TMI Blog1985 (7) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... al predicament, since Krishna Iyer J. was due to retire on November 15, 1980, Tulzarpurkar J. differed from all of us, holding that the impugned Act is not protected under Article 31-C or under Article 31-B since, it did not further the Directive principles contained in clauses (b) and (c) of Article 39 of the Constitution. The learned Judge held further that since Chapter III of the Act, comprising the substratum of the very scheme of the Act was invalid the entire Act had to be struck down as unconstitutional. A.P. Sen J. agreed with us on all the points except that according to him, subsections (1), (2) and (3) of section 23 and the opening words of section 23(4) of the Act are unconstitutional, not being protected by Articles 31-B and 31-C of the Constitution. Krishna Iyer J. concurred with us in holding that the entire Act is valid save and except section 27(1), insofar as that section imposes restrictions on the transfer of any urban or urbanisable land with a building or a portion of such building, which is within the ceiling area. We took the view that the impugned Act was intended to and did in fact implement or achieve the purpose of clauses (b) and (c) of Article 39 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaking 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 provisions of sub-sections (1), (2) and (3) but the provisions of sub-section (1) are enabling and not compulsive and those of sub-sections (2) and (3) are incidental to the provisions of sub-section (1). The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub-section (4) of section 23, subject to this, that in a given case such land may be allotted to any person; for any purpose relating to, or in connection with, any 'industry' or for the other purposes mentioned in sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance 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. I proceed to turn the focus only on three issues, namely, the alleged artificiality of family' as defined in s. 2 (f) of the Urban Land (Ceiling and Regulation) Act, 1976 (for short, the Act), the invalidity of s. 23 of the Act as discriminatory and, therefore, unconstitutional and the invalidity of s. 11 (6) of the Act on the score that the compensation offered is illusory and, therefore, violative of Art. 31 (2) of the Constitution. The legislation, as its title indicates, is obviously a measure for inhibiting concentration of urban lands in the hands of a few persons and fore quitetable distribution of such land to subserve the common good. Article 39 (b) and (c) of the Constitution are directly attracted and there is no doubt that the fullest exploitation of the material resources of the community undoubtedly requires distribution of urban land geared to the common good. It is also a notorious fact that concentration of urban land in private hands is an ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolable 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 be fair enough so as not to be castigated as illusory. The various amendments to Art. 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 compensation is out of bounds for the court to investigate. The question is whether in the light of Kesavananda Bharati (especially the observations of Chandrachud, J), a sum of ₹ 2 lakhs in s. 11 (6) is a farthing for a fortune. I repudiate the proposition that payment of a sum of ₹ 2 lakhs, whatever the total value of the property in the market may be is so fictitious and flimsy as to be a farthing. There are no absolutes in law as in life and the compulsions of social realities must unquestionably enter the judicial verdict. What is the dimension of Indian penury? What is the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 a 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 B. Pant and Rajagopalachari, not to speak of Jawahar Lal Nehru, where 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 the debates in condensed form given by Granville Austin: Sardar Patel closed the debate with a speech that sounded like a requiem for land-lords....What did 'public use' mean he wondered. Pant then said: Suppose the government acquires zamindari rights and then abolishes them. Or what if the Government takes over Connaught Place (the central shopping and office area of New Delhi) and then redistributes the buildings to the tenants? The first stage is acquisition. Does that come under this clause? To Ayyar's answer of 'Certainly', Pant replied that he opposed the wording if it means that the government would not be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 equalization 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 of tax leaving next to nothing to the income earner. We have to be pragmatic and show empathy with the values of the Constitution. Chief Justice Earl Warren's statement is apposite as a reminder to our judicial conscience: Our judges are not monks or scientists, but participants in the living stream of our national life, steering the law between the dangers of rigidity on the one hand and of formlessness on the other. Our system faces no theoretical dilemma but a single continuous problem: how to apply to ever-changing conditions the never-changing principles of freedom. I have no hesitation in holding s. 11(6) as invulnerable. 'Family' as defined in s.2(f) has been held invalid by my lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. I may permit myself a few observations on s. 23 of the Act and the grounds of invalidation relied on by the challengers. The section has been loosely or ambivalently drafted and runs thus: 23. Disposal of vacant land acquired under the Act. (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 purposes 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, than, such land shall be deemed to be vacant land acquired under such other law: (b) industry means any business, profession, trade, undertaking or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible. 