State of Bihar vs Maharajadhiraja Sir Kameshwar Singh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 2 May, 1952

Coram: Patanjali Sastri, Mehr Chand Mahajan, Chandrasekhara Aiyar

The case titled State of Bihar versus Maharajadhiraja Sir Kameshwar Singh was pronounced on 2 May 1952 by the Supreme Court of India. The Bench that heard the matter consisted of Chief Justice Patanjali Sastri, Justice Mehr Chand Mahajan and Justice Chandrasekhara Aiyar. The Court was called upon to consider a group of appeals and petitions that fell into three distinct categories, each of which raised the question of whether certain State enactments were constitutionally valid. The statutes under scrutiny were the Bihar Land Reforms Act, 1950 (referred to as Bihar Act XXX of 1950), the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (identified as No. I of 1951), and the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (identified as U.P. Act No. I of 1951). For convenience, these three pieces of legislation will be described respectively as the Bihar Act, the Madhya Pradesh Act and the Uttar Pradesh Act. The common objective of each of these statutes, in general terms, was to extinguish the zamindari system and other proprietary estates and tenures existing in the three concerned States. They sought to achieve this goal by compulsorily acquiring the rights and interests of the land-holding intermediaries and by thereby establishing a direct relationship between the occupants of the land – the raiyats and other cultivators – and the respective State Governments. All three Acts had been challenged before the High Courts of the respective States on a variety of constitutional grounds. In the case of the Bihar Act, the High Court declared it to be unconstitutional and void on the basis that it violated article 14 of the Constitution; other grounds of attack raised in that proceeding were rejected. By contrast, the High Courts hearing the challenges to the Madhya Pradesh Act and the Uttar Pradesh Act held both statutes to be constitutional and valid. The appeals that are before this Court were filed against those High Court decisions. In addition, separate petitions invoking article 32 of the Constitution were filed by other zamindars who sought a determination of the same constitutional questions. Consequently, the single, common issue that arises for determination in all of the appeals and petitions is whether the three State Legislatures that enacted the Bihar Act, the Madhya Pradesh Act and the Uttar Pradesh Act possessed the constitutional competence to pass those statutes, even though a few of the cases also involve certain special points of law. Various grounds of attack were advanced in the lower courts, and those same grounds were reiterated in the memoranda of appeal and in the petitions. All of those points would have required a full examination by this Court, but the analysis was overtaken by a constitutional amendment that was enacted while the proceedings were still pending. The Constitution (First Amendment) Act, 1951 – hereinafter referred to as the Amendment Act – was passed by the provisional Parliament during the pendency of these cases. By inserting new provisions – namely articles 31-A and 31-B – the Amendment Act sought to place a blanket protection over all laws that provided for the acquisition of estates or interests therein, and it specifically listed certain statutes, including the three impugned Acts, as being insulated from attacks based on article 13 read together with the other relevant provisions of Part III of the Constitution. The Amendment Act further made the operation of those new articles retrospective by declaring in section 4 that article 31-A shall be deemed always to have been inserted, and by stipulating in article 31-B that none of the specified statutes shall ever be deemed to have become void. The validity of the Amendment Act itself was subsequently challenged in proceedings instituted under article 32 of the Constitution; however, that challenge was decided in the case of Sankari Prasad Singh Deo v. Union of India and State of Bihar, reported in 1952 S.C.R. 89, where the Amendment Act was upheld. As a result of that decision, the three impugned statutes can no longer be attacked on the ground that they infringe any of the rights guaranteed by the provisions of Part III of the Constitution.

The petition was filed in this Court under article 32 of the Constitution, but the provision was later upheld by the decision in Sankari Prasad Singh Deo v. Union of India and State of Bihar reported in 1952 S.C.R. 89. As a consequence of that decision, the three statutes that were called the impugned Acts could no longer be challenged on the basis that they infringed any of the rights guaranteed by the provisions of Part III of the Constitution.

It was nevertheless observed that articles 31-A and 31-B offered protection only against a single type of challenge, namely the allegation that a law is “inconsistent with, or takes away or abridges any of the rights conferred by any provisions of this Part.” This limitation was underscored by the introductory words of article 31-A, which state “notwithstanding anything in the foregoing provisions of this Part.” Because the Constitution (First Amendment) Act did not alter the constitutional Lists, the amendment did not provide immunity from attacks based on the absence of legislative competence under article 246 read together with the entries in List II or List III of the Seventh Schedule for enacting the three impugned statutes.

Mr P. R. Das, who appeared as counsel for the zamindars, therefore based his principal argument in these proceedings on entry 36 of List II and entry 42 of List III. The text of those entries was quoted as follows: “36. Acquisition or requisitioning of property, except for the purposes of the Union, subject to the provisions of entry 42 of List III.” and “42. Principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given.”

The counsel’s argument could be summarised in the following way. When read together with article 246(3), entry 36 of List II was clearly intended to authorise a State Legislature to exercise the right of eminent domain, that is, the right of compute sorv acquisition of private property. The exercise of such power had been recognised in the jurisprudence of all civilised countries as being conditioned upon a public necessity and the payment of compensation. In this country, every piece of legislation authorising the acquisition of property—from Regulation I of 1824 of the Bengal Code to the Land Acquisition Act of 1894—had proceeded on that premise. Because a public purpose and an obligation to pay compensation were therefore essential concomitants of the compulsory acquisition of private property, the term “acquisition” had to be construed as necessarily implying those two conditions. A well-settled rule of statutory construction required that, unless the wording of a statute expressly demanded otherwise, a statute should not be interpreted so as to deprive a person of property without compensation, as expressed in Attorney-General v. Di Keyser’s Royal Hotel (1920) A.C. 508, 542. Likewise, the power to take property compulsorily carried with it, by implication, a right to payment, as observed in Central Control Board v. Cannon Brewery (1919) A.C. 744. The phrase “subject to the provisions of entry 42 of List III” in entry 36 reinforced this line of reasoning, indicating that any law made under entry 36 must also satisfy the conditions laid down in entry 42 regarding public purpose and compensation.

The Court explained that the expression in question required the authority to enact a law concerning the acquisition of property to be exercised only if that law also dealt with the matters mentioned in entry 42. In other words, the power to legislate under entry 36 was subjected to a two-fold limitation: the law had to be for a public purpose and it had to provide for payment of compensation, both of which were referenced in entry 2. The Court further observed that the legislative authority granted by entry 42 was coupled with a duty to use that authority for the benefit of those whose property might be compulsorily acquired under a law made pursuant to entry 36. Consequently, it was asserted that State legislatures possessed no power to enact a law for acquiring property unless they satisfied both conditions of a public purpose and compensation. On the basis of these submissions, counsel examined in detail various provisions of the impugned Acts in order to demonstrate that the compensation stipulated by those statutes had, through “various shifts and contrivances,” been reduced to an illusory amount when compared with the market value of the properties taken. The principles laid down for computing compensation, the Court noted, operated in practice as “principles of confiscation.” The enactment of the statutes, therefore, amounted to a “fraud on the Constitution,” serving as a legislative device for taking private property without providing compensation, thereby violating the Constitution while ostensibly appearing to comply with its requirements. Moreover, the statutes were not enacted for any genuine public purpose; their sole effect and intention were to dismantle the class of zamindars and tenure-holders and to transform the Government into a “super-landlord.” While such an objective might be praised as a political policy by the party in power, the Court held that, in law, it could not be regarded as a public purpose.

Subsequently, counsel for some of the zamindars from the Madhya Pradesh group, while adopting the earlier arguments, raised an additional ground of objection. He contended that the impugned Acts had not been passed in accordance with the procedure required by article 31(3), which stipulates that “No such law as is referred to in clause (2) made by the Legislature of a State shall have effect unless such law, having been reserved for the consideration of the President, has received his assent.” Counsel emphasized the terms “law” and “legislature” and submitted that, because the legislature of a State includes the Governor under article 168, and a bill becomes law only after the Governor’s assent under article 200, clause (3) of article 31 must be interpreted to require that a State law authorising compulsory acquisition of property obtain both the Governor’s assent, which makes it a law, and the President’s assent, which gives it “effect.” The Court noted that the relevant bills had been reserved for the President’s consideration after they were passed by the State legislature but before the Governor had given his assent, raising the issue of whether the procedural requirements of article 31(3) had been satisfied.

In each of the statutes under consideration, the Governor, after the respective bill had been passed by the appropriate House or Houses of the Legislature, did not give his assent as required by article 200. Because the Governor’s assent was missing, the statutes failed to meet the condition imposed by article 31(3), which demands that a law of a State, after being reserved for the President’s consideration, must receive the President’s assent before it can have “effect”. Accordingly, the Court observed that the failure of the Governor to assent meant that the statutes could not acquire the legal effect contemplated by article 31(3). The parties contended that this particular ground of attack was not barred by article 31-A or article 31-B, since the objection was not premised upon an alleged infringement of any fundamental right guaranteed by Part III of the Constitution.

Dr Ambedkar, appearing for several zamindars in the Uttar Punjab batch of cases, advanced a different line of argument. He deliberately refrained from relying on entry 36 of List II or entry 42 of List III, and he seemed to accept the position strongly defended by Mr Das that those entries, which merely confer the power on a State Legislature to legislate on the subjects enumerated, do not, by their construction, create an obligation to pay compensation. Nevertheless, Dr Ambedkar argued that the Constitution, regarded as a document establishing liberty, justice, equality and a government of a free people with limited powers, contains an implied prohibition against the compulsory acquisition of private property unless there is a public purpose and payment of just compensation. He maintained that this prohibition could be derived from the “spirit of the Constitution”, a notion he presented as a legitimate test for judging the constitutionality of a statute. To support this view, he cited certain American judicial decisions and legal textbooks that accept the inference of an implied constitutional bar when no express provision exists. He noted that article 31-A and article 31-B prevent objections that are based solely on alleged violations of the fundamental rights in Part III, but they do not forbid a challenge founded on the inference, drawn from other constitutional provisions, that a public purpose and compensation are prerequisites for any compulsory acquisition. Consequently, he asserted that there was no bar in those two articles to an objection on the ground that the impugned Acts failed to satisfy these implied requirements and were therefore unconstitutional.

In addition to the common grounds of attack outlined above, which were raised against each of the three statutes, the validity of each Act or of particular provisions within them was also contested on special, case-specific bases. The Court indicated that it would address those particular challenges after disposing of the principal contentions that applied uniformly to all three groups of proceedings. The Court further observed that, in its judgment, it found the common contentions to be without merit and therefore rejected them without hesitation. It noted that the zamindars had previously lost the decisive battle when this Court upheld the constitutionality of the Amendment Act enacted by the Provisional Parliament, an Act that among other objectives was intended to bring an end to the ongoing litigation. This prior decision was highlighted not as a disparagement of the zamindars, but as a factual backdrop to the present analysis.

The counsel for the respondent observed that the balance of the campaign had been pursued with arguments that were feeble and could only be described as the product of exhausted ingenuity. It was then necessary to set out the substantive constitutional provisions that formed the backbone of the arguments raised before the Court. Article 31(2) provides that no movable or immovable property shall be acquired for public purposes under any law authorising such acquisition unless the law provides for compensation for the property acquired and either fixes the amount of compensation or specifies the principles on which and the manner in which the compensation is to be determined and given. Clause (3) adds that no law of the kind referred to in clause (2) made by a State Legislature shall have effect unless, having been reserved for the consideration of the President, it has received his assent. Clause (4) states that if any bill pending at the commencement of this Constitution in a State Legislature was, after being passed by that Legislature, reserved for the President’s consideration and subsequently received his assent, then, notwithstanding anything in this Constitution, the law so assented to shall not be called into question in any court on the ground that it contravenes the provisions of clause (2). Clause (5) clarifies that nothing in clause (2) shall affect – (a) the provisions of any existing law other than a law to which clause (6) applies, or (b) the provisions of any law which the State may hereafter make – (i) for the purpose of imposing or levying any tax or penalty, or (ii) for the promotion of public health or the prevention of danger to life or property, or (iii) in pursuance of any agreement entered into between the Government of the Dominion of India or the Government of India and the Government of any other country, or otherwise, with respect to property declared by law to be evacuee property. Article 31-A, titled “Saving of laws providing for acquisition of estates, etc.”, provides that notwithstanding anything in the foregoing provisions of this Part, no law providing for acquisition by the State of any estate or of any rights therein, or for the extinguishment or modification of any such rights, shall be deemed void on the ground that it is inconsistent with, or takes away or abridges, any of the rights conferred by any provisions of this Part. Finally, Article 31-B, titled “Validation of certain Acts and Regulations”, declares that without prejudice to the generality of the provisions contained in Article 31-A, none of the Acts and Regulations specified in the Ninth Schedule, nor any of the decisions thereon, shall be deemed to be void or ever become void on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges, any of the rights conferred by any provisions of this Part, and that notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.

It will be observed that the scope of article 31(4) of the Constitution is simultaneously narrower and broader than the scope of article 31-A. Article 31(4) applies only to statutes that were pending before the legislature at the moment the Constitution came into force, whereas article 31-A is not limited by any such temporal condition. In addition, article 31(4) permits a challenge to a law only on the ground that it violates article 31(2), while article 31-A bars challenges on the basis of contravention of any provision of Part III, including articles 14 and 19. This broader protection was the reason for introducing articles 31-A and 31-B, because the limited wording of article 31(4) was found inadequate to cover objections based on a breach of article 14. Moreover, the legislation referred to in article 31(4) concerns acquisition of any kind of property, whereas article 31-A is confined to the acquisition of a specific class of property, namely estates and the rights attached to them. Most importantly for the present discussion, the non-obstante clause contained in article 31(4) overrides all other provisions of the Constitution, even those listed in the Seventh Schedule, while a law falling within article 31-A can prevail only over “the foregoing provisions of this Part”. The three statutes that are under challenge fall within the ambit of both article 31(4) and articles 31-A and 31-B. Setting aside articles 31-A and 31-B for the moment, it is clear that, under article 31(4), the three statutes are insulated from any court attack on the ground that they contravene article 31(2). The relevant requirements of article 31(2) that are material here are: (i) a law dealing with acquisition of property must authorize acquisition solely for a public purpose; and (ii) such a law must provide for payment of compensation. Mr Das, while acknowledging that clause (ii) forms part of article 31(2), argued that clause (i) was not a provision of article 31(2). He contended that clause (2) merely assumed, but did not expressly provide, that acquisition should be authorized only for a public purpose. That contention cannot be accepted. In the Court’s view, the clause also imposes a limitation concerning public purpose. The wording of the clause mirrors, with minor variations, section 299(2) of the Government of India Act, 1935, which was drafted to give effect to the Joint Parliamentary Committee’s recommendation that two conditions be imposed on the expropriation of private property: that the expropriation be for a public purpose and that compensation be determined either initially or on appeal by an independent authority. Consequently, section 299(2) was intended to enforce both conditions, and it follows that article 31(2) was likewise intended to impose the same twin requirements on legislation authorising the expropriation of private property.

In its analysis, the Court observed that the requirement for a law authorising the expropriation of private property to be lawful was rooted in the same two conditions that had governed the earlier statutory provision, namely that the acquisition must be for a public purpose and that provision for payment of compensation must be made. The Court reasoned that if article 31(2) of the Constitution did not embody these two conditions, the Constitution would contain no barrier against acquisition for a private purpose without compensation, which would lead to an absurd result. Accordingly, the Court concluded that the framers of the Constitution could not have intended to incorporate only one of the two well-established limitations on the exercise of eminent domain while leaving the other to be supplied by common law; therefore article 31(2) must be read as expressly providing for both limitations. The Court noted that an attack on a statute on the ground that it contravened article 31(2) amounted to an allegation that the statute authorised acquisition without reference to a public purpose and without a provision for compensation. This was precisely the objection raised by the counsel identified as Mr Das and by Dr Ambedkar when they questioned the constitutional validity of the impugned statutes, even though the counsel for the respondents denied that their arguments relied on article 31(2). The Court considered the denial to be a quibbling distinction that did not change the substance of the attack, which was fundamentally based on the absence of the two essential prerequisites of a valid law authorising acquisition of private property. While Mr Das sought to infer those prerequisites from entry 36 of List II and entry 42 of List III, and Dr Ambedkar derived them from the spirit of the Constitution, the Court held that both approaches ultimately rested on the same substantive objection—that the statutes lacked a public purpose and a provision for just compensation. The Court further observed that if these two grounds of attack fell within the scope of article 31(4), the phrase “notwithstanding anything in this Constitution” would exclude them, regardless of whether the basis of the objection was found in the legislative lists or in the Constitution’s spirit. Consequently, the Court concluded that permitting a challenge on these grounds would render clause 4 of article 31 meaningless, since that clause was specially crafted to shield the impugned statutes and similar laws from judicial attacks on the very grounds of public purpose and compensation.

The Court observed that no submission was offered to explain the purpose of article 31(4); counsel were unable to suggest any. It noted that article 31(4) was expressly intended to prevent courts from entertaining objections to the validity of a particular class of statutes on the two grounds previously discussed, namely the lack of a public purpose and the absence of provision for just compensation. The Court warned that the entire purpose of article 31(4) would be defeated if the zamindars’ argument were allowed to succeed. Even assuming that a court might entertain such objections, the Court held that, in its view, those objections were unsustainable. It reiterated that article 31-A functions as an exception to article 31(2) read together with article 13, but only with respect to laws that deal with “estates” and the rights therein, and that this exception has formed part of the Constitution since its inception. The Court further explained that article 31-A does not apply to statutes that authorize the acquisition of other kinds of property; for such statutes, the requirements of a public purpose and the payment of compensation continue to be enforced by the explicit provisions of article 31(2). In light of the constitutional limitations on the State’s power of compulsory acquisition, which exclude only “estates,” the Court found it contrary to basic principles of statutory interpretation to read, by implication, those same limitations into entry 36 of List II alone or in combination with entry 42 of List III of the Seventh Schedule, nor could they be derived from “the spirit of the Constitution,” especially when the provisions concerned the very properties that are excluded. The Court then turned to the common-law rule of eminent domain, which requires that the State may not take a subject’s property unless it is needed for a public purpose and the owner receives compensation. However, the Court emphasized that when the Constitution expressly provides these safeguards and further declares that any law contravening them shall be void, there is no room for implication. Consequently, the phrase “acquisition of property” must be understood simply as the act of acquiring property, without importing a mandatory compensation obligation or a public-purpose condition. The Court added that the entries in the Seventh Schedule are meant to delineate the legislative competence of the Union and the States, and that such a context is not suitable for imposing implied restrictions on legislative power, which are matters to be addressed by positive constitutional provisions. Finally, the Court pointed to article 31 itself, indicating that the expression “acquisition of property” in entry 36 does not inherently carry an obligation to pay compensation. Clause (4) of article 31 envisions a law authorising acquisition of property that contravenes clause (2) by lacking a public purpose or compensation, and clause (5)(b) similarly excepts certain categories.

The passage explained that clause (5)(b) of article 31, by excluding certain “laws” from the operation of clause (2), explicitly contemplated statutes that could be enacted without a public purpose and without providing compensation. Accordingly, such statutes could be enacted by a State Legislature only under entry 36 of List II, and that entry therefore had to be understood as granting a legislative power that was not limited by any implied restriction. It was submitted that the statutes referred to in sub-clause (b) of clause (5) might be statutes made in the exercise of the State’s taxing power or its police power, and that the sub-clause had been inserted merely as a precaution. The Court found this argument unsatisfactory. Even if a taxing law were at issue, the source of the legislative power for statutes falling under heads (2) and (3) of sub-clause (b) necessarily derived from, and must be measured against, the legislative competence conferred by entry 36 of List II, insofar as those statutes intended to authorise the acquisition of any property. The police power of a State, the Court observed, is a general authority to regulate and control the exercise of private rights and liberties in the interest of the community and does not constitute a distinct head of legislative power. Moreover, that line of reasoning did not apply to clause (4). The Court further rejected the proposition that the position of the zamindars improved by reading entry 36 of List II together with entry 42 of List III. It had been argued that the phrase “subject to the provisions of entry 42 in List III” meant that the law-making power under entry 36 could be exercised only if two conditions—public purpose and payment of compensation—were satisfied, as those conditions appear in entry 42. The Court held that those words merely indicated that any law made under entry 36 by a State Legislature could be displaced or overridden by a Union law made under entry 42 of List III. This interpretation could not support the construction advanced by Mr Das, because similar wording does not appear in entry 33 of List I, which grants Parliament the power to make laws concerning acquisition or requisitioning of property for Union purposes. If the restrictive conditions of public purpose and compensation were to be derived solely from the phrasing in entry 42, then the absence of such phrasing in entry 33 would imply that Parliament could enact acquisition or requisition statutes without a public purpose or compensation provision. No justification was offered for allowing Parliament to be free from those restrictions while imposing them on State legislation. The Court concluded that the law-making powers of both Parliament and State Legislatures are subject to the two restrictions—public purpose and compensation—by virtue of the substantive provisions of article 31(2), not because of any language contained in the entries themselves.

The Court held that the protection available to certain statutes does not stem from the statutes themselves but from the positive provisions of Article 31(2). Because statutes that fall under Article 31(4) or under Articles 31-A and 31-B are insulated from judicial challenge for non-compliance with those provisions, such statutes cannot be declared unconstitutional or void. It was further submitted that the authority to enact legislation under entry 42 of List III was a power coupled with a duty, on the basis that the law was clearly intended to benefit the owners whose property was being taken. The argument asserted that once the Legislature authorised the expropriation, it was also bound to prescribe the principles by which those owners should be compensated for their loss. Support for this novel contention was placed on the well-known case of Julius v. Bishop of Oxford (L.R. 5 H.L. 214). The Court observed that the cited case had no application in the present context. While certain powers may be granted to be exercised for the benefit of designated persons and may therefore be regarded as coupled with a duty to act when appropriate, the power given to a Legislature to make a law on any matter cannot be placed in that category. The Court reasoned that it could not have been intended for a Legislature to be under a judicially enforceable obligation to enact a law, because no court can compel a legislative body to exercise such a power.

The argument advanced by counsel relying on clause (3) of Article 31 was likewise found to be untenable. Although the term “Legislature” of a State includes the Governor and a bill passed by that Legislature does not become a law until the Governor gives his assent, Article 200 provides three possible courses for the Governor when a bill is presented after passage by the House or Houses of the Legislature: (1) to give his assent, (2) to withhold assent, or (3) to reserve the bill for the President’s consideration. The first proviso deals with situations where the Governor is bound to give assent and is therefore irrelevant here. The second proviso makes reservation compulsory only where the bill, if it became law, would derogate from the powers of the High Court, and such reservation must be made without the Governor himself giving assent to the bill. The Constitution does not contemplate a scenario in which the Governor first gives assent and, after the bill has become a full-fledged law, reserves it for the President’s consideration. In fact, the Governor is prohibited from giving assent when a compulsory reservation is required. Consequently, the constitutional scheme appears to apply solely to “bills” that have been passed by the Legislature but have not yet received the Governor’s assent.

In this case, the Court observed that the Constitution contemplates the reservation of a bill presented by a House or Houses of the Legislature for the President’s consideration, and it does not speak of reserving a law to which the Governor has already given his assent. It had been argued that article 31(3) creates a special safeguard against hasty or unfair expropriatory legislation by requiring the assent of both the Governor and the President, and that the deliberate use of the words “law” and “legislature” in clause (3) supports this view. The Court rejected that interpretation. It noted that the term “legislature” is not uniformly employed in the Constitution to include the Governor, even though article 168 makes the Governor a component of the State Legislature. For example, article 173 uses the word in the sense of the “House of the legislature” and thereby excludes the Governor. Several other provisions also employ the term in contexts that leave the Governor out. Likewise, the word “law” is sometimes used loosely to refer to a bill. Article 31(4) speaks of a “bill” being reserved for the President’s assent after it has been passed by the “legislature of a State” and also mentions the “law so assented to”. If “passed by the legislature” were read to mean “passed by the Houses and assented to by the Governor”, the instrument would no longer be a bill and could not be reserved as such. Moreover, the expression “law so assented to” is not accurate in that clause because the reservation and the President’s assent pertain to a bill, not to a law; the phrase actually refers to the law that results after the President’s assent.

