Shrikant
B. Karulkar Vs. State of Gujarat [1994] INSC 369 (13 July 1994)
Kuldip
Singh (J) Kuldip Singh (J) Yogeshwar Dayal (J)
CITATION:
1994 SCC (5) 459 JT 1994 (5) 91 1994 SCALE (3)190
ACT:
HEAD NOTE:
The
Judgment of the Court was delivered by KULDIP SINGH, J.- The appellants
challenged the validity of Sections 6(3-A), 4, 10 and 11 of the Gujarat
Agricultural Lands Ceiling Act, 1960 (the Act) by way of writ petitions under
Article 226 of the Constitution of India before the Gujarat High Court on the ground
that these provisions were extraterritorial in their operation and, as such,
were beyond the legislative competence of the State Legislature under Article
245(1) of the Constitution of India. The High Court upheld the validity of the
provisions and dismissed the writ petitions. These appeals by way of special
leave are against the judgment of the High Court.
2. The
appellants are the owners of agricultural lands in the State of Gujarat. They also hold agricultural land
in another part of India outside the State of Gujarat. Section 6(3-A) of the Act was
inserted by the Gujarat Agricultural Lands Ceiling (Amendment) Act, 1972 which
provides for computing the ceiling area of a person who also owns land in
another part of India outside the State of Gujarat. It lays down that for
computing the ceiling area of such a person in the State of Gujarat, his holding in another part of India has also to be taken into account.
In respect of some of the appellants notices were issued by the State of Gujarat for reopening the ceiling cases
under the amended provisions. In respect of other petitioners either notices
were issued under the amended provisions to enable them to file their
objections or final orders were passed pursuant to the said provisions.
3.
Section 6(3-A) of the Act is reproduced hereunder:
"6(3-A).
Where any person holds any land in any other part of India, outside the State,
then, the area of land so held by him in suc h other part, not exceeding the
maximum area of land which such person is entitled to hold in such other part
of India under any law, if any, relating to ceiling 462 on land, used or
capable of being used for agricultural purposes, shall be excluded from the
ceiling area in excess of which a person is not entitled to hold land under this
section and the extent of land determined after so excluding such area shall in
relation to such person, be deemed to be the ceiling area, to be held by him in
this State:
Provided
that where any such person disposes of, at any time before the determination of
ceiling area under this Act, any land or part thereof so held by him in any
other part of India outside the State in accordance with the provisions of law
in force in such part, the area equal to the land or part thereof so disposed
of shall not be excluded while determining the ceiling area, to be held by him
in this State." It is clear from the plain language of Section 6(3-A) of
the Act that for the purpose of computing the permissible area of a person in
the State of Gujarat the area held by him in any other part of India, not
exceeding the maximum area of land which such person is entitled to hold there,
is to be excluded from the permissible ceiling area under the Act.
In
other words, the ceiling area of land permissible under the Act is reduced by
deducting the area of the land owned by a person in another State not exceeding
the maximum area of land which such person is entitled to hold in the other
State and whatever is the balance would be the ceiling area in the State of
Gujarat under the Act. If a person already holds land in other State/States in
excess of the ceiling provided under the Act, he becomes disentitled to hold
any land in the State of Gujarat. Holding agricultural land outside
the State of Gujarat is, thus, considered as a relevant
factor for deciding whether a person can hold agricultural land in the State of
Gujarat and, if so, to what extent.
4. Mr
G. Ramaswamy and Mr R.F. Nariman, Senior Advocates, appearing for the
appellants, have vehemently contended that in pith and substance Section 6(3-A)
of the Act has extraterritorial operation in the sense that the land owned by a
person outside the State of Gujarat is taken into consideration while
determining the ceiling area of a landowner in the State of Gujarat. Mr Nariman
further contended that while examining the question of extraterritorial
operation of a statute the effect of the provisions of the statute on the
rights of a citizen has to be taken into consideration. We have given our
thoughtful consideration to the arguments advanced by the learned counsel. We
are not inclined to agree.
5. The
Act has been enacted to fix a ceiling on the agricultural holding and to
provide for the acquisition and disposal of surplus agricultural lands. The Act
provides a restriction upon holding agricultural land in excess of the celling
with the purpose of securing the distribution of agricultural lands as best to subserve
the common good and to provide for acquisition of surplus agricultural land for
distribution amongst the landless farmers. Section 6(3-A) of the Act has been
enacted as stated in the declaration contained in Section 2 of the Amendment
Act for giving effect to the policy of the State towards securing principles
specified in clauses (b) and (c) of Article 39 of the Constitution of India and
in particular for providing that the ownership and control of the agricultural
resources of the community are so 463 distributed as best to subserve the
common good, and also that the operation of the agricultural economic system
does not result in the concentration of wealth and means of agricultural
production to the detriment of the common people. The Act and the Amendment Act
have been included in the Ninth Schedule to the Constitution of India and as
such are immune from challenge on the ground that the provisions thereunder
infarct any of the rights conferred by Part III of the Constitution of India.
The constitutional validity of the Act was upheld by this Court in Hasmukhlal Dahayabhai
v. State of Gujarati. The question of legislative
competence, however, was not pointedly raised before this Court in the said
case.
6.
Entry 18 List II Entry 42 List III, Seventh Schedule, Constitution of India are
as under:
"LIST
II
18.
Land, that is to say, rights in or over land, land tenures including the
relation of landlord and tenant, and the collection of rents; transfer and
alienation of agricultural land; land improvement and agricultural loans;
colonization.
LIST
III
42.