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 between the power and its oblique exercise is an intellectual fallacy we must guard against. Fanciful possibilities, freak exercise and speculative aberrations are not realistic enough for constitutional invalidation. The legislature cannot be stultified by the suspicious improvidence or worse of the Executive. I wholly agree with the perspective of my learned brother Sen, J. that Part IV which seeks to build a Social Justice Society, is basic to our constitutional order. Any transgression of Art. 39(b) and (c) is beyond the scope of s. 23(1) and disposal of land thereunder must subserve the common good and not the reverse. This limitation on the wide words of s. 23(1) is a matter of semantics and reading down meanings of words with loose lexical amplitude is permissible as part of the judicial process. To sustain a law by interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structure. Peripheral inequality is inevitable when large-scale equalisation processes are but into action. If all the judges of the Supreme Court in solemn session sit and deliberate for half a year to produce a legislation for reducing glaring economic inequality their genius will let them down if the essay is to avoid even peripheral inequalities Every large cause claims some martyr, as sociologists will know. Therefore, what is a betrayal of the basic feature is not a mere violation if Art. 14 but a shocking, unconscienable or unscrupulous travesty of the quintessence of equal justice. If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty. But to permit the Bharati ghost to haunt the corridors of the court brandishing fatal writs for every feature of inequality is judicial paralysation of parliamentary function. Nor can the constitutional fascination for the basic structure doctrine be made a Trojen horse to penetrated he entire legislative camp fighting for a new social order and to overpower the battle for abolition of basic poverty by the 'basic structure' missile. Which is more basic? Eradication of die-hard, deadly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to them, some of the impugned provisions are pivotal and non-severable, having an impact on its entire scheme, the whole Act is liable to be struck down as being invalid and unconstitutional. The petitioners have, therefore, prayed for an order quashing notices issued to them by the concerned competent authorities under the Act and a mandamus directing the respondents not to implement the provisions thereof against them. The impugned enactment has its genesis in the resolutions passed by eleven sponsoring States under Art. 252 (1) of the Constitution. The State Legislatures of Andhra Pardesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable to have an uniform legislation enacted by Parliament for the imposition of ceiling on urban property for the country as a whole and as required by the first part of Art. 252 (1) of the Constitution passed a resolution to that effect. Parliament accordingly enacted the Urban Land (Ceiling and Regulation) Act, 1976. It received the assent of the President on February 17, 1976 and, in the first instance, it come into force on that day in all the Union T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omprising ss. 25 to 30 deals with regulation of transfer and the use of urban property; while Chapter V which includes ss. 31 to 47, deals with appeals, revisions, offences and punishments and other miscellaneous matters. The primary object and purpose of the Act, as its 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 bring about an equitable distribution of land in urban agglomerations to subserve the common good, presumably in furtherance of the Directive Principles of State policy contained in Art. 39 (c) and (b) respectively. The enactment has also been but in the Ninth Schedule as Item 132 by the Constitution (Fortieth Amendment) Act, 1976, in other words, the enactment enjoys the benefit of protective umbrella of both the articles, Art. 31B and 31C as it stood prior to its amendment by the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same is beyond the constituent power of the Parliament if it damages the essential features or basic structure of the Constitution; but at the same time the impugned Act has, apparently, received the protective umbrella of Art. 31C as it stood prior to its amendment by 42nd Amendment Act inasmuch as it seems to have been enacted in furtherance of the Directive Principles contained in Art. 39 (b) and (c) with the result that in order to succeed in their challenge the petitioners will have to cross two hurdles. In the first place they will have to establish that the Act is outside the pale of the protective umbrella of Art. 31C which they can do by showing that though purporting to do so, it does not, in fact, further any of the said Directive Principles. A scrutiny of the Directive Principles contained in Art. 39 (b) and (c) clearly shows that the basic postulate underlying the former obviously is that diffusion of ownership and control of the material resources of the community is always in public interest and hence the State is directed to ensure such distribution (equitable) there of as best to subserve the common good, while the postulate underlying the latter obviously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Attorney