State of Karnataka & ANR Vs. Shri
Ranganatha Reddy & ANR  INSC 195 (11 October 1977)
BEG, M. HAMEEDULLAH (CJ) CHANDRACHUD, Y.V.
SINGH, JASWANT KAILASAM, P.S.
CITATION: 1978 AIR 215 1978 SCR (1) 641 1977
SCC (4) 471
CITATOR INFO :
R 1980 SC1955 (12) F 1981 SC 234 (100) RF
1981 SC1597 (3) F 1983 SC 239 (19,20) F 1983 SC 937 (33) F 1984 SC 326
(6,24,25,33,57,61,64,66,71,73, F 1984 SC 374 (18) R 1984 SC 981 (8) RF 1984
SC1130 (52) RF 1986 SC 468 (26,31,34) RF 1986 SC1466 (13) RF 1988 SC1487 (32)
RF 1989 SC 509 (7) F 1990 SC 123 (37) C 1990 SC 781 (72) R 1990 SC1277 (29) R
1990 SC2072 (24,29,37,47) RF 1992 SC 938 (22,31)
Constitution of India. Article
31(2)-"Public purpose" Scope of, Whether includes compulsory
acquisition for Road Transport Corporation-Part acquisition of undertaking,
validity of-"Amount" in lieu of acquired property, quantum and
principles of evaluation, whether questionable under Art. 31(2).
Karnataka Contract Carriages (Acquisition)
Act, 1976, vis-avis Constitution of India, Articles 31(2) and 39(b) and (c) and
Schedule List 1 Entry 42-Whether on acquisition the State Govt. can transfer
counter signed portions of InterState permits to Road Transport Corporation-S.4(3),
"deemed", whether introduces legal fiction-S.6(1), fixation of amount
by arbitrator S. 6(1) Schedule, Para 1(1), Explanation-Interpretation of
The Karnataka State Road Transport
Corporation published in the Karnataka Gazette dated May 16. 1974 a draft
scheme for nationalization of contract carriages in the State. under Chapter
IV-A of the Motor Vehicles Act, 1939. Objections were preferred by some of the
respondents, but the State Government and the Corporation dropped the idea of
proceeding with the scheme without concluding the hearing.
Later, on January 30, 1976 the State
Government promulgated an ordinance followed by a number of notifications by
which all contract carriages operating in Karnataka, and the permits specified
in the notifications, vested in the State.
Under Clause 20(1) of the Ordinance, the
State Government transferred them to the Corporation which seized the vehicles
and the relative permits. The High Court stayed the seizure of six vehicles
operating tinder Inter State permits, and quashed some of the notifications,
holding that the ordinance did not empower the acquisition of the vehicles not
covered by valid contract permits. The ordinance was replaced by the Karnataka
contract carriages (Acquisition) Act, 1976, published in the Karnataka Gazette
dated March 12. 1976. The Act was made effective retrospectively from January
30. 1976. and everything done under the Ordinance was deemed to have been done
trade the Act. Writ Petitions were filed by various contract carriage
operators, fanciers and others including those who had successfully filed the
earlier Writ Petitions. The High Court allowed the writ petitions, struck down the
Act as unconstitutional, and quashed the notifications. (Judgment reported in
K.Jayaraj Ballal and Ors. v. State of Karnataka and Ors. I.L.R. Karnataka 1976,
Vol. 26, P. 1478).
Allowing the appeals and upholding the
constitutional validity of the Act on merits, the Court
HELD : Per Untwatia, J. (Also on behalf of M.
H. Be-,, C.J., V. Y. Chandrachud, and P. S. Kailasam, JJ.)
1. Whether the law of ocquisition is for
public purpose or not has to be gathered mainly from the statement of Objects
and Reasons of the Act and its preamble. The matter has to be examined with
reference to the various provisions of the Act its context and set up and then
it has to be judged whether the acquisition is for a public purpose within the
meaning of Article 31(2) and the law providing for such acquisition while
establishing a Road Transport Corporation, the State Government is obliged to
keep in mind primarily the public interest. The acquisition for the purpose of
the Corporation was, therefore, in public interest. [648 C-E] H. H.
Keshavananda Bharathi Sripadagalavaru v. State of Kerala  Suppl. S.C.R.
642 The court observed :
There may be many circumstances and facts to
justify the acquisition of even a movable property for a public purpose.
A particular commercial activity of the State
may itself be for a public purpose. In a larger sense one can say that
augmentation of the coffers of the State is also for a public purpose.
Acquisition of property either movable or immovable, may in such a situation be
for a public purpose.
[651 C-D] The State of Bihar v.
Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Ors.  SCR 889,
(2) The scheme for the compulsory acquisition
may be for a part of the undertaking also and that would mean a part of the
property of the under taking or a branch of the undertaking [651 F-G] (3) The
amount payable for the acquired property either fixed by the legislature or
determined on the basis of the principles engrafted in the law of acquisition
cannot be wholly arbitrary and illusory. In some respects it may be inadequate
but that cannot be a ground for challenge of the constitutionality of the law
under Article 31(2). [653 B-C] H. H. Keshavananda Bharati Sripadagalavaru v.
State of Kerala,  Suppl. SCR 1, applied.
The State of West Bengal v. Mrs. Bala
Banerjee and Ors.
 SCR 558, P. Vajravelu Mudaliar v. The
Special Deputy Collector, Madras  1 SCR 614, Union of India v. The Metal
Corporation of India Ltd. &Anr.  1 SCR 255, State of Gujarat v. Shri
Shantilal Mangaldas and Ors.  3 SCR 341 and Rusto covarjee Cooper v.
Union of India  3 SCR 530, referred to.
(4) The Karnataka Contract Carriages
(Acquisition) Act, 1976 does not seek to legislate in regard to any Inter-State
trade and commerce. In pith and substance it is an Act to provide for the
acquisition of contract carriage, the InterState permits and the other
properties situated in the State of Karnataka. Any incidental encroachment on
the topic of Inter-State trade and commerce cannot invalidate the Act.
[661 D-E] Prafulla Kumar Mukherjee & Ors.
and Bank of Commerce Ltd., Khulna v. Advocate Genera,' of Bengal  Federal
Court Reports 28, Kerala State Electricity Board v. Indian Aluminium Co.,
 1 S.C.R. 552 S. K. Peseri V. Abdul Ghafoor and Ors., Civil Appeal No.
306/1964 decided on 4-51964, Narayanappa v. State of Mysore  3 S.C.R.
742, and Tansukh Rai Jain v. Nilratan Prasad Shaw and Ors.,  2 S.C.R. 6
A. S. Krishna v. State of Madras 
S.C.R. 399, U.S.A., Plff. in Crr. v. Can Hill 63 Law Ed. 337, Claude R. Wickard,
Secy. of Agriculture of the United States etal v. Roscoe C. Filburn 87 Law Ed.
122 and the Steamer Denial Ball, Bayron D. Ball and Jessie Ganoe, Claimants,
United States 19 Law Ed. 999 referred to.
(5) The acquisition of permits of the
vehicles kept and registered in the State of Karnataka, in respect of which
initially Inter-State Permits had been granted by the State, would be an
acquisition of the permit operative within the territory of the State. Permits
granted by one regional Authority and counter-signed by another Regional
Authority either in the same state or in different states are really different
permits rolled into one. The counter-signed portion of the permit is in
substance and in effect a separate permit authorising the permit holder to ply
the bus in another State, and cannot be acquired. Such an acquisition would
fall within the extra-territorial operation of the law. The State Govt. on acquisition
and the vesting of acquired permits, therefore, cannot transfer their
counter-signed portions to the Road Transport Corporation. Any particular
vehicle which is kept and registered, or is plying, on an initial permit
granted by another State, also could not be acquired under the Act and the
notification issued, thereunder. [662 C-D, 663 B, C-D] M/s Bundelkhand Motor
Transport Company, Nowgaon v. Behari Lal Chaurasia and Anr.  1 S.C.R.
485, and Punjab Sikh Regular Motor Service, Mondhapara v. The Regional
Transport Authority, Raipur and Anr.  2 S.C.R. 221; applied.
643 The Bengal Immunity Co. Ltd. v. The State
of Bihar and Ors.
 S.C.R. 603, R.M.D. Chamarbaugwala v.
Union of India and Ors.  S.C.R. 930, Gulabhai Vallabhbhai Desai etc.
v. Union of India and Ors.,  1 S.C.R.
602; and lit re.
a Special Reference under Section 213 of the
Govt. of India Act, 1935  Federal Court Reports 12; referred to.
(6) Section 4(3) of the Karnataka contract
carriages (Acquisition) Act, 1976, is worded with the object of putting the
challenge to the factum of public purpose beyond the pale of any attack. The
use of the word "deemed" does not invariably and necessarily imply an
introduction of a legal fiction, but it has to be read and understood in the
context of the whole statute. [651 A-B] (7) In the absence of an agreement, the
State Government shall appoint an arbitrator for fixing the amount payable in
lieu of the acquired property. The arbitrator, reading section 6(1) of the Karnataka
Contract Carriages (Acquisition) Act, as a whole, is not obliged to fix the
amount as specified in the Schedule, but he has to fix an amount which appears
to him just and reasonable on the totality of the facts and circumstances
keeping primarily in mind the amount mentioned in the Schedule occurring in
Sec. 6(1). [657 E-F, 658 D-E] Saraswati Industrial Syndicate Ltd., etc. v.
Union of India , 1 S.C.R. 956, Illingworth v. Walnsley (1900) 2 Q.B.
142 and Perry v. Wright (1908) 1 K. B. 441;
(8) The correct meaning of "acquisition
cost", used in the Explanation in the light of Para 1 (1) of the Schedule
of Sec. 6 (1) of the Karnataka Act, would mean, the cost of the chassis fixed
by the manufacturers for their dealers to charge from the purchasers. The
acquisition cost qua the purchaser is the price which he pays to the
manufacturer's dealer from whom he purchases and not the manufacturer's actual
cost of manufacturing the chassis. The acquisition cost of the body of a
schedule would be the actual cost charged by the body builder. [659 B--C] Per
Iyer. J. (Also on behalf of P. N. Bhagwati and Jaswant Singh, JJ.) (1) The
purpose of a public body to run a public transport service for the benefit of
the, people, operating it in a responsible manner through exercise of public
power which is controlled and controllable by society through its organs like
the legislature and, at times, even the court, is manifestly a public purpose.
If the purpose subserves some public use or interest, or produces some public
good or utility then everything considered for subserving such public purpose
falls under the broad and expanding rubric.
If the purpose is a private or nonpublic one,
the mere fact that the hand that acquires or requires is Government or a public
corporation, does not make the purpose automatically a public purpose. The
acquisition of road transport undertakings by the State will undoubtedly be a
public purpose, and it is a fallacy to deny the presence of public purpose
merely because its satisfaction by readily available private purchase is
possible. [672 D-E, 673 B, 676 D] Black's Legal Dictionary, 'The Supreme Court
of India' by Rajeev Dhavan (Tripathi Publications), 'Words and Phrases Legally
defined' II Edn. P. 229; Sir Alladi Krishnaswami Ayyar's speech in the
Constituent Assembly; Mr. Justice Mathew's speech in the second Kerala. State
Lawyer's Conference; H. F. Peti v. Secy. of State for India, 42 I.A.
44; The State of Bihar v. Maharjadhiraja Sir
Kameshwar Singh of Darbhanga & Ors.  SCR 889; The State of Bombay v.
Ali Gulshan, AIR 1955 SC 810; A. K. Gopalan
v. State of Madras, AIR 1950 SC 27; The State of West Bengal v. Anwar Ali
Sarkar  SCR 284 and The State of West Bengal v. S. B. Bose & Ors.
 SCR 587, referred to.
(2) The amount Payable when private property
is taken by the State is a matter of legislative policy and not of judicial
fixation. The 25th, Amendment of the Constitution, while restructuring Article
31 and bringing in Article 31C, has excluded judicial examination even of the
principles of evaluation.The Court can only satisfy itself about the amount not
being a monstrousor unprincipled undervalue.
The payment may be substantially less than the
644 market value and the principles may not be all-inclusive, but the court can
upset the taking only where the principles of computation are too arbitrary and
illusory to be unconscionably shocking. The quantum of the amount or the
reasonableness of the principles are out of bounds for the court. [680 B, 682 C,
685 A, C, G, H.] H. H. Kesavanand Bharati Sripadagalavaru v. Stale of Kerala
(supra) followed. Speech by Mahatma Gandhi at the Round Table Conference;
Fundamental Rights & Socio-Economic Justice by K. P. Krishna Shetty pp. 123
and 127-128; The 46th Report of the Law Commission and R. S. Cooper v. Union of
India (supra), referred to.
(3) Article 39(b) fulfils the basic purpose
of restructuring the economic order and undertakes to distribute the entire
material resources of the community, as best to sub serve the common good. To
exclude ownership of private resources from its coils, is to cipherise its very
purpose of redistribution the socialist way. Article 39(b) is ample enough to
rope in buses, as motor vehicles, are part of the material resources of the
operators. Socially conscious economists will find little difficulty in
treating nationalisation of transport as a distributive progress for the good
of the community. [689 C-D, E-.F. 690 0] The Court observed :
(1) The State symbolises, represents and acts
for the good of society. Its concerns are the ways of meeting the wants of the
community, directly or otherwise, and the public sector in our constitutional
system, is a strategic tool in' the national plan for transformation from stark
Poverty to social justice, transcending administrative and judicial allergies.
[672 D-E] (2) Serious constitutional problems cannot be studied in a
socioeconomic vacuum, since socio-cultural changes are the source of new
values. Our emphasis is on abandoning formal legalistic or sterile logomachy in
assessing the vires of statutes regulating vital economic areas, and adopting
instead, a dynamic, goal-based approach to problems of constitutionality. Our
nation has, as its dynamic doctrine, economic democracy sans which political
democracy is chimerical. The Constitution ensouls such a value system in Parts
III and IV and elsewhere, and the dialectics of social justice should not be
missed if their synthesis is to influence State action and Court pronouncement.
Illusory compensation, nexus doctrine and 'distributed to sub serve the common
good, should not reduce lofty constitutional considerations into hollow
concepts. [666 F, 667 A] R. S. Cooper v. Union of India (Supra); Towne v.
Eigner 245 U.S. 418= 62 L. ed. 372, 376; Dias Jurisprudence 4th Edn. p. 625 H.
H. Kesavananda Bharati Sripadagalavaru v. State of Kerala (supra); Legal Theory
and Social Evolution 5th Edn. P. 81 and Dr. Ambedkar's speech in the
Constituent Assembly, referred to.
(3) Bills without sufficient study of their
project, occasionally result in
incomprehensibility and incongruity of the law for the lay and the legal. A
radicalisation of the methodology and, philosophy of legal drafting, and
ability for the legislative manpower to express them in streamlined, simple,
project-oriented fashion is, therefore, essential. [667 C-E] 'Laws are not for
laymen'-Guardian Miscellany dated May 29.
1975 referred to.
(4) Sheer legalism cannot lightly upset
legislative wisdom or efficiency while passing on the constitutionality of
economic legislation based on national planning, public finance, private
investments, cost accounting, policy decisions historical factors and a host of
complex social variables. Raw realities like poverty id stark inequalities to
abolish which, Article 31(2), 31C. 38 and 39 have been enacted, must inform
legal interpretation. The Courts must be circumspect not to rush in where
serious reflection will make them fear to tread, not to resort to adroit
circumvention because of economic allergy to a particular policy. [669 F, 670
A-B] 645 Burton v. Honan 1952, 86 CLR 169. 179; Preface to the English Leg Aid
System by Seton Pollck (Orient Longmans);
(5) Part IV of the Constitution, especially
Article 39(b) and (c) is futuristic mandate to the State with the message of
transformation of the economic and social order. Such change calls for
collaborative effort from a the legal institutions of the system: the
legislature, the judiciary and the administrative machinery. The Court and
counsel have a justice constituency with economic overtones, the manifesto
being the constitution designed to uphold the humanist values of life, liberty
and the equal pursuit of happiness, material and spiritual. [690 D-E] Lawyers
for Social Change; Perspectives on Public Interest Law' by Robert L. Rabin,
Standord Law Review Vol. 28, No. 2 January 1976; Law in America p. 34 by
The nature of judicial Process by Cardozo,
1932. p. 170;
The Indian Constitution-by Granville Austin;
British Coal Corporation v. The Kind 1935 AC 500; Attorney General of Ontario
v. Attorney General of Canada 1947 AC 503; 1 Constituent Assembly Debates, p.
61. referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1085 and 1522 1894/76.
From the Judgment and Order dt. 20th
September 1976 of the Karnataka High Court in W. P. Nos. 817 and 818-826/76
L. N. Sinha, R. N. Byra Reddy, Adv. Genl.,
Narayan Nettar, K., S. Puttawany (For A. 2 in CA. Nos. 1085 & 1522) and Mr.
Aruneshwar Gupta, Advs. for the appellants :
A. K. Sen, K. N. Bhatt, and M. R. V. Achar,
for the Respondents in Civil Appeals Nos. 1537, 1538-48, 1549, 155152, 1555,
1557-69. 1562, 1564-66 1967-68, 1569-72, 1574, 1576-80, 1586-89 1593-9
1597-1611, 1612-1613, 1618-24 162829, 1631-329 1635-36 1638-42-, 1644, 1646-48
1660, 166263, 1664-65, 1668, 1670-74, 1676, 1684-85, 1689 1695, 1697, 1700,
1701, 1703-4, 1710, 171216, 1724-27 1729-30, 1732, 1734-37, 1738-39, 1741,
1746, 1748-50, 1753, 1-59-60, 1761, 1763, 1765-66, 1768-69, 1771. 1774-76,
1786, 1785, 1803, 1805 (R-1) 1806-7, 1809, 1814-17, 1825, 1828, 1832, 1836-37
1840-41, 1844-46, 1850, 1858-59, 1863. 1865-66, 1868-71, 1873-77, 1879, 1882,
1884, 1887 & 1889/76 A.K.C. Sen. A. T. M. Sampath, and M. R. V. Achar, for
the Respondents in Civil Appeals Nos. 1677, 1758 & 1778/76 :
G. L. Sanghi, S. K. Mehta, K. R. Nagraja
& P. N. Puri and A.
K. Sanghi, for the Respondents in Civil
Appeals Nos. 1523-24 1528, 1530, 1532-33 1575, 1581. 1583, 1595-96, 1626. 167883,
1686-88, 1691-94, 1996 (R-1) 1717, 1720, 1723, 1742.
1747, 1755-56, 1779-80, 1782-83, 1785,
1787-90 1792, 1798.
1810 1823, 1830, 1861 & 1878/76.
S. S. Javali, A. K. Srivastava, and B. P.
Singh, for the Respondents In Civil Appeals Nos. 1630, 1656, 1657 & 1854/76
Girish Chandra, (Not present) for Respondent
No. 2 in CA 1085/76,.
S. Narayana Bhat (In persons) for Respondent
in CA. No. 1804/ 76:
N. Byra Reddy, Adv, Gnl. Narayan Nettar. for
the Adv. Genl/Karnataka.
646 The following Judgment were delivered
UNTWALIA, J. This batch of 374 appeals by certificate is from the decision of
the High Court of Karnataka given in 374 Writ Petition filed by different
persons having various kinds of interest in the Contract Carriages which were
taken over by the State of Karnataka Contract Carriages (Acquisition)
Ordinance, 1976 (Karnataka Ordinance No. 7 of 1976) (for brevity, hereinafter,
the Ordinance) followed by the Karnataka Contract Carriages (Acquisition) Act,
1976 (Karnataka Act No. 21 of 1976) (hereinafter to be referred to as the Act).
The judgment of the High Court is reported in K. Jayaraj Ballal, and others v.
State of Karnataka and others.(1) For the sake of convenience hereinafter in
this judgment, reference to the High Court judgment wherever necessary will be
made from the said report.
The broad and the, common facts of the
various cases are in a narrow compass and not in dispute. At the outset, we
shall state them mostly from the High Court judgment. We were not concerned to
go into the special facts of some cases in these appeals. They may have to be
looked into, if necessary, by the, High Court in the light of this judgment.
The Karnataka State Road Transport
Corporation (hereinafter called the Corporation) was established by the State
Government of Karnataka on August 1, 1961 under section 3 of the Road Transport
Corporations Act, (Central Act 64 of 1950). The Corporation was a party
respondent to the writ petitions aid is an appellant before us along with the
State of Karnataka. We are stating the facts mostly from Civil Appeal No. 1985
of 1976 arising out of Writ Petition No. 817 of 1976. The Corporation published
in the Karnataka Gazette dated May 16, 1974 a draft scheme for nationalisation
of Contract Carriages in the State under Chapter IV-A of the Motor Vehicles
Act, 1939 (Central Act 4 of 1939).
Objections were invited. Some of the
writ-petitioners preferred their objections. it appears the State, Government
and the Corporation dropped the idea of proceeding with the scheme and without
concluding the and the disposal of the objections and the finalization of their
scheme the Government came out with the Ordinance which was promulgated on
January 30, 1976. As per clause 1(3) of the Ordinance, it applied to "all
contract carriage(s) operating in the State of Karnataka By a number of
notifications issued under the Ordinance almost all the contract carriages and
the permits specified in the notifications vested in the State.
They were transferred to the Corporation
under clause 20(1) of the Ordinance. The officers of the Corporation seized the
vehicles and the relative permits pursuant to the notifications aforesaid
except six vehicles which were operating under Inter-State permits belonging to
some of the writ petitioners. The seizure of the said six vehicles was stayed
by the Order of the High Court made on 5th April, 1976 in some of the earlier
writ petitions. The earlier writ petitions were decided on February 26, 1976
and March 3, 1976 by a learned (1) The Indian Law Reports (Karnataka) 1976
647 single Judge of the High Court who field
that the Ordinance did not empower the acquisition of the vehicles not covered
by valid contract permits and consequently quashed some of the notifications.
The Ordinance with some changes was replaced by the Act which received the
assent of the President on March 11, 1976 and was published in the;
Karnataka Gazette dated the 12th March, 1976.
The, operation of the Act was, however, made retrospective from the 30th
January, 1976-the day when the Ordinance had been promulgated and come into
force. The Ordinance was repealed by section 31 of the Act and the saving
clause in subsection (2) says "Notwithstanding such repeal (i) anything
done or any action taken under the said Ordinance, shall be deemed to have been
done or taken under the corresponding provisions of this Act;" Fresh
notifications were also issued under the Act. 'The combined effect of all these
actions was that whatever was done on and from the 30th January, 1976 either
under the Ordinance or under the Act was all deemed to have been done or done
under the Act. Fresh writ petitions numbering 374 were filed in the High Court
by the various contract carriages operators, financiers and others including
those who, had filed or succeeded in the earlier writ petitions.
The High Court has allowed all the writ
petitions, struck down the Act as unconstitutional and has declared it null and
void. The notifications have been quashed. The respondents in the writ
petitions, namely the appellants before us, were directed to restore, the
vehicles with the relative, permits and all other assets to the operators from
whom they were taken over. Some consequential directives for determination of
damages in some later proceedings were also given.
We now proceed to state the findings of the
High Court on the various points argued before it not in the order as finally
recorded in para 98 of its judgment at page 1530 but in the order the points
were urged before us by Mr. Lal Narayan Singh, learned counsel for the
appellants. They are as follows (1) The acquisition is not for a public
(2) The compensation or the amount provided
for or the principles laid down in the Act for payment in lieu of the various
vehicles, permits and other assets is wholly illusory and arbitrary.
For the two reasons aforesaid, the Act is
violative of Article 31 (2) of the Constitution and is a fraud on it. It is,
therefore, null and void.
(3) The acquisition of contract carriages
with Inter-State permits and other assets pertaining to such operators is ultra
vires the legislative power and the competence of the State Legislature.
648 Article 31 C does not bar the challenge
to the Act as being violative of Article 31(2) of the Constitution as there is
no reasonable and substantial nexus between the purpose of the acquisitions and
securing the principles specified in clauses (b) and (c) of Article 39.
We now proceed to deal with the points
aforesaid seriatim in the above order.
PUBLIC PURPOSE It is indisputable and beyond
the pale of any controversy now as held by this Court in several decisions
including the decision in the case of His Holiness Kesavananda Bharati
Sripadagalaveru v. State of Kerala(1) popularly known as Fundamental Rights
case-that any law providing for acquisition of property must be, for a public
Whether the law of acquisition is for public
purpose, or not is a justiciable issue. But the decision in that regard is not
to be given by any detailed inquiry or investigation of facts. The intention of
the legislature has to be gathered mainly from the Statement of Objects and
Reasons of the Act and its Preamble. The matter has to be examined with
reference to the various provisions of the, Act, its context and set up, the
purpose of acquisition has to be culled out there from and then, it has to be
judged whether the acquisition is for a public purpose within the meaning of
Article 31(2) and the law providing for such acquisition.
The acquisition of the vehicles namely the
contract carriages. their permits and other assets for running them for the
purposes, of the Corporation could not be challenged as being not for a public
purpose merely because it was for the purposes of transferring them to the
Statement of Objects and Reasons for the
impugned law as follows :
"A large number of contract carriages
were being operated in the State to the detriment of public interest and were
also functioning stealthily as stage carriages. This had to, be prevented.
Article 39(b) and (c) enjoins upon the State to see that the ownership and
control of the material resources of the community are so distributed as best
to sub serve the common good and that the operation of the economic system does
not result in the concentration of wealth to the common detriment.
In view of the aforesaid it was considered
necessary acquire the contract carriages run by private operators."
Accordingly the Karnataka Contract Carriages (Acquisition) Ordinance, 1976 was
The Bill seeks to replace the Ordinance."
The title of the Actindicates that it is "An Act to provide for the
acquisition of contract carriages and for matters incidental, ancillary or (1)
 Suppl. S.C.R.1 649 subservient thereto." In the Preamble it is
stated :"Whereas contract carriages and certain other categories of public
service vehicles are being operated in the State in a manner highly detrimental
and prejudicial to public interest;
And whereas with a view to, prevent such
misuse and also to provide better facilities for the transport of passengers by
road and to give effect to the policy of the State towards securing that the
ownership and control of the material resources of the community are so
distributed as best to subserve the common good and that the operation of the
economic system does not result in the, concentration of wealth and means of
production to the common detriment;
And whereas for the aforesaid purposes it is
considered necessary to provide for the acquisition of contract carriages and
certain other categories of public service vehicles in the State and for
matters incidental, ancillary or subservient thereto:
A declaration was also made in section 2 that
the Act is for giving effect to the policy of the State towards securing the
principles specified in clauses (b) and (c) of Article
39. A deep probe into an investigation of the
facts stated in the Statement of Objects and Reasons and the Preamble of the
Act was neither permissible nor was it gone into by the High Court. Mr. A. K.
Sen advanced the leading argument on behalf of the respondents followed by some
other Advocates and one of the respondents in person. The main plank of the
argument advanced on behalf of the respondents was that acquisition of vehicles
which are available for sale in the market cannot be said to be for a public
purpose. Counsel submitted that the scheme of nationalisation in Chapter IV-A
of the Motor Vehicles Act was given up, whole Undertaking of the various operators
was not acquired but what was acquired was certain assets most of which were
available in the market. Acquisition of chattels or movables can never be for a
public purpose. The High Court. in support of its view, also refers to the
wordings of sub-section (3) of section 4 of the Act wherein it has been
provided that the contract carriage and other property vesting in the State,
Government shall "be deemed to have been acquired for a public
purpose". We are of the opinion that neither the argument nor the decision
of the High Court that the acquisition is not for a public purpose is correct.
On the fact of the Statement of Objects and
Reasons of the Act as also from its Preamble it is clear, apart from further
facts which were stated in the various affidavits filed on behalf of the State,
that the operators were misusing their permits granted to them as contract
carriages permits. In many cases the vehicles were used as stage carriages
picking up and dropping passengers in the way.
The Legislature thought that to prevent such
misuse and to provide for better facilities to transport passengers and to the
general public it is necessary to acquire the vehicles, permits and all rights,
title and interest of the contract carriage operators in or over lands, buildings,
workshops and other places and 650 all stores, instruments, machinery, tools,
plants etc. as mentioned in sub-section (2) of Section 4 of the Act. It was not
a case where some chattels or movables were merely acquired for augmenting the
revenue of the State or for its commercial purposes. Mr. Sen heavily relied
upon some passages in the judgment of this Court in The State of Bihar v.
Maharajadhiraja Sir Kameshwar Singh of Darbhanga and others(1) to strengthen
his submission. The, said decision was concerned with the vires of the Bihar
Land Reforms Act, 1950 by which the Zamindaries or intermediaries' interest
were acquired by the State. One of the provisions in the Act was for
acquisition of arrears of rent due to the intermediaries from their respective,
tenants. This provision was struck down as being unconstitutional. And in that
connection, Mahajan, J, as he, then was, said at page 944 :
"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." Mukherjee J., as he then was agreed with this
view at page 957. Das J.,as he then was and Chandrasekhara Aiyar J., also
concurred in the same. But the said decision given in respect of the debts due
to the Zamindars from their tenants, which were merely chooses in action is of
no' help to the respondents.
In these appeals we are not called upon to.
decide and express any final opinion as to whether an acquisition of chattels
or movables can be for a public purpose or not.
What may only add that the preposition so
broadly but is not quite correct. There may be many circumstances and facts to justify
the acquisition of even a movable property for a public purpose. It may not be
universally so but the converse is also not correct. In the instant cases what
has been acquired under the Act is not only movables and chattels namely the
vehicles but also the permits, the workshops, land and buildings etc. Although
the whole transport undertaking of any carriage operator was not acquired, the
acquisition in no sense was of more movable properties available easily for
purchase in the market.
Several hundred vehicles were acquired by the
various notifications. In substance it was a nationalisation of the contract
transport service in the State of Karnataka.
Undoubtedly it was for a public purpose. We
may just quote a few lines from the judgment of Mahajan J., in the case of The
State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga and others
(supra) occurring at page 941 "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 (1)  3 S.C.R. 889 651 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 language of section 4(3) of the Act is not for the purpose
of introducing a legal fiction as observed by the High Court but with the
object of putting the challenge to the factum of public purpose beyond the pale
of any attack.
Tile use of the word '.'deemed" does not
invariably and necessarily implies an introduction of a legal fiction but it
has to be read and understood in the context of the whole statute. it may well
be that the State is not authorised to compulsorily acquire any property merely
to augment its revenue although in a larger sense one can say that augmentation
of the coffers of the State is also for a public purpose. But it is not always
correct to say that a property cannot be acquired merely for a commercial need
of the Government. Under the Land Acquisition Act, 1894 land can be acquired
for commercial purposes of the Government a Public Corporation or a Company.
Why can't movables be acquired for commercial purposes if the exigencies of the
situation so require ? A particular commercial activity of the State may itself
be for a public purpose. Acquisition of property either movable or immovable
may in such a situation be for a public purpose.
Mr. Sen referred to section 19 of the Road
Transport Corporations Act and specially to clause (c) of sub-section (2) to
lend support to his argument that without acquiring the whole undertaking only
a portion of its assets leaving out the liabilities could not be acquired. For
this purpose, he relied upon the provisions of Chapter IV-A of the Motor
Vehicles Act also. The nationalisation of routes under the said Chapter of the Motor
Vehicles Act does not necessarily imply the acquisition of the transport
undertakings of the various operators, their vehicles or properties. That is a
separate and distinct method altogether. In section 19 of the Road Transport
Corporations Act are enumerated the powers of the Corporation. Sub-section (2)
(c) gives a power to the Constitution "to prepare schemes for the
acquisition of, and to acquire, either by agreement or compulsorily in accordance
with the law of acquisition for the time being in force the state concerned and
with such procedure as may be prescribed, whether absolutely or for any period,
the whole or any part of any undertaking of any other person to the extent to
which the activities thereof consist of the operation of road transport
services in that State or in any area". It is plain that the scheme for
the compulsory acquisition may be for a part of the undertaking also and that
would mean a part of the property of the undertaking or a branch of the
undertaking. Of course, the Corporation can purchase vehicles as provided for
in clauses (a) and (g) of sub-section (2) of section 19. But it does not follow
there from that in all cases it is obliged to do so.
