The
State of Tamil Nadu Vs. M/S. Arooran Sugars Ltd.
[1996] INSC 1362 (31
October 1996)
Kuldip
Singh, M.M. Punchhi, N.P. Singh, M.K. Mukherjee, S. Saghir Ahmad N.P. Singh, J.
ACT:
HEAD NOTE:
(With
C.A. Nos. 352-354 of 1980)
The
State of Tamil Nadu is the appellant in these appeals.
Civil Appeal No. 134 of 1980 has been filed against the judgment of the High
Court of madras in Writ Petition 1464 of 1974, whereas Civil Appeal Nos.
352-352-354 of 1980 have been filed against the judgment of the same High Court
in Writ Petition 2341-2343 of 1978. All the writ Petitions had been filed on
behalf of the respondent which were allowed by the High Court.
The
respondent, a public limited company which owned and possessed 3421.14 acres of
land, was engaged in composite and integrated activity of raising sugarcane on
the aforesaid land and crushing it in its sugar factory. The Tamil Nadu Reforms
(Fixation of ceiling on Land) Act, 1961 (Act 58 Of 1961), (hereinafter referred
to as the principal Act) was published in the Tamil Nadu government Gazette on
2.5.1962. According to the said Act, a ceiling of 30 standard acres of
agricultural land was fixed as the maximum holding. Under Section 18(1) of the
principal Act, the surplus land has to be notified as required for public
purposes and on such publication in view of Section 18(3) of the Act land
specified in the notification shall deemed to have been acquired for a public
purpose and shall vest in the Government free from all encumbrances with effect
from the date of such publication and all right, title and interest of all
persons in such land shall be deemed to have been extinguished. The relevant
part of Section 18 of the Act is as follows:-
18.
Acquisition of surplus land.-(1) After the publication of the final statement
under section 12 or 14, the Government shall, subject to the provisions of
sections 16 and 17, publish a notification to the effect that the surplus land
is required for a public purpose.
(2)..............................
(3) On
the publication of the notification under sub-section (1), the land specified
in the notification together with the trees standing on such land and
buildings, machinery plant or apparatus, constructed, erected or fixed on such
land and used for agricultural purpose shall, subject to the provisions of this
Act, be deemed to have been acquired for a public purpose and vested in the
Government free from all encumbrances with effect from the date of such
publication and right, title and interest of all persons in such land shall,
with effect from the said date, be deemed to have been extinguished:
Provided
that where there is any crop standing on such land on the date of such
publication, the authorized officer may, subject to such conditions as may be
prescribed, permit the harvest of such crop by the person who had raised such
crop.
Section
50(1) of the Act provides for payment of amount at the rates specified in
Schedule III thereto, to person whose right, title or interest in any land is
acquired by the Government.
Tamil Nadu
land Reforms (Reduction of Ceiling on Land ) Act 17 of 1970, Under the
Principal Act there was provision for grant of Exemption to the lands held by
sugar factories in excess of the ceiling area. This provision was deleted by
Tamil Nadu Amendment Act 41 of 1971, which came into force from 15.1.1972.
Because of such amendment even the sugar factories in general could not hold
land in excess of 15 standard acres. The respondent filed its return under
Section 8 of the Principal Act on 6.4.1972. The Additional Authorised officer
(Land Reforms), Tiruvarur, published the draft statement under section 10(1) of
the principal Act on 19.4.1972. The minimum compensation payable for excess
Lands vesting in the Government was 9 times of the net annual income. As such
when the respondent filed its return on 6.4.1972, it was entitled to
compensation at the rare of 9 times of the net annual income. However, the
Tamil Nadu land Reforms (Fixation off Ceiling of land) Fourth Amendment Act,
1972(Act 39 of 1972) which came in force with effect from 21.12.1972 amended
Schedule III of principal Act reducing the minimum multiples from 9 times to 2
times. The said Amending Act 39 of 1972 purported to reduce the multiple of
compensation which was payable in respect of lands which vested in the
Government after 21.12.1972. A notification under Section 18(1) of the
principal Act was published on 4.4.1973 declaring as surplus an extent of
3414.87 acres of land held by the respondent. Possession over such excess land
were taken over by the state Government between 6.4.1973 and 26.4.1973. The
Draft Compensation Assessment Roll was published by the state Government on
5.12.1973 determining the amount payable to the respondent in respect of the
surplus lands applying the rate of 2 times the net annual income.
On
15.2.1974, The Tamil Nadu Land Reforms (Fixation of Ceiling on Land ) Sixth
Amendment Act 1972 (Act 7 of 1974) was published in the Tamil Nadu Government
Gazette. Sub- section(2) of Section 3 of Act 7 of 1974 amended sub- section (3)
of section 18 of the principal Act on and from 1.3.1972. The relevant part
thereof is as follows:- "3(2) in section 18 of the principal Act,-
(a) in
sub-section (3), for the words "with effect from the date of such
publication," The words "with effect from the date of the commandment
of this Act," had been substituted:
(b)..................................
(c)....................................
The
effect of substitution of sub-section (3) of section 18 of the principal Act
shall be that whereas under the original sub-section (3) of section 18 of the
principal Act only on publication of the notification under sub- section(1) of
section 18, the land specified in the notification together with the trees
standing on such land and buildings, machinery plant etc., was deemed to have
been acquired for a public purpose and vested in the Government free from all
encumbrances `with effect from the date of such publication'; because of the
substitution of sub- section (3) of section 18 of the principal Act by Act 7 of
1974 the lands in question shall deemed to have vested in Government' with
effect from the date of the commencement' of Act 7 of 1974, i.e. with effect
from 1.3.1972. It can be said that as sub-section (3) of section 18 stood prior
to amendment by Act 7 of 1974 on publication of the notification under Section
18(1), the vesting of the respondent's sugarcane land in the state Government
had taken place with effect from 4.4.1973, but in view of substituted
sub-section (3) of section 18 by Act 7 of 1974, it shall be deemed that the
vesting of the excess lands took place with effect from 1.3.1972. In Section 3
of the principal Act by Act 7 of 1974 a new sub-section (3-A) was also
introduced which is as follows:
"(3-A)
(a) Every person who, after the date of the commencement of this Act, was in
possession of, or deriving any benefit from the property vested in the
Government under Sub-section (3) shall be liable to pay to the Government, for
the period, after such commencement, for which he was in such possession or deriving
such benefit, an amount as compensation for the use, occupation or enjoyment of
that property as the authorised officer may fix in the prescribed manner. Such
officer shall take into consideration such facts as may be prescribed.
