TMI Blog2011 (8) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... xist for payment of such compensation, as a result of which, whether the Act really is expropriatory in nature? Whether on true interpretation of Article 300A of the Constitution, the said Act is violative of Article 300A as the said Article is not, by itself, a source of Legislative power, but such power of the State Legislature being traceable only to Entry 42 of List III of Schedule VII to the Constitution viz., "Acquisition and Requisition of Property", which topic excludes expropriation and confiscation of property? If Article 300A of the Constitution is construed as providing for deprivation of property without any compensation at all, or illusory compensation, and hence providing for expropriation and confiscation of property, whether the said Article would violate the rule of law and would be an arbitrary and unconscionable violation of Article 14 of the Constitution, thus violating the basic structure of the Constitution? - CIVIL APPEAL NO.6520-6538 of 2003 - - - Dated:- 9-8-2011 - S.H. Kapadia, Mukundakam Sharma, K.S. Radhakrishnan, Swatanter Kumar, Anil R. Dave ,JJ. JUDGMENT : The constitutional validity of Roerich and Devika Rani Roerich Estate (Acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Land Reforms Act. 5. Dr. Roerich, it was stated, had sold 141.25 acres (which included 100 acres granted by the Government for Linaloe cultivation) to M/s K.T. Plantations Pvt. Ltd. (the first appellant herein, in short `the Company') by way of a registered Sale Deed dated 23.3.91 for a sale consideration of ₹ 56,65,000/-. It was stated that Mrs. Devika Rani Roerich had also sold an extent of 223 acres 30 guntas to the Company on 16.2.1992 for a sale consideration of ₹ 89,25,000/- by way of an unregistered sale deed, a transaction disputed by Mrs. Devika Rani. The Company, however, preferred a suit OS 122/92 for a declaration of title and injunction in respect of that land before the District and Civil Judge, Bangalore which is pending consideration. 6. The Company sought registration of the sale deed dated 16.02.92 before the Sub Registrar, Kingeri, who refused to register the sale deed. The Company then preferred an appeal before the District Registrar, but when the appeal was about to be taken up for hearing, one Mary Joyce Poonacha who claimed rights over the property on the strength of an alleged will preferred a Writ Petition No.2267 of 1993 befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been surrendered by them to the Government. The view of the Law Department was sought for in that respect and the Law Department on 18.11.93 stated that the earlier order dated 15.03.82 of the Land Tribunal, Bangalore be re- opened and the action under Section 67(1) be initiated for resumption of the excess land. The Deputy Commissioner was requested to issue suitable instructions to the Tahsildar, Bangalore South Taluk to place the matter before the Land Tribunal, for review of the earlier order dated 15.03.82 by invoking the provisions of Section 122A of the Land Reforms Act. 10. The Deputy Commissioner reported that Dr. Roerich had sold an extent of 137.33 acres of land comprising of survey nos. 124, 126 of B.M. Kaval and survey No. 12 of Manavarth Kaval of Bangalore South Taluk on 23.3.1991 to M/s K.T. Plantations Private Limited and it was reported that the request for mutation in respect of those lands was declined by the local officers and the lands stood in the name of late Dr. Roerich in the Record of Rights. 11. The Commissioner and Secretary to the Government, Revenue Department taking note of the above mentioned facts sought the legal opinion of the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, Mary Joyce Poonacha has approached this Court and filed Civil Appeal No. 6538 of 2003. 14. The Company, through its Managing Director, filed Writ Petition No. 32560 of 1996 before the Karnataka High Court challenging the constitutional validity of the Acquisition Act, Section 110 of the Land Reforms Act, the notification dated 08.03.1994 issued thereunder and also sought other consequential reliefs. The writ petition was dismissed by the High Court upholding the validity of the Acquisition Act as well as Section 110 of the Land Reforms Act and the notification issued thereunder except in relation to the inclusion of certain members in the Board of Directors constituted under the Acquisition Act. Aggrieved by the same the Company has come up before this Court in Civil Appeal No.6520 of 2003. 15. Mary Joyce Poonacha and others had also challenged the constitutional validity of the Acquisition Act by filing Writ Petition Nos. 32630- 32646 of 1996 before the Karnataka High Court, which were also dismissed in view of the judgment in Writ Petition No. 32560 of 1996. Aggrieved by the same, they have preferred Civil Appeal Nos. 6521-6537 of 2003. 16. When the Civil Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Land Reforms Act by virtue of Section 107(1)(vi) of the Act. Learned senior counsel submitted that the State Government cannot, in exercise of its powers under Section 110 of the Act, issue notification dated 08.03.94 to withdraw the exemption granted by the Legislature which is essentially a legislative policy. Learned senior counsel also submitted that Section 110 gave unfettered and unguided power to the Executive to take away the exemption granted by the Legislature and hence that Section is void for excessive delegation of legislative powers on the State Government. In support of his contention, reliance was placed on the judgments of this court In Re: The Delhi Laws Act, 1912, the Ajmer-Merwara (Extension of Laws) Act, 1947 and the Part C States (Laws) Act, 1950 (1951) 2 SCR 747, Rajnarain Singh v. The Chairman, Patna Admnistration Committee, Patna Another, AIR 1954 SC 569, Vasantlal Maganbhai Sanjanwala v. State of Bombay and Ors. AIR 1961 SC 4, Hamdard Dawakhana (Wakf) Lal Kuan, Delhi Another v. Union of India Others (1960) 2 SCR 671. 