General appearing on behalf of the Union of India and counsel for the concerned States of Rajasthan, Andhra Pradesh, Uttar Pradesh and for the concerned competent authorities under the Act, refuted the contentions urged on behalf of the petitioners. It was denied that any provision of the Act runs counter to the Directive Principles of Art. 39 (b) and (c) of the Constitution. It was pointed out that the impugned Act having been put in the Ninth Schedule and having been enacted in further of the Directive Principles of the State policy contained in Art. 39 (b) and (c) of the Constitution was protected both under Art. 31B and 31C of the Constitution. It was disputed that any provision of the Act violated the petitioners' fundamental rights under Arts. 14, 19 and 31 and, it was contended that even if there was any such violation, the Act and its provisions could not be challenged by the petitioners on that ground because of the protective umbrella of Art. 31B and 31C of the Constitution and, therefore, the petitions were liable to be dismissed. I shall first deal with those impugned provisions of the Act, which according to the petitioners, not merely violate their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under category 'A' where the ceiling limit is prescribed at 500 sq. metres, a family of a father, mother and say three minor sons (being in all five) together will be entitled to retain for itself only 500 sq. metres of vacant land whereas a family of a father and four major sons (being in all five) will be entitled to retain for itself 2,500 sq. metres of vacant land (500 sq. metres for father as a person and 500 sq. metres each for four sons as persons). Counsel urged that such discrimination or inequality arises from the classification made between minor children and major children belonging to a family but such classification is not based on any intelligible differentia having any nexus to the object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to a family and as such the same is clearly violative of Art. 14 of the Constitution. Counsel strongly relied upon two decisions of this Court in this behalf, namely, decisions in Karimbil Kunhikoman v. State of Kerala and A.P. Krishnasami Naidu etc. v. State of Madras, where on similar ground the whole of Chapter III of Kerala Agrarian Relations Act, 1961 and the whole o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an impact on the scheme of that Chapter and, therefore, along with it the whole Chapter III must fall as being violative of Art. 14. There is yet one more aspect which needs consideration in connection with this adoption of the artificial definition of 'family' given in s.2 (f) and the double standard for fixing ceiling area. Apart from the discriminatory results which it produces the question is what is its impact in the context of the directive principle contained in Art. 39 (c) of the Constitution? As stated earlier the postulate underlying the said directive principle in that concentration of wealth in the hands of few is deterimental to common interest and as such the State should ensure such economic system which prevents such concentration and the Act has been put on the Statute book professedly to achieve that objective. But, by adopting the artificial definition of 'family' in s. 2(f) and having double standard for fixing ceiling limit a contrary result is obtained inasmuch as the Act actually permits an unwarranted and unjustified concentration of wealth (urban vacant land) in the hands of a family having major sons in it as compared to the family havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority having jurisdiction giving full particulars there of and also specifying the vacant land within the ceiling limit which he desires to retain. Sections 8 and 9 provide for preparation of draft statement as regards vacant land held in excess of the ceiling limit, holding of an inquiry in that behalf and preparation of final statement and service thereof on the concerned person by the competent authority, Section 10 provides for acquisition of excess vacant land by the concerned State Government and determination of claims of all persons interested in such excess vacant-land and under sub-s.(3) it is provided that upon the publication of a notification in that behalf such excess vacant land as may be specified therein shall be deemed to have been acquired by the State Government and the same shall vest absolutely in the State Government free from all encumbrances with effect from the date specified in the notification. Then comes s.23 which deals with disposal of such excess vacant land acquired by the State Government under the Act. It runs as follows: 23.(1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit, any vac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same. Five or six aspects or peculiar features emerge clearly from the provisions contained in s. 23 in the context of the entire Act. In the first place unlike agrarian ceiling which deals with land as means of production, urban ceiling under the impugned Act deals with vacant land in urban agglomerations not as a means of production but as a part of the holder's wealth or capital asset. Secondly, unlike agrarian ceiling which has the objective of distributing surplus agricultural land straightway among landless persons, under the impugned Act excess vacant land in urban agglomerations is acquired by and vests in the State to be disposed of as indicated in the section; clearly a legislation in exercise of the State's power of eminent domain (i.e. power of compulsory acquisition of private property). Thirdly, such excess vacant land thus acquired