Compulsory acquisition is also provided for
in clause (c).
Under section 3 of Act 64 of 1950 while
establishing a Road Transport Corporation the State Government is obliged to
keep in mind primarily the public interest as provided for in clauses (a) to
(c) thereof. The acquisition in question for the purpose of the Corporation
was, therefore, in public interest.
5-951SCI/77 652 In our judgment, therefore,
the decision of the High Court on the question of public purpose is erroneous.
We hold that the impugned law of acquisition and the acquisitions are for
AMOUNT TO BE PAID FOR THE PROPERTY ACQUIRED.
The High Court in paragraph 92 at page 1527
has come to the conclusion........ the scheme for payment for the property
acquired under the Act is wholly illusory and therefore the Act violates the
fundamental rights of the petitioners secured under Article 31 (2)." The
history in relation to the provision of payment of compensation or the amount
in Article 31(2) of the Constitution is interesting and clearly points out the
difference in the approach to the question by this Court and the Parliament
resulting in the amendments in the provisions from time to time as and when
some important and leading judgment were handed down by this Court which
according to the Constituent Body did not correctly lay down the law as it
intended the Article to mean. The word used in the original Article 31(2) was
'compensation'. In The State of West Bengal v. Mrs. Bela Banerjee and others(1)
compensation was held to mean a just equivalent of what the owner has been
deprived of. Then came an amendment in the Article by the Constitution (4th
Amendment), Act, 1955 stating in clause (2) of Article 31........ no such law
shall be called in question in any court on the ground that the compensation provided
by that law is not adequate." In spite of the amendment, this Court in
some decisions-to with P. Yajravelu Mudaliar v. The Special Deputy Collector,
Madras (2) and Union of India v. The Metal Corporation of India Ltd. and
Another (3) largely, if not fully, stuck to its view in Mrs. Bela Banerjee's
case (supra). Then came the decision in State of Gujarat v. Shri Shantilal
MangaldaS N Ors (4) where Shah J., as he then was in his leading judgment to
which was appended a short concurring note by Hidayatullah C. J., made a
conspicuous departure from the views expressed in Vajravalu's case and the case
of The Metal Corporation (supra) and the said decisions were over-ruled.
Thereafter came the decision of 11 Judges of this Court the, leading judgment
being of Shah J., on behalf of himself and 9 others in what is known as the
Bank Nationalisation , case in Rustom Cavasjee Cooper v. Union of India(5).
Although in terms the decision of this Court in the case of Shantilal Mangaldas
(supra) was merely explained, in substance it was over-ruled. Thereafter, by
the Constitution (25th Amendment) Act the word 'compensation was substituted by
the word 'amount? in Article 31(2), which, as in the case of 'compensation',
may be fixed by the law of acquisition or be determined in accordance with such
principles and given in such manner as may be specified in such law. law was
sought to be kept beyond the pale of challenge in any Court by reiterating in a
slightly different form that it cannot be assailed on the ground "that the
amount (1)  S.C.R. 558.
(2)  1 S.C.R. 614.
(3)  1 S.C.R. 255.
(4)  3 S.C.R. 341.
(5)  3 S.C.R. 530.
653 so fixed or determined is not adequate or
that the whole or any part ,of such amount is to be given otherwise than in
cash". In the Fundamental Rights case (supra) the change in the
phraseology of Article 31(2) came up for consideration before the Bench of 13
Judges. The ,High Court is not right in saying that decision in the Bank
Nationalisation case still holds the field on the question of amount or
compensation to be paid for the acquired property. A departure has been made
from the view expressed earlier in the light of the 25th Amendment. It is not
necessary to pin-point the details of such departure. For the purpose of
deciding the point which, falls for consideration in these appeals, it will
suffice say that still the over-whelming view of the majority of judges in
Kesavananda Bharati's case is that the amount payable for the acquired property
either fixed by the legislature or determined on the basis of the principles
engrafted in the law of acquisition cannot be wholly arbitrary and illusory.
When we say so we are not taking into account the effect of Article 31 C
inserted in the ,Constitution by the 25th Amendment (leaving out the invalid
part as declared by the majority).
Just to support the principle of law culled
out above, we may refer to a few lines in some of the judgments in Kesavananda
Bharati's case. Sikri C. J., has said at page 197 : "Applying this to the
fundamental right of property, Parliament cannot empower legislatures to fix an
arbitrary amount or illusory amount or an amount that virtually amounts to
confiscation, taking all the relevant circumstances of the acquisition into
consideration." Shelat and Grover JJ., in addition to what they have said
earlier categorically say at page 285 : and further that the "amount"
is neither illusory nor it has been fixed arbitrarily, nor at such a figure
that it means virtual deprivation of the right under Article 31(2). The
question of adequacy or inadequacy, however, cannot be gone into." Hedge,
and Mukherjee JJ., have observed at page 338 :
"Therefore, stated briefly, what the
25th Amendment makes non-justiciable is an enquiry into the question whether
the amount fixed or determined is an equivalent value of or 'compensations for
the property acquired or requisitioned It is difficult to believe that
Parliament intended to make a mockery of the fundamental right conferred under
Article 31(2). It cannot be that the Constitution while purporting to preserve
the fundamental right of the citizens to get an "amount" in lieu of
the property taken for public purpose has in fact robbed him of all his
right." Ray J., as he then was goes point out at pages 446 and 447 the
Article still binds the legislature to provide for the giving to the owner a
sum of money either in cash or otherwise. The legislature may either lay down
principles for the determination of the amount or may itself fix the amount.
The Constitution does not allow judicial
review of a law on the ground of adequacy of the amount and the manner as to
how such amount is to be otherwise than in cash." At page 555 is to be
found the view of Jaganmohan Reddy J., in these words 654 "Once the Court
is satisfied that the challenge on the ground that the amount or the manner of
its payment is neither arbitrary or illusory........
Lastly we would refer to a passage occurring
in the judgment of one of us (Chandrachud J.) at pages 992 and 993. It runs
"The specific obligation to pay an
"amount" and in the alternative the use of the word
"Principles" for determination of that amount must mean that the
amount fixed or determined to be paid cannot be illusory. If the right to
property still finds a place in the Constitution, you cannot mock at the man
and ridicule his right. You cannot tell him . "I will take your fortune
for farthing." As already stated the High Court took the view that the
amount payable under the, Act for the property acquired would be such that it
will be wholly arbitrary illusory and leave the many operators in huge debts.
Many of them were playing their contract carriages having taken loans of
considerable sums of money from the, various financiers on hire-purchase
system, for whom also Mr. A. K. Sen appeared and argued before us. They would
not only be paupers but huge liability will remain on their shoulders if the
interpretation put by the High Court were to be correct.
Mr. Lal Narayan Sinha, learned counsel for
the appellants, took a just and proper attitude in advancing an argument before
us which would take away the basis of the High Court Judgment in this regard.
With respect to each and every relevant section on the question of payment of
the amount in lieu of the property acquired he suggested such a reasonable,
harmonious and just construction' by the rules of interpretation that we found
no difficulty in accepting his argument-rather, were glad to do so. The other
side on the interpretation so put, which we are going to mention hereinafter,
felt satisfied to a large extent. Mr. Sinha also advanced some argument with
reference to the valid part of Article 31 C read with clauses (b) and (c) of
Article 39 but very wisely did not choose to heavily rely upon it. On the
interpretation of the statute as canvassed by him, there hardly remained any
necessity of it.
Section 3 of the Act defines in clause (a)
'acquired property' to mean the vehicles and other property vesting in the
State, Government under section 4. The definition of 'contract carriage is an
inclusive one with reference to certain provisions of Motor Vehicles Act.
Clause (h) runs thus :
"Contract carriage operator' means an
operator holding one or more contract carriage permit and includes any person
in whose name a public service vehicle is registered and is specified as a
contract carriage in the certificate of registration of such vehicle."
`Permit' in clause (m) means the permit granted under the Motor Vehicles Act,
authorising the use of a vehicle as a contract carriage Then comes the
important clause (n) which runs as follows:
655 'Person interested' in relation to any
acquired property includes the contract carriage operator and any secured
creditor or financier under a hire purchase agreement, who has a charge, lien
or any interest in the acquired property and any other person who is affected
by the vesting of the acquired property and claiming or entitled to claim an
interest in the amount." Section A provides for vesting of contract
with the permit or the certificate of
registration or both absolutely free from all encumbrances. Various other
properties mentioned in clauses (i) and (ii) of sub-section (2) also vest on
the issuance of the notification under subsection (1). While providing that the
property shall vest absolutely free from all encumbrances, a safeguard has been
provided for a person interested and having a claim to the amount in respect of
such property under the Act. Under section 5, the operators are to furnish the
required particulars. Section 6 which deals with determination of the amount
must be read in full.
"6. Determination of the amount.-(1) For
the vesting of the acquired property under section 4, every person interested
shall be entitled to receive such amount as may be in the manner hereinafter
set out and as specified in the Schedule, that is to say(a) where the amount
can be fixed by agreement it shall ,be determined in accordance with such
(b) where no such agreement can be reached,
the State Government shall appoint as arbitrator a person who is an ,officer
not below the rank of a Divisional Commissioner or a District Judge;
(c) the State Government may, in any
particular case, nominate a person having expert knowledge as to the nature of
,he acquired property to assist the arbitrator and where Such nomination is
made, the person interested may also nominate an assessor for the same purpose;
(d) at the commencement of the proceedings
before the :arbitrator, the State Government and the person interested shall
state what in their respective opinion is the amount payable:
(e) the arbitrator shall, after hearing the
dispute, make an award determining the amount which appears to him just and
reasonable and also specifying the person or persons to whom the amount shall
be paid; and in making the award be shall have regard to the circumstances of
each case and the provisions of the Schedule so far as they are applicable;
(f) where there is any dispute as to the
person or persons who are entitled to the amount, the arbitrator shall decide
such dispute and if the arbitrator finds that more persons than one are
entitled to the amount, he shall apportion the amount, amongst such persons;
656 (g) nothing in the Arbitration Act, 1940
(Central Act X of 1940), shall apply to arbitrations under this section.
(2) Every award made by the arbitrator under
clause(e) of sub-section (1) shall also state the amount of costs incurred in
the proceedings before him and by whom and in what proportions such amount is
to be paid." A notice under section 7 is to be given to all persons
interested in respect of the amount determined under section
6. Any person interested and served with a
notice under section 7 can file a claim before the authorised officer under
sub-section (1) of section 8. The language of subsection (2) created some
difficulty in harmonising it with the other provisions of the statute. It runs
"The authorised officer shall forward
the claim made under sub-section (1) to the State Government for the payment of
the amount to the person interested in the manner specified under section
11." Section 10 is important and provides for the various categories of
the: amount liable to deduction in certain cases. The nature of such amounts
liable to be deducted are relatable to the Employees' Provident Funds and
Family Pension Fund Act, 1952, Employees' State Insurance Act, 1948, salary,
wags etc. due to an employee, taxes etc. But the important item to be noticed
is mentioned in clause (iii) of subsection (3) which makes "the amount due
towards the claims of secured creditors" deductible under section
10. Sub-section (4) authorises the arbitrator
to decide any dispute regarding the sum to be deducted under sub-section (3).
Then section 11(1) providing for the manner of payment of amount for the
acquired property says "The amount determined under section 6 shall, after
deduction, if any, made under this Act, be given in cash by the State
Government to the person interested,(a) in one lumpsum where the amount does
not exceed ten thousand rupees; and (b) in ten equal annual installments in
other cases, the amount of each installment carrying interest at the rate of
six per cent per annum from the notified date." An appeal lies to the High
Court from the, award of the arbitrator as provided for in the 12th section.
Certain powers of the Civil Court have been conferred on the arbitrator and the
authorised officer under section 13.
Section 19 enjoins the, State Government to
transfer the whole of the acquired property in favour of the Corporation.
The permit stands transferred to the
Corporation under section 19(2). Subsection (6) says :
"(a) All sums deducted by the State
Government under sub-section (3) of section 10 shall stand transferred to the
corporation referred to in sub-section (1).
657 (b) The corporation shall credit the sums
transferred to the appropriate funds or if any part of the sums is payable to
the employee, directly, such part shall be paid to him directly." A
monopoly is created in favour of the Corporation by the 20th section.
Then comes the Schedule spoken of in section
6 which provides for principles for determination of the amount in relation to
the various properties acquired under the Act.
Para 1 deals with the principle and the
manner of determination of the amount for the vehicles. The acquisition cost is
to be determined first and then a certain percentage is to be deducted in
accordance with the Table appended to sub-para (1). The explanation says :
"For the purpose, of this paragraph
"acquisition cost" shall be the aggregate cost of the chassis as well
as the body of the contract carriage as charged by the manufacturer of chassis
and by the body builder." In respect of almost all other properties
acquired the amount to be paid is by and large the market value. of the
property; vide paras, 2, 3, and 4. Provisions have been also made for payment
of the amount in respect of the workshops in para 5 and in respect of stores in
para 6. Some compensation has been provided in para 7 of the Schedule for every
permit acquired under the Act, although the amount so fixed may not be
Now by the harmonious and reasonable rules of
construction as also to save the Act from being violative of Article 31(2) of
the Constitution, we proceed to discuss and accept in a large measure the
interpretation put and canvassed by Mr. Sinha. If the amount is fixed by
agreement, well and good. In the absence of an agreement, the State Government
shall appoint an arbitrator who will be an officer of a high rank. Two
assessors having expert knowledge as to the nature of the acquired
property--one by the Government and one by the person interested, can be
appointed to assist the arbitrator. Both sides will state before the arbitrator
as to what should be the amount payable according to each. The arbitrator shall
hear the dispute and make an award determining the amount which appears to him
just and reasonable. He shall also specify the person or persons to whom the
amount shall be paid. In making the award,. he shall have regard to the
circumstances of each case and the provisions of the schedule so far they are
applicable. Some difficulty at the outset arose in reconciling the expression
"as specified in the schedule" occurring in subsection (1) of section
6 and the underlined expression occurring in clause (e) of that sub-section.
The content and purport of the expressions
"having regard to" and "shall have regard to" have been the
subject matter of consideration in various decisions of the Courts in England
as also in this country. We may refer only to a few. In Illingworth v.
Welmsley(1) it was held (1) (1900) 2 Queen's Bench, 142.
658 by the Court of Appeal, to quote a few
words from the, judgment of Romer C.J. at page 144 : "All that clause 2 means
is that the tribunal assessing the compensation is to bear in mind and have
regard to the average weekly wages earned before and after the accident
respectively. Bearing that in mind, a limit is placed on the amount of
compensation that may be awarded....... In another decision of the Court of
Appeal in Perry. Wright (etc. etc.) (1) Cozens-Hardy M.R. observed at page 45 1
:"No mandatory words are there used; the phrase is simply "regard may
The sentence is not grammatical, but I think
the, meaning is this : Where you cannot compute you must estimate, as best as
you can, the rate per week at which the workman was being remunerated, and to
assist you in making an estimate you may have regard to analogous cases."