18. Learned senior counsel also submitted that the State Government cannot take away retrospectively the veste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssive delegation of legislative power is still available and the Land Reforms Act cannot be protected by Article 31B. Shri Andhyarujina also submitted that the State Govt. was led to deprive the appellants of their property even by-passing the Act when it resorted to withdrawing the exemption available under Section 107(1)(vi) of the Land Reforms Act, by issuing its notification dated 08.03.1994 by withdrawing the exemption and making the Company ineligible to hold the agricultural land under Section 79B of the Land Reforms Act which also provided inadequate compensation. 22. Mr. Basavaprabhu S. Patil, senior counsel for the State of Karnataka submitted that the validity of Section 110 of the Act was never questioned before the High Court on the ground of excessive delegation and hence, the appellants are precluded from raising that contention before this Court. Learned senior counsel submitted that the validity of Section 110 was challenged on the ground of violation of the fundamental rights which was rightly negatived by the High Court since the Land Reforms Act was placed in the IXth Schedule. Learned senior counsel also submitted that the Land Reforms Amendment Act (Act 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Land Reforms Act, as a matter of right, much less a Company which is statutorily barred from holding excess agricultural land. By withdrawing the exemption the State Govt. was only giving effect to the underlying legislative policy. 25. Learned senior counsel submitted, but for the exemption granted, Roerichs' would not have held the land used for the cultivation of Linaloe. Exemption was granted to Roerichs subject to Section 110 of the Land Reforms Act and it was with that statutory limitation the Company had purchased the land. Learned senior counsel cited the following judgments of this Court in Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi and Another AIR 1968 SC 1232; Delhi Cloth General Mills Ltd. v. Union of India Others. (1983) 4 SCC 166; Premium Granites and Anr. v. State of Tamilnadu and Ors. (1994) 2 SCC 691; Registrar of Co-operative Societies, Trivandrum and Anr. v. Kunjabmu and Ors. (1980) 1 SCC 340. 26. Learned senior counsel also submitted that there is no provision for providing hearing or recording reasons before issuing the notification dated 08.03.1994, while exercising powers under Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute etc. 30. Chapter V of the Act, as we have already indicated, imposes certain restrictions on holding or transfer of agricultural lands. Section 79B(1) of the Act prohibits holding of agricultural land by certain persons which says that with effect on and from the date of commencement of the Amendment Act (Act 1/74) w.e.f. 1.3.1974, no person other than a person cultivating land personally shall be entitled to hold land; and that it shall not be lawful for, a company inter alia to hold `any land'. Further sub- section (2) of Section 79B states that the company which holds lands on the date of the commencement of the Amendment Act and which is disentitled to hold lands under sub-section (1), shall within ninety days from the said date furnish to the Tahsildar within whose jurisdiction the greater part of such land is situated a declaration containing the particulars of such land and such other particulars as may be prescribed; and which acquires such land after the said date shall also furnish a similar declaration within the prescribed period. Sub- section (3) of Section 79B states that the Tahsildar shall, on receipt of the declaration under sub- section (2) and afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt which together with the land cultivated by linaloe, if any, already held by him exceeds ten units. (3) In respect of every acquisition contrary to sub-section (2), the provisions of Section 66 to 76 shall mutatis mutandis apply. Section 107, we have already indicated, is made subject to Section 110, which reads as follows: 110. Certain lands to be not exempt from certain provisions.- The State Government may, by notification direct that any land referred to in [Section 107 and 108] shall not be exempt from such of the provisions of this Act from which they have been exempted under the said sections. 33. The question that is canvassed before us is whether Section 110 is invalid due to excessive delegation of legislative powers on the State Government. Before we examine the scope and ambit of the above quoted provision, reference may be made to few of the decided cases of this Court on the power of delegation of legislative functions. 34. In re: The Delhi Laws Act, 1912 (supra), this Court held that legislatures in India have been held to possess wide powers of delegation but subject to one limitation that a legislature cannot delegate essential legislative func ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be determined by the court having regard to the subject-matter, the scheme, the provisions of the statute including its preamble and the facts and circumstances and the background on which the statute is enacted. See Bhatnagars Co. Ltd. v. Union of India AIR 1957 SC 478; Mohmedalli and Ors. v. Union of India and Ors., AIR 1964 SC 980. 