TMI Blog1980 (11) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... or children, will not necessarily lead to concentration of wealth in the hands of a few persons or families. Such is not the intendment, nor the drive, nor the direct and inevitable consequence of the aforesaid definition of 'family '. 3. Section 23 of the Act in our opinion valid and does not suffer from any constitutional infirmity. The definition of the word 'industry ' in clause (b) of the Explanation to that section is undoubtedly unduly wide since it includes any business, profession, trade, undertaking or manufacture . If sub-section (1) of Section 23 were to stand alone, no doubt could have arisen that the Urban Land Ceiling Act is a facade of a social welfare legislation and that its true, though concealed purpose is to benefit favoured private individuals or associations of individuals. But the preponderating provision governing the disposal of excess vacant land acquired under the Act is the one contained in sub-section (4) of Section 23 whereby, all vacant lands deemed to have been acquired by the State Government under the Act shall be disposed of ..... to subserve the common good . The provisions of sub-section (4) are subject to the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he constraints mentioned in sub-section (1) of Section 27 of the Act. 6. The writ petitions are accordingly dismissed except for the restricted striking down of Section 27(1) of the Act. There will be no order as to costs. 7. Fuller reasons will follow later. Krishna Iyer, J. - I agree with the learned Chief Justice both regarding the constitutionality of the legislation and regarding the partial invalidation of Section 27(1). Nevertheless, I consider it necessary to strike a few emphatic notes of concordance having special regard to the discordance of my learned brother Tulzapurkar, J. I have carefully perused the judgment of Tulzapurkar, J., but must express my deferential disagreement because on a few fundamentals there is sharp divergence between us. 9. I proceed to turn the focus only on three issues, namely, the alleged artificiality of 'family ' as defined in Section 2(f) of the Urban Land (Ceiling and Regulation) Act, 1976 (for short, the Act), the invalidity of Section 23 of the Act as discriminatory and, therefore, unconstitutional and the invalidity of Section 11(6) of the Act on the score that the compensation offered is illusory and, therefore, vio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a social order informed by economic justice, is to materialise, law must respond effectively and rise to the needs of the transformation envisioned by the founding fathers. But it is contended that any legislation which violates Article 31(2) or Article 19(1)(f) (both of them have since been deleted by the 44th Amendment to the Constitution although on the relevant date they were part of Part III) must fail notwithstanding the fact that Articles 31-B and 31-C shield the legislation in question. It is said that the Act is vulnerable for the reason that right to property armoured by the above two articles is inviolable unless the taking is for a public purpose in contrast to a private industry and the payment in return, even if not an equivalent, is fair enough so as to be castigated as illusory. The various amendments to Article 31 culminating in the present provision which provides for the payment of an amount disclose a determined approach by Parliament in exercise of its constituent power to ensure that full compensation or even fair compensation cannot be claimed as a fundamental right by the private owner and that short of paying a farthing for a fortune the question of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Crisis of India : It is unique in its depths, which seen incapable of supporting life at all; unique in its blatancy, for it is everywhere, in city and village, and concealed among chimneys or trees, not isolated like an epidemic in an inaccessible slum, but everywhere, on the movement of one s feet, always somewhere in the circle of one s sight; unique in its sheer magnitude, for in India the poor are not to be numbered in hundreds of thousands, but in hundreds of millions; unique in the quality of its submission, which registers a kind of glazed pride. In this context we may also read what Rajan Babu stated as a framer of the Constitution : To all we give the assurance that it will be our endeavour to end poverty and squalor and its companions, hunger and disease, to abolish distinctions and exploitation and to ensure decent conditions of living. We may have to remember that a galaxy of Constitution-makers like Sardar Patel and G. B. Pant and Rajagopalachari, not to speak of Jawahar Lal Nehru, were doubtful about the court being given the power to pronounce upon the question of compensation when the State acquired property. Indeed, it is revealing to read th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a farthing with contempt. Having regard to the human condition of a large percentage of pavement dwellers and slum dwellers in our urban areas and proletarian miserables in our rural vastnesses, any one who gets ₹ 2 lakhs can well be regarded as having got something substantial to go by. In a society where half of humanity lives below the breadline, to regard ₹ 2 lakhs as a farthing is farewell to poignant facts and difficult to accept. In my view, with the greatest respect for my learned Brother. I am unable to assent to the view that Section 11(6) contravenes Article 31(2) because the payment stipulated is a mere mockery. 14. To put a ceiling on the maximum amount payable when property is taken is reasonable and does not spell discrimination unless the maximum itself is a hoax, being trivial. In a Constitution which creates a Socialist Republic egalite is the rule of life and where gross inequalities mar the economic order, a measure of equalisation is but one strategy of promoting equality and has to be viewed as part of the dynamics of social justice. Indeed, even in the Income Tax Act, at a certain stage, almost all the income is taken away by a steep rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ink of large joint families as the natural unit is to resurrect bygone ways of life and turn the blind eye to the rapid growth of the small family of man and wife - 'we two and we shall have two ' is the desideratum and social factum. In these days of family planning and self-reliance of the adult we cannot condemn as arbitrary, by a process of judicial ratiocination, the legislative provision that a family shall be defined as the parents plus their minor children. I, therefore, hold that 'family ' as defined in Section 2(f) of the Act accords