It is worthwhile to quote a few words from the judgment of Fletcher Moulton
L.J. at page 458. Under the phrase" "Regard may be had to" the
facts which the Court may thus take cognizance of are to be "a guide, and
not a fetter." "This Court speaking through one of us (Beg J., as he
then was), has expressed the same opinion in the case of Saraswati Industries
Etc. v. Union of India(2). Says the learned
Judge at page 959 : "The expression "having regard to" only
obliges the Government to consider as relevant date material to which it must
have regard." The arbitrator, therefore, reading section 6(1) as a whole
is not obliged to fix the amount as specified in the Schedule. But he has to
fix the amount which appears to him just and reasonable on the totality of the
facts and circumstances keeping primarily in mind the amount mentioned in the
Another apparent conflict was writ large on
the phraseology of subsection (2) of section 6 and the provisions contained in
sections 10 and 11. Section 10 provides for the deductions of the various
amounts at the outset from the amount determined by the arbitrator payable in
respect of the acquired properties, including those due to the secured
creditors, which undoubtedly, would include the financiers of the hire-purchase
agreements. The amount payable under section 11 and the manner of its payment
is, after deducting all the amounts, provided in section 10. To that extent,
for the purpose of harmonious construction, sub-section (2) of section 8 must
mean the payments of the amounts as mentioned in section 10 and the balance to
the operator in the manner specified under section 11. The Act thus interpreted
to a large extent will satisfy not only the claims on account of wages and tax
etc. but also the amount due to the secured creditors. Surely the amount due,
if any,' to any unsecured creditor cannot be taken into account as there is no
such provision made in section 10.
Sufficient power has been conferred on the
arbitrator to arrive at a just and reasonable figure of the amount payable for
the property acquired. And further, a procedural safeguard has been provided by
making a provision for an appeal to the High Court from the award of the
(1)  1 King's Bench, 441.
(2)  1 S.C.R. 956.
659 No attack with any reasonable
justification could be made on paras 2 to 7 of the schedule. But a difficulty
arose in interpretation of the term "acquisition cost" occurring in
sub-para (1) of para 1. The literal meaning of that expression in sub-para (1)
would have been the acquisition cost of the contract carriage operator or any
other person interested therein. But the difficulty created was by the language
of the explanation appended thereto when it said that "acquisition
cost" shall be the aggregate cost of the chassis as well as the body of
the contract carriage as charged by the manufacturer of chassis and by ,the
body builder." Mr. Sinha rightly pointed out that the true and the correct
meaning of the words used in the explanation in the light of sub-para (1) of para
1 would mean the cost of the chassis fixed by the manufacturers for their
dealers to charge from the purchasers. Really the acquisition cost qua the
purchaser is the price which he pays to the manufacturers' dealer from whom he
purchases and not the manufacturer's actual cost of manufacturing the chassis.
So far the acquisition cost of the body of the vehicle is concerned, no
difficulty is created by the explanation. It would be the actual cost charged
by the body builder.
On the interpretations aforesaid which we
have put to the relevant provisions of the Act, it was difficult-rather
impossible-to argue that the amount so fixed will be arbitrary or illusory. In
some respects it may be inadequate but that cannot be a ground for challenge of
the ,constitutionality of the law under Article 3 1 (2). The respondents felt
quite satisfied by the interpretations aforesaid and could not pursue their
attack on the vires of the Act on that ground.
Legislative Competence Re : Contract
Carriages Plying on Inter-State Routes The number of such carriages and such
permits compared to the total number of vehicles acquired was very few. It was
about 20 to 25 ,only. It is no doubt true that under the Ordinance contract
carriages with Inter-State permits were not sought to be acquired. The Act, however,
has done so and with are trospective effect. Question is whether the State
Legislature ofKarnataka has gone beyond its powers and competence in making
such a provision. In that regard it was also canvassed before us whether it was
possible to read down certain provisions of the Act to save it from
constitutional invalidity. If so, to what extent and in what respect ? The
first attack on the legislative competence was that acquisition ,of such a
contract carriage squarely fell under Entry 42 of List I of the Seventh
Schedule to the Constitution that is to say, "Inter-State trade and
commerce." In paragraph 97 of the judgment the High 'Court seems to have
rejected the contention that the Act violated the freedom of trade and commerce
guaranteed under Article 301 and 304. But the High Court in the earlier portion
of its judgment appears to have taken the view that an Inter State permit is,
in fact and in substance, two or more permits rolled into one. The vehicle ply
in the different States. The permit originally granted by the Karnataka
authority under the Motor Vehicle Act has to be countersigned by the
authorities of the other States, Some of the operators kept their 660 vehicles
and have got their workshops in other States. The law made: by the Karnataka
Legislature cannot have extra territorial operation.
We, do not think that the view expressed by
the High Court is wholly correct. There are numerous decisions of the Privy
Council,. the Federal Court and the Supreme Court in support of the proposition
that the pith and substance of the Act has to be looked into and an incidental
trespass would not invalidate the law, vide for example Prafulla Kumar
Mukherjee and others and Bank of Commerce Limited,.
Khulna and Advocate-General of Bengal(1);
Kerala State Electricity Board v. Indian Aluminum Co.(2) The earlier case of
this Court is reported in A. S. Krishna v. State of Madras(3). Almost a direct
decision on this point is to be found in an unreported decision of this Court
in S. K. Pasari v. Abdul Ghafoor and Ors. (4) The question for consideration in
that case was whether the State Government had power under section 64A of the Motor
Vehicles Act as introduced by the Bihar Amendment to deal with a revision in
relation to an Inter-State permit. The High Court had taken the view that it
bad no such power, as such, a provision falls within item 42 of List I of the
Seventh Schedule to the Constitution, namely, Inter-State trade and' commerce
and not Entry 35 of List 111, namely, mechanically propelled vehicles. This
Court following the principle laid down in the case of Narayanappa v. State of
Mysore(5) reversed the view of the High Court and held that the impugned section
fell within the legislative power of the State under Entry 20 of List III of
Schedule Seven, of the Government of India Act, 1935 corresponding to Entry 35
of List III of the Seventh Schedule to the Constitution. The said decision has
been followed by this Court in Tansukh Rai Jain v. Nilratan Prasad Shaw and
Mr. Sen submitted that the, portion of the
Statute providing for acquisition of contract carriages running on Inter-State
routes is in reality legislating on the subject of InterState trade and
commerce.The State Legislature was not competent to do so. In support of his
argument, learned counsel referred to some of the American decisions, viz.
United States of America, Plff. in Err., v.
Claude R.Wickard, Secretary of Agriculture of
the United States etal v. Roscoe C. Filburn(8); The Steamer Daniel Ball, Byron
D. Ball and Jessie Ganoe, Claimants, Appit. v. United States(9). In Dan Hill's
case (supra) it was held that the transportation of intoxicating liquor from
one State to, another was in itself Inter-State commerce, and the Congress in
(2)  1 S.C.R. 552.
(3)  S.C.R. 399.
(4) Civil Appeal No. 306 of 1964 decided on
(5)  3 S.C.R. 742.
(6)  2 S.C.R. 6 (7) 63 Law Ed. 337.
(8) 87 Law Ed. 122.
(9) 19 Law Ed. 999.
661 exercise of its plenary authority to
regulate the InterState transportation of intoxicating liquors. may prohibit
such transportation even into a State which permits it. In the case of Claude
R. Wickard (supra) the question arose entirely in a different context. A
Federal regulation of the production of wheat not intended in any part for
commerce but wholly for consumption on the farm was held to be within the power
conferred by the commerce clause where the, purpose of such regulation was to
control the market price of wheat in Inter-State commerce. In the case of The
Steamer Daniel Ball (supra) the question was whether the impugned Act
applicable to a steamer engaged as a common carrier to carry goods in a
navigable river between places in the same State when a portion of the
merchandise transported by her is destined to places in other States could
control such a steamer under the authority of the Congress to regulate an
agency employed in commence between the States. It was held that it could be so
In our judgment it is difficult to apply the
principles of any of the cases aforesaid to the facts and the provisions of the
Act. It is not an Act which deals with any InterState trade and commerce. Even
assuming for the sake off argument that carriage of passengers from one State
to the other is in one sense a part of the Inter-State trade and commerce, the
impugned Act is not one, which seeks to legislate in regard to the said topic.
Primarily and almost wholly it is an act to provide for the acquisition of
contract carriages, the Inter-State permits and the other properties situated
in the State of Karnataka. In pith and substance it is an act of that kind. The
incidental encroachment on the. topic of Inter-State trade and commerce, even
assuming there is some, cannot invalidate the Act. The Motor Vehicles Act, 1939
was enacted under Entry 20 of List III of Schedule Seven of the Government of
India Act, 1935 corresponding to Entry 35 of List III of the Seventh Schedule
to the Constitution. The subject being in the Concurrent List and the Act
having received the assent of the President, even the repugnancy, if any,
between the Act and the Motor Vehicles Act stands cured and cannot be a ground
to invalidate the Act. Entry 42 of List III deals with acquisition of property.
The State has enacted the Act mainly under this entry. It does not in any way
violate or militate against the provisions of the Road Transport Corporation
Act either, as argued by Mr. Sen.
Now we proceed to refer to some of the
provisions of the Motor 'Vehicles Act, to repel Mr. Sen's arguments even with
reference to that Act. But it cannot be rejected fully. A portion of it for the
reasons to be hereinafter stated has got to be accepted.
Under Section 23, every owner of a Motor
Vehicle has got to cause his vehicle to be registered by a registering
authority in the State in which he has the residence or place of business where
the vehicle is normally kept.
Almost all the Inter-State vehicles (there
may be a few exceptions) are registered in the State of Karnataka. They are
normally kept there. If a vehicle registered in one State has been kept in
another State for a period exceeding 12 months, then the registration has to be
changed in accordance with section 29. Under the 662 second proviso to section
45(1) if it is proposed to use a vehicle in two or more regions lying in
different States, an application for a permit has to be made to the Regional
Transport Authority of the region in which the appellant resides or has his in
principal Place of business. Almost all the Inter-State permits were initially
granted by the Karnataka authority. Section 63(1) says :
"Except as may be otherwise prescribed,
a permit granted by the Regional Transport Authority of any one region shall
not be valid in any other region, unless the permit has been countersigned by
the Regional Transport Authority of that other region, and a permit granted in
any one State shall not be valid in any other State unless countersigned by the
State Transport Authority of that other State or by the Regional Transport
Authority concerned :" This Court has expressed the view in the case of
Bundelkhand Motor Transport Company, Nowgaon
v. Behari Lal Chaurasia and another(1) followed in Punjab Sikh Regular Motor
Service, Modhapara v. The Regional Transport Authority, Raipur and another(2)
that permits granted by one Regional Authority and counter-signed by another
Regional Authority either in the same State or in different States are really
different permits rolled into one. If the initial granting authority does not
renew the permit for plying the vehicle within the, jurisdiction of another
authority the latter by mere counter-signing the permit cannot empower the
permit holder to ply the bus either in their region or another State. None of
the Inter-State permits in these cases has been issued by any central authority
in accordance with section 63A of the Motor Vehicles Act.
In the case of The Bengal Immunity Company
Limited v. The State of Bihar and others(3) Venkatarama Ayyar J., delivered his
separate judgment. Although he dissenting from the majority view in regard to
the main controversy in the case, in his judgment from page 811 onwards he
discussed very lucidly, if we may say so with respect, the concept of extra
territorial operation of a law. It has two connotations as pointed out by the
learned Judge at page 814 : It........
means a law of a State with reference to its
own citizens in respect of acts or events which take place outside the State.
In discussing questions relating to extraterritorial operation, it is desirable
that the two connotations of the words should be kept distinct and
separate". Two other connotation is the operation of the law itself to
subjects or properties outside the territory of the State which has made the
For the reasons stated above by and large the
law is not invalid. But to maintain its constitutionality in full, on the
well-known principles of law established and noticed in several decisions, such
as, in The Hindu Women's Rights to Property Act 1937. and the Hindu Women's (1)
 1 S.C.R. 485.
(2) 2 S.C.R. 221.
(3)  2 S.C.R. 603, 663 Rights to
Property (Amendment) Act, 1938, and A Special Reference under section 213 of
the Government of India Act, 1935: (1) R.M.D. Chamarbaugwalla v. The Union of
India(2) and Gulabhai Vallabhbhai Desai etc. v. Union of India & Ors(3) a
reading down of some of the provisions is permissible. And that reading down will
be only to this effect. Vehicles kept and registered in the State of Karnataka
in respect of which initially the Inter State permit has been granted by this
State have validly been acquired. The permit acquired in respect of those
vehicles will be the permit operative within the territory of the State of
Karnataka. The counter-signed portion of the permit, which as pointed out above
on the authorities of this Court is in substance and in effect a separate
permit authorising the permit holder to ply the bus in another State, cannot be
acquired. Such an acquisition will fall within the second connotation, of the
extra-territorial operation of the law, as referred to above from the Bangal
Immunity case. The State Government on acquisition and the vesting of the acquired
property cannot transfer the countersigned portion of the permit to the
Corporation. The Corporation in view of the transfer under section 19 will be
able to utilize the unexpired portion of the permit for plying the vehicle only
in the Sate of Karnataka until and unless it gets it signed by the Transport
authority of the other State or States in accordance with the Motor Vehicles Act
or take steps in accordance with section 20 of the Road Transport Corporations
Act. This portion of the law, although it is a very minor one, has got
extra-territorial operation in the connotation and sense which did not permit
the Karnataka Legislature to enact such a law. If on the facts of a particular
case it be found that any particular vehicle is kept and registered or is playing
on an initial permit granted by another State, such a vehicle also would not
stand acquired under the Act and the notifications issued there under. Since
the High Court has not gone into the details of the facts, we were not
concerned to go into them. The Constitution Bench was formed merely to decide
the constitutional issues.
At the end we may also indicate that under
sub-section (6) of section 19 all sums deducted by the State Government under
sub-section (3) of section 10 which include the sums payable to the secured
creditors stand transferred to the Corporation which is obliged to credit the
sums transferred to the appropriate funds. The said provision would take within
its ambit the liability of the Corporation to pay forthwith the sum found due
to the secured creditors. Since we have upheld the constitutional validity of
the Act on merits by repelling the attack on it by a reasonable and harmonious
construction of the Act, we do not consider it necessary to express any opinion
with reference to Article 31C read with clauses (b) and (c) of Article 39 of
the Constitution. Our learned brother Krishna Iyer J., has prepared a separate
judgment. specially dealing with this point. We must not be understood to agree
with all that he has said in his judgment in this regard.
(1)  1 S.C.R. 485.
(2)  S.C.R. 931.
(3)  1 S.C.R. 602.
664 For the reasons stated above, we allow
the appeals and set aside the judgment of the High Court. It will be open to
any of the writ petitioners to file a petition in the High Court either in the
same writ petition or a fresh one for adjudication and decision of the special
facts of a particular case, if necessary, in the light of this judgment. It is
hoped that since the matter has been considerably delayed by now, very early
and expeditious steps would be taken for determination and payment of the
amounts in respect of the acquired property to the persons interested in
accordance with the Act in the light of this judgment. We shall make no order
as to costs in any of the appeals.
KRISHNA IYER, J.-We go wholly with our
learned brother Untwalia J. Then why a separate afterword ? Because, to put it
simplistically, a legislation for the nationalisation of contract carriages by
the Karnataka State, where provision has been made for fair compensation under
present circumstances, has still been struck down by the High Court on the
surprising grounds of absence of public purpose, illusoriness of compensation
State take-over being beyond the orbit of Article 39(b) and the like, and to
express ourselves emphatically in reversal on the obvious, yet basic, issue we
itemise below which is necessary to obviate constitutional derailment again.
The public sector, in our constitutional system, is so strategic a tool in the
national plan for transformation from stark poverty to social justice,
transcending administrative and judicial allergies,, that the questions raised
and rulings thereon are of larger import for the country than one particular
legislation and its vires and one particular government and its policies. What
are those disturbing interrogatories ? If the State, to sub serve the objects
of governmental or other like agencies, compulsorily takes movable property or
realty of private citizens, the like of which are readily available in the open
market. does the law authorising such taking violate the limitation of 'public
purpose' imposed by Article 31(2) of the Constitution, in the absence of
urgency which brooks no delay whatever 9 Further, does the prospect of easy
purchase elsewhere, negate the presence of 'public purpose', implying thereby
the resort to compulsory acquisition within the framework of Article 31(2) is
interdicted save where there is 'State necessity' coupled with scarcity' of
supplies in the market ? Secondly, does a legislation qualify for immunity
under Article 31C read with Article 39(b), only where the scheme is to divide
and deal out to a plurality of persons, to disperse, diffuse or scatter
ownership and control of material resources of the community compulsorily taken
by the State ? Or does it embrace 'distribution with a wider connotation of 'removal'
from the private sector and allocation in the public sector, dividing and
arranging. separating and allocating, acquiring from individuals and making
over to collective institutions or State organs, acting for and in the interest
of the, community, according, to the State Plan or policy decision on the
scheme of distribution and allocation of resources among the different sectors
of economic activity so as best to subserve the public good ? How, in short, do
we decode 'distribute' in Article 39(b) illumined by Article, 38 ? As
permitting or proscribing holding of 'resources by 665 the State or its
designated organ monopolistically, for the better production and/or
distribution of goods and services to the community, for participative control
by and distribution of profits among workers and for all those other benefits
claimed to flow out of public ownership, social control, commitment to
community, parliamentary accountability and vaster capability ? Does R. C.