36. Further, if the legislative policy is formulated by the legislature, the function of supplying details may be delegated to the executive for giving effect to the policy. Sometimes, the legislature passes an act and makes it applicable, in the first instance, to some areas and classes of persons, but empowers the government to extend the provisions thereof to different territories, persons or commodities, etc. So also there are some statutes which empower the government to exempt from their operation certain persons, commodities, etc. Some statutes authorise the government to suspend or relax the provisions contained therein. So also some statutes confer the power on the executive to adopt and apply statutes existing in other states without modifications to a new area. 37. In Brij Sunder Kapoor v. I Additional District Judge and Ors. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral) Others (1994) Supp. 3 SCC 46, Ashok Leyland Ltd. v. State of T.N. Another (2004) 3 SCC 1, Printers (Mysore) Ltd. v. M. A. Rasheed Others (2004) 4 SCC 460, South India Corporation (P) Ltd. v. Secretary, Board of Revenue, Trivendrum Another AIR 1964 SC 207, Commissioner of Wealth Tax, Andhra Pradesh, Hyderabad v. Trustees of H.E.H. Nizam's Family (Remainder Wealth Trust), Hyderabad (1977) 3 SCC 362 and Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (1986) 4 SCC 447. 40. The Legislature's apathy in granting exemption for lands used for cultivation of Linaloe is discernible from the language used in sub-section (2) of Section 107, which says that no person shall after the commencement of the Amendment Act acquire in any manner for the cultivation of Linaloe, land of an extent which together with the land cultivated by Linaloe, if any, already held by him exceeds ten units. Legislature, therefore, as matter of policy, wanted to give only a conditional exemption for lands used for Linaloe cultivation and the policy was to empower the State Government to withdraw the same especially when the law is that no person can claim exemption as a matter of right. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not followed the procedure laid down in Section 140 of the Act and that the approval of the notification by the State Legislature is an important circumstance to be taken into account in determining its validity. Learned counsel submitted that laying of notification under Section 140 is not a mere laying but is coupled with a negative/affirmative resolution of the Legislature; the failure to lay the notification is an illegality which cannot be cured. 46. Following is the procedure generally followed when an order or notification is laid before the Legislature:- 1) Laying which requires no further procedure; 2) Laying allied with the affirmative procedure; and 3) Laying allied with negative procedure. The object of requirement of laying provided in enabling Acts is to subject the subordinate law making authority to the vigilance and control of the Legislature. The degree of control the Legislature wants can be noticed on the language used in such laying clause. 47. We have in this case already found that there has not been any excessive delegation of legislative powers on the State Government and we may now examine whether the failure to follow the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-compliance with sub-section (6) of Section 3 of the Essential Commodities Act, 1955 which provides that every order made under the section shall be laid before both Houses of Parliament as soon as may be, after it is made. The Court held that non-compliance with the Laying Clause did not affect the validity of the order and make it void. In Quarry Owners' Association v. State of Bihar Others (2000) 8 SCC 655, this court while examining the scope of Section 28(3) of the Mines and Minerals (Regulation and Development) Act 1957, stated that when a statue required the placement of a notification before the State Legislature it is the obligation of the state to place the same with the specific note before each House of State Legislature. Even if it had not been done, the State could place the same before the House at the earliest and the omission to comply with it would not affect the validity of the notifications and their coming into force. Direction was issued to the State Government to lay notifications at the earliest. 50. Section 140 does not require the State Legislature to give its approval for bringing into effect the notification, but a positive act by the Legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awal, especially when the same is done through a legislative action. Delegated legislation which is a legislation in character, cannot be questioned on the ground of violation of the principles of natural justice, especially in the absence any such statutory requirement. Legislature or its delegate is also not legally obliged to give any reasons for its action while discharging its legislative function. See - State of Punjab v. Tehal Singh and Ors. (2002) 2 SCC 7; West Bengal Electricity Regulatory Commission v. CESC Ltd. etc. etc. (2002) 8 SCC 715; Pune Municipal Corporation and Anr. v. Promoters and Builders Association and Anr. (2004) 10 SCC 796; Bihar State Electricity Board v. Pulak Enterprises and Ors. (2009) 5 SCC 641. 