1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6520 OF 2003
WITH
CIVIL APPEAL NO.6521-6537 OF 2003
AND
CIVIL APPEAL NO.6538 OF 2003
K.T. Plantation Pvt. Ltd. & Anr. ... Appellants
Vs
State of Karnataka ...Respondent
J U D G M E N T
K.S. RADHAKRISHNAN, J.
The constitutional validity of Roerich and
Devika Rani Roerich Estate (Acquisition & Transfer)
Act, 1996 (in short the "Acquisition Act"), the
legal validity of Section 110 of the Karnataka Land
Reforms Act, 1961 (in short "Land Reforms Act"), the
Notification No. RD 217 LRA 93 dated 8th March, 1994
issued by the State Government thereunder and the
scope and content of Article 300A of the
Constitution of India, are the issues that have come
up for consideration in these civil appeals.
2. We propose to deal with the above issues in
three parts. In Part-I, we will deal with the
validity of Section 110 of the Land Reforms Act and
2
the validity of the notification dated 8.3.1994 and
in Part-II, we will deal with the constitutional
validity of the Acquisition Act and in Part-III, we
will deal with the claim for enhanced compensation
and the scope of Article 300A of the Constitution.
PREFACE
3. Dr. Svetoslav Roerich, a Russian born, was an
internationally acclaimed painter, artist and
recipient of many national and international awards
including Padma Bhushan from the President of India
in the year 1961. Smt. Devika Rani Roerich, grand
niece of Rabindranath Tagore had made valuable
contributions and outstanding services to the Indian
Motion Pictures and Film Industry, was known to be
the "First Lady of the Indian Screen". She was
awarded Padmashri by the President of India in the
year 1958 and was the recipient of the first Dada
Saheb Phalke Award and the Soviet Land Nehru Award
in the year 1989.
4. Dr. Roerich and Mrs. Devika Rani Roerich had
owned an Estate called Tatgunni Estate covering
470.19 acres at B.M. Kaval Village of Kengeri Hobli
3
and Manvarthe Kaval Village of Uttarhalli Hobli,
Bangalore South Taluk, out of which 100 acres were
granted to them by the State Government in the year
1954 for Linaloe cultivation vide G.O. dated
16.3.1954 read with Decree dated 19.4.1954. When
the Land Reforms Act came into force, they filed
declarations under Section 66 of the Act before the
Land Tribunal, Bangalore South Taluk-II stating that
they had no surplus lands to surrender to the State
since the entire area held by them had been used for
the cultivation of Linaloe which was exempted under
Section 107(1)(vi) of the Land Reforms Act. The
Land Tribunal, Bangalore vide order dated 15.3.82
dropped the proceedings instituted under the Act
against them holding that the land used for
cultivation of Linaloe did not attract the
provisions 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,
4
in short `the Company') by way of a registered Sale
Deed dated 23.3.91 for a sale consideration of
Rs.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 Rs.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 before the Karnataka High Court and a learned
Single Judge of the High Court dismissed the writ
5
petition. On appeal, the Division Bench confirmed
the order, against which she had approached this
Court vide C.A.No.3094 of 1995 and this Court vide
its judgment dated 18th April, 1995 directed the
District Registrar not to proceed with the matter
till the suit is disposed of by the Civil Court.
The judgment is reported in (1995) Suppl. 2 SCC 459.
7. Dr. Roerich and Mrs. Devika Rani had no issue
and due to old age and other ailments it was
reported that they were staying at Hotel Ashok,
Bangalore for a couple of years before their death.
It was alleged that some of the persons who were
associated with the couple, had an eye on their
properties, including the land used for linaloe
cultivation, valuable paintings, jewellery,
artefacts etc., and began to create documents to
grab those properties.
8. The Chief Secretary of the State of Karnataka
noticing the above facts and circumstances convened
a meeting on 1.4.92 in the presence of the Director
of Archaeology to take effective and proper steps to
preserve the paintings, artefacts and other
6
valuables. For that purpose, they met Smt. Devika
Rani and Dr. Roerich on 03.04.92 and a letter was
handed over to Dr. Roerich on behalf of the State
Government expressing the Government's willingness
to purchase the paintings and other valuables so as
to set up a Roerich Gallery. The State Cabinet in
its meeting held on 09.04.92 also discussed about
the desirability of acquiring the landed properties
of Roerichs and also for setting up an Art Gallery-
cum-Museum, in public interest. Following that
meeting, the Roerich and Devika Rani Roerich Estate
(Acquisition and Transfer) Ordinance, 1992 was
drafted, but could not be issued.
9. The Deputy Commissioner, Bangalore Rural
District had reported on 26.6.1993 that though
Roerichs had owned 470.19 acres of land including
the land used for Linaloe cultivation they had filed
declarations only to the extent of 429.26 acres.
Out of the extent of 470.19 acres of land owned by
them, they had raised Linaloe cultivation to the
extent of 356.15 acres and the remaining extent of
114.04 acres was agricultural land. As per the
7
ceiling provisions of the Land Reforms Act they were
entitled to hold an extent of 54 acres of
agricultural land. As such, the excess of 60.04
acres ought to 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
8
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 Department of Law and Parliamentary Affairs as
to whether valuable lands held by the late Roerichs
could be resumed by the State before lands changed
hands, by withdrawing the exemption given to the
lands used for Linaloe cultivation. The Department
of Law and Parliamentary Affairs in their note
No.108:/L/11/94 dated 1.3.1994 opined that the
exemption given under Section 107 of the Land
Reforms Act, 1961 can be withdrawn by the Government
by issuing a notification as per Section 110 of the
Land Reforms Act. Consequently the Commissioner and
Secretary to the government proposed to issue a
notification to that effect for which approval of
the Cabinet was sought for. The Cabinet accorded
sanction in its meeting held on 04.03.1994 and the
Government issued a notification dated 08.03.1994 in
9
exercise of powers conferred by Section 110 of the
Land Reforms Act, withdrawing the exemption granted
for the lands used for cultivation of Linaloe under
clause (vi) of Sub-section 1 of Section 107 of the
Act. Notification was published in the Government
Gazette on 11.03.1994.
12. The Assistant Commissioner, Bangalore sub-
division later issued a notice no.LRF:CR 17:93-94
dated 28.03.94 to the company to show cause why
137.33 acres of land be not forfeited to the
Government, since it had purchased the above
mentioned lands in violation of Section 80 and 107
of the Land Reforms (Amendment) Act, 1973. An
enquiry under Section 83 of the Land Reforms Act was
ordered for violation of the provisions of the Act.
The Company, aggrieved by the above mentioned
notice, filed Writ Petition No.12806/94 before the
High Court of Karnataka, which was allowed to be
withdrawn giving liberty to the petitioner to take
recourse to the remedies under law. Due to the
status quo order passed, by this Court in these
appeals the proceedings pending before the Asst.
10
Commissioner, Bangalore following the show-cause
notice dated 28.03.1994 was kept in abeyance.
13. Mary Joyce Poonacha, the appellant in Civil
Appeal No. 6538 of 2003 had, in the meanwhile, filed
W.P. No. 11149 of 1994 before the Karnataka High
Court claiming rights over some of the articles
belonging to Roerichs' couple on the strength of a
will dated 4.3.1994. The writ petition was
dismissed by the High Court holding that the
articles claimed by the appellant stood vested in
the State in view of the Acquisition Act. Against
that judgment, 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
11
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 came up before a bench
of this Court on 28.07.04 and this Court passed an
order framing the following substantive questions of
law:-
1. Whether Section 110 of the
Karnataka Land Reforms Act, 1961, as
amended by the Karnataka Land Reforms
amendment Act, 1973, (Act 1 of 1974),
which came into effect from 01.03.1974,
read with Section 79 B of the said Act,
introduced by amending Act 1 of 1974,
violates the basic structure of the
12
Constitution, in so far as it confers
power on the Executive Government, a
delegatee of the Legislature, of
withdrawal of exemption of Linaloe
plantation, without hearing and without
reasons?
2. Whether the Roerich and Devika
Rani Roerich (Acquisition and Transfer)
Act, 1996, (the Acquisition Act), is
protected by Article 31C of the
Constitution?
3. Whether the true interpretation of
Article 300A of the Constitution, the
said Act is violative of the said
Article in so far as no specific
compensation prescribed for the
acquisition of 468 acres of Linaloe
plantation, and, after deduction of
liabilities and payment of compensation
for the artefacts, no balance may and/or
is likely to exist for payment of such
compensation, as a result of which,
whether the Act really is expropriatory
in nature?
4. 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?
5. If Article 300A of the
Constitution is construed as providing
for deprivation of property without any
compensation at all, or illusory
13
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?
Part-I
We will first examine the validity of Section
110 of the Land Reforms Act and the notification
dated 08.03.94, issued thereunder.
17. Mr. T.R. Andhyarujina, Senior Advocate
appearing for the Company submitted that it had
purchased the lands from Roerich couple when those
lands stood exempted from 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
14
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 vested rights of persons to hold lands used for
Linaloe cultivation from 01.03.1974 onwards, without
assigning any reasons. Further, it was also
submitted that the exemption under Section
107(1)(vi) was granted with respect to the lands
used for the cultivation of Linaloe, and not for any
specific individual, and there is no bar in
15
alienating the land to third parties. In support of
the above contention, learned counsel placed
reliance on the decisions of this Court in Bakul
Cashew Co. and Ors. v. Sales Tax Officer, Quilon
and Anr. (1986) 2 SCC 365, Income Tax Officer,
Alleppy v. M.C. Ponnoose and Ors. (1969) 2 SCC 351,
Regional Transport Officer, Chittoor and Ors. v.