The Court further explained that article 31(3) must be understood in its historical sequence: a measure first passes the House or Houses of the State Legislature, then the Governor may, if required, reserve it for the President’s consideration, and finally the President’s assent turns the bill into a law. If the Constitution had intended that a law required the assent of both the Governor and the President, a clearer or more explicit provision would have been present, and article 200 would contain a reference to the Governor’s power to reserve a measure after his own assent. The Court also pointed out that where the Governor’s reservation is compulsory, he is barred from giving his assent. Consequently, having decided that the objections based on the absence of a public purpose and the failure to provide just compensation are barred by article 31(4) and lack merit, the Court found it unnecessary to examine further what constitutes a public purpose or whether the acquisition authorized by the impugned statutes serves such a purpose.

In this case the Court observed that it was unnecessary to examine whether the statutes provided for a public purpose, nor was it required to determine whether the compensation scheme designed by the statutes was so illusory that expropriated owners would receive no real compensation for the loss of their property. The Court then turned to the specific issues raised in the individual petitions. The petitioner, identified as Mr. Das, argued that section 4(b) of the Bihar Act, which provides that all arrears of rent, royalties and cesses due for any period prior to the date of vesting of the estates in the Government “shall vest and be recoverable by the State,” was unconstitutional and void. The petitioner contended that there was no public purpose served by the acquisition of such property, noting that the Government apparently lacked the funds to pay even the nominal compensation prescribed in the Act and therefore resorted to acquiring the arrears on payment of only fifty per cent of their value as provided in section 24. The petitioner further maintained that raising funds for the Treasury could not be regarded as a public purpose sufficient to justify the expropriation of private property.

The petitioner also argued that the arrears represented a sum of money, and that money could not be subject to compulsory acquisition because the obligation to pay compensation would, in effect, turn such acquisition into a forced loan. He claimed that paying only fifty per cent of the face value of the arrears could not constitute compensation for the loss of the full amount, because refunding half of a sum taken away could never make good the loss of the balance. The Court rejected this line of argument as based on a misconception. It held that, irrespective of the position on the acquisition of money per se, it was not correct to say that a law made under entry 36 of List II could not authorize the acquisition of choses in action such as arrears of rent due from tenants, since the term “property” used in that entry and in article 31 includes such rights. Moreover, the Court found it fallacious to assert that payment in cash or Government bonds of half the amount of such arrears left the zamindar without compensation for the balance.

The Court explained that it was unrealistic to assume that arrears which had remained uncollected for years, during which the zamindar as landlord enjoyed summary remedies and other collection facilities, represented a large sum of money or equivalent value in his hands at the moment he ceased to be a landlord and lost those remedies. Taking into account the doubtful and irrecoverable portions of the arrears and the trouble and expense involved in collecting the remainder, the Court concluded that paying fifty per cent of the face value of the entire arrears was reasonable and fair compensation for the State’s taking of those rights. The Court further observed that the contention seemed to overlook any real advantage that zamindars might obtain by seeking to overturn this provision of the Act. Consequently, because article 31(4) barred a challenge on the grounds raised, the objections to section 4(b) could not be entertained.

Such a measure may indeed prove beneficial to them, yet, for the reasons already indicated, article 31(4) prohibits a challenge on those two grounds and the objections to section 4(b) cannot be entertained.

The Court also examined an attack on section 23(1)(f), which authorises a percentage deduction from the gross assets in the amount described as “cost of works of benefit to the raiyats of such estate or tenure” when calculating the net assets on which compensation is to be based. The challengers asserted that there was no evidence that zamindars customarily incurred such expenditure and contended that the deduction amounted to a mere contrivance designed to reduce the compensation payable for the acquisition of their estates. They further claimed that the provision for such a deduction constituted a fraud on the Constitution. The Court, however, observed that the argument overlooks the well-established duty of zamindars to maintain and repair the irrigation tanks and channels serving the villages comprised in their estates. As the Privy Council observed in The Madras Railway Co. v. Zamindar of Carvatenagaram (1874) 1 I.A. 364, “the zamindars have no power to do away with these tanks in the maintenance of which large numbers of people are interested, but are large, under Indian law, by reason of their tenure, with the duty of preserving and repairing them.” Those works clearly benefit the raiyats of the estate, and the cost that zamindars are obligated to bear therefore represents a legitimate deduction in computing the estate’s net assets. If the zamindars had, in the past, neglected this duty, that fact does not affect the propriety of the deduction before determining the compensation payable to them. Consequently, it is idle to describe the deduction as a mere contrivance intended to reduce compensation. Moreover, the Court noted that, as it has endeavoured to show, payment of compensation is not a justiciable issue in the case of the impugned statutes, having regard to articles 31(4), 31A and 31-B; consequently, the Court is not permitted to inquire whether a deduction that reduces compensation is unwarranted or constitutes a fraud on the Constitution.

Finally, the Court considered the attack on section 32(2) read with section 43(2)(p). Under section 32(2) compensation could be paid in cash, in bonds, or partly in cash and partly in bonds; the bonds were to be either negotiable or non-negotiable, non-transferable, and payable in forty equal instalments. Section 43(2)(p) empowered the State Government to make rules specifying “the proportion in which compensation shall be payable in cash and in bonds and the manner of payment of such compensation.” The challengers argued that, although the Constitution granted legislatures under entry 42 of List III the power to enact laws concerning the principles that determine compensation for acquired property and the form and manner of its disbursement, the Bihar Legislature had improperly delegated this essential legislative power to the executive. They maintained that because section 43(2)(p) was thus void, section 32(2) was also untenable, vague, and could not be given effect, and that, since payment of compensation formed an inseparable part of the acquisition scheme, the entire Act should be struck down. The Court found no merit in that argument, observing that the legislature had thoughtfully addressed the form of compensation, fixed the number of equal instalments, and provided for interest on the amount pending payment, while leaving the exact cash-bond proportion and instalment intervals to the executive, which must consider the State’s financial resources and fund availability.

The Court observed that the Constitution required the Bihar Legislature to determine the manner in which compensation should be paid, and therefore it could not lawfully delegate this essential legislative function to the executive government. Because Section 43(2)(p) delegated such power, the Court held that the provision was void and could not operate. Consequently, Section 32(2), which depended on Section 43(2)(p) and was described as vague and incapable of being applied on its own, also fell. Since the payment of compensation formed an inseparable part of the acquisition scheme created by the Act, the Court concluded that the entire Act could not stand. The Court rejected the contention that the legislation was invalid on this ground. It noted that the Legislature had deliberately considered the form of compensation, fixing the number of equal instalments in which the payment should be made, and had also provided for the payment of interest on the compensation amount during the interim period. The Legislature left to the executive government the task of deciding the proportion of compensation payable in cash versus bonds and the timing of each instalment, because those decisions necessarily depended on the State’s financial resources and the availability of funds—matters for which the executive possessed special knowledge. The Court held that, under any acceptable standard of permissible delegation, the legislature’s limited discretion to entrust such determinations to an administrative body could not be deemed incompetent. The same reasoning was applied to the rule-making powers related to compensation under the other two Acts. The Court then turned to the argument raised by counsel that the Madhya Pradesh Act had not been properly passed because the Speaker had failed to put the motion to a vote at the third reading, as required by Rule 20(1) of the rules governing legislative business then in force, and that this omission was not a mere “irregularity of procedure” which the Constitution, under article 212(1), prohibited the Court from examining. Rule 20(1) provided: “A matter requiring the decision of the Assembly shall be decided by means of a question put by the Speaker on a motion made by a member.” The Court examined what had occurred in that case. One of the Ministers moved that “The C. P. and Berar Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Bill 1949, (No. 64 of 1949) as considered by the House be passed into law.” The Speaker then read the motion to the House, after which several speeches were delivered praising the measure and welcoming it as a great benefit to cultivators. However, the official report of the proceedings prepared by the Secretary under Rule 115(1) did not record that the Speaker had put the question in the usual form, such as “The question is…,” nor did it note that the motion had been carried. It was argued that, because the official report was the only “authentic record of the proceedings of the Assembly” under Rule 115(2), it must be taken as conclusive proof that the motion had not been formally put to the House and recorded as carried.

The Court examined the allegation that the motion had never been formally presented to the House and therefore had not been carried. It concluded that this objection had no substance. The Court observed that the original Bill, signed and authenticated by the Speaker, had been produced before it. That Bill bore an endorsement by the Speaker indicating that the Bill was passed by the Assembly on 5 April 1950. The endorsement itself was signed by the Speaker on 10 May 1950. The official report of the proceedings was prepared later, on 21 June 1950, and was signed by the Speaker on 1 October 1950. When the Speaker signed the report, he apparently did not notice the omission of the customary wording that the motion had been put and carried. The Court held that such an omission could not, in view of the explicit endorsement on the Bill, be construed to show that the Bill had not been put before the House and carried. Even assuming that the motion had not been formally moved, the Court described the omission as a mere procedural irregularity, because it was not disputed that an overwhelming majority of members present and voting had supported the motion and no dissenting voice was raised.

The Court then turned to the contention raised by Mr Somayya concerning the status of malguzari lands under the Madhya Pradesh Act. Mr Somayya argued that articles 31-A and 31-B of the Constitution could not assist the Government because such lands were not “estates” within the meaning of clause (2) of article 31-A, and therefore the objection based on article 14, alleging discriminatory compensation, should prevail. The Court recalled that the Patna High Court had held the Bihar Act unconstitutional for being discriminatory in its compensation scheme, and that articles 31-A and 31-B were inserted in the Constitution to overcome that difficulty. The learned Advocate-General of Madhya Pradesh conceded that the malguzari lands could not be regarded as estates under article 31-A read with the Tenancy Act in force in Madhya Pradesh, but he contended that article 31-B specifically validated the Madhya Pradesh Act among others and was not limited in its application to estates, so the objection could not succeed. Mr Somayya countered by pointing to the opening words of article 31-B, “Without prejudice to the generality of the provisions contained in article 31-A,” asserting that the mention of particular statutes in article 31-B and the Ninth Schedule was merely illustrative and that article 31-B could not be given a wider scope. He relied on the Privy Council decision in Sibnath Banerji’s case (1945) F.C.R. 195 (P.C.) for support. The Court could not agree with that view. It observed that nothing in article 31-B indicated that the specific mention of certain statutes was intended only as an illustration of the general words of article 31-A. The opening words of

In the judgment the Court explained that the opening words of article 31-B are meant only to confirm that article 31-A must not be limited by any provision contained in article 31-B, and that those words are not intended to restrict the operation of article 31-B itself or of the statutes mentioned therein in relation to the acquisition of “estates.” The Court noted that the decision cited by the submitters did not provide a relevant parallel. In several cases the property sought to be taken over was located in territory that formerly belonged to Indian princely states and was owned by the former rulers of those states. When those states merged into Madhya Praadesh or Uttar Praadesh, the “covenant of merger” executed between the rulers and the Government of India recognized the lands in question as the “Private Property” of the rulers. It was argued in those proceedings that the estates formed part of the rulers’ “personal rights” guaranteed by the merger instrument and that neither the statutes challenged nor the notifications issued under them could deprive the ruler of such property without violating article 362. The Attorney-General responded to this contention by invoking article 363, which bars judicial interference in disputes arising out of agreements and covenants to which the Government of India is a party. However, the Court observed that a straightforward answer is that no guarantee or assurance given under the covenant of merger was infringed, because the lands were being taken only as the private property of the rulers, not as any other category of interest. Consequently, any compensation payable under the statute is merely recognition of the rulers’ private ownership, just as it would be for any other landowner, and the objection therefore lacks any force. In Appeal No. 285 of 1951, filed by the Raja of Kapurthala, a similar argument was raised, asserting that the ruler’s privy purse had been fixed at a low amount because the Oudh Estate remained his private property, and that compulsory acquisition would prevent him from meeting his family’s financial obligations. The Court found that no material was offered to substantiate this allegation and therefore refused to consider it. The Court also observed that a number of other minor points were raised in various cases, but these points were either based on misunderstandings or were manifestly unsound, and thus did not merit discussion. Accordingly, the Court concluded that every objection raised to the constitutional validity of the Bihar Land Reforms Act, the Madhya Praadesh Act and the Uttar Praadesh Act, or any part thereof, must fail and were therefore overruled. The judgment, delivered by Justice Mahajan, further noted that the present appeal is filed under article 132(3) of the Constitution of India against a Full Bench judgment of the Patna High Court dated 12 March 1951, which had declared the Bihar…

In this case the Court noted that the High Court had upheld the respondent on every point except the allegation that the Bihar Land Reforms Act, 1950 was ultra vires because it violated article 14 of the Constitution. The Court described the legislative history of the Act, stating that on 30 December 1949 a Bill named the Bihar Land Reforms Bill was introduced in the Legislative Assembly of Bihar, passed by both Houses of the Legislature, and after being reserved for the President of India received the President’s assent on 11 September 1950. The Act was then published in the Bihar Government Gazette on 25 September 1950, and on that same day a notification under section 1(3) of the Act declared that the Act would come into force immediately. A further notification under section 3 of the Act was issued on the same day, stating that the estate and tenures belonging to the respondent and two other persons passed to and became vested in the State of Bihar under the provisions of the Act. The respondent subsequently filed a petition in the High Court of Judicature at Patna under article 226 of the Constitution, challenging the constitutionality of the Bihar Land Reforms Act and seeking a writ of mandamus restraining the State of Bihar from acting under any provision of the Act. That petition was heard together with three title suits and other similar applications filed by various zamindars of Bihar before a Special Bench of the High Court. By three separate but concurring judgments the Court declared the Act unconstitutional and void on the ground that it infringed the fundamental right guaranteed by article 14. The High Court had considered the validity of the Act on seven specific grounds: (1) that the Bihar Legislature lacked competence to pass the legislation; (2) that it contravened clause (1) of article 31; (3) that the vesting of estates in the State amounted to an acquisition not made for a public purpose and that any compensation provision was illusory; (4) that it infringed article 19(1)(f); (5) that certain provisions represented an improper delegation of legislative power; (6) that the Act constituted a fraud on the Constitution; and (7) that it violated article 14. The Court ultimately held that (1) the Bihar Legislature was competent to enact the law; (2) the Act did not contravene article 31(1); (3) the acquisition of the estate and tenures was for a public purpose; (4) the subject-matter fell within the scope of article 31(4); (5) article 19(1)(f) was inapplicable; (6) the delegation of powers to the executive was permissible; (7) the Act was not a fraud on the Constitution; and (8) that the Act was not unconstitutional for contravening article 14.

The Court noted that the Act had been declared unconstitutional because it violated article 14 of the Constitution. While the appeal against the High Court’s decision was pending, the Union Government introduced a Bill intended to terminate the zamindars’ litigation. This Bill was enacted as the Constitution (First Amendment) Act, 1951, after obtaining the requisite majority in Parliament. The zamindars subsequently filed petitions under article 32 of the Constitution challenging the Amendment Act itself on the ground that it was unconstitutional and void. On 5 October 1951, the Court dismissed all those petitions and held that the Constitution (First Amendment) Act, 1951, had been validly enacted. Consequently, the argument that the Bihar Act was unconstitutional on the basis that it contravened articles 14, 19, or 31 of the Constitution could no longer survive, and the Act could not be attacked on any such ground. Since the High Court had struck down the Act solely on the ground that it breached article 14, the basis for declaring the Act unconstitutional was no longer tenable, and therefore the High Court’s decision should be reversed if the Court agrees with the High Court on the points decided against the respondent.

Counsel for the respondent, Mr. P. R. Das, openly admitted that at this stage no objection could be raised to the validity of the Act on the ground that it violated any provision of Part III of the Constitution. Nonetheless, he supported the High Court’s decision on the other grounds that had been decided against him and advanced the following arguments: first, that the Bihar State Legislature lacked the competence to enact the impugned Act; second, that the acquisition of the estates was not for a public purpose and therefore the Act was unconstitutional; third, that various sections of the Act delegated legislative power to the executive, an abdication that he claimed was unconstitutional; and fourth, that the Act constituted a fraud on the Constitution and that certain provisions were unenforceable because they were vague and indefinite. The core of counsel’s challenge to the validity of the Act rested on the contention that entry 36 of List II of the Seventh Schedule implicitly required that property could not be acquired without payment of compensation. He argued that the compulsory power to acquire property carried an inherent obligation to pay compensation, making the power to acquire inseparable from the duty to compensate, and that the statutory provisions failed to meet this requirement.

In this part of the judgment the Court observed that when the provisions concerning payment of compensation are merely illusory, they render the statute unconstitutional. The Court then turned to article 31(2) of the Constitution, noting that this article protects the fundamental right to property and does so by using negative language. By contrast, entry 36 of the Seventh Schedule is expressed in affirmative terms. The Court explained that although articles 31(4), 31-A and 31-B strip an expropriated owner of certain rights guaranteed in Part III of the Constitution, they do not enlarge the scope of entry 36 nor authorize a State legislature to enact a law that permits compulsory acquisition of property without a genuine right to compensation. The Court placed special emphasis on the phrase “subject to the provisions of entry 42” that appears in entry 36. It was contended that the legislative authority conferred by entry 36 can be exercised only together with, and is dependent upon, the authority under entry 42, and that the two entries must be read as assuming that any acquisition will be accompanied by payment of compensation. Further, it was pleaded that the power in entry 42 carries with it a coupled duty, obligating the legislature to act for the benefit of the person whose property is taken under the authority of entry 36. The Court also noted the submission that the Bihar Legislature had legislated under both entry 36 and entry 42 with the intention that any acquisition would be conditional upon payment of compensation. However, if it becomes evident that the statutory provisions on compensation are illusory, that portion of the Act would be void, and because the legislature could not have intended to pass a truncated law that survives without those compensation provisions, the entire Act should be held unconstitutional. The Court then indicated that to understand the arguments raised by Mr Das regarding the competence of the Bihar Legislature to enact the Bihar Land Reforms Act, 1950, it was necessary to examine the Act’s provisions and the subjects on which the legislature attempted to legislate. The title of the Act shows that it was intended to bring about a form of land reform in Bihar. Its preamble, however, does not specify the exact nature of the reforms, except that it provides for the creation of a Land Commission to advise the State Government on agrarian policy, whatever that term may mean. The dominant objective of the Act, as the Court observed, is to transfer to the State the interests of land proprietors and tenure-holders, as well as those of mortgagees and lessees, including interests in trees, forests, fisheries, jalkars, ferries, huts, bazaars, mines and minerals. Finally, Section 3 of the Act empowers the Government, by way of periodic notification, to declare that the estates or tenures mentioned in the Act have passed and become vested in the State.

Section 4 described the consequences that followed the vesting of an estate or tenure. It provided that the interests of any proprietor or tenure-holder in a building or part of a building that formed part of such estate or tenure, and that was used principally as an office or cutchery for the collection of rent, as well as the proprietor’s interests in trees, forests, fisheries, jalkars, huts, bazars, ferries and all other sairati interests, and also the proprietor’s interest in the subsoil including any rights to minerals—whether those minerals were discovered or undiscovered, being worked or not, and including the rights of a lessee of mines and minerals—were to vest absolutely in the State free from all encumbrances, except for the interests of raiyats or those held under raiyats. Clause (b) further provided that all areas of rent, including royalties, all cesses and any interest on those amounts that were due for any period before the date of vesting, and that were still recoverable because they were not barred by any law of limitation, would vest in and become recoverable by the State. The expression “arrears of rent” was explained to include arrears for which suits were pending on the date of vesting, or for which decrees—whether rent decrees or money decrees—had been obtained before that date, had not been satisfied, and were not barred by limitation; the definition also covered the costs allowed by such decrees. In other words, every outstanding sum that was in the nature of rent or a rent decree, and that was due to the proprietor or tenure-holder before the State acquired any right, title or interest in the estate, would also pass to the State. This result was described as a peculiar and extraordinary consequence of vesting, because ordinarily such financial consequences were not regarded as an incident of the transfer of estates. The clause therefore operated as an independent provision stating that monies due to the proprietor or tenure-holder for periods preceding the vesting, whether being realised through private effort or through pending suits or decrees, together with the costs of those suits and decrees, would be forfeited to the State. Clause (c) retained the liability of proprietors or tenure-holders for the payment of arrears of revenue and cesses that were owed to the Government prior to the date of vesting. Additional effects of the vesting were that no suit could be filed to recover any money from a proprietor or tenure-holder that was secured by a mortgage or charge on the estate, and that no estate or tenure covered by the Act could be subjected to attachment. Finally, the Collector was given the authority to take charge of the estate and to inspect any documents and accounts that he deemed necessary for its management.

Section 5 of the Act allowed proprietors and tenure-holders to keep their homesteads, but only on the condition that they occupied them as tenants who were not required to pay any rent. Section 6 then permitted those individuals to continue possessing lands that were either already in their possession or held by lessees beneath them, provided that they paid rent to the State in the form of raiyats, thereby becoming occupancy tenants. Under Section 7, the Act stipulated that any buildings together with the land on which those buildings stood, when such premises were in the possession of proprietors or tenure-holders and were being used as golas, factories or mills, could be retained by those persons upon payment of rent to the State. Section 8 granted a right of appeal to any party who was aggrieved by an order issued by the Collector. Section 9 dealt with mines that were part of an estate or tenure at the commencement of the Act; it declared that mines which were actually being worked at that time by the proprietor or tenure-holder were to be treated as if the State Government had leased them to the proprietor or tenure-holder. The provision expressly excluded from its coverage mines on which large sums of money might have been spent but which were not in actual operation. To give effect to this limitation, the Act introduced an artificial definition in Section 2, sub-clause (m), describing “mines in operation” as those mines for which a notice had been served on the Government under the Indian Mines Act. Section 10 preserved any existing leases of mines and minerals, deeming the lessee to be a lessee of the Government. Buildings and lands that were appurtenant to a mine were transferred to the State by the operation of Section 11, and from the date of vesting they were deemed to be leased by the State to the lessee. Section 12 provided for the constitution of a Mines Tribunal, while Section 13 set out the manner in which the estates and tenures that vested in the State were to be managed. Sections 14, 15, 16, 17 and 18 made provisions relating to the investigation of debts owed by proprietors and tenure-holders and laid down the procedural steps for the payment of those debts. Section 19 provided for the appointment of a compensation officer. Sections 20 and 21 dealt with specific procedural directions that the compensation officer had to follow when a proprietor possessed only a certain share in an estate or when certain trusts had been created by the tenure-holder or proprietor. Section 22 defined the terms “previous agricultural year” and “gross assets” as they applied to a proprietor or tenure-holder. In the Act, “gross assets” meant the total of the rents, including all cesses, that were payable in respect of the estates or tenures of such a proprietor or tenure-holder for the previous agricultural year, regardless of whether the payment was made by a subordinate tenant or by the raiyats. The provision also detailed the assessment of those rents and expressly included in the expression “gross assets” the gross income of the previous agricultural years derived from fisheries, trees, jalkars, ferries, huts, bazaars and sairati interests.

