The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Others

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 27 May 1952

Coram: PATANJALI SASTRI, MAHAJAN, MUKHERJEA, CHANDRASEKHARA AIYAR, DAS

In this case the matter was titled The State of Bihar versus Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Others. The judgment was delivered on 27 May 1952 by a Bench of the Supreme Court of India. The petitioner was the State of Bihar and the respondents were Maharajadhiraja Sir Kameshwar Singh of Darbhanga together with other parties. The judgment record lists the date of the decision as 27/05/1952 and identifies the bench as consisting of Justice Gupta, A.C., Justice Beg, M. Hameedullah, Justice Chandrachud and Justice Y.V. The case citation appears in the 1975 volume of All India Reporter at page 1083. The substantive dispute concerned the Bihar Land Reforms Act, designated as Act XXX of 1950, which was enacted to abolish zamindaris. The parties contested the validity of the Act on several grounds, including the necessity of providing compensation for acquisition, the requirement of a public purpose. They also challenged the jurisdiction of the court to examine the Act’s validity, alleged delegation of legislative powers, and the allegation of fraud on the Constitution. The judgment also referred to the Constitution of India, 1950, as amended by the First Amendment Act of 1951, and specifically to Articles 31, 31-A, 31-B, 362 and 363. It also considered entries in the Seventh Schedule – List II entries 18 and 36 and List III entry 42 – for purposes of construction. The Court examined the spirit of the Constitution, the right of eminent domain and the meanings of the terms “law”, “legislature”, “public purpose”, among other concepts. The headnote recorded that the Court, speaking per curiam through Justices Mahajan, Mukherjea and Chandrasekhara Aiyar, held that the Bihar Land Reforms Act of 1950 was not unconstitutional or void. The Court further observed that the provisions of section 4(b) and section 23(f) were unconstitutional. In contrast, a separate opinion authored by Chief Justice Patanjali Sastri and Justice Das concluded that the entire Act, including sections 4(b) and 23(f), was constitutional and valid. The majority opinion, attributed to Justices Patanjali Sastri, Mahajan, Mukherjea, Das and Chandrasekhara Aiyar, set out three principal points. First, it observed that the Act did not fall within the subject matter of entry 18 of List II, which deals with “lands and land tenures”. Instead, the Act pertained to “acquisition of property”, a matter covered by entry 36 of List II. Second, it held that the obligation to pay compensation for property acquired by the State was not imposed by entry 36 of List II, either alone or read together with entry 42 of List III. Nor was the obligation imposed by the spirit of the Constitution; consequently, an objection to the validity of a statute on the ground that it failed to provide compensation amounted to an objection based on Article 31(2). Such an objection amounted to an objection based on Article 31(2). The court further held that its jurisdiction to entertain such an objection against a statute placed in the Ninth Schedule was barred by Articles 31(4), 81-A and 31-B. Justice Das added that even assuming an implicit compensation obligation in entry 86 of List II, read with entry 42 of List III, the Act’s validity could not be challenged on the basis of Articles 81(4), 31-A and 31-B. Third, the judgment examined Section 32(2) of the Act, which empowers the State Government to make rules specifying the proportion of compensation payable in cash and in bonds and the manner of payment.

The Court observed that Section 32(2) of the Act, which authorises the State Government to make rules regarding “the proportion in which compensation shall be payable in cash and in bonds and the manner of payment of such compensation,” did not amount to a delegation of legislative power because the statute itself already specified that compensation could be paid in cash, in bonds, or partly in each, and it also fixed the number of instalments in which the payment must be made. The Court explained that the expression “subject to” in entry 36 of List II merely indicates that any law enacted by a State Legislature under that entry will be subordinate to the provisions of a law made by Parliament under entry 42 of List III. The words do not require a State to lay down the principles for determining the amount of compensation or the form in which it must be given when it enacts a law under entry 36. The Court further held that entries in the Legislative Lists are of an enabling character only; the power they confer on the legislatures is not coupled with any duty to exercise that power, and therefore the rule articulated in Julius v. Bishop of Oxford [5 A.C. 214] does not apply to the Lists.

Speaking for the majority, Chief Justice Patanjali Sastri, and Justices Mukherjea and Das, the Court said that a public purpose is an essential prerequisite for the exercise of the power of compulsory acquisition under article 31(2) of the Constitution, and an alleged infringement of that requirement could not be used as a basis for challenging the validity of an Act that provides for compulsory acquisition. Justice Das added that even if a public purpose were only implied in entry 36 of List II or entry 42 of List III, articles 31(4), 31-A and 31-B would still shield the Act from being questioned on the ground that the acquisition was not for a public purpose; the impugned Act, in the Court’s view, was supported by a public purpose.

Justices Mahajan and Chandrasekhara Aiyar, dissenting, observed that the scope of article 31(4) is limited to the express provisions of article 31(2). While courts cannot evaluate the adequacy of the compensation provisions contained in any law dealing with compulsory acquisition, article 31(4) does not prevent a court from examining whether the acquisition is for a public purpose. They argued that although the primary objective of the Act—acquisition of estates—served a public purpose, the acquisition of arrears of rent owed to zamindars on payment of only fifty percent of their value could not be regarded as serving a public purpose; consequently, section 4, clause (b) of the Act was unconstitutional and void.

Justice Mukherjea, also dissenting, held that if article 31(4) were to be interpreted as covering everything provided for in article 31(2), whether expressly or impliedly, the question of…

The Court observed that the question of whether a public purpose exists is not a matter for judicial determination, because the true intention of Section 4, clause (b) was to deprive a person of his money. The Court held that money is not a thing that can be acquired under the power of eminent domain, and that the provision offered no consideration in return. Acting ostensibly under entry 42, the legislature in effect evaded and nullified the substance of its own provisions, making Section 4, clause (b) unconstitutional and void.

Chief Justice Patanjali Sastri then considered the argument that the acquisition of money might be permissible. He noted that it was incorrect to claim 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” in that entry and in Article 31 embraces such rights. He rejected the notion that paying the arrears in cash or government bonds at half their value left the zamindar without any compensation for the remaining balance, describing that view as fallacious. Accordingly, Section 4, clause (b) was not ultra vires and was not unconstitutional.

The Court, speaking through Justices Mahajan, Mukherjee and Chandra Sekhara Aiyar, with Chief Justice Patanjali Sastri and Justice Das dissenting, turned to Section 23(b) of the Act. That provision allowed a percentage deduction from the gross assets for “costs of works of benefit to the raiyat,” and was said to be enacted under entry 42 of List III. The majority held that this deduction was a colourable piece of legislation, merely a device to reduce the gross assets, and did not truly fall within entry 42, rendering it unconstitutional. Chief Justice Patanjali Sastri and Justice Das, however, disagreed. They explained that zamindars were obligated to maintain and repair minor irrigation works in their villages, works that benefited the raiyats. Consequently, the cost of such works constituted a legitimate deduction when computing the net assets of an estate, and Section 23(f) was not unconstitutional. The Court further observed that, because the payment of compensation is not a justiciable issue under the challenged statute, and in view of Articles 31(4), 31-A and 31-B, the Court could not inquire whether a deduction that reduced compensation was unwarranted or amounted to a constitutional fraud.

Justice Mahajan clarified that the phrase “public purpose” must be interpreted in light of the spirit of the era in which the legislation was enacted. Under that approach, the acquisition of estates to prevent the concentration of large tracts of land in the hands of a few individuals and to eliminate intermediaries served a public purpose. Justice Das added that no rigid definition of “public purpose” could be fixed, as the concept evolves rapidly worldwide. Nonetheless, he emphasized that when an object or aim contains an element of general interest to the community, it becomes a public purpose, and any measure that advances the general interest of the community, as opposed to a particular individual’s interest, must be regarded as such.

In this case, the Court explained that an activity which serves the interest of the community rather than the private interest of an individual must be considered a public purpose. The judgment considered several appeals filed under Article 132(1) of the Constitution of India. These appeals challenged the judgment and decree dated 12 March 1951 issued by the Patna High Court, where Judges Shearer, Reuben and Das had decided Title Suits numbered one to three and a series of Miscellaneous Judicial Cases identified by numbers 230-234, 237-244, 2-16 to 254, 257, 261-264, 266, 262, 270-277, 287-290 and 297 of 1951. Along with the appeals, Petition No. 612 of 1951, filed under Article 32 for the enforcement of fundamental rights, was heard. The factual background that gave rise to the appeals and the petition was set out in the earlier judgment. For the State of Bihar, the Attorney-General for India, M. C. Setalvad, and the Advocate-General of Bihar, Mahabir Prasad, appeared together with counsel G. N. Joshi, Lal Narain Singh and Alladi Kuppuswami. Respondents in various cases were represented by counsel listed as follows: P. R. Das, assisted by B. Sen, for the respondents in Cases 339, 319, 327, 330 and 332 of 1951; Sanjib K. Chowdhury, S. N. Mukherjee and S. K. Kapur for the respondents in Cases 309, 328 and a36 of 1951; Urukramdas Chakravarty for the respondents in Cases 326, 337 and 344 of 1951; Raghosaran Lal for the respondents in Cases 310, 311 and 329 of 1951; S. C. Mazumdar for the respondent in Case 313 of 1951; S. Mustarid and Jagadih Chandra Sinha for the respondent in case 1951; Ray Parasnath for the respondent in Case 331 of 1951; and S. K. Kapur for the petitioner in Petition 612 of 1951. The Court delivered its judgment on 2 and 5 May 1952, with Chief Justice Patanjali Sastri presiding. The matters before the Court fell into three groups, each raising the constitutional validity of a State enactment: the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (No. 1 of 1951), and the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act No. 1 of 1951). These statutes were collectively referred to as the Bihar Act, the Madhya Pradesh Act and the Uttar Pradesh Act. Their common purpose, as explained by the Court, was to abolish zamindari and other proprietary estates and tenures in the three States, to remove intermediaries through compulsory acquisition of their rights, and to place the cultivators and other land occupants in direct relationship with the Government. The constitutionality of each of these Acts had been challenged in the respective State High Courts.

In this case, the State High Courts, after considering various arguments, held that the Bihar Act was unconstitutional and void because it violated article 14 of the Constitution. While the courts rejected all other grounds of attack against the Bihar Act, they pronounced the Madhya Pradesh Act and the Uttar Pradesh Act to be constitutional and valid. The present appeals have been filed against those decisions of the High Courts, seeking reversal of the declaration of unconstitutionality of the Bihar Act. In addition, several other zamindars have filed separate petitions in this Court under article 32, asking for a determination of the same constitutional questions raised in the appeals. All these appeals and petitions raise a common question: whether the three State Legislatures that enacted the respective statutes possessed the constitutional competence to do so. Although the main issue concerns legislative competence, a few of the cases also involve special points that require separate consideration. The parties therefore contested whether the legislative jurisdiction claimed by the States fell within the powers expressly enumerated in the Constitution. Both the appellants and the respondents emphasized the importance of a proper construction of the constitutional distribution of powers to resolve the dispute. The outcome of these contentions would determine the validity of the land reform measures enacted by the respective State legislatures.

The various grounds of attack that were raised before the lower courts have been repeated in the memoranda of appeal and in the petitions. Those grounds would have required detailed examination if it were not for the Constitution (First Amendment) Act, 1951, which was enacted by the provisional Parliament while the proceedings were still pending. The First Amendment Act introduced new articles 31-A and 31-B, which were intended to shield, in general, all laws dealing with acquisition of estates or interests therein. In particular, the amendment sought to protect the three impugned Acts from attacks based on article 13 read together with other relevant provisions of Part III of the Constitution. Section 4 of the Amendment Act made the operation of these articles retrospective by declaring that article 31-A shall be deemed always to have been inserted. It also provided that none of the specified statutes shall ever be deemed to have become void under the amendment. The validity of the First Amendment Act itself was challenged in proceedings instituted in this Court under article 32. However, the Court upheld the amendment in the cases of Sankari Prasad Singh Deo v. Union of India and State of Bihar. Consequently, the three impugned Acts can no longer be attacked on the basis that they infringe any of the rights guaranteed by the provisions of Part III of the Constitution. However, articles 31-A and 31-B provide only limited protection, guarding against a challenge that the law is inconsistent with, or takes away or abridges any right conferred by any provision of Part III. This limited scope is evident from the opening words of article 31-A, which state “notwithstanding anything in the foregoing provisions of this Part.” Because the amendment does not alter the entries in List II or List III of the Seventh Schedule, it does not confer immunity from attacks based on lack of legislative competence under article 246. Accordingly, Mr P.R. Das, counsel for the zamindars, based his principal argument on entry 36 of List II and entry, relying on those statutory provisions.

In this case, the Court set out the wording of the two relevant entries in the Seventh Schedule. Entry 36 of List II reads: “Acquisition or requisitioning of property, except for the purposes of the Union, subject to the provisions of entry 42 of List III.” Entry 42 of List III states: “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” (1) [1952] S.C.R. 89. The argument was that entry 36, read with article 246(3), was clearly intended to empower a State Legislature to exercise the power of eminent domain – that is, the power to compulsorily acquire private property. The Court noted that the exercise of such a power has, in the jurisprudence of all civilised countries, always been conditioned on two requisites: a genuine public necessity and the payment of compensation. The Court observed that every Indian statute authorising acquisition of property, from Regulation I of 1824 of the Bengal Code to the Land Acquisition Act 1894, proceeded on that foundation. Consequently, the Court explained that the term “acquisition” must be understood as implicitly requiring the existence of a public purpose and the obligation to pay compensation. It further cited the rule of statutory construction that, unless the language of a statute expressly demands otherwise, a statute must not be interpreted to deprive a person of property without compensation, as held in Attorney-General v. De Keyser’s Royal Hotel (2). The Court added that the power to take property compulsorily raises, by implication, a right to payment, referring to Central Control Board v. Cannon Brewery (2). The phrase “subject to the provisions of entry 42 of List III” appearing in entry 86 was said to reinforce the argument, meaning that any law made under entry 36 must be enacted subject to the conditions laid down in entry 42 – namely, that the acquisition must be for a public purpose and must provide compensation. The Court therefore held that the legislative power conferred by entry 42 is coupled with a duty to exercise it for the benefit of owners whose property is taken under a law made pursuant to entry 36.

On the basis of these principles, the Court accepted the submission that State Legislatures possessed no authority to enact a law providing for acquisition of property unless both conditions – a public purpose and payment of compensation – were satisfied. Counsel then examined the provisions of the impugned Acts in detail, arguing that the compensation schemes contained in those Acts had been reduced, through “various shifts and contrivances”, to an illusory figure. The argument sought to demonstrate that, despite the formal language, the Acts effectively deprived owners of proper compensation, thereby violating the constitutional requirement that acquisition be accompanied by just compensation.