with the current life-style in urban conditions and is neither artificial nor arbitrary nor violative of Article 14. It is noteworthy that many agrarian legislations have been upheld by this Court in a spate of recent cases where the definition of 'family ' is substantially the same. 16. I may permit myself a few observations on Section 23 of the Act on the grounds of invalidation relied on by the challengers. The section has been loosely or ambivalently drafted and runs thus : Disposal of vacant land acquired under the Act. - (1) It shall be competent for the State Government to allot, by order, in excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay serve common good. Even a medical clinic, legal aid bureau, engineering consultants s office, private ambulance garage, pharmacist s shop or even a funeral home may be a public utility. Professions for the people, trade at the service of the community and industry in the strategic sector of the nation s development may well be in private hands in the transitional stage of our pluralist economy undergoing a fabian transformation. Why should lands allotted to such private industries or professionals be condemned ? The touchstone is public purpose, community good and like criteria. If the power is used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo. To presume as probable graft, nepotism, patronage, political clout, friendly pressure or corrupt purpose is impermissible. The law will be good, the power will be impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down. We must interpret wide words used in a statute by reading them down to fit into the constitutional mould. The confusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. In their self-defensive campaign the judges have almost given as a constitution, establishing a kind of entrenched provision to the effect that even Parliament cannot deprive them of their proper function. They may be discovering a deeper constitutional logic than the crude absolute of statutory omnipotence. 19. I have no doubt that even the crude drafting of Section 23(4) by the unwanted 'subject to ' will not whittle down the power, why the obligation, to distribute vacant land, not according to personal, political or official fancy but strictly geared to the good set down in Article 39(b) and (c). 20. The question of basic structure being breached cannot arise when we examine the vires of an ordinary legislation as distinguished from a constitutional amendment. Kesavananda Bharati ( : 1973 Supp SCR 1) cannot be the last refuge of the Proprietariat when benign legislation takes away their 'excess ' for societal weal. Nor, indeed, can every breach of equality spell disaster as a lethal violation of the basic structure. Peripheral inequality is inevitable when large-scale equalisation processes are put into action. If all the judges of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er will know no law. This is the root of the matter. And then comes the irony of continual litigative clamour and the periodic chorus for property : (Tennyson, Northern Farmer, 1869) Doesn 't thou 'ear my 'erse 's, as they canters away ? Proputty, proputty, proputty - that s what I 'ears 'em saay. And holders and hoarders of wealth may pensively reflect : (Robert G. Ingersoll : Speech N.Y.C. October 29, 1896) Few rich men own their own property. The property owns them. 22. I have not had the leisurely advantage of my learned Brothers ' full judgments save some discussions but my impending retirement impels a hurried recording of my reasons for subscribing to the order passed just now. 'Tomorrow to fresh woods and pastures new ', but today must be fulfilled before tomorrow arrives, and so, I deliver this judgment as is my duty to do. Tulzapurkar, J. - By these writ petitioners, who are holders of vacant land in the urban agglomerations in various States, are seeking to challenge the vires of some of the salient provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) and since, according to them, some of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 500 sq. metres for urban agglomerations with a population between three lakhs and ten lakhs falling under category 'D ' : vide Section 4 read with Schedule I of the Act. the said Schedule does not mention the urban agglomerations having a population of one lakh and above but if a particular State which passed a resolution under Article 252(1) (first part) of if a State which subsequently adopts the Act by passing a resolution under Article 252 (1) (second part) wants to extend the Act to such areas, it could do so by a notification under Section 2(n)(A)(ii) or Section 2(n)(B), as the case may be, after obtaining main Chapter, comprising Sections 3 to 24, deals principally with imposition and limits of ceiling on vacant land, acquisition and vesting in the State Government of vacant land in excess of the ceiling limits, payment to be made to the holders for such acquisition, disposal of excess vacant land so acquired and exemptions from the applicability of this Chapter. Chapter IV comprising Sections 25 to 30 deals with regulation of transfer and the use of urban property; while Chapter V which includes Sections 31 to 47, deals with appeals, revisions, offences and punis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the 9th Schedule by a constitutional amendment made after April 24, 1973 is saved by Article 31-C as it stood, prior to its amendment by the 42nd Amendment, the challenge to the validity of the relevant Constitutional Amendment by which that Act or Regulation is put in the 9th Schedule, on the ground that the Amendment damages or destroys a basic or essential feature of the Constitution or its structure as reflected in Articles 14, 19 or 31, will become otiose . Article 31-C of the Constitution, as it stood prior to its amendment by Section 4 of the Constitution (42nd Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in Kesavananda Bharati ( : 1973 Supp SCR 1). Article 31-C, as it stood prior to the Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure. Since the impugned Act has been put in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976 i.e. after April 24, 1973, the said Constitution Amendment would be open to challenge on the ground that the same is beyond the constituent power of the Parliament if it damages the essential features ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cription of ceiling area, (b) provision contained in Section 11 relating to amount payable in respect of excess vacant land acquired by the State, (c) provision contained in Section 23 relating to disposal of excess vacant land acquired by the State and (d) prohibition or restriction on transfer of a building or