In this case the Court explained that the gross income derived from forest land must be determined by averaging the gross annual incomes of the preceding twenty-five agricultural years. The average is to be taken for the agricultural year in which the date of vesting occurs, and the calculation must reflect the amount the forests would have yielded if, during those twenty-five years, they had been placed under the management of the State, as judged by a forest officer. Section 23 of the Act then sets out the procedure for computing net income. According to that provision, the net income of a proprietor or a tenure-holder is arrived at by deducting certain specified amounts from the gross assets of the proprietor or tenure-holder, as the case may be. The deductions enumerated are: first, any sum payable as land revenue or rent; second, any sum payable by the proprietor as agricultural income-tax in respect of any agricultural income derived from the estate or tenure for the previous agricultural year; third, any sum payable by the proprietor or tenure-holder as income-tax on any income derived from the estate or tenure, other than royalties, for the previous agricultural year; fourth, any sum payable as chaukidari tax or municipal tax; and fifth, the cost of management of the estate or tenure, which is to be charged at rates that vary between five per cent and twenty per cent according to the amount of the gross asset. The legislation fixes a minimum management charge of Rs 2,000 and a maximum charge for any amount that exceeds Rs 15,000. The Court observed that these rates appear to have been fixed arbitrarily and have no connection with the actual cost of management. To illustrate the effect of the formula, the Court referred to the estate of the Maharaja of Darbhanga, whose gross income was nearly Rs 48 lakhs. Under the statutory calculation the management cost would be assessed at approximately Rs 9.5 lakhs, a figure that the Court described as startling and apparently unrelated to the real expenses incurred. Normally, the expense ratio for management would be lowest when gross income is highest and would increase only as gross income falls. However, the Act reverses this economic principle, resulting in a portion of the money that should, according to compensation principles, be payable to the proprietor or tenure-holder being effectively forfeited by this artificial reduction of net income. Clause (f) of the same section provides for an additional deduction from gross assets for the cost of works that benefit the raiyats of the estate or tenure. This deduction is allowed at rates ranging from four per cent to twelve and a half per cent. The lower rate of four per cent applies where the gross asset does not exceed Rs 5,000, while the higher rate of twelve and a half per cent applies if the gross asset exceeds Rs 25,000. The Court found that calculating the cost of such beneficial works at a flat rate, without reference to the actual expenses that might have been incurred, creates a confiscatory provision. This flat-rate deduction, combined with the other deductions, artificially lowers the net income that forms the basis for assessing compensation.

In this provision, the effect was to lower the net income that served as the basis for computing compensation. Clause (g) of the same section permitted deduction of any other tax or legal charge that was payable in respect of the estate or tenure but not specifically listed in the earlier clauses. Section 24 then set out the procedure for determining the amount of compensation owed to the proprietor or tenure-holder. It introduced a sliding scale for the assessment. When the net income was Rs 500 or less, the compensation was fixed at twenty times that net income; when the net income exceeded Rs 1,00,000, the compensation was limited to three times the net income, resulting in a nominal payment. The judgment illustrated this scheme with the example of the Maharaja of Darbhanga. The estate that had been acquired included land that the Maharaja had bought for approximately one crore rupees, as well as mortgages amounting to about half a crore. All of these assets, together with the inherited zamindaris and arrears of rent totaling Rs 30,00,000, passed to the State of Bihar, yet the total compensation calculated under the Act was only about Rs 9,00,000. Section 24 further directed that to the amount determined by the sliding scale, fifty per cent of the arrears of rent mentioned in clause (b) of Section 4 must be added, along with any compensation payable for mines and minerals as fixed under Section 25. The same section also prescribed the method of assessing compensation for persons who held only a share in a zamindari, or who possessed other minor interests in a trust-held estate, or whose interests were of an impartible nature. For mines and minerals, Section 25 gave the rule for assessment, stating that the amount could be fixed either by agreement of the parties or by a tribunal appointed for that purpose. Subsequent provisions required the preparation of a compensation roll and provided for the hearing of appeals. Section 32 specified how compensation should be paid. Sub-section (2) allowed payment either wholly in cash, wholly in bonds, or partly in cash and partly in bonds. The bonds could be negotiable or non-negotiable, were to be non-transferable, and were payable in forty equal installments to the named person, bearing interest at two and a half per cent per annum from the date of issue. Any disputes concerning compensation between proprietors or tenure-holders were to be resolved by a tribunal appointed by the State Government. Section 34 created the Bihar Land Commission to oversee implementation of the Act. The remaining provisions were of a miscellaneous character and did not require special description. The final section empowered the State Government to formulate rules necessary for the execution of the Act’s provisions. From this survey of the Act it appears that the law

The Court observed that the enactment could be said to touch upon many subjects listed in the legislative tables. These subjects include rights in land, land tenures, forests, fisheries, mines, minerals, acquisition of property, and the principles for determining compensation for acquired property. In the Court’s view, however, the core purpose of the legislation is the transfer of ownership of estates to the State Government, which falls within legislative head entry thirty-six of List II. The Court noted that the statute contains no comprehensive land-reform scheme, only a hopeful statement that the commission might eventually formulate one. The Court concluded that the Bihar Legislature possessed the authority to enact the law concerning transfer of estates and that, with respect to such transfers, the Act is constitutionally valid. Section forty-two of the Act further provides for the recovery of rent arrears that were due before the estates were vested in the zamindaris. It also directs that fifty percent of the recovered amount be surrendered to the State treasury as revenue. The Court also observed that, indirectly, the Act causes the State treasury to forfeit the portion of compensation that would otherwise be payable to proprietors or tenure-holders. This occurs because the net income is reduced by deductions of artificial items that have no relation to genuine expenses. Both of these provisions, according to the Court, will be examined separately later, and the Court expressed the opinion that the enactment of these provisions is unconstitutional.

Having held that the Bihar Act is constitutionally valid insofar as it relates to the transfer of estates under legislative head thirty-six of List II, the Court turned to the argument advanced by Mr. Das. Mr. Das contended that the power granted to the legislature by entry thirty-six inherently includes a corresponding duty to pay compensation. He further argued that because the statutory provisions concerning compensation are illusory, the Act should be struck down as unconstitutional. He further argued that article thirty-one clause four of the Constitution does not provide protection against this challenge. The Court sought to properly assess Mr. P. R. Das’s proposition that the duty to pay compensation is implicit in entry eighty-six of List II of the Seventh Schedule, the Court considered the historical origin of the State’s power of compulsory acquisition as a sovereign function. The Court reiterated that this power is a sovereign attribute of the State, exercised since ancient times for public purposes. Citing Kent, the Court noted that this power has been described as an inherent sovereign power in legal literature. The Court further explained that a necessary incident of this sovereign power is the requirement that property cannot be taken for public use without the payment of just compensation. Mr. Broom, in his work on Constitutional Law, said, “ Next in degree to the right of personal liberty is that of enjoying private property without”.

Undue interference or molestation of private property is prohibited, and the rule that property may not be taken for public use without just compensation re-affirms the long-standing common-law doctrine that protects private ownership. This rule rests on natural equity and is expressed as a principle of universal law. In the words of Lord Atkinson in Central Control Board v. Cannon Brewery Co. Ltd. (1919) A.C. 744, the power to take compulsorily “raises by implication a right to payment.” On the European continent the authority to acquire property compulsorily is commonly described as “eminent domain.” The expression appears to have been coined in 1525 by Hugo Grotius in his treatise De Jure Belli et Pacis, where he wrote: “The property of subjects is under the eminent domain of the State, so that the State or he who acts for it may use and even alienate and destroy such property, not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility, to which ends those who founded civil society must be supposed to have intended that private ends should give way. But it is to be added that when this is done the State is bound to make good the loss to those who lose their property.”

The connection between an individual’s entitlement to compensation and the sovereign’s power to condemn is examined in Thayer’s Cases on Constitutional Law (Vol. I, p. 953) as quoted on page 3 of Nichols on Eminent Domain: “But while this obligation (to make compensation) is thus well established and clear, let it be particularly noticed upon what ground it stands, viz., upon the natural rights of the individual. On the other hand, the right of the State to take springs from a different source, viz. a necessity of government. These two, therefore have not the same origin; they do not come, for instance, from any implied contract between the State and the individual, that the former shall have the property, if it will make compensation; the right is no mere right of pre-emption, and it has no condition of compensation annexed to it, either precedent or subsequent; but there is a right to take, and attached to it as an incident, an obligation to make compensation; this latter, morally speaking, follows the other, indeed like a shadow but it is yet distinct from it, and flows from another source.” Stripped of all ancillary matters, the simplest definition of compulsory acquisition—or “eminent domain”—is the sovereign’s power to take property for public use without the owner’s consent. In its essential terms the power consists of (a) the authority to take, (b) without the owner’s consent, and (c) for a public purpose, while the notion of public use remains inseparably linked to the proper exercise of that authority.

In this discussion, the Court observed that the concept of compensation, while not forming part of the definition of the term itself, was nevertheless an indispensable component of any lawful exercise of the sovereign power to acquire property. It noted that judicial pronouncements have defined “eminent domain” so as to incorporate this universal limitation, and that authoritative sources uniformly support an expanded meaning of “eminent domain” as the power of the sovereign to take property for public use without the owner’s consent, provided that just compensation is paid. The Court therefore held that the duty to pay just compensation was an essential incident of the power of compulsory acquisition, a principle that was recognised both under English common law and under the continental doctrine of eminent domain, which later influenced American law. The principal issue before the Court was whether the obligation to pay compensation for compulsory acquisition was impliedly contained in the Constitution by virtue of the legislative entries in entry 36 of List II and entry 33 of List I, or whether that important obligation had been expressly set out elsewhere in the Constitution. The Court expressed the view that the Constitution elevated the duty to pay compensation for compulsory acquisition to the level of a fundamental right and expressly declared that any law failing to make provision for such payment would be void. It rejected the suggestion that the requirement might be inferred from the language of entry 36, pointing out that the Constitution itself, in article 31(2), explicitly provided for the payment of compensation. Since the duty to pay was incorporated as a mandatory part of legislation enacted under entry 33 of List I and entry 36 of List II, the Court could not accept the argument advanced by Mr P R Das that the obligation was inherent in the wording of entry 36. Agreeing with the Attorney-General, the Court explained that the notions of acquisition and compensation originated from different sources: the power to acquire stemmed from the sovereign authority of the State, whereas the right to compensation derived from the natural right of the individual deprived of property to be compensated for the loss. Accordingly, the power to take was mentioned in entry 36, while the condition that the power could be exercised only upon payment of compensation was embodied in article 31(2), and there was no implicit duty to pay compensation within the entry itself. The Court further referred to the Government of India Act, 1935, noting that section 299 of that statute imposed a limitation on the legislative power, and contrasted this with the Constitution’s explicit declaration that laws which failed to provide for compensation were void.

The Court observed that the Constitution declared any law that failed to provide compensation as void, and that this provision not only restrained legislative power but also gave a person whose property had been taken a right to approach the Supreme Court under article 32 for enforcement of his fundamental right. Consequently, the Court held that Mr Das was incorrect in arguing that a law made under the legislative authority of entry 36 of List I would be unconstitutional unless it expressly included a compensation provision, because entry 36 itself did not itself require a law to contain such a provision. It was further submitted that entry 36 of List II was connected with entry 42 of the Concurrent List by the words “subject to” appearing in the former, and that the validity of any statute enacted under entry 36 depended on a simultaneous exercise of the power under entry 42; since the challenged Act contained only an illusory mechanism for fixing compensation, the Court said the legislation under entry 36 could not stand. The Court found this argument unsound. It explained that the two entries were simply heads of legislative power and were neither inter-dependent nor complementary. According to article 31(2), it became mandatory to make a law providing compensation under entry 42 of the Concurrent List in order to give effect to a law enacted under entry 36, and this requirement did not arise from the presence of the words “subject to” in entry 36. The Court noted that no such phrase appeared in entry 33 of the Union List. It further observed that it would be unreasonable to claim that Parliament could pass a law for compulsory acquisition without also satisfying the condition of enacting a law under entry 42, although a State legislature faced a different position. The Court described the contention as untenable. It clarified that the expression “subject to” in entry 36 merely indicated that legislation made under that entry would be subordinate to any Parliament-enacted law made under entry 42 of the Concurrent List. Both Parliament and a State legislature could legislate under entry 42, but a Parliamentary statute would prevail over a conflicting State law. Hence, the reference to entry 42 in the State List entry 36 served to make a State law subordinate to a Parliamentary law on the same subject. In other words, whenever a State legislature passed a law under entry 36, that law would be subject to the provisions of a Parliamentary statute enacted under entry 42 of the Concurrent List. Finally, it was urged that the legislative power given in entry 42 of the Concurrent List was a power intended for the benefit of the owner whose property was taken, and that the legislature was bound to exercise that power for his benefit.

The Court observed that the argument asserting a legislative duty to benefit the ex-propriated owner, and that the legislature must exercise its compulsory power for that owner’s benefit, was essentially a claim that the power granted by the constitutional entry was coupled with an obligatory duty. In support of that claim, reference was made to the observation of Lord Cairns in Julius v. Bishop of Oxford (1880) 5 App. Cas. 214, where the principle stated that when a power is conferred in the nature of a trust, the holder of that power is bound to exercise it for the benefit of the cestui que trust. The Court held that such observations could not be applied to the exercise of legislative powers conferred by a constitution because the entries in the Seventh and Eighth Lists are merely heads of legislation and are of an enabling character. Consequently, a duty to exercise legislative power in a particular manner cannot be implied from a simple head of legislation. The Court further noted that if the learned counsel’s argument were correct, the Court could, in theory, issue a writ of mandamus directing the legislature to legislate under entry 42 when it chose not to. However, counsel for the State, when confronted with this proposition, conceded that it was untenable to argue that a legislature could be compelled to enact a statute against its will. The Court emphasized that a failure to make a law under entry 42 does not render a law made under entry 36 invalid. Accordingly, the Court concluded that the decision in Julius v. Bishop of Oxford has no relevance to the matter before it. The pivotal issue for determination in these appeals, the Court explained, was to assess the extent to which Article 31(4) of the Constitution, together with the newly inserted Articles 31-A and 31-B, have deprived the ex-propriated proprietor of his rights or remedies, including the guaranteed right to compensation for property acquired. Article 31(4) states that if a bill pending at the commencement of the Constitution in a State legislature was passed, reserved for the President’s consideration, and received his assent, then, notwithstanding any constitutional provision, that law may be challenged in any court on the ground that it contravenes clause (2). Articles 31-A and 31-B provide, respectively, that no law providing for State acquisition of any estate or rights therein shall be deemed void for being inconsistent with the rights guaranteed in the Constitution, except where such a law is made by a State legislature, in which case the protection of Article 31-A does not apply.

Unless a law that has been reserved for the President’s consideration subsequently receives his assent, the provisions set out in this article apply. The article defines two key terms. First, the term “estate” with respect to any local area is to be given the same meaning as the word or its local equivalent has in the existing law relating to land tenures that are in force in that area; the definition also embraces any jagir, inam, musafi or any other similar grant. Second, the term “rights” in relation to an estate is to include any rights that vest in a proprietor, a sub-proprietor, an under-proprietor, a tenure-holder or any other intermediary, as well as any rights or privileges concerning land revenue.

Article 31-B, without affecting the general scope of the provisions contained in article 31-A, provides that none of the Acts and Regulations listed in the Ninth Schedule, nor any of their provisions, shall be regarded as void or as having ever become void on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges, any of the rights conferred by any provision of this Part. Moreover, notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of those Acts and Regulations shall, subject to the power of a competent legislature to repeal or amend them, continue in force.

The language of article 31(4) is clear and unequivocal. It states that when a Bill has obtained the President’s assent in accordance with the procedure prescribed in articles 31(3) and 31(4), then, notwithstanding anything else in this Constitution, the law so enacted may not be called into question in any court on the ground that it contravenes the provisions of clause (2). To ascertain the extent of this protection, it is necessary to identify the specific provisions of clause (2) that clause (4) makes non-justiciable. A strict construction must be applied because the clause functions as a debarring provision.

In the Court’s view, the provisions of sub-clause (2) rendered non-justiciable by clause (4) relate to the determination of compensation and the payment of compensation. The overarching purpose of clause (4) is to make the obligation to pay compensation a condition precedent to any compulsory acquisition of property. The words that appear before “unless” merely describe the law, whose validity would be doubtful if it lacked a provision for determining and paying compensation for the property taken. The use of the word “such” supports this interpretation, indicating that the law must contain a specific provision for compensation to the expropriated proprietor. According to the Oxford Dictionary (Vol. 8, p. 1526), the term “provision” in statutes refers to what is expressly set out therein. Consequently, article 31(4) essentially provides that a breach of the express provisions of article 31(2) concerning the payment of compensation will not constitute a justiciable issue.

The Court observed that the clause contained no reference to any matter that might be implied from its language. It held that although the existence of a public purpose was undeniably an implied condition on the State’s exercise of compulsory acquisition powers, article 31(2) did not expressly make public purpose a condition precedent to acquisition. The provision was understood to assume that compulsory acquisition could occur only for a public purpose, and therefore that requirement was inherent in the power itself. Consequently, the Court concluded that article 31(4) did not deprive the courts of jurisdiction to inquire whether a law dealing with compulsory acquisition of property was invalid because the acquisition was not made for a public purpose. This view was consistent with the opinion of the learned judges of the Patna High Court. The Court emphasized that the sovereign power to acquire property compulsorily was limited to acquisition for a public purpose and that there was no sovereign authority to acquire private property for the benefit of private persons. Public purpose, the Court noted, formed part of the very substance of the power. In support of this principle, the Court referred to Willoughby’s Constitutional Law (page 795), which stated that “as between individuals, no necessity, however great, no exigency, however imminent, no improvement, however valuable, no refusal, however unneighbourly, no obstinacy, however unreasonable, no offers of compensation, however extravagant, can compel or require any man to part with an inch of his estate.” The Court further observed that public purpose was an essential element in the definition of eminent domain as explained by Nichols and other constitutional writers, even though the obligation to pay compensation was not part of that definition but had been added by judicial interpretation. The Court explained that the exercise of compulsory acquisition was conditioned on the existence of a public purpose; this condition, while not an express provision of article 31(2), existed independently in the content of the power itself and formed the assumption upon which the article operated. The Court therefore concluded that the scope of article 31(4) was limited to the express provisions of article 31(2). Courts could not examine the extent or adequacy of compensation provisions in statutes governing compulsory acquisition for public purpose, but the bar created by article 31(4) did not affect the courts’ power to determine whether the acquisition had been made for a public purpose. Moreover, the clause did not strip the courts of the authority to assess whether the legislature that enacted the law had acted within its competence under the appropriate lists, or whether it had merely pretended to act under a certain legislative head while actually exercising a different power. Regarding the newly introduced articles 31-A and 31-B, the Court noted that they merely placed beyond the reach of judicial scrutiny any enactment dealing with compulsory acquisition of property, thereby shielding such statutes from challenge under the provisions of Part III of the Constitution.

In that part of the judgment the Court observed that the Constitution barred the use of article 13(2) to attack statutes that dealt with compulsory acquisition of property, because such statutes might otherwise clash with the fundamental rights listed in Part III. Having already explained the meaning of article 31(4), the Court turned to the question of how far the protection in that provision extended to the statute that was being challenged. The Court noted that Mr Das argued, and that his argument was not substantially contested by the learned Attorney-General, that the compensation scheme contained in the impugned law was grossly unfair to certain persons and, in some instances, the compensation was merely a pretence. Nevertheless, the Court pointed out that the Constitution expressly prohibited a judicial inquiry into the adequacy or quantum of compensation. It recalled that the same Constituent Assembly had earlier guaranteed the right to compensation under article 31(2) and had provided a mechanism for enforcing that right through article 32, but had later withdrawn that remedy for the Bihar and other zamindari estates and had replaced it with the procedure laid down in articles 31(3) and 31(4). The Court emphasized that, however repugnant the law might appear to the sense of justice, the judiciary could not examine the amount of compensation prescribed by the statute. That task lay with the legislature, which could amend any provisions that were manifestly unjust or illusory. The Court explained that article 31(4) restrained the courts from entertaining any issue that the Constitution had declared non-justiciable, and that the courts could not indirectly revive such a matter by claiming that it was implicitly covered by another provision. The Court added that nothing in articles 31(4), 31-A or 31-B prevented the Court from looking into other questions that were not expressly removed from its jurisdiction.

The Court then stated that the crucial issue to be decided was whether the acquisition of the estates was made for a public purpose; if it was not, the law could be declared unconstitutional. The Court agreed with Mr Das that the power to acquire private property by legislation could be exercised only for a public purpose, whether that purpose belonged to the Union, to a State, or to any other public objective. private property could not be taken for a private purpose. The Court referred to entry 36 of the Constitution, which presupposed the existence of a public purpose for any such legislation, and noted that the contention was that the Act lacked such a purpose. The learned judges of the High Court had rejected this contention, holding that the question of whether a public purpose existed had been implicitly decided by the Constituent Assembly and therefore could not be reopened by the Court.

The Court observed that the question of whether the acquisition of the estates was for a public purpose had, according to the High Court, been implicitly decided by the Constituent Assembly, and therefore the Court could not revisit the matter. Justice Shearer expressed this view, stating, “We are, in my opinion, estopped from saying that the acquisition of estates and tenures is not an acquisition for such a purpose. That it is, has been decided by the Constituent Assembly itself.” This conclusion was drawn on the basis of clauses (4) and (6) of Article 31, which the Court interpreted as indicating that the Constituent Assembly had given its explicit approval to the legislation in question. Justice Reuben added that Article 31, clause (2) made clear that the Constituent Assembly regarded two conditions as essential for compulsory acquisition: a public purpose and provision for compensation. He noted that the protection afforded by clauses (4) and (6) concerned only the compensation requirement, implying that the Assembly considered the nationalisation of land itself to constitute a public purpose. Consequently, he held that a public purpose existed for the impugned Act within the meaning of clause (2) of Article 31. Justice Das further explained that the Constitution itself indicated that “public purpose” should be understood broadly and comprehensively. He pointed out that the Land Reforms Bill was pending at the commencement of the Constitution and that the Constituent Assembly, representing the people, must have been aware of the nature of the legislation. He argued that if the pending legislation were not for a public purpose, it would be surprising that the Assembly attempted to save it by invoking clause (4) of Article 31. Accordingly, he concluded that there was an implied declaration by the Assembly that the legislation served a public purpose, and that such a declaration warranted judicial deference unless it proved impossible. On these grounds, he held that the impugned Act did not fail for lack of a public purpose.

Counsel for the petitioner challenged the High Court’s view, contending that Article 31(4) of the Constitution did not answer the issue. He argued that the Act was silent on the reasons for acquiring the zamindaris and merely provided for the interception of rents, which would be diverted to the Government’s coffers without any benefit accruing to the tenants. He maintained that private property could not be taken merely to augment State revenue and that the only purpose discernible from the Act was the acquisition of land without any corresponding public benefit.

The counsel argued that the effect of the legislation was the ruin of a vast segment of the population without any comparable advantage to any part of the community. He pointed out that Bihar contained roughly 1,335,000 land-owners and tenure-holders; assuming an average family size of four, the legislation would devastate about five and a half million individuals. He further maintained that the cultivators, or ryots, would not receive any benefit because the lands, except for waste lands, were already possessed and cultivated by them, and none of the rent that could be realized from those lands was being redirected for the ryots’ advantage. The counsel added that the waste lands were already sufficient to satisfy the villagers’ needs for grazing and pasturage, and that the acquisition of the estates was essentially intended to create a single, highly bureaucratic “super-landlord,” thereby depriving a substantial portion of the public of its means of livelihood. He concluded that while a political party might adopt land nationalisation as a policy, such a policy did not constitute a public purpose that conferred benefit on the community at large.

Continuing, the counsel cited the decision in Hamabai Pramjee Petit v. Secretary of State for India [(1915) 42 I.A. 44.] to contend that the term “public purpose” must denote an objective directly and vitally concerned with the general interest of the community, not merely the private interest of individuals. He also referred to Vol. II of Cooley’s Constitutional Limitations, page 744, where it is stated that a purpose must be public and must address the needs or convenience of the public; a mere general policy reason cannot validate transfers that affect existing vested rights. Further, the counsel asserted that the Act contained no definite or tangible indication of a public purpose for acquiring the estates, suggesting that the legislature was unclear about its own intentions and had acted on a vague notion of future policy. The judge, however, observed that it was unnecessary to examine every argument raised. He noted that acquisition of private property under entries 33, 36, and 42 can be made for Union purposes, State purposes, or a public purpose, and that the statute need not expressly state the precise purpose provided that the overall tenor and intent of the Act indicate that the acquisition is for the State or public benefit.