(b)
Any amount payable to the Government under clause (a) shall be recoverable as
arrears of land revenue." According to the respondent, in view of the
amendment introduced by Act 7 of 1974, antedating the date of vesting from
4.4.1973 to 1.3.1972 the respondent was entitled to the payment applying the
multiple of 9 times of the net annual income instead of multiple of 2 times
which was introduced by aforesaid Act 39 of 1972 with effect from 21.12.1972.
Writ
petition No. 1464 of 1974 was filed on behalf of the respondent challenging the
Draft Compensation Assessment Roll aforesaid, before the High Court which was
admitted by the High Court.
It may
be pointed out that the learned counsel appearing for the appellant-state,
could not explain as to what was the purpose of enacting Act 7 of 1974
aforesaid and what object it purported to achieve. He simply stated that later
the legislature itself restored the original position by enacting Tamil Nadu
Land Reforms (Fixation of ceiling on Land) Amendment Act 78 (Act 25 of 1978).
Section 4 of that Act is as follows:
"4.
Tamil Nadu Act 58 of 1961, as subsequently modified, to have effect subject to
modifications-The Principal Act, shall, on and from the 1st day of march 1972,
have effect as if, - (1) in section 18 of the principal Act,-
(a) in
sub-section (3), for the words "with effect from the date of the
commencement of this Act," the words "with effect from the date of
such publication" had been substituted:
(b)................................
.......
(c)
sub-section (3-A) had been omitted..................................."
In
view of section 4 aforesaid, in sub-section (3) of section 18 of the principal
Act the words "with effect from the date of such publication" was
again substituted for the words " with effect from the date of commencement
of this Act" which had been introduced by Act 7 of 1974. Sub- section(3-A)
which had been introduced by Act 7 of 1974 was also omitted. Sections 5 and 6
of Act 25 of 1978 which are relevant provided:
"5.
Certain provisions of Tamil Nadu Act 7 of 1974 not to have effect- (1)
Notwithstanding anything contained in the Tamil Nadu land Reforms (Fixation of
Ceiling on Land) Sixth Amendment Act, 1972 (Tamil Nadu Act 7 of 1974)
(hereinafter in this section referred to as the 1972 Act), or in any judgment,
decree or order of any court or other authority, sub- section(2) of section 3
of the 1972 Act shall be omitted and shall be deemed always to have been
omitted and accordingly the modifications made to section 18 of the principal
Act by the said sub-section (2),- (a) shall be deemed never to have been made
and the provisions of the said section 18 of the principal Act as they stood
prior to the said modifications shall continue in force and shall be deemed
always to have continued in force; and (b) shall be deemed never to have had
the effect of vesting in the State Government the surplus lands specified in
any notification published under sub-section (1) of the said section 18 of the
principal Act on or after the 2nd may 1962 and before the date of publication
of this Act in the Tamil Nadu Government Gazette, from a date earlier to the
date of the publication of the notification under the said sub-section (1) and
shall be deemed always to have had the effect of vesting in the state
Government such surplus lands, only with effect from the date of the
publication of such notification.
(2)
Anything done or any action taken under the principal Act in pursuance of the
provisions of sub- section (2) of section 3 of the 1972 Act, shall be re-opened
and determined in accordance with provisions of the principal Act, as modified
by this Act.
6.
Vesting of certain surplus lands and validation - Notwithstanding anything
contained in any judgment, decree, or order of any court or other authority,-
(a) where before the date of publication of this Act in the Tamil Nadu
Government (1) of section 18 of the principal Act has been published, the
surplus land specified in such notification shall be deemed to have vested in
the state Government, with effect from the date of such publication only, and
accordingly the provisions of the principal Act, as modified by section 4 of
this Act, shall for all purposes apply and be deemed always to have been
applied in respect of such surplus lands so vested; and (b) all acts done and
proceedings taken by any officer or authority under the principal Act, on the
basis that compensation in respect of surplus lands referred to in clause (a)
shall be payable only according to the rates specified in schedule III of the
principal Act, as in force on the date of publication of the said notification,
shall, for all purposes be deemed to be and to have always been validly Section
4 of this Act had been in force at all material times when such acts or
proceedings were done or taken." As already mentioned the respondent filed
Writ Petition No. 1464 of 1974 claiming compensation applying the multiple of 9
times instead of 2 times and for a direction to the authorised officer to
prepare the Draft Compensation Assessment Roll in respect of the lands which
had vested taking into account the provisions of aforesaid Act 7 of 1974. This
stand was taken on behalf of the respondent because the effect of Act 7 of 1974
was that vesting was to take effect with effect from 1.3.1972 as provided in
section 3 of Act 7 of 1974. On 1.3.1974, admittedly aforesaid Amendment Act 39
of 1972 by which the compensation amount payable for the surplus lands was
reduced from 9 times to 2 times of the net annual income had not come into
force, it came into force with effect from 21.12.1972. As such if by virtue of
Act 7 of 1974 if the vesting had taken place with effect from 1.3.1972 the date
of commencement of Act 7 of 1974, it shall be deemed that vesting had taken
place prior to 21.12.1972 when admittedly schedule III provided for payment by
applying the multiple of 9 times. The High Court by; its order dated 8.10.1976
quashed the Draft Compensation Assessment Roll published, treating the vesting
of the surplus lands with effect from 1.3.1972 because of Act 7 of 1974. Civil
Appeal No. 134/80 is directed against aforesaid order of the High Court dated
8.10.1976. The respondent also filed Writ petition No. 624 of 1978 for issuance
of mandamus to the authorised officer on basis of the aforesaid judgment and
order of the High Court dated 8.10.1976 in writ petition No. 1464/74 to prepare
the Draft Assessment Roll as per that a judgment. The High Court by its order
dated 3.3.1978 directed the authorised officer to prepare the Assessment Roll
accordingly.
