REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4772 OF 1998
Rajiv Sarin & Anr. ....
Appellants
Versus
State of Uttarakhand & Ors. ....
Respondents
JUDGMENT
Dr. MUKUNDAKAM SHARMA, J.
The present Civil Appeal emanates from the judgment
1.
and order dated 12th August 1997 passed by the High
Court of Judicature at Allahabad in Writ Petition No.
8927 of 1988, whereby the Division Bench of the High
Court dismissed the writ petition filed by the appellants.
Whether the High Court was justified in holding that the
appellants were not entitled to any compensation even
when their forest land is acquired by the government,
merely because the appellants had not derived any
Page 1 of 52
income from the said forest, is one of the several
important questions of law which has arisen for
consideration in the present appeal.
The appellant's father Shri P. N. Sarin had in the year
2.
1945 acquired proprietary right in an Estate known as
Beni Tal Fee Simple Estate situated in Pargana
Chandpur, Tehsil Karan Prayag, District Chamoli,
Uttarakhand (hereinafter referred to as "the property in
question") which comprised of large tracts of forest
spanning in and around 1600 acres. On the death of
Shri P.N. Sarin in the year 1976 appellants succeeded to
the property in question. By a Gazette Notification dated
21st December, 1977 under Section 4-A of the Kumaun
and Uttarakhand Zamindari Abolition and Land Reforms
Act, 1960 (hereinafter referred to as "KUZALR Act") as
amended by the U.P. Act No. 15 of 1978, the rights, title
and interest of every hissedar in respect of forest land
situated in the specified areas ceased with effect from
01st January, 1978 and the same were vested in the
State Government. A notice issued by the Assistant
Collector, Karan Prayag, District Chamoli, under Rule 2
of the Kumaun and Uttrakhand Zamindari Abolition and
Page 2 of 52
Land Reform Rules, 1965 (hereinafter referred to as "the
KUZALR Rules") framed under the KUZALR Act was
served upon the appellants intimating them that effective
from 1st January, 1978, the rights, title and interest of
hissedar in respect of the property in question had
vested in the State Government free from all
encumbrances and it invited objections and statement, if
any, relating to the compensation qua the property in
question.
Assailing the aforesaid notice issued by the Assistant
3.
Collector, the appellants preferred a writ petition under
Article 32 of the Constitution before this Court. On 13th
December 1978 while disposing the aforesaid writ
petition, this Court passed the following order
"We are of the opinion that it will be better if the
Petitioner files a petition under Article 226 of the
Constitution in the High Court. This Petition is
therefore allowed to be withdrawn."
Subsequently, on 02nd April 1979 the appellants filed
4.
objections to the notice issued by the Assistant Collector
challenging the vires of the KUZALR Act and also stating
that no profit was being made from the property in
Page 3 of 52
question. By an order dated 11th April 1988, the Assistant
Collector dismissed the objections of the appellants by
observing that that he had no jurisdiction to consider the
legal validity of the KUZALR Act. With regard to the issue of
compensation, the Assistant Collector held that since the
KUZALR Act does not provide for a method to compute
compensation in cases where no income has been derived
from the forests, the appellants were not entitled to any
compensation.
Feeling aggrieved, the appellants preferred a writ petition in
5.
the High Court of Judicature at Allahabad questioning the
legality and validity of the order of the Assistant Collector
and also challenging the constitutional validity of Sections
4A, 18(1)(cc) and 19(1)(b) of the KUZALR Act. By impugned
judgment dated 12th August 1997, the High Court
dismissed the writ petition.
Not satisfied with the judgment rendered by the High
6.
Court, the appellants preferred a Special Leave Petition in
which leave was granted by this Court by order dated 11th
September 1998. By an order passed on 11th August, 2010,
this appeal was directed to be listed before the Constitution
Page 4 of 52
Bench. This matter was thereafter listed before the
Constitution Bench alongwith other connected matters
wherein also the issue of scope and extent of right under
Article 300A of the Constitution of India was one of the
issues to be considered.
7. We heard the learned senior counsel appearing for the
parties in respect of all the contentions raised before us.
Before addressing the rival contentions advanced by the
parties, it will be useful to throw some light on the relevant
legal position which is intrinsically complex and requires
closer examination.
The Uttar Pradesh Zamindari Abolition and Land Reforms
8.
Act, 1950 (hereinafter to be referred as "UPZALR Act") was
enacted in the year 1950 and the UPZALR Act was made
applicable to the whole of the State of U.P. except inter-alia
the areas of Kumaon, Uttarakhand. The object of the
UPZALR Act as quite evident from its statements and
objects are to provide for the abolition of the Zamindari
System which involves intermediaries between the tiller of
the soil and the State in Uttar Pradesh and for the
acquisition of their rights, title and interest and to reform
Page 5 of 52
the law relating to land tenure consequent upon such
abolition and acquisition and to make provision for other
matters connected therewith.
Subsequently, on 02nd August 1960 Kumaun and
9.
Uttarakhand Zamindari Abolition and Land Reforms Act,
1960 was enacted. The object of the KUZALR Act is to
provide for the acquisition of the rights, title and interests
of persons between the State and the tiller of the soil in
certain areas of the Kumaun and Garhwal Divisions and for
the introduction of land reforms therein. It is important to
notice that the original KUZALR Act did not provide for
vesting of private forests, and the definition of the word
"land" in Section 3(10) thereof excluded forest. Section
3(10) of the KUZALR Act reads as follows:-
"3(10). "land" means land held or occupied for
purposes connected with agriculture, horticulture
or animal husbandry which includes pisciculture
and poultry farming but shall not include a forest;"
However, after the commencement of the Constitution (42nd
10.
Amendment) Act, 1976 which came into effect from 03rd
January 1977 wherein inter-alia the subject "forests" was
included in the Concurrent List of the Seventh Schedule of
Page 6 of 52
the Constitution as Entry 17A; the U.P. Zamindari Abolition
(Amendment) Act, 1978 (U.P. Act 15 of 1978) was passed on
30th November 1977 whereby KUZALR Act was amended.
In the preamble and Statement of Objects and Reasons
necessitating the amendment, it is stated that the
amendment act amends Kumaun and Uttarakhand
Zamindari abolition and Land Reforms Act, 1960 also. It
goes on to state that in the areas governed by the Principal
Act namely the Uttar Pradesh Zamindari Abolition and
Land Reforms Act, the rights, title and interest of ex-
intermediaries in respect of their private forests were
abolished and vested in State. It also states that in the
areas to which the Kumaun and Uttarakhand Zamindari
Abolition and Land Reforms Act, 1960 apply, the hissedars
(Intermediaries) continued to enjoy their rights in respect of
their private forests and therefore it was necessary to
remove the disparity as well by introducing an amendment
in the nature of Section 4A. Under the aforesaid
amendment to the KUZALR Act, Section 4A was added to
the KUZALR Act and private forests were brought within its
purview. It will be useful to reproduce Section 4A, 18(1)(cc)
and 19(1)(b) of the KUZALR Act which reads as follows:
Page 7 of 52
"4-A. Vesting of interest of hissedar in the forest
land - With effect from January 1, 1978 the rights,
title and interest of every hissedar in respect of
forest land shall cease and shall vest in the State
Government free from all encumbrances, and the
provisions of this Chapter and Chapter V shall
mutatis mutandis apply to a forest land as they
apply to a khaikari land."