In this case, the Court observed that the legislation was intended to acquire the property either for the purposes of the State or for the purposes of the public, and that the underlying intention was to benefit the community at large. The Court conceded that the statute did not explicitly disclose the legislature’s ultimate plan for the estates once they were vested in the State Government, and it was possible that the State Government had not yet decided precisely how and for what purposes the acquired lands and tenures would be utilized. Section 34 of the statute, however, provided for the creation of a land commission whose function was to advise the Government on its agrarian policy. Despite the criticism raised by counsel, the Court held that the Act could not be said to fail because it did not expressly state a public purpose; the Act in question was the Bihar Land Reforms Act, 1950. The Court referred to the preamble of the Constitution, which declared India to be a sovereign democratic republic established to secure justice, social, economic and political rights for all citizens. It also cited Article 39 of the Directive Principles of State Policy, which directed the State to shape its policy so that ownership and control of the material resources of the community were distributed in a manner that best served the common good and that the economic system did not lead to a concentration of wealth and means of production to the detriment of the community. The Court found it evident that the concentration of large blocks of land in the hands of a few individuals was contrary to the constitutional principle articulated in Article 39. Consequently, the purpose of the acquisition contemplated by the impugned Act was to eliminate such concentration, to distribute ownership and control of material resources that came into State possession, and thereby to subserve the common good as fully as possible. In other words, the purpose of the Act was to bring about a reform of the land-distribution system in Bihar for the general benefit of the community, as the Court noted. The Court further stated that the legislature, being the body elected by the people, was the best judge of what was good for the community, and therefore the Court could not hold that there was no public purpose behind the acquisition contemplated by the statute. The Court concluded that the purpose of the statute was fully in line with both the letter and the spirit of the Constitution of India. It rejected the assertion that the object of the Act was to ruin the five and a half million people of Bihar, noting that not all lands in khas possession of those persons had been made subject to acquisition, and that their homesteads and mineral wealth, except for mines not in operation, were not seriously affected by the provisions of the Act.

The Court noted that the lands of the small zamindaris had not been seriously affected by the provisions of the Act and that the Act had granted a number of other exemptions in their favour, separate from the compensation provisions, which could not be described as wholly illusory. It examined the difficulty of asserting, in contemporary global conditions, that legislative measures intended for community welfare and aimed at implementing a policy of land nationalisation could be dismissed on the ground that they lacked a public purpose. The Court explained that the expression “public purposes” must be interpreted in light of the spirit of the era in which the legislation was enacted, and that, when construed accordingly, the acquisition of the estates must be regarded as having been made for a public purpose. The Court then clarified that these observations did not apply to the acquisition of arrears of rent. It observed that, on the face of the statute, one-half of the arrears was acquired for a private purpose of the zamindars, while the remaining half was intended either to augment the State’s revenue or to provide funds for paying compensation to the zamindars, the purpose being to discharge the acquirer’s obligation to pay the price. The same reasoning was said to apply to clause 23(f) of the statute, which had been introduced partially to negate the Act’s provisions on compensation, and the Court stated that clause 44 of article 31 offered no protection against the invalidity of those clauses. The learned Attorney-General argued that the acquisition of arrears amounted to an acquisition of a chose-in-action and that the compensation payable was fifty percent of the arrears. The Court expressed regret that it could not accept that submission. It reiterated the well-settled legal principle that the State may not appropriate an individual’s property under compulsory acquisition merely to increase its own revenue. Citing Cooley (in Vol. II at p. 113, Constitutional limitations), the Court observed that the principle of compulsory acquisition is founded on the superior claim of the community over an individual, but it applies only where private property is required for public use or public welfare, and no instance is known where property has been taken solely to raise revenue, for such a use would be destructive of individual rights. The Court further described taking money under the power of eminent domain, with later monetary compensation, as equivalent to a forced loan. It added that money, or anything that functions as money in ordinary use and that the Government can obtain through taxation, as well as rights in action that only become monetary when realized, cannot be taken under the power of eminent domain. Willis, in his Constitutional work, is cited in support of this view.

In this case, the Court observed that a legal treatise cited on page 816 expressed the same opinion. Nichols, in his work on eminent domain (Vol. I, page 97), offered a contrary view and referred to the decision in Cincinnati v. Louisville, R. Co. (223 U.S. 390). The Court examined that decision and found that it did not contain the proposition alleged. The cited case concerned a Kansas statute that restrained enforcement of a state fire-insurance regulation, which the Court held to be a valid law of that State. The Court noted that it was unnecessary to decide whether the State’s power of compulsory acquisition allowed it to acquire choses in action or money, but it was clear that such an acquisition would amount to a forced loan. The Court explained that the same result could be more appropriately achieved by the State’s police power rather than by the power of eminent domain, and that compensation in such a scenario would simply be the amount of money taken, or in the case of a chose in action, the money that the chose would yield. Consequently, the Court held that fifty percent of the outstanding arrears could not be treated as compensation. The factual position was that the State had taken over all the arrears, decided to refund half, and retain the remainder. The validity of this acquisition had to be considered independently of any acquisition of estates; it bore no connection with land reform or any public purpose. It was likened to other debts owed to zamindars or their movable property, which the Act did not aim to acquire. The sole purpose behind the acquisition was to raise revenue to pay compensation to some zamindars whose estates were being taken, a purpose that did not fall within any definition of “public purpose.” Accordingly, to that extent the law was held constitutional. The Court illustrated the effect with figures: in Appeal No. 299 of 1951, the arrears of Darbhanga Raj as of 26 September 1950 totaled Rs 30,81,967, with half payable and half forfeited; in Appeal No. 330 of 1951 concerning Raja P. C. Lal, rents due were Rs 10,26,103; and in Appeal No. 339 of 1951 the amount was Rs 9,52,937. Finally, the contention was raised that the impugned Act was a fraud on the Constitution and therefore void, alleging that while the Act pretended to comply with the Constitution by providing for compensation, it in effect created a scheme that resulted in non-payment of compensation, thereby evading and invading constitutional mandates.

In the submissions before the Court, it was argued that the statute achieved its purpose through shift and contrivance. Counsel referred to several provisions of the Act that were of a confiscatory character, provisions that had already been identified in the earlier part of this judgment. Particular emphasis was placed on Section 9, which allowed mines that were still under development and not yet producing any income to vest in the State without any compensation being payable. In the same vein, it was pointed out that the Act did not provide for compensation for forests or trees that were not generating income at the moment of vesting.

The argument was summarized by stating that the true object of the Act was to acquire the properties of the zamindars by offering a so-called payment of compensation that would be drawn from the zamindars’ own funds. Accordingly, in certain instances the zamindars would not only be forced to surrender their estates without receiving any consideration, but they would also be required to make additional payments to the State if the principles laid down in the Act were applied. An illustration was given concerning the Maharaja of Darbhanga, where it was observed that his zamindari would be acquired by the State Government without any payment to him, yet the Maharaja would be compelled to pay six lakh rupees out of his own money to the Government.

Further examples were cited from specific cases. In Case No. 330 of 1951 (Raja P. C. Lall), it was asserted that the Government would obtain the zamindari free of charge. In Case No. 339 of 1951, the State would acquire the zamindari and also retain two and a half lakh rupees from the arrears. In Case No. 331 of 1951 (the Chota Nagpur appeal), the zamindari would be acquired for a modest sum of fourteen thousand rupees only. In none of these instances was any payment to be made to the zamindars out of the public exchequer.

The Court’s attention was drawn to a passage of observation by Justice Shearer, which stated: “The legislature, it is clear, are optimistic enough to hope that this reform may conceivably be effected without raising any great loan. The conclusion, to my mind, is irresistible that the intention is to take over the great estates in the province, paying no compensation or the most inadequate compensation, and out of the considerable profits which are likely to be derived from them, to take over, in course of time, the remaining estates and tenures. In other words, a comparatively small minority belonging to this particular class are to be expropriated without compensation or with the most inadequate compensation in order that, when the great majority are expropriated, they receive compensation which will not be inadequate and may, quite possibly, in many cases, be more than adequate.”

Mr Das strongly maintained that the statute amounted to a fraud on the republican Constitution, which promised that no person would be deprived of property without payment of compensation. He argued that although the Act appeared to contain elaborate provisions for compensation, by means of shift and contrivance it actually provided a mechanism for evading that payment. Counsel further cited a passage from Moran Proprietary Ltd. v. Deputy Commissioner of Taxation for New South Wales (1940) A.C. 838, page 858, which described a hypothetical case wherein a purported exercise of the power to grant…

The Court explained that a statutory scheme which ostensibly provided financial assistance under section ninety-six could, in reality, be nothing more than a colourable device; the true purpose, concealed behind the pretense of aiding a State with money, might simply be to create discrimination in the field of taxation. In that view, such a provision could be beyond the constitutional authority of the Commonwealth Parliament and therefore ultra vires. The judges noted that they employed cautious language because the precise situation might never arise, and because their usual practice in constitutional disputes is to decide only what is strictly required by their duty. Consequently, they added that, in their assessment, certain legislative mechanisms that had been described as ultra vires by Evatt J. in his forceful dissent might indeed be colourable, and that such measures did not receive the Court’s approval.

The Court further considered that a statute could be declared a fraud upon the Constitution on the same footing as corporations or executive bodies that act beyond or abuse their statutory powers. In support of this position, the Court referred to the observations of Abbott C.J. in Fox v. Bishop of Chester, volume one hundred seven Equity Reports page five hundred twenty, paragraph five hundred twenty-seven, which state that the judgment is founded upon the language of the Statute thirty-one Elizabeth c. 6 and the well-known principle that an Act of Parliament must not be evaded by shift or contrivance. The Court also cited Fox v. Bishop of Chester, volume six Equity Reports page five hundred eighty-one, noting that fraud on the law may constitute an insult to an Act of Parliament even when the text of the law does not expressly mention such fraud. Further authority was drawn from Westminster Corporation v. London & North Western Railway (1905) Appeal Cases page four hundred thirty, where it was observed that a public body endowed with statutory powers must not exceed or abuse those powers, must remain within the limits of its authority, must act in good faith, and must act reasonably, the latter being inherent in the second requirement. The judgment also referenced Maharaja Luchmeswar Singh v. Chairman of the Darbhanga Municipality, Indian Appeals volume seventeen page ninety, highlighting that an offer and acceptance of one rupee represented a colourable attempt to obtain title under the Land Acquisition Act without paying for the land. Additionally, Alexander v. Brame, forty-four Equity Reports page two hundred five, was mentioned to illustrate that where a deed appears to be a device intended to evade the statute while seemingly remaining clear of it, a court may rule in favour of the appellants. All these principles are well-settled, but the Court posed the question of whether they are applicable to the present controversy.

It is by no means straightforward to attribute a dishonest motive to a State legislature and to declare that it acted in a malicious or bad-faith manner when it passed the Bihar Land Reforms Act, nor is it proper to say that the legislature committed a fraud upon the Constitution by enacting that law. It is possible that certain provisions of the Act may operate harshly upon particular individuals or a few zamindars, and that some of those provisions might exceed the legislative competence of the Bihar Legislature. However, the fact that some provisions may be harsh or beyond power does not imply that the entire enactment is fraudulent or unconstitutional. The observation that a handful of zamindars could be dispossessed without receiving compensation does not justify the conclusion that the whole statute is a constitutional fraud or that every provision concerning compensation is illusory. At most, the claim of illusion can be sustained with respect to only a limited segment of the large class of persons affected by the statute. Section 23(f), in the Court’s view, is a colourable piece of legislation. That provision was enacted under the authority granted by legislative entry 42 of List III. Established judicial precedent holds that a legislature possessing only limited powers cannot achieve indirectly what it is expressly prohibited from doing directly. In Vict South Australia v. The Commonwealth and in Madden v. Nelson & Port Sheppard R.W. Co., as well as in Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Proprietary Ltd., the courts emphasized that where the law-making power is limited, the substance of the law must be examined with strict scrutiny to determine the true purpose of the legislature. The courts warned against being misled by the mere appearance of the challenged legislation. The principle applied is that a legislature bound by a constitutional prohibition cannot evade that prohibition simply by employing an indirect method to obtain the same result. Consequently, when legislation appears on its face to comply with constitutional requirements, the court may need to look beyond names, forms, and appearances to ascertain whether the law is in fact colourable or disguised. The provision attacked in this case was not derived by laying down any genuine principles for payment of compensation; rather, it is, in substance, designed to deprive a group of people of their property without providing compensation. While the State legislature is empowered to enact a law concerning persons deprived of property under entry 42, that power does not extend to passing a law whose purpose is to undermine the rights of those persons and to deny them compensation to any significant extent. In this connection, the Court considered…

It became necessary to consider the argument raised by the Attorney-General concerning the meaning of legislative entry 42 in List III. The Attorney-General argued that, under this entry, either Parliament or a State Legislature could enact a law that sets out principles which might lead to the non-payment of compensation, or even to a complete refusal to pay compensation. The Court could not accept such an interpretation of the entry. The entry, as it is worded, states: “Principles on which compensation for property acquired or requisitioned for purposes of the Union or of a State or for any other public purpose is to be determined, and the form and manner in which such compensation is to be given.” This provision appears in the Concurrent List not merely because the established legal principle requires compensation when property is compulsorily acquired, but also because Article 31(2) of the Constitution expressly mandates that any law authorising acquisition of property must provide for payment of compensation, must fix the amount of compensation, or must specify the principles and manner by which compensation is to be determined and paid; otherwise such a law would be void. Consequently, the legislative power conferred by entry 42 is intended to enable the enactment of principles for determining compensation and for its disbursement. Those principles are meant to ascertain the equivalent price of the property that is taken away, and may be based on uniform rules such as a rental valuation or market value of the property. It is hard to envisage any principled basis that would authorize non-payment or denial of compensation. No principle need be articulated for refusing payment; a simple declaration that no compensation will be paid would already achieve that result, and the Court is unaware of any principled rule for determining compensation that would intentionally lead to non-payment, except in the Act that is under consideration. All legislative entries must be given a reasonable construction, and the power granted by entry 42 is a positive authority aimed at securing the payment of compensation, not its denial. The essential terms of the entry are “compensation” and “given”; any provision unrelated to compensation or its delivery cannot be justified under this entry. The Court noted a reference to United Provinces v. Atiqa Begum (1940) F.C.R. 110 at page 135, where it was held that the descriptive words in the head “collection of rents” were sufficiently broad to permit legislation in that area, a point that was considered in this context.

The Court observed that under item twenty-two of the Government of India Act, 1935, the legislative head “forests” authorised legislation not only for afforestation but also for disafforestation, and that the legislative head “fisheries” authorised legislation that could prohibit fishing altogether. The Court held that these analogies could not be applied to the interpretation of the language used in entry forty-two, because the cited entries were not on the same subject matter as entry forty-two. The Court suggested that a more comparable authority was the decision in Attorney General for Ontario v. Attorney-General for the Dominion (1896) A.C. 348, where the issue was whether the legislative head “Regulation of Trade and Commerce” also included the power to abolish trade. The Privy Council, at page three-sixty-three of the report, explained that a power to regulate presupposes the preservation of the thing to be regulated, and therefore it could not consider prohibitive provisions in the Canadian statute as regulations of trade and commerce, noting a clear distinction between prohibiting a trade and regulating or governing it. The Court then stated that an entry dealing with the payment of compensation could not in any sense convey a power to withhold compensation; the purpose of that head was to secure payment, not confiscation of property. The Court further examined the provision that required a deduction ranging from four per cent to twelve and a half per cent from net income as an account of costs of works for the benefit of raiyats, and found that this provision bore no relation to actual facts. Similarly, the earlier clause (d) which permitted deduction of management costs up to twenty per cent was found to have no real connection to the true state of affairs. The Court noted that these deductions were partially confiscatory in many cases and that the deduction under clause (f) from gross income was merely artificial, its purpose being to increase deductions and thereby prevent payment of compensation. The Court concluded that such legislation was not permitted by entry forty-two of List III. For illustration, the Court imagined that instead of a twelve-and-a-half-per-cent deduction, the statute prescribed a seventy per cent deduction; it would be unreasonable for any person to regard that as legislation on the principles of determining or paying compensation. Consequently, the Court held that the provision had been inserted in the Act as a colourable exercise of legislative power under entry forty-two and was unconstitutional on that ground. The Court further observed that no other legislative head empowered the State legislature to enact such a law, and that legislation appearing to be exercised under a constitutional power but in reality not falling within that power was colourable and therefore invalid.

The Court noted that the substance of the power relied upon is only apparently constitutional and, in reality, is not. It referred to the principle discussed in Quebec v. Queen Insurance Co. (1878) App. Cas. 1090 and Russell v. The Queen (1882) App. Cas. 841, and also drew on the Privy Council’s decision in Madden v. Nelson & Fort Sheppard R. W. Co. (1899) A.C. 626. On the basis of those authorities, the Court held that the clause in question was unconstitutional legislation that had been colourably rendered valid by invoking legislative power under entry 42 of List II. The petitioner’s counsel argued that if any provision of the Act were ultra vires, the entire statute should be declared ultra vires and that it could not be assumed that the legislature intended to pass a truncated version. The Court explained that the decisive inquiry in such situations is whether the surviving provisions are so inseparably linked to the invalid part that they cannot exist independently, or, as has sometimes been phrased, whether a fair review of the whole would lead to the conclusion that the legislature would not have enacted the remaining provisions without the invalid ones. After examining the Act as a whole, the Court concluded that the offending provisions were not so inextricably bound to the valid parts as to destroy the remainder. Consequently, no presumption could be drawn that the legislature would have omitted the two or three provisions that must be declared invalid and still enacted the Act. The petitioner’s counsel also raised a technical objection that the Bihar Act was unenforceable. He pointed to section 32(2) of the Act, which provides that the amount of compensation payable, as finally published in a compensation assessment roll, shall be paid in cash or in bonds, or partly in cash and partly in bonds, with bonds payable in forty equal instalments, bearing interest at two and a half per cent per annum from the date of issue. The counsel argued that the provision failed to specify a payment date, the interval between instalments, or the proportion of cash and bond payments, rendering the Act unenforceable. However, section 43 of the Act authorises the State Government to make rules to give effect to the Act, and clause (p) of that section states that the proportion of cash and bond compensation and the manner of payment shall be prescribed. The Court found that, when section 32(2) is read together with the rule-making powers conferred by section 43, the Act contains adequate mechanisms for enforcement and therefore cannot be said to be unenforceable on the basis of the alleged omission.

The Court examined the contention that section 32(2) of the Act is void on the ground that it allegedly transfers legislative authority from the legislature to the executive. The submission was presented in two distinct parts. First, it was argued that entry 42 of List III in the Seventh Schedule of the Constitution entrusts the legislature with the power to make laws concerning the principles governing the payment of compensation as well as the manner and form of such payment; consequently, the Constitution would not permit the legislature to delegate those matters to the executive. Second, it was asserted that section 32(2) purportedly delegates an essential legislative function to the executive, a delegation that the Constitution does not allow. The Court referred to its earlier opinion in Special Reference No. 1 of 1950 to support this line of argument. The matters specifically alleged to have been delegated were: (i) the determination of the proportion of the compensation payable in cash versus bonds, whether the bonds would be negotiable or non-negotiable; (ii) the determination of the period of redemption of those bonds; and (iii) the interval between the multiple instalments of payment. The Court observed that the provision in section 32 states that compensation may be paid wholly in cash, wholly in bonds, or partly in each form, thereby establishing the principle that these two modes of payment are permissible. It further provides that bonds, if issued, shall be either negotiable or non-negotiable and shall be non-transferable, thus defining the nature of the bonds. Moreover, the provision mandates that payment in bonds shall occur in forty equal instalments, implying that the redemption period of the bonds coincides with the instalment schedule, and it fixes the interest rate on the bonds at two and a half per cent per annum. The only elements left to the executive, according to the Court, are the precise proportion of cash versus bond payment and the specific timing of each instalment. The Court held that such a limited delegation is permissible, citing the precedent of State of Bombay v. Narottamdas Jethabai (1951) S.C.R. 51 and the Privy Council decision in Queen v. Burah (1877) 5 I.A. 178. The legislature, the Court noted, had indeed exercised its mind on the method and manner of compensation payment, had set the overarching policy and broad principles, and had consequently empowered the State Government to decide the detailed matters thereafter. Therefore, the Court concluded that the legislature did not abandon its constitutional duty, nor did it fail to lay down a clear policy. Accordingly, the Court found that section 32(2) of the Act cannot be declared invalid on the basis of an unregulated delegation of legislative power.

In this case the Court observed that the decision as to whether compensation should be paid in cash, in bonds, or entirely in cash was a matter that only the State Government was authorised to determine, and that the schedule for issuing the instruments and the period during which the benefit could be redeemed were also details that could more appropriately be fixed by the executive exercising its rule-making power. The Court stressed that no essential legislative authority had been transferred to the executive and that the legislature had fulfilled the constitutional trust placed in it. It further noted that if the rule-making authority were to abuse its power or attempt to render the payment illusory, the proprietor whose property had been taken would still retain a remedy. Accordingly, for the reasons set out above, the Court was of the opinion that section 32(2) of the Act could not be declared invalid on the ground that it represented an unregulated delegation of legislative power. The counsel who appeared in cases numbered 319, 327, 330 and 332 of 1951, and in the other matters in which he participated, advanced the same submission in each instance. In the matters numbered 309 and 328 of 1951 the counsel raised a large number of points; some of those points had already been covered by the arguments of another counsel, which the Court had previously discussed. The remaining points appeared unsubstantial, but the Court found it necessary to address a few of them because they had been strongly emphasised by the learned counsel. One argument advanced by a counsel was that the field of legislation concerning the principles for determining compensation and the mode of payment was already occupied by the Land Acquisition Act, an existing statute of Parliament, and that therefore the State Legislature could not legislate on the principles of payment of compensation. The Court rejected this argument, observing that the provisions of the Land Acquisition Act relating to assessment of compensation applied only to acquisitions made by notification under that Act and did not extend to acquisitions made under local or central statutes unless those statutes expressly incorporated the provisions. Another point raised by the counsel was that articles 31-A and 31-B of the Constitution could not affect pending cases; the Court found this contention untenable because the prospective effect of those articles was evident on their face. The counsel also suggested that the transfer of zamindari estates to the State under a statute required registration; the Court regarded this argument as unsubstantial. A further argument was that the Bihar Legislature lacked the power to issue bonds without following the procedure laid down in article 293 of the Constitution. The Court responded that the stage for issuing such bonds had not yet arrived, and that any challenge would arise only if the legislature issued bonds that were unenforceable or beyond its competence.

In the matters identified as Nos. 326, 337 and 344 of 1951, counsel identified as Mr. Chakravarty argued that the Bihar Legislature lacked authority to acquire trust property without providing full compensation, contending that such compulsory acquisition would seriously impair certain educational and charitable institutions. However, he was unable to demonstrate how the Legislature was without power to acquire such trust property. In the separate proceedings numbered Nos. 310, 311 and 329 of 1951, counsel identified as Mr. Raghav Saran raised a novel contention that because the Bihar Land Reforms Act was not reasonable and just, the Supreme Court possessed jurisdiction to declare the Act void on that ground. He failed to substantiate this argument, and the Court observed that the constitutionality of a statute enacted by a competent legislature could not be challenged merely on the basis that the law was unreasonable or unjust. Counsel representing the parties in Cases Nos. 307, 313, 315, 320, 321, 322 and 331, as well as Petition No. 612 of 1951, simply reiterated the points previously raised by Mr. P. R. Das. Consequently the Court held that the provisions of the Bihar Land Reforms Act contained in sections 4(b) and 23(f) were unconstitutional, while the remainder of the Act was upheld. The appeals were therefore allowed except to the extent indicated, and a writ of mandamus was issued to the State Government directing it not to give effect to the two provisions deemed unconstitutional. Petition No. 612 of 1951, filed under article 32, was dismissed as non-maintainable because it alleged no infringement of any fundamental right. No respondents appeared in Cases Nos. 18 of 1950 and 299 of 1951, and there was no opposition to the appeals being allowed; thus the appeals were allowed without any order as to costs. Judge Mukherjea, concurring with the judgment of his learned brother Justice Mahajan, affirmed that the Bihar Land Reforms Act of 1950 was not unconstitutional except for the provisions in sections 4(b) and 23(f), which alone must be declared void and inoperative. Regarding section 23(f), he agreed with his brother’s reasoning that the provision amounted to a fraud on the Constitution, since although the Legislature purported to act under entry 42 of the Legislative List III in Schedule VII, the enactment was in reality a colourable use of that power, effecting a matter beyond the scope of the entry. He added no further comment on that point.