53. We, therefore, repel the challenge on the validity of Section 110 of the Karnataka Land Reforms Act as well as the notification dt.8.3.1994 and we hold that the land used for linaloe cultivation would be governed by the provisions of the Land Reforms Act which is protected under Article 31B of the Constitution having been included in the IXth Schedule. PART-II Constitutional Validity of the Acquisition Act 54. The State Government after withdrawi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference was made to the judgments of this Court in State of Kerala v. Gwalior Rayon Silk Manufacturing (Wvg.) Co. Limited (1993) 2 SCC 713, Kavalappara Kottarathil Kochuni Others v. State of Madras Others (1960) 3 SCR 887, P. Vajravelu Mudaliar v. Special Deputy Collector, Madras and Another (1965) 1 SCR 614, Balmadies Plantations Ltd. Others v. State of Tamil Nadu (1972) 2 SCC 133. 57. Shri Andhyarujina, also submitted that the impugned Act is ex-facie repugnant to the provisions of Land Acquisition Act, 1894 and hence void under Article 254(1) due to want of Presidential assent on repugnancy. Learned Counsel elaborately referred to the various provisions of the impugned Act and the Land Acquisition Act to bring home his point on repugnancy between both the Legislations, the former being a State Legislation and the latter being a Central Legislation. Learned Counsel specifically pointed out that the procedure and the principle for the acquisition of land as well as determination of compensation, etc., under both the Acts are contrary to each other and hence the impugned Act can be saved only if Presidential assent is obtained under Article 254(2) of the constitution. Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposal of the State Government and there had never been any proposal pointing out the repugnancy between the impugned Act and the Land Acquisition Act and hence the impugned Act is void of ex-facie repugnancy between provisions of the existing Land Acquisition Act 1894 and the impugned Act. In support of his contentions learned counsel placed reliance on judgments of this Court in Gram Panchayat of Village Jamalpur v. Malwinder Singh Others (1985) 3 SCC 661; Kaiser-I- Hind Pvt. Ltd. Another v. National Textile Corporation (Maharashtra North) Ltd. Others (2002) 8 SCC 182. 61. Shri Patil, learned senior counsel appearing for the Respondent-State submitted that Acquisition Act is not open to challenge on the ground of violation of Article 14 or 19 since the same is protected under Article 31A and the assent of the President was obtained. Learned counsel submitted that the impugned Act was enacted in public interest to provide for acquisition of Roerich's Estate, to secure its proper management and to preserve the valuable tree growth, paintings, art objects, carvings and for the establishment of an art gallery-cum-museum. Learned counsel submitted that general scheme of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote also indicated that the provisions of draft bill would attract sub-clause (a) of Clause (1) of Article 31A of the Constitution inasmuch as rights of the land owners were proposed to be extinguished, and hence required the assent of the President in accordance with the proviso to Article 31A of the Constitution to make it free from attack and to protect it from being declared as void on the ground of inconsistency or violation of Articles 14 and 19 of the Constitution of India. Further, it was also proposed to place the Bill before the Governor as provided under Article 200 of the Constitution of India for consideration of the President under Clause 2 of Article 254 of the Constitution. Later, a letter dated 20.09.1996 was addressed by the State of Karnataka to the Secretary to the Government of India, Ministry of Home Affairs requesting to obtain the assent of the President. No reference to Article 254(2) was, however, made in that letter but the operative portion of the letter reads as follows :- The subject matter of the Bill falls under Entry 18 of List II and Entry 42 of List III of the 7th Schedule to the Constitution of India. Therefore, the State Legislature is comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely because the two legislations refer to some allied or cognate subjects, they do not cover the same field. A provision in one legislation to give effect to its dominant purpose may incidentally be on the same subject as covered by the provision of the other legislation, but such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intended to be covered by Article 254(2). In other words, both the legislations must be substantially on the same subject to attract Article 254. In this connection, reference may be made to the decisions of this Court in Municipal Council Palai v. T. J. Joseph (1964) 2 SCR 87; Ch. Tika Ramji v. State of U.P. 1956 SCR 393; State of Karnataka v. Shri Ranganatha Reddy (1977) 4 SCC 471; M. Karunanidhi v. Union of India Another (1979) 3 SCC 431; and Vijay Kumar Sharma Others v. State of Karnataka Others (1990) 2 SCC 562. 67. We are of the considered view that the Acquisition Act, in this case, as rightly contended by the State, primarily falls under Entry 18 List II, since the dominant intention of the legislature was to preserve and protect Roerichs' Estate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the social function of the land and includes various other proposals of agrarian reforms. To test whether the law was intended for agrarian reforms, the court is required to look to the substance of the Act and not its mere outward form. In Kunjukutty Sahib v. State of Kerala Another (1972) 2 SCC 364, this Court held that any provision for promotion of agriculture or agricultural population is an agrarian reform, which term is wider than land reforms. In Mahant Sankarshan Ramanuja Das Goswami etc., etc. v. State of Orissa Another (1962) 3 SCR 250, this Court held that a law for the acquisition of an estate etc. does not lose the