In the Court’s view, the method used to calculate compensation was effectively a scheme of confiscation, and the statutes that embodied those methods were described as a fraud upon the Constitution. The legislation was portrayed as a deceptive device that enabled the state to take private property without providing compensation, thereby violating constitutional requirements while outwardly appearing to comply with them. The Court further observed that the statutes were not enacted for any legitimate public purpose; rather, their sole aim and effect were to dismantle the class of zamindars and other tenure-holders and to transform the Government into a “super-landlord”. Although the political party in power might consider such an objective as a desirable policy, the Court held that, under law, it could not be classified as a public purpose. Counsel representing several zamindars in the Madhya Pradesh group of cases, while echoing the arguments of another counsel, introduced an additional ground of objection. He contended that the challenged Acts had not been passed according to the procedure mandated by article 31(3), which states that a law referred to in clause (2) enacted by a State Legislature shall have no effect unless, after being reserved for the President’s consideration, it receives the President’s assent. The counsel emphasized the terms “law” and “legislature”, arguing that because the legislature of a State includes the Governor under article 168 and because a bill becomes law only after the Governor’s assent pursuant to article 200, article 31(3) must be interpreted to require that a State law authorising compulsory acquisition obtain both the Governor’s assent, to render it a law, and the President’s assent, to give it effect. The counsel pointed out that in each case the bills had been reserved by the Governor after passage by the relevant House or Houses of the Legislature, but the Governor had not granted assent under article 200; consequently, the statutes failed to satisfy the conditions of article 31(3) and therefore could not possess legal effect. This line of attack, the counsel argued, was not barred by articles 31-A or 31-B since it did not rely on an alleged infringement of fundamental rights. Another counsel, appearing for some zamindars in the Uttar Pradesh batch of cases, put forward a different argument. He did not rely on entry 36 of List II or entry 42 of List III, and seemed to accept the earlier counsel’s contention that those entries, which concern the power of State Legislatures to legislate on specified matters, did not by their construction impose an obligation to pay compensation. Nevertheless, he maintained that a constitutional prohibition against compulsory acquisition of property without a public necessity and without payment of compensation could be inferred from the Constitution’s broader principles.

Dr. Ambedkar argued that the “spirit of the Constitution” provided a legitimate test for assessing whether a statute was constitutional. He maintained that a Constitution openly committed to liberty, justice, equality and a government of limited powers must be interpreted as containing an implied prohibition against the State’s taking of private property without just compensation and without a public purpose. To support this position, he referenced several decisions of American courts and various constitutional textbooks, asserting that where the Constitution contains no express prohibition, an implied prohibition may be derived from its overall spirit. He further observed that Articles 31-A and 31-B barred objections only when they were founded on alleged infringements of the fundamental rights enumerated in Part III. Nevertheless, he contended that if other provisions of the Constitution could be read to require a public purpose and the payment of compensation before any private property could be compulsorily acquired by the State, nothing in Articles 31-A or 31-B prevented an objection on the ground that the impugned Acts failed to satisfy those requirements and were therefore unconstitutional. In addition to these common attacks, each of the three challenged statutes, or specific provisions within them, faced separate special challenges. The Court indicated that it would consider those special challenges only after addressing the principal objections that were common to all three batches of cases. The Court found that those additional contentions lacked any substantive force and were therefore rejected without hesitation. It noted that the zamindars had already lost the decisive battle when this Court upheld the constitutionality of the Amendment Act enacted by the Provisional Parliament, an Act that among other things was intended to bring an end to the litigation. The Court added that it was not a disparagement of the counsel for the zamindars to observe that the remaining arguments appeared weak and stemmed from strained ingenuity. For clarity, the Court then set out the material constitutional provisions that formed the basis of the arguments before it. 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 compensation and either fixes the amount of compensation or specifies the principles and manner for determining and giving the compensation. Article 31(3) states that any such law made by a State Legislature shall have no effect unless, after being reserved for the President’s consideration, it has received his assent. Article 31(4) adds that if any bill pending at the commencement of this Constitution in a State Legislature has, after being passed by that Legislature, been reserved for the President’s consideration and has received his assent, it shall thereafter be governed by the foregoing provisions.

In the Constitution, clause (4) provides that once a law has obtained the President’s assent, that law cannot be challenged in any court on the basis that it violates the requirements of clause (2). Clause (5) further states that nothing in clause (2) shall affect (a) the operation of any existing law, except a law to which clause (6) applies, nor (b) the provisions of any law that the State may subsequently enact for (i) the purpose of imposing or levying any tax or penalty, (ii) the promotion of public health or the prevention of danger to life or property, or (iii) the execution 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 that has been declared by law to be evacuee property. Article 31-A, titled “Saving of laws providing for acquisition of estates, etc.,” declares that notwithstanding any provision of this Part, no law that provides for the State’s acquisition of any estate or any rights therein, or for the extinguishment or modification of such rights, shall be deemed void merely because it is inconsistent with, or takes away or abridges, any of the rights conferred by the provisions of this Part. Article 31-B, titled “Validation of certain Acts and Regulations,” provides that, without prejudice to the generality of article 31-A, none of the Acts and Regulations enumerated in the Ninth Schedule, nor any of their provisions, shall be considered void, nor shall they ever be treated as void, on the ground that such Act, Regulation or provision is inconsistent with, or diminishes, any of the rights granted by any provision of this Fart; and 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 any competent Legislature to repeal or amend them, continue in force. The Court observed that the reach of article 31-(4) is both narrower and broader than that of article 31-A: article 31-(4) applies only to statutes that were pending in a State legislature at the commencement of the Constitution, whereas article 31-A applies without such temporal limitation. Moreover, article 31-(4) permits attack on a law only on the ground that it contravenes article 31-(2), while article 31-A bars objections based on violation of any other provisions of Part III, such as articles 14 or 19. This limitation motivated the enactment of articles 31-A and 31-B, because the exclusion language in article 31-(4) was found insufficient to address objections founded on a breach of article 14. Finally, the Court noted that the law mentioned in article 31-(4) pertains to acquisition of any type of property, whereas article 31-A is confined to acquisition of a specific category of property, namely estates and the rights thereon.

In this case, the Court examined the effect of the non-obstante clause contained in article 31(4) of the Constitution. The Court observed that this clause overrode all other constitutional provisions, including the entries listed in the Seventh Schedule, whereas a law that fell under article 31-A could prevail only over “the foregoing provisions of this Part”. The three statutes that were under challenge were found to lie within the scope of both article 31(4) and articles 31-A and 31-B. Setting aside the latter two articles for the moment, the Court noted that, pursuant to article 31(4), the three statutes were shielded from judicial attack on the ground that they violated article 31(2). The relevant provisions of article 31(2), as noted by the Court, required that (i) any law dealing with acquisition of property must authorize acquisition solely for a public purpose, and (ii) such a law must provide for compensation.

The Court recorded that Mr Das admitted that clause (ii) was a “provision” of article 31(2) but contended that clause (i) was not a provision, arguing that the clause merely assumed but did not “provide” that acquisition be authorized only for a public purpose. The Court rejected this argument. It held that the clause also intended to impose a limitation concerning public purpose. The Court explained that the wording of article 31(2) was copied, with minor variations, from section 299(2) of the Government of India Act, 1935. That provision had been drafted to give effect to the Joint Parliamentary Committee’s recommendation in paragraph 369 of its report, which stipulated two conditions for the expropriation of private property: that legislation authorising such expropriation be lawful only if it was confined to a public purpose, and that compensation be determined either initially or on appeal by an independent authority.

From this history, the Court concluded that section 299(2) was intended to secure fulfillment of those two conditions, and it was reasonable to infer that article 31(2) was meant to impose the same dual requirements on legislation authorising the acquisition of private property. Accordingly, the Court interpreted article 31(2) as providing that any law authorising expropriation of private property must be lawful only when it serves a public purpose and must include a provision for payment of compensation. The Court warned that, absent such an interpretation, the Constitution would contain no barrier against acquisition for a private or non-public purpose without compensation, which would be an absurd outcome. The Court further observed that the framers of the Constitution could not have intended to enact one of the two well-established restrictions on the exercise of eminent domain while leaving the other to be imported from common law. Consequently, the Court held that article 31(2) must be read as expressly containing both limitations.

An attack on the ground that the impugned statutes violated the constitutional provisions meant that the statutes were said to permit acquisition of property without a public purpose and without payment of compensation. That precise objection had been raised by Mr. Das and by Dr. Ambedkar when they challenged the constitutional validity of the statutes, and their objection effectively claimed that the statutes contravened article 31 (2) even though counsel for them vehemently denied that they relied on article 31 (2). The denial appeared to be a quibbling distinction that did not change the substance of the argument. Their principal attack was based on the absence of the two essential prerequisites required for valid legislation authorising acquisition of private property: a public purpose and a provision for just compensation. Mr. Das attempted to infer those prerequisites by reference to entry 36 of List II and entry 42 of List III, while Dr. Ambedkar sought to derive them from the spirit of the Constitution. In effect, the objection was that the statutes were invalid because they lacked a public purpose and omitted a provision for compensation. This was the burden of argument before the Court. If those 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 they were derived from the legislative List entries or from the spirit of the Constitution, because both would be covered by those words. Indeed, if an objection based on the absence of a public purpose and a compensation provision remained open, clause (4) of article 31 would become meaningless surplusage. It was clear that clause (4) had been specially fashioned to shield the impugned statutes and other similarly enacted laws from judicial attack on those very grounds, and if the statutes were held to lie outside that protection, the purpose of article 31 (4) would be hard to discern. Counsel were unable to offer any alternative purpose for the clause. The reality was that article 31 (4) was intended to bar courts from entertaining objections to the validity of a particular class of enactments on the two-fold ground identified above, and its entire purpose would be defeated if the zemindars’ contention succeeded. Even assuming the Court could entertain those objections, they were, in the view of the Court, unsustainable. As previously noted, article 31-A functions as an exception to article 31 (2) read with article 13, but only with respect to laws authorising acquisition of “estates” and rights therein, and that exception was deemed to be part of the Constitution from its commencement. That exception did not apply to laws authorising acquisition of other kinds of property, and for such property the requirements of a public purpose and compensation remained enforceable under article 31 (2).

In the present case, the Court observed that the requirements of a public purpose and the payment of compensation continue to be imposed by the explicit language of Article 31(2). The Court noted that, given the constitutional constraints placed on the State’s power of compulsory acquisition—constraints that exclude only “estates” from such limitations—it would be contrary to basic principles of statutory interpretation to imply those very limitations into entry 36 of List II, either by itself or together with entry 42 of List III of the Seventh Schedule, or to infer them from “the spirit of the Constitution,” especially with respect to the categories of property that are expressly excluded. The Court further explained that under the common-law doctrine of eminent domain, recognized in the jurisprudence of all civilized nations, the State may not take a subject’s property unless that property is needed for a public purpose and the owner receives compensation for the loss. However, the Court emphasized that when the Constitution itself contains explicit provisions establishing those safeguards and expressly declares that any law violating them shall be void, there is no room for implication. Consequently, the phrase “acquisition of property” must be understood in its ordinary sense—simply the act of acquiring property—without importing an obligation to pay compensation or a condition that a public purpose must exist.

The Court continued by stating that the entries in the Seventh Schedule’s Lists are intended to define and delimit the separate legislative competencies of the Union and the State, and that it is inappropriate to impose implied restrictions on legislative powers within that context, since such restrictions are normally set out by positive constitutional provisions. The Court pointed to indications within Article 31 itself, showing that the expression “acquisition of property” in entry 36 of List II does not inherently carry any compensation obligation. Clause (4) of Article 31 envisions a “law” authorising acquisition of property that contravenes clause (2) by lacking a public purpose or compensation. Likewise, clause (5)(b) exempts certain categories of “laws” from clause (2), contemplating laws that may be enacted without a public purpose or compensation. The Court concluded that such laws can be enacted by a State Legislature only under entry 36, which therefore must be read as conferring a legislative power free from any implied restrictions. The Court rejected the argument that the laws mentioned in sub-clause (b) of clause (5) are merely exercises of a taxing power or a police power and that the sub-clause was inserted only as a cautionary measure, finding that explanation unsatisfactory. Regardless of the nature of a taxing law, the Court held that laws falling under heads (2) and (3) of sub-clause (b) necessarily derive their competence from the legislative authority granted by entry 36 of List II when they purport to authorise the acquisition of any property.

In this case, the Court observed that the competence of the laws in question must be traced to the legislative authority granted by entry 36 of List II, but only to the extent that those laws aim to authorize the acquisition of any property. The Court explained that the police power of a State, which is merely the broad authority to regulate and control the exercise of private rights and liberties in the public interest, does not constitute a distinct head of legislative power. Consequently, the argument that the police power could supply the missing source of authority for clause (4) does not assist Mr Das. The Court further noted that the position is not improved for the zemindars even when both entry 36 of List II and entry 42 of List III are read together. It was submitted that the phrase “subject to the provisions of entry 42 in List III” should be interpreted to mean that the law-making power under entry 36 may be exercised only if two conditions—public purpose and payment of compensation—are satisfied, both of which are mentioned in entry 42. The Court, however, held that this phrase merely indicates that a law made under entry 36 by a State Legislature can be displaced or overridden by a Union law made under entry 42 of List III; it does not impose the restrictive conditions suggested by Mr Das. This interpretation is supported by the absence of similar wording in entry 33 of List I, which gives Parliament the power to make laws concerning acquisition or requisitioning of property for Union purposes. If the restrictions of public purpose and compensation were to arise solely from the wording, then Parliament could, in the absence of those words, enact acquisition or requisition laws without any public purpose or compensation provision. No justification was offered for treating parliamentary legislation differently from State legislation on this point. The Court clarified that both Parliament and State Legislatures may exercise their law-making powers only subject to the two restrictions, not because of anything contained in the entries themselves, but because of the explicit provisions of Article 31(2) of the Constitution. Moreover, laws that fall under Article 31(4) or Articles 31-A and 31-B are insulated from challenge in a court of law on the ground of non-compliance with those provisions, and therefore such laws cannot be declared unconstitutional or void. The Court also addressed a further contention that the authority to make a law under entry 42 of List III is a power coupled with a duty, on the ground that such a law is intended for the benefit of owners whose property has been expropriated. It was argued that once the Legislature authorizes expropriation, it is consequently bound to legislate the principles governing compensation for the loss suffered by the owners. This line of reasoning was noted but not accepted as providing a different basis for the analysis.

In addressing the novel contention that relied on the well-known case of Julius v. Bishop of Oxford, the Court observed that that precedent had no bearing on the present matter. While it is true that certain powers may be conferred with the intention that they be exercised for the benefit of specific persons, and that such powers may therefore be regarded as coupled with a duty to be exercised when appropriate circumstances arise, the power vested in a legislature to enact a law on any subject does not fall within that category. The Court held that it could not have been intended that the legislature be under an enforceable obligation to pass a law in the exercise of that power, because no court can compel a legislative body to fulfill such a duty.

The Court further rejected Mr Somayya’s reliance on clause (3) of article 31, noting that the argument was untenable. It is accurate that the term “Legislature” of a State includes the Governor and that a bill passed by the Legislature does not become law until the Governor gives assent. However, article 200 provides three possible courses for the Governor when a bill is presented after passage by the House or Houses of the Legislature: (i) to grant assent, (ii) to withhold assent, or (iii) to reserve the bill for the President’s consideration. The first proviso to article 200, which obliges the Governor to give assent in certain situations, was not relevant to the present issue.

The second proviso makes reservation compulsory when the bill, if it became law, would diminish the powers of the High Court. The Court emphasized that such compulsory reservation must be effected without the Governor first giving his assent. In fact, the Constitution does not envisage a scenario where the Governor first assents to a bill and thereafter, after it has become a full-fledged law, reserves it for the President. The Governor is, in fact, barred from granting assent when reservation is mandatory. Consequently, the constitutional scheme appears to contemplate only “bills” that have been passed by the Legislature being subject to reservation for the President’s consideration, and not “laws” that have already received the Governor’s assent.