a part thereof or a flat therein, though unconcerned with excess vacant land, without permission, as being flagrantly violative of those aspects of the petitioners ' fundamental rights under Articles 14, 19 and 31 as constitute the essential features or basic structure of the Constitution. for the petitioners also contended that some of the aforesaid impugned provisions which are pivotal and have an impact on the entire scheme of the Act, in fact, run counter to the Directive Principles of Article 39(b) and (c) and, therefore, put the entire Act outside the pale of the protective umbrella of Article 31-C of the Constitution. Counsel therefore, urged that both the 40th Amendment to the extent it inserted the impugned Act in the Ninth Schedule and the impugned Act deserve to be struck down. 28. On the other hand, the learned Attorney-General appearing on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 'person as including an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not; while Section 2(f) declines 'family ' thus : 'family ', in relation to a persons means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children. And the Explanation to this clause states that 'minor ' means a person who has not completed his or her age of eighteen years. There is no doubt that the aforesaid definition of 'family ' is an artificial one inasmuch as it excludes from its scope major children who are normally included in the concept of a family; it further completely ignores the normal Joint Hindu Family. Counsel for the petitioners pointed out that if this artificial definition of 'family ' is considered in the context of ceiling limits prescribed under Section 4(1) it produces discriminatory results because of adoption of double standard for fixing the ceiling limit one for the artificial family as defined and another for a normal family which includes major children or for Joint Hindu Family governed by Mitakshara Law obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the said two decisions relied upon by counsel but in the instant case no material whatsoever has been placed before the court by the respondents justifying the adoption of the artificial definition of 'family ' in Section 2(f) and double standard of fixation of ceiling in the impugned Act. It has not been shown that the so-called nuclear families allegedly in vogue have replaced normal families which includes major sons or joint Hindu families in urban areas. Besides, if the object of the impugned Act is to acquire excess vacant land in urban agglomerations after leaving permissible ceiling area to a family the classification made between minor children and major children belonging to a family has no nexus whatsoever to that object. In my view, therefore, the artificial definition of 'family ' given in Section 2(f) when considered in relation to the prescription of the ceiling area under Section 4(1) is clearly violative of and strikes at the root of the equality clause contained in Article 14 of the Constitution. It cannot be disputed that this artificial definition together with the double standard adopted for fixing the ceiling area runs through and form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th of and not in furtherance of the Directive Principle of Article 39(c); in fact, it is a negation of that principle. It is not possible to take the view that the Parliament out of inadvertance ignored joint Hindu Family or forgot the possible concentration of vacant land in the hands of major members of large joint Hindu families, because in another context the concept of Joint Hindu Family was present to the mind of the draftsman as is clear from Section 4(7) of the Act. In my view, therefore, the adoption of the artificial definition of 'family ' and double standard for fixing ceiling area one for a family with minor children and another for a family with major children and completely ignoring the concept of joint Hindu family in relation to prescription of ceiling area clearly lead to results which run counter to the directive principle contained in Article 39(c) of the Constitution. The Act which contains such provision being in teeth of that Directive Principle must fall outside the pale of protective umbrella of Article 31-C.Re : Section 23 relating to disposal of excess vacant land acquired under the Act. 33. It may be stated that under Section 6 every person h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e industry shall be put in operation or, as the case may be, the residential accommodation shall be provided for : Provided that if, on a representation made in this behalf by the allottee, the State Government is satisfied that the allottee could not put the industry in operation, or provide the residential accommodation, within the period specified in the order of allotment, for any good and sufficient reason, the State Government may extend such period to such further period or periods as it may deem fit. (3) Where any condition imposed in an order of allotment is not complied with by the allottee, the State Government shall, after giving an opportunity to the allottee to be heard in the matter, cancel the allotment with effect from the date of the non-compliance of such condition and the land allotted shall revest in the State Government free from all encumbrances. (4) Subject to the provisions of sub-sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deed fit to impose. (5) Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the benefit of the public, but the priorities in the matter of disposal or distribution of such excess vacant land have been peculiarly fixed in the section; these priorities, as indicated in sub-sections (1) and (4), are :- (i) for the purpose of an industry, namely, any business, profession, undertaking, trade or manufacture, (ii) allotment for the purpose of construction of houses for the employees of an industry specified in item (i) above and (iii) disposal to subserve the common good which would include allotment of vacant land for governmental purpose or local authorities or for institutions, etc. In other words, it is after the disposal of such excess vacant land for items (i) and (ii) above, that the balance thereof can be disposed of to subserve the common good which means private purposes have precedence over public purposes, and this is clear from the fact that disposal under sub- section (4) is subject to the prior disposal under sub-section (1) for purposes for common good is last in the priorities. Sub-section (5) undoubtedly has an overriding effect over sub-sections (1) to (4) but that provision deals not with disposal or distribution of excess vacant la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. Article 31 