is to be disposed of by the State Government for any purpose relating to or connected with industry or for providing residential accomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial housing and provision for basic arenities etc. Having regard to the aforesaid peculiar features that energe from a consideration of the provisions contained in s.23, counsel for the petitioners contended that the acquisition of excess vacant land in urban agglomerations cannot be said for a public purpose at all and hence the ehactment which is primarily for compulsory acquisition of private property runs counter to a valid exercise of the State's power of 'eminent domain'. He pointed out that no scheme for any industrial development for any urban agglomeration has been indicated in the Act, nor any such scheme seems to have been prepared by any State Government or even by the Union Government before undertaking the legislative measure in hand and no definite public purpose of industrialisation with any plan or blue print with set specifications or standards seems to have been within the contemplation of the sponsoring States or the Union Government; at any rate no material in that behalf has been placed on record before the Court and, therefore, according to counsel, compulsory acquisition of all excess vacant land in all urban agglomerations throughout the Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the 25th Amendment of the Constitution and subsequent decisions of this Court. But it is well settled that these two conditions precedent are sine qua non for the exercise of the State's power of eminent domain' and, in my view, represent those aspects of the right to property under Art. 31 which constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any law authorising expropriation of private property in breach of any one of those conditions would damage or destroy the basic structure of our constitution. It is extremely doubtful whether a bald, indefinite and unspecified objective like 'industry' simpliciter without any attempt at dovetailing it by having a proper scheme for industrial development will constitute a valid public purpose for the exercise of the power of 'eminent domain'. It is because of the absence of any definite scheme for industrial development with plans or blue prints with set specifications or standards for any of the urban agglomerations that wide power has been conferred on the State Government under sub-s. (1) in vague terms to al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt of eminent domain is clearly suicidal. By adopting such definition for the purposes of s. 23 the State Government has been empowered under sub-s. (1) to allot any extent of such excess vacant land to any businessman, trader or professional man like a lawyer, doctor and astrologer to enable him to carry on his private business, trade or profession. In other words, acquisition of excess vacant land in urban agglomeration would clearly be for private purposes and what is worse is that under the priorities laid down such private purposes are to be catered to first and then comes the disposal or distribution thereof to subserve common good. This clearly smacks of depriving peter of his property to give it to Paul and, therefore, clearly amounts to an invalid exercise of State's power of 'eminent domain'. Section 23, which thus authorises compulsory acquisitions of property for private purposes flagrantly violates those aspects of Art. 31 which constitute the essential or basic features of the Constitution and is, therefore, ultra vires and unconstitutional. Further, indisputably it is the most vital, integral and non-severable part of the entire scheme of urban ceiling as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he equitable distribution of land in urban agglomerations to subserve the common good. In the first place, it is well settled that it is only when there is some ambiguity in test of any provision in the enactment that the preamble could be looked at and here there is no ambiguity whatsoever in s.23(1) and (4). Secondly, far from there being any ambiguity there is express provision in s.23(1) and (4) indicating the priorities in the matter of disposal or distribution of excess vacant land, in face of which, the preamble cannot control, guide or direct the disposal or distribution in any other manner. Next, reliance was placed on s. 46(1) which empowers the Central Government to make rules for carrying out the provisions of the Act and the disposal or distribution of excess vacant land could be prescribed by rules. It may, however be stated that no rules under s.46 have so far been framed by the Central Government and, in any event, no rules framed thereunder can over-ride the express provisions of s.23. Lastly, reliance was placed on certain guidelines issued by the Central Government in its Ministry of Works and Housing under the Act and at page 83 of the Compendium of Guidelines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e objective underlying the directive principle of Art. 39(b) and its provisions as discussed above clearly run counter to that objective and as such the enactment which contains such provisions must forfeit the benefit of the protective umbrella of Art. 31C. Faced with the situation that the constitutional invalidity of s. 23 was likely to have adverse repercussion not only on Chapter III in which it occurs but also on the entire Act, counsel for the respondents made a valiant effort to salvage the said section by indulging in interpretative acrobatics with a view to relieve it from the two vices attaching to it, namely, (i) the adoption of the wide definition of 'industry' in cl. (b) of the Explanation which makes a mockery of the Public purpose indicated by the bald objective like 'industry' simpliciter and (ii) the priorities mentioned therein governing the disposal or distribution of excess vacant land acquired under the Act. It was suggested that the definition of 'industry' should be read down by the court so as to confine the same to industries in public sector or co-operative sector or the like where benefit to community or public at large would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he re-structuring of the entire section a function legitimately falling within the domain of the Legislature. Moreover, sub-ss.