The argument that clause (3) of article 31 provides a special safeguard requiring both the Governor’s and the President’s assent to prevent hasty or unjust expropriatory legislation was also rejected. The Court noted that the deliberate use of the words “law” and “legislature” in clause (a) does not necessarily imply that the Governor must assent to a law before it can be reserved. The term “legislature” is not uniformly defined in the Constitution as always including the Governor; for example, article 168 lists the Governor as a component of the State Legislature, whereas article 173 uses the term to refer specifically to the Houses of the Legislature, thereby excluding the Governor. This distinction reinforces the view that the constitutional language does not impose a duty on the legislature, through the Governor, to enact a law before reservation may be considered.

In the judgment the Court observed that the expression “Houses of Legislature” is used in the Constitution in a sense that excludes the Governor. The Court noted that there are other provisions where the word “legislature” is employed in contexts that likewise do not incorporate the Governor. In a similar manner, the term “law” is sometimes used rather loosely to refer to a bill that has not yet become law. For example, Article 31(4) speaks of a “bill” that is to be reserved for the President’s assent after it has been passed by the “legislature of a State” and of “the law so assented to.” The Court explained that if the phrase “passed by the legislature” were interpreted to mean that the bill had already been passed by the Houses of the legislature and also assented to by the Governor, then the instrument would no longer be a “bill” and could not be subject to reservation. The Court further pointed out that the expression “law so assented to” is not strictly correct in that part of the clause, because the earlier words make clear that what is to be reserved for the President’s assent, and what the President ultimately assents to, is a “bill” and not a law. Accordingly, the phrase “law so assented to” must be understood as referring to the bill after it becomes a law by virtue of the President’s assent. The Court applied the same reasoning to Article 31(3), holding that it must be read as referring, in historical sequence, to a measure that has first been passed by the House or Houses of the State Legislature, then reserved by the Governor for the President’s consideration, and finally assented to by the President, thereby becoming law.

The Court continued that, if the constitutional scheme had intended a law to require the assent of both the Governor and the President, the Constitution would contain a clearer or more explicit provision to that effect, and there would also be a reference in Article 200 to a power of the Governor to reserve a measure for the President after the Governor himself had given assent. On the contrary, the Court observed that where the Governor’s reservation of a bill is made obligatory, the Governor is barred from giving his assent. Having previously expressed the view that objections based on the alleged lack of a public purpose and the failure to provide just compensation are barred by Article 31(4) and lack merit, the Court held that it was unnecessary to examine whether the acquisition authorized by the impugned statutes serves any public purpose, or whether the compensation scheme is so illusory as to deprive the owners of any real compensation for their loss. Turning to the specific issues raised in the case, the Court noted that counsel for the State had contended that section 4(b) of the Bihar Act, which provides that all arrears of rent, royalties and cesses due before the date of vesting of the estates in the Government “shall vest and be recoverable by the State,” is unconstitutional and void. The Court observed that, in the first place, there was no public purpose to be served by the acquisition of such property.

In the matter before the Court, it was observed that the Government did not possess sufficient funds even to meet the nominal compensation that the Act itself prescribed, and therefore resorted to a scheme under section 24 whereby the arrears of rent, royalties and cesses were to be acquired by the State after paying only fifty percent of their assessed value. The Court held that raising money for the Treasury could not be treated as a public purpose that would justify the taking of private property. The petitioners further argued that the arrears, when eventually realised, would represent a substantial sum of money and that money itself could not be the subject of compulsory acquisition because the requirement to pay compensation would effectively convert such acquisition into a forced loan. They also contended that paying only half of the face value of the arrears could not constitute adequate compensation for the loss of the full amount, since returning merely one-half of a sum that had been taken away would never make good the loss of the remaining balance. The Court found that this line of reasoning was based on a misconception. While the acquisition of money as such might raise theoretical questions, it is incorrect to assert that a law enacted under entry 36 of List II is unable to authorise the acquisition of choses in action such as arrears of rent due from tenants, because the term “property” in that entry and in article 31 expressly includes such rights. Moreover, it is erroneous to claim that a payment made in cash or in Government bonds amounting to half of the arrears leaves the zemindar without any compensation for the other half. The Court considered it unrealistic to assume that arrears which had remained uncollected for many years, during which the zemindar enjoyed the benefit of summary remedies and other collection facilities, represented a large amount of money actually in his possession at the time he ceased to be a landlord and lost those facilities. When one allows for doubtful and irrecoverable portions of the arrears and for the difficulty and expense involved in collecting the remainder, the payment of fifty percent of the face value of the total arrears is, in the Court’s view, a reasonable and fair amount of compensation for the State’s taking of those arrears. The Court further observed that the petitioners’ contention seemed to ignore the advantage that zemindars might obtain from a provision that could ultimately be beneficial to them. Consequently, for the reasons already explained, the Court held that article 31 (4) barred any challenge on these two grounds and that the objections to section 4 (b) could not be entertained.

The petitioners contended that the deduction allowed under section 28(1)(f), which permitted a percentage reduction from the gross assets of an estate as “cost of works of benefit to the raiyats of such estate or tenure,” was a mere device to lower the compensation payable for the acquisition of their lands and therefore constituted a fraud on the Constitution. The Court observed that this contention ignored the well-settled duty of the zemindars to maintain and repair irrigation tanks and channels situated in the villages that formed part of their estates. Citing the Privy Council decision in The Madras Railway Co. v. Zemindar of Carvatenagaram, the Court reiterated that zemindars possessed no authority to abandon these tanks, which served the interests of large numbers of people, and that Indian law imposed upon them, by virtue of their tenure, an obligation to preserve and repair such facilities. Consequently, the works undertaken for the benefit of the raiyats qualified as “works of benefit,” and the costs incurred by the zemindars in performing this duty could legitimately be deducted when calculating the net assets of the estate. The Court further held that a past failure by some zemindars to fulfill this duty did not affect the propriety of the deduction for the purpose of determining compensation. Accordingly, it was inappropriate to characterize the deduction as a mere contrivance aimed at reducing compensation. Moreover, the Court noted that, as it had previously shown, the question of whether compensation was payable was not a justiciable issue under the impugned statutes, given the protection afforded by articles 31(4), 31-A and 31-B of the Constitution; therefore, the Court could not inquire whether a deduction that lowered the compensation amount was unwarranted or amounted to a constitutional fraud.

The counsel for the petitioner also challenged 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 described as 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 counsel argued that, although the Constitution authorised legislatures under entry 42 of List III to determine the principles, form and manner of compensation for acquired property, the Bihar Legislature could not delegate this essential legislative function to the executive. Consequently, the counsel asserted that section 43(2)(p) was void and inoperative, which would render section 32(2) ineffective because it was 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 rejected this argument, observing that the legislature had carefully considered the form of compensation and had fixed the number of equal instalments, as well as provided for interest on the compensation amount pending payment. The proportion of cash versus bond payment and the intervals between instalments were left to the executive because they depended on the State’s financial resources and the availability of funds—matters about which the executive alone possessed the requisite knowledge. The Court held that such limited discretion delegated to an administrative body did not violate any standard of permissible delegation, and the same reasoning applied to similar rule-making powers in the other Acts concerned.

The law provided that compensation for the acquisition of property must be paid in a series of equal instalments and that interest may be payable on the unpaid portion of the compensation until the entire amount is discharged. While the statute fixed the number of instalments, it left to the executive government the decision as to what share of the compensation could be paid in cash and what share could be paid in bonds, and also left the timing of each instalment to the executive. The Court observed that such matters necessarily depend on the State’s fiscal resources and on the availability of funds, facts that the executive alone is equipped to ascertain. Accordingly, the Court held that delegating to the executive a limited discretion of this kind does not constitute an impermissible delegation of legislative power. The same observation was extended to the rule-making powers conferred under the other two statutes dealing with compensation. The counsel for the petitioner further argued that the Madhya Pradesh Act had not been validly enacted because, at the third reading, the Speaker failed to put the motion that the Bill be passed into law to a vote, contrary to the requirement of rule 20(1) of the rules then governing legislative business. The counsel asserted that this omission was not a mere procedural irregularity, and that the Court was barred by article 212(1) of the Constitution from examining it. Rule 20(1) provides that a matter requiring the Assembly’s decision must be decided by a question put by the Speaker on a motion moved by a member. The Court described the sequence of events as follows: a Minister 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 members delivered speeches praising the measure as a boon to cultivators, and the House expressed general approval. However, the official report of the proceedings, prepared by the Secretary under rule 115(1), did not record the Speaker’s formal phrasing of the question nor the declaration that the motion was carried. The counsel argued that, under rule 115(2), the official report constitutes the sole authentic record of the Assembly’s proceedings and therefore conclusively showed that the motion had not been formally put to a vote or carried. The Court rejected this argument, noting that the original Bill, signed and authenticated by the Speaker, bore an endorsement indicating that the Bill had been passed by the Assembly on 5 April 1950. That endorsement was signed by the Speaker on 10 May 1950. The official report of the proceedings was prepared 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 regarding the formal wording of the motion. The Court held that the omission in the report could not, in light of the explicit endorsement on the Bill, be taken to establish that the Bill had not been put to the House and carried.

The official report indicated that the Speaker apparently did not notice the omission of any reference to the motion having been put and carried. That omission could not, given the explicit statement by the Speaker that was endorsed on the Bill, be taken to show that the Bill had not been presented to the House and passed. Even assuming that the motion had not been formally moved before the House, the failure was, under the circumstances, only a procedural irregularity, because it was not contested that an overwhelming majority of members present and voting supported the motion and no opposition was voiced. Counsel for the petitioner, Mr. Somayya, further argued that concerning the malguzari lands governed by the Madhya Pradesh Act, articles 31-A and 31-B could not aid the Government because those lands did not constitute “estates” as defined in clause (2) of article 31-A; consequently, the objection founded on article 14 regarding discriminatory compensation should remain valid. It was noted that the Patna High Court had declared the Bihar Act unconstitutional because it discriminated in the provision of compensation, and that difficulty was addressed by the insertion of articles 31-A and 31-B into the Constitution. The Advocate-General of Madhya Pradesh agreed that the malguzari lands could not be described as estates under article 31-A when read with the applicable Tenancy Acts, but he argued that because article 31-B expressly validated the Madhya Pradesh Act and was not restricted to estates, the objection could not succeed. Counsel for the petitioner countered that the introductory clause of article 31-B, which states “Without prejudice to the generality of the provisions contained in article 31-A,” indicated that the specific statutes listed in article 31-B together with the Ninth Schedule were merely illustrative, and therefore article 31-B should not be interpreted broadly. He supported this argument by citing the Privy Council decision in Sibnath Banerji’s case (1945) F.C.R. 195. The Court did not agree with that interpretation. The Court found that article 31-B contains no language showing that the reference to particular statutes was intended solely to illustrate the general provisions of article 31-A. The introductory clause of article 31-B was understood to clarify that article 31-A should not be limited by anything in article 31-B, and it was not meant to limit the scope of article 31-B or the statutes it references to the acquisition of “estates.” The Court held that the cited decision provided no useful analogy. In certain cases, the estates proposed for acquisition were located in former Indian princely states and were owned by the erstwhile rulers.

In the cases involving the merger of the former Indian States into Madhya Pradesh or Uttar Pradesh, the property that the government sought to acquire was recognised, by virtue of the covenant of merger executed between the rulers and the Government of India, as the private property of the respective rulers. It was contended that the estates targeted for acquisition formed part of the rulers’ personal rights that were guaranteed to them under the merger agreement, and that the statutes being challenged, together with the notifications issued thereunder, could not lawfully deprive the rulers of those properties without violating article 362. The Attorney-General responded to this contention on several grounds, including the bar created by article 363 against court interference in disputes arising out of such agreements, covenants and other arrangements to which the Government of India was a party. However, the essential response was that no guarantee or assurance given by the Government under the covenant of merger was being infringed, because the estates in question were being taken only as the private property of the rulers and not in any other character. The compensation stipulated in the statutes was therefore intended to acknowledge their status as private owners, just as it would for any other proprietor. Consequently, the objection based on the alleged breach of the merger covenant had no merit. In Appeal No 285 of 1951, filed by the Raja of Kapurthala, a similar objection was raised, arguing that the privy purse fixed for the ruler was low because the Oudh Estate was to remain his private property, and that a compulsory acquisition would deprive him of the means to support his family. As there was no material evidence to substantiate these allegations, the Court did not consider them. Other minor points were also raised in several cases, but they were dismissed as being based on misunderstanding or as plainly unsound. Accordingly, every objection to the constitutional validity of the Bihar Land Reforms Act, the Madhya Pradesh Act and the Uttar Pradesh Act, or any part thereof, was rejected and overruled.

This appeal was made under article 132(3) of the Constitution of India against a judgment of the Full Bench of the High Court of Judicature at Patna dated 12 March 1951, in which the High Court had held that the Bihar Land Reforms Act, 1950 was ultra vires the Constitution because it infringed article 14, while deciding against the respondent on all other matters. The legislative history began on 30 December 1949, when the Bihar Land Reforms Bill was introduced in the Bihar Legislative Assembly. The bill was subsequently passed by both houses of the state legislature, reserved for the consideration of the President of India, and received the President’s assent on 11 September 1950. Following the President’s assent, the Act was formally published, completing the legislative process that gave it legal effect.

The Bihar Government Gazette issued a notice dated 25 September 1950, and on that same day a notification made under section 1(3) of the Bihar Land Reforms Act declared that the Act would become effective immediately. Also on that day a further notification issued under section 3 of the Act announced that the estates and tenures belonging to the respondent together with those of two other persons were transferred to, and consequently vested in, the State of Bihar pursuant to the provisions of the Act.

The respondent subsequently instituted a petition before the High Court of Judicature at Patna invoking article 226 of the Constitution. In that petition the respondent challenged the constitutional validity of the Bihar Land Reforms Act and sought the issuance of a writ of mandamus restraining the State of Bihar from exercising any power or taking any action under the provisions of the Act. The petition was heard by a special bench of the High Court together with three title suits and several other applications filed by various zamindars of Bihar. After deliberation the bench delivered three separate but mutually agreeing judgments. In each judgment the Court declared the Act to be unconstitutional and void, holding that it infringed the fundamental right guaranteed by article 14 of the Constitution.

The High Court examined the validity of the Act on a number of grounds. First, it was alleged that the Bihar Legislature lacked the competence to enact the legislation. Second, it was contended that the Act contravened clause (1) of article 81 of the Constitution. Third, the petitioners argued that the vesting of the estates in the State amounted to an acquisition that was not for a public purpose and that the statutory provision for compensation was illusory. Fourth, the Act was said to be in conflict with article 19(1)(f). Fifth, certain provisions were attacked on the basis that they involved an improper delegation of legislative powers. Sixth, the petitioners claimed that the Act represented a fraud on the Constitution. Finally, it was asserted that the Act was unconstitutional because it violated article 14.

In response to these allegations the Court made eight specific determinations. It held that the Bihar Legislature was indeed competent to enact the law. It found that the Act did not run afoul of article 31(1). It concluded that the acquisition of estates and tenures was undertaken for a public purpose. It ruled that the subject-matter of the Act fell within the scope of article 31(4). It determined that article 19(1)(f) was inapplicable to the statute. It affirmed that the powers delegated to the executive under the Act were permissible. It rejected the contention that the Act was a fraud on the Constitution. However, the Court finally held that the Act was unconstitutional because it violated article 14 of the Constitution.

