covered by the said invalid State
Statutes.
Parliament, however, decided that rather than
make elaborate and long provisions in respect of the recovery of the, cess, it
would be more convenient to make a compendious provision such as is contained
in S. 3. The plain meaning of Section 3 is that the material and relevant
provisions of notifications, orders and rules issued or made thereunder are
included in Section 3 and shall be deemed to have been included at all material
times in it. In other words, what section 3 provides is that by its order and
force, the respective cesses will be deemed to have been recovered because the
provisions in relation to the recovery of the said cesses have been
incorporated in the Act itself. The command under which the cesses would be
deemed to have been recovered would, therefore, be the command of Parliament,
because all the relevant sections, notifications, orders and rules have been
adopted by the Parliamentary statute itself." No Parliamentary ,
omnipotence to re-draw. Legislative Lists in the VII Schedule can be arrogated
to confer on the State compe160 tence to enact on a topic where it is outside
its Lists.
But if parliament has the power to legislate
on the topic, it can make an Act on the topic by any drafting means, including
by referential legislation.
The learned Solicitor General, in the course
of his submissions made it clear that he did not want to vindicate the levy by
any validation of the invalidated portion of s. 10 of the Bihar Act. He based
his case on the success with which Parliament had legislated for itself,
although adopting a shorthand form of incorporation referentially of a State
Act and subordinate legislation given in the Schedule to the validation Act. He
also made it clear that r.20(2) had nothing to do with the Bihar Legislature
but was the product of Parliamentary legislation by delegation in favour of
State Government. Thus, in his view, the Parliament legislated for itself and
statutorily adopted for itself the second proviso to s. 10 of the Bihar Act and
the otherwise ultra vires sub-rule (2) of r. 20. If the reenacting technique
adopted for the referential or incorporating legislation was insufficient in
law, he failed. Otherwise, the Act and rules referred to in the Schedule to the
validation Act revived and became operational, retroactively. There is force in
the submission that taking a total view of the circumstances of the validation
Act Parliament did more than simply validate an invalid law passed by the Bihar
Legislature but did reenact it with retrospective effect in its own right
adding an amending Central Act to the statute book.
Shri A. K. Sen pressed passages from
Jawaharmal (supra), but some care in scrutiny will reveal that Jawaharmal
(supra) does not clash with Jaora Sugar Mills (supra).
We may briefly deal with that decision and
explain it. Art, 255 of the Constitution insists on Presidential assent for
certain Acts of the State Legislature, although subsequent assent is curative
of the infirmity caused by absence of previous assent. In Jawaharmal (supra),
one of the points that fell for decision was the efficacy of a Legislative
declaration that an earlier invalid Act (for want of Presidential assent) be
deemed to be valid by reenactment and subsequent assent of the President to the
second Act.
This would virtually mean that by the
re-enacting device, Presidential assent could be by-passed by the Legislature,
Negativing this submission, the Court observed, with reference to the Rajasthan
Act which attempted this unconstitutional exercise :
"In other words, the Legislature seems
'to say by Section 4 that even though Article 255 may not have been complied
with by the earlier Finance Acts, it is competent to pass Section 4 whereby it
win prescribe that the failure to comply with Article 255 does not really
matter. and the assent of the President to the Act amounts to this that the
President also agrees that the Legislature is empowered to say that the
infirmity resulting from noncompliance with Article 255 does not matter.