In this case the Court observed that the learned brother had declared section 4(b) of the Bihar Land Reforms Act unconstitutional because the provision failed to disclose any public purpose. The Court explained that a public purpose is an inherent requirement whenever the State compulsorily acquires property or exercises its power of eminent domain. This requirement is implied by article 31(2) of the Constitution. Although the enactment satisfied the conditions of article 31(3) and therefore invoked the operation of article 31(4), the learned brother held that the bar created by article 31(4) was limited only to the question of compensation and did not extend to the existence or necessity of a public purpose, which, although implicit, was not expressly set out in article 31(2). The Court expressed a different view, stating that article 31(4) pertains to everything that article 31(2) provides, whether in express terms or by implication, and consequently the inquiry in the present matter need not consider the existence of a public purpose. Nonetheless, the Court agreed that the same reasoning which led the learned brother to declare section 23(f) unconstitutional also applies, with equal or greater force, to section 4(b). The Court therefore concurred with the conclusion that section 4(b) is unconstitutional, although it preferred to adopt a separate line of reasoning in support of that conclusion.

Section 4(b) of the Bihar Land Reforms Act provides that, as a consequence of publishing a notification under section 3(1), all arrears of rent and all cesses, together with any interest, which were due for any period before the date of vesting, and which were recoverable by the proprietor or tenancy-holder and not barred by any limitation law, shall vest in and become recoverable by the State. The explanation attached to this clause clarifies that, for the purposes of the clause, the term “arrears of rent” includes arrears for which suits were pending on the date of vesting or for which decrees had been obtained before that date, together with the costs awarded by such decrees. Under section 24 of the Act, fifty percent of these arrears of rent are required to be added to the amount of compensation payable for the estate or interest, calculated in accordance with the provisions of the Act.

The Court noted that the arrears of rent, whether merged in decrees or not, which were due to the landlord for a period preceding the notification under section 3(1), were unquestionably the landlord’s property, irrespective of his interest in the estate or tenancy that was the subject of acquisition. The Court further observed that such arrears could not vest in the State as a normal result of acquiring any estate or interest therein, and it was conceded by the Attorney-General that article 31-A of the Constitution does not apply to these arrears of rent. Consequently, the arrears of rent constitute a separate and independent acquisition under the Bihar Land Reforms Act, provided that the term “acquisition” can appropriately describe situations of this nature.

In the judgment the Court observed that the arrears of rent belonged to the landlord irrespective of the landlord’s interest in the estate or tenure that was the subject of the acquisition. Consequently, such arrears did not automatically vest in the State simply because an estate or interest therein was acquired. The Attorney-General conceded that article 31-A of the Constitution was inapplicable to these arrears of rent. Accordingly, the arrears were characterised as the subject of a separate and independent acquisition under the Bihar Land Reforms Act, provided that the term “acquisition” could be suitably applied to such a situation. The Court noted that every government possessed an inherent authority to appropriate private property for the necessities of the State, and that the constitutional provisions did not create this power but rather surrounded it with safeguards. A fundamental restraint on the exercise of this power was the requirement that pecuniary compensation be paid whenever private property was taken, as explained in Cooley on Constitutional Limitations, Vol. II, p. 1110. The Court further explained that eminent domain represented a covering power tempered by a principle of natural law that linked its exercise to a duty of compensation, a view supported by the Encyclopedia of Social Science, Vol. V, p. 493. The framers of the Constitution, mindful that private property should not be entrusted to the uncertain virtues of the party in power, declared as a fundamental right that no property could be taken for a public purpose unless the law authorising the taking provided for compensation in the manner prescribed by article 31(2). Clause (4) of article 31 did not abolish the obligation to pay compensation; rather it stipulated that laws referred to in clause (3) would be insulated from judicial scrutiny on the grounds of inadequate compensation or improper principles of assessment, provided that the legislation resulted from a valid exercise of legislative power under the appropriate entries in the Legislative Lists. The Court warned that if the legislature acted beyond those entries or under the pretense of acting within them in a way that contradicted the article’s substance, clause (4) could not be invoked to protect such legislation. Turning to the impugned Act, the Court explained that clause (4)(b) together with section 24 authorised the State Government to appropriate all arrears of rent due to a landlord at a specified time, imposing only the obligation to allocate fifty per cent of the appropriated amount as solatium for the alleged acquisition. On its face, the provision appeared to have been enacted under the powers conferred on the State legislature by entry 36 of List II and entry 42 of List III of Schedule VII of the Constitution.

The Court noted that the statutory provision consulted by the legislature purported to rely upon List II and entry 42 of List III of Schedule VII of the Constitution. In the Court’s view this reference was merely a device or pretence, because the true purpose of the legislation was to deprive an individual of his money – an object that is not normally a subject-matter of acquisition exercised through the recognised powers of eminent domain of the State – without providing any consideration in return. Accordingly, the Court held that by claiming authority under entry 42 of List III, the legislature in fact evaded and nullified the substantive requirements of that entry. The Court then explained that the general principles distinguishing the power of eminent domain from other State powers that may demand or impose a sacrifice of a citizen’s proprietary interest are well established. As observed by Cooley in his work on constitutional limitations, “every species of property which the public needs may require and which the Government cannot lawfully appropriate under any other right, is subject to be seized and appropriated under the right of eminent domain” (Cooley on Constitutional Limitations, Vol II, p. 1113). The Court further observed that, according to American jurists, both money as such and rights in action are ordinarily excluded from the category of property that may be taken under eminent domain, and that there is no legitimate necessity for taking either of them under that power. Money held by a citizen can be reached by taxation, may be confiscated as a penalty by a judicial order, or may be seized under the State’s police powers where it is alleged to be intended for unlawful purposes detrimental to the community. Moreover, the Court referred to Cooley’s comment that taking money under the right of eminent domain, where the taking must later be compensated by money, amounts to nothing more than a forced loan, and it is difficult to categorise such a taking as acquisition or requisition of property within the ordinary meaning of entry 36 of List II. The Court then addressed the submission of the learned Attorney-General that the subject-matter of acquisition in the present case was not money but a chose in action. The Court opined that, in principle, there is no substantive difference, because a chose in action becomes valuable to the acquiring authority only when it can be converted into money; otherwise it is of no practical use. Finally, the Court stated that even assuming entry 36 of List II were sufficiently wide to encompass the acquisition of money or a right of action, the legislature’s provision of compensation for such acquisition represented a colourable use of entry 42 of List III, thereby defeating the purpose of that entry.

The Court observed that by invoking entry 42 of List III, the legislation had nullified the purpose of that entry altogether. Entry 42 of List III states that the principles for determining compensation for property acquired or requisitioned for Union, State or public purposes, and the form and manner of giving such compensation, must be specified. The Court said the entry is a legislative head and concurred with the learned Attorney-General that, when judging a law’s competence under this head, the court does not assess the fairness of the principles. It also held that the court does not examine the justice of the method by which compensation is paid. However, the Court disagreed with the learned Attorney-General and with a fellow judge’s reasoning that legislation under this head might lawfully omit any compensation provision or declare that no compensation shall be given. The Court held that such a construction contradicts the plain wording of the entry, which expressly refers to giving compensation rather than denying or withholding it. When the impugned provision is stripped of its language, its practical effect is to allow the State Government to appropriate half of the rent arrears due to the landlord before acquisition, without providing any compensation. The Court characterized taking the entire amount and returning only half as nothing more than taking half without any return, which it termed naked confiscation, regardless of any pretended form. Consequently, the provision does not actually set any principle for determining compensation for the acquired arrears nor does it address the form of payment, although it purports to do so. The Court considered this to be a fraud on the Constitution, rendering the colourable legislation void and inoperative. The learned Attorney-General contended that the court lacks jurisdiction to examine the bona-fide or mala-fide motives of the legislature. The Court acknowledged that if the legislature possessed unlimited power, its motives would be irrelevant, and if it lacked competence, motive would not arise. Nevertheless, when a legislature has a limited or qualified power confined by specific legislative entries, the court must inquire whether, in purportedly acting under those entries, it has in substance exceeded its authority. Such an overreach, the Court noted, affects the legislature’s competence and therefore falls within the court’s judicial purview.

In cases where a law appears to be enacted under a specific constitutional entry but in reality lies outside that entry, the law must be declared void, as noted in the reference to Lefroy on the Canadian Constitution, pages 79-80. The State, during its arguments, suggested that the Government, exercising its power of acquisition, could take the arrears of rent and, because those arrears had not yet been realised, it would be legitimate for the Government to deduct half of the gross amount as compensation for the trouble and expense involved in realising the arrears. According to that view, the legislature’s intention would simply be to enable the Government to assist the zamindars in collecting the arrears of rent, and in return for that assistance the Government would be authorised to retain half of the arrears that were actually due. The Court found that such a construction could not represent the true intention of the legislature. There is no entry in the extensive legislative lists framed by the Constitution that empowers the legislature to interfere with the legal rights of a landlord in this manner, except in special circumstances such as indebtedness, and to impose upon him an onerous obligation to which he has not consented. Legislation of this character is a complete novelty, rarely, if ever, witnessed before. Consequently, the Court concurred with the order pronounced by learned brother Mahajan J. in this case and allowed the appeals, subject only to the two modifications previously indicated. No order as to costs was made. The proceedings from which these appeals arose had been initiated by various proprietors of estates in Bihar who challenged the constitutional validity of the Bihar Land Reforms Act, 1950, hereinafter referred to as “the Act.” When the Constitution came into force on 26 January 1950, the Bill that would later become the Act was pending before the Bihar State Legislature. After the Bill was passed, it was reserved for the President’s consideration and on 11 September 1950 received the President’s assent, thereby becoming law. The provisions of the Act have been analysed and summarised in the judgment delivered earlier by Mahajan J., and it is unnecessary to repeat that analysis. On 25 September 1950 the text of the Act was published in the Official Gazette with a notification under section 1(3) dated 24 September 1950, which brought the Act into operation. A further notification under section 3 of the Act, dated 25 September 1950, vesting the estates of certain named proprietors, was published in the Official Gazette on the following day, thereby giving effect to the statutory provisions concerning those estates.

After the notification vesting the estates of certain proprietors was published in the Official Gazette, the affected proprietors instituted suits in the subordinate courts of Bihar. They complied with the requirement of giving notice under section 80 of the Code of Civil Procedure and prayed that the Court declare the Act unconstitutional and void, and that their title to the properties remain undisturbed. Other proprietors filed applications before the Patna High Court under article 226 of the Constitution, seeking appropriate writs, directions or orders. The State of Bihar entered written statements in the suits, which were transferred to the High Court for disposition in exercise of its extraordinary original civil jurisdiction, and the suits and the applications were heard together. Because the matters raised involved a serious question of constitutional interpretation, the cases were placed before a special bench of the Patna High Court and were finally decided on 12 March 1951. All the learned judges, for one reason or another, rejected every principal contention raised by the proprietors, yet they held that the Act was unconstitutional because it denied the proprietors the equal protection of the laws guaranteed by article 14 of the Constitution. The High Court also rejected the State’s argument that article 31 (4) of the Constitution, by the words “notwithstanding anything in this Constitution,” excluded the operation of article 14, at least insofar as the alleged inequality of compensation was concerned. Article 31 (4) reads as follows: “If any Bill pending at the commencement of this Constitution in the Legislature of a State has, after it has been passed by such Legislature, been reserved for the consideration of the President and has received his assent then, notwithstanding anything in this Constitution the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2).” The State of Bihar obtained leave of the Patna High Court under article 132 (1) of the Constitution to appeal to this Court and subsequently preferred the present appeals. It may be noted that the States of Uttar Pradesh and Madhya Pradesh also enacted legislation for the abolition of zamindaris, and the validity of those statutes was likewise challenged by the affected proprietors. The respective high courts upheld the validity of the state statutes, and the aggrieved proprietors thereafter approached this Court either by way of appeal or by filing a substantive petition under article 32. At that juncture, the Constituent Assembly enacted the Constitution (First Amendment) Act, 1951. Sections 4 and 5 of that amendment, which are material for the present purpose, are as follows: Section 4 provides that after article 31 of the Constitution the following article shall be inserted and shall be deemed always to have been inserted, namely article 31-A. Section 5 contains the text of article 31-A, which states that, notwithstanding anything in the foregoing provisions of this Part, no law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights shall be deemed void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by any provision of this Part, provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply unless such law, having been reserved for the consideration of the President, has received his assent.

Article 31-A, as inserted by the Constitution (First Amendment) Act, 1951, declares that any law that provides for the acquisition, extinguishment or modification of rights in respect of land shall be considered void if it is inconsistent with, or removes or diminishes any of the rights guaranteed by the provisions of Part III of the Constitution. The article adds a safeguard for State legislation: the provision does not apply to a law made by a State Legislature unless that law, after being reserved for the President’s consideration, has obtained his assent. Sub-section (2) clarifies the meaning of certain terms used in the article. The term “estate,” when applied to any local area, shall carry the same meaning as it does in the existing land-tenure law of that area, and it shall also encompass any grant that is a jagir, inam, muaft or of a similar nature. The term “rights,” in relation to an estate, shall include any rights that vest in a proprietor, sub-proprietor, under-proprietor, tenure-holder or any other intermediary, as well as any rights or privileges concerning land revenue.

Article 31-B, which follows Article 31-A, provides that, without prejudice to the general provisions of Article 31-A, none of the Acts or Regulations listed in the Ninth Schedule, nor any of their provisions, shall be declared void or deemed to have become void on the ground that such an Act, Regulation or provision is inconsistent with, or removes or diminishes any of the rights conferred by Part III of the Constitution. This protection applies even if a court, tribunal, decree or judgment otherwise suggests the contrary, and the Acts and Regulations listed shall continue in force subject only to the power of a competent legislature to repeal or amend them. A new Ninth Schedule was added to the Constitution, enumerating thirteen different Acts and Regulations, the first of which was the Bihar Land Reforms Act, 1950. The Supreme Court has recently upheld the constitutional validity of the First Amendment, and all courts are required to give effect to the two newly added articles, which now form substantive parts of the Constitution. Article 31-A is applied retrospectively to the Constitution’s commencement date, whereas Article 31-B relates to the dates on which the specific Acts and Regulations entered the Ninth Schedule. It is undisputed that these newly inserted provisions must be considered in resolving the present appeals. Counsel for the respondents accepts that, as a result of the constitutional amendments, the impugned Act no longer falls within the operation of Part III, including Article 14, and therefore the respondents cannot claim a violation of the equal-protection clause, which was the sole ground of their success in the High Court. Nevertheless, the respondents’ counsel maintains that, although they…

The respondents could not dispute that they were barred from challenging the constitutionality of the Act on the basis that it violated, conflicted with, removed or curtailed any of the rights guaranteed by any provision of Part III of the Constitution. Nonetheless, the Court observed that the respondents remained free to contest the Act on other bases that derived either from different portions of the Constitution or from general principles of law. In this regard, counsel for the respondents, Mr P R Das, set out five principal grounds on which the Act could be attacked. The first ground, referred to as Ground A, contended that a proper reading of Articles 245 and 246 together with entry 36 in List II and entry 42 in List III showed that the Bihar Legislature lacked authority to enact the impugned legislation because the Act failed to make any provision for the payment of just compensation in respect of the proposed acquisition of zamindaris and tenures. The second ground, Ground B, alleged that even if the Court were to reject the argument based on entries 36 and 42 in List III and were to hold that the respondents could not raise the issue of compensation because of Articles 31(4), 31-A and 31-B, the respondents would nevertheless be entitled to challenge the Act on the ground that the acquisition was not for a public purpose. The third ground, Ground C, maintained that the Act amounted to a fraud upon the Constitution, meaning that although it purported to comply with constitutional requirements, in reality it defied them. The fourth ground, Ground D, asserted that the Act was unenforceable because Section 32(2) provided for payment of compensation in forty equal instalments without specifying the interval between those instalments. The fifth and final ground, Ground E, argued that the Act improperly delegated essential legislative functions to the executive government.

The Court noted that the objections raised by Mr P R Das were numerous and appeared formidable, and therefore required careful consideration of each argument presented in support of the five grounds. Regarding Ground A, the Court observed that the premise that Article 31(2) imposes on any law authorising compulsory acquisition of private property the duty to provide compensation was not contested. Nor was there any contention, in view of Articles 31(4), 31-A and 31-B, that the respondents were still permitted to question the validity of the impugned Act on the ground that it conflicted with, removed, or curtailed the compensation provision contained in Article 31(2). What the respondents urged was that the duty to provide compensation was not confined solely to Article 31(2); rather, similar obligations were also found in other parts of the Constitution. Consequently, the respondents claimed that the Act could be challenged on the basis that it conflicted with, removed, or curtailed the compensation requirements found elsewhere in the Constitution, and that such a ground of attack had not been eliminated by Articles 31(4), 31-A and 31-B.

In this matter, the Court considered the nature of the State’s authority to acquire private property and the implication of that authority for the requirement of payment of compensation. The argument presented explained that the State’s power to acquire private property is essentially a power to compel a landowner to transfer his property when the public interest demands it. The authorities cited in support of this view included Blackstone’s Commentary (Broom’s Edition) page 165 and Cooley’s Constitutional Limitations, eighth edition, volume II, page 1201, footnote 3. The discussion also noted that several English statutes governing compulsory acquisition of lands and hereditaments, such as 5 & 6 Vic C 94 and 8 & 9 Vic C 18, used the term “purchase” to describe the act of acquisition. Because a sale cannot occur without a price, the argument concluded that compulsory acquisition cannot be carried out without a provision for payment of just compensation, which is the monetary equivalent of the property’s value. The submission further asserted that the duty to pay just compensation for compulsory acquisition is a principle of natural equity recognized by all temperate and civilized governments, and that this right to compensation is an incident to the exercise of the power of eminent domain. It was emphasised that the two concepts are so inseparably connected that they should be regarded not as separate principles but as components of a single principle. This view was said to be firmly established by a series of American decisions quoted by Justice Harlan in Chicago, Burlington and Quincy Railroad Company v. Chicago (166 U.S. 216; 41 L. Ed. 979). In English law, Lord Dunedin, in Attorney-General v. De Keyser’s Royal Hotel Ltd. (1920 A.C. 508), described the obligation to pay compensation as “a necessary concomitant to taking.” Consequently, the Court accepted that the obligation to pay compensation is inseparable from, and implicit in, the power of acquisition. The argument drew a further inference that this obligation flows from the very use of the word “acquisition” in entry 36 of List II, just as it does from the use of the word in entry 33 of List I.

The submission continued by observing that, according to Mr P. R. Das, the term “acquisition” by itself conveys a compound concept: namely, a power of taking on just terms, which thereby limits the legislative competence conferred by those entries to the scope of that compound concept. Mr Das further argued that, if the word “acquisition” in entry 36 of List II and entry 33 of List I does not, on its own, imply the duty to pay just compensation, then the phrase appended to entry 36—“subject to the provisions of entry 42 of List III”—must be read as importing that duty. On a plain reading, the phrase “subject to” indicates that the power to legislate on matters specified in entry 36 of List II is conditional upon the exercise of the legislative power contained in entry 42 of List III. Mr Das maintained that these concluding words import the obligation to provide compensation, as set out in entry 42 of List III, into entry 36 of List II, thereby expanding the content of the latter entry to include the requirement of compensation. This line of reasoning was presented as an alternative to the view that the word “acquisition” alone carries the compensation obligation.

In the third alternative position, it was argued that even if the term “acquisition” in entry 36 of List II did not by itself carry an obligation to provide compensation, and even if the words “subject to the provisions of entry 42 of List III” did not import such an obligation, entry 42 of List III should still be interpreted as conferring a power that is coupled with a duty. Consequently, whenever the law-making power under entry 33 of List I or entry 36 of List II was exercised, the power under entry 42 of List III had to be exercised as well, following the principle laid down by the House of Lords in Julius v. Lord Bishop of Oxford and adopted by this Court in Chief Controlling Revenue Authority v. Maharashtra Sugar Mills Ltd. The argument further maintained that the Bihar Legislature, having purported to use its power to enact a law of compulsory acquisition of property under an entry in List II, failed to lay down any principle for determining what would constitute just compensation; therefore, the impugned Act was claimed to be ultra vires and void. Those submissions, presented by counsel, were acknowledged as displaying attractive ingenuity and apparent cogency, and they were said to require very careful consideration. The learned Attorney-General appearing for the State, however, contended that the questioned Act was a law made with respect to matters mentioned in entry 18 of List II, not under entry 36 of List II. He argued that the Act was essentially legislation for land-reforms and the alteration of land tenures, noting that it removed the interests of all zamindars and intermediate tenure-holders so that the State and the actual tiller of the soil could be brought into a direct relationship. He further observed that the acquisition of various interests in the land was incidental to this primary objective. To support this view, references were made to several earlier decisions, including The United Provinces v. Mst. Atiqa Begum and Others, Thakur Jagannath Baksh Singh v. The United Provinces, and Megh Raj and Another v. Allah Rakhia and Others, which endorsed the proposition that each entry in the list, being a category or head of legislative subject-matter, should be construed as broadly as possible to include all ancillary matters. While this line of reasoning had found favor with Shearer J, it had been rejected by Reuben J and S. K. Das J. It was acknowledged that “land” in entry 18 of List II had been interpreted very widely, but a further question remained whether “land” or “land tenures” in that entry should be understood to cover the acquisition of land.

In the present case the Court held that if entry 36 in List II were to be regarded as wholly redundant with respect to the acquisition of land, then the conclusion would be untenable and the Court was not prepared to accept it. Accordingly, the Court reasoned that each of the two legislative heads—entry 18 and entry 36 in List II—must be given a distinct meaning and scope. The Court explained that entry 18 should be interpreted as a legislative category that embraces land, land tenures and all matters connected with them, except for the acquisition of land itself; the acquisition of land, on the other hand, should be understood as falling within the ambit of entry 36. The Court further observed that the impugned Act attempted to acquire all arrears of rent, and that a law dealing with the acquisition of rent arrears could not be classified as a law concerning the matters specified in entry 18, because entry 18 does not relate to the collection of rent. On this point the Court found agreement with the views expressed by Reuben J. and S. K. Das J., and rejected the contrary submissions made by the learned Attorney-General. Consequently, the Court declined to dismiss the arguments advanced by Mr. P. R. Das on the basis of entry 36 in List II and entry 42 in List III without full consideration; instead, the Court indicated that those arguments must be examined and proceeded to do so immediately. The Court then turned to the principle that the duty to pay compensation necessarily accompanies the State’s power to compulsorily acquire private property. The first fundamental question identified by the Court was whether this duty is implicitly contained in the term “acquisition” as used in entry 36 of List II, that is, whether the obligation to pay compensation can be inferred simply from the inclusion of the term within that entry. Referring to the decision in Attorney-General v. De Keyser’s Royal Hotel Limited, the Court noted that Lord Dunedin had observed that the power of acquisition originally derived from the Crown’s prerogative and that compensation was initially a matter of negotiation between the Crown and the subject. Over time, however, compensation became regulated by statutes of local and then general application, and the Crown, as a party consenting to every statute, must be deemed to have accepted that its prerogative would be subject to statutory compensation provisions. The Court pointed out that, in that case, there was no dispute that the taking itself was a prerogative right. The Court then examined the United States experience, observing that the power of eminent domain was never conferred by any specific provision of the Federal Constitution but has always been recognized as an inherent attribute of State sovereignty. The Court highlighted that the Fifth Amendment, by requiring that private property shall not be taken for public use without just compensation, provides constitutional recognition of the right of eminent domain and imposes a limitation to protect owners. This demonstrates that the power of acquisition and the duty to pay compensation are distinct concepts, even though the latter follows the former. The Court concluded that if the duty to pay compensation were an integral part of the concept of “taking,” the compensation clause of the Fifth Amendment would be unnecessary. Therefore, the expression “acquisition” does not, by itself, create an obligation to pay compensation without further qualification.