While the appeal against the High Court’s decision was pending, the Union Government moved to terminate the ongoing litigation by the zamindars. To that end it introduced a constitutional amendment bill, which was passed by the required majority and became the Constitution (First Amendment) Act, 1951. The amendment was intended to put an end to the challenges to the Bihar Land Reforms Act. Subsequently the zamindars filed petitions under article 32 of the Constitution contesting the validity of the First Amendment itself, but those petitions were dismissed by this Court on 5 October 1951, and the Court held that the First Amendment had been validly enacted.

In this case, the petitioners invoked article 32 of the Constitution to challenge the Constitution (First Amendment) Act itself, alleging that the amendment was unconstitutional and void. The Supreme Court dismissed all such petitions on 5 October 1951, holding that the First Amendment had been validly enacted by the Parliament. Consequently, the Court observed that, in view of the amendment, any contention that the Bihar legislation was unconstitutional because it allegedly violated articles 14, 19 or 31 of the Constitution could no longer survive. The Court further explained that the High Court had declared the Bihar Act invalid solely on the ground that it breached article 14; since that ground had been removed by the amendment, the basis of the High Court’s judgment was no longer tenable. Therefore, the Supreme Court indicated that, should it agree with the High Court on the remaining points that were decided against the respondent, the earlier declaration of unconstitutionality must be set aside.

Mr P.R. Das, appearing for the respondent, openly admitted that, after the amendment, no objection could be raised at this stage on the ground that the Bihar Act contravened any provision of Part III of the Constitution. Nevertheless, he supported the Court’s earlier decision on the points that had been decided against him and advanced the following arguments: first, that the Bihar State Legislature was not competent to enact the impugned Act; second, that the acquisition of estates under the Act was not for a public purpose and therefore the Act was unconstitutional; third, that several sections of the Act transferred legislative power to the executive, an abdication he characterised as unconstitutional; and fourth, that the Act constituted a fraud on the Constitution because certain provisions were vague and indefinite, rendering them unenforceable. The core of Mr Das’s challenge rested on the contention that entry 36 of List II of the Seventh Schedule implicitly requires that compulsory acquisition be accompanied by a payment of compensation. He argued that the power to acquire property compulsorily cannot be separated from the obligation to pay compensation, and that the statute’s compensation clauses were illusory, making the Act unconstitutional. Regarding article 31(2), he noted that the fundamental right to property is expressed in negative language, whereas entry 36 uses affirmative language, and he referred to articles 31(4), 31-A and 31-B, claiming that despite their provisions, they do not alter the scope of entry 36 or permit acquisition without compensation.

In the matter before the Court, it was observed that the provision which permits the expropriation of a proprietor’s rights under Part III of the Constitution does not, in any manner, alter the scope of entry 36 of the Seventh Schedule nor does it authorize the State Legislature to enact a law that mandates compulsory acquisition of property without a genuine payment of compensation. The Court highlighted that entry 36 contains the phrase “subject to the provisions of entry 42,” and it was contended that the legislative authority conferred by entry 36 can be exercised only if the authority under entry 42 is also exercised. In other words, the two entries are interdependent, and the power to acquire must be interpreted on the premise that the acquisition is to be accompanied by payment of compensation. Further, it was argued that the power assigned to the Legislature by entry 42 is not a mere authority but a power coupled with a duty, obligating the Legislature to act for the benefit of the person whose property is taken under the authority of entry 36. The argument continued by stating that the Bihar Legislature had legislated under both entry 36 and entry 42 with the intention that any taking of property would be conditional upon the payment of compensation. However, if it were to be established that the statutory provisions relating to compensation are illusory, then the portion of the Act dealing with compensation would be void. Moreover, because the Legislature could not have intended to pass a law that would survive in a truncated form once the compensation provisions are removed, the entire Act should be declared unconstitutional. To evaluate the submissions raised by counsel on the question of whether the Bihar Legislature possessed the competence to enact the Bihar Land Reforms Act, 1950, the Court considered it necessary to examine the text of the Act itself and to identify the subjects over which the Legislature claimed to legislate. The title of the Act suggests that it deals with a form of land reform in Bihar, while its preamble does not specify the exact nature of the reforms, except to provide for the establishment of a Land Commission tasked with advising the State Government on agrarian policy, whatever that term may signify. The principal objective of the Act, as discerned from its provisions, is the transfer to the State of the interests of land proprietors and tenure-holders, as well as the interests of mortgagees and lessees, including rights in trees, forests, fisheries, jalkars, ferries, huts, bazaars, mines and minerals. Section 3 empowers the Government, by way of notification, to declare that the estates or tenures specified therein have passed and become vested in the State. Section 4 then sets out the consequences of such vesting, providing that the interests of the proprietor or tenure-holder in any building or part of a building included in the vested estate, especially where such building is used primarily as an office or cottage for the collection of rent, together with the proprietor’s interests in trees, forests, fisheries, jalkars, huts, bazaars and ferries, shall vest absolutely in the State, free from all encumbrances.

The Court noted that the statute required that every interest belonging to a proprietor or tenure-holder in the estate, including all other sairati interests and the interest in the subsoil, shall vest absolutely in the State free from all encumbrances. This absolute vesting embraced any rights in mines and minerals, irrespective of whether the minerals were discovered or undiscovered, whether the mines were being worked or not, and it also covered the rights of any lessee of those mines and minerals. The provision expressly excluded only the interests of raiyats or interests held under a raiyat, and all other rights comprised in the estate or tenure were transferred to the State.

Clause (b) of the same provision stipulated that all arrears of rent, including royalties and all cesses together with any interest payable on such arrears for any period prior to the date of vesting, and which were recoverable in respect of the estates or tenures of the proprietor or tenure-holder, shall vest in the State and be recoverable by it, provided that the recovery of those arrears was not barred by any law of limitation. The term “arrears of rent” was defined to include arrears on which suits were pending on the date of vesting, as well as arrears for which rent decrees or money decrees had been obtained before the vesting date but had not been satisfied and were not barred by limitation; the definition also embraced the costs awarded by such decrees. In effect, every outstanding amount in the nature of rent and every rent decree that was due to the proprietor or tenure-holder before the vesting date, and before the State acquired any right, title or interest in the estate, would pass to the State. The Court described this as a peculiar and extraordinary consequence of vesting, noting that it is not a normal incident of the transfer of estates but rather an independent provision that causes monies due to the proprietor or tenure-holder, which were in the course of being realized by private effort or by pending suits or decrees, together with the costs of those suits and decrees, to be forfeited to the State. Clause (c) preserved the liability of the proprietors or tenure-holders to pay arrears of revenue and cesses to the Government that accrued prior to the date of vesting.

The Court further explained that, as a consequence of the vesting, no suit could be maintained for the recovery of any money from a proprietor or tenure-holder that was secured by a mortgage or charge on the estate, and the estate or tenure covered by the Act would not be liable to attachment. The Collector was given the authority to take charge of the estate and to inspect any documents and accounts that he deemed necessary for the management of the estate or tenure. Under Section 5, the statute permitted proprietors and tenure-holders to retain their homesteads, but only in the capacity of tenants who were freed from the obligation to pay rent. Section 6 allowed them to retain possession of lands that were in their khas possession or in the possession of lessees under them, provided that they paid rent as stipulated by the statute.

The Court explained that, under the Act, raiyats who occupied land were to become occupancy tenants liable to pay rent to the State. Section 7 provided that any building together with the land on which it stood, if owned or possessed by a proprietor or tenure-holder and used as a gola, factory or mill, could be retained by that person upon payment of rent. Section 8 conferred a right of appeal on any party who was aggrieved by an order of the Collector. In Section 9 the Act stipulated that all mines that formed part of an estate or tenure and that were in operation at the start of the Act, and that were being worked directly by the proprietor or tenure-holder, were to be deemed leased by the State Government to that proprietor or tenure-holder. The provision expressly excluded mines on which substantial expenditure might have been incurred but which were not actually operating. For the purpose of the Act an artificial definition of “mines in operation” was introduced in Section 9(2)(m), describing such mines as those for which a notice had been served on the Government under the Indian Mines Act. Section 10 preserved any existing lease of mines and minerals, treating the lessee as a lessee of the Government. Section 11 transferred to the State the buildings and lands appurtenant to a mine and deemed them to be leased by the State to the lessee from the date of vesting. Section 12 established the composition of a Mines Tribunal, and Section 13 dealt with the management of estates and tenures that vested in the State.

Sections 14, 15, 16, 17 and 18 contained provisions relating to the investigation of debts owed by proprietors and tenure-holders and set out the procedure for the payment of those debts. Section 19 provided for the appointment of a compensation officer. Sections 20 and 21 gave specific directions for the compensation officer’s procedure where the proprietor held only a portion of an estate or where 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. The Act described “gross assets” as the aggregate of rents, including all cesses payable for the previous agricultural year, whether the rent was payable by a subordinate tenant or by raiyats. The definition also encompassed the gross income of the previous agricultural year derived from fisheries, trees, jalkars, ferries, huts, bazaars and sairati interests. For forest income, the Act required calculation on the basis of the average gross annual income of the twenty-five agricultural years preceding the agricultural year of vesting, based on the amount the forest would have yielded if it had been under state management during that twenty-five-year period, as estimated by a forest officer.

The Court explained that Section 23 of the Act prescribed the method for computing the net income of a proprietor or tenure-holder. It required that the net income be arrived at by deducting, from the gross assets of the owner, several specified items. First, any sum payable as land revenue or rent had to be subtracted. Second, any sum payable as agricultural income-tax on agricultural income derived from the estate or tenure in the previous agricultural year was to be deducted. Third, any sum payable as income-tax on income other than royalties for the previous agricultural year was also to be deducted. Fourth, any chaukidari tax or municipal tax payable by the proprietor was to be removed from the gross assets. Fifth, the cost of managing the estate or tenure was to be deducted at rates varying from five to twenty per cent, depending on the amount of the gross asset; the minimum fixed amount was Rs 2,000 and the maximum applied to any amount exceeding Rs 15,000. The Court observed that these rates appeared to be fixed arbitrarily and bore no relation to the actual cost of management. For illustration, the Court noted that the Maharaja of Darbhanga’s estate generated a gross income of nearly forty-eight lakhs, yet the statutory calculation would impose a management cost of nine and a half lakhs, a figure that seemed unreasonable and unrelated to real expenses. The Court further observed that, under ordinary economic principles, the expense ratio for management would be lowest for the highest gross income and would increase as gross income fell, but the Act reversed this rule, causing an artificial reduction of net income and consequently forfeiting part of the compensation that should have been payable. Sixth, Clause (f) allowed deduction of the cost of works of benefit to the raiyats at rates ranging from four to twelve and a half per cent; four per cent applied where the gross asset did not exceed Rs 5,000, and twelve and a half per cent applied where the gross asset exceeded Rs 25,000. The Court held that calculating the cost of such works at a fixed rate, without reference to actual expenses incurred, was confiscatory and further reduced the net income on which compensation was based. Seventh, Clause (g) permitted deduction of any other tax or legal imposition payable in respect of the estate or tenure that was not expressly mentioned in the earlier clauses. Finally, the Court noted that Section 24 set out the manner of determining the compensation payable to the proprietor or tenure-holder, laying down a formula for calculation.

In the statute, the assessment of compensation followed a sliding scale based on the net income of the estate. When the net income did not exceed five hundred rupees, the compensation payable was calculated as twenty times that net income; conversely, when the net income exceeded one hundred thousand rupees, the compensation was limited to three times the net income, resulting in a merely nominal amount. In the specific instance of the Maharaja of Darbhanga, the estate that was acquired also included property that the Maharaja had purchased by spending approximately one crore rupees, as well as mortgages amounting to half a crore rupees. All of these interests, together with the inherited zamindaris of the Maharaja and arrears of rent totalling thirty lakhs rupees, vested in the State of Bihar, whereas the total compensation calculated under the Act amounted to roughly nine lakh rupees. The provision further required that to the amount determined under the sliding scale, an additional fifty percent of the arrears of rent referred to in clause (b) of section four be added, together with any compensation payable in respect of mines and minerals as determined under section twenty-five. The Act also prescribed the manner of assessing compensation for persons who possessed only a share in a zamindari, held other minor interests in tenures or estates, where the estate or tenure was held in trust, or where the interest was of an impartible nature. Regarding mines and minerals, section twenty-five stipulated that the compensation be fixed either by agreement of the parties or by a tribunal appointed for that purpose. Subsequent sections dealt with the preparation of the compensation roll, the hearing of appeals, and related procedural matters. Section thirty-two laid down the method and manner of payment of compensation; sub-section two of that section authorized payment in cash, in bonds, or partly in cash and partly in bonds. The bonds could be either negotiable or non-negotiable, were to be non-transferable, and were to be payable in forty equal instalments to the named person, carrying interest at the rate of two and a half percent per annum from the date of issue. Any dispute concerning compensation between proprietors or tenure-holders was to be determined by a tribunal appointed by the State Government. Section thirty-four provided for the constitution of a commission known as the Bihar Land Commission. The remaining provisions of the Act were of a miscellaneous character and required no special mention. The final section empowered the State Government to make rules for the implementation of the Act’s provisions. From this overview, it appeared that the legislation potentially touched upon several entries in the legislative lists, including rights in or over land and land tenures, forests, fisheries, mines and minerals, acquisition of property, and the principles for determining compensation for acquired property. Nonetheless, the essential purpose and substance of the legislation, in the Court’s view, was the transfer of ownership of the estates to the State Government.

In this case the Court observed that the transfer of ownership of estates to the State Government falls within the legislative competence of entry 36 of List II of the Seventh Schedule. The statute does not contain a comprehensive land-reform programme, although it expresses a hopeful expectation that the Bihar Land Commission may eventually devise one. The Court held that the Bihar Legislature possessed the authority to enact provisions dealing with the transfer of estates, and therefore the provisions concerning such transfers are constitutionally valid. The Act also provides for the recovery of rent arrears that were due before the estates vested in the zamindars, directing that fifty per cent of the amount recovered be surrendered to the State exchequer. In addition, by an indirect mechanism the Act requires that the portion of compensation which would otherwise be payable to proprietors or tenure-holders be reduced by deducting from the gross income certain artificial items that have no connection with actual expenses; the effect is that the State exchequer receives that reduced share. The Court indicated that these two provisions—relating to the forfeiture of rent arrears and the indirect reduction of compensation—would be examined separately because, in the Court’s view, they are unconstitutional. Having concluded that the Bihar Act is constitutional insofar as it deals with the transfer of estates to the State under entry 36 of List II, the Court turned to the argument advanced by Mr P R Das. Mr Das contended that the very language of entry 36 imposes an accompanying duty on the legislature to provide compensation, and that because the Act’s compensation provisions are merely illusory, the statute should be struck down as unconstitutional. He further argued that article 31(4) of the Constitution does not shield the Act from this challenge. To assess Mr Das’s proposition that the obligation to pay compensation is implicitly embedded in entry 36, the Court examined the historical basis of the State’s power of compulsory acquisition. The Court noted that this power is a sovereign authority of the State, a power that has existed since ancient times. Kent described it as an inherent sovereign power, and an essential corollary, according to the Court, is the principle that property may not be taken for public use without the payment of just compensation. The Court cited Mr Broom’s constitutional commentary, which characterises the right to enjoy private property without undue interference as second only to personal liberty, and affirms that the requirement of just compensation is a reaffirmation of a long-standing common-law doctrine rooted in natural equity and universal law. The Court further referred to the statement of Lord Atkinson, reinforcing the view that the power of compulsory acquisition necessarily carries with it the obligation to compensate the affected owners.