In our opinion, the Legislature is
incompetent to declare that the failure to comply with Article 255 is of no
consequence; and, with respect, the 161 assent of the President to such
declaration also does not serve the purpose which subsequent assent by the
President can serve under Article 255 . . ." x x x x we have tried s.4 as
favourably as we can while appreciating the argument of the learned Advocate
General; but the words used in all the three parts of Section 4 are clear and
unambiguous; they indicate that the Legislature thought that it was competent
to it to cure, by its own legislative process, the infirmity resulting from the
noncompliance with Article 255 when it passed the earlier Finance Acts in
question, and it was probably advised that such a legislative declaration would
be valid and effective provided it received the assent of the President.In our
opinion, the approach adopted by the Legislaturein this case is entirely
misconceived. The Legislature,no doubt, can validate an earlier Act which is
invalid byreason of non-compliance with Article 255 and such an Act may receive
the assent of the President which will make the Act effective. The Legislature cannot,
however, itself declare by a statutory provision that the failure to comply
with Article 255 can be cured by its own enactment even if the said enactment
received the assent of the President. In our opinion, even the assent of the
President cannot alter the true constitutional position under Art. 255. The
assent of the President cannot, by any legislative process, be deemed to have
been given to an earlier Act at a time when in fact it was not so given. In
this context there is no scope for a retrospective deeming in regard to the
assent of the President. It is somewhat unfortunate that the casual drafting of
Section 2 leaves the period covered by Act 11 of 1962 and the notification
issued thereunder as unenforceable as before, and the omnibus and general
provisions of Section 4 are of no help in regard to the said period." In
dismissing a similar contention based on Jawaharmal (supra), to challenge the
identical statute with which we are here concerned, the Patna High Court
observed, in Dhabhum T & I Ltd. v. Union of India (1) ;
"In that case, the validating law merely
declared that the original invalid legislation was valid in spite of the
contravention of Article 255 of the Constitution. In the instant case,
Parliament has not sought to declare that the failure to comply with the
requirements of Article 255 of the Constitution is of no consequence." The
crucial demarcation between Jaora Sugar Mills (supra) and Jawaharmal (supra) is
important and cannot be overlooked. The latter (1) AIR 1972 Pat. 364, 373 162
case dealt with a State Legislature ineffectually overcoming invalidity caused
by absence of Presidential assent.
Validation by a legislature must necessarily
be of what it could validly have done and not of what someone else had to do.
The assent of the President could not be made up for by the validating process
adopted by the legislature. So it was that Jawaharmal (supra) suffered from
legislative incompetence a second time.
It is important to notice, however, that the
alleged vice of the legislation in the present case relates to a radically
different area. What is within the competence of Parliament it seeks to
do-validation by incorporation of a legislation on a topic within its purview.
The device adopted of reenacting by validation is familiar to the Indian
draftsman as to his Anglo-American counterpart. We have no doubt that
incorporation of Acts is permissible in the absence of other disabling factors.
It is one thing to say that retroactive validation by a competent legislature
is impermeable; it is another to contend that there has not been a valid
execution of this process or rather Parliament has not, in the present case,
done what the draftsman ought to have done to effectuate the ostensible purpose
of creating a new power to levy royalty and to alter the terms of the mining
cases andthen to give such newly created liability anterior effect.
The controversy now shifts to the
effectiveness or otherwise of the legislative device in achieving retroactive
validation. We have already noticed that the second proviso to s.10(2) of the
Bihar Act and sub-r.(2) of r.20 of the Mineral Concession Rules, 1964 were
void, as held by this Court. We have therefore to treat them as non est. We
have already held that the Bihar Act qua Bihar nation could not be resuscitated
by Parliament conferring such power through a law. The position may be
different so far as rule 20(2) is concerned since that is a rule framed by
Parliament through its delegate, the State Government, although the rule itself
being in excess of the power conferred by s.15 of the Central Act was ultra
vires. In this invalidatory situation, Parliament passed an Act to validate the
void provision of the Bihar Land Reforms Act, 1950 and the ultra vires sub-rule
of r.20 of the Mineral Concession Rules as well as the action taken and things
done in connection therewith. 'The Act is itself short and consists of two
sections, of which the ,latter is the only important one.
It validates the laws specified in the
schedule by a deeming device. Secondly, it brings into force, back-dating it,
all action taken, rents and royalties realised and rules made 'notwithstanding
any judgment, decree or order of any Court'. The problem before us is whether
the Act has achieved its purpose of creating retrospective liability for rents,
royalties etc., and validating retrospectively the impugned provisions of the
Bihar Act and the Mineral Concession Rules.