protection of Article 31A(1) merely because ancillary provisions are included in such law. 71. The Acquisition Act was enacted in public interest, to preserve and protect the land used for the linaloe cultivation and its tree growth as part of agrarian reforms which is its dominant purpose. Proposal to preserve the paintings, artefacts, carvings and other valuables and to establish an Art-Gallery-cum-Museum are merely ancillary to the main purpose. The dominant purpose of the Act is to protect and preserve the land used for Linaloe cultivation, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t fixed is illusory, compared to the value of the property taken away from the company in exercise of the powers of eminent domain. Learned senior counsel submitted that the inherent powers of public purpose and eminent domain are embodied in Article 300A, and Entry 42 List III, Acquisition and Requisitioning of Property which necessarily connotes that the acquisition and requisitioning of property will be for a public use and for compensation, as it is the legislative head for eminent domain. Learned senior counsel also submitted that the twin requirements of public purpose and compensation though seen omitted from Article 300A, but when a person is deprived of his property, those limitations are implied in Article 300A as well as Entry 42 List III and a Constitutional Court can always examine the validity of the statute on those grounds. 76. Learned senior counsel traced the legislative history and various judicial pronouncements of this Court in respect of Articles 19(1)(f), 31(1) and 31(2) and submitted that those are useful guides while interpreting Article 300A and the impugned Act. Reference was made to the judgments of this Court in State of Bihar v. Maharajadhiraja S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and 16.02.1992 would show that the company had paid only a total sale consideration of ₹ 1,46,10,000 for purchasing the lands from Roerichs' but the transferees/owners and other claimants, if any, would get more than what they had paid. Learned counsel also submitted that Section 19A also provides for principles/machinery for payment of amount to the owners/interested persons and the amount is to be apportioned among owners, transferees and interested persons having regard to value on the appointed day i.e. 18.11.1996. Further learned counsel also submitted that the company has not perfected their title or possession over the land and litigation is pending in the civil court between the company and the other claimants. 82. Right to life, liberty and property were once considered to be inalienable rights under the Indian Constitution, each one of these rights was considered to be inextricably bound to the other and none would exist without the other. Of late, right to property parted company with the other two rights under the Indian Constitution and took the position of a statutory right. Since ancient times, debates are going on as to whether the right to property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible, to the one who has lost his right. Application of the above principle varies from countries to countries. Germany, America and Australian Constitutions bar uncompensated takings. Canada's constitution, however, does not contain the equivalent of the taking clause, and eminent domain is solely a matter of statute law, the same is the situation in United Kingdom which does not have a written constitution as also now in India after the 44th Constitutional Amendment. 85. Canada does not have an equivalent to the Fifth Amendment taking clause of the U.S. Constitution and the federal or provincial governments are under any constitutional obligation to pay compensation for expropriated property. Section 1(a) of the Canadian Bill of Rights does state that, The right of the individual to life, liberty, security of a person and enjoyment of property and the right not to be deprived thereof except by due process of law. 86. In Australia, Section 51 (xxxi) of the Constitution permits the federal government to make laws with respect to the acquisition of property on just terms from any State or persons for any purpose in respect of which the Parliament has powers to make l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there are several significant differences between regulatory exercises of the police powers and eminent domain of deprivation of property. Regulation does not acquire or appropriate the property for the State, which appropriation does and regulation is imposed severally and individually, while expropriation applies to an individual or a group of owners of properties. 91. The question whether the element of compensation is necessarily involved in the idea of eminent domain arose much controversy. According to one school of thought (See Lewis, Eminent Domain, 3rd Edition, 1909) opined that this question must be answered in the negative, but another view (See Randolph Eminent Domain in the United States (Boston 1894 [AWR]), the claim for compensation is an inherent attribute of the concept of eminent domain. Professor Thayer (cases on Constitutional law Vol 1.953), however, took a middle view according to which the concept of eminent domain springs from the necessity of the state, while the obligation to reimburse rests upon the natural rights of individuals. Right to claim compensation, some eminent authors expressed the view, is thus not a component part of the powers to dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of property for a limited period either in the `public interest' or to `secure the proper management of the property', amalgamate properties, and extinguish or modify the rights of managers, managing agents, directors, stockholders etc. Article provides that such laws cannot be declared void on the grounds that they are inconsistent with Articles 14 and 19. Article 31B protected the various lands reform laws enacted by both the Parliament and the State Legislatures by stating that none of these laws, which are to be listed in the Ninth Schedule, can become void on the ground that they violated any fundamental right. 