(1), (2), (3) and (4) of s.23 are integral parts of one whole scheme dealing with disposal of excess vacant land acquired under the Act and as such cannot be severed from one another. The attempt to salvage s.23, either wholly or in part, by seeking to free it from the two vices must, therefore, fail. The next provision challenged by the petitioners as being violative of their fundamental rights is s. 11 (6) which puts the maximum limit of Rs. two lakhs on compensation (called 'amount') payable to the holder of excess vacant land irrespective of the extent of such excess vacant land. For the purpose of determining the quantum of compensation s.11 (1) divides vacant land in urban agglomerations into two categories -(i) vacant land from which income is derived and (ii) vacant land from which no income is derived and in regard to the former category cl, (a) of sub-s. (1) fixes the quantum payable at an amount equal to eight and one third times the net average annual income actually derived from such land during the period of five consecutive years i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed rates it of the value of Rs. two crores a payment of Rs. two lakhs only (i.e. 1/100th of the value at the prescribed rates) must, by any standard, be regarded as illusory and, therefore, the fixation of maximum limit at Rs. two lakhs under s. 11(6) irrespective of the extent of excess vacant land held by a person violates Art. 31(2) of the Constitution. I find considerable force in both the submissions of counsel for the petitioners. In fact, in my view, this provision which puts the maximum limit of Rs. two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent of such excess vacant land held by him is not merely violative of Arts. 14 and 31(2) of the Constitution in the manner indicated above, but would be a piece of confiscatory legislation, because vacant land in excess of that portion which at the prescribed rates is worth Rs. two lakhs stands confiscated to the State without any payment whatsoever. I do not suggest that a provision putting a maximum limit upon compensation payable to the owner or holder irrespective of the extent of the property acquired whenever or wherever is found in any enactment has to be reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same at market rate of ₹ 15.12 per sq. metre at ₹ 3,98,05021.84 (say about Rs. four crores) and inclusive of other items of properties the total value was put down at ₹ 4.12 crores and these averments are substantially admitted in the counter- affidavit filed by S. Mahadeva Iyer on behalf of the Union of India where in para 9 he has stated thus: In reply to para 20 of the writ petition I submit that the total assessment of the entire property comes to ₹ 4.56 crores. In other words, in the case of this petitioner the fact that he owns urban vacant land of the value of about Rs. four crores in the city of Kota stands admitted. Now, under s. 11(6) for all this urban vacant land worth nearly Rs. four crores the petitioner will get only rupees two lakhs, it works out to a princely sum of eight annas for property worth ₹ 100, which would clearly be an illusory payment. In fact, all his vacant land, in excess of that portion which is worth Rs. two lakhs at the prescribed rates, shall stand conficated without any payment whatsoever. Such a glaring instance, available on the record of these petitions, brings out in bold relief how flagrantly s. 11(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority has been authorised after making such inquiry as it deems fit to grant the permission or refuse the same, but a refusal has to be accompanied by written reasons, copy whereof is to be furnished to the holder. Sub- s. (4) provides that if within sixty days of the receipt of the application refusal is not communicated, the permission shall be deemed to have been granted by the competent authority. Counsel for the petitioners made two submissions in regard to aforesaid restriction as made applicable to transfers of built-up properties that fall within the limits of ceiling area permitted to be retained by a holder. Firstly, such restriction would be outside the legislative authorisation conferred upon the Parliament as well as beyond the ambit and scope of the Act which has assiduously kept built-up properties outside the pale of imposition of ceiling. Secondly, such restriction requiring permission from the competent authority is arbitrary and violative of Art.14 in as much as the power to grant the permission or to refuse it is unguided and untrammeled which is bound to produce arbitrary results. In my view both the submissions have substance in them. It cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recited in the Preamble would afford the requisite guidance for the exercise of the power to grant the permission sought or to refuse the same. Firstly, which of the three objectives mentioned in the Preamble should guide the exercise of power by the competent authority in any given case is not clear and in any case no standard