In the case of Central Control Board v. Cannon Brewery Co. Ltd. (1), the Court observed that whenever the sovereign exercises the power to acquire property compulsorily, this power necessarily brings with it a right to receive payment as compensation. The doctrine of compulsory acquisition on the European continent is commonly expressed by the term “eminent domain.” Historical evidence indicates that this term was first coined in the year 1625 by the jurist Hugo Grotius. In his treatise De Jure Belli et Pacis, Grotius explained the concept as follows: “The property of subjects is under the eminent domain of the State, so that the State or the person acting on its behalf may use, alienate, or even destroy such property, not only in cases of extreme necessity, where even private persons have a right over the property of others, but also for purposes of public utility, which the founders of civil society must have intended to supersede private ends. It must also be added that when the State exercises this power, it is bound to compensate those who lose their property.” The Court further referred to the discussion of the relationship between an individual’s entitlement to compensation and the sovereign’s power to condemn, as presented in Thayer’s Cases on Constitutional Law (Vol. I, p. 953) and cited on page 3 of Nichols on Eminent Domain. The passage quoted reads: “While the obligation to make compensation is well established and clear, it must be noted that it rests upon the natural rights of the individual. Conversely, the State’s right to take originates from a different source, namely the necessity of government. Accordingly, these two rights do not share the same origin; they do not arise, for example, from any implied contract between the State and the individual that the former may acquire property provided it pays compensation. The right to take is not a mere pre-emptive right, and it carries no condition of compensation either before or after the taking. Nevertheless, there exists a right to take, (1) [1919] A.C. 744, and, as an incident to that right, an obligation to make compensation; this latter obligation, morally speaking, follows the former like a shadow, yet remains distinct and derives from a separate source.” Stripping away all ancillary considerations, the Court defined the simple meaning of the power of compulsory acquisition, or “eminent domain,” as the sovereign’s authority to take property for public use without the consent of the owner. In its most basic elements, the power consists of three components: (a) the authority to take, (b) the absence of the owner’s consent, and (c) the purpose of public use. The notion of public use is inseparably linked to the proper exercise of this power and is regarded as an essential part of any definition. Although the term “eminent domain” does not intrinsically require compensation, the Court emphasized that payment of compensation is a necessary element for the lawful exercise of the power. Accordingly, courts have interpreted “eminent domain” to include this universal limitation as an integral constituent of its meaning.

The principle that the definition of eminent domain includes the sovereign’s power to acquire property for public purpose without the owner’s consent, provided that just compensation is paid, enjoys universal acceptance. Consequently, the duty to pay just compensation is an essential and inevitable incident of any power of compulsory acquisition of property. This requirement is recognised both under the English common law tradition and under the continental doctrine of eminent domain, which was later embraced in the United States. The matter before the Court was whether this duty to compensate, which follows a compulsory taking like a shadow, was impliedly incorporated by the makers of our Constitution in the legislative entries that empower the State—specifically entry 36 of List II and entry 33 of List I—or whether the duty was set out in clear and express terms elsewhere in the constitutional text.

In the opinion of the Court, the Constitution elevates the obligation to pay compensation for a compulsory acquisition to the rank of a fundamental right. It expressly declares that any law which fails to provide for payment of compensation is void. The Constitution did not leave the question to be inferred by arguments advanced before the bar from the language of entry 36; instead, it placed an explicit provision in article 31 (2). Because the requirement to pay compensation has been made a mandatory component of legislation that purports to exercise the powers conferred by entry 33 of List I and entry 36 of List II, the contention advanced by Mr P R Das—that the duty to compensate is inherent in the wording of entry 36—cannot be accepted. The Court concurs with the learned Attorney-General that the concepts of acquisition and of compensation stem from different sources. The power to acquire belongs to the sovereign authority of the State, whereas the right to compensation derives from the natural right of a person who is deprived of his property to be indemnised for his loss. Thus, the power to take is mentioned in entry 36, while the condition that renders that power valid—namely the provision of compensation—is embodied in article 31 (2) and is not implicit in the entry itself. For comparative perspective, reference may be made to the Government of India Act, 1935, where section 299 imposed a restriction on legislative authority. Our Constitution, however, goes further by declaring any law that does not provide compensation to be void, thereby not only imposing a limitation on legislative power but also guaranteeing the dispossessed proprietor a remedy under article 32 for enforcement of his fundamental right. Accordingly, the Court is of the view that Mr Das is incorrect in his submission that the duty to pay compensation is automatically derived from entry 36.

The Court examined the contention that a law enacted under the legislative authority conferred by entry 36 of List I would be unconstitutional if it failed to incorporate a provision for compensation, because entry 36 itself did not permit the making of such a law without a compensation clause. It was further argued that entry 36 of List II was linked with entry 42 of the Concurrent List by the words “subject to” appearing in the former, and that the validity of any legislation made under entry 36 was conditioned upon a concurrent exercise of the power under entry 42. According to that argument, because the provisions of the impugned Act dealing with the determination of compensation were considered illusory, there had been no valid exercise of the power under entry 42, and therefore the legislation under entry 36 failed. The Court held this line of reasoning to be unsound. It explained that the two entries in question are merely heads of legislation and are neither interdependent nor complementary. The obligation to legislate a compensation scheme under entry 42 of the Concurrent List, which gives validity to a law enacted under entry 36, arises from the force of article 31(2), not from the presence of the words “subject to” in the entry. The Court noted that no such words occur in entry 33 of the Union List, and it could not be reasonably argued that Parliament could enact a law for compulsory acquisition of property without also fulfilling the condition of making a law under entry 42. However, the situation for a State Legislature is different, and the contention that the State must likewise satisfy that condition was deemed untenable. The Court clarified that the sole purpose of the phrase “subject to” in entry 36 is to indicate that legislation made under that entry would be subject to any law made by Parliament exercising its power under entry 42. Both legislatures may legislate under entry 42, but a Parliamentary statute created under that entry would have precedence over a State law in the event of a conflict, which is why entry 42 is mentioned in the head of legislation in the State List under entry 36. In other words, whenever a State Legislature enacts a law under entry 36, that law will be subordinate to the provisions of any Parliamentary statute enacted under entry 42. Finally, it was urged that the legislative power conferred by entry 42 of the Concurrent List is intended for the benefit of the expropriated owner and that the legislature is bound to exercise this power for his benefit whenever it acquires property under its compulsory powers, essentially coupling the power with a duty to exercise it.

In addressing the issue, reference was made to Lord Cairns’s observations in Julius v. Bishop of Oxford (1880) 5 App. Cas. 214. That decision established the principle that when a power is granted in the character of a trust, the holder of that power has a duty to exercise it for the benefit of the cestui que trust. The Court observed, however, that this principle cannot be transferred to the situation of legislative powers conferred by a constitution. The entries in the constitutional lists are merely heads of legislation and possess an enabling character; they do not impose a mandatory duty to exercise legislative power in any particular way. Accordingly, even if the argument advanced by counsel were sound, it would not enable the Court to issue a mandamus compelling the legislature to act under entry 42 when it chooses not to do so. When confronted with this point, the counsel representing the State acknowledged that he could not convincingly argue that a legislature could be ordered to enact a statute against its will. The Court therefore concluded that a failure to enact legislation under entry 42 does not render a law made under entry 36 invalid. In the Court’s view, the precedent set in Julius v. Bishop of Oxford has no relevance to the matter presently before it.

The essential question for resolution in these appeals is to determine the extent to which Article 31(4) of the Constitution, together with the newly inserted Articles 31-A and 31-B, have removed the rights or remedies of an expropriated proprietor, particularly the guaranteed right to receive compensation for property acquired. Article 31(4) states: “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).” Articles 31-A and 31-B provide further protection. Article 31-A(1) declares that no law providing for the acquisition by the State of any estate or rights therein, or for the extinguishment or modification of such rights, shall be deemed void on the ground of inconsistency with, or abrogation of, any rights conferred by this Part, except where the law is a State law that has not been reserved for the President’s consideration and received his assent. Article 31-A(2)(a) defines the term “estate” to have the same meaning in each local area as the expression used in existing land-tenure law, encompassing jagirs, inams, musafi and similar grants. These provisions are central to assessing the extent of the proprietor’s retained rights under the constitutional framework.

In this case, the Court explained the meaning of the terms used in Article 31-A. The expression “estate”, with respect to a local area, has the same meaning as the term used in the existing law that governs land tenures in that area; it also includes any jagir, inam, musafi, or any similar grant. The expression “rights”, in relation to an estate, embraces 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 limiting the generality of Article 31-A, provides that none of the Acts and Regulations listed in the Ninth Schedule, nor any of their provisions, shall be deemed void or 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 Court then turned to the language of Article 31(4). It noted that the provision is unequivocal: when a Bill has obtained the President’s assent in accordance with the procedure laid down in Articles 31(3) and 31(4), the law so assented to cannot be called into question in any court on the ground that it contravenes the provisions of clause (2). To ascertain the scope of this non-justiciability, the Court held that a strict construction is required because the clause operates as a debarring provision. In the Court’s opinion, the provisions of sub-clause (2) that become unjusticiable by clause (4) are those dealing with the determination and payment of compensation. The purpose of clause (4) is to make the obligation to pay compensation a condition precedent to the compulsory acquisition of property. The wording that precedes the word “unless” merely describes 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. The mandate, therefore, is that any such law must contain an express provision for payment of compensation to the proprietor whose property is expropriated. Citing the Oxford Dictionary (Vol. 8, p. 1526), the Court observed that the term “provision” in statutes refers to what is expressly provided therein. Consequently, Article 31(4) means that a breach of the express provisions of Article 31(2) relating to compensation will not be a justiciable issue; it does not refer to any implication that may be read into the clause. The Court concluded that while a “public purpose” is an implied condition of the exercise of compulsory powers, Article 31(2) does not expressly make it a condition precedent to acquisition.

In this case the Court explained that while the Constitution authorises the State to acquire property, article 31(2) does not expressly state that a public purpose must be a condition precedent to acquisition. The provision presumes that compulsory acquisition may be undertaken only for a public purpose, and that presumption is therefore built into the acquisition power itself. Consequently, the Court held that article 31(4) does not prevent the judiciary from examining whether a law governing compulsory acquisition is invalid because the acquisition was not made for a public purpose. This same view had been expressed by the learned judges of the Patna High Court. The sovereign power to acquire property compulsorily is limited to acquisitions made for a public purpose; the Constitution does not grant the sovereign authority to take private property and transfer it to private individuals. Public purpose is an inherent element of the power. The Court referred to Willoughby's Constitutional Law (page 795), which observes 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.” Public purpose also forms a necessary component of the definition of eminent domain according to Nichols and other constitutional writers, although the requirement to pay compensation is not part of the original definition; it has been incorporated through judicial interpretation. The exercise of the compulsory acquisition power is therefore conditioned upon the existence of a public purpose, a condition that does not appear as an express term in article 31(2) but resides elsewhere in the nature of the power itself. That assumption underlies the clause. From this analysis the Court concluded that the reach of article 31(4) is confined to the express provisions of article 31(2). Courts may not assess the extent or adequacy of compensation provisions contained in a statute dealing with compulsory acquisition for a public purpose. However, the limitation in article 31(4) does not affect the court's authority to determine whether the acquisition was undertaken for a public purpose. Nor does the clause strip the court of the power to review whether the legislature, in enacting the statute, acted within its constitutional competence under the relevant list, or whether it merely invoked a legislative head that does not support the legislation. Regarding the newly introduced articles 31-A and 31-B, the Court noted that those provisions merely place beyond judicial review any enactment concerning compulsory acquisition of property that might infringe the fundamental rights contained in Part III of the Constitution; in other words, the protection of article 13(2) of

The Court observed that the Constitution could not be invoked to challenge the validity of statutes such as the one under review. After having clarified the ambit of article 31(4), the Court turned to examine how far the protection afforded by that provision extended to the impugned legislation. The learned counsel for the petitioner, Mr Das, argued – an argument that was not seriously contested by the learned Attorney-General – that the compensation regime created by the statute was highly unjust, inequitable to certain persons, and in some instances merely illusory. The Court noted, however, that the Constitution expressly forbids a court of law from inquiring into the adequacy or fairness of compensation. It recalled that the same Constituent Assembly which had guaranteed, in article 31(2), the payment of compensation and had provided a remedial avenue under article 32 for enforcing that guarantee, had withdrawn that remedial jurisdiction in the case of the Bihar and other zamindari estates. In place of the earlier remedy, the Assembly introduced the procedure prescribed in articles 31(3) and 31(4), declaring that compliance with those provisions would be sufficient to render the acquisition laws valid and effective. Consequently, however repugnant the Court might find the impugned law from a moral standpoint, it was not within the Court’s power to examine the quantum of compensation dictated by the statute. The Court emphasised that it is the duty of the appropriate legislature to consider revising any provision that appears unjust, repugnant to notions of justice, or merely illusory. The provisions of article 31(4) tie the Court’s hands, and a matter that the Constitution has declared non-justiciable cannot be rendered justiciable by an indirect inference that the same subject matter is implicitly covered by another entry. Nonetheless, none of these provisions prevent the Court from investigating any other issue whose cognizance has not been expressly removed by article 31(4) or by articles 31-A and 31-B.

The essential question, therefore, was whether the acquisition of the estates was effected 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 through legislation exists only when a public purpose is demonstrable, whether that purpose belongs to the Union, the State, or any other recognized public objective. Private property, the Court reiterated, cannot be taken for a private purpose. The right to legislate under entry 36 of the Constitution presupposes the existence of a public purpose, and the contention before the Court was that no such public purpose existed behind the Act. The learned judges of the High Court had rejected this contention on the basis that the question of public purpose had been, by implication, settled by the Constituent Assembly, and therefore the Court could not entertain a fresh inquiry into it.

In this case the Court recorded that the judges of the High Court were unable to reject the proposition that the acquisition of estates and tenures constituted an acquisition for a public purpose because the Constitution’s Constituent Assembly had already decided that such acquisition was permissible. The Court explained that this conclusion was based on clauses (4) and (6) of article 31, which were interpreted to show that the Constituent Assembly had given its explicit approval to the legislation in question. One of the judges observed that article 31, clause (2), required two elements for a compulsory acquisition: a public purpose and a provision for compensation. He noted that the protection afforded by clauses (4) and (6) concerned only the compensation element, suggesting that the Assembly considered the nationalisation of land itself to satisfy the public-purpose requirement. Accordingly, the judge held that the Act under challenge did meet the public-purpose test contained in clause (2) of article 31.

Another judge added that the Constitution itself indicated that the term “public purpose” should be interpreted broadly and comprehensively. He pointed out that the Constituent Assembly, acting as the people’s representative while framing the Constitution, was aware of legislation similar to the impugned Act, as shown by clause (4) of article 31. He further observed that the Land Reforms Bill was still pending when the Constitution came into force, and it would have been surprising for the Assembly to preserve such a Bill by invoking clause (4) if it did not consider the Bill to serve a public purpose. The judge therefore argued that the Assembly made an implied declaration that the legislation pursued a public purpose, and that courts should give such a declaration respect unless it proved impossible. On this basis he concluded that the Act did not fail for lack of a public purpose.