In the United States the Fifth Amendment gave constitutional recognition to the right of eminent domain and, to protect individuals, imposed a limitation on the exercise of that right by the State. This shows that the power to acquire property and the duty to pay compensation are two separate and distinct concepts, although the duty follows from the power. If the duty to pay compensation were an essential part of the meaning of “taking” itself, then the provision of the Fifth Amendment would have been unnecessary. Consequently, the term “acquisition” does not, by itself and without additional language, create any obligation to pay compensation. Counsel for the petitioner argued that entry 42 in List III implements the compensation obligation that is implicit in entry 36 in List II and that the two entries complement each other. If the compensation duty were not implicit in entry 36 of List II, the question arises where else that duty might be found. The obvious answer is that it is located in article 31(2) of Part III of our Constitution. The duty to pay compensation may be incorporated into the legislative power itself, thereby forming a composite power that combines the authority to make laws concerning acquisition with the requirement to provide compensation. For example, section 31 (XXXI) of the Commonwealth of Australia Constitution Act makes the acquisition of property on just terms a separate head of legislative power of the Commonwealth Parliament. In that context the power is not to enact a law for simple acquisition of property but to enact a law for acquisition on just terms, indicating that the legislative power is limited by the necessity of providing just terms. However, there is no overriding constitutional requirement known to this Court that makes the compensation duty an inseparable part of the legislative power to enact a law for compulsory acquisition of private property. The presence or absence of such a requirement depends on the specific constitution under consideration. Looking at our own Constitution, article 246 grants Parliament exclusive authority to make laws concerning matters listed in entry 33 of List I, namely “acquisition or requisitioning of property for the purposes of the Union.” Correspondingly, state legislatures have exclusive authority to make laws concerning matters listed in entry 36 of List II, that is, “acquisition or requisitioning of property except for the purposes of the Union,” subject to the provision of entry 42 of List III. Both Parliament and the state legislatures may also make laws regarding the matters set out in entry 42 of List III, which relate to the principles for determining compensation and the form and manner of its payment.

The Court observed that the requirement to pay compensation for the acquisition of property is not an incidental part of the legislative power conferred on Parliament or on the State Legislatures. Under article 245 that legislative power is exercised “subject to the provisions of this Constitution.” One such constitutional provision is article 31(2), which stipulates that no property may be taken possession of or acquired for public purposes under any law authorising such taking unless that law provides compensation for the property and either fixes the amount of compensation or specifies the principles and manner by which the compensation is to be determined and given. The constitutional scheme therefore separates three distinct elements: first, the power to make a law for acquisition of property, which is placed in article 246 read with entry 33 of List I for the Union and entry 36 of List II for the States; second, the mandatory inclusion of a compensation provision, which is set out in article 31(2); and third, the power to lay down the principles for determining that compensation, which is vested in article 246 read with entry 42 of List III. Because the Constitution supplies the compensation duty in a separate and explicit provision, it is unnecessary to read the heads of legislative power in entries 33 and 36 as themselves containing any obligation to provide compensation. In other words, the duty to pay compensation is not implicit in, nor part of, those legislative entries, since article 31(2) expressly imposes it. The Court referred to the well-known maxim “expressum facit cess tacitum,” describing it as a principle of logic and common sense rather than a mere technical rule of construction. Accordingly, the explicit requirement of article 31(2) that a law of acquisition must contain a compensation clause excludes any suggestion that an implied compensation obligation should be read into the meaning of “acquisition” in entry 36 of List II. Faced with the clear language of article 31(2), there is no room to infer any additional implication within the legislative heads themselves.

Mr P. R. Das, as an alternative, argued that if the compensation obligation is not implicit in the term “acquisition” as used in entry 36 of List II, then the obligation becomes attached to that entry by reason of the words “subject to the provisions of entry 42 of List III.” The Court pointed out that those concluding words are not found in entry 33 of List I. Accepting Mr Das’s line of reasoning would therefore produce an anomalous result: the compensation obligation would be deemed part of the legislative power under entry 36 of List II because of the phrase “subject to entry 42,” yet the same obligation would not be regarded as part of the legislative power under entry 33 of List I, where the phrase is absent. This inconsistency would contradict the constitutional design, which treats the compensation requirement as a separate, expressly provided duty rather than an attribute of the legislative entries themselves.

In the Court’s view, entry 33 of List I did not impose a duty on Parliament, unlike the State Legislatures, to provide compensation when it enacted a law for acquisition of property. The Court held that such an outcome could not have been intended by the framers of the Constitution. The Court also examined the submission of Mr P. R. Das, who interpreted the words “subject to” in entry 36 of List II as creating a condition that compensation must be provided after the legislative power under entry 42 of List III was exercised, and that the manner and force of that compensation were therefore governed by the “subject to” clause. The Court agreed with the observations of S. K. Das J. that this construction was misplaced. According to the Court, the phrase “subject to” did not convey a conditional meaning but rather the sense of “but not,” indicating that the scope of entry 36 in List II was limited and that the subject matter of entry 42 in List III was expressly excluded from it. The Court explained that, had entry 42 of List III been read as part of entry 36 because of the “subject to” wording, it could be argued that, under article 246, Parliament would lack competence to legislate on the principles governing compensation. To avert such an argument, the Court reasoned that the drafters deliberately excluded the subject-matter of entry 42 from entry 36 by using the words “subject to …,” thereby allowing Parliament to legislate freely on matters placed in entry 42 as a separate and independent head. The Court noted that this precaution was unnecessary for entry 33 of List I, which explains why the words “subject to” are absent from that entry. Finally, the Court considered Mr P. R. Das’s further contention that, even if the obligation to provide compensation were not implicit in the term “acquisition” in entry 36 of List II and could not be read into that entry through the “subject to” clause, a State Legislature that enacted a law under entry 36 would still be required to legislate on the matters covered by entry 42 of List III. The Court observed that entry 42 confers a power on the Legislature to protect the interests of persons whose property is compulsorily acquired, and that this power must be regarded as coupled with a corresponding duty.

In its analysis, the Court observed that no authority had been cited that extended the principle articulated by the House of Lords in Julius v. Lord Bishop of Oxford to the exercise of legislative power, and it declined to adopt that proposition. The Court explained that Article 246 of the Constitution did not impose any mandatory obligation on Parliament or on State Legislatures to enact legislation under any of the entries listed in the Seventh Schedule. Consequently, Entry 42 in List III did not create a duty upon Parliament or the State Legislatures to enact a law providing for compensation. The Court clarified that the requirement for Parliament or a State Legislature, when legislating for compulsory acquisition of private property, to provide compensation and to fix the amount or to specify the principles and manner for determining and disbursing that compensation derived solely from the explicit mandate of Article 31(2). According to the Court, Entry 42 in List III merely served as a legislative head under which Parliament or a State Legislature could enact a law to give effect to the obligation expressly imposed by Article 31(2). Given the clear language of Article 31(2), the Court found it unnecessary to read an implied duty into Entry 42 based on the principle cited in the House of Lords decision.

The Court further noted that the absence of a compensation obligation in the content of the legislative power conferred by Entry 36 in List II, whether considered alone or together with Entry 42 in List III, would become evident upon close examination of clauses (4) and (5) of Article 31 and of Article 31-A. The Court explained that Article 31(4) protected a law described therein from the provisions of Article 31(2). This meant that the protection sought by Article 31(4) applied to a law concerning acquisition or taking possession of property that failed to provide compensation, to fix an amount, or to specify the principles and manner for determining and granting compensation; otherwise, no protection would be required. The Court then posed the question of whether any legislative entry in List II allowed a State Legislature to enact a law for acquisition or taking possession of property without compensation. To test the argument raised by counsel and to avoid complications arising from the residuary powers of Parliament under Article 248 and Entry 97 of List II, the Court examined a hypothetical law of acquisition made by a State Legislature that also fell within the scope of Article 31(4). The Court concluded that there was no entry in List II, except Entry 36, that permitted a State Legislature to pass a law for acquisition without compensation or a public purpose.

In considering whether entry 36 of List II, either by itself or read together with entry 42 of List III, imposes any restriction that would prevent a State Legislature from making a law of acquisition that lacks a compensation provision, the Court observed that if such an implication were accepted, then no other entry in List II would empower a State to enact such a law. Consequently, a law that conflicts with article 31(2) could never be passed by a State, rendering the protection afforded by article 31(4) against the operation of article 31(2) pointless. Article 31(4) envisions a law that offends article 31(2), and for a State the only entry that could possibly authorize such an offending law is entry 36 of List II. This situation therefore demonstrates that entry 36, whether considered alone or in conjunction with entry 42, does not carry the implication that the Court attributes to it. The same reasoning was applied to article 31(5)(b)(ii), which safeguards any State law enacted for the promotion of public health or the prevention of danger to life or property. The Court noted that a law sought to be protected under this clause must also involve acquisition of property without a compensation clause; otherwise there would be no need for protection against article 31(2). Any such law that includes acquisition must, if it is to be made at all, be enacted under entry 36 of List II. If Mr P. R. Das’s contention were correct—that entry 36 (alone or read with entry 42) implicitly requires compensation—then a State could never enact a law for health promotion or danger prevention that involves acquisition without compensation, because the implied compensation requirement would make the law unconstitutional from the outset. Attempts to overcome this apparent anomaly by suggesting that clauses (4) and (5)(b)(ii) of article 31 were inserted “ex abundanti cautela” would be futile; if Mr Das were right, no amount of caution would be necessary because the law could not exist at all. The Court further observed that similar arguments could be raised under article 31-A, which also protects a law from article 31(2) and is placed in Part III of the Constitution. It has been suggested that article 31-A presupposes a valid law made by a legislature competent to exercise its legislative powers. However, if a State law concerning acquisition of property for a public purpose under entry 36 must provide compensation, then such a law would require no protection against article 31(2), rendering article 31-A meaningless and unnecessary.

In this case, the Court observed that if a law made by a State Legislature for a public purpose under entry 36 of List II is required to provide compensation, then such a law would not need any protection against the provisions of article 31(2), and article 31-A would become meaningless and unnecessary. The Court said that this conclusion was clearly untenable. The Court further held that clauses (4) and (5)(b)(ii) of article 31 and article 31-A expressly negate the proposition advanced by Mr P. R. Das. Accordingly, the Court concluded that, for the reasons already discussed, the principal premise relied upon by Mr P. R. Das in his first argument—that the duty to pay compensation is implicit in entry 36 of List II, either alone or read together with entry 42 of List III—is unsound.

The Court explained that the duty to provide compensation, as the Court considered it, is a provision of article 31(2) and is not an implicit component of the legislative competence granted by entry 36 of List II, whether read alone or in conjunction with entry 42 of List III. Consequently, the impugned Act cannot be challenged on the basis that it violates, contradicts, or abridges any of the rights conferred by clause (2) of article 31, that is, the right to compensation, by relying on articles 31(4), 31-A and 31-B.

The Court further assumed, for the sake of argument, that the compensation duty contained in article 31(2) might also be implicit in entry 36 of List II or entry 42 of List III. Even under that assumption, the Court said, the respondents could not question the validity of the impugned Act on the ground that it fails to provide compensation, because doing so would be precisely the conduct prohibited by article 31(4) and the newly added articles. The Court noted that article 31(4) and the added articles prevent the respondents from challenging the Act on any ground that it contravenes, is inconsistent with, or diminishes any of the rights conferred by clause (2) of article 31. The emphasis, the Court observed, is on the “provisions” rather than on the article number or the part of the Constitution in which they appear. It was therefore evident that the substance of the matter is that articles 31(4), 31-A and 31-B are intended to bar a challenge to the Act on the basis that it does not provide compensation. The Court accepted that the compensation duty is indeed one of the provisions of article 31(2), but if, as Mr P. R. Das contended, the same provision is also found in entry 36 of List II or entry 42 of List III, then that provision must likewise be considered covered by article 31(4) and the two added articles, for otherwise those articles

The Court observed that if two possible constructions of a constitutional provision exist, the interpretation that best effectuates the apparent intention of the Constitution’s framers should be adopted, while the alternative that would nullify that intention must be rejected. In this regard, the Court noted that article 31(4), which operates “notwithstanding anything in this Constitution,” by its very terms shields the Act from any legislative deficiency that might arise from alleged non-compliance with the implied provisions of entry 36 in List II or entry 42 in List III. Consequently, the Court held that the respondents, relying on articles 31(4), 31-A and 31-B, are not entitled to challenge the validity of the Act on the ground that it fails to provide for compensation, whether that ground is expressed as a breach of article 31(2) or as a breach of the implied provisions of the aforementioned legislative entries.

Turning to the substantive argument that the Act is unconstitutional because it purportedly lacks any principle for determining compensation as required by entry 42 of List III, the Court examined Chapter V of the Act, which deals with the assessment of compensation. The scheme, the Court explained, commences with the gross assets, treated as equivalent to gross income, from which certain deductions are made to arrive at net assets. Compensation is then calculated using a sliding scale of rates ranging from twenty to three times the net income. To this amount, a portion of accumulated arrears of rent and other dues, as well as compensation for mines and minerals determined under section 25, are added. On its face, the Court found that the Act does prescribe principles for determining the compensation payable to a proprietor or tenure-holder.

The Court acknowledged the contention that the deduction of five to twenty percent of gross assets as a cost of management is arbitrary, noting that the percentage varies with the size of the estate—twenty percent for larger estates and five percent for smaller ones. Additionally, objections were raised to deductions under the head of works of benefit to raiyats and to the scale of such deductions. However, the Court concluded that, upon close scrutiny, these objections do not amount to a claim that the Act fails to lay down any principle for determining compensation. Rather, the underlying implication of the arguments is that the principles, while present, are considered insufficient to ensure fair compensation. The Court stated that it is not within its function to assess the policy merits of the legislation; its concern is limited to determining whether the Act contains any principle as required by entry 42 of List III.

The court refrained from examining the policy purpose of the legislation. Its focus was limited to determining whether the statute had laid down any principle as required by entry 42 of List III. The court acknowledged that the percentage of management costs calculated on the basis of the income of a large estate is lower than that of a smaller estate. Nevertheless, the court observed that the Act expressly fixed the scale of deduction for the head of management costs as well as for the head of works of benefit, and that these scales were set in accordance with the capacity of the proprietor or tenure-holder to bear them. Accordingly, the court held that it was untenable to assert that the deduction provisions for works of benefit to the raiyats lacked any supporting principle. The court noted that a landlord was expected to spend money on works of benefit for his raiyats, such as constructing tanks and wells, providing irrigation facilities, maintaining charitable dispensaries and schools, and that, in practice, some landlords did indeed incur such expenditures. Consequently, the court found nothing improper in allowing a deduction from a landlord’s gross income for expenditures that the landlord was obligated to make and, in many instances, actually made. The court concluded that the provision did contain a principle, because the rate of deduction had been fixed in line with the financial capacity of the proprietors or tenure-holders.

The court further observed that, in several cases, applying the principles laid down in the Act reduced a landlord’s gross income to a very modest net income. For example, the gross annual income of the Darbhanga estate was approximately Rs 47,85,069; the deduction permitted by the Act amounted to about Rs 44,88,585; and the net income calculated under the statutory principles was roughly Rs 2,96,484, which the court rounded to about Rs 3 lakh. On that basis, the compensation payable to the Maharajadhiraj of Darbhanga would be only Rs 9 lakh. The court also referred to the case of the Raja of Purnea, where the compensation computed according to the statutory principle resulted in a deficit figure. The court held that the occurrence of a single isolated case in which the calculation produced a deficit did not demonstrate the absence of any principle in the legislation. In all other instances, the statutory principle produced a compensation amount, albeit sometimes inadequate. Accordingly, the court found that a principle had indeed been laid down, satisfying the requirement of entry 42 of List III, and that no question of legislative incompetence arose. The court further stated that if a principle existed but failed to yield adequate compensation in rare cases, the proper objection should be directed at the adequacy of the compensation, not at the absence of any principle.

In this case the Court observed that, even if the principle laid down in the Act fails to produce what may be described as just compensation, such a result might conflict with the requirements of article 31(2) of the Constitution, but it does not infringe entry 42 of List III. Moreover, the Court held that, in view of articles 31(4), 31A and 31B, the Act could not be challenged on the ground of non-compliance with article 31(2). The Court further explained that, should it be found that the Act in fact does not lay down any principle of compensation, this omission would amount not only to a breach of entry 42 in List III but also to a breach of article 31(2), which explicitly obliges the law either to fix the amount of compensation or to prescribe the principles and manner for fixing it. The Court stressed that such a breach, whether characterised as a violation of article 31(2) or of entry 42, could not be questioned because articles 31(4), 31A and 31B protect the legislation despite such deficiencies. The Court also noted that article 31(4) contains the phrase “notwithstanding anything in this Constitution,” which shields the Act from any alleged legislative incompetence arising from failure to comply with constitutional provisions relating to the payment of compensation or the existence of a public purpose, including any supposed requirement that actual compensation be produced under entry 42. Consequently, the Court concluded that the Act could not be attacked on the ground of legislative incompetence of the Bihar Legislature under entry 36 of List II or entry 42 of List III. This reasoning was deemed sufficient to reject the first ground of attack raised by Mr P R Das.

The Court then turned to subsidiary points that had been raised. It addressed the contention that section 3 of the Act, which is the principal operative provision, does not contemplate or authorize the acquisition of arrears of rent because the notification under that section merely refers to the vesting of estates or tenures in the State. The Court clarified that the effect of issuing such notifications is that the arrears of rent, including those specified in clause (b) of section 4, also vest in and become recoverable by the State. This vesting of arrears necessarily implies the transfer of the proprietors’ or tenure-holders’ rights to the State, and such a transfer must, therefore, be regarded as an acquisition of those rights by the State. In this manner, the Court held that the Act does, in fact, contemplate the acquisition of arrears of rent by the State. Finally, the Court referred to a passage in Wills’ Constitutional Law (page 816) that had been cited to argue a particular view of the power, though the argument was not pursued further in the present excerpt.

The Court observed that a passage in a constitutional treatise asserted that eminent domain could not be exercised with respect to money and choses in action, except for certain other unusual forms of property. The passage claimed its foundation in several earlier decisions of American courts. However, the Court pointed out that Nichols on Eminent Domain, Volume I, page 99, paragraph 2, together with the decision in Cincinnati v. Lowisville & N. R. Co., reported at 223 United States 390, 50 Lawyer's Edition 481, demonstrated that the contemporary view allowed the power of eminent domain to be exercised over choses in action. The Court then examined whether arrears of rent qualified as “property” in the sense in which that expression appears in the Constitution and is interpreted by Indian law. It explained that arrears of rent were simply rents that had become due but remained unpaid. The Court stressed that such arrears were not cash held in the landlord’s till; instead, they constituted a debt owed by the tenants. Accordingly, the Court described arrears of rent as an actionable claim against the tenants, which amounted undeniably to a species of “property” that could be assigned. From this description, the Court concluded that the State could acquire arrears of rent as a form of “property.”

It was finally urged that the Act contained no provision for the payment of compensation when this type of property was taken. The Court noted that Section 24 used the term “compensation” in relation to the taking of estates or tenures and also in respect of mines and minerals, but that the same term was not expressly linked to the fifty percent of arrears of rent that were directed to be added to the compensation. Nevertheless, the Court observed that the provision for adding the fifty percent of the arrears appeared in the chapter titled “Assessment of Compensation,” and therefore that fifty percent was incorporated as part of the compensation assessment process. The Court further questioned why the fifty percent was given to the proprietors or tenure-holders at all unless it was intended as compensation. It remarked that when the State seized a lakh of rupees and returned only fifty thousand rupees, it effectively paid no compensation and, by this mechanism, retained the remaining fifty thousand rupees without any consideration. The Court found this line of argument initially plausible but ultimately lacking in sound principle. It explained that the argument arose only because a moiety was returned in the same form of money. The Court illustrated that if compensation for money were provided, for example, by granting land equal in value to half of the money taken, the same objection could not be raised, and the only criticism would be that the land given was not equivalent in value to the money compulsorily taken, and therefore could not be described as just compensation. In view of Articles 31(4), 31-A and 31-B, such a criticism would have been ineffective. The Court stated that it saw no difference in principle or law when compensation for the acquisition of arrears was made in money. It added that in a situation where only a moiety of the amount of

In the situation where only a portion of the arrears is returned, the immediate complaint would be that returning fifty thousand rupees does not constitute fair or adequate compensation for the loss of one lakh rupees, and such a complaint might have succeeded if the Constitution had not contained the provisions of Articles 31(4), 31-A and 31-B. Moreover, this line of argument ignores the important fact that arrears of rent are not cash held by the proprietor or the tenant-holder; they represent a debt owed by the tenants. The market value of such a book debt is uncertain, and the debt would have to be realized, perhaps through a suit and subsequent execution proceedings, which would involve time, expense and legal costs. It is quite possible that a portion of the debt might never be realized at all. Consequently, the State assumes the risk of either realizing or failing to realize the arrears of rent. Nonetheless, regardless of the result of the State’s efforts, half of the arrears is added in a lump sum to the compensation awarded. This, in the view of the Court, clearly shows that compensation is indeed being paid for the arrears of rent, and the Court is not prepared to accept the contention, expressed by Mr P R Das, that the payment of a moiety of the book debts as compensation is so illusory that it amounts to nothing. Even if the amount paid is deemed inadequate, the grievance would not be that the Act fails to lay down any principle, as required by Entry 42 in List III, but rather that the principle incorporated does not yield sufficient compensation, thereby allegedly violating Article 31(2). However, that defect cannot be invoked as a ground of attack because Articles 31-A and 31-B preclude such a challenge, as explained earlier. Regarding Ground B, the second point raised by Mr P R Das is that, even if the Court rejects the argument that compensation is implicitly required under Entry 36 in List II and Entry 42 in List III, and even if it holds that the respondents, by reason of Articles 31(4), 31-A and 31-B, are barred from questioning the validity of the Act on the basis that it does not provide compensation, the respondents remain entitled to contest the Act on the ground that it lacks a public purpose. The learned Attorney-General did not dispute that a public purpose is an essential pre-condition for exercising the power of compulsory acquisition. The respondents submit that the requirement of a public purpose as a condition precedent to compulsory acquisition of private property is not a “provision” of Article 31(2) but a requirement derived from Entry 36 in List II or Entry 42 in List III. Although the words “for public purposes” appear in Article 31(2), it is argued that there is a distinction between a “provision” and an “assumption”; consequently, it is urged that Article 31(2) merely assumes a law authorising acquisition for public purposes and does not itself impose the public-purpose requirement as a substantive provision.

Article 31(2) was interpreted as presuming the existence of a law that authorises either the taking of possession or the acquisition of property for a public purpose. The provision further stipulates that such taking or acquisition may not occur, even when the purpose is public, unless the authorising law also contains a requirement for payment of compensation. From this wording the Court concluded that the sole “provision” found in article 31(2) is the mandatory inclusion of a compensation clause in any law that permits acquisition for a public purpose. Consequently, only that compensation requirement may be insulated from attack on the basis of articles 31(4), 31-A and 31-B of the Constitution. This line of reasoning received the support of both Reuben J. and S. K. Das J. The latter judge, after citing a passage from his own earlier decision in Sir Kameswar Singh v. Province of Bihar, A.I.R. 1950 Pat. 392, observed that “Clause (2), strictly speaking, does not, in express words, make ‘public purposes’ a condition precedent to compulsory acquisition but rather assumes that such acquisition can be for public purposes only; it has so by necessary implication.” The learned judge then referred to a passage from the judgment of his brother Mukherjea J. in Chiranjit Lal Choudhury v. Union of India & Others, (1950) S.C.R. 869, wherein it was held that article 31(2) “prescribes a two-fold limit within which such superior right of the State should be exercised. One limitation, implied in the clause, is that the taking away must be for public purpose. The other condition is that no property can be taken unless the law which authorises such appropriation contains a provision for payment of compensation in the manner laid down in the clause.”