of the Constitution has more than one facet; it undoubtedly confers upon individuals (including non-citizens) and corporate bodies a fundamental right to property but because of conflict of views in Kesavananda Bharati case ( : 1973 Supp SCR 1) it may be debatable whether that right forms part of basic structure or not; but that apart, Article 31 incorporates in our Constitution the concept of State s power of eminent domain i.e. power of compulsory acquisition of private Property and prescribes two conditions precedent to the exercise of the power, namely, (i) such acquisition cannot be except for a public purpose, and (ii) it must be on payment of compensation (now termed 'amount ') to the claimant having interest in the property. In Kameshwar Singh case (State of Bihar v. Kameshwar Singh, 1952 SCR 889 : 1952 AIR(SC) 252) this position has been clarified where Mahajan, J., after referring to some authoritative books has summed up the definition of the concept in one sentence thus - Authority is universal in support of the amplified definition of 'eminent domain ' as the power of the sovereign to take property for public use without th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interests and to bring the raiyats and other occupants of lands in those distinguishable and its ratio would not apply to the instant case where the purpose of acquisition of the excess vacant (urban) land is bald objective like 'industry ' simpliciter; surely different considerations would apply. In my view it is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomerations throughout the country for a bald, indefinite and unspecified objective like 'industry ' simpliciter, would be a valid exercise of the power of 'eminent domain '. However, it is not necessary for me to decide this larger question inasmuch as in my view the alternative submission of counsel for the petitioners clinches the issue in this case. Assuming that a bald objective of 'industry ' simpliciter partakes of the character of a public purpose, what Parliament intended by the said objective has been expressly clarified by clause (b) of the Explanation where 'industry ' has been very widely defined so as to include any business, trade or profession in private sector which makes a mockery of such public purpose. Whatever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent of such land to individuals or bodies for private purposes. Secondly, the priorities in the matter of disposal or distribution of the excess vacant land under sub-sections (1) and (4) are as indicated above, which show that disposal or distribution of excess vacant land for subserving the common good comes last in the priorities. I have already indicated that the postulates underlying the directive principle of Article 39(b) is that diffusion of ownership and control of the material resources of the community is always in the public interest and, therefore, the State is directed to ensure such distribution (equitable) thereof as best to subserve the common good but the priorities prescribed in sub-sections (1) and (4) of Section 23 in regard to distribution of material resources produce contrary results or results in the opposite direction inasmuch as private purposes receive precedence over common good. The enactment which contains such provisions that produce contra results cannot be said to be in furtherance of the directive principle of Article 39(b) and cannot receive the benefit of the protective umbrella of Article 31-C. 38. Counsel for the respondents, however, reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llotment of vacant land for government purposes, local authorities, institutions, etc., (iii) Allotment for the purpose of construction of houses for the employees of industries specified in item (iv) below, (iv) Allotment for the purpose of industry, viz., any business, profession, trade, undertaking of non-polluting manufacture; cottage and small scale and wherever possible ancillary industry, manufacture. It will appear clear that the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development seek to furnish improved guide-lines but in the process reverse the priorities given in the section in the matter of disposal or distribution of excess vacant land. It is obvious that the priorities given in Section 23 and as have been summarised in para 3 of the Note must prevail over the priorities indicated in the guide-lines contained in para 4 of the Note and the latter are of no avail. It is thus clear that the priorities as given in Section 23(1) and (4) in the matter of disposal or distribution of excess vacant land acquired under the Act run counter to and in a sense operate to negate the directive principle of Section 39(b). 39. It was then f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Section 23 should be construed as an enabling provision which merely permits the State Government to allot excess vacant land for the purpose of industry, while the real obligations in the matter of disposal of excess vacant land arises under sub-section (4) which speaks of disposal of such land to 'subserve the common good '; in other words, the disposal under sub-section (4) should override the disposal under sub-section (1); at any rate 'common good ' spoken of in sub-section (4) should permeate the disposal under sub-section (1). It is impossible to read sub-section (1) of Section 23 as containing merely an enabling provision; the scheme of sub-sections (1) and (4) read together clearly shows that the disposal of the excess vacant land is first to be done under sub-section (1) and disposal under sub-section (4) comes thereafter. The opening words of sub-section (4) 'subject to ...... sub- sections (1), (2) and (3) ' cannot be read as constituting a non-obstante clause giving an overriding effect to sub-section (4) nor can sub-section (4) be read as if the opening words were absent. By indulging in such interpretative acrobatics the court cannot r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations falling within categories 'C ' and 'D '. In other words, for vacant land yielding income the method of capitalisation of the income for certain number of years is adopted while for vacant land yielding no income maximum rates of compensation for 'A ' and 'B ' categories at ₹ 10 per sq. metre and for 'C ' and 'D ' categories at ₹ 5 per sq. metre have been fixed. Compensation (called 'amount ') once determined is payable to the holder under Section 14(2) in a certain manner, namely, 25 per cent. thereof will be paid in cash and the balance 75 per cent. in negotiable bonds redeemable after expiry of 20 years carrying interest at 5 per cent. per annum. Section 11(6) which puts the maximum limit of two lakhs on the quantum payable in respect of excess vacant land acquired under the Act runs thus : 11. (6) Notwithstanding anything contained in sub-section (1) or sub- section (5), the amount payable under either of the said sub-sections shall, in no case, exceed two lakhs of rupees. 