The
aforesaid Act 25 of 1978 was published in the Tamil Nadu Government Gazette on
18.5.1978 and took effect on and from 1.3.1972. It restored parts of
sub-section (3) of section 18 as it stood prior to the amendment in that sub-
section by Act 7 of 1974. it reiterated that the date of vesting of the surplus
lands shall be date of the publication of the notification under sub-section
(1) of section 18 of the Act. so far the respondent is concerned, such
notification under sub-section (1) of section 18 had been published on
4.4.1973, i.e. after 21.12.1972 from which date because Amendment Act 39 of
1972 the compensation amount payable for the surplus lands had been reduced
from 9 times to 2 times of the net annual income. Section 5 of Act 25 of 1978
also contained non-obstante clause with deeming fiction saying that
notwithstanding anything contained in the Tamil Nadu land Reforms (Fixation of
Ceiling on Land) Sixth Amendment Act 1972 (Act 7 of 1974) or any judgment,
decree or order of any court, sub-section (2) of section 3 of the aforesaid
1972 Act shall be omitted and shall be deemed always to have been omitted.
Section 6 thereof said that notwithstanding anything contained in any judgement,
decree or order of any court where before the date of the publication of the
said Act in Tamil Nadu Government Gazette a notification under sub-section (1)
of section 18 of the principal Act had been published the surplus lands
specified in such notification ' shall be deemed to have vested in the state
Government with effect from the date of such publication only.........' and the
provisions of the principal Act as modified by section 4 of Act 25 of 1978
shall for all purposes apply and be deemed always to have applied in respect of
such surplus lands so vested and compensation in respect of surplus land shall
be paid only according to the rates specified in Schedule III of the principal
Act as in force on the date of the publication such notification. In other
words, sections 5 and 6 of Act 25 of 1978 purported to efface and obliterate
the amendment which had been introduced in sub-section (3) of section 18 by Act
7 of 1974 and purported to validate the notification which had been issued on
4.4.1973 under sub-section (1) of section 18 of the principle Act declaring
3414.78 acres of the land belonging to the respondent as surplus. It need not
be pointed out that this was done because the multiple of 9 times was reduced
to 2 times by Act 39 of 1972 with effect from 21.12.1972. If the vesting had
taken place by effect of amended sub-section (3) of section 18 by Act 7 of 1974
with effect from 1.3.1972, the date of the commencement of the said Act, then
the respondent was entitled for compensation applying the multiple of 9 times.
Writ
petition Nos. 2341-2343 of 1978 were filed on behalf of the respondent
questioning the validity of the aforesaid provisions of Act 25 of 1978 and for
a direction that such provisions which were introduced by the said Act had no
effect on the right of the respondent to receive compensation applying the
minimum multiple of 9 times of the net annual income. Those writ petitions were
allowed by a Division Bench of the High Court on 20.7.1979. Civil Appeal Nos.
352-354/80 have been filed against the said Judgment.
Mr. Venugopal,
the learned counsel appearing for the appellant-state, took a stand that civil
Appeal No. 134/80 has been filed on behalf of the state challenging the
validity of the judgment and order of the High Court dated 8.10.1976 in Writ
petition No. 1464/74 directing payment of compensation to the respondent
applying the provisions of Act 7 of 1974, after coming into force of the Act 25
of 1978 it shall be deemed that the basis of the judgment in writ petition No.
1464/74 has been taken away as such the respondent cannot claim compensation by
applying the multiple of 9 times. It was also submitted on behalf of the
appellant-State that the provisions of Act 25 of 1978 being constitutional and
valid, High court should have dismissed the writ petition Nos. 2341-2343 of
1978 filed on behalf of the respondent questioning the validity of Act 25 of
1978.
It may
be mentioned at the outset that none of the two judgments of the High Court
dated 88.10.1976 and 20.7.1979 in writ petition No. 1464/74 and writ petition
Nos. 2341- 2343/78 have became final. Civil Appeal No. 134 of 1980 and civil
appeal Nos. 352-354 of 1980 are directed against the aforesaid judgments dated
8.10.1976 and 20.7.1979. In this background, it has to be examined whether
sections 4, 5 and 6 of Act 25 of 1978 with non-obstante clause and deeming
provisions have taken away the effect of the aforesaid judgment of the High
Court dated 8.10.1976 directing the appellant-state to apply 9 times multiple
in view of the amendments introduced by Act 7 of 1974. The other aspect is as
to whether in view of the provisions aforesaid of Act 25 of 1978, this Court
while considering the appeal against aforesaid judgment dated 8.10.1976 in writ
petition No.1464/74 has now to proceed as if the amendments in the principal
Act by Act 7 of 1974 had never been introduced.
There
is no dispute in respect of legislative competence of legislature to enact Act
25 of 1978. The only dispute is whether provisions of that Act has achieved the
achieved the desired result.
Sections
5 and 6 of Act 25 of 1978 contain deeming fiction in its different clauses
while purporting to omit and remove the amendments which had been introduced by
Act 7 of 1974 in the principal Act. The role of a provision in a statute
creating legal fiction is by now well settled. When a statute creates legal
fiction saying that something shall be deemed to have been done which in fact
and truth has not been done, the court has to examine and ascertain as to for
what purpose and between what persons such a statutory fiction is to be
resorted to. Thereafter courts have to give full effect to such a statutory
fiction and it has to be carried to its logical conclusion. In the well-known
case of East End Dwellings Co. Ltd. V. Finsbury Borough Council, 1952 AC 109
Lord Asquith while dealing with the provisions of the Town and Country Planning
Act, 1947 observed:
"If
you are bidden to treat an imaginary state of affairs as real, you must surely,
unless prohibited from doing so, also imagine as real the consequences and
incidents which, if the putative, state of affairs had in fact existed, must
inevitably have flowed from or accompanied it....The statute says that you must
imagine a certain having done so, you must cause or permit your imagination to
boggle when it comes to the inevitable corollaries of that state of
affairs." That statement of law aforesaid in respect of a statutory
fiction is being consistently followed by this court. Reference in this
connection may be made to the cases of state of Bombay V. Pandurang Vinayak,
1953 SCR 773; Chief Inspector of Mines V. Karam Chand Thapar, 1962(1) SCR 9; J.K.
Cotton Spinning and Weaving Mills Ltd. V. Union
of India,(1988) 1 SCR 700; M. Venugopal V.