95. This Court in a series of decisions viz. in State of West Bengal v. Bella Banerjee Others AIR 1954 SC 170 and State of West Bengal v. Subodh Gopal Bose AIR 1954 SC 92 took the view that Article 31, clauses (1) and (2) provided for the doctrine of eminent domain and under clause (2) a person must be deemed to be deprived of his property if he was substantially dispossessed or his right to use and enjoy the property was seriously impaired by the impugned law. The Court held that under Article 31(1) the State could not make a law depriving a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in P. Vajravelu Mudaliar's case (supra) examined the scope of the Land Acquisition (Madras Amendment) Act 1961 by which the lands were acquired for the purpose of building houses which move was challenged under Articles 31 and 14. The Court held that if the compensation fixed was illusory or the principles prescribed were irrelevant to the value of the property at or about the time of acquisition, it could be said that the Legislature had committed a fraud on power and therefore the law was inadequate. Speaking for the Bench, Justice Subha Rao stated that If the legislature, through its ex facie purports to provide for compensation or indicates the principles for ascertaining the same, but in effect and substance takes away a property without paying compensation for it, it will be exercising power it does not possess. If the Legislature makes a law for acquiring a property by providing for an illusory compensation or by indicating the principles for ascertaining the compensation which do not relate to the property acquired or to the value of such property at or within a reasonable proximity of the date of acquisition or the principles are so designed and so arbitrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the 17th Amendment, the 1st Amendment and the 4th Amendment were also questioned. Chief Justice Subha Rao speaking for the majority said that the Parliament could not take away or abridge the Fundamental Rights and opined that those rights form `basic structure' of the Constitution and any amendment to the Constitution can be made to preserve them, not to annihilate. 102. The Parliament enacted the (24th Amendment) Act 1971, by which the Parliament restored to the amending power of the Parliament and also extended the scope of Article 368 which authorised the Parliament to amend any part of the Constitution. 103. Parliament then brought in the 25th Amendment Act, 1971 by which Article 31(2) was amended by which private property could be acquired on payment of an amount instead of compensation . A new Article 31(C) was also inserted stating that no law giving effect to the policy of the State towards acquiring the principles specified in clause (b) or clause (c) of Article 39 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, Article 19 or Article 31; and no law containing a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight, would, however, be given express recognition as a legal right, provision being made that no person shall be deprived of his property save in accordance with law. 107. In Jilubhai Nanbhai Khachar Others v. State of Gujarat Another (1995) Supp. 1 SC 596, this Court examined whether Section 69-A, introduced by the Gujarat Amendment Act 8 of 1982 in the Bombay Land Revenue Code which dealt with vesting mines, minerals and quarries in lands held by persons including Girasdars and Barkhalidars in the State violated Article 300A of the Constitution. The Court held that the `property' in Article 300A includes mines, minerals and quarries and deprivation thereof having been made by authority of law was held to be valid and not violative of Article 300A. 108. Article 300A, when examined in the light of the circumstances under which it was inserted, would reveal the following changes: 1. Right to acquire, hold and dispose of property has ceased to be a fundamental right under the Constitution of India. 2. Legislature can deprive a person of his property only by authority of law. 3. Right to acquire, hold and dispose of property is not a basic feature of the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of a statute is in question. On the other hand, it was the contention of the State that since the Constitution consciously omitted Article 19(1)(f), Articles 31(1) and 31(2), the intention of the Parliament was to do away the doctrine of eminent domain which highlights the principles of public purpose and compensation. 