Learned counsel, however, challenged the High Court’s view. He contended that article 31(4) did not answer the central issue because the Act failed to explain why the zamindaris were being acquired. He argued that the legislation merely provided for the interception of rents, directing those rents to the State without any benefit to the tenants. He further maintained that private property could not be taken merely to increase State revenue and that the only effect of the Act appeared to be the ruin of a large class of persons without any corresponding advantage to any segment of the community.

It was asserted that the State of Bihar contained approximately 1,335,000 land-owners and tenure-holders. Assuming an average family comprised four members, the counsel calculated that about five and a half million individuals would be impoverished by the operation of the legislation. The counsel emphasized that the cultivators, known as ryots, would derive no advantage because every parcel of land, except for the waste lands proposed for transfer, was already possessed and cultivated by the ryots. Moreover, none of the rent that could be collected from those lands was being redirected for the benefit of the cultivators. The argument further highlighted that the waste lands were sufficient to satisfy the villagers’ needs for grazing cattle and pasture. Consequently, the acquisition of the estates was portrayed as an attempt to create a single, heavily bureaucratic “super-landlord,” thereby stripping a substantial segment of the public of its means of livelihood. While acknowledging that land nationalisation might represent the policy of the ruling party, the counsel contended that such a policy did not constitute a public purpose that conferred benefit upon the community.

The counsel referred to the decision in Harnabai Pramjee Petit v. Secretary of State for India (1915) 42 I.A. 44, in which it was observed that the term “public purpose” must embody an objective that directly and vitally concerns the general interest of the community rather than the particular interests of individuals. According to the counsel, the impugned Act failed to satisfy this definition of a public purpose. A further citation was made to volume II of Cooley’s Constitutional Limitations, page 744, which states: “The purpose must be public, and must have reference to the needs or convenience of the public, and no reason of general public policy will be sufficient to validate other transfers when they concern existing vested rights.” The counsel finally argued that the Act and the legislature’s statements contained no definite or tangible indication of a public purpose for acquiring the estates; instead, the legislature appeared uncertain, acting on a vague notion of an unspecified future policy. In the Court’s view, scrutinising each argument presented by the counsel would not be productive. The Court noted that acquisition of private property under entries 33, 36, and 42 could only be effected for the purposes of the Union, the purposes of the State, or a public purpose, and that the statute need not expressly articulate the precise purpose so long as the overall tenor and intent of the Act reveal that the property is being taken for either State purposes or a public purpose.

In its consideration, the Court observed that the statute under review was intended either for the purposes of the State or for a public purpose, the ultimate aim being to benefit the community at large. It was acknowledged that the present legislation did not explicitly set out the legislature’s specific intentions regarding the disposition of the estates after they were vested in the State Government, and that the State Government might not yet have determined precisely how the acquired lands and tenures would be employed. The Act, however, did provide in section 34 for the creation of a land commission whose function would be to advise the Government on its agrarian policy. Despite the criticism voiced by counsel against the Act, the Court held that the absence of an express statement of public purpose in the statute did not render the Act invalid. The title of the legislation, “The Bihar Land Reforms Act, 1950,” together with the constitutional backdrop, reinforced its public character. The Court referred to the preamble of the Constitution, which declares India to be a sovereign democratic republic established to secure justice—social, economic and political—to all citizens. It then cited Article 39 of the Directive Principles of State Policy, which directs the State to ensure that ownership and control of material resources are distributed in a manner that serves the common good and prevents concentration of wealth and means of production to the detriment of society. From this constitutional principle, the Court concluded that the concentration of large tracts of land in the hands of a few individuals was contrary to the foundational values of the Constitution. Accordingly, the purpose of the acquisition contemplated by the impugned Act was to dismantle such concentration, to bring the ownership and control of material resources into the hands of the State, and thereby to redistribute them as widely as possible for the benefit of the community. In other words, the Act sought to reform the land-distribution system of Bihar so as to achieve a general benefit for the people, as advised by the land commission. The Court emphasized that the legislature, being the body elected by the people, is the appropriate authority to determine what is best for the community, and that it was not within the Court’s jurisdiction to declare that the statute lacked a public purpose. The purpose articulated in the statute was consistent with both the letter and the spirit of the Constitution of India. The Court rejected the argument that the Act was designed to ruin the five-and-a-half-million people of Bihar, noting that not all lands held in khas possession by those individuals were subjected to acquisition. Their homesteads, as well as mineral wealth except for mines that were not in operation, remained largely untouched by the provisions of the Act.

In its discussion of the Act, the Court noted that the legislation granted several specific exemptions in favor of small zamindaris and that the compensation provisions applicable to them could not be described as illusory. The Court found it difficult to assert, given contemporary global conditions, that legislative measures intended for community welfare and aimed at implementing a policy of land nationalisation lacked a public purpose. It explained that the term “public purpose” must be interpreted in light of the spirit of the era when the legislation was enacted, and that, when so interpreted, the acquisition of the estates was to be regarded as being made for a public purpose. The Court then clarified that these observations did not extend to the acquisition of arrears of rent. According to the plain terms of the statute, half of the arrears were acquired for the private benefit of the zemindars, while the remaining half was intended either to augment State revenues or to provide funds for paying compensation to the zemindars, the purpose being to meet the acquirer’s obligation to pay the price. The same reasoning was applied to clause 23(f) of the statute, which was designed to partially negate the Act’s provisions on compensation, and the Court observed that clause 4 of article 31 offered no protection against the invalidity of those clauses. The learned Attorney-General argued that the acquisition of arrears constituted an acquisition of choses in action and that compensation should be fifty per cent of the arrears amount. The Court expressed regret that it could not accept this argument, reiterating the well-settled legal principle that the State could not appropriate individual property through compulsory acquisition merely to increase its own revenues. Citing Cooley, the Court explained that compulsory acquisition is based on the community’s superior claim over an individual but applies only when private property is needed for public use or welfare, and that no case is known where property has been taken solely to raise revenue, as such a taking would destroy individual rights. The Court further described taking money under eminent domain, with later monetary compensation, as tantamount to a forced loan, and held that money, tax-generated monies, and rights in action that merely produce money cannot be taken under the power of eminent domain. Willis’s commentary in Constitutional Law was also referenced in support of this view.

In this discussion the Court observed that Nichols, in his treatise on eminent domain (Vol. 1, p. 97), expressed a view that contrasted with the opinion previously cited. Reference was also made to the decision in Cincinnati v. Louisville, R. Co. C. The Court examined that case and found that it did not contain any proposition supporting the view advanced by Nichols. The Kansas case held that a legislative Bill intended to restrain the enforcement of a state statute concerning fire-insurance rights was a valid exercise of the state’s authority. The Court noted that it was unnecessary to determine, for the purposes of that case, whether the compulsory acquisition power allowed a state to acquire choses in action or money. Nevertheless, the Court could not accept that such an acquisition would be anything other than a forced loan. It was further emphasized that the same objective could be more appropriately achieved by the exercise of the state’s police power rather than by invoking eminent domain or compulsory acquisition of property. The Court explained that compensation in such a forced-loan scenario would amount to the exact sum of money taken, and where a chose in action was involved, the compensation would correspond to the monetary value that the chose could generate, citing the authority (1) 223 U.S. 390.

The Court then turned to the specific facts concerning the arrears claimed by the zamindars. It held that the payment of fifty per cent of the outstanding arrears could not be described as “compensation” within any recognized meaning of the term. The factual position, according to the Court, was that the State had taken over the entire amount of arrears and had arbitrarily decided to refund only half of it while forfeiting the remaining half. The validity of this acquisition, the Court observed, had to be assessed independently of the acquisition of land estates, as it bore no relation to land-reform measures or any recognized public purpose. The Court likened the acquisition of these arrears to the State’s acquisition of other debts owed to zamindars or to their other movable property, which the Act did not intend to acquire. The sole purpose, the Court said, was to generate revenue that would later be used to pay compensation to certain zamindars whose estates were being taken. Such a purpose, the Court found, did not fit within any definition—however expansive—of “public purpose,” and therefore, the provision was unconstitutional. To illustrate the character of the provision, the Court cited several appeals: In Appeal No. 299 of 1951, the arrears of Darbhanga Raj as of 26 September 1950 amounted to Rs 30,81,967, of which half was payable and half forfeited; in Appeal No. 330 of 1951 (Raja P.C. Lal), the rents due were Rs 10,26,103; and in Appeal No. 339 of 1951, the amount claimed was Rs 9,52,937. Finally, the Court noted that the petitioners contended that the impugned Act was a fraud upon the Constitution and therefore void. They argued that, while the Act pretended to comply with constitutional requirements by claiming to provide for compensation, in reality it devised a scheme that effectively resulted in non-payment of such compensation.

The petitioners argued that the statute achieved payment of compensation only through artificial methods of “shift and contrivance.” They pointed to several provisions of the Act that had already been identified in this judgment as having a confiscatory character. In particular, they referred to Section 9, which provides that mines, while they are being developed and produce no income, become vested in the State without any payment of compensation. The petitioners also noted that no compensation was payable for forests or trees that were not generating income at the time of vesting. In summary, they maintained that the purpose of the Act was to acquire the zamindars’ properties by providing only a nominal or illusory compensation that was to be drawn from the zamindars’ own funds. Moreover, they asserted that in certain cases the zamindars were required not only to surrender their estates without any consideration but also to make an additional payment to the State if the principles laid down in the Act were applied. Specific illustrations were cited: in the case of the Maharaja of Darbhanga, the zamindari would be taken over by the State Government without any payment, yet the Maharaja would be obliged to pay six lakhs of his own money to the Government. In Case No. 330 of 1951 (Raja P.C. Lall), it was said that the Government would acquire the zamindari free of charge; in Case No. 339 of 1951, the State would obtain the zamindari together with two and a half lakhs from arrears; and in Case No. 331 of 1951 (the Chota Nagpur appeal), the zamindari would be acquired for a modest sum of only fourteen thousand rupees, with nothing payable to the zamindars out of the public treasury.

The petitioners also drew attention to observations made by Justice Shearer, which were quoted at length. Justice Shearer expressed the view that the legislature seemed overly optimistic in hoping that the reform could be carried out without raising a substantial loan. He concluded that the intention was clearly to take over the large estates in the province, providing either no compensation or only the most inadequate compensation, and then to use the considerable profits expected from those estates to eventually take over the remaining estates and tenures. In other words, a relatively small minority belonging to a particular class would be expropriated without adequate compensation so that, when the majority of estates were eventually expropriated, the compensation provided could be less inadequate and perhaps even more than adequate. Mr. Das, representing the petitioners, forcefully contended that the statute was a fraud on the republican Constitution, which promised that no person would be deprived of property without payment of compensation. He argued that while the Act pretended to contain elaborate provisions for payment, it in reality, through shift and contrivance, provided for the evasion of such payment. The petitioners further referenced a passage from the case Moran Proprietary Ltd. v. Deputy Commissioner of Taxation for New South Wales, emphasizing that the case illustrated how a purported exercise of power to grant...

The Court observed that providing financial assistance under section ninety-six could be merely a façade. It warned that, although the legislation appeared to assist a State with money, its true purpose might be to create discriminatory taxation. Such a scheme could be beyond the authority of the Commonwealth Parliament. The judges used cautious language because the situation might never arise and because, in constitutional cases, they preferred to limit their decision to what was strictly required. They added that, in their view, some of the legislative devices condemned as ultra vires by Justice Evatt in his strong dissent might indeed be colourable, and that those devices did not receive the Court’s approval. It was also submitted that a statute could be declared a fraud on the Constitution on the same footing as cases involving corporations or executive bodies that exceed or misuse their statutory powers. The argument relied on observations of the Chief Justice in Fox v. Bishop of Chester, which stated that the judgment was based on the language of the Statute of Thirty-one George the Third, chapter six, and on the well-known principle that the provisions of an Act of Parliament must not be avoided by shift or contrivance. The Court noted that in Fox v. Bishop of Chester it was said that fraud upon the law could exist even when the language of the statute made no mention of such fraud. In Westminster Corporation v. London & North Western Railway it was observed that a public body given 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, with the last requirement included in the second and, if not the first. In Maharaja Luchmeswar Singh v. Chairman of the Darbhanga Municipality the Court pointed out that offering and accepting one rupee was a colourable attempt to obtain title under the Land Acquisition Act without paying for the land. In Alexander v. Brame it was observed that if there were sufficient grounds to hold that a deed was a device of Mr. Brame intended to evade the statute while appearing to comply with it, a view favourable to the appellants might be adopted. All these principles are well settled. However, the Court questioned whether they applied to the present case, noting that the issue was not simple.

In this case, the Court cautioned against attributing a dishonest motive to the legislature of a State and declaring that it acted in bad faith or maliciously in enacting the Bihar Land Reforms Act, nor should it be said that the legislation represents a fraud on the Constitution. The Court recognised that certain provisions of the Act might impose severe consequences on a few individuals, including some zamindars, and that a few provisions might exceed the legislative authority of the Bihar Legislature. However, the Court held that such circumstances do not automatically render the entire enactment a constitutional fraud. The Court explained that the mere fact that the estates of a handful of zamindars could be taken without payment of compensation (1) 6 E.R. 581 (3) 17 I.A. 90. (2) [1905] A.C. 426 at p. 430. does not permit the conclusion that the whole statute is fraudulent or that every clause concerning compensation is illusory. At most, the illusory effect might be confined to a limited segment of those affected. The Court specifically criticized Section 23(f) as a colourable piece of legislation, noting that it was enacted under the power conferred by legislative entry 42 of List III. The Court reiterated the settled principle that Parliament, when exercising limited powers, may not achieve indirectly what it is prohibited from doing directly, citing South Australia v. The Commonwealth (1) and Madden v. Nelson & Port Sheppard R.W. Co. (2). In Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Proprietary Ltd. (3), the Court observed that when the law-making authority is limited or qualified, the substance of the legislation must be examined with strictness to determine the true purpose, and that courts should not be swayed merely by the appearance of the challenged law. The Court further explained that a legislature cannot evade a constitutional prohibition simply by employing an indirect method to attain the same result, and that courts may need to look beyond names, forms and appearances to discern whether legislation is colourable or disguised.

The Court found that the provision under attack had not been derived from principles of paying compensation; rather, it was designed to deprive a number of persons of their property without compensation. While the State legislature is authorised to pass an Act in the interests of persons deprived of property under entry 42, the Court held that the legislature could not be permitted, under that power, to enact a law that operates to the detriment of those persons. The Court concluded that such legislation would exceed the scope of the authority granted by entry 42 of List III, which is intended to determine the principles, form and manner of compensation for property acquired or requisitioned for public purposes, and not to authorize the denial of compensation altogether.