The Court, however, was not persuaded that Mukherjea J.’s observations supported the contention advanced by Mr P. R. Das that the existence of a public purpose is not a “provision” of article 31(2) but merely an inherent condition applicable to any legislation concerning compulsory acquisition of private property. It was noted that Mukherjea J. expressly recognised that article 31(2) “prescribes” a two-fold limit, and a limit that is “prescribed” by a constitutional article must itself be a provision of that article. Moreover, even an implied requirement within the clause must be regarded as a provision, since the term “provision” is sufficiently broad to encompass both express and implied stipulations. Accordingly, the Court was prepared to affirm, for reasons to be explained subsequently, that the requirement of a public purpose as an essential prerequisite to compulsory acquisition is, in substance, a provision of clause (2) and forms an integral part of it. Article 31, as a component of Part III of the Constitution under the heading “Fundamental Rights,” therefore confers a fundamental right insofar as it protects the owner’s interest in private property.

Clause (1) of Article 31 protects a private owner from being deprived of his property except by authority of law. A careful reading shows that this protection is not absolute; it becomes clear when the negative wording of the clause is recast in a positive form. In positive language the clause would state: “Any person may be deprived of his property by authority of law.” The sole condition that limits State action, therefore, is that the State must act under a law that authorises the deprivation. This requirement gives the owner a measure of protection, because deprivation cannot occur unless there is lawful authority. The negative phrasing of the clause was chosen deliberately to highlight this immunity from arbitrary State action as a fundamental right. In the same way, Clause (2) is also expressed in negative terms in order to underscore the fundamental right it embodies. To articulate that right it is necessary first to define the scope of State power and then to specify the limits on that power, because those limits are the very measure of the right. When Clause (2) is rendered in positive language, omitting words that are not essential for the present discussion, it reads: “Any property may be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition if the law provides for compensation for the property taken possession of or acquired.”

Expressed in this form the clause makes unmistakably clear that three separate limitations are placed on the State’s power. First, the taking or acquisition must be for a public purpose. Second, the taking or acquisition must be carried out under a law that expressly authorises such action. Third, the authorising law must contain a provision for payment of compensation to the owner of the property that is taken or acquired. These three conditions together constitute the protection guaranteed to the property owner and define the extent of his fundamental right under Clause (2). If these conditions were not part of the constitutional provision, the article would furnish no immunity at all. The Court therefore holds that the requirement of a public purpose is an essential and integral component of the “provisions” of Clause (2). To suggest otherwise would lead to the untenable conclusion that Parliament could, under its residuary powers in Article 248 and entry 97 of List VII, enact a law acquiring private property without any public purpose, thereby defeating the purpose of the constitutional guarantee of compensation and protection.

In the present case, the Court observed that allowing Parliament, under entry 7 of the Seventh Schedule, to enact a statute that would acquire private property without any public purpose would lead to an absurd situation. Under such a scheme, Parliament would be required by article 31(2) to provide compensation when the acquisition is made for a public purpose, yet it would not be compelled to provide any compensation when the acquisition is made without a public purpose. The Court said that this outcome could never have been intended by the framers of the Constitution. Consequently, the Court held that the existence of a public purpose is a condition precedent to the exercise of the power of compulsory acquisition and that this condition constitutes a “provision” of article 31(2). Because it is a provision of article 31(2), any infringement of that condition cannot, according to the Court, be invoked as a basis for questioning the validity of the Act under articles 31(4), 31-A and 31-B.

Counsel for the petitioner, Mr P R Das, advanced a second line of argument. He maintained that the necessity of a public purpose is implicit in entry 36 of List II and likewise required by entry 42 of List III, the latter being incorporated into entry 36 by the words “subject to” that appear at the end of entry 36. On that basis, he concluded that, in the absence of a public purpose, the Bihar Legislature lacked the legislative competence to enact the impugned Act and that this ground of attack remained open despite the safeguards of articles 31(4), 31-A and 31-B. The Court examined these submissions and found that entry 36 merely covers any purpose other than that of the Union and is not, by its terms, restricted to a public purpose. Moreover, the Court held that the argument relying on the “subject to” language is not well-founded, pointing out that entry 33 of List I does not contain similar qualifying words, and therefore the public-purpose requirement of entry 42 cannot be said to be incorporated into entry 33. Accordingly, while entry 36 of List II, read with entry 42 of List III, limits a State legislature to acquire property only for a public purpose, entry 33 of List I, which is not subject to entry 42, permits Parliament to legislate for compulsory acquisition without a public purpose.

The Court observed that the result sought by the appellant could never have been intended by the Constitution. In examining entry 42 of List III, the Court found no support for the contention raised by Mr P R Das. The phrase “acquired or requisitioned for the purpose of the Union or of a State or for any other public purpose” that appears in entry 42 is merely descriptive of the preceding word “property”. The matters covered by entry 42, considered as a legislative head, are the principles for determining compensation and the form and manner of providing such compensation for property that is described as having been acquired or requisitioned for the stated purpose. Accordingly, entry 42 cannot be regarded as a legislative head dealing with the acquisition of property itself, and it certainly does not impose a requirement that a public purpose must exist as a condition precedent to any acquisition. The Court therefore concluded that entry 42 offers no assistance to Mr P R Das for the part of his argument that seeks to import a public-purpose requirement from that entry. The reasons previously given for rejecting the appellant’s arguments that the obligation to provide compensation was implied in entry 36 of List II, either alone or read together with entry 42 of List III, apply mutatis mutandis to the present contention and need not be repeated. In short, the provisions of article 31(2), which, as explained, require the existence of a public purpose, exclude the implication that the Court is being asked to read into entry 36 of List II and entry 42 of List III. Moreover, articles 31(4), 31-A and 31-B expressly exclude a challenge to the Act on the ground that it contravenes the “provision” of clause (2). If the “provision” of clause (2) of article 31, which stipulates the necessity of a public purpose as a prerequisite to compulsory acquisition, were to be treated as an implication in those two legislative entries, then the language of articles 31(4), 31-A and 31-B—especially the phrase “notwithstanding anything in this Constitution” in article 31(4)—would protect the Act from such an implied provision. For the reasons already explained, the Court therefore rejected the second main point raised by Mr P R Das as untenable.

Assuming, for the sake of argument, that the necessity of a public purpose is not a provision of article 31(2) but is instead a provision found only in entry 36 of List II and/or entry 42 of List III, and consequently that articles 31(4), 31-A and 31-B do not bar the respondents from challenging the validity of the Act on the ground of legislative incompetence caused by the absence of a public purpose, the Court noted that the substantive question would remain whether a public purpose, as understood in the Constitution, actually exists to support the Act. The Court observed that the Act itself contains no explicit recital of any public purpose, although it was conceded that this absence does not, by itself, render the Act invalid. The Court therefore indicated that the lack of a stated public purpose in the text of the legislation would not, in itself, be fatal to the validity of the Act, but it would still be necessary to determine whether a public purpose, within the constitutional meaning, can be discerned from the purpose and effect of the legislation.

The submission argued that the absence of an explicit statement of public purpose in the statute was fatal to the statute’s validity. Nevertheless, the argument contended that this very absence demonstrated that the Legislature, at the time it enacted the law, possessed no conception of a public purpose whatsoever. The petitioners further claimed that, besides the missing recital, none of the operative provisions of the Act contained any indication of a public purpose. They did not dispute that, as a consequence of the legislation, a substantial amount of money which tenants currently owe as rent and arrears to their landlords will now be diverted to the State. However, they relied on passages from Cooley’s Constitutional Limitations, eighth edition, volume II, page 1118 (Footnote 1), and from Professor Willis’s Constitutional Law, page 817, to assert that the power of taxation—not the power of eminent domain—was the proper constitutional vehicle for increasing public revenue. To establish that the Act lacked any supporting public purpose, the petitioners pointed out that Bihar recorded approximately 13,35,919 land proprietors. Assuming an average family size of four, they estimated that nearly five and a half million individuals would be impoverished by the legislation. They emphasized that the actual cultivators would receive no benefit; they would remain in place and would be compelled to continue paying rent, not to their former landlords but to the State, which they described as an unfeeling, ruthless machine. The petitioners maintained that a public purpose must be definite, tangible, and immediate, and that the statute itself must contain an indication of such purpose. They argued that the State could not appropriate private property today and defer consideration of the public purpose to a later time. This line of reasoning prompted the Court to examine the meaning of “public purpose” within the Constitution.

The Court noted that reference had been made to several American authorities in order to determine the meaning and implication of the term “public use,” a phrase that is comparatively narrower than the constitutional expression “public purpose.” The Court further observed that a review of contemporary textbooks, such as Professor Willis’s Constitutional Law beginning at page 817, revealed that the concept of “public use” is evolving rapidly in the United States. Historically, “public use” signified a use by the public itself. Under the modern interpretation, however, “public use” is understood to mean a use that is useful to the public. The Court cited a passage from Cooley’s Constitutional Limitations, volume II, pages 1139-40, as quoted by Justice S K Das of the Patna High Court, which summarized the prevailing position: “No satisfactory definition of the term ‘public use’ has ever been achieved by the Courts. Two different theories are presented by the judicial attempts to describe the subjects.” The Court indicated that these divergent theories illustrate the difficulty of arriving at a single, precise definition of the term.

In considering the reach of the expression, one school of thought restricts “public use” to matters of direct employment or occupation. By contrast, a broader and more adaptable interpretation equates the phrase with “public advantage” or “public benefit.” A modest inquiry reveals that any attempt to fix a precise definition inevitably omits some matters that ought to fall within the scope of “public use” while simultaneously admitting others that should be excluded. Historically, the narrower construction predominated in early judicial decisions, whereas the evolution of society, the rise in population density, and the increasingly intricate conditions of modern life have compelled a more expansive approach. The very nature of the present case reflects contemporary circumstances in which the growing inter-dependence of various human factors within a progressively complex community obliges the Government to intervene and regulate individual activities at a greater number of points than was previously required.

Similar observations appear in the treatise Corpus Juris, volume twenty, article thirty-nine, pages five-52 and five-53, under the heading “What is a public use.” The author there observes that no single definition can capture every degree of public good that satisfies constitutional criteria for a “public use,” because each instance is fundamentally a matter of public policy. The meaning, the author notes, is flexible and not confined to a fixed conception at any given moment; generally, it can be described as a use that affects the public at large or a sizable segment of the public, as opposed to use that benefits only particular individuals. Some courts have embraced a liberal construction to the extent of declaring that “public use” is synonymous with “public benefit,” “public utility,” or “public advantage,” thereby authorizing the exercise of eminent domain to advance such benefits, especially where the interests at stake are of considerable magnitude and the power is employed to ensure that natural resources and local advantages are fully developed for the general welfare.

The author then turns to discuss the more restrictive sense of the term. Reference is made to the Judicial Committee’s decision in Hamabai Framjee Petit v. Secretary of State for India [(1915) L.R. 42 I.A. 44]. It is important to recall that the Committee had to interpret the words “public purposes” within a nineteenth-century lease. Even in 1914, the Committee refrained from attempting a precise definition of “public purpose,” preferring instead to endorse the passage from Bachelor J., who stated that general definitions should be avoided where possible and that it was sufficient to recognize that the phrase “public purposes” in the lease encompassed, without requiring exact limits, the intended meaning.

In the passage quoted at paragraph 135, the Court observed that the expression, irrespective of any other interpretation, must contain a purpose—an object—whose aim directly concerns the general interest of the community as opposed to the particular interest of individuals. The Court noted that no rigid definition of “public purpose” was laid down, because the concept has been evolving rapidly throughout the world. The quotation referred to “the general interest of the community,” and the Court explained that the presence of this element in an object or aim converts that object or aim into a public purpose, as recorded at paragraph 136. From these observations, the Court inferred that any activity that advances the general interests of the community in contrast to the specific interests of an individual must be regarded as a public purpose. The Court further observed that the march of civilization has broadened and expanded the scope of what is understood as the community’s general interest. Consequently, the earlier, narrower view that gave absolute sanctity to private individual interests can no longer restrain the forward flow of social progress. The emphasis, according to the Court, has unmistakably shifted from the individual to the community. This modern movement in social and political philosophy, the Court said, is reflected in the Constitution, which does not ignore the individual but seeks to harmonise individual interests with the paramount interest of the community.

The Court then turned to constitutional provisions and judicial precedents to illustrate this balance. It recalled the statements made in Gopalan’s case (1950) S.C.R. 88 and again in Chiranjit Lal’s case, noting that Article 19(1)(a) to (e) and (g) protect the freedoms of citizens, yet the State is empowered to impose reasonable restrictions on those freedoms in the interests of the State, public order, morality, or the general public as provided in clauses (2) to (6). The Court further explained that when a regulated individual freedom becomes incompatible with, or threatens, the freedom of the community, Article 21 authorises the State to deprive a person of life or personal liberty according to a procedure established by law, subject to the safeguards of Article 22. Regarding property rights, the Court observed that Article 19(1)(f) protects private property only subject to reasonable restrictions in the interest of the general public under clause (5). Moreover, when the community’s interest so requires, Article 31 permits the State, by authority of law and upon payment of compensation, to acquire or requisition property. The Court concluded that this constitutional framework clearly demonstrates a fresh outlook that places the general interest of the community above the individual interest.

In this case the Court observed that the Constitution placed the general interest of the community above the interest of the individual. It noted that the aspirations once expressed as idealistic slogans had become entrenched in the preamble, which declared the people’s solemn resolve to secure justice—social, economic and political—and equality of status and opportunity for all citizens. The Court stated that concepts previously regarded as fanciful had been adopted as directive principles of State policy, prominently set out in Part IV of the Constitution. It explained that Article 38 articulated an ideal of a State that must constantly strive to promote the welfare of the people by establishing a social order in which social, economic and political justice informs all national institutions. Under Article 39, the Court said, the State is directed to ensure, among other things, that ownership and control of the community’s material resources are distributed to serve the common good and that the economic system does not concentrate wealth and means of production to the detriment of the community. The Court interpreted the phrase “public purpose” in Article 23(2) as having a very broad meaning. It emphasized that the law must keep pace with the social and political evolution reflected in the Constitution, and therefore, to give effect to the Constitution’s avowed purposes, every measure calculated to promote the welfare of the people as envisaged in the directive principles must be regarded as a public purpose. The Court then asked what the purpose of the State was in adopting measures for the acquisition of zamindaries and the interests of intermediaries. It answered that the purpose was to serve the common good by bringing land that fed, sustained and produced wealth through forests, minerals and other resources under State ownership or control. Such State ownership or control, the Court held, constituted a necessary preliminary step toward implementing the directive principles and could not be separated from a public purpose. It observed that the directive principles in Part IV were not the policy of any particular political party but principles fixed by the Constitution to guide State policy irrespective of which party held power. Finally, the Court reminded that the object of the impugned Act was not to authorize the arbitrary acquisition of a particular property for a narrow public purpose, but to bring the majority of wealth-producing land under State ownership or control by abolishing the outdated system of land tenure.

In this case the Court observed that the old system of land tenure had been found archaic and not conducive to the general interest of the community. The legislation under review therefore creates a Land Commission whose function is to advise the State Government on the agrarian policy that the Government may adopt from time to time. The Court held that it is impossible to say that the Act lacks a public purpose. It noted that the very Bihar Act was placed before the Constituent Assembly when Article 31(4) was enacted and was again considered when the Constitution was amended in order to preserve this Act. The Court asked rhetorically whether the Constituent Assembly would have chosen to protect such legislation unless it were convinced that the Act was necessary for the community’s general interest. Agreeing with the observations of Reuben J. and S. K. Das J., the Court concluded that these circumstances clearly show that the Constituent Assembly regarded the Act as being supported by a public purpose. The Court warned that a narrow construction of the expression “public purpose” would defeat the overall aim of the Constitution as well as the specific purpose of the recent amendments. It emphasized that the measure should not be interpreted through the lens of early nineteenth-century ideas about the sanctity or inviolability of individual rights. Accordingly, the Court affirmed the High Court’s finding that the impugned Act was enacted for a public purpose.

Mr P. R. Das then advanced a narrow argument. He assumed that the Act contains a general public purpose for the compulsory acquisition of zamindaris and tenures, but he contended that no public purpose can be found in the provisions that permit the taking of arrears of rent or the deduction of four to twelve and a half percent of the gross assets on the speculative premise that landlords must spend that percentage of their gross income on works benefiting the raiyats of the estates, and therefore that part of the Act exceeds the legislative competence of the Bihar Legislature. The Court found this argument unsound for several reasons. First, the existence of a public purpose is a condition prescribed by Article 31(2); consequently, even if a public purpose were absent with respect to the arrears of rent, articles 31(4), 31-A and 31-B prevent that absence from being a ground for attacking the Act. Second, the Court held that it is wholly erroneous to isolate a single item from a comprehensive land-reform scheme and declare that item unsupported by a public purpose. By the same logic one could argue that there is no public purpose in the acquisition of forests or of mines, especially undeveloped mines, merely because such acquisitions do not directly affect the conditions of those who till the soil. The Court concluded that this approach does not represent the correct method of analysis.

In this case, the Court observed that the proper method was to consider the land-reform programme as a whole and then determine whether the entire scheme of acquisition served a public purpose. The Court further stated that it did not regard the deduction of four to twelve and one-half per cent of the gross assets as an acquisition or confiscation; rather, it treated the deduction as part of a principle established for calculating the amount of compensation required by article 31(2) of the Constitution and entry 42 of List III of the Seventh Schedule. The Court also rejected the contention that taking the arrears of rent in connection with the acquisition of zamindaries could not be based on a public purpose. It reiterated that the acquisition of zamindaries and tenures formed a scheme intended to bring about agrarian reforms and to improve the condition of the tenants. The object, inter alia, was to place the tillers of the soil directly under the State, thereby freeing them from the grip of oppressive landlords and making them masters of their own holdings while obliging them to pay dues to the State.

The Court noted that a large proportion of tenants were in arrears and that, when arrears accumulated, tenants found it difficult to pay current rent after liquidating part of the old arrears, causing a cycle in which the current rent also fell into arrears. According to Annexure B(2) to the affidavit of Lakshman Nidhi, affirmed on 22 January 1951, the total raiyati rent payable by the various tenants in the different circles of the Darbhanga Estate alone would exceed three lakh rupees. The Court observed that it was not entirely clear whether all these arrears were due from genuine raiyats—i.e., the actual tillers of the soil—but, for the purposes of its analysis, it could safely assume that the majority, if not all, of the actual raiyats were habitually and perpetually in arrears because of chronic indebtedness and financial strain.

The Court explained that if the zamindaries and tenures were acquired under the Act while leaving the zamindars and tenure-holders free to recover the huge arrears from the cultivating tenants through legal processes, the likely result would be the sale of the tenants’ holdings or, at least, the sale of their rights, title and interest. Such sales could occur at court auctions following execution of decrees or through private sales coerced upon the tenants. Consequently, the bulk of the actual tillers would become landless labourers, and the entire scheme of land reforms envisioned by the Act would be rendered ineffective.

Finally, the Court concluded that, since the acquisition of zamindaries and tenures was motivated by the sound public purpose of improving the economic and political conditions of the actual tenants, the same public purpose might justify the acquisition of the arrears of rent in order to prevent the undesirable consequences described above.

The Court explained that the acquisition of zamindaries and tenures was, in the Judge’s view, driven by the genuine public purpose of improving the economic and political conditions of the actual cultivating tenants. That same public purpose, the Court said, could require the State to acquire the arrears of rent in order to prevent the undesirable but inevitable consequences that had been described earlier. The Bihar Legislature, the Court observed, evidently believed that tenants who were behind in rent would receive more humane treatment and a more reasonable settlement of the large arrears from the State acting under the guidance of the Land Commission than they would from the ex-propriated landlords. The Court noted that the landlords’ only surviving interest in their former tenants would be to recover as much of the arrears as possible in the shortest time, without any mercy or accommodation. The same observation applied, the Court added, to the acquisition of decrees for rent arrears. The Court pointed out that the overriding public purpose of ameliorating the condition of the cultivating raiyats might have led the Legislature to treat the arrears of rent and the corresponding decrees differently from other ordinary movable property of the zamindars or tenure-holders, such as bank deposits, jewellery or ornaments, which the raiyats had no concern with, and to provide a specific provision for acquiring those arrears and decrees. On that basis, the Court rejected the second main ground of attack raised by Mr P R Das against the Act. The Judge further confessed that, even if he were to agree with Mr P R Das that those particular provisions might be defective for lack of a public purpose, it would be extremely difficult to accept the argument that the entire Act was invalid, because it would not be easy to assume that the Bihar Legislature, knowing that some provisions might be struck down, would nevertheless have passed the remaining parts in the truncated form presented. The Court held that the acquisition of rent arrears appeared to be an integral component of the agrarian reform scheme and inseparably interwoven with it, and that the Scheme might not have been implementable by the State without that acquisition. Since the Judge concluded that no part of the Act was invalid for lack of a public purpose, he found no need to further address the question of severability or to cite the judicial decisions relied upon by counsel on either side. Regarding Ground C, the Court noted that Mr P R Das’s third contention was that the Act, while purporting to conform to the Constitution, in effect constituted a defence of it; he alleged that the Act pretended to comply with constitutional requirements by laying down principles for determining compensation and the manner of its payment, but in reality created a scheme for non-payment of compensation.

In this case, the Act was said to establish certain principles for determining compensation and to prescribe the form and manner in which such compensation should be paid, yet, in effect, the Act created a scheme that resulted in non-payment of compensation. The petitioner argued that the Act ostensibly offered to repay fifty percent of the arrears of rent as compensation, but in reality it confiscated the remaining fifty percent without providing any compensation. He further contended that, under the pretense of deducting between four and twelve and one-half percent of the gross income, the State was in fact appropriating a substantial sum under that heading. According to his submission, the entire arrangement amounted to a mere pretense or a contrived shift designed to confiscate private property. This line of argument, when the concept of property was understood, was essentially an attack on the legislative competence of the Bihar Legislature to enact the statute. On a fundamental level, the argument asserted that although the Act pretended to give compensation, it in truth failed to do so. The petitioner maintained that the absence of a provision for just and adequate compensation rendered the Act defective, because the legislative authority conferred by entry thirty-six of List II and entry forty-two of List III required the inclusion of such a provision. He explained that non-compliance with this constitutional condition could be either overt or covert. When the non-compliance was overt, the law was plainly ultra vires for breaching constitutional requirements; when the non-compliance was covert, it amounted to a fraud on the Constitution, meaning that the Legislature pretended to act within its power while in fact exceeding it. Thus, the allegation of fraud on the Constitution was described as a vivid way of expressing the idea of constitutional non-compliance. The petitioner illustrated his point by referring to the acquisition of the arrears of rent, asserting that the provisions in the Act concerning that acquisition constituted a fraud on the legislative power granted by the Constitution. He questioned why such a characterization as fraud was necessary, noting that the Constitution contained no provision prohibiting the acquisition of arrears of rent, and therefore no covert attempt to achieve something that was not prohibited was required. He had already explained that, within a land-reform scheme like that envisaged by the Act, the acquisition of arrears of rent could properly accompany matters relating to zamindaris and tenures. Consequently, he asked where the theory of fraud entered the analysis, concluding that the only basis for the fraud allegation was that a portion of the arrears was taken away without compensation. He then turned to the acquisition of non-income-yielding properties, asking why that too was described as a fraud on the Constitution.