Associated Transport Madras (P) Ltd. and Ors. (1980)
4 SCC 597, Cannanore Spinning and Weaving Mills Ltd.
v. Collector of Customs and Central Excise, Cochin
and Ors. (1969) 3 SCC 112, Hukam Chand etc. v.
Union of India (UOI) and Ors. (1972) 2 SCC 601.
19. Shri Andhyarujina also submitted that the show
cause notice dated 28.03.1994 was ex facie illegal
and that the prohibition of transfer of land under
Section 80 of the Act cannot act retrospectively in
respect of lands already stood exempted under
Section 107(1)(vi) of the Act.
20. Learned senior counsel also refuted the
contention of the State that, under Section 107(2)
of the Land Reforms Act, there can be only 10 units
of land used for Linaloe cultivation exempted under
16
Section 107(1)(vii) of the Act. Learned senior
counsel submitted that it would be anomalous for the
Legislature, by amending the Act, on the one hand,
to exempt the lands for cultivation of Linaloe from
operation of the Land Reforms Act, without any limit
of holding and, at the same time, deprive the
existing cultivators of Linaloe, except to the
extent of 10 units on 1.3.74. Learned counsel
submitted that Section 107(1)(vi) does not put a
limit of 10 units of Linaloe lands.
21. Learned senior counsel also submitted that the
State Government has also not followed the procedure
laid down in Section 140 of the Land Reforms Act
and, in any view, the mere laying of the
notification before the State Legislature would not
cure the infirmity of excessive delegation. Learned
counsel also submitted that though the Land Reforms
Act was placed in the 9th Schedule which saves its
provisions from the challenge of Articles 14, 19 and
31, a challenge to a provision of the Act for
excessive delegation of legislative power is still
17
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.
18
Learned senior counsel also submitted that the Land
Reforms Amendment Act (Act 1 of 1974) was also
placed in the IXth Schedule and, hence immune from
attack on the ground of violation of Articles 14 or
19 of the Constitution and, hence, the notification
dated 8.03.1994 issued under Section 110 of the Act
is also immune from challenge. Learned senior
counsel submitted that the constitutional validity
of the amended Act was also upheld by this Court in
H.S. Srinivasa Raghavachar and Ors. v. State of
Karnataka and Ors. (1987) 2 SCC 692.
23. Learned senior counsel also submitted that the
appellants have no locus standi to maintain these
writ petitions since they have not perfected their
title over the properties in question. Further,
Mrs. Devika Rani Roerich had also disputed the
execution of the sale deed dated 16.02.92 and a suit
disputing title is pending consideration before the
Civil Court. Learned senior counsel also submitted
that the company had illegally acquired 141 acres 25
guntas of land in excess of the ceiling prescribed
under Section 107(2) of the Land Reforms Act and the
19
Act mandates that no person shall, which includes a
Company also, after the date of commencement of the
Land Reforms Act, i.e., 01.03.74, acquire land in
any manner for cultivation of Linaloe to an extent
which together with the land cultivated by Linaloe,
if any, already held by him exceed 10 units
notwithstanding anything contained in sub-section
(1) of Section 107.
24. Learned senior counsel further submitted that
the provisions of Sections 66 to 76 also shall apply
mutatis mutandis, in respect of every acquisition
contrary to Section 107(2). Learned senior counsel
also submitted that in any view Section 110 of the
Land Reforms Act does not suffer from the vice of
excessive delegation of legislative powers. Learned
senior counsel submitted that Section 110 of the
Land Reforms Act is guided by the policy laid down
by the state legislature which is discernible from
the scheme of the Land Reforms Act, its objective,
provisions in Chapter-VIII, history of the amendment
substituting Section 107 (1)(vi) etc. Learned
counsel also submitted that exemption under Section
20
107(1)(vi) was granted to Roerichs' for cultivation
of Linaloe, while the Company is statutorily
disentitled to hold the land and, hence, the claim
for exemption from the provisions of Land Reforms
Act is opposed to the policy of the Act. Further
nobody can claim the exemption from the 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.
21
(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 110 of the Act. Learned senior counsel
submitted that exercise of powers under Section 110
of the Act is in the nature of subordinate
legislation and no opportunity of hearing or
recording of reasons are warranted. In support of
his contention learned counsel placed reliance on
the decisions of this Court in Shri Sitaram Sugar
Co. Ltd. and Another v. Union of India and Others
(1990) 3 SCC 223; Union of India and Another v.
Cynamide India Ltd. and Another Etc. (1987) 2 SCC
720; H.S.S.K. Niyami & Another v. Union of India &
Another (1990) 4 SCC 516; Laxmi Khandsari and Ors.
v. State of U.P. and Ors. (1981) 2 SCC 600; J. K.
22
Industries & Another v. Union of India & Others
(2007) 13 SCC 673.
27. Learned senior counsel also submitted that
requirement of placing the notification dated
08.03.94 before the State Assembly is not a
mandatory requirement once the State Government
publishes the notification in the official gazette.
Reference was made to the judgment in Jan Mohammad
Noor Mohammad Bagban v. State of Gujarat and Anr.,
AIR 1966 SC 385. Learned senior counsel submitted
that in any view of the matter, as per the order of
this Court dated 24.2.2011 the State Govt. have
already taken steps for placing the notification
before both the Houses of the State Legislature.
Consequently, the defect, if any, of non-laying the
notification, has been cured.
28. The Land Reforms Act was enacted by the
Karnataka State Legislature to have a uniform law
relating to land reforms in the State of Karnataka,
relating to agrarian relations, conferment of
ownership on tenants, ceiling on land holdings etc.
Chapter II of the Act deals with general provisions
23
relating to tenancies, Chapter III deals with
conferment of ownership on tenants. Ceiling on land
holdings is dealt with in Chapters IV and Chapter V
deals with restrictions on holding or transfer of
agricultural lands. Chapter VIII of the Act deals
with exemptions and Chapter XI deals with the
miscellaneous provisions.
29. Appellants in these appeals have challenged
the validity of Section 110 of the Act primarily on
the ground of excessive delegation of legislative
powers on the State Government. To examine that
contention it is necessary to refer to certain
provisions contained in various Chapters referred to
above, the scheme of the Act, its object and
purpose, legislative policy underlying in the
provisions of the statute 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
24
(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 after such enquiry as may be
prescribed, send a statement containing the
prescribed particulars relating to such land to the
Deputy Commissioner who shall, by notification,
declare that such land shall vest in the State
25
Government free from all encumbrances and take
possession thereof in the prescribed manner. Sub-
section (4) of Section 79B states that in respect of
the land vesting in the State Government under that
section an amount as specified in Section 72 shall
be paid. Explanation to Section 79B states that for
the purpose of that section it shall be presumed
that a land is held by an institution, trust,
company, association or body where it is held by an
individual on its behalf. Section 80 bars transfer
of any land to non-agriculturists, which says that
no sale, gift or exchange or lease of any land or
interest therein etc. shall be lawful in favour of a
person who is disentitled under Section 79A or 79B
to acquire or hold any land.
31. The first appellant being a company was,
therefore, prohibited from holding any agricultural
land after the commencement of the Act. If the
company was holding any land with Linaloe
cultivation on the date of the commencement of the
Act, the same would have vested in the State
26
Government under Section 79B(3) of the Act and an
amount as specified in Section 72 would have been
paid. Section 104, however, states that the
provisions of Section 38, Section 63 other than sub-
section (9), thereof, Sections 64, 79-A, 79-B and 80
shall not apply to plantations and is not made
subject to the provisions of Section 110.
32. Section 107 states that the provisions of the
Act would not apply to certain lands mentioned
therein, but made subject to the provisions of
Section 110. Section 107, to the extent it is
relevant for the purpose, is extracted below for
easy reference:
"107. Act not to apply to certain
lands.- (1) Subject to the provisions of
Section 110, nothing in this Act, except
Section 8, shall apply to lands,-
xxx xxx xxx
xxx xxx xxx
(vi) used for the cultivation of
linaloe;
xxx xxx xxx
xxx xxx xxx
(2) Notwithstanding anything in sub-
section (1), no person shall, after the
date of commencement of the Amendment
Act acquire in any manner for the
27
cultivation of linaloe, land of an
extent 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
28
one limitation that a legislature cannot delegate
essential legislative functions which consists in
the determination of the legislative policy and of
formally enacting that policy into a binding rule of
conduct. In Maharashtra State Board of Secondary
and Higher Secondary Education and Anr. v. Paritosh
Bhupeshkumar Sheth and Others (1984) 4 SCC 27, this
Court declared that while examining whether a
particular piece of delegated legislation - whether
in the form of a rule or regulation or any other
type of statutory instrument - was in excess of the
power of subordinate legislation conferred on the
delegate, has to be determined with reference only
to the specific provisions contained in the relevant
statute conferring the power to make the rule,
regulation etc. and the object and purpose of the
Act as can be gathered from the various provisions
of the enactment. It was held that the Court cannot
substitute its own opinion for that of the
legislature or its delegate as to what principle or
policy would best serve the objects and purpose of
the Act or sit in judgment over the wisdom and
29
effectiveness or otherwise of the policy laid down
by the regulation making body and declare a
regulation to be ultra vires merely on the ground
that, in the opinion of the Court, the impugned
provisions will not help to serve the object and
purpose of the Act. It is exclusively within the
province of the legislature and its delegate to
determine, as a matter of policy, how the provision
of the Statute can best be implemented and what
measures, substantive as well as procedural would
have to be incorporated in the rules or regulations
for the efficacious achievement of the objects and
purposes of the Act. It is not for the Court to
examine the merits or demerits of such a policy
because its scrutiny has to be limited to the
question as to whether the impugned regulations fall
within the scope of the regulation-making power
conferred on the delegate by the Statute.