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
"18 (1) (cc) in the case of a private forest, the
average annual income from such forest for a period
of twenty agricultural years immediately preceding
the date of vesting;"
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
"19(1) (b) - in the case of a private forest, eight times
of the amount of average annual income from such
forest."
Kumaun and Uttarakhand Zamindari Abolition and Land
11.
Reforms Act, 1960, which is a State legislation received the
assent of the President of India on 10th September, 1960.
The amendment brought in 1978 through UP Act 15 of
1978 to the said Act also received the assent of the
President on 26th April, 1978.
12.At the outset we would like to mention that there is no
specific whisper of defence raised under Articles 31A, 31B
and 31C of the Constitution in the Counter-Affidavit/Reply
filed by the State of Uttarakhand to the writ petition filed by
Page 8 of 52
the appellants in the High Court nor even before this Court
but an attempt was made to argue the case on those
grounds on behalf of the respondents. As there is no
mention of any of the aforesaid Articles of the Constitution
in the arguments or specific pleadings by the respondents
in the writ petition, the question of deciding the
applicability of those provisions of the Constitution and
consequent protection of the Act, therefore, does not arise.
13.It was contended by Shri K.K. Venugopal, learned senior
counsel appearing for the appellants that the original
KUZALR Act, 1960 excluded private forests [Section 6(1)
(4)], since the vesting of private forests in the State would
not be by way of agrarian reform. It was further contended
that the provision for agrarian reforms, therefore, should be
a part of the Act, but, in the present case, the private
forests so acquired under Section 4A of the KUZALR Act
becomes the property of the State which is untenable.
14.It was further argued that in any event, under Section 4A
of the KUZALR Act, it is only the provisions of Chapter-II
and Chapter-V which shall apply to forests land while Rule
41 occurs in Chapter IV and has no application to the
Page 9 of 52
forests covered by Section 4A, and hence Rule 41 will not
apply to forests acquired under Section 4A of the KUZALR
Act. Further, if Article 31A of the Constitution has no
application, then the law has to be tested against the
Constitution as it stood on the date of its enactment, i.e.
the U.P. Amendment Act, 1978 bringing forth amendment
to KUZALR Act has to stand the test of Articles 14, 19 and
21 of the Constitution. It was further contended that the
said Amendment Act would be invalid since the mere
transfer of the private forests to the State would by itself
not be a public purpose and, furthermore, non-grant /total
absence of compensation to the appellants, while granting
full compensation to other owners of private forests who
have mismanaged the forests or clear-felled the forests,
would be violative of Article 14 of the Constitution.
Per contra Shri Parag P. Tripathi, Ld. Additional Solicitor
15.
General strenuously argued that that the entry "Acquisition
and Requisitioning of property" which was earlier in the
form of Entry 36/List-II of the Seventh Schedule of the
Constitution [which was subject to Entry 42/List-III of the
Seventh Schedule of the Constitution] and Entry 33/List-I
of the Seventh Schedule of the Constitution provided only
Page 10 of 52
the field of legislative power and did not extend to providing
or requiring compensation. The requirement of
compensation in the event of "taking" flows only from
Article 31(2) of the Constitution, which was repealed by the
Constitution (44th Amendment) Act, with effect from 26th
September, 1979.
16.As far as the question of alleged discrimination i.e. giving
compensation to other owners and nil compensation to the
appellants herein is concerned, it was contended by
Learned Additional Solicitor General that merely because
there may be two compensation laws, which may be
applicable, one of which provides for a higher compensation
than the other, would not by itself make the provisions
discriminatory or violative of Article 14 of the Constitution.
17.It is settled law that Agrarian Reforms fall within Entry
18/List-II read with Entry 42/List-III of the Seventh
Schedule of the Constitution.
In the instant case, it cannot be denied that KUZALR Act,
18.
1960 is a statutory enactment, dealing with the agrarian
reforms. Section 4 of the KUZALR Act provides that in
respect of non-forest land, State Government may by
Page 11 of 52
notification take over the rights, title and interests of
hissedar. The land so released is then dealt with by giving
bhumidhari rights/asami rights to the tillers and thereby
effectuating the purpose of agrarian reforms.
It is important to notice that Section 4A introduced in
19.
KUZALR Act by the UP Amendment Act 1978 does not
require any notification but it specifies the date i.e. 01st
January 1978 and provides that the right, title and interest
of a hissedar in respect of forest land shall cease and vest
by the application of the statute itself in the State
Government. Section 8 of the KUZALR Act mandates that
such "hissedar" becomes by operation of the statute a
"bhumidhar". The aforesaid amendment was introduced
by way of amendment so as to bring the said act in parity
with the Principal Act, namely UP Zamindari Abolition and
Land Reforms Act wherein the rights, title and interest of an
intermediary (hissedar) was abolished and vested with the
State from the very inception of the said Act as such
provision was part of the principal Act itself.
20.Further, Rule 41 of the KUZALR Rules, 1965 framed under
the KUZALR Act declares that the forests belonging to the
Page 12 of 52
State shall be managed by "Goan Sabha or any other local
authority established" upon a notification issued by the
State Government. The Rule 41 of the KUZALR Rules,
1965 reads as follows:-
"41. Section 41 : Management of land and things
belonging to State - At any time after the
appointed date, the State Government, may, by
notification published in the Gazette, declare that as
from the date to be specified, all or any of the
following things, namely, -
(i) lands, whether cultivable or otherwise, except
land for the time being comprised in any
holding or grove,
(ii) forests,
trees, other than trees in a holding or in a grove
(iii)
or in abadi,
(iv) fisheries,
Hats, bazars and melas, except hats, bazars and
(v)
melas held on land referred to in Section 7 or
which is for the time being comprised in the
holding of a bhumidar, and
Tanks, ponds, ferries, water-channels, pathways
(vi)
and abadi sites;
Belonging to the State, shall be managed by the Goan
Sabha or any other local authority established for the
whole or part of the village in which the things
specified in clauses (i) to (vi) are situate, subject to
and in accordance with the provisions of Chapter VII
of the Uttar Pradesh Zamindari Abolition and Land
Reforms Act, 1950, and the rules made thereunder,
as applicable to Kumaun and Uttarakhand Divisions:
Provided that it shall be lawful for the State
Government to make the declaration aforesaid
Page 13 of 52
subject to such exceptions or conditions as may be
specified in the notification."
21. This being so, it clearly brings out that the vesting of
forest land under the KUZALR Act are directly linked with
the agrarian reforms, as the land as also the forest are
managed by the Goan Sabha or any local authority dealing
with the rights of villagers for betterment of village
economy. So, where the land acquired by the State is to be
transferred to a Goan Sabha/Village Panchayat for its
management and use of land leading to betterment of
village economy, the legislation is in the nature of agrarian
reforms.