In considering whether the Constitution forbids the acquisition of such property, the Court observed that the Constitution contains no prohibition against taking that property. Consequently, the allegation of fraud cannot rest on a constitutional ban. The Court explained that, in its view, the claim of fraud arises because the Act provides compensation only on the basis of income. As a result, properties that are currently generating income but possess considerable unrealised potential are acquired without any compensation. The same reasoning applies to the provision that permits a deduction of four to twelve and a half percent of gross assets under the heading “Works of Benefit to the Rayats”. Ultimately, the Act is challenged on the ground that it fails to fulfil the constitutional requirement to provide compensation for the acquisition of property, and therefore it is ultra vires. The Court noted that this argument is essentially the same as the argument that the Act lacks provision for just compensation, merely expressed in more elaborate language. The Court reiterated that it had already addressed the issue of the absence of a provision for just compensation while examining the first point raised by counsel for the petitioner. The Court reaffirmed that the duty to provide compensation does not arise implicitly from entry 36 of List II, nor from entry 42 of List III, but is confined to article 31(2) of the Constitution. Under entry 42 of List III, the Act has indeed set out a principle for determining compensation, and therefore there is no ground to claim legislative incompetence for any alleged non-compliance with a requirement that is supposedly implied in those entries. The Court further held that if, in rare cases, the principles laid down in the Act fail to produce any compensation or fail to produce adequate compensation, such a failure might contravene article 31(2). However, because articles 31(4), 31-A and 31-B, and especially the phrase “notwithstanding anything in this Constitution” in article 31(4), pre-empt such a challenge, the argument cannot be used as a basis to attack the Act, even though it is framed as a fraud on the Constitution. Accordingly, the Court rejected that point. The Court added that even if a different view were adopted, the same difficulty would arise concerning the severability of the various provisions of the Act, as previously indicated. Regarding Ground D, counsel for the petitioner had argued that section 32(2) of the Act made the Act unenforceable because it provided compensation in forty equal instalments without specifying the interval between instalments. The Court noted that, during the arguments, the petitioner chose not to pursue this point, and therefore the Court found no need to refute it. Finally, on Ground E, counsel for the petitioner contended that the Act had improperly delegated essential legislative functions to the Executive Government, rendering the Act invalid. The Court observed that article 31(2) requires

The Court noted that any statute which authorises the taking possession of land or the acquisition of land for a public purpose must contain a provision for compensation. Such a provision must either fix the amount of compensation or must specify the principles on which the amount is to be calculated and the manner in which the compensation is to be paid. The Constitution, by Entry 42 in List III, speaks of the principles that should guide the determination of compensation as well as the form and manner in which that compensation should be given. The argument presented by counsel was that the Constitution imposes on Parliament or on a State Legislature the duty of laying down these principles, the form and the manner of payment. However, the Bihar Legislature, by virtue of section 3 (22) of the Act, merely stated that compensation could be paid in cash, in bonds, or partly in cash and partly in bonds. It further provided that the bonds might be negotiable or non-negotiable, non-transferable, and payable in forty equal instalments. No decisive provision was made as to the exact amount, the principles for assessment, or the detailed manner of payment; instead, the statute left that entire matter to be decided by the State Government. The Court therefore held that the Legislature had failed to discharge the duty expressly assigned to it, a duty that required the use of its knowledge, wisdom and patriotism. Counsel Mr P R Das complained that the Legislature had shirked its responsibility and had effectively delegated an essential legislative power to the State Government, to be exercised under rules made by the Government pursuant to the rule-making authority in section 43 (2) (p).

The Court observed that the propriety and legality of such a delegation of legislative power had recently been examined by the Court in In re The Delhi Laws Act, 1912 etc. [(1951) S.C.R. 747]. The Court indicated that, were it to consider the matter purely on its own notions, the argument would have been dismissed in limine because the Legislature had not abdicated or effaced itself in the manner explained in the earlier decision. Applying the principles laid down in that earlier case, as articulated by the late Chief Justice and the learned judges referred to by counsel, the Court was compelled to overrule the contention. Section 32 of the Act clearly shows that the Legislature had thought through the problem and had laid down the principle that compensation could be paid in cash, in bonds, or partially in each, and that bonds could be either negotiable or non-negotiable and non-transferable. Having set this principle, the Legislature, by a rule framed under section 43 (3) (p), entrusted the Executive with the task of determining the proportion of compensation to be paid in cash versus bonds and the precise manner of such payment. The Court noted that these details necessarily depend on special circumstances, such as the Government’s fiscal capacity and the needs of the proprietors, matters with which the Executive is more familiar than the Legislature.

The Court observed that the determination of how much the Government can pay, the degree of necessity faced by landowners, and numerous other relevant factors are matters with which the Executive is more intimately acquainted than the Legislature. Consequently, the Court could not accept the submission that delegating this responsibility to the Executive amounted to an unlawful delegation of a core legislative function, as alleged by the counsel who raised that contention. Another counsel argued that the Land Acquisition Act of 1894, having been sustained by the Constitution and extended by a 1899 notification to the State of Ramgarh, should continue to govern compensation in that State until such notification is withdrawn, thereby precluding the application of the impugned State Act because the subject matter would already be occupied by the Central Act. The Court noted, however, that the compensation provisions of the 1894 Act are limited to lands acquired pursuant to that Act and do not extend to lands acquired under different statutes. Therefore, those provisions could not be invoked for acquisitions made under the Bihar Act, and the doctrine of an occupied field was inapplicable. In the Court’s view, the argument lacked any substantive merit. Accordingly, the appeals were allowed, as set out in the reasons previously given.

The Court further stated that the factual background leading to these matters had been exhaustively detailed in the judgment delivered by the learned brother and required no repetition. The conclusions arrived at by that brother and another judge were fully endorsed. While the Court ordinarily would have limited its response to this concurrence, it chose to elaborate because of the significance of the issue and the interests involved. Article 31(1) of the Constitution declares that no person shall be deprived of his property except by law. The Court identified three methods of deprivation: destruction, acquisition, and requisition. Destruction, which may be justified on grounds of public health or to avert danger, is not the focus here. Acquisition involves a permanent transfer of property, whereas requisition is temporary. Apart from this distinction, both acquisition and requisition impose similar obligations on the State with respect to private citizens. Under the Constitution, property may be requisitioned or acquired for Union purposes, State purposes, or any other public purpose. Entry 33 of List I of the Seventh Schedule authorizes acquisition or requisition for Union purposes, while Entry 42 of List III provides that the principles governing compensation for property acquired or requisitioned for Union, State, or other public purposes must be determined, including the form and manner of such compensation.

The Court observed that the Constitution mandated that whenever property was taken, the purpose for such taking had to be expressly identified, and the law had to prescribe the form and manner in which compensation would be determined and paid. It noted that from the earliest days of legal history the government’s power to acquire private property for a public purpose had been recognized, a doctrine commonly described as the law of eminent domain. However, the Court emphasized that a universal principle of law required that such acquisition could occur only upon payment of just compensation. In support of this principle, the Court referred to a passage from Story on the Constitution (Vol. 2, p. 534, para. 1790) that discussed the concluding clause of the Fifth Amendment to the United States Constitution. The passage declared that private property could not be taken for public use without just compensation, describing the rule as an affirmation of a great common-law doctrine protected by natural equity and regarded as a principle of universal law. The passage further warned that, in a free government, all other rights would become worthless if the state possessed uncontrolled power over each citizen’s private fortune, and it asserted that the administration of justice was a fundamental objective of any good government, a goal rendered meaningless if property were subject to the arbitrary will of the legislature.

The Court then affirmed that payment of compensation constituted an essential element in the lawful exercise of the power to take property. It cited the leading case Attorney-General v. De Keyser’s Royal Hotel, Ltd. (1920 A.C. p. 508), where Lord Dunedin described compensation as a necessary concomitant of a taking. The Court also quoted Bowen L.J. in London and North Western Railway Co. v. Evans (1893 1 Ch. pp. 16 & 28), who explained that the legislature could not be presumed to intend, absent clear language, that a person’s property would be confiscated for public benefit without providing compensation. While Parliament possessed the power to override this ordinary principle, the Court noted that such a departure would be unlikely without explicit statutory language. The principle, the Court observed, was embodied in article 31(2) of the Constitution, which states that no movable or immovable property, nor any interest in a commercial or industrial undertaking, may be taken or acquired for public purposes unless the law furnishes compensation and either fixes the amount of that compensation or specifies the principles and manner for its determination and delivery. The Court concluded that it would not address the sub-clauses (3) and (4) of article 31 or the provisions of articles 31-A at this stage.

The Court observed that articles 31-A and 31-B had been introduced by amendment through the Constitution First Amendment Act of 1951, dated 18-6-1951, and that those provisions would be examined at a later stage. The Court then turned to the submission of Shri P R Das, who argued that the obligation to pay compensation necessarily accompanied the State’s compulsory acquisition of property. While the Court accepted that the principle of paying compensation was sound, it rejected Das’s further claim that this requirement was implicitly contained in entry 42 of the Concurrent List. The Court explained that the entries in the List merely provide headings for legislation; to determine the scope and effect of a law, one must examine the statute itself or rely on established principles of jurisprudence. Where a statute expressly addresses a subject, nothing may be inferred from anything implicit or hidden. Since the Constitution required that compensation be paid when property is taken for a public purpose, the legislature must lay down the principles for calculating that compensation and prescribe the form and manner of its payment. Entry 42, the Court held, simply conferred a power on the legislature to achieve this purpose; it did not impose a duty to provide compensation. Accordingly, any assertion that compensation is a primary condition for acquisition must be found in article 31(2) of the Constitution, not in entry 42. The Court noted that Shri Das was forced to adopt an untenable position—that entry 42 itself implied a compensation obligation—because otherwise he could not overcome the obstacles presented by sub-sections (3) and (4) of article 31 and the newly added articles 31-A and 31-B.

The Court then considered the argument made by the learned Attorney-General, who contended that legislation enacted under entry 42 could establish principles that would lead to the non-payment of compensation, citing the decision in Aliqa Begum’s case [(1940) F.C.R. 110]. The Court found this contention equally unsound. It reiterated that acquisition cannot occur without compensation, and therefore entry 42 enables the legislature to define the principles for calculating compensation and to specify the mode of payment. If those principles were fashioned so as to eliminate compensation altogether, the legislature would be flagrantly evading the law. The Court observed that the Aliqa Begum case dealt with the head “payment of rent,” where the Court held that the legislature could provide for remission of rent because rent is not a legal obligation inherent in every tenancy and may be waived under certain conditions. The Court concluded that the reasoning in that case could not be extended to the issue of compensation for State acquisition, where payment of compensation is a universally recognized primary requirement.

In matters concerning compensation for State acquisition, the payment of compensation is a fundamental requirement that the law recognises universally. This requirement forms the crucial distinction that must be kept in mind when attempting to apply the earlier cited case. The final words of entry 42, namely “form and the manner in which such compensation is to be given,” indicate clearly that any principles laid down must inevitably result in the provision of some compensation. To eliminate compensation entirely by formulating principles that lead to such an outcome would contradict the express terms of the entry and could not be said to reflect the intention of the framers of the Lists. Nevertheless, this observation does not advance Shri P R Das’s argument in any meaningful way. The first barrier he encounters is Article 31(4), which states that if a Bill was pending at the commencement of the Constitution, was passed by a State legislature, then reserved for the President’s consideration and thereafter received the President’s assent, the law so enacted cannot be questioned in any court on the ground that it conflicts with clause (2). The Bill that later became the Bihar Land Reforms Act 1950 was indeed pending at the Constitution’s commencement, was passed by the State legislature, reserved for the President, and obtained his assent. Consequently, the prohibition against judicial scrutiny on the basis of a violation of clause (2) applies to that Act. While clause (2) itself obliges the provision of compensation, clause (4) creates an exception that bars any challenge to the Act on the grounds that compensation is absent, illusory, or insufficient. Further obstacles arise from the constitutional amendments that introduced Articles 31-A and 31-B. Article 31-A, clause (1), provides that notwithstanding any other provision in this Part, no law dealing with the acquisition of property or rights by the State shall be deemed void for being inconsistent with, taking away, or abridging any rights conferred by this Part, provided that, for a State law, the provision applies only if the law was reserved for the President’s consideration and received his assent. Article 31-B then validates certain Acts and Regulations, stating that, without prejudice to the general provisions of Article 31-A, none of the specified Acts or Regulations shall be declared void or deemed to have become void on the ground of inconsistency with the rights guaranteed by this Part, and that they shall continue in force notwithstanding any contrary judicial order, subject only to the power of a competent legislature to amend or repeal them.

The Court explained that any Act or Regulation listed in the Ninth Schedule, together with each of its provisions, cannot be declared void or be treated as having become void merely because it is inconsistent with, or purports to take away or abridge, any right guaranteed by any provision of this Part. This protection remains even if a judgment, decree or order of any court or tribunal declares otherwise; the listed Acts and Regulations will continue to operate, subject only to the authority of a competent Legislature to repeal or amend them. When the Ninth Schedule of the Amending Act is examined, the very first entry recorded is the Bihar Land Reforms Act, 1950. Confronted with what the Court described as almost insurmountable difficulties, the counsel for the petitioner, Shri P R Das, frankly acknowledged that he could not argue about whether the compensation fixed by the Act was adequate or illusory unless he could persuade the Court that the Act could be challenged on a ground other than those enumerated in Part III of the Constitution. He further submitted that a reading of entry 36 of the State List together with entry 42 of the Concurrent List imposes on the State Legislature a duty to provide just or proper compensation, and that failure to fulfil this duty gives him the right to assail the validity of the Act as unconstitutional. The Court then noted the principle that acquisition of property may be effected only for a public purpose. Under the Land Acquisition Act, 1894, a government declaration that land is required for a public purpose is conclusive evidence that such a purpose exists, and courts are not empowered to examine whether the purpose is genuine. No constitutional article directly governs this point. Although article 31(2) of the Constitution refers to property being acquired for public purposes, the restriction embodied in article 31(4) relates solely to violations of the compensation provisions of article 31(2). The compensation requirement is set out in the latter part of article 31(2), which states that unless the law provides compensation for property taken possession of or acquired, and either fixes the amount of compensation or specifies the principles and manner for determining and paying it, the law is invalid. It was correctly observed that the existence of a public purpose is an inherent element of the law itself and not a condition imposed by article 31(2). Consequently, article 31(4) only bars a challenge to the constitutionality of a law on the ground of non-compliance with the compensation clause, and does not preclude any other constitutional challenge, including those based on the absence of a demonstrable public purpose.

In this case, the Court observed that the question of whether a purpose declared in a statute truly qualifies as a public purpose is open to judicial review. When a legislature states that a law serves a public purpose, the Court must give effect to that declaration, but it may still examine the validity of the purpose. The Act under consideration was intended to eliminate the interests of intermediaries such as zamindars, proprietors, estate-holders and tenure-holders, and to place the actual cultivator in a direct relationship with the State Government. To realise this objective, the Act introduced several provisions that transferred and vested those intermediary interests in the State with respect to various categories of property. While it is clear that the Act is motivated by a public purpose, the Court noted that the issue remained whether the acquisition of particular items under the Act could also be said to serve a public purpose. Accordingly, the Court turned to the two specific items mentioned in the Act – the “arrears of rent” and the “cost of works of benefit to the rayats” – which are dealt with respectively in section 4(b) and section 23(f).

The Court found that the taking over of “arrears of rent” does not appear to have any meaningful connection with the land-reform objectives of the statute. It likened this taking to a hypothetical scenario in which the Act attempted to seize cash held by zamindars, proprietors or tenure-holders, noting that the situation is no better because the rents in question simply had not been realised before the Act was passed. Whether the rents were realised or not, they represent money owed to the landlord by the tenants. The Court explained that the vesting of estates necessarily relates to the tenures themselves and may have a remote link to agrarian reform, but the arrears of rent are distinct. It posed a hypothetical where a law, aiming to abolish rent-collectors and to distribute land equitably among tillers while bringing them directly under State control, also required that all rents collected during the three years preceding the Act’s commencement be vested in the State. The Court concluded that, even in such a scenario, there is no reasonable basis to claim a public purpose for taking those monies. The arrears of rent therefore lack any demonstrable public purpose. The Court observed that the likely motive for appropriating the arrears was either to increase the State’s financial resources or to fund compensation to smaller proprietors, and it emphasized that individuals’ property cannot be seized under eminent domain merely to augment State revenue, as taxation is the recognized mechanism for that purpose.

In this matter, the Court observed that if the true purpose of the statutory provision was to use the arrears of rent as a source of revenue for the State, then it could not be said that a legitimate public purpose existed. The Court explained that it is not a permissible exercise of the power of acquisition for the State to compulsorily take one person’s property merely in order to transfer it to another person in order to satisfy the Government’s financial obligations. The Court then turned to the language of sub-clause (1) of section 24, which unequivocally stipulates that fifty percent of the arrears of rent shall be added to the amount of compensation payable to the landowner. The Court pointed out that this linguistic provision leads to one of two possible interpretations. The first possibility is that the remaining fifty percent of the arrears would be taken without any compensation, which would amount to a virtual confiscation of private property. The second possibility is that the entire arrears of rent would be treated as a consolidated monetary claim – a lump-sum payment representing the acquisition of a chose in action or other actionable claim. In either scenario, the Court found it difficult to discern any genuine public purpose that could justify such taking.

The Court further examined whether money itself could be subject to compulsory acquisition by a State. Relying on the authority of Wills in his treatise on Constitutional Law (page 816), the Court noted that while the power of eminent domain generally extends to all kinds of private property, certain unusual forms of private property are excluded. Wills listed as excluded: corpses, money, choses in action, property used by the government in its official capacity, property that would be transferred only to afford a substituted ownership unless the substituted use is essential, certain trusts dedicated to the State, mortgage liens, and suits to quiet title. The Court also cited Cooley’s observations in Vol. II of his work on Constitutional Limitations (page 1117), where Cooley expressly excepted money – or anything that ordinarily functions as money – and rights in action that can only be realised by producing money, from the reach of eminent domain. In a footnote, Cooley warned that taking money under the power of eminent domain, only to be compensated later with money, would be nothing more than a forced loan that could be justified only in a situation of extreme emergency where both the credit of the government and the power of taxation were unavailable.

Nicols, in his treatise on Eminent Domain (Vol. I, page 100, paragraph 2. 1 (3)), concurred with this line of reasoning. Nicols reported that the question of whether money may be taken by eminent domain has been raised, and that it has been held, at least with respect to a State or a private corporation, that money is not subject to such taking. According to Nicols, the objection does not arise from an implied inherent limitation on governmental power, but rather from the practical difficulty of effecting a taking of money that would serve any public purpose without breaching constitutional constraints.

In this matter, the Court observed that even when the purpose of a taking was public, the Constitution required that compensation be rendered in money, either immediately or as promptly as practicable. Consequently, the seizure of money without providing compensation, or the offer of payment in the form of notes, bonds, or merchandise—effectively a forced sale or loan—could not be justified as a constitutional exercise of eminent domain, even if it were alleged to be necessary under conditions of extreme emergency. The learned Attorney-General attempted to rationalise the acquisition by characterising it as a compulsory taking of choses in action. Nevertheless, the Court noted that choses in action were comparable to money in value, perhaps even less valuable than coin or currency notes, and therefore could not be acquired in the same manner. Reference was made to earlier commentary by Cooley, which supported the view that such intangible rights could not be taken without compensation. The Court further examined two United States cases, Long Island Water Supply Company v. City of Brooklyn and City of Cincinnati v. Louisville & Nashville Railroad Company, and found that neither supported the opposite proposition. In the Brooklyn case, the water-supply company held a contract to furnish water to the town of New Lots for a term of twenty-five years, with the town obligated to pay for hydrants as stipulated. When New Lots merged with the City of Brooklyn, the city was authorised, first by a municipal ordinance and later by a legislative act, to condemn the company’s property provided it commenced proceedings within a prescribed period. The compensation was fixed by the commissioners. The company challenged the condemnation on the basis of Article I, Paragraph 10 of the United States Constitution, which forbids any State law impairing contractual obligations, and on the ground that due process under the Fourteenth Amendment had not been observed. The Supreme Court, however, affirmed the condemnation, holding that the contract was merely incidental to the tangible property, which alone was subject to condemnation for public use; any impairment of the contract was merely a consequence of appropriating the physical property. The Court emphasized that the taking of arrears of rent could not be deemed a natural consequence of acquiring the estates. In the Cincinnati case, the railroad company sued to condemn a right of way for an elevated track across a public landing. The city argued that the landing had been dedicated to the public under an earlier contract and that condemnation under Ohio law would impair that contract, contrary to the tenth section of the first article of the United States Constitution. Justice Lurton, speaking for the Court, held that the constitutional prohibition against impairment of contracts did not limit the power of eminent domain; when a contract is appropriated for public use and just compensation is provided, the contract’s obligation is not impaired. Thus, the Court concluded that the cited cases did not constitute instances of compulsory acquisition of choses in action and that such acquisitions remained untenable under constitutional principles.

In the case involving the proposed elevated railroad track that was to cross the public landing at Cincinnati, the city argued that the landing had already been dedicated to public use under a prior contract. The city contended that allowing the railroad’s condemnation under an Ohio statute would impair that earlier contract, an act prohibited by the tenth section of the first article of the United States Constitution. The Court, speaking through Mr. Justice Lurton, rejected the city’s claim. The judgment explained that the constitutional prohibition against a state law impairing the obligations of contracts does not restrict the power of eminent domain. When a contractual right is appropriated for a public purpose and appropriate compensation is provided, the contract’s obligation is not considered impaired. The Court emphasized that such an exercise of power does not challenge the contract’s validity; rather, the contract is recognized as an existing enforceable right that is taken, not merely impaired. Consequently, the Court held that if just compensation is paid, no constitutional right is violated. The Court then observed that the railroad case, together with the earlier discussion, demonstrated that the situations presented were not instances of compulsory acquisition of choses in action. It noted that choses in action that are unrelated to any tangible property can serve a public purpose only after being converted into money, and that arrears of money fall squarely within this category. The Court clarified that the exemption of money and choses in action from compulsory acquisition is based not on their status as movable property but on the general principle that there is ordinarily no public purpose served by acquiring such rights directly.

The Court turned to the statutory provisions of section 23, sub-clause (f), which permitted a deduction of four to twelve and a half percent of the gross assets on the basis that the amount represented “cost of works of benefit to the raiyats.” The judgment described this deduction as a transparent device intended to lower the declared gross assets to the smallest possible figure. The Act, the Court observed, does not explain that this charge corresponds to actual expenditures on works of benefit or improvement that the zamindars or proprietors were legally obliged to perform and subsequently failed to perform. Moreover, the statute provides no information regarding how the deducted sum would be applied in the future. The Court characterized the percentage as an arbitrary figure imposed by the legislature, a mere contrivance designed to reduce compensation. It labeled the deduction as a colourable or fraudulent exercise of legislative power that subtracts a fanciful amount from the calculation of gross assets. Stripping away the terminology, the Court concluded that the provisions concerning “arrears of rent” and the “cost of works of benefit” amount to a form of confiscation. When legislative action lacks a reasonable connection to the intended purpose, it transgresses the limits of legislative authority. The Court warned that, under the pretense of enabling acquisition, the legislature cannot permit the State to carry out confiscation, and any such part of the Act must be declared unconstitutional and void. If a void portion is so closely intertwined with the remainder of the legislation, the entire Act may need to be struck down, though the Court noted that this particular scenario did not arise in the present case.

The Court explained that if a provision which is declared unconstitutional is so tightly integrated with the remainder of a statute that it cannot be separated, then the appropriate result is to invalidate the entire statute. However, the Court observed that this situation did not arise in the matter before it. Consequently, the Court held that the statute under consideration could remain operative because the offending provision could be severed without destroying the rest of the law.

The Court then turned to consider the two other statutes that were challenged in the proceedings. It expressed satisfaction that the Madhya Pradesh Abolition of Proprietary Rights Act of 1950 and the Uttar Pradesh Zamindari Abolition and Land Reforms Act of 1950, which were also under scrutiny, did not contain the defect identified in the earlier legislation. Specifically, the Court noted that both of those Acts were free from the blemish of permitting the recovery of arrears of rent for any period that preceded the date on which the land vested in the State. Because the statutes were free from that particular flaw, the Court found no basis to strike them down.

Having addressed the substantive issues, the Court concluded the appeal by allowing it and dismissed Petition No. 612. The order thereby affirmed the lower court’s decision and left the challenged statutes, except for the provision already severed, in force.