35. Law is settled that the Court shall not
invalidate a legislation on the ground of delegation
of essential legislative functions or on the ground
of conferring unguided, uncontrolled and vague
30
powers upon the delegate without taking into account
the preamble of the Act as also other provisions of
the statute in the event they provide good means of
finding out the meaning of the offending statute.
The question whether any particular legislation
suffered from excessive delegation, has 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
31
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. (1989) 1 SCC 561 this Court
held that the Parliament decided as a matter of
policy that the cantonment areas in a State should
be subject to the same legislation relating to
control of rent and regulation of housing
accommodation as in force in other areas of the
State and this policy was given effect to by
empowering the Central Government to extend to a
cantonment area in a State the tenancy legislation
as in force as in other areas of the State including
future amendments and that there was no abdication
of legislative functions by Parliament.
38. Chapter VIII of the Land Reforms Act deals
with exemption provisions. Section 104 of the Act
32
deals with plantations, which says, that the
provisions of Section 38, Section 63, other than
sub-section (9), thereof, Sections 64, 79-A, 79-B
and 80 shall not apply to plantations, but the power
to withdraw the exemption in respect of the
plantations, has not been conferred on the State
Government, but evidently retained by the
Legislature. Legislative policy is therefore clearly
discernible from the provision of the Statute
itself, that, whenever the Legislature wanted to
confer the power to withdraw the exemption to the
State Government it has done so, otherwise it has
retained the power to itself.
39. Section 110 of the Land Reforms Act empowers
the State Government to withdraw the exemption
granted to any land referred to in Sections 107 and
108. Section 107 itself has been made "subject to"
Section 110 of the Act. The words `subject to'
conveys the idea of a provision yielding place to
another provision or other provisions to which it is
made subject. In Black Law Dictionary, 5th Edn. At
p.1278, the expression "subject to" has been defined
33
as under:
"Liable, subordinate, subservient,
inferior, obedient to; governed or
effected by; provided that; provided;
answerable for."
Since Section 107 is made subject to Section 110,
the former section conveys the idea of yielding to
the provision to which it is made subject that is
Section 110 which is the will of legislature.
Reference may be made to the decisions of this Court
in Punjab Sikh Regular Motor Service, Moudhapara,
Raipur v. Regional Transport Authority & Another AIR
1966 SC 1318, Joginder Singh & Others v. Deputy
Custodian-General of Evacuee Property & Others AIR
1967 SC 145 and Bharat Hari Singhania & Others
v. Commissioner of Wealth Tax (Central) & 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
34
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 legislative will was to make Section 107 subject
to Section 110 and not the will of the delegate,
hence, overriding effect has to be given to Section
110. Further, the Land Reforms Act including
Section 110 was placed in IXth Schedule in the year
35
1965 and, hence, immune from challenge in a court of
law.
41. Dr. Roerich and Mrs. Devika had got only the
conditional exemption from the provisions of the
Land Reforms Act for the lands used for Linaloe
cultivation and, hence, they also would have lost
ownership and possession of the lands once the
exemption had been withdrawn and the land would have
vested in the State. The land was purchased by the
Company with that statutory condition from Roerichs
and, hence, was bound by that condition. We,
therefore, reject the contention that Section 110 is
void due to excessive delegation of legislative
powers.
42. The State Government issued the notification
dated 8.3.1994 in exercise of the powers conferred
by Section 110 of the Land Reforms Act which was
published in the official gazette on 11.3.94.
Section 2(22) of the Act defines `Notification' to
mean a notification published in the official
gazette. Section 23 of the General Clauses Act 1897
36
also states that the publication in the official
gazette of a rule or by-law purported to have been
made in exercise of power to make rules or by-laws
after previous publication shall be conclusive proof
that the rule or by-law has been duly made.
43. This Court in B.K. Srinivasan and Ors. v.
State of Karnataka and Ors. (1987) 1 SCC 658 held
as follows:-
"Unlike Parliamentary legislation which
is publicly made, delegated or
subordinate legislation is often made
unobtrusively in the chambers of a
minister, a secretary to the Government
or other official dignitary. It is,
therefore, necessary that subordinate
legislation, in order to take effect,
must be published or promulgated in some
suitable manner, whether such
publication or promulgation is
prescribed by the parent statute or not.
It will then take effect from the date
of such publication or promulgation."
44. So far as this case is concerned, the State
Government has already followed the legal
requirement of publication of the notification dated
08.03.1994 which came into effect on 11.03.94.
45. Mr. T.R.Andhyarujina, learned counsel
appearing for the appellants submitted that the
respondent State has not followed the procedure laid
37
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
38
has not been any excessive delegation of
legislative powers on the State Government and we
may now examine whether the failure to follow the
procedure laid down under Section 140 of the Act has
affected the legal validity of the notification.
Facts would indicate that, in the instant case, the
notification has not been laid before the
Legislature, but looking at the language of Section
140, it has not affected the validity or the effect
of the notification.
For easy reference Section 140 is extracted
hereunder:
"Section 140. Rules and notifications
to be laid before the State
Legislature.- Every rule made under this
Act and every notification issued under
Sections 109, 110 and 139 shall be laid
as soon as may be after it is made or
issued before each House of the State
Legislature while it is in session for a
total period of thirty days which may be
comprised in one session or in two
successive sessions, and, if, before the
expiry of the session in which it is so
laid or the session immediately
following both Houses agree in making
any modification in the rule or
notification or both Houses agree that
the rule or notification should not be
made, the rule or notification shall
thereafter have effect only in such
modified form or be of no effect, as the
39
case may be; so however that any such
modification or annulment shall be
without prejudice to the validity of
anything previously done under that rule
or notification."
(Emphasis supplied)
48. The Constitution Bench of this Court in Jan
Mohammad Noor's case (supra) examined the effect of
sub-section 5 of Section 26 which provides that the
rules shall be laid before each House of the
provisional Legislature, for giving effect.
Interpreting that provision the Court held that
Section 26(5) of Bombay Act 29 of 1939 does not
prescribe that the Rules acquired validity only from
the date on which they have been placed before the
House of Legislature. The Court held that the Rules
are valid from the date on which they are made under
Section 26(1). The Court noted that the Legislature
has prescribed that the Rules shall be placed before
the House of the Legislature, but held that the
failure to place the rules before the House of
Legislature does not effect the validity of the
rules and merely because they have not been placed
before the House of the Legislature, the provision
40
cannot be regarded as mandatory.
49. This Court in Atlas Cycle Industries Ltd. &
Others v. State of Haryana (1979) 2 SCC 196 examined
the question relating to the non-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
41
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
Legislature has been contemplated in Section 140 to
make the notification effective, that does not mean
that failure to lay the notification has affected
the legal validity, its effect or the action taken
precedent to that notification. We, therefore, hold
that non-laying of the notification dated 08.03.1994
before the State Legislature has not affected its
validity or the action taken precedent to that
notification. We have now, vide our order dated
24.02.2011, directed the State Government to place
the notification before both the Houses of the State
Legislature following the judgment in Quarry Owners'
case (supra). Therefore, the defect, if any, of not
placing the notification has been cured.
51. We may also consider the effect of
Section 80 of the Land Reforms Act on Section 79-B.
42
Section 80 prohibits transfer of any land to non-
agriculturalist. Section 80(1)(iv), states that it
shall not be lawful to sell, gift, exchange or lease
of any land, in favour of a person, who is
disentitled under Section 79-B, to acquire or hold
any land. The expression "land" has been defined
under Section 2(18) which is all comprehensive and
takes in agricultural lands, that is land which is
used or capable of being used for agriculture, but
for the exemption granted under Section 107(1)(vi)
lands used for the cultivation of linaloe would have
fallen under Section 2(18). But, so far the
company is concerned, the prohibition was total and
complete since Section 79-B states that it would not
be lawful for a company to hold "any land", with
effect and from the date of the commencement of the
amending Act. The Company, therefore, could not
have held the land used for the cultivation of
Linaloe on the date of the commencement of the Act.
Further on withdrawal of exemption vide notification
dated 08.03.94 the Company was disentitled to hold
the land belonging to Roerichs' since the same would
43
be governed by the provisions of the Land Reforms
Act.
52. We also find no force in the contention that
opportunity of hearing is a pre-condition for
exercising powers under Section 110 of the Act. No
such requirement has been provided under Section 107
or Section 110. When the exemption was granted to
Roerichs' no hearing was afforded so also when the
exemption was withdrawn by the delegate. It is
trite law that exemption cannot be claimed as a
matter of right so also its withdrawal, 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
44
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 withdrawing the
exemption granted to the lands used for Linaloe
cultivation, felt the necessity to take effective
and proper steps to manage the estate, its tree
growth, preserve paintings, artefact and other
valuables of Roerichs' and their transferees and to
establish an Art Gallery-cum-Museum. For the said
purpose initially the State issued an ordinance,
45
namely, the Roerich and Devika Rani Roerich Estate
(Acquisition and Transfer) Ordinance 1992, which was
sent for the approval of the President of India. In
the meanwhile Roerich couple passed away and the
ordinance was returned to make sufficient
amendments. After necessary amendments ordinance of
1995 was issued. However, the ordinance was returned
by the Government of India informing that it had no
objection to introduce legislation as a bill and
hence the same with requisite amendments was placed
before the Legislative Assembly and the Legislative
Council. The Acquisition Act was then passed and
subsequently got the assent of the President on
15.11.96 and was brought into force on 21.11.1996.