In this case, the Court examined the submission of the learned Attorney-General that legislative entry 42 of List III permitted Parliament or a State Legislature to enact a law setting out principles that could lead to the non-payment of compensation, or to a complete denial of any compensation. The Court could not accept such an interpretation. The entry is worded as follows: “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 was placed in the Concurrent List precisely because the settled rule of law requires payment of compensation when property is compulsorily acquired, and because Article 31(2) expressly declares that any law authorising acquisition will be void unless it provides for compensation, fixes the amount of compensation, or at least specifies the principles and manner for determining and granting that compensation. Accordingly, the legislative power in entry 42 is confined to enacting the principles for assessing compensation and for the actual payment of that compensation. The principles may prescribe the method for arriving at an equivalent price, for example by applying a uniform rule such as valuation on a rental basis or by reference to market value. However, the Court found it inconceivable that this entry could be used to create principles for the refusal or negation of compensation. No principles are necessary to contemplate non-payment; a simple legislative declaration that no compensation will be paid would be sufficient to achieve that aim, and such a declaration is not within the scope of entry 42. The Court is aware of no principle for determining compensation that results in its non-payment, except for the provision contained in the Act under notice. All legislative heads must be interpreted reasonably, and the power conferred by entry 42 is a positive one intended to bring about the payment of compensation, not its denial. The key terms in the entry are “compensation” and “given”; any matter unrelated to compensation or its disbursement falls outside the authority granted by entry 42. Consequently, the Court concluded that the challenged provision, which sought to deprive persons of their right to compensation, could not be justified under the ambit of entry 42.

The Court referred to the decision rendered in United Provinces v. Atiqa Begum (1), which examined the scope of certain legislative headings. In that case, the Court held that the expression “collection of rents” within a legislative head was sufficiently wide to permit legislation dealing with remission of rents. The Court also observed that under item 22 of the Government of India Act, 1935, the legislative head “forests” included power not only to order afforestation but also to authorize disafforestation. Further, the Court noted that the legislative head “fisheries” would encompass authority to legislate a complete prohibition of fishing. The Court expressed the opinion that those analogies had no application to the construction of the language employed in entry 42. It further emphasized that the cited entries were not of the same subject matter as entry 42, and therefore could not be used for comparison. The Court suggested that a more analogous case might be Attorney-General for Ontario v. Attorney-General for the Dominion (2). That case addressed whether the legislative head “Regulation of Trade and Commerce” also contained the power to abolish trade altogether. The Privy Council’s observations, as reproduced at page 363 of the report, were quoted in full to illustrate the principle. The quoted passage stated: “A power to regulate assumes the conservation of the thing which is to be made the subject of regulation. In that view, their Lordships are unable to regard the prohibitive enactments of the Canadian statute as regulations of trade and commerce … there is marked distinction between the prohibition or prevention of a trade and the regulation or governance of it.” The Court held that an entry concerning the payment of compensation could not be interpreted as conferring a legislative power to withhold compensation. According to the Court, the purpose of the compensation head was to ensure the provision of compensation, not to enable confiscation of property. The Court observed that the provision requiring a deduction of four percent to twelve and a half percent from net income for the benefit of raiyats had no factual basis. It also noted that an earlier clause (d) allowing up to twenty percent deduction for management costs similarly lacked any real connection to the actual circumstances. The Court described these deductions as partially confiscatory and artificial, aiming to inflate deductions and thereby achieve non-payment of compensation. It concluded that such legislation was not permissible under entry 42 of List III, which authorizes payment rather than denial of compensation. To illustrate, the Court suggested that if the statute had prescribed a seventy percent deduction instead of twelve and a half percent, no person could view that as legislation aimed at determining or providing compensation. Consequently, the Court held that the provision had been inserted into the Act as a colourable exercise of legislative power under entry 42.

The Court observed that the provision in question was unconstitutional because the State legislature had no other constitutional head under which it could legitimately enact such a law. The Court explained that when a statute is purportedly based on a power granted by the Constitution but, in reality, does not fall within the scope of that power, it is only apparently constitutional and is in fact colourable. The Court cited the principles laid down in Quebec v. Queen Insurance Co. and Russell v. The Queen, and also referred to the Privy Council decision in Madden v. Nelson & Fort Sheppard R.W. Co. to support this view. Consequently, the clause under scrutiny was deemed colourable legislation that was improperly made under entry 42 of List II.

Mr. Das contended that if any part of the Act was ultra vires, the entire statute should be held ultra vires and that it could not be assumed that the legislature intended to pass a truncated version of the law. The Court clarified that the proper test in such circumstances is whether the valid portions are so inseparably linked to the invalid portions that the remainder cannot stand on its own, or whether, upon a fair examination of the whole, it can be presumed that the legislature would have enacted the surviving sections even if it had omitted the invalid ones. After reviewing the Act as a whole, the Court concluded that the offending provisions were not so intertwined with the valid provisions as to invalidate the remainder. Accordingly, there was no basis for a presumption that the legislature would not have passed the Act without the two or three provisions that needed to be struck down.

Mr. Das also raised a technical objection that the Bihar Act was unenforceable because Section 32(2) of the Act did not specify a payment date, the interval between instalments, or the proportion of compensation to be paid in cash versus bonds. The provision read: “The amount of compensation so payable in terms of a compensation Assessment-roll as finally published shall be paid in cash or in bonds or partly in cash and partly in bonds. The bonds shall be either negotiable or non-negotiable and non-transferable and be payable in forty equal instalments to the person named therein and shall carry interest at two and a half per centum per annum with effect from the date of issue.” (1) (1878) 3 App. Cas. 1090. (3) [1899] A.C. 626, (1) 7 (1882) App. Can. 841. The Court noted that, although the section omitted certain details, Section 43 of the Act authorised the State Government to make rules to give effect to the purposes of the Act. Therefore, when Section 32(2) is read together with the rule-making power in Section 43, the Act contains sufficient mechanism to enforce its provisions, and it cannot be said that the Act is unenforceable on the ground raised.

In the present discussion, the Court examined the wording of the statutory provision that directed the State Government to determine “the proportion in which compensation shall be payable in cash and in bonds and the manner of payment of such compensation under sub-sections (2) and (3) of section 32.” The Court concluded that, when section 32(2) is read together with the rule-making powers conferred by section 43, the Act supplies adequate mechanisms for enforcement and cannot be deemed unenforceable on that ground. The final argument advanced by counsel for M. Das asserted that section 32(2) was void because it allegedly transferred legislative functions to the executive. This contention was presented as a two-fold attack. First, it was argued that entry 42 of List III of the Seventh Schedule of the Constitution vested the legislature with the authority to frame laws concerning the principles of compensation payment, including its manner and form, and therefore the legislature could not delegate those matters to the executive. Second, it was contended that section 32(2) improperly delegated essential legislative power, which the executive was incompetent to exercise. The Court noted that counsel referred to the judgment of this Court in Special Reference No. 1 of 1950 to support this position. The matters said to have been delegated were identified as: (i) the determination of the proportion of cash payment versus payment by bonds, whether negotiable or non-negotiable; (ii) the determination of the period of redemption of those bonds; and (iii) the period of interval between the several instalments.

The Court observed that section 32(2) itself enacts that compensation may be paid in cash, in bonds, or partly in cash and partly in bonds, thereby establishing the principle that these two forms of payment are permissible. It further provides that the bonds may be either negotiable or non-negotiable and are non-transferable, thus defining the nature of the bonds to be issued. Moreover, the provision stipulates that if payment is made in bonds, it shall be made in forty equal instalments, implying that the redemption period of the bonds coincides with the instalment schedule, and that the bonds shall bear interest at a rate of two and a half per cent per annum. The only aspect left to the executive, according to the Court, is the determination of the proportion of cash versus bond payment and the fixation of the interval between instalments. The Court held that such a delegation is permissible, relying on the authority of State of Bombay v. Narottamdas Jethabai and the Privy Council decision in Queen v. Burah. It was emphasized that the legislature had indeed applied its mind to the method and manner of payment, establishing the policy and broad principles, and consequently authorised the State Government to decide the detailed matters of proportion, instalment interval, and bond redeemability. The delegation, therefore, did not constitute an abdication of essential legislative power.

The Court observed that the statute on compensation had clearly set out its overall policy and the broad principles governing the matter. It further noted that the legislation expressly conferred on the State Government the authority to work out the detailed aspects once the essential policy had been established. The Court rejected the suggestion that the legislature had failed to consider the subject of the legislation or that it had omitted to lay down any guiding policy. According to the Court, the decision as to what proportion of compensation should be paid in cash and what proportion, if any, should be paid in bonds, or whether the entire amount ought to be paid in cash, was a question that only the State Government was empowered to determine. In the same vein, the determination of the interval between instalments and the period during which the bonds could be redeemed were also matters of detail that the executive could more appropriately resolve in the exercise of its rule-making power, as indicated by the citations (1) [1951] S.C.R. 51 and (2) (1877) 5 I.A. 178. The Court stressed that no essential legislative power had been improperly transferred to the executive and that the legislature had fulfilled the trust placed in it by the Constitution. It added that, should the rule-making authority misuse its power or attempt to render the payment illusory, the proprietor whose property had been taken would still have a remedy. Consequently, the Court concluded 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 Court also addressed the submissions of Mr P.R. Das, noting that his arguments in Cases Nos. 319, 327, 330 and 332 of 1951, as well as in the other matters in which he appeared, were essentially the same.

The Court then turned to the arguments presented by Mr Choudhury, who had appeared in Cases Nos. 309 and 328 of 1951. It recorded that Mr Choudhury raised numerous points, many of which overlapped with those already discussed in the submissions of Mr Das. While the Court found the majority of the remaining points to be unsubstantial, it deemed it necessary to address a few that had been strongly emphasized by the counsel. First, Mr Choudhury contended that the field of legislation concerning the principles for determining compensation and the mode of its payment was already occupied by the Land Acquisition Act, an existing statute of Parliament, and that therefore the State Legislature could not legislate on those principles. The Court rejected this contention, explaining that the provisions of the Land Acquisition Act relating to the assessment of compensation apply only to acquisitions made by notification under that Act and do not extend to acquisitions undertaken under local or central statutes unless those statutes expressly incorporate the provisions of the Land Acquisition Act. Next, Mr Choudhury argued that Articles 31-A and 31-B of the Constitution could not affect pending cases. The Court found this argument untenable because the language of those articles clearly indicates a retrospective effect. Finally, Mr Choudhury suggested that the transfer of zamindar estates to the State under a statutory provision required registration. The Court regarded this contention as unsubstantial and noted that the only other point Mr Choudhury pressed seriously related to this issue.

The Court observed that the Bihar Legislature did not possess authority to issue bonds unless it complied with the procedure prescribed in article 293 of the Constitution, but noted that the circumstance for issuing bonds had not yet arisen; consequently, any challenge to the competence of the State legislature to issue unenforceable bonds could only be raised if such bonds were actually issued. Counsel appearing in three matters, numbered 326, 337 and 344 of 1951, contended that the Bihar Legislature lacked power to acquire trust properties without paying full compensation, arguing that such acquisitions would seriously affect certain educational and charitable institutions. However, that counsel could not demonstrate how the Legislature was powerless to acquire trust property. In other matters, numbered 310, 311 and 329 of 1951, another counsel raised a novel argument that, because the Act was not reasonable and just, the Supreme Court possessed jurisdiction to declare it void on that ground. The Court found that counsel could not substantiate this contention on any reasonable basis, and reiterated that the constitutionality of a statute enacted by a competent legislature could not be questioned on the ground that the law was unreasonable or unjust. Counsel appearing in cases numbered 807, 313, 815, 320, 321, 822 and 331, as well as petition 612 of 1951, merely adopted the arguments previously advanced by counsel. The Court consequently held that the provisions of the Bihar Land Reforms Act contained in sections 4(b) and 23(f) were unconstitutional, while the remaining provisions of the Act were upheld. Accordingly, the appeals were 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 unconstitutional provisions. Petition 612 of 1951, filed under article 32, was dismissed as non-maintainable because no infringement of any fundamental right was alleged. No respondents appeared in cases 18 of 1950 and 299 of 1951, and there was no opposition to the allowance of the appeals; therefore, the appeals were allowed. No order as to costs was made in any of these appeals or the petition. Justice Mukherjee, after a careful review of the judgment of his learned brother Mahajan, fully concurred with those conclusions, affirming that the Bihar Land Reforms Act of 1950 is not unconstitutional save for the provisions in sections 4(b) and 23(f), which must be declared void and inoperative. Regarding section 23(f), his brother’s decision was based on the finding that the clause amounted to a fraud on the Constitution, despite the legislature’s claim to have exercised powers under entry 42 of the Legislative List III in Schedule VII of the Constitution.

In this connection, the Court observed that the exercise of power was not within the scope of the legislative entry; the power was exercised in a manner not contemplated by that entry and therefore fell outside its ambit. The Court agreed with the line of reasoning adopted by the learned brother and stated that it had nothing further to add. Regarding section 4(b), the Court noted that the learned brother had held the provision to be unconstitutional because it failed to disclose any public purpose. The Court explained that a public purpose is an implicit requirement whenever the State compulsorily acquires property, an act commonly described as the exercise of its eminent domain power. This requirement is read into article 31(2) of the Constitution. Although the present enactment satisfied the conditions of article 31(3) and consequently attracted the operation of article 31(4), the learned brother had taken the view that the bar created by article 31(4) applied only to the question of compensation and did not extend to the need for a public purpose, which, although implicit, was not expressly stated in article 31(2). The Court expressed that it was prepared to assume that article 31(4) relates to everything provided for in article 31(2), whether expressed expressly or impliedly, and therefore the existence of a public purpose did not fall within the Court’s enquiry in the present case. Nevertheless, the Court held that the same reasons which had led the learned brother to declare section 23(f) of the impugned Act unconstitutional also applied, with equal or greater force, to section 4(b) of the Act. The Court therefore expressed no hesitation in agreeing with the learned brother’s conclusion that section 4(b) was unconstitutional, although it preferred to adopt a different line of reasoning in support of the same result. The Court then set out the substance of section 4(b) of the Bihar Land Reforms Act. The provision provided that, as a consequence of publishing a notification under section 3(1) of the Act, all arrears of rent and all cesses, together with any interest due on them for any period preceding the date of vesting, which were recoverable in respect of the estate or tenure by the proprietor or tenure-holder and whose recovery was not barred by any law of limitation, would vest in and be recoverable by the State. The explanatory clause attached to section 4(b) clarified that, for the purposes of the provision, the term “arrears of rent” also included arrears on which suits were pending on the date of vesting, or arrears on which decrees had been obtained before that date, together with the costs allowed by such decrees. Finally, the Court noted that under section 24 of the Act, fifty percent of these arrears of rent were directed.

The Court observed that the amount of compensation payable for the estate or interest, as calculated in accordance with the provisions of the Act, was required to include an additional sum. It further held that arrears of rent, whether those arrears had been merged into decrees or remained separate, which were due to the landlord for a period preceding the date of notification under section 3(1) of the Act, were undeniably the property of the landlord. This ownership applied irrespective of the landlord’s interest in the estate or tenure that formed the subject-matter of the acquisition. The Court noted that such arrears could not, as a matter of ordinary acquisition of any estate or interest therein, vest in the State, and it accepted the concession made by the learned Attorney-General that article 31-A of the Constitution did not apply to these arrears of rent. Consequently, the arrears of rent were regarded as the subject-matter of a separate and independent acquisition under the Bihar Land Reforms Act, provided that the term “acquisition’’ could at all be applied to situations of this description. The Court affirmed that every government possesses an inherent authority to appropriate the property of its citizens for the necessities of the State, and that constitutional provisions do not themselves confer this power, although they surround it with safeguards. The Court reiterated that the usual restraint on such power is the requirement that, when private property is taken, a pecuniary compensation must be paid¹. In this context, eminent domain was described as an attribute of sovereign power that must be tempered by a principle of natural law linking its exercise to a duty of compensation. The Court suggested that, perhaps motivated by the belief that the sanctity of private property should not be left to the uncertain virtues of the party presently in power, the Constitution-makers declared it a fundamental right that no property shall be taken, possessed or acquired for a public purpose unless the law directing its appropriation provides for compensation in the manner prescribed by article 31(2). Clause (4) of article 31, the Court explained, does not abolish the obligation to pay compensation; rather, it provides that laws referred to in clause (3) of the article are immune from judicial scrutiny on the ground of an inadequate amount of compensation or an improper principle for assessing such compensation as set out in the enactment. The Court emphasized, however, that this immunity presupposes that the enactment results from a valid exercise of legislative power conferred on the legislature by the appropriate entries in the Legislative Lists. If the legislature acts outside those entries, or, while pretending to act within them, does something that flatly contradicts the content of the entries, clause (4) of article 31 cannot be invoked to protect such legislation. Finally, the Court held that clause (4)(b) of the impugned Act, read together with the provision of section 24 of the same Act, empowers the State Government to appropriate all the arrears of rent due to a landlord at a particular time, with the sole obligation to allow fifty per cent of the amount thus appropriated as solatium for the acquisition.