Divisional Manager, Life Insurance Corporation of India, (1964) 2 SCC 323; and Harish Tandon
V. Additional District Magistrate. Allahabad, (1995)1 SCC 537.
Section
5 of Act 25 of 1978 provides that notwithstanding anything contained in Act 7
of 1974, or in any judgment, decree or order of any court , or other authority,
sub-section (2) of section 3 of the aforesaid Act' shall be omitted and shall
be deemed always to have been omitted and the modifications made to section 18
of the principal Act by the said sub-section (2)- (a) 'shall be deemed never to
have been made and the provisions of the said section 18 of the principal Act
as they stood prior to the said modifications shall continue in force and shall
be deemed always to have continued in force; and (b) 'shall be deemed never to
have had the effect of vesting in the state Government the surplus lands
specified in any notification published under sub-section (1) of the said
section 18 of the principal Act on or after the 2nd May 1962 and before the
date of publication of this Act in the Tamil Nadu Government Gazette, from a
date earlier to the date of the publication of the notification under the said
sub-section (1) and shall be deemed always to have had the effect of Vesting in
the state Government such surplus lands, only with effect from the date of the
publication of such notification.' The legislature by different deeming clauses
and through statutory fiction requires the Court to treat that amendments so
introduced by Act 7 of 1974 had never been introduced in the principal Act. The
power of the legislature to amend, delete or obliterate a statute or to enact a
statute prospectively or retrospectively cannot be questioned and challenged
unless the court is of the view that such exercise is in in violation of
Article 14 of the constitution. It need not be impressed that whenever any Act
or amendment is brought in force retrospectively or any provision of the Act is
deleted retrospectively, or any provision of the Act is deleted
retrospectively, in this process rights of some are bound to be effected one
way or the other. In every case, it cannot be urged that the exercise by the
legislature while introducing a new provision or deleting an existing provision
with retrospective effect per se shall be violative of Article 14 of the
constitution. If that stand is accepted, then the necessary corollary shall be
that legislature has no power to legislate retrospectively, because in that
event a vested right is effected; of course, in special situation this court
has held that such exercise was violative of Article 14 of the constitution.
Reference in this connection may be made to the cases of state of Gujarat &
Another V. Raman Lal Keshav Lal Soni & others,(1983) 2 SCR 287; T. R. Kapur
V. State of Haryana, 1986 (Supp) SCC 584; and Union of India V. Tushar Ranjan Mohanty,
1994(5) SCC 450. In the case of state of Gujarat V. Raman Lal (Supra) a
Constitution Bench on the facts and circumstances of that case observed:
"The
legislation is pure and simple, self-deceptive, if we may use such an
expression with reference to a legislature-made law. The legislature is
undoubtedly competent to legislate with retrospective effect to take away or
impair any vested right acquired under existing laws but since the laws are
made under a written Constitution, and have to conform to the do's and don'ts
of the constitution neither prospective nor retrospective laws can be made so
as to contravene Fundamental Rights. The law must satisfy the requirements of
the Constitution today taking into account the accrued or acquired rights of
the parties today. The law cannot say, twenty years ago the parties had no
rights, therefore, the requirements of the Constitution will be satisfied if
the law is dated back by twenty years. We are concerned with today's rights and
not yesterday's. A legislature cannot legislate today with reference to a
situation that obtained twenty years ago and ignore the march of events and the
constitutional rights accrued in the course of the twenty years. That would be
most arbitrary, unreasonable and a negation of history." In same terms
this Court expressed the opinion in the cases of T.R. Kapur V. State of Haryana
(supra) and Union of India V. Tushar Ranjan Mohanty (supra) in respect of
alterations in rules framed under Article 309 of the constitution
retrospectively regarding conditions of service.
So far
the facts of the present case are concerned, the provisions of Act 25 of 1978
do not purport to effect any vested or acquired right. It only restores the
position which existed when the principal Act was in force. By notification
dated 4.4.1973 issued under section 18(1) of the Act as it stood prior to
amendment introduced by Act 7 of 1974, 3414.87 acres of land had been declared
as surplus which vested in the state Government under section 18(3) of the
principal Act as it stood on that date. It can be said that Act 25 of 1978
simply nullifies Act 7 of 1974 which had made amendments in the principal Act
after notification gad been issued under section 18(1) and vesting had taken
place under section 18(3) of the principal Act as it stood prior to enactment
Act 7 of 1974. By Act 7 of 1974 futile attempt had been made by introducing
different amendments. in this process not only it created anomaly in the
principal Act, but nothing purposeful was achieved. It is true that because of
the amendments introduced by that Act 7 of 1974, the respondent could urge
before the High Court that as the vesting had taken place on 1.3.1972, in spite
of amendment Act 39 of 1972 which had reduced the multiple from 9 times to 2
times of the net annual income with effect from 21.12.1972 the respondent was
entitled to compensation to be worked out on basis of 9 times of the net annual
income. But on this ground the provisions of Act 25 to 1978 cannot be held to
be violative of Article 14 of the constitution and as such ultra vires. Once
the provisions are held to be legal and valid, then as pointed out above the
wish and desire of the legislature has to be given full effect and to its
logical end. The courts have to proceed on the assumption the Act 7 of 1974 had
never been enacted and no amendment whatsoever had been introduced in the
principal Act directing the vesting to take place with effect from 1.3.1972.
This court shall be fully justified in examining the judgment of the High Court
dated 8.10.1976 on Writ Petition No. 1464/74 filed by the respondent, treating
that Act 7 of 1974 was never enacted or was in existence. As the aforesaid
judgment dated 8.10.1976 is solely based on amendments introduced by Act 7 of
1974, once such amendments have been effected retrospectively, there is no
escape from the conclusion that the substratum and basis of the judgment of the
High court dated 8. 10.1976 is solely based on amendments introduced by Act 7
of 1974, one such amendments have been effaced retrospectively, there is no
escape from the conclusion that the substratum and basis of the judgement of
the High Court dated 8.10.1976 has been taken away. The High Court had
proceeded on the assumption that because of amendment introduced by Act 7 of
1974 the vesting shall be deemed to have taken place with effect from 1.3.1972
and on that assumption direction was given to calculate the compensation
applying 9 times multiples which had been reduced to 2 timed with effect from
21.12.1972 by amendment Act 39 of 1972. But if the provision which directed
Vesting with effect from 1.3.1972 does not exist in eyes of law, then there is
no question of holding that vesting shall be deemed to have taken place with
effect 1.3.1972 when compensation was to be worked out by applying the 9 times
to 2 times of the net annual income with effect from 21.12.1972. Thereafter on
4.4.1973 notification under Section 18(1) of the principal Act was issued
declaring 3414.87 acres of land of the respondent as surplus which vested in
the State Government under Section 18(3) of the principal Act as it stood on
that date. As such the compensation has to be worked out on basis of the
amendment which had been introduced in schedule III of the Act by amendment Act
39 of 1972. This Court can modify the judgement of the High Court dated
8.10.1976 taking into account No.134 of 1980 is against aforesaid judgment of
the High Court dated 8.10.1976.