Shri A. K. Sen's criticism has to be noticed
in this background; for he urges that in the light of the rulings of this Court
no liability to levy rent or royalty can be created retroactively without two
clear stages or steps :
firstly, a law must be enacted creating the
liability-, next, such provision should be made retrospective. This two-stage
procedure is absent in the statute tinder attack and therefore the pur163 pose,
whatever it be, has misfired,. argues Mr. Sen. In plain terms the present case
raises the question of enactment by reference and incorporation. It is correct
to contend that curative-statutes and validating exercises, unless the process
is explicit enough and permissible otherwise, cannot be given ex post facto
effect by courts.
What is the intention of Parliament is mainly
to be gathered from the language used, tested by approved canons of
construction.
The profusion of precedents touched upon at
the Bar leaves us with a few which were stressed as having direct pertinence to
the points in debate. The power of a legislature to pass a law obviously
includes the power to pass it retrospectively. Minor minerals, as explained
already, being a topic withdrawn and confided to Parliament for legislation,
the validating Act cannot fail for incompetence. But before a levy expost facto
is made, the legislation must first create the fiscal liability and then
project it retrospectively. This is the broad trend of Sri A. K. Sen's
submission. He relies heavily on Kamrap(1) to urge that a legislation cannot by
a simple 'deeming' device render valid what is unconstitutional.
The following observations were emphasized by
counsel (p. 580 of the report) :
"It is to be seen that the core of Assam
Act 21 of 1960 is the deeming provision of s.2 under which certain lands are
deemed to be acquired under the earlier Act. As this deeming provision is
invalid, all the other ancillary provisions fall to the ground along with it.
The later Act is entirely dependent upon the continuing existence and validity
of the earlier Act. As the earlier Act is unconstitutional and has no legal
existence, the provisions of Act No. 21 of 1960 are incapable of enforcement
and are invalid." The ratio is apt to be misunderstood for, in its
essence, the judgment merely holds that where the later Act isentirely
dependent upon the valid continuance of the earlier Act, which has been held
unconstitutional, the deeming provision cannot produce the desired effect. The
learned Solicitor General, however, argues that the situation in the present
case is altogether different. The earlier Bihar Act or the rules framed by the
State Government under the Act do not have to be valid for sustaining the
amending Act made by Parliament. The constitutionality of the earlier law has
not to be posited for the survival of the Central amending Act. In this
submission the learned Solicitor General is right and so the proposition in
Kamrup(1) is inapplicable here.
In Hari Singh(2), Kamrup(1) was approved but
there is no quarrel over the correctness of the proposition there, its
application being inept in the context of the present case.
However, Ray J. (as he then was), made
certain observations which were pressed before us by Mr. Sen (1) [1968] 1 SCR
561.
(2) [1973] 1 SCR 515.
164 "The ratio is that the 1960 Act has
no power to enact that an acquisition made under a constitutionally invalid Act
was valid. The 1960 Act did not stand independent of the 1955 Act. The deeming
provision of the 1960 Act was that land was deemed to be acquired under the
1955 Act. If the 1955 Act was unconstitutional, the 1960 Act could not make the
1955 Act constitutional." With great respect we agree with the position
but, as earlier stated, the statutory complex confronting us is something
different. In the present case, the Bihar Legislature is not legislating into
validity, by a deeming provision, what has been declared ultra vires by the
Court.
It is Parliament, whose competency to
legislate on the topic in question is beyond doubt, that is enacting the
'deeming' provision. It follows that Hari Singh (supra) also cannot salvage the
appellant.
We reach the twilight of legislative area
when we move into West Ramnad Electric Distribution Co. Case(1) which also
dealt with a validating Act. The Madras Electricity Supply Undertakings Act.
1949 clothed the State with power to acquire Electricity Supply Undertakings.
The validity of the said Act was challenged and this Court held the law ultra
vires. In consequence, the Madras Legislature passed Madras Act 29/54 which
incorporated the impugned provisions of the earlier Act of 1949 and purported
to validate the action taken under the earlier Act. The affected appellant
assailed the new Act to the extent to which it purported to validate acts done
under the earlier Act of 1949 which had been declared inoperative by the Court.