42. Counsel for the petitioners contended that Section 11 (6) which puts the maximum limit of Rs. two lakhs on the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds held on janman right were acquired without payment of any compensation on the ground that such acquisition was for implementing a scheme of agrarian reform by assigning lands on registry or by way of lease to poorer sections of the rural agricultural population, the enactment being protected under Article 31-A(1) of the Constitution. Again the Coal Mines (Nationalisation) Act, 1973 whereunder the right, title and interest of the owners in relation to their coal mines specified in the schedule to the Act stood transferred to and became vested absolutely in the Central Government free from encumbrances in exchange of payment of fixed amounts specified in that schedule was upheld by this Court. But such cases involving large schemes of social engineering where avowedly the benefit of the community or public at large is the sole consideration are distinguishable from the instant case, where 'industry ' has been expressly defined to include business, trade or profession in private sector and where power has been conferred upon the State Government to allot properties acquired under the enactment to individual businessman, trader or professional to enable him to carry on his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged by the petitioners is Section 27 occurring in Chapter IV to the extent to which it imposes restriction on transfer of an urban land with building or a part thereof or a flat therein though unconcerned or unconnected with the excess vacant land as unconstitutional being beyond the legislative authorisation as also violative of petitioners ' fundamental rights under Articles 14 and 19(1) (f). Section 27, as its marginal note indicates, deals with the subject of prohibition of transfer of urban property and sub-section (1) thereof runs thus : 27. (1) Notwithstanding anything contained in any other law for the time being in force, but subject to the provisions of sub-section (3) of Section 5 and sub-section (4) of Section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the competent author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding flats therein) standing on urban land falling within the permissible ceiling area would be outside the purview of the Act. It was urged for the respondents that such a provision would be incidental or ancillary to the ceiling contemplated by the Act and would fall within the phrase 'for matters connected therewith ' occurring in the Preamble and the long title of the Act. It is not possible, to accept the contention, for, the words 'matters connected therewith ' occurring in the concerned phrase must be correlated to what precedes that phrase, namely, 'an Act to provide for ceiling on vacant land in urban agglomerations, for the acquisitions of such land in excess of the ceiling limit, to regulate the construction of buildings on such land ' and, therefore, the words 'matters connected therewith ' must mean matters in relation to the ceiling imposed by the Act. A reference to objectives under Article 39(b) and (c) (for the achievement of which the enactment is allegedly taken in hand) in the Preamble or long title cannot enlarge the ambit or scope of the Act. Any restriction imposed on built-up properties falling within the permissible ceili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any standards having been laid down by the legislature for achieving the objectives of prevention of concentration, speculation and profiteering in urban land and urban property, the provision for appeal and revision would not be of much avail to preventing arbitrariness in the matter of granting or refusing to grant the permission. Section 27 which does not adequately control the arbitrary exercise of the power to grant or refuse the permission sought is clearly violative of Article 14 of the Constitution and as such the requirement of permission contained therein will have to be struck down as being ultra vires and unconstitutional. 48. In the result, in view of the aforesaid discussion, I would like to indicate my conclusion thus : (1) The impugned Act, though purporting to do so, does not, in fact, further the directive principles in Article 39(b) and (c). Section 2(f) in relation to prescription of ceiling area, as shown above, permits unwarranted and unjustified concentration of wealth instead of preventing the same and is in teeth of the objective under Article 39(c); similarly, Section 23, as discussed above, produces results contrary to the objective under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11(6), a severable provision, being violative of petitioners ' fundamental right under Article 31 is declared to be ultra vires and unconstitutional. (6) Section 27, being severable, is also declared ultra vires and unconstitutional to the extent indicated above as being beyond the ambit of the Act and violative of Article 14 of the Constitution. 49. Before parting with the matter I would like to refer to the manner in which this important complicated measure came to be enacted. It cannot be doubted that the 11 sponsoring State Legislatures passed their resolutions under Article 252(1) with a laudable object, namely, to clothe the Parliament with legislative competence to enact a law for the imposition of ceiling on urban immovable property for the country as a whole. Though initially a model bill based on the recommendations made by the Working Group in its Report dated July 25, 1970 had been prepared where ceiling was proposed to be imposed on urban property on the basis of monetary value, Parliament later on realised that the implementation of that proposal was beset with several practical difficulties indicated in the Approach Paper prepared by a Study Group, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut to be an ill-conceived and ill- drafted measure. The measure was, undoubtedly, taken in hand with a view to achieve the unexceptional objectives underlying Article 39(b) and (c), but as shown above, the enacted provisions misfire and produce the opposite results and also damage or destroy the essential features or basic structure of the Constitution and hence dutybound I am constrained to strike down this impugned piece of purported socio-economic legislation. The legislative competence of the Parliament being still there a well- drafted enactment within the constitutional limitations on the subject would be the proper remedy. 