There
is yet another aspect of the matter. Section 6 of the Act 25 of 1978 provides
that notwithstanding anything contained in any judgment, decree, or order of
any court or other authority where before the date of publication of this Act
in the Tamil Nadu Government Gazette, a notification under sub-section (1) of
section 18 of the principal Act had been published, the surplus lands specified
in such notification shall be deemed to have vested in the state Government,
with effect from the date of such publication only, and accordingly the
provisions of the principal Act, as modified by section 4 of this Act, shall
for all purposes apply and be deemed always to have been applied in respect of
such surplus lands so vested.
The
scope of a non-obstante clause and of validating Act has been examined by this
Court from time to time .
Reference
in this connection be made to the judgment in the case of Prithvi Cotton Mills
Ltd. V. Broach Borough Municipality, (1969) 2 SCC 283 where Hidayatullah, C.J.
speaking
for the Constitution bench said:
"When
a legislature sets out to validate a tax declared by a court to be illegally
collected under and ineffectiveness or invalidity must be removed before
validation can be said to take place effectively. The most important condition,
of course, is that the legislature must possess the power to impose the tax,
for if it does not, the action must ever remain ineffective and illegal.
Granted
legislative competence, it is not sufficient to declare merely that the
decision of the court shall not bind for that is tantamount to reversing the
decision in exercise of judicial power which the legislature does not possess
or exercise. A Court's decision must always bind unless the conditions on which
it is based are so fundamentally altered that the decision could not have been
given in the altered circumstances. Ordinarily, a court holds a tax to be
invalidly imposed because the power to tax is wanting or the statute or the
rules or both area invalid or do not sufficiently create the jurisdiction .
Validation
of a tax so declared illegal may be known only if the grounds of illegality or
invalidity are capable of being removed and are in fact removed and the tax
thus made legal. Sometimes this is done by providing for jurisdiction where
jurisdiction had not been properly invested before. Sometimes this is done by
re-enacting retrospectively a valid and legal taxing provision and then by
fiction making the tax already collected to stand under the re- enacted law.
Sometimes the legislature gives its own meaning and interpretation of the law
under which the tax was collected and by legislative fiat makes the new meaning
binding upon courts. The legislature may follow any one method or all of them
and while it does so it may neutralise the effect of the earlier decision of
the court which becomes ineffective after the change of the law." The same
view was reiterated in the cases of west Ramnad Electric Distribution Co. Ltd.
V. State of Madras, (1963) 2 SCR 747; Udai Ram Sharma v. Union of India,(1968)
3 SCR 41; Tirath Ram Rajindra Nath V. State of U.P,(1973) 3 SCC 585; Krishna
Chandra Gangopadhyay v. Union of India, (1975) 2 SCC 302; Hindustan Gum &
Chemicals Ltd. V. State of Haryana, (1985), 4 SCC 124; Utkal Contractors and
Joinery (P) Ltd. V. State of Orissa, 1987 Supp SCC 751; D. Cawasji & Co. v.
state of Mysore, 1984 Supp SCC 490 and Bhubaneshwar Singh V. Union of India,
(1994) 6 SCC 77. It is open to the legislature to remove the defect pointed out
by the court or to amend the definition or any other provision of the Act in
question retrospectively. In this process it cannot be said that there has been
an encroachment by the legislature over the power of the judiciary. A court's
directive must always bind unless the conditions on which it is based are so
fundamentally altered that under altered circumstances such decisions could not
have been given. This will include removal of the defect in a statute pointed
put in the judgment in question, as well as alteration or substitution of
provisions of the enactment on which such judgment is based, with retrospective
effect. This is what has happened in the present case. The judgment of the High
Court in writ petition No. 1464/74, dated 8.10.1976 was solely based on the
amendments which had been introduced by Act 7 of 1974 .
If
those amendments so introduced have been effaced by Act 25 of 1978 with
retrospective effect saying that it shall be deemed that no such amendments had
ever been introduced in the principal Act, then full effect has to be given to
the provisions of later Act unless they are held to be ultra vires or
unconstitutional .
On
behalf of the respondent, it was pointed out that the High Court in its
judgment dated 8.10.1976 in writ petition No. 1464/74 has not declared any
provision to be invalid because of which a validating Act was required. The
said judgment had also no pointed out any defect in any Act which had to be
rectified by a validating Act. It had simply proceeded on the provisions of Act
7 of 1974 and had issued direction to the state Government to proceed in
accordance with those provisions. This Court has examined the power of the
legislature to amend the provisions of the Act in question after a court
verdict. Reference in this connection may be made to the case of Government of
Andhra Pradesh & Anr. v. Hindustan Machine Tools Ltd. (1975) 2 SCC 274
where it was observed:
"We
see no substance in the respondent's contention that by re- defining the term
`house' with retrospective effect and by validating the levies imposed under
the unamended Act as if notwithstanding anything contained in any judgment,
decree or order of any court, that Act as amended was in force on the date when
the tax was levied, the Legislature has encroached upon a judicial function.
The power of the legislature to pass a law postulates the power to pass it
prospectively as well as retrospectively the one no less than the other. Within
the scope of its legislative competence and subject to other constitutional limitations,
the power of the legislature to enact laws is plenary.
In
United provinces V. Atiga Begum, Gwyer, C.J. while repelling the argument that
Indian Legislatures had no power to alter the existing laws retrospectively
observed that within the limits of their powers the Indian legislatures were as
supreme and sovereign as the British parliament itself and that those powers
were not subject to the "strange and unusual prohibition against
retrospective legislation". The power to validate a law retrospectively
is, subject to the limitations aforesaid, an ancillary power to legislate on
the particular subject.
The
state legislature, it is significant, has not overruled or set aside the
judgment of the High Court. It has amended the definition of `house' by the
substitution of a new section 2(15) for the old section and it has provided
that the new definition shall have retrospective effect, notwithstanding
anything contained in any judgment, decree or order of any court or other
authority. In other words, it has removed the basis of the decision rendered by
the High Court so that the decision could not have been given to the altered
circumstances. If the old Section 2(15) were to define `house' in the manner
that the amended section 2(15) does, there is no doubt that the decision of the
High Court would have been otherwise. In fact, it was not disputed before us
that the buildings constructed by the respondent meet fully the requirements of
Section 2(15) as amended by the Act of 1974.
In Tirath
Ram Rajindra Nath v. State of U.P, the
Legislature amended the law retrospectively and thereby removed the basis of
the decision rendered by the High Court of Allahabad. It was held by this Court
that this was within the permissible limits and validation of the old Act by
constitute an encroachment on the functions of the judiciary." Again in
the case of Sunder Dass V. Ram Prakash, (1977) 3 SCR 60 it was said:
"The
appellant, however, urged that the introduction of the proviso in section 3
should not be given greater retrospective operation than necessary and it
should not be so construed as to affect decrees for eviction which had already
become final between the parties. Now, it is true, and that is a settled
principle of construction, that the court ought not to give a larger
retrospective operation to a statutory provision than what can plainly be seen
to have been meant by the legislature.