Cooper(1) remain a legal tender even after demonetisation on the question of
acquisition vis-a-vis compensation, by the 25th (Constitution) Amendment ? Can
the theory of 'illusory compensation' be apocryphal or be exaggerated to apply
to diminished compensation as a revised reincarnation of 'adequate
compensation' still menacing projects of nationalisation ? How do we
conceptulise 'material resources' and 'public purpose' in our current constitutional
setting ? When cryptic phrases expressive of constitutional, culture and
aspirational future, fundamental to the governance of the nation, call for
interpretative insight, do we merely rest content to consult the O.E.D. and
alien precedents, or feel the philosophy and share the foresight of the
founding fathers and their telescopic faculty ? Is the meaning of meanings an
artless art ? Holmes (2) J. in lovely language,, stated 'what oft was thought
but never so well expressed' :
"A word is not crystal, transparent and
unchanged; it is the skin of living thought and may vary greatly in colour and
content according to the circumstances and the time in which it is used."
Jerome Frank adopted a quotation from Holmes which drives home the same point :
"We must think things not words, or at
least, we must constantly translate our words into the facts for which they
stand if we are to keep to the real and the true. (3) " Be the High
Court's judgment right or wrong, its socioeconomic and jurisprudential
repercussions for a social Welfare State or a 'Socialist Republic' are
sufficiently profound to explain why, from us too, an afterword.
Is it otiose to ponder over these matters
articulately even though we generally concur in the reasoning and conclusion of
our learned colleagues ? Some economic issues of moment, quiet in their legal
look but critical in their later portent, come before the Court as has happened
now, when, regardless of assent or dissent, the spelt-out opinion of the judges
sitting on the same bench, separately or conjointly, becomes the right of the
citizen, read in the context of the pregnant provision in Article 141. When
major juristic problems of futuristic import involve constitutional probes, a
plurality of opinions may bring out if we may mix metaphors-more facets, shifts
in emphasis, finer notes, fresh vistas and seeds of development, not
necessarily verbal re-hash or medley of repetitive prolixity. A hundred notice
flowers and some cerebral briars are not a confusing crowd of colours.
Judicial perspective vis a vis
constitutionality of economic legislation.
(1)  3 S.C.R. 530.
(2) Towne V.Eigner,245U.S..418=62L.ed.
372,376 (3) Dias Jurisprudence, 4th Edn. p. 625 666 When confronted by serious
constitutional problems, judicial statesmanship drops the craft of a legal
tinker or lexicographic borrower but transforms itself into that of social
engineer who 'beholds the future in the present and his thoughts are the germs
of the flower and fruit of latest time'. He gives conscious expression, in
juristic tongue, to the Constitution's implicit purpose grounded on the
permanent in terests of man as a progressive. being-here, the little yet large
man of India breaking out of an iniquitous system, yet reaching out to a human
society, shot with distributive justice. The presence of this peopleoriented
perspective in the court, as the interpreter of the Constitution and its
imperatives and the laws designed to inaugurate a Human Tomorrow, compels us in
all humility and aware of inadequacy, to lend our pen to the reversal of the
decision under appeal which de facto proceeds on fastidious societal values of
vanishing validity. in the changed setting, and is partly founded on exotic
juridical doctrines (eminent domain) incongruous with the legitimate realities
of the emerging Indian Order as are writ into Article 31 (2) and more
unmistakably in Article 31C read (in the manner of Keshvananda Bharati) (1)
along side of Article 39(b) and (c).
The social philosophy of the Constitution
shapes creative judicial vision and orientation. Our nation has, as its dynamic
doctrine,, economic democracy sans which political democracy is chimerical. We
say so because our Constitution, in Parts III and IV and else-where, ensouls
such a value system and the debate in this case puts precisely this soul in
Friedman has said in his 'Legal Theory and
'The lawyer cannot afford to isolate himself
from the social process. His independence can never be more than relative, and
it is only a clear awareness of the political, social and constitutional
foundations of, his function in general as well as of particular legal problems
that enables him to find the proper balance between Stability and
progress."(2) Our thesis is that the dialectics of social justice should
not be missed if the synthesis of Part III and Part IV is to influence State action
and court pronouncements.
Constitutional problems cannot be studied in
a socioeconomic vacuum, since socio-cultural changes are the source of the new
values,, and sloughing off old legal thought is part of the process of the new
equity-loaded legality. A judge is a social scientist in his role as
constitutional invigilator and fails functionally if he forgets this dimension
in his complex duties.
The credal essence of the Constitution
consists in its Preamble,Articles 38, 39(b) and (c), 31 and the bunch of
Articles 31A, 31Band 31C (We do not deem it necessary to refer in this case to
the42nd Constitution Amendment Act).
(1)  Supp S.C.R. 1 (2) Legal Theory
and-Social Evolution, p. 81, 5th Edn.
667 Our emphasis is on abandoning formal
legalistics or sterile logomachy in assessing the vires of statutes regulating
vital economic are-as, and adopting instead a dynamic,, goal-based approach to
problems of constitutionality. It is right that the rule of law enshrined in
our ,Constitution must and does reckon with the roaring current of change which
shifts our social values and shrivels our feudal roots, invades our lives and
fashions our destiny. The key issues argued at learned length in these appeals
cannot suffer 'judicial separation' from the paramount principles in the
Preamble and in Article 39(b) and (c). So we have to view the impugned
provisions from the vantage point of socio-legal perception.
The semantic sin of dubious legislating
drafting Before entering the thorny thicket of debate on the questions arising
in this batch of appeals a cautionary word may be uttered, without disrespect,
about the unwitting punishment of the community by our legislative draftsmen
whose borrowed skills of Westminster vintage and hurried bills without
sufficient study of their economic project, occasionally result in
incomprehensibility and incongruity of the law for the lay and the legal.
Francis Bennion,(1) commenting on the Renton Committee Report, writes :
"The Renton Committee points out that
the problem of obscure statute law is important to every citizen.
"There is hardly any part of our
national life or of our personal lives that is not affected by one statute or
another. The affairs of local authorities, nationalised industries, public corporations
and private commerce are regulated by legislation. The life of the ordinary
citizen is affected by various provisions of the statute book from credle to
grave." The committee might have added that the rule of law and
parliamentary democracy itself are imperilled if laws are incomprehensible.
They did say that it is of fundamental
importance in a free society that the law should be readily ascertainable and
reasonably clear, and that otherwise it is oppressive and deprives the citizens
of one of his basic rights. It is also needlessly expensive and wasteful. Reed
Dicerson, the famous American draftsman, said it cost the government and the
public "many millions of dollars annually." It must be said in
fairness to both sides that Shri Lal Narain Sinha whole heatedly agreed with
Shri Asoke Sen (they appeared on opposite sides> that the legislation was
illdrafted and made a big drift on the creative imagination and linguistic
tolerance of the judges, to reconcile the verbal deficiencies and semantic
difficulties besetting the text. Shri Sinha told the Court that a clarification
bill was going before the House shortly as an amending exercise in this behalf.
Our draftsmen (1) Laws are not for laymen-Guardian Miscellany May 29, 1975.
6-951SCI/77 668 handle foreign know-how meant
for different circumstances, and without full grasp of the economic regulation
or the leisure and facilities for such study.
In a country where the people are, by and
large, illiterate, where a social revolution is being pushed through by
enormous volume and variety of legislation and where new economic adventures
requiring unordhoodoz jural techniques are necessitous, if legal drafting is to
be equal to the challenge of change, a radicalisation of its methodology and
philosophy and an ability for the legislative manpower to express themselves in
streamlined, simple, project-oriented fashion is essential. In the hope that a
role-conscious court communicates to a responsive Cabinet, we make this
What is the battle about? Back to the challenging
problems thrown up by the High Court's decision. The facts are there in the
leading judgment and the formulation of the controverted propositions also
needs no reiteration. Broadly speaking, we strike no note of dissensus but seek
to bring out some social, nuances even in consensus. Let us project the pegs on
which our discussion may hang. Incidentally, conceptual differences about the
dimensions of the change visualised by Article 31C read with Article 39(b) and
(c) are bound to exist among judges who, after all, professionally objectify
the social philosophy of the Constitution through the subjective prism of their
1.What is a 'public purpose', set as a
constitutional limitation in Article 31(2), compliance with which conditions
the immunity from attack based on Article 19(1) (f) or inadequacy of recompense
when any person is deprived of his property ?
1. (a) What is the degree of nexus between
the public purpose and the acquisition desiderated by Article, 31(2) ? 1 (b)
Can Cooper (supra) be judicially resurrected, draped differently but with the
same 'compensation' soul, even after the amendment of Article 31 (2) ?
2. What are the pervasive ambience and
progressive amplitude of the 'directive principle' in Article 39(b) and (c) in
the context of nationalisation of public utilities ? 2(a) Can State monopoly by
taking over private property be a modus operandi of distribution of ownership
and control of the material resources of the community to sub serve the common
good, within the framework of Article 39(b) ? 2(b) Are distribution and
nationalisation antithetical of overlapping ? 2(c) What is the connotation of
the expression 'material resourcesí? Can private buses be regarded as material
resources of the community? 669 These and cousin issues are the legal-economic
points canvassed before us and are sure to occupy the centre of the stage when
management and control of growth in effective measure for common weal expand
the frontiers of public law with a view to implement the 'distributive justice'
embodied in Articles 38 and 39 and, by Article 37, made fundamental in the
governance of the country. Dr. Ambedkar, in words significant, said :
"In enacting this part (Part IV) of the
Constitution, the Assembly is giving certain directions to the future
legislature and the future executive to show in what manner they are to
exercise the legislative and executive power they will have. Surely it is not
the intention to introduce in this part these principles as mere pious
declarations. It is the intention of this Assembly that in future both the
legislature and the executive should not merely pay lip-Service to those
principles but that they should be made the basis of all legislative and
executive action that they may be making hereafter in the matter of the
governance of the country." The Directive Principles, being the spiritual
essence of the constitution, must receive sweeping signification, being our
socio-economic Magna Carta, quiddities apart.
They key etc. thought of the Constitution and
the interpretative response.
The role of nationalisation of essential
services for the better life of the people, an item on the country's urgent
developmental agenda, must be gathered before the wide range of the companion
set of constitutional articles can be spanned by the court in interpretative
terms. Codified law is legislatively crystallised politico-economics and so the
search of the jurist has to be wider and deeper and interlaced. Take care of
the basics, the specifics will take care of themselves. So we have to go behind
the legal facade to respond to the rhythm of the pulsating text of the
Constitution which casts heavy developmental responsibilityties on the Welfare
State. Roscoe Pound's remark reflects this thought :
"All he social sciences must be
co-workers, and emphatically all must be co-workers with jurisprudence."
Moreover, sheer legalism cannot lightly upset legislative wisdom or efficiency
while passing on the constitutionality of economic legislation based on
national planning, public finance, private investments, cost accounting, policy
decisions, historical factors and a host of complex. social variables, Dixon
C.J.(1) in a different context observed :
"These matters of incidental powers are
largely questions of degree, but in considering them we must not lose sight of
the fact that once the subject matter is fairly within the province of the
Federal legislature the justice and wisdom of the provisions which it makes in
the exercise of its powers over the subject matter are matters entirely for the
legislature and not for the Judiciary." (1) Burton v. Honan : 1952, 86
C.L.R. 169, 179.
670 This is no argument for abdication of
judicial power; for where legislation is colourable, measures make-believe or
orders mala fide, the judges are the masters of the situation, and this Court,
under Article 141, declares the law in that supreme spirit. But courts must be
circumspect not to rush in where serious reflection will make them fear to
tread nor to resort to adroit circumvention because of economic allergy to a
particular legislative policy.
At this stage, a glance at the raw realities,
to abolish which Article 31(2), Article 31C and Articles 38 and 39 have been
enacted, is necessary. Poverty has, for ages, been the omnipresent reality of Indian
life. Stark inequalities have been chronic and the 'hidden hunger' (to use
Myrdal's phrase) of the people have pushed the Freedom Movement forward in the
socialistic direction toward a better life.
The fasciculus of clauses in the Constitution
we have referred to is calculated to prevent the revolution of rising
expectations from becoming a revolution of rising frustrations. These
compulsions must inform legal interpretation. For, in the words of Seton
Pollock, "The law itself, though of crucial social importance, is only one
element in the total human task. That task is to meet and master those
frustrations that diminish man in this humanity and obstruct the realisation of
his freedom and fulfilment within the human society. Those frustrations stem from
ignorance, poverty, pain, disease and conflicts of interest both within the
person (the field of psychological medicine) and between persons (the territory
of the law).
These manifold and interacting frustrations
cannot be met by any one discipline but only by a coordinated attack upon the
problem through enlightened political and administrative initiatives and by
educational, medical, psychological and legal remedies.
Our concern is with the human condition and
the imperative need to improve it through such resources as we can develop. We
are beginning to see more clearly the need for a unitary view which is, in
essence, spiritual in its character, reaching down to the realities that
underlie our fragmented disciplines.
The burning issue of our times is how our
resources can be developed and combined to achieve the fulfillment of the human
task and the improvement of the human condition." (Preface to 'The English
Legal Aid System' by Seton Pollock Orient Longmans) The Father of Nation long
ago argued for 'the art and science of mobilising the entire physical, economic
and spiritual resources of all the various sections of the people in the
service of the common good of all'. Sir Leslie Scarman developed this new
dimension of law in the English climate when he said :
"I shall endeavour to show that there
are in the contemporary world challenges, social, political and economic, 671
which, if the system cannot meet them, will destroy it. These challenges are
not created by lawyers; they certaintly cannot be suppressed by lawyers; they
have to be met either by discarding or by adjusting the legal system. Which is
to be ?" A panoramic sociological view-not a narrow legal peep-alone can
invest judicial power with capability to help solve the myriad problems of
Mankind and Mother Earth.
We have divagated to drive home the
pertinence and power of poverty to change our social order through law, and the
necessity of the constitutional court to appreciate this fundamental logos
before voiding any 'law'. Ideas of the Old Order on 'public purpose', illusory
compensation, nexus doctrine and 'distributed to sub serve the common good'
should not reduce lofty constitutional considerations into 'hollow concepts,
tea-cup debates and impotent ideas (which) debase modern jurisprudence' and are
'intellectually subversive', to use the indignant expressions of John Batt.
Nietzsche once said : 'The great problems are
in the streets'. Abraham Lincoln warned that 'the dogmas of the quiet past are
no longer adequate to the stormy present.' Our legal doctrines, canons of
interpretation and constitutional attitudes must therefore take not of this
adaptational potential and response to The scheme of the impugned statute
Coming now to the concrete provisions of the Act, tested on the anvil of
Article 31(2) and 39(b) and (c), we have to get a hang of the legislative
project. Its purpose is to acquire contract ages from a,]]. private sources.