55. The Act was questioned by filing a writ
petition before the High Court of Karnataka on the
ground that enactment providing for compulsory
acquisition of Titgunni Estate was not for public
purpose and the compensation provided thereunder was
illusory. During the pendency of the writ petition
the Act was amended by the Amendment Act 2001,
w.e.f. 01.11.96 by inserting a new Section 19A to
46
provide clarity for payment of amount to the
owners/interested persons. The challenge against the
validity of the Act and its provisions were repelled
by the High Court except in relation to certain
provisions, providing for the inclusion of certain
members in the board of directors constituted under
the Act.
56. Shri Andhyarujina, submitted that the
impugned Act does not contain any provision for
protection of agrarian reforms and hence not
protected by the provisions of Article 31A and hence
not saved from challenges on the ground of violation
of Articles 14 and 19 of the Constitution. Learned
counsel also pointed out that the management and
protection of land used for linaloe cultivation and
the preservation of artefacts, paintings etc. are
not part of agrarian reforms. Learned senior counsel
submitted that concept of agrarian reforms is a
dynamic one and this Court in various decisions
examined its meaning and content. Reference was
made to the judgments of this Court in State of
Kerala v. Gwalior Rayon Silk Manufacturing (Wvg.)
47
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. Learned Counsel
48
submitted that the Acquisition Act is in pith and
substance a law on acquisition and presidential
assent under Article 254(2), was warranted to save
that Legislation.
58. Shri K.N. Bhat, learned senior counsel
appearing for the appellants in CA No.6521-6537 of
2003 submitted that Article 300A is almost a replica
of Article 31(1), hence, all the judicial
pronouncements rendered by this Court on Article
31(1) would equally apply when we interpret Article
300A. Learned counsel also referred to the view
expressed by Justice Subba Rao in P. Vajravelu
Mudaliar's case (supra) and also referred to Subodh
Gopal Bose v. Bejoy Kumar Addya and Others (1973) 2
SCC 105 and few other decisions. Learned counsel
submitted that the concept of eminent domain has to
be read into Article 300A, which is an over-arching
principle. Learned counsel also submitted that the
concept of reasonableness, could be the touchstone
while interpreting a statute enacted to deprive a
person of his property under Article 300A. Learned
counsel also referred to the Judgment of this Court
49
in Kavalappara Kottarathil Kochuni's case (supra)
and submitted that a person can be deprived of his
property only by a valid law which can be tested in
the light of Articles 14 and 21.
59. Shri Dushyant R. Dave, learned senior counsel
appearing for the appellants in CA No.6520 of 2003
also supported the arguments of Shri Andhyarujina
and submitted that the concept of eminent domain be
read into Article 300A of the Constitution and the
impugned Act is unconstitutional for not providing
adequate compensation to the transferors. Reference
was made to several decisions of this Court
including the decisions in P. Vajravelu Mudaliar v.
Special Deputy Collector, Madras & Anr. (1965) 1 SCR
614; Rustom Cavasjee Cooper (Banks Nationalisation)
v. Union of India (1970) 1 SCC 248; Deputy
Commissioner and Collector, Kamrup & Ors. v. Durga
Nath Sharma (1968) 1 SCR 561 and Reliance Energy
Limited & Anr. v. Maharashtra State Road
Development Corporation Ltd. & Ors. (2007) 8 SCC 1
etc.
50
60. Shri Andhyarujina, referring to the letter
dated 20.09.1996 submitted that the State of
Karnataka had sought the assent of the President
only for the specific purpose of Clause(a) of Clause
(1) of Article 31-A of the Constitution and not for
any other purpose and the assent was given only in
response to the said proposal 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
51
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 the Acquisition Act is for the
preservation of Linaloe cultivation and other tree
growth hence constitutes a measure of agrarian
reforms and in any view Act does not violate Article
14 or 19 of the Constitution of India.
62. Learned senior counsel also submitted that
Acquisition Act was never challenged by the
appellants before the High Court on the ground of
repugnancy or on the ground of absence of
Presidential assent under Article 254(2) of the
Constitution. Learned counsel submitted that such a
plea cannot be raised for the first time before this
Court since the same raises questions of facts.
52
Reference was made to the decisions of this Court in
Engineering Kamgar Union v. Electro Steels Castings
Ltd. and Another (2004) 6 SCC 36; Bhuwalka Steel
Industries Ltd. v. Bombay Iron and Steel Labour
Board and Another (2010) 2 SCC 273. Learned counsel
submitted that in any view assent of the President
was sought for and obtained which satisfies the
requirements of Article 254(2) as well as the
proviso to Article 31A of the Constitution.
63. Learned counsel submitted that the Bill was
referred for the assent of the President with a
specific note that subject matter of the bill falls
under Entry 18 of List II and Entry 42 of List III
of the VIIth Schedule of the Constitution of India.
Learned counsel submitted that the main object of
the Acquisition Act is not being "Acquisition and
Requisition of Property" and the Legislation in
pith and substance is in respect of "land" under
Entry 18 of List II of the Constitution and there is
no repugnancy between State and Central Legislation
and hence no assent of the President under Article
254(2) was warranted. In support of his contention
53
learned counsel also relied on the judgments of this
Court in P.N. Krishnan Lal & others vs. Govt. of
Kerala & Another (1995) Suppl. (2) SCC 187 and
Offshore Holdings Pvt. Ltd. vs. Bangalore
Development Authority and Ors. (2011) 3 SCC 139.
64. After passing the Roerich and Devika Rani
Roerich Estate (Acquisition and Transfer) Bill 1996
by the Legislative Assembly and Legislative Council,
on 10.09.1996, a request was put up in file No. Law
28 LGN 92 stating that subject matter of the Bill
would fall under Entry 18 of List II and Entry 42 of
List III of the VIIth Schedule of the Constitution
pointing out that the State Legislative would be
competent to enact such a legislation. Note 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
54
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 competent to enact
the measure.
Since the provisions of the Bill would
attract sub-clause (a) of Clause (1) of
Article 31A of the Constitution, the
Bill has to be reserved for the assent
of the President in accordance with the
proviso to Clause (1) thereof in order
to get the protection of that Article.
Accordingly, the Governor has reserved
the Bill under Article 200 of the
55
Constitution of India for the
consideration of the President."
Later, the assent of the President was obtained on
15.11.96.
65. The plea of repugnancy can be urged only if
both the legislations fall under the Concurrent
List. Under Article 254 of the Constitution, a
State law passed in respect of a subject matter
comprised in List III would be invalid if its
provisions are repugnant to a law passed on the same
subject by Parliament and that too only if both the
laws cannot exist together. The question of
repugnancy under Article 254 of the Constitution
arises when the provisions of both laws are fully
inconsistent or are absolutely irreconcilable and it
is impossible without disturbing the other, or
conflicting results are produced, when both the
statutes covering the same field are applied to a
given set of facts. Repugnancy between the two
statutes would arise if there is a direct conflict
between the two provisions and the law made by the
56
Parliament and the law made by the State Legislature
occupies the same filed. Reference may be made to
the decisions of this Court in Deep Chand v. State
of U.P. & Others AIR 1959 SC 648; Prem Nath Kaul v.
State of Jammu & Kashmir, AIR 1959 SC 749; (1959)
Supp. (2) SCR 270, Ukha Kolhe v. State of
Maharashtra AIR 1963 SC 1531; Bar Council of Uttar
Pradesh v. State of U.P & Another (1973) 1 SCC 261;
T. Barai v. Henry Ah Hoe & Another (1983) 1 SCC
177; Hoechst Pharmaceuticals v. State of Bihar
(1983) 4 SCC 45; Lingappa Pochanna Appelwar v. State
of Maharashtra & Another (1985) 1 SCC 479; and Vijay
Kumar Sharma & Others v. State of Karnataka & Others
(1990) 2 SCC 562.
66. When the repugnancy between the Central and
State Legislations is pleaded we have to first
examine whether the two legislations cover or relate
to the same subject matter. The test for
determining the same is to find out the dominant
intention of the two legislations and if the
dominant intention of the two legislations is
different, they cover different subject matter then
57
merely 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
58
by the State, primarily falls under Entry 18 List
II, since the dominant intention of the legislature
was to preserve and protect Roerichs' Estate covered
by the provisions of the Land Reforms Act, on the
State Government withdrawing the exemption in
respect of the land used for linaloe cultivation.
The Acquisition Act, though primarily falls under
Entry 18 List II incidentally also deals with the
acquisition of paintings, artefacts and other
valuable belongings of Roerichs' and, hence, the Act
partly falls under Entry 42 List III as well.
Since the dominant purpose of the Act was to
preserve and protect Roerichs' Estate as part of
agrarian reforms, the inclusion of ancillary
measures would not throw the law out of the
protection of Article 31A(1)(a). On the other
hand, the Land Acquisition Act, 1894 is an act which
fell exclusively under Entry 42 List III and enacted
for the purpose of acquisition of land needed for
public purposes for companies and for determining
the amount of compensation to be made on account of
such acquisition, which is substantially and
59
materially different from the impugned Act whose
dominant purpose is to preserve and protect "estate"
governed by Art.31A(a) read with Art.31A(2)(a)(iii)
of the Constitution.
68. We are, therefore, of the considered view
that no assent of the President was required under
Article 254(2) of the Constitution to sustain the
impugned Act, which falls under Article 31A(1)(a) of
the Constitution, for which the assent of the
President was obtained. The contention of the
counsel that the Acquisition Act was invalid due to
repugnancy is, therefore, rejected.