22. The aforesaid conclusions arrived at by us find support
from the Constitution Bench decision of this Court in
Ranjit Singh and Others Vs. State of Punjab and Others
reported in [1965] 1 SCR 82. In the said decision, the
Constitution Bench has stated thus:-
"..........The scheme of rural development today
envisages not only equitable distribution of land so
that there is no undue imbalance in society resulting
in a landless class on the one hand and a
concentration of land in the hands of a few on the
other, but envisages also the raising of economic
standards and bettering rural health and social
conditions. Provisions for the assignment of lands to
village Panchayat for the use of the general
Page 14 of 52
community, or for hospitals, schools, manure pits,
tanning grounds etc. ensure for the benefit of rural
population must be considered to be an essential
part of the redistribution of holdings and open lands
to which no objection is apparently taken. If
agrarian reforms are to succeed, mere distribution of
land to the landless is not enough. There must be a
proper planning of rural economy and conditions and
a body like the village Panchayat is best designed to
promote rural welfare than individual owners of small
portions of lands...."
It is true that Section 4A of KUZALR Act, 1960, as
23.
amended by the UP Amendment Act 1978, provides that
Chapter II and Chapter V of the KUZALR Act would apply
mutatis mutandis and Rule 41 of the KUZALR Rules is
relatable to Chapter IV of the KUZALR Act. However, the
necessary consequence of Section 4A of the KUZALR Act is
that the forest land vests in the State and all that Rule 41
of the KUZALR Rules does is to provide how the lands
vested in the State including forest and non-forest land is to
be dealt with. Thus, Rule 41 of the KUZALR Rules clearly
applies to forest lands as it has been specifically so
mentioned in the said Rules as well which are vested in the
State under Section 4A of the KUZALR Act and therefore
have become the land/property of the State, which would
be managed by the Goan Sabha.
Page 15 of 52
Repugnancy and Article 254 of the Constitution
Learned senior counsel appearing for the appellants raised
24.
two contentions in the context of the inter-relation of the
Indian Forest Act 1927 and the KUZALR Act; firstly, the
case of alleged discrimination in as much as the Central
Act i.e. the Indian Forests Act provides for compensation
under the Land Acquisition Act 1894, which is higher; and
secondly, the case of alleged repugnancy.
It was submitted that the provisions of Section 18(1)(cc)
25.
read with Section 19(1)(b) of KUZALR Act as amended by
the UP Amendment Act 1978 are repugnant to Section 37
and Section 84 of the Indian Forests Act 1927, in so far as
no compensation is provided for under the U.P. Amendment
Act, 1978 for private forests which are preserved and
protected through prudent management, while a private
forest which is neglected or mismanaged to which Section
36 of the Indian Forest Act, 1927 applies, can be acquired
under the Land Acquisition Act, 1894 by paying market
value and solatium.
However, per contra the Learned Additional Solicitor
26.
General appearing for the respondents contended that the
Page 16 of 52
issue of repugnancy does not arise at all in the instant case
as there is in fact no repugnancy between the Central Act
i.e. the Indian Forest Act, 1927 and KUZALR Act in as much
as the Central Act and KUZALR Act in pith and substance
operates in different subject matters.
It was submitted by Learned Additional Solicitor General
27.
that once the pith and substance of the aforesaid two
legislations viz. KUZALR Act and the Indian Forest Act,
1927 is examined, the following picture would emerge:
firstly, the KUZALR Act is an enactment under Entry
18/List-II, i.e. "land" read with Entry 42/List-III of the
Seventh Schedule of the Constitution. It was further
submitted that at the highest, it can be said that KUZALR
Act is relatable to Entry 18 of List II and 42 of List-III of the
Seventh Schedule of the Constitution and if at all, only
incidentally trenches in the legislative field of Entry
17A/List-III of the Seventh Schedule of the Constitution;
and secondly, the Indian Forest Act, 1927 on the other
hand, is in pith and substance a legislation under Entry
17-A/List-III i.e. "Forests" read with Entry 42/List-III of the
Seventh Schedule of the Constitution.
Page 17 of 52
28.It is trite law that the plea of repugnancy would be
attracted only if both the legislations fall under the
Concurrent List of the Seventh Schedule of the
Constitution. Under Article 254 of the Constitution, a
State law passed in respect of a subject matter comprised
in List III i.e. the Concurrent List of the Seventh Schedule
of the Constitution would be invalid if its provisions are
repugnant to a law passed on the same subject by the
Parliament and that too only in a situation if both the laws
i.e. one made by the State legislature and another made by
the Parliament cannot exist together. In other words, the
question of repugnancy under Article 254 of the
Constitution arises when the provisions of both laws are
completely inconsistent with each other or when the
provisions of both laws are absolutely irreconcilable with
each other and it is impossible without disturbing the other
provision, or conflicting interpretations resulted into, when
both the statutes covering the same field are applied to a
given set of facts. That is to say, in simple words,
repugnancy between the two statutes would arise if there is
a direct conflict between the two provisions and the law
made by the Parliament and the law made by the State
Page 18 of 52
Legislature occupies the same field. Hence, whenever the
issue of repugnancy between the law passed by the
Parliament and of State legislature are raised, it becomes
quite necessary to examine as to whether the two
legislations cover or relate to the same subject matter or
different.
It is by now a well-established rule of interpretation that
29.
the entries in the list being fields of legislation must receive
liberal construction inspired by a broad and generous spirit
and not a narrow or pedantic approach. This Court in the
cases of Navinchandra Mafatlal v. CIT, reported in AIR
1955 SC 58 and State of Maharashtra v. Bharat Shanti
Lal Shah, reported in (2008) 13 SCC 5 held that each
general word should extend to all ancillary and subsidiary
matters which can fairly and reasonably be comprehended
within it. In those decisions it was also reiterated that
there shall always be a presumption of constitutionality in
favour of a statute and while construing such statute every
legally permissible effort should be made to keep the
statute within the competence of the State Legislature.
30.As and when there is a challenge to the legislative
Page 19 of 52
competence, the courts will try to ascertain the pith and
substance of such enactment on a scrutiny of the Act in
question. In this process, it would also be necessary for the
courts to examine the true nature and character of the
enactment, its object, its scope and effect to find out
whether the enactment in question is genuinely referable to
a field of the legislation allotted to the respective legislature
under the constitutional scheme. In the aforesaid context
we now proceed to examine the nature and character of the
KUZALR Act and examine and scrutinize the same in the
context of the Central Act, namely, the Indian Forests Act,
1927.
As noted hereinbefore, Section 4A was introduced in
31.
KUZALR Act by an amendment in the year 1978 as a part
of agrarian reforms and not by a separate enactment, as
was done in the case of the UP Private Forests Act, 1948.
Significantly, the agrarian reforms introduced by the
UPZALR Act were not brought about by amending the UP
Private Forests Act, 1948. It is to be noticed that the Indian
Forest Act, 1927 and the UP Private Forests Act, 1948 that
deal broadly with the same field of, inter-alia conservation,
regulation, etc., of forests. It is to be further noticed that
Page 20 of 52
the UPZALR Act and after the 1978 amendment, KUZALR
Act do not deal with conservation or regulation of forests
but with agrarian reforms. In order to find out the subject
matter of an enactment, even in the context of enactments
relatable to List III of the Seventh Schedule of the
Constitution, passed by different legislatures, the doctrine
of pith and substance can be relied upon and would apply.