has been laid down for achieving the objectives of preventing concentration, speculation, and profiteering in urban land or urban property and in the absence of any standard being laid down by the Legislature-a purely legislative function, it will be difficult to hold that these broad objectives recited in the Preamble could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the permission and in the absence of guidelines the exercise of the power is bound to produce arbitrary or discriminatory results. It was also said that against the order passed by the competent authority under s. 27 an appeal to the Appellate Authority has been provided for under s. 33 and revision lies to the State Government under s. 34 and in view of such provision for appeal and revision the exercise of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basic structure of the Constitution. (3). The artificial definition of 'family' given in s. 2(f) in relation to prescription of ceiling area under s. 4(1) is clearly violative of Art. 14 and as such is ultra vires and unconstitutional. Similarly, s. 23 which authories compulsory acquisition of property for private purposes is in breach of the doctrine of eminent domain and since it flagrantly violates Art. 31(2) is ultra vires and unconstitutional. (4). Since s. 2(f) together with adoption of double standard for fixing ceiling area runs through and forms basis of the whole Chapter III and since s. 23 is a vital, Integral and non-severable part of the entire scheme of urban ceiling envisaged by the Chapter III, the whole of Chapter III has to fall along with those two provisions and as such that Chapter is also declared to be ultra vires and unconstitutional. Further, it cannot be disputed that Chapter III comprises the substratum of the entire scheme of urban ceiling contemplated by the enactment incorporating its main provisions while the other Chapters deal with arcillary or incidental matters which from the decorative frills of the main fabric. If the substra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of eliciting opinion thereon by May 15, 1976 was negatived, (c) that another motion supported by quite a few members that the Bill be referred to a Select Committee with a view to improve the same by removing defects, deficiencies and omissions therein with instructions to the Select Committee to report by April 1, 1976, was also negatived, (d) that though over 150 amendments had been moved (some of which were received by the members on the very day as speeches were in progress), an earnest request to postpone the second reading of the Bill to the following day to enable the members to consider those amendments (many of which were neither formal nor clarificatory but of substance) was also turned down, and (e) that the original time schedule of six hours fixed by the Speaker for the Bill was adhered to and the entire process (including general discussion, clause by clause reading, consideration of the several amendments and the third reading) was completed in undue haste by 18.01 hours. In Rajya Sabha also a request to refer the Bill to a Select Committee went unheeded and the entire process was completed in one day, February 5, 1976. The result is that it has, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976. Thus, the Act is in force in seventeen States and all the Union Territories in the country. The legislative competence of Parliament to enact the Urban Land (Ceiling and Regulation) Act, 1976 having been upheld by this Court in Union of India etc- v. Valluri Basavaiah Chaudhary,(1) there remains the question of its constitutional validity. Schedule I to the Act lists out all States, irrespective of whether or not they have passed a resolution under Art. 252(1) authorizing the Parliament to enact a law imposing a ceiling on urban immovable property, and the urban agglomerations in them having a population of two lace or more. The ceiling limit of vacant land of metropolitan areas of Delhi, Bombay, Calcutta and Madras having a population exceeding ten lacs falling under category 'A' is 500 sq. metres, urban agglomerations with a population of ten lacs and above, excluding the four metropolitan areas falling under category 'B' is 1000 sq. meters agglomerations with a population between three lacs and ten lacs falling under category 'C' is 1500 sq. metres and urban agglomerations with a population between two lacs and three lacs falling under categor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd' and Chapter V contains miscellaneous provisions, There can be no doubt that the legislative intent and object of the impugned Act was to secure the socialisation of vacant land in urban agglomerations with a view to preventing the concentration of urban lands in the hands of a few persons, speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve to common good, in furtherance of the Directive Principles of State Policy under Art. 39 (b) and (c). The Act mainly provides for the following: (i) imposition of a ceiling on both ownership and possession of vacant land in urban agglomerations unders. 