50. I would, therefore, allow the petitions and direct issuance of the appropriate writs sought. Sen, J. - These writ petitions under Article 32 of the Constitution seek to challenge the constitutional validity of the Urban Land (Ceiling and Regulation) Act, 1976 on various grounds. The act has been placed as Item 132 in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976. Questions involved are of far-reaching importance affecting the national interest. 52. The history of the legislation is well-known. The State Legislatures of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 000 sq. metres. The schedule does not mention the urban agglomerations having a population of one lac and above; but if a particular State which passed a resolution under Article 252(1), or if a State which subsequently adopts the Act, wants to extend the Act to such areas, it could do so by a notification under Section 2(n)(B) or Section 2(n)(A)(ii), as the case may be, after obtaining the previous approval of the Central Government. 55. The primary object and the purpose of the Urban Land (Ceiling and Regulation) Act, 1976, 'the Act ', as the long title and the preamble show, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good, in furtherance of the Directive Principles of State Policy under Article 39(b) and (c). 56. The State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in Section 11(6); (iv) granting exemptions in respect of vacant land in certain cases under Sections 20 and 21; (v) regulating the transfer of vacant land within the ceiling limits under Section 26; (vi) regulating the transfer of urban or urbanisable land with any building (whether constructed before or after the commencement of the Act), for a period of ten years from the commencement of the Act or the construction of the building whichever is later under Section 27; (vii) restricting the plinth area for the construction of future residential buildings under Section 29; and (viii) other procedural and miscellaneous matters. 59. The Act is thus intended to achieve the following objectives : (1) to prevent the concentration of urban property in the hands of a few persons and speculation and profiteering therein : (2) to bring about socialisation of urban land in urban agglomerations to subserve the common good to ensure its equitable distribution, (3) to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials, and (4) to secure orderly urbanisation. Thus the dominant object and purpose of the legislation is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule by the Fortieth Amendment, is challenged principally on the ground that, firstly, it is violative of the fundamental rights guaranteed under Articles 14, 19(1)(f) and 31(2), since it seeks to alter the 'basic structure ' of the Constitution as formulated by this Court in His Holiness Kesavananda Bharati v. State of Kerala (1973 Supp SCR 1 : and, therefore, has not the protective umbrella of Article 31-B, and secondly that it is a law in negation of, and not in furtherance of the Directive Principles of State Policy under Article 39(b) and (c) and is, therefore, not protected under Article 31-C. 63. In Waman Rao v. Union of India ( 588-89), this Court by its order, in the context of the decision in Kesavananda Bharati case (1973 Supp SCR 1 : has laid down : (SCC pp. 588-89, paras 2-3) Amendments to the Constitution made on or after April 24, 1973 by which the Ninth Schedule to the Constitution was amended from time to time by the inclusion of various Acts and Regulations therein, are open to challenge on the ground that they, or any one or more of them, are beyond the constituent power of the Parliament since they damage the basic or essential features of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the previous permission in writing of the competent authority, even though such vacant land in an urban agglomeration is within the ceiling limits is an unreasonable restriction on the fundamental right to property guaranteed under Commissioner 19(1)(f); and (4) the 'priorities ' laid down in Section 23 of the impugned Act are not in keeping with Part IV of the Constitution and, therefore, liable to be struck down. It is urged upon these grounds that the impugned Act is flagrantly violative of those aspects of the petitioners ' fundamental rights under Articles 14, 19 and 31 as constitute the basic structure or framework of the Constitution, and therefore, it is not protected under Article 31-B or 31-C. 65. Land in urban areas is a vital physical recourse capable of generating and sustaining economic and social activities. It should be properly utilised by the community for social good. But the attraction of urban areas has led to profiteering and racketeering in land in these areas. There is also misapplication of this scarce resource of urban land for undesirable purposes. Therefore, a comprehensive policy of effective control of land covering its use, distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stribution of land in urban agglomerations to subserve the common good, in furtherance of the directive principles under Article 39 (b) and (c). The constitutional validity of Section 23 of the Act depends on whether in truth and substance these objectives have been translated into action. Section 23 of the Act reads : 23. (1) It shall be competent for the State Government to allot by order, in excess of the ceiling limit any vacant land which is deemed to have been acquired by the State Government under this Act or is acquired by the State Government under any other law, to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry and it shall be lawful for such person to hold such land in excess of the ceiling limit. Explanation. - For the purpose of this section, - (a) where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by the State Government, then, such land shall be deemed to be vacant land acquired under such other law;(b) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 23 of the impugned Act must, therefore, be struck down as unconstitutional, it being not in keeping with Part IV of the Constitution was not protected under Article 31-C and that it cannot also have the protective umbrella of Article 31-B as it seeks to alter the basic structure of the Constitution. 