As discussed hereinbefore KUZALR Act is a law principally
32.
relatable to Entry 18 (land) of List II read with Entry 42 in
List III of the Seventh Schedule of the Constitution and only
incidentally trenches upon "forest" i.e. Entry 17A/List-III of
the Seventh Schedule of the Constitution. This is so
because it is an enactment for agrarian reforms and so the
basic subject matter is "land". Since the land happens to be
forest land, it spills over and incidentally encroaches on
Entry 17A i.e. "forest" as well. On the other hand, the
Central Act i.e. the Indian Forests Act 1927 is relatable to
Entry 17A read with entry 42, both of List III of the Seventh
Schedule of the Constitution. It is in pith and substance
relatable to Entry 17A, as it deals with "forests" and not
with "land" or any other subject. It only incidentally spills
over in the field of Entry 42, as it deals with "control over
Page 21 of 52
forest land and not property of the Government" and in that
context Section 37, as an alternative to management of
forests under Section 36 of the Indian Forests Act 1927,
deals with the grant of power to acquire land under the
Land Acquisition Act 1894.
This Court in the case of Glanrock Estate Private
33.
Limited v. State of Tamil Nadu, reported in (2010) 10
SCC 96 observed in paragraph 45 of the Judgment as
follows:
".............we are of the view that the requirement of
public purpose and compensation are not legislative
requirements of the competence of legislature to
make laws under Entry 18 List II or Entry 42 List
III, but are conditions or restrictions under Article
31(2) of the Constitution as the said article stood in
1969. ................ Lastly, in pith and substance, we
are of the view that the Janmam Act (24 of 1969)
was in respect of "land" and "land tenure" under
Entry 18 List II of the Constitution.
It is quite clear that the KUZALR Act relates to agrarian
34.
reforms and therefore it deals with the "land"; however, the
Central Act i.e. the Indian Forests Act 1927 deal with
"forests" and its management, preservation and levy of
royalty/fees on forest produce. KUZALR Act further
provides for statutory vesting, i.e., statutory taking over of
property of hissedar, which happens to be 1st January
Page 22 of 52
1978, i.e. the statutorily fixed date. Therefore, this forest
land becomes the property of the State Government and is
dealt with like land, which is acquired under Section 4A of
KUZALR Act. This emerges from a reading of Rule 41 of the
KUZALR Rules itself. Further, the acquisition under the
KUZALR Act is a case of "taking" upon payment of an
amount, which is not intended to be the market price of the
rights acquired. On the other hand, the power of acquisition
under Section 37 of the Indian Forests Act 1927 i.e. the
Central Act is an acquisition based on the principles of
public purpose and compensation.
Thus, not only do the aforesaid Acts relate to different
35.
subject matters, but the acquisitions mentioned therein are
conceptually different. The Central Act i.e. the Indian
Forests Act 1927 mainly deals with the management,
preservation and levy of royalty on transmit of forest
produce. The Indian Forests Act 1927 also incidentally
provides for and empowers the State Government to acquire
any land which might be required to give effect to any of the
purposes of the Act, in which case such land could be
acquired by issuing a notification under Section 4 of the
Indian Forests Act 1927. This however is to be understood
Page 23 of 52
as an incidental power vested on the State Government
which could be exercised for giving effect to the purposes of
the Indian Forests Act 1927. While considering the issue of
repugnancy what is required to be considered is the
legislation in question as a whole and to its main object and
purpose and while doing so incidental encroachment is to
be ignored and disregarded.
In fact, it is the UP Private Forest Act, 1948, which is an
36.
enactment relatable to Entry 17A of List III, i.e., Forests,
read with Entry 42 of List III of the Seventh Schedule of the
Constitution, i.e., acquisition to the extent of "vested"
forests. It is this Act which covers a field similar to that of
the Central Act and therefore, sought and obtained the
permission of the President under Section 76 of the
Government of India Act.
Thus, in the State, there are two Acts, which are applicable
37.
viz. the UP Private Forests Act, 1948, which is in the same
field as the Central Act i.e. the Indian Forest Act 1927 and
the KUZALR Act, which is in respect of a different subject
matter.
38.For repugnancy under Article 254 of the Constitution,
Page 24 of 52
there is a twin requirement, which is to be fulfilled: firstly,
there has to be a "repugnancy" between a Central and State
Act; and secondly, the Presidential assent has to be held as
being non-existent. The test for determining such
repugnancy is indeed to find out the dominant intention of
the both legislations and whether such dominant intentions
of both the legislations are alike or different. To put it
simply, a provision in one legislation in order 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 or incidental coverage of the same area in
a different context and to achieve a different purpose does
not attract the doctrine of repugnancy. In nutshell, in order
to attract the doctrine of repugnancy, both the legislations
must be substantially on the same subject.
Repugnancy in the context of Article 254 of the
39.
Constitution is understood as requiring the fulfillment of a
"Triple test" reiterated by the Constitutional Bench in M.
Karunanidhi v. Union of India, (1979) 3 SCC 431 @ page
443-444, which reads as follows:-
"24. It is well settled that the presumption is
always in favour of the constitutionality of a statute
and the onus lies on the person assailing the Act to
Page 25 of 52
prove that it is unconstitutional. Prima facie, there
does not appear to us to be any inconsistency
between the State Act and the Central Acts. Before
any repugnancy can arise, the following conditions
must be satisfied:
1. That there is a clear and direct inconsistency
between the Central Act and the State Act.
2. That such an inconsistency is absolutely
irreconcilable.
3. That the inconsistency between the provisions of
the two Acts is of such nature as to bring the two
Acts into direct collision with each other and a
situation is reached where it is impossible to obey
the one without disobeying the other."
In other words, the two legislations must cover the same
40.
field. This has to be examined by a reference to the
doctrine of pith and substance. In the instant case, the
KUZALR Act deals with agrarian reforms and in the
context deals with the private forests, this vests with the
State and would therefore be managed by the Goan
Sabha. The Indian Forest Act, 1927 which is the existing
Central law, has nothing to do with agrarian reforms but
deals with forest policy and management, and therefore
is in a different field. Further, there is no direct conflict
or collision, as the Indian Forest Act, 1927 only gives an
enabling power to the government to acquire forests in
accordance with the provisions of the Land Acquisition
Act 1894, whereas KUZALR Act results in vesting of
forests from the dates specified in Section 4A of the
Page 26 of 52
KUZALR Act. Consequently, it could be deduced that
none of the aforesaid three conditions as mentioned in
the decision of M. Karunanidhi case (supra) is attracted
to the facts of the present case.
The only other area where repugnancy can arise is
41.
where the superior legislature namely the Parliament
has evinced an intention to create a complete code.
This obviously is not the case here, as admittedly even
earlier, assent was given under Section 107(2) of the
Government of India Act by the Governor General to the
U P Private Forests Act, 1948.
This Court succinctly observed as follows in Hoechst
42.