Acquisition and requisitioning of property." It is not disputed that the
State Legislature derives the legislative competence to enact the Act from the
aforesaid entries. The grievance of the appellants is that while enacting the
impugned provisions the State Legislature has transgressed its legislative
powers by making provisions of the Act to operate in respect of persons and
property beyond the territorial jurisdiction of the State of Gujarat.
7. It
is no doubt correct that under Articles 245 and 246 of the Constitution of
India the Legislature of a State can make laws for the State or any part
thereof. It would be overstepping the limits of its legislative field when it
purports to affect men and property outside the State. In other words the State
Legislature has no legislative competence to make laws which have extraterritorial
operation. Meaning of the words "extraterritorial operation" have
been authoritatively laid down by this Court in various judgments. A State
Legislature has plenary jurisdiction to enact laws in respect of subjects in
Lists II and III, Seventh Schedule, Constitution of India. Such laws may be in
respect of persons within the territory, of property immovable or movable
situated within the State, or of acts and events which occur within its
borders. So long as the law made by the State Legislature is applicable to the
persons residing within its territory and to all things and acts within its
territory, it cannot be considered extraterritorial. This Court over a period
of three decades has evolved a principle called "doctrine of territorial
nexus" to find out whether the provisions of a particular State law have
extraterritorial operation. The doctrine is well-established and there is no
dispute as to its principles. If there is a territorial nexus between the
persons/property subject-matter of the Act and the State seeking to comply 1
(1976) 4 SCC 100: AIR 1976 SC 2316 464 with the provisions of the Act then the
Statute cannot be considered as having extraterritorial operation.
Sufficiency
of the territorial connection involves consideration of two elements, the
connection must be real and not illusory and the liability sought to be imposed
under the Act must be relevant to that connection. The Act has to satisfy the
principles of territorial nexus which are essentially discernible from the factual
application of the provisions of the Act.
8. The
State Legislature has the legislative competence to enact the Act under Entry
18, List II, read with Entry 42, List 111, Seventh Schedule, Constitution of
India. The lands governed by the provisions of the Act are situated within the
territory of the State of Gujarat. The
provisions of the Act provide for fixation of ceiling in respect of the
agricultural lands which are within the territory of the State of Gujarat. The declaration of the surplus
land under the Act is also in respect of the lands held by various persons in
the State of Gujarat. The territorial nexus is obvious.
It is the land and the persons holding such land within the territory of Gujarat to which the provisions of the Act are applicable. If a
person has no land within the State of Gujarat the provisions of the Act are not applicable to him or to the land
which he owns outside the territory of the State of Gujarat. The sine qua non for the
application of the provisions of the Act is the holding of the land within the
State of Gujarat.
The
territorial connection is thus, real and sufficient and the liability sought to
be imposed under Section 6 (3-A) of the Act is directly in relation to that
connection. The factum of a person holding land outside the State of Gujarat is undoubtedly an aspect pertinent
to the question of his entitlement under the Act to hold land in the State of Gujarat. There is no dispute that within
the State a ceiling can be fixed by law beyond which no person can hold agricultural
land, and if for determining the extent of said ceiling, the land held by a
person outside the State is taken into consideration, the law pertaining to
fixation of ceiling would not become extraterritorial. In pith and substance
the law remains to be a legislation imposing the ceiling on holding of land
within the State under Entry 18, List II, read with Entry 42, List III, Seventh
Schedule, Constitution of India. Mere consideration of some factors which exist
outside the State, for the purpose of legislating in respect of the subject for
which the legislature is competent to make law, would not amount to
extraterritorial legislation. Such considerations are part of the plenary
legislative function of the State Legislature. The legislative entries not only
indicate the subjects for the exercise of legislative power but their scope is
much wider in the sense that they specify a field for legislation on the
subject concerned. Therefore, when a statute fixes a ceiling on agricultural
land holding within the State, it would not become extraterritorial simply
because it provides that while determining the permissible area of a person
under the said statute the land owned by him outside the State is to be taken
into consideration. We are, therefore, of the view that the impugned provisions
are within the legislative competence of the State Legislature and have been
validly enacted.
465
9. The
learned counsel for the appellants have placed reliance on the Full Bench
judgment of the Bombay High Court in Shankarrao v. State of' Maharashtra2 and
other connected matters decided on 2-10-1980. We have been taken through the
judgment of the Full Bench. Section 3(2) of the Maharashtra Agricultural Lands
Act, 1961 "Bombay Act) which was struck down by the Bombay High Court was as
,.rider:
"All
land held by a person, or as the case may be, a family unit whether in this
State or any other part of India in excess of the ceiling area, shall,
notwithstanding anything contained in any law for the time being in force or usage,
be deemed to be surplus land, and shall be dealt with in the manner hereinafter
provided for surplus land......
It is
obvious that the provisions of Section 6(3-A) of the Act and Section 3(2) of
the Bombay Act are entirely different. On the plain reading of Section 3(2) of
the Bombay Act it is patent that the Maharashtra Legislature was making law in
respect of the land held by a person anywhere in India. The expression "all land field by a person or as the
case may be by a family unit whether in this State or any other part of India ..." clearly indicates the
intention on the part of the Maharashtra Legislature to make extraterritorial
law. No assistance can, thus, be taken by the learned counsel from the Full
Bench judgment of the Bombay High Court. Even otherwise we are of the view that
various observations made by the learned Judges of the Bombay High Court are,
rather, broadly stated and require to be straightened, if necessary, in some
appropriate proceedings.
10.
The appeals are dismissed with costs. We quantify the costs as Rs 10,000 in
each appeal to be paid by each of the appellants.
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