The reason for this measure of nationalisation is set out in the 'whereas'
paragraphs. In broad terms, it is.... that private contract carriages are being
operated in the State in a manner highly detrimental and prejudical to the
public interest. it is further claimed that with. a view to prevent such misuse
and also to provide better facilities for the transport of passengers and 'to
give effect to the policy of the State towards securing that the ownership and
control of the material resources of the community are so distributed as best
to sub serve 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,' acquisition of contract carriages is being resorted to. The
requisite declaration contemplated in Article 31C is thus made in the preamble
as well as in Section 2 of the Act. Of course, in the light of the Keshavananda
Bharati Case (supra) there is in this Court a power-and if demanded, a duty-to
examine whether there is real nexus between the legislation and Article 39(b)
and (c) or whether the ritualistic declaration is cutely but colourably
designed to ward off attack from Article 14, 19 and 31, Make-believes cannot
make-do. But if there is a reasonable relation between the two, the Court
cannot constitute itself as a super administrator and suggest that there are
better ways of achieving the object than what the legislature has chosen to
adopt. 'Quo modo' is not for the court.
672 The anatomy of the Act has been set out
in the leading judgment and we adopt it.
Let us now examine the fatal constitutional
vices, embedded in the Act and discovered at the High Court level. One such
lethal feature which appealed to the High Court, and has been repeated before
us by Shri Asoke Sen with insistence, is that there is no public purpose
involved in the acquisition of contract carriages and so the enactment is not
invulnerable under Article 31(2). The statutory purpose was to acquire contract
carriages in private ownership, and transfer them to the State Road Transport
Corporation which was to enjoy the exclusive privilege of running contract
carriages. The expected shower of benefits was elimination of misuse of
contract carriages in private hands and augmentation of public good by plying
these vehicles under prolic ownership and direction. The first question is whether
such taking from a private person and vesting in a public body is not a public
purpose. There are two subissues which are distinct and mu-it be kept distinct
if ideational confusion is not to vitiate our conclusion : (a) Is there a
public purpose ?; and (b) If there is, what are the ways to fulfill that
purpose ? The ends cannot be telescoped into the means. Once this perspicacity
in thinking is present, it is unarguably obvious that the, State Government's
or the State Corporation's purpose is a public 'purpose. Putting aside the
possible distortions, historically proved, of class domination of the, State
apparatus and assuming the values of our constitutional order, the State
symbolizes, represents and acts for the good of society. Its concerns are the
ways of meeting the wants of the community, directly or otherwise. The purpose
of a public body to run a public transport service for the benefit of the
people, operating it in a responsible manner through exercise of public power
which is controlled and controllable by society through its organs like the
legislature and, at times, even the court, is manifestly a public purpose. Does
the purpose sub serve some public use or interest or produce some public good
or utility ? If it does, the purpose becomes public. 'Public' qualifies the
object. Black's Legal Dictionary elucidates the expression :
"The term is synonymous with government
purpose, (State V. Dizon). As employed to denote the objects for which taxes
may be levied, it has no relation to the urgency of the public need or to the
extent of the public benefit which is to follow; the essential requisite being
that a public service or use shall effect the inhabitants as a community, and
not merely as individuals. (Stevenson v.
Port of Portland). A public purpose or public
business has for its objective the promotion o f the public health, safety,
morals, general welfare, security, prosperity, and contentment of all the
inhabitants of residents within a given political division, as, for example,
state, the sovereign powers of which are exercised to promote such public
purpose or public business. (Green v. Frazier)." (underscoring ours) There
may be many processes of satisfying a public purpose.
wide range of choices may exist. The State
may walk into the open market and buy the items, movable and immovable, to fulfill
the public 673 purpose; or it may compulsorily acquire from some private
person's possession and ownership the articles needed to meet the public
purpose; it may requisition, instead of resorting to acquisition; it may take,
on loan or on hire or itself manufacture or produce. All these steps are
various alternative means to meet the public purpose. The State may need chalk
or cheese, pins, pens or planes, boats, buses or buildings, carts, cars, or
eating houses or any other of the innumerable items to run a welfare-oriented
administration or a public corporation or answer a community requirement.
If the purpose is for servicing the public,
as governmental purposes ordinarily are, then everything desiderated for sub
serving such public purpose falls under the broad and expanding rubric. The
nexus between the taking of property and the public purpose springs necessarily
into existence if the former is capable of answering the latter. On the other
hand, if the purpose is a private or non-public one, the mere fact that the
hand that acquires or requires is Government or a public corporation, does not
make the purpose automatically a public purpose. Let us illustrate.
If a fleet of cars is desired for conveyance
of public officers, the purpose is a public one. If the same fleet of cars is
sought for fulfilling the tourist. appetite of friends and relations of the
same public officers, it is a private purpose. If bread is 'seized' for feeding
a starving section of the community, it is a public purpose that is met but, if
the same bread is desired for the private dinner of a political maharajah who
may pro tem fill a public office, it is a private purpose. Of course, the thing
taken must be capable of 'serving the object of the taking. If you want to run
bus transport you cannot take buffaloes.
A public purpose is vastly wider than public
necessity, even as a mere purpose is more pervasive than an urgency. That which
one sets before him to accomplish; and end, intention or aim, object, plan,
project-is purpose (Black's Legal Dictionary). A need or necessity is
compulsive, urgent, unavoidable. In purpose, there is dires; in necessity,
there is imperative demand. 'The presumption is that a use is public, if the
legislature has declared it to be such, and the decision of the legislature
must be treated with the consideration due to a co-ordinate department of the
government of the state'. It-, effect is not conclusive but considerable'
'Public purpose' should be liberally construed, not whittled down by logo machy.
The concept of 'public purpose' has been
considered in some academic writings and judicial rulings and a glance at them
may give theoretical nourishment to juridical ideas. We have to remember that
neither socialist jurisprudence nor capitalist legal culture can govern the
concept of public purpose in India's mixed economy and expanding public sector,
in the context of progressive developmental programmes. Even the Privy Council,
way back in 1914, in Framjee Patit 42 I.A. 44 approved of the wide definition
of 'public purpose.' This court has also taken a liberal view of 'Public
purpose'. In a host of cases beginning with Kameshwar AIR (1952 SC 889).
Agrarian reform, slum clearance to house the homeless, procuring a house for a
diplomat (Bombay v. Ali Gulshan : AIR 1955 SC 810) or an office for the State
Trading Corporation, acquisition of land to construct a dharmashala, houses for
members of a cooperative society housing scheme, 674 houses for workmen or for
a Mahatma Gandhi Memorial, as pointed out by an Indian Jurist (Rajeev Dhavan,
in his study of 'The, Supreme Court of India' (Tripathi) have been regarded in
decided cases as public purposes.' Conceptually, it has a home-spun texture
altho' that public transport is a public purpose is self-evidence anywhere. The
dynamics of development must inform interpretation in this area.
There is a touch of swadeshi about a
country's jurisprudence and so our legal notions must bear the stamp of Indian
Developmental amplitude linked to constitutional goals.
Counsel for the appellant, from his angle,
produced before us the Industrial Policy Resolution of the Government of India
of April 6, 1948 and April 30, 1956 wherein considerable importance was
attached to the national economy securing a continuous increase in production
and equitable distribution. This 1948 Resolution itself pointed out that the
State must play an increasingly active role in the development of industries.
Many other items were included for a progressive participation by the State by
the time the 1956 Resolution was made. This fresh statement of Industrial
policy took note of the constitutional preamble which, inter alia aimed at
securing justice-social, economic and political. Articles 38 and 39 were also
adverted to so that a precise direction might be given to the socialist pattern
of society as the objective of social and economic policy. In particular, it
was explicitly stated that 'the State will progressively assume the predominant
and direct responsibility from setting up new industrial undertakings and for
developing 'transport facilities'. Indeed, the State was to become the agency
for planned national development and the socialistic pattern of society as the
national objective required that all industries, of basic and strategic
importance, or in the nature of public utility services should be in the public
sector'. 'There was a division and distribution, in a broad manner, of
industries and utilities between the private and the public sector.
Stress was laid on the need to improve the
living and working conditions of workers a,., well as their efficiency and a
schedule in which road transport figures (Schedule B) was appended setting out
those categories which would be progressively State-owned and in which the
State would therefore generally take the initiative in establishing new
When we ascertain the content of 'public
purpose, we have to bear the above factors in mind which mean that acquisition
of road transport Indeed, even in England, 'public purposes' have been defined
to mean such 'purposes'of the administration of the government of the country
(p. 228, Words & Phrases Legally defined, II Edn.). Theoretically, or even
otherwise, there is no warrant for linking up public purpose with State
necessity, or in the court throwing off the State's declaration of public
purposes to make an economic research on its own. it is indeed significant that
in Section 40(b) of the Land Acquisition Act, 1894, the concept of 'public use'
took in acquisition for the construction of some work even for the benefit of a
company, provided such work as likely to prove useful to the public.
Even the American Constitution, in the Vth
Amendment, uses the expression 'Public use and it has been held in India in
Kameshwar that 'public purpose' is 675 wider than 'public use'. Mahajan J. (as
he then was) observed ill that case :
"The phrase 'public purpose' has to be
construed according to 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." (p. 942) In the 'same judgment, the learned judge
went on to state :
"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 he acquisition contemplated by the impugned statute." (P. 941) We
have no doubt that this wider approach necessarily means that a comprehensive
signification has to be, given to the expression 'public purpose'.
It is true that Cooley and Willoughby and
Willis and other American writings and rulings and theories like 'eminent
domain and 'police powers' have been eruditely referred to in the early days of
this Court. However useful they may be in helping to understand the scope of
'public purpose, we have to be guided by the Directive Principles of State
Policy while decoding the cryptic expression "public purpose'. Even in
Kameshwar the Court referred to Article 39 and the preamble to the Constitution
and the obligation to secure its citizens justice Social, economic and
political. The reference, here and there, in the separate judgments delivered
in that case to the 'necessities of the State' cannot cut back upon the ambit
of the concept.
It is significant that Das J. (as he then
was) has in Kameshwar observed:
"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 Constitut ion." The learned Judge explains
that the notion of 'public use' is-rapidly changing in America, for in the
modern view, 'public use' means 'useful to the public.' It is right to
remember, what has been mentioned in Shri Justice Das' judgment, that modern
conditions and the increasing inter-dependence of the different human factors
in the progressive complexity of the community make it necessary for the
government to touch upon and limit individual activities at more points than
formerly. In Corpus Juris the meaning of the term is stated to be flexible and
varying with time and circumstances. All that can be said is that it embraces
public utility, public advantage public interest or object.
676 "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.... The words 'public purpose' used
in Article 23(2) indicate that the Constitution used those words in a very
large sense. In the never ending 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 Sate has to give effect to this avowed
purpose of our Constitution, we must regard as '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." This new outlook, in the words of Das J. brings in economic justice
regarded yesterday as a fantastic formula, but is today a directive principle
of State policy.
To conclude this branch of the discussion,
there 'is no validity in Shri Sen's contention that because the Road Transport
Corporation, Act, 1950, speaks of business principles as guiding State
Transport Services, therefore taking over of private buses is not a public
purpose. Nor is there any force in reading compulsive need or State necessity
of some imperative urgency as a component of the concept of public purpose.
Speaking for ourselves, nothing that has been stated in the judgment of the
High Court discussing the doctrine of 'eminent domain', and allied matters,
or/in the submissions of Shri Sen conjuring up..,I grim picture of government
acquiring even paper, pencil, ink. furniture. spares and tyres and cars and
buses merely because they do not want to pay market price even when these items
are abundantly available, does not defect us from the conclusion that a
Government which seeks to serve the community is entitled even for its
commercial purposes to invoke its power of compulsory purchase, even when not
driven by necessitous circumstances. We cannot confuse between abuse of public
power and limitation of public purpose.
The nexus between 'public purpose' and Part
IV is also relevant. Sir Alladi Krishnaswami Ayyar in his speech in the
Constituent Assembly said : 'No Government responsible to the people can afford
lightheartedly to ignore the provisions in Part IV of the Constitution. As
early as A. K. Gopalan (1950 SC 27), Chief Justice Kania state, with reference
to Directive Principles, that 'it represents not the temporary will of a
majority in the Legislature but the deliberate wisdom of the nation'. Shri
Justice Mathew explained this idea at the Second Kerala State Lawyers'
Conference thus :
". . . State is not an end in itself,
but only an instrumentality, to be evaluated in terms of its contribution to
the welfare of the political community. The concept of the laissez faire of the
nineteenth century arose from a philosophy that general welfare is best
promoted when the intervention of the State in economic and social matters is
kept to the lowest possible minimum. The rise of the welfare State proceeds
from the political philosophy that the greater economic 677 and social good of
the greater number requires greater intervention of the Government and the
adoption of public measures aimed at general economic betterment. Today, people
cry for intervention of Government when anything goes wrong in any front. They
demand interjection of Government in every aspect and sphere of life."
Will 'public purpose' run riot ? The consternation that if anything can be
acquired compulsorily for a public purpose everything will be so acquired is
understandable only if we readily grant that the Legislature and the Cabinet
are the veils and vestments worn by a callous body irresponsible to the people
and irresponsive to justice. There is a general presumption in favour of honest
and reasonable exercise of power (State of West Bengal v. Anwar Ali Sarcar,
1952 SCR, 284, 301, per Patanjali Sastry J.). of course not that gross abuse of
power and demoniac departure from legal norms are unknown;
even so we should have faith in Parliament
which, ultimately, is responsible to the people who cannot be ignored by it for
all time without imperilling it own existence. Repelling the argument of likely
abuse of power, Das J. observed (1954, SCR 587) :
"What is abnormal if our Constitution
has trusted the legislature, as the people of Great Britain have trusted their
Parliament ? Right to life and personal liberty and the right to private
property still exist in Great Britain in spite of the supremacy of Parliament.
Why should we assume or apprehend that our Parliament or State legislatures
should act Eke mad men and deprive us of our property without any rhyme or
reason ? After all our executive government is responsible to the legislature
and the legislature is answerable to the people. Even if the legislature
indulges in occasional vagaries, we have to put up with it for the time being.
That is the price we must pay for democracy.
But the apprehension of such vagaries can be
no justification for stretching the language of the Constitution to bring it
into line with our notion of what an ideal Constitution should be. To do so is
not to interpret the Constitution but to make a new Constitution by unmaking
the one which the people of India have given to themselves. That I apprehend,
is not the function of the Court. If the Constitution, properly construed
according to the cardinal rules of interpretation, appears to some to disclose
any defect or lacuna the appeal must be to the authority competent to amend the
Constitution and not to the court." (1954 SCR 587; 654; Subodh Gopal Bose)
To take Sri Sen's illustration, if a law authorises--or government does-resort
to compulsory acquisition of all its requirements of stationary or routine
needs of public sector undertakings, with a view to pay nominal sum and get
away with it, that Legislature or Government will, without the Court's
services, go the way world history 678 has blown away gross misrule. The court
is not the only sanctuary in a democracy against caprise dressed in 'little brief
authority. If the act becomes so shockingly iniquitious to violate the law of
life, the Court will have enough reserve power under the Constitution to speak
for law and to save the government from itself. These extreme lurid, recondite
picturisations cannot be transformed into probabilities and realities,
especially in a case where we find little to complain in fairness of procedure
or delivery of the end product. Of course, in a 'radical change' situation,
certain classes, invoking varnishing values, may cry 'wolf' and in any welfare
legislation stray injustice is unavoidable. Perfection is God's property, to
aim at its is human progress. We find no legal flaw in the measure under
We think it is a fallacy to deny the presence
of public purpose merely because its 'satisfaction by readily available private
purchase is possible in the circumstances.