Pharmaceuticals Ltd. v. State of Bihar, (1983) 4 SCC 45,
at page 87:
"67. Article 254 of the Constitution makes
provision first, as to what would happen in the case
of conflict between a Central and State law with
regard to the subjects enumerated in the
Concurrent List, and secondly, for resolving such
conflict. Article 254(1) enunciates the normal rule
that in the event of a conflict between a Union and a
State law in the concurrent field, the former prevails
over the latter. Clause (1) lays down that if a State
law relating to a concurrent subject is `repugnant' to
a Union law relating to that subject, then, whether
the Union law is prior or later in time, the Union law
will prevail and the State law shall, to the extent of
such repugnancy, be void. To the general rule laid
down in clause (1), clause (2) engrafts an exception
viz. that if the President assents to a State law
Page 27 of 52
which has been reserved for his consideration, it
will prevail notwithstanding its repugnancy to an
earlier law of the Union, both laws dealing with a
concurrent subject. In such a case, the Central Act,
will give way to the State Act only to the extent of
inconsistency between the two, and no more. In
short, the result of obtaining the assent of the
President to a State Act which is inconsistent with a
previous Union law relating to a concurrent subject
would be that the State Act will prevail in that State
and override the provisions of the Central Act in
their applicability to that State only. The
predominance of the State law may however be
taken away if Parliament legislates under the
proviso to clause (2). The proviso to Article 254(2)
empowers the Union Parliament to repeal or amend
a repugnant State law, either directly, or by itself
enacting a law repugnant to the State law with
respect to the `same matter'. Even though the
subsequent law made by Parliament does not
expressly repeal a State law, even then, the State
law will become void as soon as the subsequent law
of Parliament creating repugnancy is made. A State
law would be repugnant to the Union law when
there is direct conflict between the two laws. Such
repugnancy may also arise where both laws operate
in the same field and the two cannot possibly stand
together: See Zaverbhai Amaidas v. State of
Bombay; M. Karunanidhi v. Union of India and T.
Barai v. Henry Ah Hoe."
Again a five-Judge Bench of this Court while discussing
43.
the said doctrine in Kartar Singh v. State of Punjab, (1994) 3
SCC 589 @ page 630 observed as under:
"60. This doctrine of `pith and substance' is applied
when the legislative competence of a legislature with
regard to a particular enactment is challenged with
reference to the entries in the various lists i.e. a law
dealing with the subject in one list is also touching
on a subject in another list. In such a case, what
has to be ascertained is the pith and substance of
the enactment. On a scrutiny of the Act in question,
if found, that the legislation is in substance one on a
matter assigned to the legislature enacting that
statute, then that Act as a whole must be held to be
Page 28 of 52
valid notwithstanding any incidental trenching upon
matters beyond its competence i.e. on a matter
included in the list belonging to the other
legislature. To say differently, incidental
encroachment is not altogether forbidden."
Further in Govt. of A.P. v. J.B. Educational Society, (2005) 3
44.
SCC 212, this Court while explaining the scope of Articles
246 and 254 of the Constitution and considering the
proposition laid down by this Court in M. Karunanidhi case
(supra) with respect to the situations in which repugnancy
would arise, held as follows at page 219:
"9. Parliament has exclusive power to legislate with
respect to any of the matters enumerated in List I,
notwithstanding anything contained in clauses (2)
and (3) of Article 246. The non obstante clause under
Article 246(1) indicates the predominance or
supremacy of the law made by the Union Legislature
in the event of an overlap of the law made by
Parliament with respect to a matter enumerated in
List I and a law made by the State Legislature with
respect to a matter enumerated in List II of the
Seventh Schedule.
10. There is no doubt that both Parliament and the
State Legislature are supreme in their respective
assigned fields. It is the duty of the court to interpret
the legislations made by Parliament and the State
Legislature in such a manner as to avoid any conflict.
However, if the conflict is unavoidable, and the two
enactments are irreconcilable, then by the force of
the non obstante clause in clause (1) of Article 246,
the parliamentary legislation would prevail
notwithstanding the exclusive power of the State
Legislature to make a law with respect to a matter
enumerated in the State List.
11. With respect to matters enumerated in List III
Page 29 of 52
(Concurrent List), both Parliament and the State
Legislature have equal competence to legislate. Here
again, the courts are charged with the duty of
interpreting the enactments of Parliament and the
State Legislature in such manner as to avoid a
conflict. If the conflict becomes unavoidable, then
Article 245 indicates the manner of resolution of
such a conflict."
Thereafter, this Court, in para 12, held that the
question of repugnancy between the parliamentary
legislation and the State legislation could arise in the
following two ways: (SCC p. 220)
"12. ... First, where the legislations, though enacted
with respect to matters in their allotted sphere,
overlap and conflict. Second, where the two
legislations are with respect to matters in the
Concurrent List and there is a conflict. In both the
situations, parliamentary legislation will
predominate, in the first, by virtue of the non
obstante clause in Article 246(1), in the second, by
reason of Article 254(1). Clause (2) of Article 254
deals with a situation where the State legislation
having been reserved and having obtained President's
assent, prevails in that State; this again is
subject to the proviso that Parliament can again
bring a legislation to override even such State
legislation."
The aforesaid position makes it quite clear that even if
45.
both the legislations are relatable to List-III of the
Seventh Schedule of the Constitution, the test for
repugnancy is whether the two legislations "exercise
their power over the same subject matter..." and
secondly whether the law of Parliament was intended "to
be exhaustive to cover the entire field". The answer to
Page 30 of 52
both these questions in the instant case is in the
negative, as the Indian Forest Act 1927 deals with the law
relating to forest transit, forest levy and forest produce,
whereas the KUZALR Act deals with the land and
agrarian reforms.
46.In respect of the Concurrent List under Seventh
Schedule to the Constitution, by definition both the
legislatures viz. the Parliament and the State legislatures
are competent to enact a law. Thus, the only way in
which the doctrine of pith and substance can and is
utilised in determining the question of repugnancy is to
find out whether in pith and substance the two laws
operate and relate to the same matter or not. This can
be either in the context of the same Entry in List III or
different Entries in List III of the Seventh Schedule of the
Constitution. In other words, what has to be examined is
whether the two Acts deal with the same field in the
sense of the same subject matter or deal with different
matters.
47.The concept of repugnancy does not arise as far as the
American and Canadian Constitutions are concerned, as
Page 31 of 52
there is no Concurrent List there, nor is there any
provision akin to Article 254 of the Constitution of India.
Repugnancy arises in the Australian Constitution, which
has a Concurrent List and a provision i.e. Section 107,
akin to Article 254 of the Constitution of India.
48.In the Australian cases, the concept of Repugnancy has
really been applied in the context of Criminal Law where
for the same offence, there are two inconsistent and
different punishments, which are provided and so the
two laws cannot co-exist together. To put it differently,
an area where the two Acts may be repugnant is when
the Central Act evinces a clear interest to be exhaustive
and unqualified and therefore, occupies the entire field.
In a Full Bench decision of this Court in the case of
49.
State of Maharashtra v. Bharat Shanti Lal Shah, (2008)
13 SCC 5, this Court observed as follows at page 23 :
"48. Article 254 of the Constitution succinctly
deals with the law relating to inconsistency
between the laws made by Parliament and the
State Legislature. The question of repugnancy
under Article 254 will arise when a law made by
Parliament and a law made by the State
Legislature occupies the same field with respect to
one of the matters enumerated in the Concurrent
List and there is a direct conflict in two laws. In
Page 32 of 52
other words, the question of repugnancy arises
only in connection with subjects enumerated in
the Concurrent List. In such situation the
provisions enacted by Parliament and the State
Legislature cannot unitedly stand and the State
law will have to make way for the Union law. Once
it is proved and established that the State law is
repugnant to the Union law, the State law would
become void but only to the extent of repugnancy.