This
rule of interpretation is hallowed by time and sanctified by decisions, though
we are not at all sure whether it should have validity in the context of
changed social norms and values. But even so, we do not see how the
retrospective introduction of the proviso in section 3 can be construed so as
to leave unimpaired a decree for eviction already passed, then the question
arises in execution whether it is a nullity.
The
logical and inevitable consequence of the introduction of the proviso in
section 3 with retrospective effect would be to read the proviso as if it were
part or the section at the date when the Delhi Rent Control Act, 1958 was
enacted and the legal fiction created by the retrospective operation must be
carried to its logical extent and all the consequences and incidents must be
worked out as if the proviso formed part of the section right from the
beginning. This would clearly render the decree for eviction a nullity and
since in execution proceeding, an objection as to nullity of a decree is a nullity,
the principle of finality of the decree cannot be invoked by the appellant to
avoid the consequences and incidents flowing from the retrospective
introduction of the proviso in section 3. Moreover , the words
"notwithstanding any judgment, decree or order of any court or other
authority" in the proviso make it clear and leave no doubt that the
legislature intended that the finality of "judgment, decree or order of
any court or other authority" should not stand in the way of giving full
effect to the retrospective introduction of the proviso in section 3 and
applying the provisions of the Delhi Rent Control Act, 1958 in cases falling
within the proviso." Same was the situation in the case of Bhubaneshwar
Singh V. Union of India (supra) where taking note of the subsequent amendments
in the concerned Act the Court came to the conclusion:- "In the present
case as already pointed out above, if sub- section (2) as introduced by the
Coal Mines Nationalisation Laws (Amendment) Act 1986 in section 10 had existed
since the very inception, there was no occasion for the High Court or this
Court to issue a direction for taking into account the price which was payable
for the stock of code lying on the date before the appointed day. The authority
to introduce sub-section (2) in section 10 of the aforesaid Act with
retrospective effect cannot be questioned. Once the amendment has been introduced
retrospectively, courts have to act on the basis that such provision was there
since the beginning. The role of the deeming provision need not be emphasised
in view of series of judgments of this court
...................................................................................
In the
present case, the lacuna or defect has been removed by the introduction of
sub-section (2) in section 10 of the Act with retrospective effect. Sub-section
(2) of section 10 as well as section 19, both have specified that the amount
which is to be paid as compensation mentioned in the schedule shall be deemed
to include and deemed always to have included, the amount required to be paid
to such owner in respect of all coal in stock on the date immediately before the
appointed day. As such the earlier judgment of this court is of no help to the
petitioner." On behalf of the respondent reference was made to the
well-known judgment of this court in the case of Madan Mohan Pathak V. Union -
of India, (1978) 2 SC 50 and it was pointed out from the judgment of Chief
justice Bag who observed:
"I
may, however, observe that even though the real object of the Act may be to set
aside the result of the Mandamus issued by the Calcutta High Court, Yet, the
section does not mention this object at all. Probably this was so because the
jurisdiction of a High Court and the effectiveness of its orders derived their
force from Article 226 of the Constitution Itself. These could not be touched
by an ordinary act of parliament.
Even
if section 3 of the Act Seeks to take away the basis of the judgment of the
Calcutta High Court, without mentioning it, by enacting what may appear to be a
law, yet, i think that, where the rights of the citizen against the State are
concerned, we should adopt an interpretation which upholds those rights.
Therefore, according to the interpretation I prefer to adopt the rights which
had passed into those embodied in a judgment and became the basis of a mandamus
from the High Court could not be taken away in this indirect fashion." The
facts of that case were entirely different. In the Act which was being
challenged, there was no non-obstante clause purporting to take away the effect
of the judgment of the Calcutta High Court. Letters patent Appeal filed against
the judgment whose effect was being taken away by the provisions in question
had been withdrawn. Bhagwati, J (as he then was) made a special mention of the
aforesaid facts for purpose of holding that the effect of the Calcutta High
Court had not be nullified by the provisions in question:- "It is
significant to note that there was no reference to the judgment of the Calcutta
High Court in the Statement of objects and Reasons , nor any non-obstante
clause referring to a judgment of a court in section 3 of the impugned Act. The
attention of parliament does not appear to have been drawn to the fact that the
Calcutta High Court has already issued a writ of Mandamus commanding the Life
Insurance Corporation to pay the amount of Bonus for the year April 1, 1975 to March
31,1976. It appears that unfortunately the judgment of the Calcutta High Court
remained almost unnoticed and the impugned Act was passed in ignorance of that
judgment. Section 3 of the impugned Act or issued that the provisions of the
settlement in so far as they relate to payment of annual cash bonus to class
III and class IV employees shall not have any force or effect and shall not to
deemed to have had any force or effect from April 1,1975 to March 31,1976 was
concerned, it became crystalised in the judgment and thereafter they became
entitled to enforce the writ of mandamus granted by the judgment and not any
right to annual cash bonus under settlement. This right under the judgment was
not sought to be taken away by the impugned Act. The judgment continued to
subsist and the Life Insurance Corporation was bound to pay annual cash bonus
to Class III and Class IV employees for the year April 1, 1975 to Mandamus. The
error committed by the Life Insurance Corporation was that it withdrew the
Letters patent Appeal and allowed the judgment of the learned single judge to
become final. By the time the Letters Patent Appeal came up for hearing, the
impugned Act had already come into force and the Life Insurance Corporation
could, therefore , have successfully contended in that letters Patent Appeal
that, since the settlement, in so far as it provided for payment of annual cash
bonus, was annihilated by the impugned Act with effect from April 1,1975 to
March 31,1976 and hence no writ of mandamus could issue directing the life
Insurance Corporation to make payment of such bonus . If such contention had
been raised, there is little doubt, subject of course to any constitutional
challenge to the validity of the impugned Act , that the judgment of the
learned single judge would have been upturned and the writ petition dismissed.
But on account of some inexplicable reason, which is difficult to appreciate,
the Life Insurance Corporation did not press the letters patent Appeal and the
result was that the judgment of the learned single judge granting writ of
mandamus became final and binding on the parties. It is difficult to see how in
these circumstances the Life Insurance Corporation could claim to be absolved
from the obligation imposed by the judgment to carry out the writ of mandamus
by relying on the impugned Act." (emphasis supplied) Because of the
aforesaid factual position of that case the view expressed by the Constitution
Bench in the Prithvi Cotton Mills Ltd. V. Broach Borough Municipality (Supra)
was held to be of no help to the life insurance Corporation.