The facet of that decision which relates to the point under discussion before
us establishes that validation, with retrospectively superadded, is perfectly
competent for the Legislature.
Gajendragadkar, J. (as he then was), observed
:
"The argument is that there is no
specific or express provision in the Act which makes the Act retrospective and
so, s.24, even if it is valid, is ineffective for the purpose of sustaining the
impugned order by which possession of the appellant concern was obtained by the
respondent." x x x x "Before dealing with this argument, it would be
necessary to examine the broad features of the Act and understand its general
scheme.
The Act was passed because the Madras
Legislature thought it expedient to provide for the acquisition of undertakings
other than those belonging to and under the control of the State Electricity
Board constituted under section 5 of the Electricity (Supply) Act, 1948 in the
State of Madras engaged in the business of supplying electricity to the public.
It is with that object that appropriate provisions have been made by the Act to
provide for the acquisition of undertakings and to lay down the principles for
paying compensation for them. It is quite clear that the scheme of the Act was
to bring within the purview of its material provisions undertakings in respect
(1) [1963] 2 S C.R. 747.
165 of which no action had been taken under
the earlier Act and those in respect of which action had been so taken." x
x x x "It is thus clear that the Act, in terms, is intended to apply to
undertakings of which possession had already been taken, and that obviously
means that its material and operative provisions are retrospective. Actions taken
under the provisions of the earlier Act are deemed to have been taken under the
provisions of the Act and possession taken under the said earlier provisions is
deemed to have been taken under the relevant provisions of the Act. This
retrospective operation of the material provisions of the Act is thus writ
large in all the relevant provisions and is an essential part of the scheme of
the Act.
Therefore, Mr. Nambiar is not right when he
assumes that the rest of the Act is intended to be prospective and so, section
24 should be construed in the light of the said prospective character of the
Act. On the contrary, in construing s.24, we have to bear in mind the fact that
the Act is retrospective in operation and is intended to bring within the scope
of its material provisions undertakings of which possession had already been
taken." x x x x "The third part of the section provides that the
statutory declaration about the validity of the issue of the notification would
be subject to this exception that the said notification should not be
inconsistent with or repugnant to the provisions of the Act. In other words,
the effect of this section is that if a notification had been issued properly
under the provisions of the earlier Act and its validity could not have been
impeached if the said provisions were themselves valid, it would be deemed to
have been validly issued under the provisions of the Act, provided, of course,
it is not inconsistent with the other provisions of the Act. The section is not
very happily worded, but on its fair and reasonable construction, there can be
no doubt about its meaning or effect. It is a saving and validating provision
and it clearly intends to validate actions taken under the relevant provisions
of the earlier Act which was invalid from the start. The fact that s. 24 does
not use the usual phraseology that the notifications issued under the earlier
Act shall be deemed to have been issued under the Act, does not alter the
position. that the second part of the section has and is intended to have the
same effect." x x x x "We have no doubt that s.24 was intended to
validate actions taken under the earlier Act and on its fair and reasonable
construction, it must be held that the intention has been 166 carried out by
the legislature by enacting the said section. Therefore, the argument that s.24
even if valid, cannot effectively validate the impugned notification, cannot
succeed." The ratio of West Ramnad (supra) is clear. The Legislature can
retrospectively validate what otherwise was inoperative law or action. Unhappy
wording, infelicitous expression or imperfect or inartistic drafting may not
necessarily defeat, for that reason alone, the obvious object of the validating
law and its retrospective content.