At the same time it is to be noted that mere
possibility of repugnancy will not make a State
law invalid, for repugnancy has to exist in fact and
it must be shown clearly and sufficiently that the
State law is repugnant to the Union law."
50.In a nutshell, whether on account of the exhaustive
code doctrine or whether on account of irreconcilable
conflict concept, the real test is that would there be a
room or possibility for both the Acts to apply.
Repugnancy would follow only if there is no such room
or possibility.
Having discussed the law, as applicable in the aforesaid
51.
manner and upon scrutiny of subject matters of both the
concurrent Acts, it is crystal clear that no case of
repugnancy is made out in the present case as both the
Indian Forest Act, 1927 and the KUZALR Act operate in
two different and distinct fields as pointed out
hereinbefore. Accordingly, both the Acts are legally valid
and constitutional. That being so, there was no
Page 33 of 52
requirement of obtaining any Presidential assent.
Consequently, Article 254(2) of the Constitution has also
no application in the instant case. However, it would be
appropriate to discuss the issue as elaborate argument
was made on this issue as well.
Presidential Assent and Article 254(2) of the Constitution
The issue argued was whether "General Assent" can
52.
always be sought and obtained by the State Government.
Reference was made to a Constitutional Bench decision
of this Court in Gram Panchayat Jamalpur v. Malwinder
Singh, (1985) 3 SCC 661; which was subsequently
further interpreted and followed in the case of P.N.
Krishna Pal v. State of Kerala, (1995) Suppl. 2 SCC 187.
In the Gram Panchayat Jamalpur case (supra), the
53.
Constitution Bench observed as follows at page 669:
"13. This situation creates a conundrum. The
Central Act of 1950 prevails over the Punjab Act of
1953 by virtue of Article 254(1) of the Constitution
read with Entry 41 of the Concurrent List; and,
Article 254(2) cannot afford assistance to reverse
that position since the President's assent, which
was obtained for a specific purpose, cannot be
utilised for according priority to the Punjab Act.
Though the law made by the Parliament prevails
over the law made by the State Legislature, the
interest of the evacuees in the Shamlat-deh lands
Page 34 of 52
cannot be dealt with effectively by the Custodian
under the Central Act, because of the peculiar
incidents and characteristics of such lands. The
unfortunate result is that the vesting in the
Custodian of the evacuee interest in the Shamlat-
deh lands is, more or less, an empty formality. It
does not help the Custodian to implement the
provisions of the Central law but, it excludes the
benign operation of the State law.
14. The line of reasoning of our learned Brother,
Chinnappa Reddy, affords a satisfactory solution to
this constitutional impasse, which we adopt without
reservation of any kind. The pith and substance of
the Punjab Act of 1953 is "Land" which falls under
Entry 18 of List II (State List) of the Seventh
Schedule to the Constitution. That Entry reads
thus:
"18. Land, that is to say, rights in or over land,
land tenures including the relation of landlord and
tenant, and the collection of rents; transfer and
alienation of agricultural land; land improvement
and agricultural loans; colonisation."
Our learned Brother has extracted a passage from a
decision of a Constitution Bench of this Court in
Ranjit Singh v. State of Punjab3 which took the view
that since, the Punjab Act of 1953 is a measure of
agrarian reform, it would receive the protection of
Article 31-A. It may be recalled that the Act had
received the assent of the President as required by
the first proviso to that article. The power of the
State Legislature to pass laws on matters
enumerated in the State List is exclusive by reason
of the provision contained in Article 246(3). In a
nutshell, the position is that the Parliament has
passed a law on a matter which falls under Entry 41
of the Concurrent List, while the State Legislature
has passed a law which falls under Entry 18 of the
State List. The law passed by the State Legislature,
being a measure of agrarian reform, is conducive to
the welfare of the community and there is no reason
why that law should not have effect in its full
amplitude. By this process, the Village Panchayats
will be able to meet the needs of the village
Page 35 of 52
community and secure its welfare. Accordingly, the
Punjab Act of 1953 would prevail in the State of
Punjab over the Central Act of 1950, even insofar as
Shamlat-deh lands are concerned."
Following the ratio of Gram Panchayat Jamalpur case
54.
(supra) this Court in the case of P.N. Krishna Pal v. State of
Kerala, (1995) Suppl. 2 SCC 187 observed as follows at
page 200.
"14. In Jamalpur Gram Panchayat case3 the facts
were that specific assent of the President was
sought, namely, Article 31 and Article 31-A of the
Constitution vis-`-vis Entry 18 of List II of the
Seventh Schedule of the Constitution. The President
had given specific assent. The Shamlat-deh lands in
Punjab were owned by the proprietors of the village,
in proportion to their share in the property of the
lands held by them. After the partition, the
proprietary interests in the lands of the migrants
and proportionate to share of their lands vest in the
Union of India. The question arose whether the
Punjab Village Common Lands (Regulation) Act,
1953 prevails over Evacuee Property Act, 1950. It
was contended that in view of the assent given by
the President, the State Act prevails over the Central
Act. This Court in that context considered the scope
of the limited assent. Chandrachud, C.J. speaking
for majority, held that the Central Act, 1950 prevails
over the Punjab Act, 1953 and the assent of the
President which was obtained for a specific purpose
cannot be utilised for according precedence to the
Punjab Act. At page 42, placitum `B' to `E', this
Court held that
"the assent of the President under Article 254(2) of
the Constitution is not a matter of idle formality.
The President has, at least, to be apprised of the
reason why his assent is sought if, there is any
special reason for doing so. If the assent is sought
Page 36 of 52
and given in general terms so as to be effective for
all purposes, different considerations may
legitimately arise."
Thus it is clear that this Court did not intend to
hold that it is necessary that in every case the
assent of the President in specific terms had to be
sought and given for special reasons in respect of
each enactment or provision or provisions. On the
other hand, the observation clearly indicates that if
the assent is sought and given in general terms it
would be effective for all purposes. In other words,
this Court observed that the assent sought for and
given by the President in general terms could be
effective for all purposes unless specific assent is
sought and given in which event it would be
operative only to that limited extent."
Further, in the case Kaiser-I-Hind (P) Ltd. v. National Textile
55.
Corporation (Maharashtra North), (2002) 8 SCC 182, this
Court made it clear that it was not considering; whether
the assent of the President was rightly or wrongly given?;
and whether the assent given without considering the
extent and the nature of the repugnancy should be taken
as no assent at all? It observed as follows at page 203:
"27. In this case, we have made it clear that we
are not considering the question that the assent of
the President was rightly or wrongly given. We are
also not considering the question that -- whether
"assent" given without considering the extent and
the nature of the repugnancy should be taken as no
assent at all. Further, in the aforesaid case, before
the Madras High Court also the relevant proposal
made by the State was produced. The Court had
specifically arrived at a conclusion that Ext. P-12
shows that Section 10 of the Act has been referred
Page 37 of 52
to as the provision which can be said to be
repugnant to the provisions of the Code of Civil
Procedure and the Transfer of Property Act, which
are existing laws on the concurrent subject. After
observing that, the Court has raised the
presumption. We do not think that it was necessary
to do so. In any case as discussed above, the
essential ingredients of Article 254(2) are: (1)
mentioning of the entry/entries with respect to one
of the matters enumerated in the Concurrent List;
(2) stating repugnancy to the provisions of an earlier
law made by Parliament and the State law and
reasons for having such law; (3) thereafter it is
required to be reserved for consideration of the
President; and (4) receipt of the assent of the
President."