69. We may also state that the Constitution (17th
Amendment) Act, 1964 extended the scope of the
expression "estate" in Art.31A(a) as to protect all
legislations on agrarian reforms and the expression
"estate" was given a wider meaning so as to bring
within its scope lands in respect of which
provisions are normally made in land reforms
enactments. Art.31A(2)(a)(iii) brings in any land
held or let for the purpose of agriculture or for
purpose ancillary thereto, including waste or vacant
60
land, forest land, land for pasture or sites of
buildings and other structure occupied by the
cultivators of land etc.
70. In Gwalior Rayon Silk Manufacturing
(Wvg.) Co. Ltd's case (supra), this Court held that
the concept of agrarian reform is a complex and
dynamic one promoting wider interests than
conventional reorganisation of the land system or
distribution of land, which is intended to realise
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
61
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 part of agrarian reforms. The Act
is, therefore, saved by the provisions of
Art.31A(1)(a).
72. We, therefore, hold that Roerich's estate
falls within the expression "estate" under clause
(2) of Article 31A of the Constitution and the Act
has obtained the assent of the President, hence, is
protected from the challenge under Articles 14 and
19 of the Constitution of India. No arguments have
been raised on the applicability or otherwise of
Article 31C and hence it is unnecessary to examine
62
whether the Act is protected by Article 31C of the
Constitution or not.
Part-III
Article 300A of the Constitution and the Acquisition
Act
73. We will now examine the validity of the
Acquisition Act on the touchstone of Article 300A of
the Constitution and examine whether the concept of
eminent domain be read into Art.300A and in the
statute enacted to deprive a person of his property.
74. Shri Andhyarujina, learned senior counsel
submitted that Art.300A and the statute framed
should satisfy the twin principles of public purpose
and adequate compensation. Learned counsel
submitted that whenever there is arbitrariness in
State action whether it be of the legislature or of
the executive or of an authority under Article 12,
Article 14 springs into action and strikes down such
State action as well as the legislative provisions,
if it is found to be illegal or disproportionate.
Reference was made to the judgments of this Court in
Kavalappara Kottarathil Kochuni's case (supra), E.P
Royappa v. State of Tamil Nadu & Another (1974) 4
63
SCR 3; Maneka Gandhi v. Union of India & Another
1978 (1) SCC 248; Ramana Dayaram Shetty v.
International Airport Authority of India & Others
(1979) 3 SCC 489; Kasturi Lal Lakshmi Reddy,
represented by its Partner Kasturi Lal, Jammu &
Others v. State of Jammu & Kashmir & Another. (1980)
4 SCC 1. Learned counsel submitted that even a tax
law can be discriminatory and violative of Article
14 or confiscatory and hence can be subjected to
judicial review. Learned counsel made reference to
the decisions of this court in Chhotabhai Jethabhai
Patel & Co. v. Union of India & Another (1962) Supp
(2) SCR 1 and Kunnathat Thathunni Moopil Nair v.
State of Kerala & Another AIR 1961 SC 552.
75. Shri Andhyarujina also submitted that the Act
does not provide for any principle or guidelines for
the fixation of the compensation amount and the
amount 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
64
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 Sir
Kameshwar Singh of Darbhanga and Ors. (1952) 1 SCR
889; State of West Bengal v. Union of India (1964)
65
1 SCR 371; Sub-Committee of Judicial Accountability
v. Union of India & Others (1991) 4 SCC 699; I.R.
Coelho(Dead) by LRs. v. State of Tamil Nadu (2007) 2
SCC 1; D.C. Wadhwa & Others v. State of Bihar &
Others (1987) 1 SCC 378 and Glanrock Estate Private
Limited. v. State of Tamil Nadu (2010) 10 SCC 96.
77. Learned counsel further submitted that the
action depriving a person of just and fair
compensation is also amenable to judicial review
under Articles 32 and 226 of the Constitution of
India, which is the quintessence of the rule of law,
otherwise the Constitution would be conferring
arbitrary and unbridled powers on the Legislature,
to deprive a person of his property. Reference was
made to the provisions of the Constitutions of
Australia and Republic of South Africa.
78. Mr. Patil, on the other hand, contended that,
having regard to the express language of Article
300A, the common law limitations of eminent domain
cannot be read into that Article especially when,
the right to property is no more a Fundamental Right
on deletion of Article 19(1)(f), Article 31(1) and
66
(2). Learned senior counsel submitted that the
history of Constitutional Amendments shows that the
Legislature in its wisdom expressed its intention to
do away with the requirement of public purpose and
compensation. Further, the adequacy of the amount
fixed by Legislature is also not amenable to
judicial review.
79. Learned senior counsel also referred to the
decisions of this Court reported in Subodh Gopal
Bose's case (supra), Dwarakadas Shrinivas (1954) 1
SCR 674; Sir Kameshwar Singh's case (supra), P.
Vajravelu Mudaliar's case (supra) and State of
Gujarat v. Shantilal Mangaldas & Others (1969) 1
SCC 509.
80. Learned senior counsel submitted that the
impugned Act has provided Rs.5 crore to meet various
priorities, which cannot be said to be illusory,
especially when the Government has withdrawn the
exemption granted with respect to the land used for
linaloe cultivation. Further, it was pointed out
but for impugned Act the Roerich's or the
transferors would have got only Rs.2 lakhs under
67
Section 72 of the Land Reforms Act, if they were in
possession and ownership of the land.
81. Learned counsel submitted, in any view, sale
deeds dated 23.03.1991 and 16.02.1992 would show
that the company had paid only a total sale
consideration of Rs.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
68
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 is
a "natural" right or merely a creation of `social
convention' and `positive law' which reflects the
centrality and uniqueness of this right. Property
rights at times compared to right to life which
determine access to the basic means of sustenance
and considered as prerequisite to the meaningful
exercise of other rights guaranteed under Article
21.
83. Eminent thinkers like Hugo Grotius,
Pufendorf, John Locke, Rousseau and William
Blackstone had expressed their own views on the
right to property. Lockean rhetoric of property as
a natural and absolute right but conventional in
civil society has, its roots in Aristotle and
Aquinas, for Grotius and Pufendorf property was both
natural and conventional. Pufendrof, like Grotius,
69
never recognised that the rights of property on its
owners are absolute but involve definite social
responsibilities, and also held the view that the
private property was not established merely for the
purpose "allowing a man to avoid using it in the
service of others, and to brood in solitude over his
hoard or riches." Like Grotius, Pufendorf
recognised that those in extreme need may have a
right to the property of others. For Rousseau,
property was a conventional civil right and not a
natural right and private property right was
subordinate to the public interest, but Rousseau
insisted that it would never be in the public
interest to violate them. With the emergence of
modern written constitutions in the late eighteenth
century and thereafter, the right to property was
enshrined as a fundamental constitutional right in
many of the Constitutions in the world and India was
not an exception. Blackstone declared that so great
is the regime of the law for private property that
it will not authorise the land violation if it - no,
not even for the general good of the whole
70
community. Writings of the above mentioned
political philosophers had also its influence on
Indian Constitution as well.
EMINENT DOMAIN
84. Hugo Grotius is credited with the invention of
the term "eminent domain" (jus or dominium eminens)
which implies that public rights always overlap with
private rights to property, and in the case of
public utility, public rights take precedence.
Grotius sets two conditions on the exercise of the
power of eminent domain: the first requisite is
public advantage and then compensation from the
public funds be made, if possible, 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
71
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 laws."
87. Protocol to the European Convention on Human
Rights and Fundamental Freedom, Article 1 provides
that every natural or legal person is entitled to
the peaceful enjoyment of his possession and no one
shall be deprived of his possessions except in
72
public interest and subject to the conditions
provided by law and by the several principles of
International law.
88. Fifth Amendment of the U.S. Constitution says
that the government shall not take private property
for public use without paying just compensation.
This provision referred to as the eminent domain, or
taking clause has generated an enormous amount of
case laws in the United States of America.
89. The US Supreme Court in Hawaii Housing
Authority v. Midkiff, 467 US 229 (1984) allowed the
use of eminent domain to transfer land from lesser
to lessees. In that ruling the court held the
government does not itself have the use the property
to legitimate taking, it is a takings purpose and
not its mechanics that must pass the muster under
the public use clause. The US Supreme Court later
revisited the question on what constitute public use
in Kelo v. City of New London (545 US 469 (2005).
In that case the Court held that a plan of economic
development, that would primarily benefit a major
pharmaceutical company, which incidentally benefited
73
the public in the nature of increased employment
opportunities and increased tax benefits was a
`public use'. The Court rejected the arguments that
takings of this kind, the Court should require a
`reasonable certainty' that the respective public
benefits will actually accrue.
90. Eminent domain is distinguishable alike from
the police power, by which restriction are imposed
on private property in the public interest, e.g. in
connection with health, sanitation, zoning
regulation, urban planning and so on from the power
of taxation, by which the owner of private property
is compelled to contribute a portion of it for the
public purposes and from the war-power, involving
the destruction of private property in the course of
military operations. The police power fetters
rights of property while eminent domain takes them
away. Power of taxation does not necessarily
involve a taking of specific property for public
purposes, though analogous to eminent domain as
regards the purposes to which the contribution of
the taxpayer is to be applied. Further, there are
74
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
75
individuals. Right to claim compensation, some
eminent authors expressed the view, is thus not a
component part of the powers to deprive a person of
his property but may arise, but it is not as if, the
former cannot exist without the other. Relationship
between Public Purpose and Compensation is that of
"substance and shadow". Above theoretical
aspects of the doctrine have been highlighted only
to show the reasons, for the inclusion of the
principle of eminent domain in the deleted Article
31(2) and in the present Article 30(1A) and in the
2nd proviso of Article 31A of our Constitution and
its apparent exclusion from Article 300A.