3, the ceiling being on a graded basis according to the classification of the urban agglomerations under s.4; (ii) acquisition of the excess vacant land by the State Government under s.10(3), with powers to dispose of the vacant land with the object to subserve the common good under s.23; (iii) payment of an amount for the acquisition of the excess land in cash and in bonds under s. 14(2), according to the principles laid down in s.11(I) subject to the maximum specified in s.11(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such excess vacant lands by the Government, may not be high, the Act incorporates a specific provision, namely, sub-section (1) of s.11 which fixes the amount broadly on the following basis: (1) eight and one- third of the annual net income from the land during the last five years or where such annual income is not being derived, at rates not exceeding ₹ 10 per sq. metre or ₹ 5 per sq. metre in Categories A and B, and C and D urban agglomerations respectively, and classifying the area into different zones. There is also a ceiling on the maximum amount payable in any single case placed by subsection (6) of s.11. Sub-section (1) s.27 provides for the freezing of all transfers of urban land with or without a building or portion of a building in all agglomerations for a period of ten years from the date of the commencement of the Act or from the date on which the building is constructed. The constitutional validity of the Act which has been placed in the Ninth Schedule by the Fortieth Amendment, is challenged principally on the ground that, firstly, it is violative of the fundamental rights guaranteed under Arts 14, (19(1)(f) and 31(2), since it seeks to alter the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffends against the equal protection clause in Art.14, as persons similarly situate are differentially treated without any rational basis; (2) the impugned Act is inconsistent with, takes away and abridges the fundamental right guaranteed under Art. 31 (2) inasmuch as the fixation of the maximum amount payable under sub-s. (6) of Sec 11, makes the Act confiscatory or at any rate, the amount payable illusory; (3) sub-section (1) of s. 27 of he Act freezing all transfers by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise, of any urban or urbanisable land with a building (whether constructed before or after the commencement of the Act), or a portion of such building, for a period of ten years from 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 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 Art. 19 (1); and (4) the 'priorities' laid down in s.23 of the impugned Act are not in keeping with part IV of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on prospects for expansion in the distant future, is thus sought to be avoided. The fundamental issue is: Whether s. 23 of the impugned Act impairs the basic structure or framework of the Constitution being violative of Art. 39 (b) and (c) and Art, 31 (2) of the Constitution and is, therefore, not protected under Arts. 31-B and 31-C. The impugned Act is designed as a law 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 under Art. 39 (b) and (c). The constitutional validity of s. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same. The submission is that though the impugned Act is designed as a law for the imposition of a ceiling on vacant land in urban agglomerations, to subserve the common good, in furtherance of the Directive principles under Art. 39 (b) and (c), the dominant object of the impugned Act for the acquisition of vacant land in urban agglomerations under s. 23 of the Act, was to facilitate the setting up of industries in the private sector and, therefore, the Act was not in furtherance of part IV of the Constitution and void being violative of Art. 31 (2). It was urged that s. 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 Art. 31C and that it cannot also have the protective umbrella of Art. 31B as it seeks to alter the basic structure of the Constitution. Although the impugned Act is enacted with a laudable object, to subserve the common good, in furtherance of the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislative function. The matter is essentially of political expediency, and as such it is the concern of the statesmen and, therefore, the domain of the legislature and not the judiciary. It was, however, urged that s.23(1) of the Act is only an enabling provision, and the real power was under s.23(4), and if there is ambiguity in the language of s 23, it was possible to read the section in the light of the preamble and the Directive Principles under Art. 39(b) and (c) and as such s.23(1) is subject to s.23(4). The use of the words subject to the provisions of sub-sections (1), (2) and (3) in s.23(4) takes away the compulsion on the State Government to adhere to the Directive Principles under Art. 39(b) and (c) in making allotment of the vacant lands in an urban agglomeration acquired under the Act. The words subject to the provisions of subsections (1), (2) and (3) in s.23(4), appearing in the context of s.23(1) means 'in addition to; if anything is left over after the allotment under s.23(1)'. I cannot, therefore, read the provisions of sub-ss.(1), (2) and (3) s.23 of in the light of the preamble or the Directive Principles under Art. 39(b) and (c). By no rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. It may be stated here that these Guidelines cannot supersede or alter any of the provisions of the Act or the rules made thereunder. The Guidelines issued under s. 23 are in these terms: Section 23 of the Urban Land (Ceiling and Regulation) Act, 1976, governs, inter alia, disposal of vacant land acquired under the Act. In brief, this Section enables the State Government to allot any vacant land for the purpose of an industry or to subserve the common good, or to retain or reserve such land for the benefit of the public. 2. For the purpose of the 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 house ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) and (3) in s. 23(4) which make the setting up of industries the dominant object for the acquisition of vacant land in urban agglomerations under the Act, are not in keeping with Part IV of the Constitution and, therefore, not protected under Article 31-C. A legislation which directly runs counter to the Directive Principles of State Policy enshrined in Art. 39(b) and (c) cannot by the mere inclusion in the Ninth Schedule receive immunity under Art. 31B. 