69. Although the impugned Act is enacted with a laudable object, to subserve the common good, in furtherance of the directive principles of State Policy under Article 39(b) and (c), it appears from the terms of sub- sections (1), (2) and (3) of Section 23 that it would be permissible to acquire vacant land in urban agglomerations and divert it for private purposes. The whole emphasis is on industrialisation. The opening words in Section 23(4) 'subject to the provisions of sub-sections (1), (2) and (3) ' make the provisions of Section 23(4) subservient to Section 23(1) which enables the government to allot vacant land in an urban agglomeration to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry. It further makes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on the State Government to adhere to the Directive Principles under Article 39(b) and (c) in making allotment of the vacant lands in an urban agglomeration acquired under the Act. The words 'subject to the provision of sub- sections (1), (2) and (3) ' in Section 23(4), appearing in the context of Section 23(1) means 'in addition to; if anything is left over after the allotment under Section 23(1) '. I cannot, therefore, read the provisions of sub-sections (1), (2) and (3) of Section 23 in the light of the preamble of the Directive Principles under Article 39(b) and (c). By no rule of construction can the operation of sub-section (1) of Section 23 of the Act be controlled by the operation of sub-section (4). 72. A legislation built on the foundation of Article 39(b) and (c) permitting acquisition of private property must be for a public purpose, that is, to subserve the common good. In my view, sub-sections (1), (2) and (3) of Section 23 of the Act negate that principle. Furthermore, Article 31(2) consists of three prerequisites namely (i) the property shall be acquired by or under a valid law, (ii) it shall be acquired only for a public purpose, and (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to retain or reserve such land for the benefit of the public. 2. For the purpose of this section 'industry ' has been given a wider meaning so as to cover any business, profession, trade, undertaking or manufacture. 3. The section also enables government to allot land for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry. Thus the excess vacant land acquired by the State Government under the Act can be dealt with in the following manner : (i) allotted for the purpose of an industry namely, any business, profession, trade, undertaking or manufacture; (ii) allotted for the purpose of construction of houses for the employees of an industry specified in item (i) above; (iii) disposed of to subserve the common good which may include allotment of vacant land for government purpose, for institutions, etc.; and (iv) retained/reserved for the benefit of the public. It appears that the government issued the following guide-lines pursuant to the recommendations made at a conference of State Ministers of Housing and Urban Development with a view to implement the policy of socialisation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... munity under Article 31-B. The directive principles are not mere homilies. Though these directives are not cognizable by the courts and if the government of the day fails to carry out these objects no court can make the government ensure them, yet these principles have been declared to be fundamental to the governance of the country. Granville Austin (Granville Austin : THE INDIAN CONSTITUTION : CORNERSTONE OF A NATION pp. 50-52) considers these directives to be aimed at furthering the goals of the social revolution or ...... to foster this revolution by establishing the conditions necessary for its achievement. He explains : By establishing these positive obligations of the State, the members of the Constituent Assembly made it the responsibility of future Indian governments to find a middle way between individual liberty and the public good, between preserving the property and the privilege of the few and bestowing benefits on the many in order to liberate 'the powers of all men equally for contributions to the common good '. 78. In short, the directives emphasise, in amplification of the preamble, that the goal of the Indian polity is not laissez faire, but a we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion; and that (iv) the Nation shall be governed by a Government of laws, not of men. These, in my opinion, are the pillars of our constitutional philosophy, the pillars, therefore of the basic structure of the Constitution. 81. According to him, the pillars of the Constitution are Sovereign Democratic Republic, Equality of Status and Opportunity, Secularism Citizen s right to religious worship, and the Rule of Law. With respect, I would add that the concept of social and economic justice - to build a Welfare State - is equally a part of the basic structure or the foundation upon which the Constitution rests. The provisions of sub-sections (1), (2) and (3) of Section 23 and the opening words 'subject to the provisions of sub-sections (1), (2) and (3) ' in Section 23(4) are the very antithesis of the idea of a Welfare State based on social and economic justice. Since these provisions permit acquisition of property under the Act for private purposes, they offend against the Directive Principles of State Policy of Article 39(b) and (c) and are also violative of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l s right to property, the court must take judicial notice of the fact of vast inequalities in the existing distribution of property in the country. The court s concern lies not merely with applying the pre-existing sets of theories, concepts, principles and criteria with a view to determining what the law is on a particular point. The proper approach should be to view the principles with the realisation that the ultimate foundation of the Constitution finds its ultimate roots in the authority of the people. This demands that constitutional questions should not be determined from a doctrinaire approach, but viewed from experience derived from the life and experience or actual working of the community, which takes into account emergence of new facts of the community s social and economic life affecting property rights of the individual, whenever, among others, the validity of a law prescribing preference or discrimination is in question under the 'equal protection ' guarantee. 86. It should be remembered that the directive principles cannot be regarded only as idle dreams or pious wishes merely by reason of the fact that only are not enforceable by a court of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' appearing in the different State laws relating to imposition of ceiling on agricultural land. The ultimate object is to reduce inequalities in the larger interest. That takes us to the question whether the definition of 'family ' in Section 2(f) of the Act results in the exclusion of a joint Hindu family. 