92. Our Constitution makers were greatly
influenced by the Western doctrine of eminent domain
when they drafted the Indian Constitution and
incorporated the right to property as a Fundamental
Right in Article 19(1)(f), and the element of public
purpose and compensation in Articles 31(2). Of
late, it was felt that some of the principles laid
down in the Directive Principles of State Policy,
which had its influence in the governance of the
76
country, would not be achieved if those articles
were literally interpreted and applied. The
Directive Principles of the state policy lay down
the fundamental principles for the governance of the
country, and through those principles, the state is
directed to secure that the ownership and control of
the material resources of the community are so
distributed as best to sub-serve the common good and
that the operation of the economic system does not
result in the concentration of wealth and means of
production to the common detriment. Further, it
was also noticed that the fundamental rights are not
absolute but subject to law of reasonable
restrictions in the interest of the general public
to achieve the above objectives specially to
eliminate Zamindari system.
93. While examining the scope of the Bihar Land
Reforms Act, 1950 conflicting views were expressed
by the Judges with regard to the meaning and content
of Article 19(1)(f) and Article 31 as reflected in
Sir Kameshwar Singh's case (supra). Suffice it to
say that the Parliament felt that the views
77
expressed by the judges on the scope of Articles
19(1)(f) and 31 might come as a stumbling block in
implementing the various welfare legislations which
led to the First Constitutional Amendment 1951
introducing Articles 31A and 31B in the
Constitution.
94. Article 31A enabled the legislature to enact
laws to acquire estates which also permitted the
State in taking over 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
78
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 of his property without complying with the
provisions of Article 31(2). In Bella Banerjee's
case (supra), this Court held that the legislature
has the freedom to lay down principles which govern
the determination of the amount to be given to the
owners of the property appropriated, but the Court
can always, while interpreting Article 31(1) and
Article 31(2), examine whether the amount of
compensation paid is just equivalent to what the
owner had been deprived of.
96. The Parliament, following the above judgment,
brought in the Fourth Amendment Act of 1955 and
79
amended clause (2) of Article 31 and inserted clause
(2-A) to Article 31. The effect of the amendment is
that clause (2) deals with acquisition or
requisition as defined in clause (2-A) and clause
(1) covers deprivation of a person's property by the
state otherwise than by acquisition or requisition.
The amendment enabled the State to deprive a person
of his property by law. Under amended clause (2),
the property of a citizen could be acquired or
requisitioned by law which provides for compensation
for the property so acquired or requisitioned and
either fixes the amount of compensation or specifies
the principles on which and the manner in which the
compensation is to be determined. However, it was
also provided that no such law could be called in
question in any court on the ground that the
compensation provided by that law was not adequate.
97. This Court in Kavalappara Kottarathil
Kochuni's case (supra) held that Articles 31(1) and
(2) are different fundamental rights and that the
expression `law" in Article 31(1) shall be a valid
law and that it cannot be a valid law, unless it
80
imposes a reasonable restriction in public interest
within the meaning of Article 19(5) and therefore be
justiciable.
98. The Constitution was again amended by the
Seventeenth Amendment Act of 1964, by which the
State extended the scope of Article 31A and Ninth
Schedule to protect certain agrarian reforms enacted
by the Kerala and Madras States and Jagir, Inam,
muafi or any other grant, janmam, ryotwari etc. were
included within the meaning of "estate". It also
added the 2nd proviso to clause (1) to protect a
person of being deprived of land less than the
relevant land ceiling limits held by him for
personal cultivation, except on payment of full
market value thereof by way of compensation.
99. This 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
81
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 that
they do not provide for compensation at all, one can
easily hold that the legislature made the law in
fraud of its powers." Justice Subha Rao
reiterated his view in Union of India v. Metal
82
Corporation of India Ltd. & Another AIR 1967 SC 637.
100. In Shantilal Mangaldas's case (supra), the
validity of Bombay Town Planning Act 1958 was
challenged before this Court on the ground that the
owner was to be given market value of land at date
of declaration of scheme, which was not the just
equivalent of the property acquired, the Court held
that after the Fourth Amendment resulting in the
changes to Article 31(2) the question of `adequacy
of compensation' could not be entertained.
Justice Hidayatullah stated that the stance taken in
the previous case by Justice Subha Rao as "obiter
and not binding". The validity of the Banking
Companies (Acquisition and Transfer of Undertakings)
Act 1969 came up for consideration before the eleven
judges Bench of this Court in Rustom Cowasjee Cooper
v. Union of India (1970) 2 SCC 298. The Act, it was
pointed out, did lay down principles for
determination and payment of compensation to the
banks, which was to be paid for in form of bonds,
securities etc., and compensation would not fulfil
the requirement of Article 31(2). A majority of
83
the judges accepted that view and held that both
before and after the amendment to Article 31(2)
there was a right to compensation and by giving
illusory compensation the constitutional guarantee
to provide compensation for an acquisition was not
complied with. The Court held that the
Constitution guarantees a right to compensation - an
equivalent in money of the property compulsorily
acquired which is the basic guarantee and,
therefore, the law must provide compensation, and
for determining compensation relevant principles
must be specified; if the principles are not
relevant the ultimate value determined is not
compensation.
101. The validity of Articles 19(1)(f) and (g) was
also the subject matter of I.C. Golaknath and Others
v. State of Punjab, AIR 1967 SC 1643. In that case,
a large portion of the lands of Golak Nath family was
declared surplus under the Punjab Security of Land
Tenures Act 1953. They challenged the act on the
grounds that it denied them their Constitutional
Rights to acquire and hold property and practice any
84
profession. Validity of Articles 19(1)(f) and (g),
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
85
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
declaration that it is for giving effect to such
policy shall be called in question in any court on
the ground that it does not give effect to such
policy.
104. The constitutionality of the above amendments
was also the subject matter in His Holiness
Kesavananda Bharati Sripadagalvaru v. State of Kerala
& Another (1973) 4 SCC 225, which overruled the
principles laid down in Gokalnath's case (supra) and
held that a Constitutional amendment could not alter
the basic structure of the Constitution, and hence
Article 19(1)(f) was not considered to be the basic
structure of the Constitution, as later explained in
Indira Nehru Gandhi v. Raj Narain (1975) Supp. SCC
1.
105. We are in these cases, primarily concerned with
the scope of the Forty Fourth Amendment 1978, which
deleted Article 19(1)(f) and Article 31 from the
Constitution of India and introduced Article 300A,
86
and its impact on the rights of persons, who are
deprived of their properties. We have extensively
dealt with the scope of Articles 19(1)(f) and Article
31 as interpreted in the various decisions of this
Court so as to examine the scope and content of
Article 300A and the circumstances which led to its
introduction. The Forty Fourth Amendment Act,
inserted in Part XII, a new chapter: "Chapter IV -
Right to Property and inserted Article 300A, which
reads as follows:-
"No person shall be deprived of property
save by authority of law."
106. Reference to the Statement of Objects and
Reasons of the 44th Amendment in this connection may
be apposite. Paragraphs 3, 4 and 5 of the Statement
of Objects and Reasons reads as follows:
"3. In view of the special
position sought to be given to
fundamental rights, the right to
property, which has been the occasion
for more than one Amendment of the
Constitution, would cease to be a
fundamental right and become only a
legal right. Necessary amendments for
this purpose are being made to Article
19 and Article 31 is being deleted. It
would, however, be ensured that the
removal of property from the list of
fundamental rights would not affect the
87
right of minorities to establish and
administer educational institutions of
their choice.
4. Similarly, the right of persons
holding land for personal cultivation
and within the ceiling limit to receive
compensation at the market value would
not be affected.
5. Property, while ceasing to be a
fundamental right, 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
88
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 Constitution, but only a
Constitutional right.
4. Right to Property, since no more a
fundamental right, the jurisdiction
of the Supreme Court under Article
32 cannot be generally invoked,
aggrieved person has to approach the
High Court under Article 226 of the
Constitution.
109. Arguments have been advanced before us
stating that the concept of eminent domain and its
key components be read into Article 300A and if a
statute deprives a person of his property
unauthorizedly, without adequate compensation, then
the statute is liable to be challenged as violative
of Articles 14, 19 and 21 and on the principle of
rule of law, which is the basic structure of our
Constitution. Further it was also contended that
the interpretation given by this Court on the scope
89
of Article 31(1) and (2) in various judgments be not
ignored while examining the meaning and content of
Article 300A.
110. Article 300A proclaims that no person can be
deprived of his property save by authority of law,
meaning thereby that a person cannot be deprived of
his property merely by an executive fiat, without
any specific legal authority or without the support
of law made by a competent legislature. The
expression `Property' in Art.300A confined not to
land alone, it includes intangibles like copyrights
and other intellectual property and embraces every
possible interest recognised by law. This Court in
State of W. B. & Others v. Vishnunarayan &
Associates (P) Ltd & Another (2002) 4 SCC 134, while
examining the provisions of the West Bengal Great
Eastern Hotel (Acquisition of Undertaking) Act,
1980, held in the context of Article 300A that the
State or executive offices cannot interfere with the
right of others unless they can point out the
specific provisions of law which authorises their
rights. Article 300A, therefore, protects private
90
property against executive action. But the question
that looms large is as to what extent their rights
will be protected when they are sought to be
illegally deprived of their properties on the
strength of a legislation. Further, it was also
argued that the twin requirements of `public
purpose' and `compensation' in case of deprivation
of property are inherent and essential elements or
ingredients, or "inseparable concomitants" of the
power of eminent domain and, therefore, of entry 42,
List III, as well and, hence, would apply when the
validity 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
91
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 the repeal of
Article 19(1)(f) and 31(2) could have repercussions
on other fundamental rights or other provisions
which are to be regarded as part of the basic
structure and also stated that notwithstanding the
repeal of Article 31(2), the word "compensation" or
the concept thereof is still retained in Article
30(1A) and in the second proviso to Article 31A(1)
meaning thereby that payment of compensation is a
92
condition of legislative power in Entry 42 List III.