Reference
was also made on behalf of the respondent to the judgment of this court in the
case of A.V. Nachane & Another V. Union of India & Another,(1982) 2 SCR
246 where it was observed in respect of the Amendment Act, which was the
subject matter of controversy in that case, that it could not nullify the
effect of the writ issued by this Court in D.J. Bahadur's case, relying on
aforesaid judgment in the Madan Mohan Pathak (Supra). From a bare reference to page
267 of the report, it appears that the learned judges placed reliance on the
defect pointed out in the case of Madan Mohan Pathak by Bhagwati, J quoted
above. In other words, on peculiar facts and circumstances of the case it was
held that the effect of the judgment in the case of D.J. Bahadur had not been
taken away by the Amending Act. On behalf of the respondent, reliance was also
placed on the cases of Janapada Sabha Chhindwara v. The Central Provinces
Syndicate Ltd. and Another, (1970) 1 SCC 509; The municipal Corporation of the
City of Ahmedabad and Another, etc. etc. v. The New Shrock Spg. and Wvg. Co.
Ltd. etc. etc.,(1970) 2 SCC 280. In the case of Government of Andhra Pradesh V.
Hindustan Machine Tools Ltd.,(1975) 2 SCC 274 the aforesaid judgments in the
cases of Janapada Sabha Chhindwara v. The Central Provinces Syndicate Ltd. and
Another (supra) and The Municipal Corporation of the city of Ahmedabad and
Another, etc. etc. (supra) were distinguished by pointing out:
"The
decisions on which the respondent relies are clearly distinguishable. In the
Municipal Corporation of the city of Ahmedabad V. New Shrock Spg. & Wvg. Co. Ltd., the impugned provision
commended the corporation to refuse to refund the amount illegally collected by
it despite the orders of the Supreme Court and the High Court. As the basis of
these decisions remained unchanged even after the amendment, it was held by
this Court the Legislature had made a direct inroad into the judicial powers.
In Janapada Sabha, Chhindwara V. Central provinces Syndicate Ltd., the Madhya
Pradesh Legislature passed Validation Act in order to rectify the defect
pointed out by this court in the imposition of a cess. But the Act did not set
out the nature of the amendment nor did it provide that the notifications
issued without the sanction of the state Government would be deemed to have
been issued validly. It was held by this court that this was tantamount to
saying that the judgment of a court rendered in the exercise of its legitimate
jurisdiction was to be deemed to be ineffective. The position in State of Tamil Nadu V. M. Ravappa Gounder , was similar.
In
that case the reassessments made under an Act which did not provide for
reassessments were attempted to be validated without changing the law retrospectively.
This was considered to be an encroachment on the judicial functions.
In the
instant case, the Amending Act of 1974 cures the old definition contained in
section 2(15) of the vice from which it suffered. The amendment has been given
retrospective effect and as stated earlier the Legislature has the power to
make the laws passed by it retroactive. As the Amending Act does not ask the
instrumentalities of the State to disobey or disregard the decision given by
the High Court but removes the basis of its decision, the challenge made by the
respondent to the Amending Act must fail. The levy of the house-tax must
therefore be upheld." In view of sections 4,5 and 6 of Act 25 of 1978
which cannot be held to be unconstitutional, there is no escape from conclusion
that the provisions which had been introduced in the principal Act 7 of 1974
have been effaced and courts have to proceed as if they had never been
introduced in the principal Act. If this is the effect of sections 4,5 and 6 of
Act 25 of 1978 then as a corollary it has to be held that under the amendment
Act 39 of 1972 the compensation amount payable for the surplus land under
schedule III to the Act was reduced from 9 times to 2 times of the net annual
income w. e. f 21.12.1972. Notification under section 18(1) of the Act
declaring 3414.78 acres of land of the respondent-Company as surplus was issued
on 4.4.1973 after coming into force of amended Act 39 of 1972 aforesaid and
because of the notification dated 4.4.1973 the surplus lands vested in the State
Government in view of section 18(3) of the Act as it stood on that date.
Thereafter,
the Draft Assessment Roll had to be published applying the rate of 2 times of
the net annual income.
On
behalf of the respondent, a stand was taken that sections 4, 5 and 6 Act 25 of
1978 shall not revive the notification dated 4.4.1973 which stood exhausted and
a fresh notification had to be issued, even if the different provisions of Act
7 of 1974 shall be deemed to have been obliterated. In this connection, it may be
pointed out that section 5 (b) of Act 25 of 1978 provided in clear and
unambiguous terms that modification made to section 18 of the principal Act by
Act 7 of 1974 "Shall be deemed never to have had the effect of vesting in
the state Government the surplus lands specified in any notification published
under sub-section (1) of the said section 18 of the principal Act on the after
the 2nd May 1962 and before the date of publication of this Act in the Tamil Nadu
Government Gazette, from a date earlier to the date of the publication of the
notification under the said sub-section (1) and shall be deemed always to have
had the effect of vesting in the State Government such surplus lands, only with
effect from the date of the publication of such notification." Again
section 6(a) provides that notwithstanding anything contained in any judgment,
decree or order of any Court "where before the date of publication of this
Act in Tamil Nadu Government Gazette, a notification under sub-section (1) of
section 18 of the principal Act has been published, the surplus land specified
in such notification shall be deemed to have vested in the state Government,
with effect from the date of such publication only, and accordingly the
provisions of the principal Act, as modified by section 4 of this Act, shall
for all purposes apply and be deemed always to have been applied in respect of
such surplus lands so vested" . In view of the aforesaid deeming
provisions, the notification which was issued on 4.4.1973 under sub-section (1)
of section 18 of the principal Act shall be deemed to be valid and shall have
the effect of vesting the lands in question in the state Government under
sub-section (3) of section 18 of the Principal Act w.e.f. 4.4.1973.