It is for the State to decide whether it
should pay market price and buy or resort to Article 31 (2) and pay an amount
which may be administratively feasible but less than the market price. It may
take on hire and not buy at all, it may requisition without paying full
compensation. These are the means which cannot be confounded with the ends and
it is egregious error to roll up the two together. The entire object of Article
31(2) is defeated if such a constricted construction or cramped meaning were to
be given to the provision. It is a social welfare handicap, a jurisprudenttial
error and a truncation of the State's constitutional power to rule that it
shall not 'seize' private property within Article 31 (2) unless it proves
beyond reasonable doubt a scarcity situation, a public necessity and
unavailability in the open market and the like. Yet this is the ` reasoning'
which has had a fascination for the High Court. The specious submission is
tersely put by the High Court thus :
"It was argued that for compulsory
taking over of the vehicles with permits and other effects of the contract
carriage operators, there was no necessity or need or, in other words, there
was no nexus between the public purpose and the taking over of the particular
property." (ILR 1976 Karnataka 11478, 1512) The accent was on need or
necessity. The Court felt the pell of this ratiocination and erroneously argued
itself into convincing conclusiveness:
"State necessity or need for taking the
particular property of a citizen is the very foundation for the exertion of the
power of Eminent Domain. If there is no State necessity or need for the
particular property, then, in my opinion, the power of Eminent Domain cannot be
exerted. Let me assume that the law provides for paying just compensation for
taking the property of a citizen but there is no state necessity for taking
over that property. In such an event. the property cannot be taken in an
exercise of the power of Eminent Domain. The ambit of legislative power
conferred by 679 Entry 42 of List 11 of the Seventh Schedule, Acquisition or
requisitioning of property', in my opinion, cannot comprehend the. taking of
private property by the state even on payment of just compensation if there is
no state necessity. If there is no nexus between the taking over or private
property and State necessity such a power cannot be exerted. I am of opinion
that even if Article 31 is deleted from Part III of the Constitution, the State
cannot acquire property of a citizen or make a law for acquisition of private
property if the taking over has no relation to State necessity. Such a
legislation will be ultra vires of the powers of the State Legislature."
material in the Act itself to show that the Legislature was conscious of the
fact that the acquisition under section 4 is not for a public
purpose.................. When the purpose of the acquisition is 'deemed' to be
a public purpose, the only meaning possible is that whereas the purpose of the
acquisition is not in reality a public purpose,, the State Legislature requires
the purpose to be treated as if it were a public purpose. It is rather an
admission on the part of the Legislature that the purpose of the acquisition is
not a public purpose." (pp. 1515-16) If this were good law and logic, the
States' operations might shrink into midget size with large spaces for laissez
faire economics. The flaw and fallacy of the law and the fetter on the State in
this constitutional interpretation goes far beyond this Act and to mortality.
We have no hesitation in visualising a wider horizon of public purpose as
outlined by us earlier and consequentially to overrule the view of the High
Court. The people in our welfare State await State undertakings in a wealth of
ways most of which involve compulsory talking of private property and this
futurism argues for a wider connotation of public purpose.
The aware court must remember the hint of
Francis Bacon that 'it is a hard thing to torture the laws so that they torture
men-poor men hopefully looking forward for benignant State action. After all,
ordinarily, the legislature will acquire compulsorily only if it considers it a
proper measure to promote public good.
Compensation vis a vis the 25th Amendment The
constitutional salvoes of Shri Sen were fired on the target of illusory
compensation granted according to him, by the impugned Act. The amendment and
recasting of Article 31(2) would stand stiutified if the High Court were right
that payment which is less than the dealer's price inclusive of sales-tax or
does not make good the loans of the operators or spreads payments over long
years awarding only 6% interest, is illusory and unconstitutional.
We are not dealing with the details of the
arithmetic arranged by the statute for payment of the amounts to persons
interested in the acquired properties since it is fairly clear, as explained by
Shri Lal Narain Sinha, that the Act awards, through the arbitrator, an amount
which is just and reasonable for those who suffer deprivation of their 680
property. Even so, the law bearing on Article 31(2), particularly in view of
the exceptionable construction adopted by the High Court, needs to be clarified
unambiguously and declared decisively. Indeed, if the High Court were right in
its holding on, this branch, 27 years of decisions and amendments and decisions
and amendments have taken us back to square one Full compensation with a formal
difference. The Court will not question the 'adequacy' directly, but
'interpret' the amended articles into the same desideratum. In this condition
of the law, we deem it proper to dive to the beginning briefly.
Right from the start the framers of the
Constitution have been clear in their minds, as the, debates, drafts, reports
and resolutions show that the amount payable when private property is taken by
the State is a matter of legislative policy and not of judicial fixation.
Speaking with a sense of history, the Father of the Nation used prophetic
words, as far back as the time of the Round Table Conference, while dealing
with the issue of compensation :
"If the national government comes to the
conclusion that the step is necessary no matter what interests are concerned,
they will be dispossessed and they will be dispossessed.
I might tell you, without any compensation
because if you want this Government to pay compensation, it will have to rob
Peter to pay Paul, and that would be impossible." He reminded the British
masters again "I have in mind many things I would have to do in order to
equalise conditions. I am afraid that for years together India would be engaged
in passing legislation in order to raise the downtrodden, the fallen, from the,
mire into which they have been sunk by the capitalists, by the land-lords, by
the so-called higher classes and then, subsequently and scientifically by the
British rulers." "If we are to lift these people from the mire then
it would be the bounden duty of the National Government of India in order to
set its house in order, continually to give preferences to these people and
even tree them from the burden under which they are being crushed.
And if the landlords, zamindars, monied-men
and those who are today enjoying privileges-I do not care whether they are European
or Indian-if they find that they are discriminated against, I shall sympathise
with them, but I will not be able to help them. It will therefore be a battle
between the haves and the have-nots." Speaking as one of the foremost
jurists of the country and with a sense of far-sightedness, Alladi Krishnaswami
Iyer, in the Constituent Assembly, argued for legislative autonomy, without
forensic intervention in the matter of fixation of compensation and the
principles in 681 that behalf. He rightly stressed that by their very nature
the principles of compensation could not be the same in every species of
"Law, according to me, if it is to fulfill
its larger purpose, must serve as an instrument of social progress. It must
reflect the progressive social tendencies of the age. Our ancients never
regarded the institution of property as an end in itself. Property exists for
dharma, dharma and the, duty which the individual owes to the society from the
whole basis of social framework. Dharma is the law of social well-being and
varies from yuga to yuga. Capitalism as it is practised in the West came in the
wake of the Industrial Revolution and is alien to the root idea of our
civilisation. The sole end of the property is yagna and to serve a social purpose."
(Quoted from Fundamental Rights & SocioEconomic Justice-by K. P. Krishna
Shetty-pp. 127-128) Shri Jawaharlal Nehru, speaking in the Constituent Assembly
with reference to determination and payment of compensation emphasized that it
was left to Parliament to determine the various aspects thereof and "there
is no reference in this to any judiciary coming into the picture. Much thought
has been given to it and there has been much debate as to where the judiciary
comes in. Eminent lawyers have told us that on a proper construction of this
clause, normally speaking, the judiciary should not and does not come in.
Parliament fixes either the compensation its--If or the principles governing
that compensation and they should not be challenged except for one reason where
it is thought that there has been a gross abuse of the law, where in fact there
has been a fraud on the Constitution. Naturally the judiciary comes in to see
if there has been a fraud on the Constitution or not. But normally speaking,
one presumes that any parliament representing the entire community of the
nation will certainly not commit a fraud on its own Constitution and will be
very much concerned with doing justice to the individual as well as the
(P. 123, Krishna Shetty, supra) When
complications arose on account of judicial interpretation of Article 31 not
being in accord with what the framers of the Constitution fancied, amendments
to the Constitution came in. Shri Jawaharlal Nehru, speaking on the 4th
Amendment, which has since been upheld by this Court, said in Parliament :
"If we are aiming, as I hope we are
aiming and we repeatedly say we are aiming, at changes in the social structure,
then inevitably we cannot think in terms of giving what is called full
compensation. Why? Well, firstly because 682 you cannot do it, secondly because
it would be improper to do it, unjust to do it, and it should not be done even
if you can do it for the simple reason that in all these social matters, laws
etc., they are aiming to bring about a certain structure of society different
from what it is at present. In that different structure, among other things
that will change is this, the big difference between the haves and the have-nots.
Now, if we are giving full compensation, the have's remain the haves and the have-nots,
have-not's. It does not change in shape or form if compensation takes place.
Therefore, in any scheme of social engineering, if I may say so, you cannot
give full compensation, apart from the patient fact that you are not in a
position-nobody has the resources--to give it." The divergence of thinking
between those who framed the Constitution and amended it and the summit
judiciary showed up glaringly in Cooper's case and then came the Constitution
25th Amendment Bill devoted primarily to overcome the effect of Cooper. While
moving, the Constitution 25th Amendment Bill which brought in Article 31C, the
then Law Minister emphasized :
"Critics of the present measure seek to
invest property rights with an aura of sacrosanctity by regarding it as a
primordial institution of the law of nature. It is this approach which led the
Supreme Court in the Bank Nationalisation case to seek help from the now
archaic and long-past dead theories of Blackstone who regarded property as a
natural right. Such a view is not only out of tune with the juristic approach
to the institution of private property in modern jurisprudence, but it is not
in tune even with the native genius of ancient and traditional juristic thought
in India. The individual's right to private property must yield second place to
the supervening-right of society to acquire the property for a public purpose.
That is the eminent and dominant basis of the amendment which the House is
called upon to consider today." The Law Commission also had, in its 46th
Report, supported Article 31-C in the sense that Cooper's case was not in
keeping with what they regarded as the intendment of the Constitution :
"Nehru described this position in his
characteristically lucid words by observing :
"The service of India means the service
of the millions who suffer. It means the ending of poverty and ignorance and
disease and inequality of opportunity. The ambition of the greatest man of our
generation has been to wipe every tear from every eye. That may be beyond us,
but as long as there are tears and suffering, so long our work will not be
over." 683 The view of the Commission has a bearing on our understanding
of the provision and were referred to in the parliamentary debates and so we
excerpts portions thereof. Wrote the Commission :
"Reverting then, to clause 2 of the
Bill, it would be noticed that sub-clause (a) of this clause deletes the word
'compensation' and introduces in its place the word 'amount' in order to avoid
any controversy about the adequacy of the amount which Parliament may direct to
be paid in the manner specified by the clause, where property belonging to a
citizen is compulsorily acquired or requisitioned. It also provides, as did
Article 31(2) in the un-amended form, that a law passed by virtue of the powers
conferred by Article 31(2) shall not be called in question in any Court on the
ground that the amount so fixed or determined is not adequate;
and it adds that the said law cannot also be
challenged on the ground that the whole or any part of such amount is to be
given otherwise than in cash.
Sub-clause (b) of clause, 2 of the Bill
inserts clause (2B) after clause (2A) in the existing Article, and it lays down
that nothing in sub-clause (f) of clause (1) of Article 19 shall effect any
such law as is referred to in clause (2). In other words, an additional
safeguard has been provided by clause (2B) which is sought to be introduced by
the Bill to prevent any attack against the law passed under Article 31 (2) on
the ground that any of its provisions contravene the fundamental rights
guaranteed by Article 19(1) (F)." Specific mention is made of the Bank
Nationalisation Case and its poignant pertinence consists in the High Court
still clinging to Cooper:
On a careful reading of the several opinions
of the learned Judges in Keshavananda Bharati's case, I am of the clear opinion
that the law laid down in Cooper's case holds good." (ILR 1976 Kar. 1478,
1522) The Commission remarks "Every student of Constitutional Law knows
that Parliament thought that it was necessary to make these provisions because
of the recent decision of the Supreme Court in Rustom Covasjee Cooper &
Another v. Union of India.
Parliament presumably thought, and we think
rightly, that the effect of this majority decision of the Supreme Court was in
substance, to make compensation provided for by the impugned legislation
justiciable and subject it to the test of reasonableness under article 19(5);
and, to that extent the said decision is inconsistent with the view taken by
the -7-951SCI/77 684 Supreme Court in State of Gujarat v. Shantilal Mangaldass
& others. Indeed, ever since. the Supreme Court had generally interpreted
clause (2) of Article 31 to mean that the adequacy of compensation directed to
be paid by laws passed under the said clause was not justiciable as we have
explained earlier, except in cases where it reasonably appeared to the Court
that the compensation was illusory or that the whole legislative exercise was a
fraud on the Constitution. But, in Cooper's case, the majority view appeared to
strike a somewhat different note; and that, according to Parliament, made it
necessary to introduce the amended clause (2) in Article 31. We think that, in
the circumstances to which we have just referred, Parliament is justified in
introducing the amendment in question." A seminal aspect of the changes
wrought by the 25th Constitution Amendment Act is the immunization of 'Article
39 enactments' from the viral attack of certain fundamental rights (the attackers
were almost never the poor). The Commission commented :
"By introducing this clause (31-C),
Parliament is taking the first major and significant step towards implementing
two of the Directive Principles enshrined in clause (b) and (c) of Article 39
in Part IV of the Constitution, and , in that sense, the clause under
consideration can be appropriately described as historic. After it is adopted,
Parliament will have heralded a new era in the pursuit of the goal placed
before the nation by the Constitution to establish social and economic justice
in this country. The Commission is in full agreement with this object of the
In the two decades after the Constitution was
passed, the inter-relation between the Directive Principles and Fundamental
Rights have been often considered by the Supreme Court. The Directive
Principles enshrined in Part IV are, in terms, declared to be non justiciable
and yet, Article 37, which makes this declaration, emphatically adds that the
said principles are nevertheless fundamental in the governance of the country
and it ordains that it shall be the duty of the State to apply these principles
in making laws." 'In the Directive Principles, however, one finds an even
clearer statement of the social revolution. They aim at making the Indian
masses free in the positive sense, free from the passivity engendered by centuries
of coercion by society and by nature, free from the abject physical conditions
that had prevented them from fulfilling their best selves." The High Court
has referred to Cooper's case the ratio of which to put it tersely-goes to the
extent of saying that if any of the relevant consideration in ascertaining the
market value were not included. It ceased to be 'compensation' within the
meaning of Article 685 31.Then came the scenario--the 25th Amendment deleting
the expression 'compensation' and substituting the neutral word 'amount' and
restructuring the Article effectively to exclude judicial examination even of
the principles of evaluation, the, challenge. to the constitutionality of that
constitutional amendment and the elaborate Bharati ruling upholding, by a
majority, the vires of the Amending Act.
And yet, the I-High Court has, after
selectively culling out passages from the bunch of opinions in Bharati come
full circle to Cooper again. This about-turn is untenable in our view and it is
necessary to run rapidly but in a short compass through the multiple views
expressed by the many judges who heard and pronounced.
Bharati-the majority opinion-blinds us. What,
on the question of payment for taking was the preponderant view ? Sikri C.J.
permitted a narrow area for judicial inspection and readily accepted that full
compensation was not a fundamental right. The Court could satisfy itself only
about the amount not being a monstrous or unprincipled under-value. Cooper was
dead by this test. The learned Chief, Justice said " . . What meaning is
to be given to the expression 'the amount so fixed'. The amount has to be fixed
by law but the amount so fixed by law must also be fixed in accordance with
some principles because it could not have been intended that if the amount is
fixed by law, the legislature would fix the amount arbitrarily. It could not,
for example, fix the amount by a letter.
If I were to interpret Article 31 (2) as
meaning that even an arbitrary or illusory or a grossly low amount could be
given, which would shock not only the judicial conscience but the conscience of
every reasonable human being, a serious question would arise whether Parliament
has not exceeded its amending power under Article 368 of the Constitution. The
substance of the fundamental right ,to property, under Article 31, consists of
three things : one, the property shall be acquired by or under a valid law;
second, it shall be acquired only for a public purpose; and thirdly, the person
whose property has been acquired shall be given an amount in lieu thereof,
which, as I have already said, is not arbitrary, illusory or shocking to the
judicial "conscience or the conscience of mankind." (196-197 pp) The
payment may be substantially less than the market value, the principles may not
be all-inclusive, but the court would not, because it could not, upset the
taking save where the principles of computation were too arbitrary and illusory
to be unconscionably shocking.
Shri Justice Shelat, with the concurrence of
Shri Justice Grover, put his viewpoint thus "It is significant that the
amount can be determined in accordance with specified principles, if it is not
fixed 'by the 686 law itself. Moreover, its adequacy cannot be questioned in a
court. The use of the word 'principles' and the question ,of inadequacy can
only arise if the amount has some norm.