112. Learned senior counsel Shri T.R. Andhyarujina,
also referred to the opinion expressed by another
learned author Prof. P.K. Tripathi, in his article
"Right to Property after 44th Amendment - Better
Protected than Ever Before" (reported in AIR 1980 J
pg. 49-52). Learned author expressed the opinion
and the right of the individual to receive
compensation when his property is acquired or
requisitioned by the State, continues to be
available in the form of an implied condition of the
power of the State to legislate on "acquisition or
requisition of property" while all the exceptions
and limitations set up against and around it in
Article 31, 31A and 31B have disappeared. Learned
author opined that Article 300A will require
obviously, that the law must be a valid law and no
law of acquisition or requisitioning can be valid
unless the acquisition or requisition is for a
public purpose, unless there is provision in law for
paying compensation, will continue to have a meaning
given to it, by Bela Banerjee's case (supra).
93
113. Learned author, Shri S.B. Sathe, in his
article "Right to Property after the 44th Amendment"
(AIR 1980 Journal 97), to some extent, endorsed the
view of Prof. Tripathi and opined that the 44th
amendment has increased the scope of judicial review
in respect of right to property. Learned author has
stated although Article 300A says that no one shall
be deprived of his property save by authority of
law, there is no reason to expect that this
provision would protect private property only
against executive action. Learned author also
expresses the wish that Article 21 may provide
viable check upon Article 300A.
114. Durga Das Basu in his book "Shorter
Constitution of India", 13th Edition, dealt with
Article 300A in Chapter IV wherein the learned
author expressed some reservation about the views
expressed by Seervai, as well as Prof. Tripathi
Learned author expressed the view, 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
94
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
provision Clause (1A) to Article 30. Resultantly,
95
though no individual or even educational institution
belonging to majority community shall have any
fundamental right to compensation in case of
compulsory acquisition of his property by the State,
an educational institution belonging to a minority
community shall have such fundamental right to claim
compensation in case State enacts a law providing
for compulsory acquisition of any property of an
educational institution established and administered
by a minority community. Further, the second
proviso to Article 31A(1) prohibits the Legislature
from making a law which does not contain a provision
for payment of compensation at a rate not less than
the market value which follows that a law which does
not contain such provision shall be invalid and the
acquisition proceedings would be rendered void.
116. Looking at the history of the various
constitutional amendments, judicial pronouncements
and the statement of objects and reasons contained
in the 44th Amendment Bill which led to the 44th
Amendment Act we have no doubt that the intention of
the Parliament was to do away with the fundamental
96
right to acquire, hold and dispose of the property.
But the question is whether the principles of
eminent domain are completely obliterated when a
person is deprived of his property by the authority
of law under Article 300A of the Constitution.
PUBLIC PURPOSE
117. Deprivation of property within the meaning of
Art.300A, generally speaking, must take place for
public purpose or public interest. The concept of
eminent domain which applies when a person is
deprived of his property postulates that the purpose
must be primarily public and not primarily of
private interest and merely incidentally beneficial
to the public. Any law, which deprives a person of
his private property for private interest, will be
unlawful and unfair and undermines the rule of law
and can be subjected to judicial review. But the
question as to whether the purpose is primarily
public or private, has to be decided by the
legislature, which of course should be made known.
The concept of public purpose has been
97
given fairly expansive meaning which has to be
justified upon the purpose and object of statute and
the policy of the legislation. Public purpose is,
therefore, a condition precedent, for invoking
Article 300A.
COMPENSATION
118. We have found 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
98
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 List III relating to "acquisition
and requisitioning of property". It was urged that
the above words be read with the requirements of
public purpose and compensation. Reference was
placed on the following judgment of this Court in
support of that contention. In State of Madras v.
Gannon Dunkerley & Co. (Madras) Ltd. (1959) SCR 379
at 413), this Court considered Entry 48 List II of
the Government of India Act, 1935, "tax on sales of
goods", in accordance with the established legal
sense of the word "sale", which had acquired a
definite precise sense and held that the legislature
99
must have intended the "sale", should be understood
in that sense. But we fail to see why we trace the
meaning of a constitutional provision when the only
safe and correct way of construing the statute is to
apply the plain meaning of the words. Entry 42 List
III has used the words "acquisition" and
"requisitioning", but Article 300A has used the
expression "deprivation", though the word deprived
or deprivation takes in its fold "acquisition" and
"requisitioning", the initial presumption is in
favour of the literal meaning since the Parliament
is taken to mean as it says.
120. A Constitution Bench of this Court in Hoechst
Pharmaceuticals Ltd.'s case (supra), held that the
various entries in List III are not "powers" of
Legislation but "fields" of Legislation. Later, a
Constitution Bench of this Court in State of West
Bengal & Another v. Kesoram Industries Ltd. & Others
AIR 2005 SC 1646, held that Article 245 of the
Constitution is the fountain source of legislative
power. It provides that subject to the provisions of
this Constitution, the Parliament may make laws for
100
the whole or any part of the territory of India, and
the Legislature of a State may make laws for the
whole or any part of the State. The legislative
field between the Parliament and the Legislature of
any State is divided by Article 246 of the
Constitution. Parliament has exclusive power to make
laws with respect to any of the matters enumerated
in List I in Seventh Schedule, called the Union List
and subject to the said power of the Parliament, the
Legislature of any State has power to make laws with
respect to any of the matters enumerated in List
III, called the Concurrent List. Subject to the
above, the Legislature of any State has exclusive
power to make laws with respect to any of the
matters enumerated in 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"
101
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 policy, object and
purpose of the statute and host of other factors.
122. Article 300A would be equally violated if the
provisions of law authorizing deprivation of
property have not been complied with. While
enacting Article 300A Parliament has only borrowed
102
Article 31(1) [the "Rule of law" doctrine] and not
Article 31(2) [which had embodied the doctrine of
Eminent Domain]. Article 300A enables the State to
put restrictions on the right to property by law.
That law has to be reasonable. It must comply with
other provisions of the Constitution. The
limitation or restriction should not be arbitrary or
excessive or what is beyond what is required in
public interest. The limitation or restriction
must not be disproportionate to the situation or
excessive. The legislation providing for
deprivation of property under Article 300A must be
"just, fair and reasonable" as understood in terms
of Articles 14, 19(1)(g), 26(b), 301, etc. Thus in
each case, courts will have to examine the scheme of
the impugned Act, its object, purpose as also the
question whether payment of nil compensation or
nominal compensation would make the impugned law
unjust, unfair or unreasonable in terms of other
provisions of the Constitution as indicated above.
At this stage, we may clarify that there is a
difference between "no" compensation and "nil"
103
compensation. A law seeking to acquire private
property for public purpose cannot say that "no
compensation shall be paid". However, there could
be a law awarding "nil" compensation in cases where
the State undertakes to discharge the liabilities
charged on the property under acquisition and onus
is on the government to establish validity of such
law. In the latter case, the court in exercise of
judicial review will test such a law keeping in mind
the above parameters.
123. Right to property no more remains an
overarching guarantee in our Constitution, then is
it the law, that such a legislation enacted under
the authority of law as provided in Article 300A is
immune from challenge before a Constitutional Court
for violation of Articles 14, 21 or the overarching
principle of Rule of Law, a basic feature of our
Constitution, especially when such a right is not
specifically incorporated in Article 300A, unlike
Article 30(1A) and the 2nd proviso to Article 31A.
104
124. Article 31A was inserted by the 1st Amendment
Act, 1951 to protect the 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).
105
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 enforced by law. A
Constitution Bench of this Court in Kunnathat
Thathunni Moopil Nair's case (supra) held that
Sections 4, 5-A and 7 of the Travancore-Cochin Land
Tax Act are unconstitutional as being violative of
Article 14 and was held to be in violation of
Article 19(1)(f). Of course, this decision was
rendered when the right to property was a
fundamental right. Article 300A, unlike Articles
31A(1) and 31C, has not made the legislation
depriving a person of his property immune from
challenge on the ground of violation of Article 14
or Article 21 of the Constitution of India, but let
us first examine whether Article 21 as such is
available to challenge a statute providing for no or
illusory compensation and, hence, expropriatory.
126. A Constitution Bench of this Court in Ambika
Prasad Mishra v. State of U.P. & Others (1980) 3 SCC
106
719, while examining the constitutional validity of
Article 31A, had occasion to consider the scope of
Article 21 in the light of the judgment of this
Court in Maneka Gandhi's case (supra). Dealing with
the contention that deprivation of property amounts
to violation of the right guaranteed under Article
21 of the Constitution of India, this Court held as
follows:
"12. Proprietary personality was
integral to personal liberty and a
mayhem inflicted on a man's property was
an amputation of his personal liberty.
Therefore, land reform law, if
unreasonable, violates Article 21 as
expansively construed in Maneka Gandhi.