An
objection was taken on behalf of the respondent that on 3.3. 1978 the High
Court had allowed the Writ petition No. 624 of 1978 filed on behalf of the said
respondent and issued a writ of mandamus directing the State to comply with the
judgment dated 8.10.1976 of the High Court in writ petition No.1464 of 1978 and
as no appeal has been filed on behalf of the state before this Court against
the aforesaid order dated 3.3.1978, the said order has attained finality and if
the appeals filed on behalf of State are allowed, it small lead to an anomalous
position. It appears that the respondent had filed the aforesaid writ Petition
No. 624 of 1978 for a direction by the High Court to comply with the aforesaid
order dated 8.10.1976 in writ Petition No. 1464 of 1974. In that writ petition
a grievance had been made that respondents of that writ petition were delaying
preparation of the Draft Compensation Roll on the plea that special Leave
Petition to Appeal to the supreme Court along with an application for stay had
been filed on behalf of the state.
In that
writ petition, a learned judge of the High Court directed to consider the
determination of the compensation and the preparation of the Draft Compensation
Assessment Roll, under section 50(3) (a) of the Act 58 of 1961 in respect of
the excess lands of the respondent. A copy of the writ of mandamus issued by
the High Court in the said Writ Petition is on the record and the operative
part thereof is as follows:- "the Respondents herein, are hereby directed
to consider the determination of the compensation and the preparation of the
Draft Compensation Assessment Roll under section 50{3}{a} of the Act 58 of
1961, in respect of the excess lands of the petitioner, acquired by you , in
due compliance, fully and properly of the judgment of this court dated 8.10.76
and passed in W.P.Nos. 346 and 1464 of 1974 on or before 30.6.1976 and you, the
second respondent herein, are hereby directed to call upon the petitioner to
furnish whatever information is required on or before 30.3.1978 (which
information will be supplied to you by the petitioner within 15 days from the
date of receipt of the said notice) and thereupon to proceed forthwith to
comply with the aforesaid directions of this Court dated 8.10.76 and passed in w.p.Nos.
346 and 1464 of 1974." It cannot be disputed that by the aforesaid order
dated 3.3.1978 the High Court had not determined any right or liability inter
se between the parties. It simply directed the state Government to comply with
the direction given by order dated 8.10.1976 in writ Petition No. 1464 of 1974
against which civil Appeal No. 134 of 1980 has been filed.
If an
order dated 8.10.1976 is set aside by this court, any direction given on
3.31978 in writ petition No. 624 of 1978 shall be of no consequence. It can be
said that the direction which was given on 3.3. 1978 was in the nature of
execution order.
It was
then pointed out on behalf of the respondent that on 15.6.1978 writ Misc.
Petition No. 3153 in Writ Petition No. 624 of 1978 was filed on behalf of the
state for recall of the aforesaid order dated 3.3.1978 which was dismissed on
23.6.1978. It was stated that in the said petition on behalf of the state,
attention of the learned judge was drawn to the fact that in the meantime Act
25 of 1978 had come in force and as such there was no question of payment of
compensation to the respondent in terms of the order dated 8.10.1976 as
directed in writ Petition No. 1464 of 1974. It was urged that as no appeal has
been filed against the order dated 23.6.1978 on behalf of the state, the said
order shall be deemed to have become final in respect of the scope and effect
of Sections 4 ,5 and 6 of Act 25 of 1978. The relevant part of order dated
23.6.1978 is as follows:- "Even otherwise, the respondent herein has
challenged the validity of Tamil Nadu Act 25 of 1978 and till the validity is
upheld, it is not open to the state of Tamil Nadu to maintain an application of
this character........
Whatever
may be said about the validity of the Act, which question need not concern me
at this stage, I find great force in what Mr. M.R. Narayanaswamy submits. In my
judgment rendered in W.P. 624 of 1978, I merely directed that state of Tamil Nadu
to give effect to the judgment of the Division Bench of this Court in W.P Nos.
346 and 1464 of 1974. I directed full compliance of that judgment on or before
30th of June , 1978." From a bare reference to the aforesaid order it
appears that the learned judge having clearly said that he was not considering
the effect of provisions of Act 25 of 1978, he dismissed the said writ Misc.
Petition in view of the order passed on 3.3.1978. When the learned judge
refused to consider the effect of the provisions of Act 25 of 1978, there is no
question of the order dated 23.6.1978 having any effect, on the special Leave
Petitions which had been filed on behalf of the state giving rise to Civil
Appeal No. 134 of 1980 and civil Appeal Nos. 352-354 of 1980 .
It may
be mentioned that a plea was taken on behalf of the appellant state that as Act
25 of 1978 provides for the vesting of the land on a particular date, it shall
be deemed to be law relating to agrarian reform and as such protected by
Article 31-A of the Constitution. As such no challenge based on Article 14 is
available to the respondent. It was stated that at the said Act had been reserved
for the consideration of the president and has received his assent and as such
it shall not be deemed to be void on the ground that it is inconsistent with or
takes away or abridges any of the rights conferred by; Article 31-c which says
that notwithstanding anything contained in Article 13, no law giving effect to
the policy of the state towards securing all or any of the principles laid down
in part IV shall be deemed to be void on the ground that it is inconsistent
with or takes away or abridges any of the rights conferred by Article 14. In
this connection, our attention was drawn to the fact that in section 2 of Act
25 of 1978 it has been specifically declared that the said Act was being
enacted for giving effect to the policy of the State towards securing the
principles laid down in particular clauses {b} and {c} of Article 39 which is
in chapter IV of the constitution i.e. 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. A
stand was also taken on behalf of the appellant-state that Act 25 of 1978 has
been included in the Ninth schedule of the Constitution and as such it has the
protection of Article 31-B of the constitution and its validity cannot be
questioned on basis of Article 14 of the constitution. In View of the findings
recorded above that sections 4, 5 and 6 of 25 of 1978 are constitutionally
valid and it has effaced the amendments which had been introduced by Act 7 of
1974 in the principal Act because of which it shall be deemed that notification
issued under section 18{1} of the principal Act on 4.4.1973 was legal and valid
and because of the said notification the lands declared as surplus vested in
the state under section 18{3} of the principal Act, there is no necessity to
decide as to whether Act 25 of 1978 has the protection of Articles 31-A, 31-B
and 31-C of the constitution.
Once
it is held that vesting of the surplus land had taken place on 4.4.1973, then
the respondent shall be entitled to the compensation amount which is to be
worked out at 2 times of the net annual income because of Act 39 of 1972 which
had reduced the multiple of the compensation from 9 times to 2 times of the net
annual income w.e.f. 21.12.1972. Accordingly, civil Appeal No. 134 of 1980 are allowed
. The Judgement dated 8.10.1976 in writ Petition No. 1464 of 1974 and judgment
dated 20.7.1979 in writ petition No. 2341-2343 of 1978 of the High Court area
set aside and the writ petitions filed on behalf of the respondent are
dismissed. There shall be no order as to costs.
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