89. The definition of 'family ' contained in Section 2(f) is in the following terms : 'family ' in relation to a person, means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children. As a result of the artificial definition of 'family ' in Section 2(f), there is no denying the fact that a joint Hindu family is excluded from the purview of the Act. Section 3 of the Act provides that no person, on and from the commencement of the Act, shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the Act applied. The word 'person ' is defined in Section 20(i) as : 'person ' includes an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not; . 90. The que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quate or that the whole or any part of such amount is to be given otherwise than in cash. Under the original Article 31(2), no property could be acquired for a public purpose under any law, unless it provided for compensation for property taken possession of, or acquired and either fixed the amount of the compensation, or specified the principles on which, and the manner in which, the compensation was to be determined and given. 92. It will be seen that Article 31(2) provides for acquisition or requisitioning of the property for an amount which may be fixed by such law, or which may be determined in accordance with such principles and given in such manner as may be specified in such law. No such law can be called in question on the ground that the amount is not adequate, or that the whole or any part of it is to be given otherwise than in cash. Section 2(b) of the 25th Amendment Act inserted a new clause (2-B) to Article 31 which provides : Nothing in sub-clause (f) of clause (1) of Article 19 shall affect any such law as is referred to in clause (2). The substitution of the neutral word 'amount ' for 'compensation ' in the new Article 31(2) still bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the amount at the rate of ₹ 10 per sq. metre and ₹ 5 per sq. metre, for the vacant land in categories 'A ' and 'B ' and categories 'C ' and 'D ' respectively, makes the amount illusory or the Act confiscatory. The submission is that the fixation of the maximum amount payable at ₹ 2 lacs in a single case by sub-section (6) makes the amount payable under sub-section (1) wholly illusory and, therefore, the Act is confiscatory. That cannot be so, because the fixation of ceiling on the maximum at ₹ 2 lacs under Section 11(6) implies that it would affect only persons owning 20, 000 sq. metres of vacant land in metropolitan cities like Delhi, Calcutta, Bombay and Madras or large cities like Hyderabad, Bangalore, Poona, Kanpur and Ahmedabad falling in categories 'A ' and 'B ' or persons owning 40, 000 sq. metres in big cities like Lucknow, Allahabad, Nagpur, Jaipur, etc. falling in categories 'C ' and 'D '. One is left to wonder how many own such vast tracts of vacant land in such cities. If any, very few indeed. Even if there are, the amount cannot be related to the value of the property t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to and covered under his Umed Bhawan Palace in the city of Kotah, which is an urban agglomeration falling under category 'D ', and which stands requisitioned under Section 23(1) of the Defence and Internal Security of India Act, 1971. There is no dispute that the property of the Maharana is valued for the purposes of the Rajasthan Lands and Buildings Tax Act, 1964, at ₹ 4, 12, 27, 726.84. Does it mean that the amount should be geared to the value of the vacant land taken under sub-section (3) of Section 10 ? When the court has no power to question the adequacy of the amount under Article 31(2), can it be said that the amount fixed determined according to the principles laid down in sub-section (1) of Section 11, subject to the maximum fixed under sub-section (6) thereof is illusory merely because of inadequacy. 96. Who are we to say that it should be 10 per cent. or less, or 50 per cent. or more. The legislature in its wisdom has laid down the principles and fixed a ceiling on the maximum amount payable. That is a legislative judgment and the court has no power to question it. Seervai in his book on Constitution, 2nd Ed., Vol. I, p. 656, while dealing with the Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant principles has been held to have been nullified by the 25th Amendment. 99. The two decisions, directly in point are the State of Kerala v. Gwalior Rayon Silk Mfg. Co. () and State of Karnataka v. Ranganatha Reddy . In Gwalior Rayon case () the court upheld the validity of the Kerala Private Forests (Vesting and Assignment) Act, 1971, which provided for the vesting of vesting of private forest lands held in janman rights, even though there was no provision for payment of compensation. The court held that since the Act envisaged a scheme of agrarian reform, it was protected under Article 31-A and could not be challenged on the ground that it takes away, abridges or abrogates the fundamental rights guaranteed by Articles 14, 19 and 31. In Ranganatha Reddy case () the court upheld a scheme for nationalisation of contract carriages in the State since it laid down the principles for the determination of the amount payable under Article 31(2) and they were not irrelevant for the determination of the amount. Untwalia, J., speaking for the majority observed : (SCC p. 489, para 26)On the interpretations aforesaid which we have put to the relevant provisions of the Act, it was difficul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermission where the transaction is calculated to defeat the provisions of the Act. It is said that the whole object of freezing of the transactions was to hold the price line of urban land. He drew our attention to the guide-lines issued by the Government of India, Ministry of Works and Housing to the various State Governments directing that all applications for grant of permission under sub-section (1) of Section 27 of the Act should be dealt with expeditiously with a view to prevent any inconvenience to the members of the public and further that permission should be granted, as a matter of course, within three days of the receipt of such application. 102. In my judgment, there is no justification at all for the freezing of transactions by way of sale, mortgage, gift or lease of vacant land or building for a period exceeding ten years, or otherwise, for a period of ten years from the date of commencement of the Act, even though such vacant land with or without building thereon falls within the ceiling limits. In Excel Wear v. Union of India (), the court held that the right to carry on a business guaranteed under Section 19(1)(g) carries with the right not to carry on business. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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