111. Seervai in his celebrated book `Constitutional Law of India' (Edn. IV), spent a whole Chapter XIV on the 44th Amendment, while dealing with Article 300A. In paragraph 15.2 (pages 1157-1158) the author opined that confiscation of property of innocent people for the benefit of private persons is a kind of confiscation unknown to our law and whatever meaning the word acquisition may have does not cover confiscation for, to confiscate means to appropriate to the public treasury (by way of penalty) . Consequently, the law taking private property for a public purpose without compensation would fall outside Entry 42 List III and cannot be supported by another Entry in List III. Requirements of a public purpose and the payment of compensation according to the learned author be read into Entry 42 List III. Further the learned author has also opined that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after the 44th amendment Act there is no express provision in the Constitution outside the two cases specified under Article 30(1A) and the second proviso to 31(1A) requiring the State to pay compensation to an expropriated owner. Learned author also expressed the opinion that no reliance could be placed on the legislative Entry 42 of List III so as to claim compensation on the touchstone of fundamental rights since the entry in a legislative list does not confer any legislative power but only enumerates fields of legislation. Learned counsel on the either side, apart from other contentions, highlighted the above views expressed by the learned authors to urge their respective contentions. 115. Principles of eminent domain, as such, is not seen incorporated in Article 300A, as we see, in Article 30(1A), as well as in the 2nd proviso to Article 31A(1) though we can infer those principles in Article 300A. Provision for payment of compensation has been specifically incorporated in Article 30(1A) as well as in the 2nd proviso to Article 31A(1) for achieving specific objectives. Constitution's 44th Amendment Act, 1978 while omitting Article 31 brought in a substantive provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the requirement of public purpose is invariably the rule for depriving a person of his property, violation of which is amenable to judicial review. Let us now examine whether the requirement of payment of compensation is the rule after the deletion of Article 31(2). Payment of compensation amount is a constitutional requirement under Article 30(1A) and under the 2nd proviso to Article 31A(1), unlike Article 300A. After the 44th Amendment Act, 1978, the constitutional obligation to pay compensation to a person who is deprived of his property primarily depends upon the terms of the statute and the legislative policy. Article 300A, however, does not prohibit the payment of just compensation when a person is deprived of his property, but the question is whether a person is entitled to get compensation, as a matter of right, in the absence of any stipulation in the statute, depriving him of his property. 119. Before answering those questions, let us examine whether the right to claim compensation on deprivation of one's property can be traced to Entry 42 List III. The 7th Constitutional Amendment Act, 1956 deleted Entry 33 List I, Entry 36 List II and reworded Entry 42 L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... List II, called the State List. Under Article 248, the exclusive power of the Parliament to make laws extends to any matter not enumerated in any Concurrent List or State List. 121. We find no apparent conflict with the words used in Entry 42 List III so as to infer that the payment of compensation is inbuilt or inherent either in the words acquisition and requisitioning under Entry 42 List III. Right to claim compensation is, therefore, cannot be read into the legislative Entry 42 List III. Requirement of public purpose, for deprivation of a person of his property under Article 300A, is a pre-condition, but no compensation or nil compensation or its illusiveness has to be justified by the state on judicially justiciable standards. Measures designed to achieve greater social justice, may call for lesser compensation and such a limitation by itself will not make legislation invalid or unconstitutional or confiscatory. In other words, the right to claim compensation or the obligation to pay, though not expressly included in Article 300A, it can be inferred in that Article and it is for the State to justify its stand on justifiable grounds which may depend upon the legislative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abolition of Jamindari Abolition Laws and also the other types of social, welfare and regulatory legislations effecting private property. The right to challenge laws enacted in respect of subject matter enumerated under Article 31A(1)(a) to (g) on the ground of violation of Article 14 was also constitutionally excluded. Article 31B read with Ninth Schedule protects all laws even if they are violative of the fundamental rights, but in I.R. Coelho's case (supra), a Constitution Bench of this Court held that the laws added to the Ninth Schedule, by violating the constitutional amendments after 24.12.1973, if challenged, will be decided on the touchstone of right to freedom guaranteed by Part III of the Constitution and with reference to the basic structure doctrine, which includes reference under Article 21 read with Articles 14, 15 etc. Article 14 as a ground would also be available to challenge a law if made in contravention of Article 30(1)(A). 