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 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 if the responsibility of future Indian governments to find a middle way between individual liberty and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution, on the score that they form a part of the basic structure of the Constitution, they are that: (i) India is a Sovereign Democratic Republic; (ii) Equality of status and opportunity shall be secured to all its citizens, (iii) The State shall have no religion of its own and all persons shall be equally entitled to freedom of conscience and the right freely to profess, practise 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. 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-ss. (1), (2) and (3) of s. 23 and the opening words subject to the provisions of sub-sections (1), (2) and (3) in s. 23(4) are the very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra vires. The Act still remains the Act as it was passed, i.e., an Act for imposition of ceiling on urban land. In determining the effect of the law upon the individual'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. It should be remembered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'family' in s.2(f) of the impugned Act must fail. The Court has recently upheld the validity of an identical definition of 'family' appearing in the different State laws relating to imposition of ceiling on agricultural land. Some marginal hardship is inevitable in the working of the legislation. The ultimate object is to reduce inequalities in the larger interest. That takes us to the question whether the definition of 'family' in s.2(f) of the Act results in the exclusion of a joint Hindu family. The definition of 'family' contained in s.2(f) is in the following terms: 2.(f) 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 s.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 s.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash. Under the original Art.31(2), no property could be acquired for a public purpose under any law, unless it provided for compensation 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. It will be seen that Art.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 (2B) to Art.31 which provides: 31.(2B) 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 the word 'compensatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tre and ₹ 5 per sq. metre, for the vacant land in categories 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-s.(6) makes the amount payable under sub-s (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 s.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. meters 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 taken. It is pure arithmetics. Twenty thousand sq. metres would make 23,920 sq. yards and forty thousand sq. metres 47,840 sq. yards. In a city like Delhi, Calcutta, Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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-s. (3) of s 10? When the Court has no power to question the adequacy of the amount under Art.31(2), can it be said that the amount fixed determined according to the principles laid down in sub-s.(1) of s.11, subject to the maximum fixed under sub-s.(6) thereof is illusory merely because of inadequacy? 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. Seeravai in his book on Constitution, 2nd Ed., vol.I, p.656, while dealing with the Fourth Amendment states that in permitting 'inadequate compensation' the 4th Amendment removed a fixed yard-stick and made all discussion about 'relevant' and 'irrelevant' principles meaningless. The learned author says: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt) Act, 1971, which provided for the 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 Art.31A and could not be challenged on the ground that it take aways, a bridges or abrogates the fundamental rights guaranteed by Arts.14, 19 and 31. In Ranganatha Reddy's 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 Art.31(2) and they were not irrelevant for the determination of the amount. Untwalia J. speaking for the majority observed: On the interpretations aforesaid which we have put to the relevant provisions of the Act, it was difficult rather impossible-to argue that the amount so fixed will be arbitrary or illusory. In some respects it may be inadequate but that cannot be a ground for challenge of the constitutionality of the law under Article 31(2). Krishna Iyer J. in a separate but concurring judgment after deducing the discernible principles from the decision in Kesavananda Bharati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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. 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 the 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 Ors. the Court held that the right to carry on a business guaranteed under Art. 19(1) (g) carries with it the right not to carry on business. It must logically follow, as a necessary corollary, that the right to acquire, hold and dispose of property guaranteed to a citizen under Art. 19(1)(f) carries with it the right not to hold any property. It is difficult to appreciate how could a citizen be compelled to own property against his will. If vacant land owned by a person falls within the ceiling limits for an urban agglomeration, he is outside the purview of s. 3 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