It is in this context, that the finding of this Court in
56.
Kaiser-I-Hind (P) Ltd. (supra) at para 65 becomes important
to the effect that "pointed attention" of the President is
required to be drawn to the repugnancy and the reasons for
having such a law, despite the enactment by Parliament,
has to be understood. It summarizes the point as follows at
page 215 as follows:
"65. The result of the foregoing discussion is:
1. It cannot be held that summary speedier
procedure prescribed under the PP Eviction Act for
evicting the tenants, sub-tenants or unauthorised
occupants, if it is reasonable and in conformity with
the principles of natural justice, would abridge the
rights conferred under the Constitution.
2. (a) Article 254(2) contemplates "reservation for
consideration of the President" and also "assent".
Reservation for consideration is not an empty
formality. Pointed attention of the President is
Page 38 of 52
required to be drawn to the repugnancy between the
earlier law made by Parliament and the
contemplated State legislation and the reasons for
having such law despite the enactment by
Parliament.
(b) The word "assent" used in clause (2) of Article
254 would in context mean express agreement of
mind to what is proposed by the State.
(c) In case where it is not indicated that "assent"
is qua a particular law made by Parliament, then it
is open to the Court to call for the proposals made
by the State for the consideration of the President
before obtaining assent.
3. Extending the duration of a temporary enactment
does not amount to enactment of a new law.
However such extension may require assent of the
President in case of repugnancy."
If it is to be contended that Kaiser lays down the
57.
proposition that there can be no general Presidential
assent, then such an interpretation would be clearly
contrary to the observation of the Bench in Para 27 itself
where it states that it is not examining the issue whether
such an assent can be taken as an assent.
Such an interpretation would also open the judgment to
58.
a charge of being, with respect, per in curium as even
though while noting the Jamalpur case - (1985) 3 SCC
661, it overlooks the extracts in the Jamalpur case
dealing with the aspect of general assent:
"The assent of the President under Article 254(2) of
Page 39 of 52
the Constitution is not a matter of idle formality.
The President has, at least, to be apprised of the
reason why his assent is sought if, there is any
special reason for doing so. If the assent is sought
and given in general terms so as to be effective for
all purposes, different considerations may
legitimately arise. But if, as in the instant case, the
assent of the President is sought to the Law for a
specific purpose, the efficacy of the assent would be
limited to that purpose and cannot be extended
beyond it."
Article 300A of the Constitution and Compensation
59. After passing of the Constitution (Forty Forth) Amendment
Act 1978 which deleted Article 19(1)(f) and Article 31 from the
Constitution and introduced Article 300A in the Constitution,
the Constitution (44th Amendment) Act inserted in Part XII, a
new chapter: "Chapter IV - Right to Property" and inserted a
new Article 300A, which reads as follows:-
"No person shall be deprived of property save by
authority of law"
60. It would be useful to reiterate paragraphs 3, 4 and 5
of the Statement of Objects and Reasons of the Constitution
(44th Amendment) Act which 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.
Page 40 of 52
It would, however, be ensured that the removal of
property from the list of fundamental rights would
not affect the 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."
61. The incident of deprivation of property within the
meaning of Article 300A of the Constitution normally occurred
mostly in the context of public purpose. Clearly, any law,
which deprives a person of his private property for private
interest, will be amenable to judicial review. In last sixty
years, though the concept of public purpose has been given
quite wide interpretation, nevertheless, the "public purpose"
remains the most important condition in order to invoke
Article 300A of the Constitution.
62. With regard to claiming compensation, all modern
constitutions which are invariably of democratic character
provide for payment of compensation as the condition to
exercise the right of expropriation. Commonwealth of
Page 41 of 52
Australia Act, a French Civil Code (Article 545), the 5th
Amendment of the Constitution of U.S.A. and the Italian
Constitution provided principles of "just terms", "just
indemnity", "just compensation" as reimbursement for the
property taken, have been provided for.
63. Under Indian Constitution, the field of legislation
covering claim for compensation on deprivation of one's
property can be traced to Entry 42 List III of the Seventh
Schedule of the Constitution. The Constitution (7th
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". The right to property being no
more a fundamental right, a legislation enacted under the
authority of law as provided in Article 300A of the
Constitution is not amenable to judicial review merely for
alleged violation of Part III of the Constitution. Article 31A was
inserted by the Constitutional (1st Amendment) Act, 1951 to
protect the zamindari abolition laws. The right to challenge
laws enacted in respect of subject matter enumerated under
Article 31A (1) (a) to (g) of the Constitution on the ground of
violation of Article 14 was also constitutionally excluded.
Further, Article 31B read with Ninth Schedule of the
Page 42 of 52
Constitution protects all laws even if they are violative of the
Part III of the Constitution. However, it is to be noted that in
the Constitutional Bench decision in I. R. Coelho v. State of
Tamil Nadu (2007) 2 SCC 1, this Court has held that the laws
added to the Ninth Schedule of the Constitution, by violating
the constitutional amendments after 24.12.1973, would be
amenable to judicial review on the ground like basic structure
doctrine.
64. It has been contended by ld. senior counsel appearing
for the appellants that the action taken by the respondents
must satisfy the twin principles viz. public purpose and
adequate compensation. It has been contended that
whenever there is arbitrariness by the State in its action, the
provisions of Article 14, 19 and 21 would get attracted and
such action is liable to be struck down. It was submitted that
the KUZALR Act does not provide for any principle or
guidelines for the fixation of the compensation amount in a
situation when no actual income is being derived from the
property in question. It was further submitted that the
inherent powers of public purpose and eminent domain are
embodied in Article 300A, and Entry 42 List III, "Acquisition
Page 43 of 52
and Requisitioning of Property" which necessarily connotes
that the acquisition and requisitioning of property will be for a
public use and for compensation and whenever a person is
deprived of his property, the limitations as implied in Article
300A as well as Entry 42 List III will come into the picture and
the Court can always examine the legality and validity of the
legislation in question. It was further submitted that awarding
nil compensation is squarely amenable to judicial review
under Articles 32 and 226 of the Constitution of India.
65. It is the case of the State that the statutory scheme
under the UPZALR Act, 1950 is provided in Section 39(1) (e) in
respect of forests. The said section provides for two methods
for computation of compensation, namely, the average annual
income of last 20 to 40 years as provided in Section 29(1) (e)
(i) and the estimate of annual yield on the date of vesting as
provided in Section 39(1) (e) (ii). It was further argued that in
respect of KUZALR Act, the same U.P. Legislature which had
the example of Section 39(1)(e) deliberately dropped the
second sub-clause and limited the compensation only to the
average annual income of the last 20 years. From this it was
argued that where there is no annual income, there would be
no compensation.
Page 44 of 52
66. It had been further argued that since the expression
"average annual income" under Section 39(1) (e) (i) has
already been judicially interpreted in the case of Ganga Devi
v. State of U.P. (1972) 3 SCC 126 to mean "actual" annual
income and not an estimate, therefore, if the forest land is not
earning any income, then in the statutory formula set out in
KUZALR Act, it would not be entitled to any compensation.