125. Article 265 states that no tax shall be levied or collected except by authority of law, then the essential characteristics of tax is that it is imposed under statute power, without tax payer's consent and the payment is enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aharashtra Another v. Basantibai Mohanlal Khetan Others (1986) 2 SCC 516, wherein this Court held that Article 21 essentially deals with personal liberty and has little to do with the right to own property as such. Of course, the Court in that case was not concerned with the question whether the deprivation of property would lead to deprivation of life or liberty or livelihood, but was dealing with a case, where land was acquired for improving living conditions of a large number of people. The Court held that the Land Ceiling Laws, laws providing for acquisition of land for providing housing accommodation, laws imposing ceiling on urban property etc. cannot be struck down by invoking Article 21 of the Constitution. This Court in Jilubhai Nanbhai Khachar's case (supra) took the view that the principle of unfairness of procedure attracting Article 21 does not apply to the acquisition or deprivation of property under Article 300A. 128. Acquisition of property for a public purpose may meet with lot of contingencies, like deprivation of livelihood, leading to violation of Art.21, but that per se is not a ground to strike down a statute or its provisions. But at the same time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the fundamental right and the restriction imposed, is well settled. 130. Plea of unreasonableness, arbitrariness, proportionality, etc. always raises an element of subjectivity on which a court cannot strike down a statute or a statutory provision, especially when the right to property is no more a fundamental right. Otherwise the court will be substituting its wisdom to that of the legislature, which is impermissible in our constitutional democracy. 131. In Dr. Subramanian Swamy v. Director, CBI Others (2005) 2 SCC 317, the validity of Section 6-A of the Delhi Special Police Establishment Act, 1946, was questioned as violative of Article 14 of the Constitution. This Court after referring to several decisions of this Court including Mcdowell's case (supra), Khoday Distilleries Ltd. Others v. State of Karnataka Others (1996) 10 SCC 304, Ajay Hasia Others v. Khalid Mujib Sehravardi Others (1981) 1 SCC 722, Mardia Chemicals Ltd. Others v. Union of India Others (2004) 4 SCC 311, Malpe Vishwanath Achraya Others v. State of Maharashtra Another (1998) 2 SCC 1 etc. felt that the question whether arbitrariness and unreasonableness or manifest arbitrariness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competence. In I.R. Coelho's case (supra), basic structure was defined in terms of fundamental rights as reflected under Articles 14, 15, 19, 20, 21 and 32. In that case the court held that statutes mentioned in the IXth Schedule are immune from challenge on the ground of violation of fundamental rights, but if such laws violate the basic structure, they no longer enjoy the immunity offered, by the IXth Schedule. 135. The Acquisition Act, it may be noted, has not been included in the IXth Schedule but since the Act is protected by Article 31A, it is immune from the challenge on the ground of violation of Article 14, but in a given case, if a statute violates the rule of law or the basic structure of the Constitution, is it the law that it is immune from challenge under Article 32 and Article 226 of the Constitution of India? 136. Rule of law as a concept finds no place in our Constitution, but has been characterized as a basic feature of our Constitution which cannot be abrogated or destroyed even by the Parliament and in fact binds the Parliament. In Kesavanda Bharati's case (supra), this Court enunciated rule of law as one of the most important aspects of the doctri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987) 2 SCR 2. This was a case involving a challenge to Ontario legislation restricting the political activities of civil servants in Ontario. Although the Court upheld the legislation, Beetz. J described the implied limitations in the following terms: There is no doubt in my mind that the basic structure of our Constitution, as established by the Constitution Act, 1867, contemplates the existence of certain political institutions, including freely elected legislative bodies at the federal and provincial levels. In the words of Duff C.J. in Reference re Alberta Statutes such institutions derive their efficacy from the free public discussion of affairs and, in those of Abbott J. in Switzman v. Elbling ... neither a provincial legislature nor Parliament itself can abrogate this right of discussion and debate. Speaking more generally, I hold that neither Parliament nor the provincial legislatures may enact legislation the effect of which would be to substantially interfere with the operation of this basic constitutional structure. 139. The Canadian Constitution and Courts have, therefore, considered the rule of law as one of the basic structural imperatives of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties are subject to the legislative control of the host country, along with the international treaties or agreements. Even, if the foreign investor has no fundamental right, let them know, that the rule of law prevails in this country. 143. We, therefore, answer the reference as follows: (a) Section 110 of the Land Reforms Act and the notification dated 8.3.94 are valid, and there is no excessive delegation of legislative power on the State Government. (b) Non-laying of the notification dt.8.3.94 under Section 140 of the Land Reforms Act before the State Legislature is a curable defect and it will not affect the validity of the notification or action taken thereunder. (c) The Acquisition Act is protected by Article 31A of the Constitution after having obtained the assent of the President and hence immune from challenge under Article 14 or 19 of the Constitution. (d) There is no repugnancy between the provisions of the Land Acquisition Act, 1894 and the Karnataka Land Reforms Act, 1961, and hence no assent of the President is warranted under Article 254(2) of the Constitution. (e) Public purpose is a pre-condition for deprivation of a person from his prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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