In fairness to counsel for the appellant, we
must state that the proposition in Jadao Bahuji's Case(1) about the powers of
the Legislature, including within itself the power to make retrospective laws,
was not canvassed. Indeed, to urge that Indian Legislatures were subject to
strange and unsual prohibition against retrospective legislation' is as late as
it is presumptuous. However, Jadao Bahuji(1) itself contained some valuable
observations of relevance for this case which we may here extract (p. 640) :
"Retrospective laws, it has been held,
can validate an Act, which contains some defect in its enactment. Examples of
Validating Acts which rendered inoperative, decrees or orders of the Court or
alternatively made them valid and effective, are many. In Atiqux Begum's Case
[(1940) FCR 110], the power of validating defective law who held to be
ancillary and subsidiary to the powers conferred by the En tries and to be
included in those powers." We have said enough to establish that no
substantial objection to the Act in question can be pressed on the strength of
incompetence of inoperative retroactivity. That is why the appellant's
submission was switched largely on the gross inadequacy of the language of s. 2
of the impugned Act to confer power on the State Government to validate the rule
20(2) or s.10 of the Bihar Act. To be precise, the highlight of Sri Sen's
arguments runs thus:
" The core of the Act on which the State
Government might issue rules is s. 15 of the Central Act, 1957. Section 15 of
the 1957 Act did not authorise the State Government to enact r.20 for modifying
the existing leases as was found in the earlier case. The present s.2 does not
confer any such power nor does it enact the provisions of the Bihar Act to this
effect. It only provides that the Bihar Act shall be considered to be valid as
if it were passed by Parliament. Section 2 being a core of the present Act and
that being invalid and being found not to amount to any incorporation of the
Bihar Act, action taken under r.20 or r.20 itself passed under the old Act would
still remain void and inoperative." In this connection, considerable
emphasis was placed on Jawaharmal (supra) and on Shama Rao (supra).
(1)[1962] 1 S.C.R. 631.
167 Passing reference was also made to
Jagannath v. Authorized officer Land Reforms (1).
The first of these decisions Jawaharmal
(supra) seemingly supports Mr. Sen's proposition, although the others fall wide
off the mark. In West Ramnad (supra), referred to by counsel this Court made
some observations which have relevance to the topic under discussion. There a
legislative validation, retrospective in operation, was challenged. The latter
legislation used the expression Thereby declared'. The observations made by
this Court in that connection are instructive and may be extracted:
"The second part of the section provides
that the notifications covered by the first part are declared by this Act to
have been validly issued ; the expression Thereby declared' clearly means
'declared by this Act' and that shows that the notifications covered by the first
part would be treated as issued under the relevant provisions of the Act and
would be treated as validly issued under the said provisions. The third part of
the section provides that the statutory declaration about the validity of the
issue of the notification would be subject to this exception that the said
notification should not be inconsistent with or repugnant to the provisions of
the Act. In other words, the effect of this section is that if a notification
had been issued properly under the provisions of the earlier Act and its
validity could not have been impeached if the said provisions were themselves
valid, it would be deemed to have been validly issued under the provisions of
the Act, provided, of course, it is not inconsistent with the other provisions
of the Act. The section is not very happily worded, but on its fair and
reasonable construction, there can be no doubt about its meaning or effect. It
is a saving and validating provision and it clearly intends to validate actions
taken under the relevant provisions of the earlier Act which was invalid from
the start. The fact that s.24 does not use the usual phraseology that the
notification issued under the earlier Act shall be deemed to have been issued
under the Act, does not alter the position that the second part of the section
has and is intended to have the same effect." It follows that, variant
phraseology apart, the meaning and intent must be unmistakable. In the present
case we are fully satisfied that Parliament desired to validate retrospectively
what the Bihar legislation bad ineffectually attempted. It has used words plain
enough to implement its object and therefore the validating Act as well as the
consequential levy are good.
Rule 20(2) of the Mineral Concession Rules,
which has been validated by s.2 of sub-s. (1) and figures as item 4 of the
Schedule to the :Impugned enactment, stands on an assured footing. This (1)
(1971) 2 SCR 893.
10 SC/75-12 168 sub-rule is made by the Bihar
Government purely as a delegate of Parliament, though beyond the scope of the
delegation. Therefore Parliament could validate it and has done so. The source
of the authority for rule-making being of Parliament, it is indubitable that
the power to give it life retrospective exists. Thus the impugned legislation,
levy and other actions are good.
For the reasons set out above, we dismiss the
writ petitions, but in the circumstances, without costs.
Petitions dismissed.
P.H.P.
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