67. The Government is empowered to acquire land by
exercising its various statutory powers. Acquisition of land
and thereby deprivation of property is possible and
permissible in accordance with the statutory framework
enacted. Acquisition is also permissible upon exercise of
police power of the State. It is also possible and permissible to
acquire such land by exercising the power vested under the
Land Acquisition Act. This Act mandates acquisition of land
for public purpose or public use, which expression is defined
in the Act itself. This Act also empowers acquisition of land for
use of companies also in the manner and mode clearly
stipulated in the Act and the purpose of such acquisition is
envisaged in the Act as not public purpose but for the purpose
specifically enumerated in Section 40 of the Land Acquisition
Page 45 of 52
Act. But, in case of both the aforesaid manner of acquisition
of land, the Act envisages payment of compensation for such
acquisition of land and deprivation of property, which is
reasonable and just.
68. Article 31(2) of the Constitution has since been
repealed by the Constitution (44th Amendment) Act 1978. It is
to be noted that Article 300A was inserted by the Constitution
(44th Amendment) Act, 1978 by practically reinserting Article
31(1) of the Constitution. Therefore, right to property is no
longer a fundamental right but a right envisaged and
conferred by the Constitution and that also by retaining only
Article 31(1) of the Constitution and specifically deleting
Article 31(2), as it stood. In view of the aforesaid position the
entire concept to right to property has to be viewed with a
different mindset than the mindset which was prevalent
during the period when the concept of eminent domain was
the embodied provision of fundamental rights. But even now
as provided under Article 300A of the Constitution the State
can proceed to acquire land for specified use but by enacting
a law through State legislature or by Parliament and in the
manner having force of law. When the State exercises the
power of acquisition of a private property thereby depriving
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the private person of the property, provision is generally made
in the statute to pay compensation to be fixed or determined
according to the criteria laid down in the statute itself. It must
be understood in this context that the acquisition of the
property by the State in furtherance of the Directive Principles
of State Policy was to distribute the material resources of the
community including acquisition and taking possession of
private property for public purpose. It does not require
payment of market value or indemnification to the owner of
the property expropriated. Payment of market value in lieu of
acquired property is not a condition precedent or sine qua
non for acquisition. It must be clearly understood that the
acquisition and payment of amount are part of the same
scheme and they cannot be separated. It is true that the
adequacy of compensation cannot be questioned in a court of
law, but at the same time the compensation cannot be
illusory.
69. Further, it is to be clearly understood that the stand
taken by the State that the right, title or interests of a
hissedar could be acquired without payment of any
compensation, as in the present case, is contrary to the
express provisions of KUZALR Act itself. Section 12 of the
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KUZALR Act, 1960 states that every hissedar whose rights,
title or interest are acquired under Section 4, shall be entitled
to receive and be paid compensation. Further, Section 4A of
the KUZALR Act makes it clear that the provisions of Chapter
II (Acquisition and Modifications of existing rights in Land),
including Section 12, shall apply mutatis mutandis to a forest
land as they apply to a khaikhari land. Further, the intention
of the legislature to pay compensation is abundantly clear
from the fact that Section 19 itself prescribes that the
compensation payable to a hissedar under Section 12 shall, in
the case of private forest, be eight times the amount of
average annual income from such forest. In the instant case,
income also includes possible income in case of persons who
have not exploited the forest and have rather preserved it.
Otherwise, it would amount to giving a licence to
owners/persons to exploit forests and get huge return of
income and not to maintain and preserve it. The same cannot
be said to be the intention of the legislature in enacting the
aforesaid KUZALR Act. In fact, the persons who are
maintaining the forest and preserving it for future and
posterity cannot be penalised by giving nil compensation only
because of the reason that they were in fact chose to maintain
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the forest instead of exploiting it.
70. We are of the considered view that the decision of this
Court in Ganga Devi (supra) is not applicable in the present
case in as much as this Court in Ganga Devi (supra) never
dealt with a situation of unexploited forest and the
interpretation of actual income was done in the peculiar facts
and circumstances of the said case. The said case does not
deal with a situation where there could be such income
possible to be derived because it was unexploited but there
could be no income derived immediately even if it is used or
exploited. Therefore, the said case is clearly distinguishable
on facts. A distinction and difference has been drawn between
the concept of `no compensation' and the concept of `nil
compensation'. As mandated by Article 300A, a person can be
deprived of his property but in a just, fair and reasonable
manner. In an appropriate case the Court may find `nil
compensation' also justified and fair if it is found that the
State has undertaken to take over the liability and also has
assured to compensate in a just and fair manner. But the
situation would be totally different if it is a case of `no
compensation' at all. As already held `a law seeking to acquire
private property for public purpose cannot say that `no
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compensation' would be paid. The present case is a case of
payment of `no compensation' at all. In the case at hand, the
forest land which was vested on the State by operation of law
cannot be said to be non-productive or unproductive by any
stretch of imagination. The property in question was definitely
a productive asset. That being so, the criteria to determine
possible income on the date of vesting would be to ascertain
such compensation paid to similarly situated owners of
neighboring forests on the date of vesting. Even otherwise,
revenue authority can always make an estimation of possible
income on the date of vesting if the property in question had
been exploited by the appellants and then calculate
compensation on the basis thereof in terms of Sections 18(1)
(cc) and 19(1) (b) of KUZALR Act. We therefore find sufficient
force in the argument of the counsel for the appellants that
awarding no compensation attracts the vice of illegal
deprivation of property even in the light of the provisions of
the Act and therefore amenable to writ jurisdiction.
71. That being so, the omission of the Section 39(1) (e) (ii)
of the UPZALR Act 1950 as amended in 1978 is of no
consequence since the UPZALR Act leaves no choice to the
State other than to pay compensation for the private forests
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acquired by it in accordance with the mandate of the law.
72. In view of the above, the present appeal is partly
allowed while upholding the validity of the Act and
particularly Sections 4A, 18(1) (cc) and 19 (1) (b) of the
KUZALR Act, we direct the second respondent, i.e. Assistant
Collector to determine and award compensation to the
appellants by following a reasonable and intelligible criterion
evolved on the aforesaid guidelines provided and in light of the
aforesaid law enunciated by this Court hereinabove. The
appellants will also be entitled to interest @ six percent per
annum on the compensation amount from the date of
dispossession till the date of payment provided possession of
the forest was handed and taken over formally by the
Respondent physically and provided the appellant was totally
deprived of physical possession of the forest. However, we
would like to clarify that in case the physical/actual
possession has not been handed over by the appellants to the
State government or has been handed over at some
subsequent date i.e. after the date of vesting, the interest on
the compensation amount would be payable only from the
date of actual handover/physical possession of the property in
question and not from the date of vesting. In terms of the
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aforesaid findings, the present appeal stands disposed of. No
costs.
.........................................CJI
[ S.H. Kapadia ]
............................................J
[Dr. Mukundakam
Sharma]
............................................J
[ K. S. Radhakrishnan ]
............................................J
[ Swatanter Kumar ]
............................................J
[ Anil R. Dave ]
New Delhi,
August 9, 2011.
Page 52 of 52