If it has no horm no question of specifying
any principles arises nor can there be any occasion for the determination of
its adequacy. The very fact that the court is debarred from going into the
question of adequacy shows that the amount' can he adequate or inadequate. Even
if it is inadequate, the fixation or determination of the amount is immune from
any challenge. It postulates the existence of some standard or norm without
which any enquiry into adequacy becomes wholly unnecessary and
irrelevant." (p . 283) (emphasis, added).
"It is true that the 'amount' to be paid
to an owner may not be the market value. The price of the property might have
increased owning to various factors to which no contribution has been made by
the owner. The element of social Justice may have to be taken into
consideration.......... The Court will certainly give due weight to legislative
judgment. But the norm or the principles of fixing or determining the 'amount'
will have to be disclosed to the Court. It will have to be satisfied that the
'amount' has reasonable relationship with the value of the property acquired or
requisitioned and one or more of the relevant principles have been applied and
further that the 'amount' is neither illusory nor it has been fixed
arbitrarily, nor at such a figure that it nor Virtual deprivation of the right
under Article 31(2), The question of adequacy or inadequacy, however, cannot be
gone into" (pp. 284-85) (emphasis; added).
Hegde J. discussed the question from
lexicographic, political and social angles and held:
"The market value of a property is the
result of an interaction of various forces. It may not have, any reasonable
relationship with the investment made by its successive owners. The price of
the property acquired might have shot up because of various contributions made
by the society such as improvements effected by the State in the locality in
question or the conversion of a rural area into an urban area.
It is undoubtedly open to the State to
appropriate to itself that part of the market value of a property which is not
the result of any contribution made by its owners. There may be several other
relevant grounds for fixing a particular 'amount' in a given case or for
adopting one or more of the relevant principles for the determination of the
price to be paid. In all these matters the legislative judgment is entitled to
great weight. It will be for the aggrieved party to clearly satisfy the Court
that the basis adopted by the legislature has no 687 reasonable relationship to
the value of the property acquired or that the 'amount' to be paid has been
arbitrarily fixed or that the same is an illusory return for the property
taken. So long as the basis adopted for computing the value of the property is
relevant to the acquisition in question or the amount fixed can be justified on
any such basis, it is no more open to the court to consider whether the amount
fixed or to be determined is adequate. But it is still open to the court to
consider whether 'amount' in question has been arbitrarily determined or
whether the same is an illusory return for the property taken. It is also open
to the court to consider whether the principles laid down for the determination
of the amount are irrelevant for the acquisition or requisition in question. To
put it differently, the judicial review under the amended Article 31(2) lies within
narrow limits. The court cannot go into the question whether what is paid or is
payable is compensation. It can only go into the question whether the 'amount'
in question was arbitrarily fixed as illusory or whether the principles laid
down for the purpose of determining the 'amount' payable have reasonable
relationship with the value of the property acquired or requisitioned."
Even here we may excerpt Hegde J's highlight
of Part IV "Part IV of the Constitution is designed to bring about the
social and economic revolution that remained to be fulfilled after
independence. The aim of the Constitution is not to guarantee certain liberties
to only a few of the citizens but for all. The Constitution visualizes our
society as a whole and contemplates that every member of the society should
participate in the freedoms guaranteed. To ignore Part IV is to ignore the
substance provided for in the Constitution, the hopes held out to the Nation
and the very ideals on which our Constitution is built. Without faithfully
implementing the Directive Principles, it is not possible to achieve the
Welfare State contemplated by the Constitution. A society like ours stepped in
poverty and ignorance satisfying the minimum economic needs of every citizen of
this country. Any Government which fails to fulfill the pledge taken under the
Constitution cannot be said to have been faithful to the Constitution and to
its commitments." (343344).
Reddy J. in short paragraph disposed of the
question "Once the Court is satisfied that the challenge, on the ground
that the amount or the manner of its payment is neither arbitrary or illusory
or where the principles upon which it is fixed are found to bear reasonable
relationship to the value of the property acquired, the Court cannot go into
the question of the-adequacy of the amount so fixed or determined on the basis
of such principles." (p. 555).
688 our learned brother Chandrachud J.
explained his stand effectively thus :
"The specific obligation to pay an
'amount' and in the alternative the use of the word 'principles' for
determination of that amount must mean that the amount fixed or determined to
be paid cannot be illusory. If the right to property still finds a place in the
Constitution, you cannot mock at the man and ridicule his right. You cannot
tell him :
I will take your fortune for a farthing
:." (p. 992-993).
"As at present advised, I am inclined to
the view which as I have said is unnecessary to discuss fully, that though it
is not open to the court to question a law under Article 31(2) on the ground
that the amount fixed or determined is not adequate, Courts would have the
power to question such a law if the amount fixed there under is illusory; if
the principles, it any are stated, for determining the amount are wholly
irrelevant for fixation of the amount, if the power of compulsory acquisition
or requisition is exercised for a collateral purpose; if the law offends
constitutional safeguards other than the one contained in Article 19(1)(f); or,
if the law is in the nature of a fraud on the Constitution. I would only like
to add, by way of explanation, that if the fixation of an amount is shown to
depend upon principles bearing on social good it may not be possible to say
that the principles are irrelevant." (p. 993) (emphasis added) It is
regrettable that two significant points made by brother Chandrachud J. have
slipped out of the scrutiny of the High Court and we have emphasized them for
identification. Are the principles wholly irrelevant? Do the principles bear on
social good ? In the present case, few will agree that the principles are
wholly irrelevant or not geared to social good.
The majority view in Bharati was set out by
the Court and there it was stated: Section 2(a) and (b) of the Constitution
(25th Amendment) Act, 1971 is valid. Glosses apart, the provision excluding the
court's power to investigate either the adequacy of the amount or the propriety
of the principles to determine the amount was upheld. It follows that
individual annotations notwithstanding the Court has set its seal of validity
on Article 31(2). Nothing covered by it can now be available for examination
using passages in separate opinions. The result is the quantum of the amount or
the reasonableness of the principles are out of bounds for the Court. Article
31C has also been upheld subject to the rider that there should be nexus
between Article 39(b) and (c) and the object of the acquisition. Our learned
brother, Chandrachud J., has struck a middle note and pointed out that where the
inputs of valuation prescribed by the statute are wholly irrelevant or
unconnected with Social good, thin, Article 3 1 (2) may not retrieve the
statute. It is a far cry from this observation to the position that the 25th
Constitution Amendment leaves untouched the ratio in Cooper. We have pointed
out how the said constitutional amendment was ex689 pressly undertaken, inter
alia, to undo the effect of Cooper and to forbid forensic diagnostics into the
question of compensation. In this light it is difficult to uphold the view of
the High Court that Cooper survives after death and keeps virtually alive the
obligation for payment of market value inclusive of the usurious rates of
interest at which the owner borrowed to buy the property seized by the state.
This takes us to the non-negotiable minimum
of nexus between the purpose of the acquisition and Article 39(b). Article
39(c) was feebly mentioned but Article 39(b) was forcefully pressed by the
appellant. Better read Article 39(b) before discussing its full import :
" 39(b) Certain principles of policy to
be followed by the State.--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 sub serve the common good."
The key word is 'distribute' and the genius of the article, if we, may say so,
cannot but be given fully play as it fulfills the basic purpose of
restructuring the economic order. Each word in the article has a strategic role
and the whole article is a social mission. 'It embraces the entire material
resources of the community. Its task is to distribute such resources. Its goal
is so to undertake distribution as best to sub serve the common good. It reorganizes
by such distribution the ownership and control.
'Resources' is a sweeping expression and
covers not only cash resources but even ability to borrow (credit resources).
Its meaning given in Black's Legal Dictionary is:
"Money or any property that can be
converted into supplied: means of raising money or supplies; capabilities of
raising wealth or to supply necessary wants; available means or capability of
any kind." And material resources of the community in the context of
reordering the national economy embraces all the national wealth, not merely
natural resources, all the private and public sources of meeting material
needs, not merely public possessions. Everything of value or use in the
material world is material resource and the individual being a member of the
community his resources are part of those of the community. To exclude
ownership of private resources from the coils of Article 39(b) is to cipherise
its very I purpose of redistribution the socialist way. 'A directive to the
State with a deliberate design to dismantle feudal and capitalist citadels of
property must be interpreted in that spirit and hostility to such a purpose
alone can be hospitable to the meaning which excludes private means of
production or goods produced from the instruments of production. Sri A. K. Sen
agrees that private means of production are included in 'material resources of
the community' but by some baffling logic excludes things produced. If a car
factory is a material resource, why not cars manufactured ? 'Material' may
cover everything worldly and 'resources', according to Random House Dictionary,
takes in 'the collective wealth of a country 690 or its means of producing
wealth : money or any property that can be converted into money; assets.' No
further argument is needed to conclude that Article 39(b) is ample enough to
rope in buses. the motor vehicles are part of the material resources of the
The next question is whether nationalisation
can have nexus with distribution. Should we assign a narrow or spacious sense
to this concept ? Doubtless, the latter, for reasons so apparent and eloquent.
To 'distribute', even in its simple dictionary meaning, is to 'allot, to divide
into classes or into groups;' and 'distribution embraces 'arrangement,
classification, placement, disposition, apportionment, the way in which items,
a quantity, or the like, is divided or apportioned; the system of dispersing
goods throughout a community' (See Random House Dictionary).
To classify and allocate certain industries
or services or utilities or articles between the private and the public sectors
of the national economy is to distribute those resources. Socially conscious.
economists will find little difficulty in treating nationalisation of transport
as a distributive process for the good of the community. You cannot condemn the
concept of nationalisation in our Plan on the score that Article 39(b) does not
envelope it. It is a matter of public policy left to legislative wisdom whether
a particular scheme of take-over should be undertaken.
Two conclusions strike us as quintessential.
Part, IV, especially Article 39(b) and (c), is a futuristic mandate to the
state with a message of transformation of the economic and social order.
Firstly, such change calls for collaborative effort from all the legal institutions.
of the system : the legislature, the judiciary and the administrative
machinery. Secondly and consequentially, loyalty to the high purpose of the
Constitution, viz., social and economic justice in the context of material want
and utter inequalities on a massive scale, compels the court to ascribe
expansive meaning to the, pregnant words used with hopeful foresight, not to
circumscribe their connotation into con tradition of the objectives inspiring
the provision. To be Pharisaic towards the Constitution through ritualistic
construction is to weaken the social spiritual thrust of the founding fathers'
An American political scientist, Benjamin
Twiss, commented with jarring exaggeration upon the conservative perspective of
the lawyer in the United States of the slump years in the thirties :' "It
is not surprising that lawyers' fame is evanescent.... Allied with those who
are preoccupied with production and profits to the exclusion of standards of
consumption and general well-being, lawyers have taken a negative rather than a
creative and constructive attitude toward social development. In defending
rights of un-trammeled enterprise against rules of fair play and in presuming
the unconstitutionality of legislative enactments, they have missed their cue
to the role of constructive leaders and have been instead dogs in the
manger." (Lawyers for Social Change : Perspectives on Public Interest Law
: by Robert L. Rabin Stanford Law Review Col. 28, No. 2, January 1976).
691 This does not apply to the Indian Bar on
Bench at all and is referred to ex abundanti cautela. Law and Development in
India should repel, as far as possible, such an unlovely judgment on Indian
jural perspectives and performances. The Court and counsel have a justice constituency
with economic overtones, the manifesto being the Constitution designed to
uphold the humanist values of life, liberty and the equal pursuit of happiness,
material and spiritual.
An Explanatory Post-script to our juristic
Attitude We have been guided by the thought that an all-too-large gap between
the law and public needs, arising out of narrow notions, must be bridged by
broadening the constitutional concepts to suit the changing social
consciousness of the emerging Welfare State. Institutional crises and
confrontations can be and should be avoided by evolving a progressive
interpretation, discarding over-sensitivity to under-valuation when private
property is taken for public good. 'A legal system that works to serve the
community' says Bernard Schwartz, 'is better than the academic conceptions of a
bevy of Platonic guardians unresponsive to public needs'. The law, in the words
of Justice Holmes, is a magic mirror in which we see reflected not only our own
lives but also the lives of those who went before us-and may we add, of those
who come after us. But basically we have brought to bear upon the impugned
legislation a value judgment in tune with the 'welfare" wave length of our
Constitution and the still, and music of Indian humanity.
'The law moves with the main currents of the
society it regulates. Each society has its own values which are necessarily
reflected in the ends that the legal order seeks to further. The ends of law
are attained by recognizing certain interest, defining the limits within which
they shall be recognized legally, and endeavouring to secure those interests
that are within the limits defined.' (Quoted from the Law in America Bernard
Schwartz-p. 34) We have recognised that rights and obligations of long ago do
not acquire a static validity in our galloping age and a decent oblivision must
put them back into forgotten antiquity if we, as a nation, are to run on the
rails of the rule of law and so we have nullified the attempt to drift back
from Bharati to Cooper on 'compensation'. A blend of law as a set of responses
to the new needs of expanding society and of Daniel Chapman's advice that 'the
known certainty of the law is the safety of all', has played upon our approach.
We are aware that in constitutional construction, a limited judicial lawmaking
is inevitable '.juristic chemistry', to borrow Roscoe Pound's expressive
phrase. " The chemist does not make the materials which go into his test
tube : He selects them and combines them for some purpose and his purpose gives
form to the result.' Our constitution makers have had due regard to the felt
necessities of the time and the philosophical and political theories about what
would best serve the country's progress; and so we have grounded ourselves on
these solid prescriptions un reflected by speculative niceties lent by literal
study and possible injuries inevitable in reshaping society. 'The object and
end of all Government is to promote the happiness and prosperity of the
community by which it is established', wrote U.S. Chief Justice Taney, 140
years ago in Charles River Bridge v. Warren Bridge and we, in a republic with
an irrevocable tryst to give social justice in the 692 midst of poverty, cannot
diminish the power to accomplish those ends. To be stable is not to stand still;
to move forward and reconcile is the road to the goal-juridical engineering
geared to desiderated policy objectives, being the key to most constitutional
problems. Not un often, the subjective philosophy of the judge under powers the
philosophy of the Constitution while it should be overpowered by it. Cardozo,
with apt elegance, struck this note :
"The great tides and currents which
engulf the rest of man do not turn aside in their course and pass the Judges
by." Cardozo, The Nature of Judicial Process, 1932, P. 170.
Taking this warning to head, we have also to
take the Constituent Assembly's hope to heart :
"The Judiciary was to be the arm of the,
social revolution, upholding the quality that Indians had longed for in
colonial days......The courts were also idealised because, as guardians of the
Constitution, they would be the expression of a new law created by Indians for
Indians." Granville Austin, The Indian Constitution.
The Discovery of Law India by interpreting
liberally to embrace the higher values of collective good and to curb, where
necessary, individual property rights, is all that we have endeavoured to do.
We have been cautioned by appellant's counsel that governments may usurp and
destroy if judges do not cry halt. Where arbitrary, oppressive and mala fide
misuse of power is a real peril, the court shall not fail. But to intervene and
strike down, because a measure, within the constitutional bounds, may work
hardship for some but is conceived for the good of the many in keeping with. the
planned process of Development, has a 'Tory' touch. Canonisation of laissez
faire cannons by the Court is to move coiner-clockwise. Lord Sankey held the
view that in the field of constitutional Law, progressive and dynamic
interpretation in the light of political developments must dominate (see :
British Coal Corporation v. The King : 1935 AC 500). Lord Jowitt L.C. in
Attorney General of Ontario v. Attorney Gen. of Canada (1947 AC 503) affirmed
the same approach "To such an organic statute the flexible interpretation
must be given that changing circumstances require and it would be alien to the
spirit with which the preamble to the Statute of Westminster is instinct, to
concede anything less than the widest amplitude of power to the Dominion
legislature under section 101 of the British North America Act." Legalism
has to yield when spacious issues arise. "Whatever the legal aspect of the
thing, there are moments when it is a feeble need to rely on," said Nehru,
in the Constituent Assembly (I Constituent Assembly Debates, p. 61).
There is another stark possibility the,
Administration sliding back from the progressive constitutional values to
protect private interests; and then the Court may be activate the 'welfare
jurisprudence' of the Constitution by appropriate commands.