The dichotomy between personal liberty,
in Article 21, and proprietary status,
in Articles 31 and 19 is plain, whatever
philosophical justification or pragmatic
realisation it may possess in political
or juristic theory. Maybe, a penniless
proletarian, is unfree in his movements
and has nothing to lose except his
chains. But we are in another domain of
constitutional jurisprudence. Of course,
counsel's resort to Article 21 is
prompted by the absence of mention of
Article 21 in Article 31-A and the
illusory hope of inflating Maneka Gandhi
to impart a healing touch to those whose
property is taken by feigning loss of
personal liberty when the State takes
only property, Maneka Gandhi is no
universal nostrum or cure-all, when all
other arguments fail!"
107
127. The question of applicability of Article 21 to
the laws protected under Article 31C also came up
for consideration before this Court in State of
Maharashtra & 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
108
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, is it the
law that a Constitutional Court is powerless when it
confronts with a situation where a person is
deprived of his property, by law, for a private
purpose with or without providing compensation?
For example, a political party in power with a
massive mandate enact a law to acquire the property
of the political party in opposition not for public
purpose, with or without compensation, is it the
law, that such a statute is immune from challenge in
a Constitutional Court? Can such a challenge be
rejected on the ground that statute does not violate
the Fundamental Rights (due to deletion of
Art.19(1)(f)) and that the legislation does not lack
legislative competence? In such a situation, is
non-availability of a third ground as propounded in
109
State of A.P. & Others v. Mcdowell & Co. & Others
(1996) 3 SCC 709, is an answer? Even in Mcdowell's
case (supra), it was pointed out some other
constitutional infirmity may be sufficient to
invalidate the statute. A three judges Bench of
this Court in Mcdowell & Co. & Others case (supra)
held as follows:
"43. .......The power of Parliament or for
that matter, the State Legislature is
restricted in two ways. A law made by
Parliament or the legislature can be
struck down by courts on two grounds and
two grounds alone, viz., (1) lack of
legislative competence and (2) violation
of any of the fundamental rights
guaranteed in Part III of the
Constitution or of any other
constitutional provision. There is no
third ground......... No enactment can be
struck down by just saying that it is
arbitrary or unreasonable. Some or other
constitutional infirmity has to be found
before invalidating an Act. An enactment
cannot be struck down on the ground that
court thinks it unjustified. Parliament
and the legislatures, composed as they
are of the representatives of the
people, are supposed to know and be
aware of the needs of the people and
what is good and bad for them. The court
cannot sit in judgment over their
wisdom.........."
110
129. A two judges Bench of this Court in Union of
India & Another v. G. Ganayutham (1997) 7 SCC 463,
after referring to Mcdowell's case (supra) stated as
under:
"that a statute can be struck down if
the restrictions imposed by it are
disproportionate or excessive having
regard to the purpose of the statute and
that the Court can go into the question
whether there is a proper balancing 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
111
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 and unreasonableness being facets of
Article 14 of the Constitution are available or not
as grounds to invalidate a legislation, is a matter
requiring examination by a larger Bench and
accordingly, referred the matter for consideration
by a Larger Bench.
132. Later, it is pertinent to note that a five-
judges Bench of this Court in Ashok Kumar Thakur v.
Union of India & Others (2008) 6 SCC 1 while
examining the validity of the Central Educational
Institutions (Reservation in Admission) Act, 2006
held as follows:
112
219. A legislation passed by Parliament
can be challenged only on
constitutionally recognised grounds.
Ordinarily, grounds of attack of a
legislation is whether the legislature
has legislative competence or whether
the legislation is ultra vires the
provisions of the Constitution. If any
of the provisions of the legislation
violates fundamental rights or any other
provisions of the Constitution, it could
certainly be a valid ground to set aside
the legislation by invoking the power of
judicial review. A legislation could
also be challenged as unreasonable if it
violates the principles of equality
adumbrated in our Constitution or it
unreasonably restricts the fundamental
rights under Article 19 of the
Constitution. A legislation cannot be
challenged simply on the ground of
unreasonableness because that by itself
does not constitute a ground. The
validity of a constitutional amendment
and the validity of plenary legislation
have to be decided purely as questions
of constitutional law........."
Court also generally expressed the view that the
doctrines of "strict scrutiny", "compelling
evidence" and "suspect legislation" followed by the
U.S. Courts have no application to the Indian
Constitutional Law.
113
133. We have already found, on facts as well as on
law, that the impugned Act has got the assent of the
President as required under the proviso to Article
31A(1), hence, immune from challenge on the ground
of arbitrariness, unreasonableness under Article 14
of the Constitution of India.
134. Statutes are many which though deprives a
person of his property, have the protection of
Article 30(1A), Article 31A, 31B, 31C and hence
immune from challenge under Article 19 or Article
14. On deletion of Article 19(1(f) the available
grounds of challenge are Article 14, the basic
structure and the rule of law, apart from the ground
of legislative 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.
114
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 doctrine of
basic structure. Rule of law affirms parliament's
supremacy while at the same time denying it
sovereignty over the Constitution.
137. Rule of law can be traced back to Aristotle
and has been championed by Roman jurists; medieval
115
natural law thinkers; Enlightenment philosophers
such as Hobbes, Locke, Rousseau, Montesquieu, Dicey
etc. Rule of law has also been accepted as the
basic principle of Canadian Constitution order. Rule
of law has been considered to be as an implied
limitation on Parliament's powers to legislate. In
Reference Re Manitoba Language Rights (1985) 1 SCR
721, the Supreme Court of Canada described the
constitutional status of the rule of law as follows:
"The Constitution Act, 1982 ... is
explicit recognition that "the rule of
law is a fundamental postulate of our
constitutional structure." The rule of
law has always been understood as the
very basis of the English Constitution
characterising the political
institutions of England from the time of
the Norman Conquest. It becomes a
postulate of our own constitutional
order by way of the preamble to the
Constitution Act, 1982 and its implicit
inclusion in the preamble to the
Constitution Act, 1867 by virtue of the
words "with a Constitution similar in
principle to that of the United
Kingdom."
Additional to the inclusion of the rule
of law in the preamble of the
Constitution Acts of 1867 and 1982, the
principle is clearly implicit in the
very nature of a Constitution. The
Constitution, as the Supreme Law, must
be understood as a purposive ordering of
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social relations providing a basis upon
which an actual order of positive laws
can be brought into existence. The
founders of this nation must have
intended, as one of the basic principles
of nation building, that Canada be a
society of legal order and normative
structure: one governed by the rule of
law. While this is not set out in a
specific provision, the principle of the
rule of law is clearly a principle of
our Constitution."
138. In Re: Resolution to Amend the Constitution
(1981) 1 SCR 753, the Supreme Court of Canada
utilized the principle of rule of law to uphold
legislation, rather than to strike it down. The
Court held that the implied principles of the
Constitution are limits on the sovereignty of
Parliament and the provincial legislatures. The
Court reaffirmed this conclusion later in OPSEU v.
Ontario (A.G.) (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,
117
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 Constitution.
Courts in Canada have exclusively rejected the
notion that only "provisions" of the Constitution
can be used to strike down legislation and comes
down squarely in favour of the proposition that the
rule of law binds legislatures as well as
governments.
140. Rule of law as a principle contains no
explicit substantive component like eminent domain
118
but has many shades and colours. Violation of
principle of natural justice may undermine rule of
law so also at times arbitrariness, proportionality,
unreasonableness etc., but such violations may not
undermine rule of law so as to invalidate a statute.
Violation must be of such a serious nature which
undermines the very basic structure of our
Constitution and our democratic principles. But
once the Court finds, a Statute, undermines the rule
of law which has the status of a constitutional
principle like the basic structure, the above
grounds are also available and not vice versa. Any
law which, in the opinion of the Court, is not just,
fair and reasonable, is not a ground to strike down
a Statute because such an approach would always be
subjective, not the will of the people, because
there is always a presumption of constitutionality
for a statute.
141. Rule of law as a principle, it may be
mentioned, is not an absolute means of achieving the
equality, human rights, justice, freedom and even
democracy and it all depends upon the nature of the
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legislation and the seriousness of the violation.
Rule of law as an overarching principle can be
applied by the constitutional courts, in rarest of
rare cases, in situations, we have referred to
earlier and can undo laws which are tyrannical,
violate the basic structure of our Constitution, and
our cherished norms of law and justice. One of the
fundamental principles of a democratic society
inherent in all the provisions of the Constitution
is that any interference with the peaceful enjoyment
of possession should be lawful.
142. Let the message, therefore, be loud and clear,
that rule of law exists in this country even when we
interpret a statute, which has the blessings of
Article 300A. Deprivation of property may also
cause serious concern in the area of foreign
investment, especially in the context of
International Law and international investment
agreements. Whenever, a foreign investor operates
within the territory of a host country the investor
and its properties are subject to the legislative
control of the host country, along with the
120
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.
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(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 property under
Article 300A and the right to claim compensation is
also inbuilt in that Article and when a person is
deprived of his property the State has to justify
both the grounds which may depend on scheme of the
statute, legislative policy, object and purpose of
the legislature and other related factors.
(f) Statute, depriving a person of his property
is, therefore, amenable to judicial review on
grounds hereinbefore discussed. 144. We
accordingly dismiss all the appeals and direct the
notified authority under the Acquisition Act to
disburse the amount of compensation fixed by
the Act to the legitimate claimants in accordance
with law, which will depend upon the outcome of the
122
pending litigations between the parties. Further,
we also order that the land acquired be utilized
only for the purpose for which it was acquired. In
the facts and circumstances of the case, there will
be no order as to costs.
......................CJI
(S.H. Kapadia)
......................J.
(Mukundakam Sharma)
......................J.
(K.S. Radhakrishnan)
......................J.
(Swatanter Kumar)
......................J.
(Anil R. Dave)
New Delhi,
August 09, 2011