The Court observed that the statutory provision authorised the State to appropriate any arrears of rent owed to a landlord at a particular time and required the Government only to set aside fifty percent of the amount taken as solatium for the purported acquisition. It noted that, on its face, the legislation claimed to exercise powers granted to the State legislature by entry 30 of List II and entry 42 of List III of Schedule VII of the Constitution. The Court, however, expressed the view that this claim was merely a device or pretence and that the true purpose of the law was to strip a person of his money—something that does not normally fall within the class of property subject to acquisition—by invoking the State’s so-called eminent-domain powers, while providing no compensation in exchange. Accordingly, the Court held that, although the legislation was purportedly made under entry 42 of List III, in substance it evaded and nullified the requirements of that entry. The Court then set out the well-recognised distinction between eminent-domain powers and other State powers that may require a citizen to sacrifice proprietary interests. Citing Cooley’s observations in Constitutional Limitations, the Court explained that every kind of property needed by the public and not lawfully appropriable by any other right may be taken under eminent domain. It further stated that, according to American jurists, money itself and rights of action are ordinarily excluded from the ambit of eminent-domain powers, because there is no necessary reason to take them in that manner. The Court observed that money in a citizen’s possession could be reached through taxation, confiscated as a penalty by a court, or seized under police powers when it is intended for illicit purposes that harm the community. Nevertheless, as Cooley warned, taking money under eminent domain and later compensating the owner with money amounts to a forced loan, and such taking does not squarely fit within the acquisition or requisition of property described in entry 36 of List II. The learned Attorney-General had submitted that the subject matter of the acquisition in the present case was not money but a chose in action. The Court agreed that, in principle, there is no material difference because a chose in action is useful to the acquiring authority only insofar as it can be converted into money; otherwise it is worthless. Finally, the Court accepted that even if entry 36 of List II were interpreted broadly enough to include money or a right of action, the legislature had nonetheless made a colourable use of entry 42 of List III, thereby defeating the purpose of that entry.

The Court held that if entry 36 of List II were interpreted to cover the acquisition of money or a right of action, then the legislature, by providing compensation for that acquisition, would be making a colourable use of entry 42 of List III and would thereby defeat the purpose of that entry altogether. Entry 42 of List III, as quoted, states: “principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or any other public purpose is to be determined, and the form and the manner in which such compensation is to be given.” (1) See Cooley on Constitutional Limitations, Vol. II, p. 1113. (2) Cooley, Vol. XI, p. 1118; Willis on Constitutional Law, p. 816. (3) Vide Cooley on Constitutional Limitations, Vol. XI, p. 1118, F.N. The Court described this text as the description of a legislative head and agreed with the learned Attorney-General that, in deciding whether legislation falls within this head, the Court is not concerned with the justice or propriety of the principles used to assess compensation under a particular law, nor with the justice of the form or manner in which such compensation is awarded. However, the Court disagreed with the Attorney-General’s contention, supported by the learned brother’s judgment, that legislation under this head could omit any compensation altogether and that a provision declaring no compensation is payable falls within the ambit of the head. Such construction, the Court observed, is repelled by the very language of the entry, which speaks of giving compensation and not of denying or withholding it. Stripped of all disguise, the net result of the impugned provision would be to allow the State Government to appropriate half of the arrears of rent due to the landlord before the acquisition date without giving the landlord any compensation. Taking the whole amount and returning only half amounts to taking half with no return, which the Court characterised as naked confiscation, regardless of any speculative form in which it might be clothed. Consequently, the Court found that the impugned provision does not actually lay down any principle for determining the compensation to be paid or for acquiring the arrears of rent, nor does it address the form of payment, although it purports to do both. In the Court’s opinion, this represents a fraud on the Constitution, rendering the legislation colourable, void, and inoperative. The learned Attorney-General argued that it is beyond the Court’s competence to examine the bona fides or mala fides of the legislature. The Court accepted that, to a certain extent, if the legislature were omnipotent, its motives would be irrelevant; however, when the legislature’s power is limited and must operate within the confines of a legislative entry, the question of whether it has, in substance, exceeded that entry becomes a matter affecting legislative competency.

The Court observed that the enquiry into why a legislature acted was not pertinent; however, when a legislature possesses only a limited or qualified authority and must operate within the boundaries defined by specific legislative entries, a critical question arises. The question is whether, while claiming to act under those entries, the legislature in substance has exceeded its authority and undertaken actions that cannot be performed within the scope of the entries. Such a determination directly impacts the competency of the legislature. Accordingly, the Court held that if a statute, although apparently enacted under a particular entry, in reality falls outside that entry, the statute must be regarded as void (1). During the arguments presented on behalf of the State, it was suggested that, in the present matter, the Government, exercising its power of acquisition, could take possession of rent arrears, and because those arrears had not yet been realized, it was legitimate for the Government to deduct half of the total amount as compensation for the trouble and expense involved in realising the arrears. This suggestion implied that the legislature’s intention was merely to permit the Government to assist the zamindars in collecting the arrears of rent, and, in return for that assistance, to allow the Government to retain half of the arrears that were actually due. The Court found that such an interpretation could not represent the true intention of the legislature. Moreover, the Court noted that none of the extensive legislative lists provided by the Constitution empowers the legislature to interfere with a landlord’s legal rights in this manner, except in special circumstances such as indebtedness, nor does it authorize the imposition of a burdensome obligation on a landlord who has not consented to it. The Court described legislation of this character as an unprecedented novelty, rarely, if ever, encountered before. Consequently, the Court agreed with the order issued by Justice Mahajan in the case and allowed the appeals, subject to the two modifications previously indicated, and declined to make any order as to costs. (1) See Lefroy on Canadian Constitution, pages 79-80. DAS J.--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 (referred to in this judgment as “the Act”). When the Constitution came into force on 26 January 1950, the bill that eventually became the Act was still pending before the Bihar Legislature. After passage by the State Legislature, the bill was reserved for the President’s consideration and received the President’s assent on 11 September 1950, thereby becoming law. The provisions of the Act had been analysed and summarised in the judgment previously delivered by Justice Mahajan.

In this case, the Court noted that it was unnecessary to repeat earlier discussion of the Act’s provisions. The text of the Bihar Land Reforms Act, 1950, was published in the Official Gazette on 25 September 1950 together with a notification made under section 1(3) dated 24 September 1951, which brought the Act into operation. A further notification, issued under section 3 of the Act and dated 25 September 1950, vested the estates of certain named proprietors and was printed in the Official Gazette on the following day. After the publication of that notification, several of the affected proprietors filed suits in the subordinate courts of Bihar, having first served the required notice under section 80 of the Code of Civil Procedure, and prayed for a declaration that the Act was unconstitutional, void, and that their title to the properties remained intact. Other proprietors filed applications before the Patna High Court under article 226 of the Constitution, seeking the issuance of appropriate writs, directions or orders. The State of Bihar entered written statements in the suits, which were subsequently transferred to the High Court for determination under its extraordinary original civil jurisdiction, and the suits and applications were heard together. Because the matters raised serious questions of constitutional interpretation, the High Court constituted a Special Bench to consider them, and that Bench delivered its judgment on 12 March 1951. All the learned judges, for one reason or another, rejected the principal contentions of the proprietors yet 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 virtue of the words “notwithstanding anything in this Constitution,” excluded the operation of article 14 at least with respect to the alleged inequality of compensation. Article 31(4) was quoted in full 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 from the Patna High Court under article 132(1) of the Constitution to appeal to this Court and consequently filed the present appeals. The Court further observed that the States of Uttar Pradesh and Madhya Pradesh had also enacted legislation for the abolition of zamindaris, and that the validity of those statutes had been challenged by the affected proprietors. The respective High Courts of those States, however, upheld the validity of the legislation, and the aggrieved proprietors thereafter approached this Court, either on appeal or by way of a substantive petition under article 32.

The petition was instituted under article 32, and while the petition was pending the Constituent Assembly enacted the Constitution (First Amendment) Act of 1951. Sections four and five of that amendment are material to the present case because they inserted two new articles, numbered thirty-one-A and thirty-one-B, into the Constitution. Article thirty-one-A provides, in its first clause, that no law which authorises the acquisition of any estate or any rights therein, or which extinguishes or modifies such rights, shall be held void on the ground that it is inconsistent with, or diminishes, any of the rights guaranteed by the provisions of Part III, except that 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. The second clause of article thirty-one-A defines the expression “estate” to mean, with respect to any local area, the term or its local equivalent as used in the existing law of land tenures in that area, and it also includes any jagir, inam, muafi or similar grant; it further defines “rights” with respect to an estate to encompass all rights vested in a proprietor, sub-proprietor, under-proprietor, tenure-holder or any intermediary, as well as any privileges relating to land revenue. Article thirty-one-B, inserted immediately after thirty-one-A, declares that none of the Acts, regulations or provisions listed in the newly created Ninth Schedule shall ever be deemed void on the basis that they are inconsistent with, or abridge, any of the rights conferred by Part III, and that despite any judgment, decree or order of any court or tribunal to the contrary, such Acts and regulations shall continue in force subject only to the power of a competent legislature to amend or repeal them. The Ninth Schedule was added to the Constitution and enumerated thirteen separate Acts and Regulations, the first of which was the Bihar Land Reforms Act of 1950. The Supreme Court has recently affirmed the constitutional validity of the First Amendment of 1951, and consequently all courts are required to give effect to the two newly inserted articles, which have become substantive components of the Constitution. Article thirty-one-A is deemed to relate retrospectively to the date of the Constitution, while article thirty-one-B is deemed to relate retrospectively to the respective dates of the Acts and regulations specified in the Ninth Schedule.

In this case the Court observed that article 31-B applies to the dates on which the Acts and Regulations listed in the Ninth Schedule came into force. It was not contested that the two newly inserted articles, namely article 31-A and article 31-B, must be taken into account when deciding the appeals before it. Counsel representing the respondents accepted that, because of those constitutional amendments, the impugned Act no longer falls within the operation of the provisions of Part III of the Constitution, including article 14. Accordingly, the respondents could not rely on a violation of the right to equal protection of the laws under article 14, which had been the sole basis of their success in the High Court. Nevertheless, the respondents’ counsel argued that, although they could no longer attack the constitutionality of the Act on the ground that it conflicts with any of the rights guaranteed by Part III, they were still entitled to question the Act on other constitutional bases or on general principles of law. To that end, Mr P. R. Das set out five principal grounds of attack. The first ground contended that, on a proper reading of articles 245 and 246 together with entry 36 in List II and entry 42 in List III, the Bihar Legislature lacked the authority to enact the Act because the Act failed to provide for the payment of just compensation for the proposed acquisition of zamindaris and tenures. The second ground argued that, even if the Court were to reject the previous argument based on the entries in the lists and were to hold that articles 31(4), 31-A and 31-B barred the respondents from raising the issue of compensation, the respondents could still challenge the Act on the ground that the acquisition was not made for a public purpose. The third ground alleged that the Act amounted to a fraud on the Constitution, meaning that while the Act claimed to conform to the Constitution, it in reality defied it. The fourth ground maintained that the Act was unenforceable because section 32(2) prescribed compensation in forty equal installments without specifying the interval between those installments. The fifth ground asserted that the Act improperly delegated essential legislative functions to the executive government. The Court noted that these heads of objection, as framed by Mr Das, appeared formidable and therefore required careful consideration of the arguments supporting each ground.

Concerning the first ground, the Court noted that article 31(2) obliges any law providing for compulsory acquisition of private property to include a provision for the payment of compensation, and that this requirement was not contested. The Court also observed that, in view of articles 31(4), 31-A and 31-B, the respondents did not argue that the compensation provision remained effective. In other words, the respondents did not claim that the compensation requirement survived the amendment of those articles. The Court therefore focused on whether the absence of a compensation provision in the impugned Act could render the Act invalid under article 31(2) and whether any other constitutional provisions might preserve the right to compensation despite the amendments. The analysis set the stage for assessing the remaining grounds of attack, each of which would be examined in turn to determine whether the Act could be sustained or struck down on constitutional or legal grounds.

In this case the Court observed that the respondents were entitled to challenge the validity of the impugned Act on the ground that it contravenes, is inconsistent with, takes away, or abridges the provision for compensation contained in article 31 (2) of the Constitution. The petitioners argued that the duty to provide compensation is not confined solely to article 31 (2); it is also enshrined in other provisions of the Constitution. Consequently, they maintained that the Act could be attacked on the basis that it conflicts with, is inconsistent with, or diminishes the compensation guarantees found in those additional constitutional provisions, because articles 31 (4), 31-A and 31-B do not remove that avenue of challenge, given the specific limiting language used in those articles. The argument was then developed in detail. The Court noted that the State’s authority to acquire private property essentially amounts to a power to compel the owner to transfer the property when a public purpose demands it. This principle finds authority in Blackstone’s Commentary (Broom’s edition, page 165) and in Cooley’s Constitutional Limitations, eighth edition, volume II, page 1201, footnote 8. The Court further pointed out that several English statutes governing compulsory acquisition of lands and hereditaments, such as 5 & 6 Vic. C. 94 and 8 & 9 Vic. C. 18, employed the term “purchase” to describe acquisition. Since a sale cannot occur without a price, the Court reasoned that compulsory acquisition of private property cannot exist without a provision for payment of just compensation, i.e., the market value of the property in monetary terms.

The Court then explained that the obligation to pay just compensation for compulsory acquisition is a principle of natural equity recognised by all temperate and civilized governments. It is an incident inherent in the exercise of the power of eminent domain, and the two are so inseparably connected that they should be regarded not as separate doctrines but as parts of a single principle. This view is supported by a series of American decisions quoted by Justice Harlan in Chicago, Burlington and Quincy Railroad Company v. Chicago (166 U.S. 216; 4th L. Ed. 979). In English law, Lord Dunedin, speaking in Attorney-General v. De Keyser’s Royal Hotel Ltd. ([1920] A.C. 508), described the duty to pay compensation as “a necessary concomitant to taking.” Accordingly, the Court held that the duty to pay compensation is inseparable from, and implicit in, the power of acquisition. This implication arises from the mere use of the word “acquisition” in entry 36 of List II, just as it does in entry 33 of List I. According to Mr P.R. Das, the term “acquisition” by itself conveys a compound concept – the notion of a power to take property on just terms – and therefore limits the legislative competence granted under those entries to the scope of that compound concept.

In the argument presented, it was asserted that if the term “acquisition” appearing in entry 36 of List II and in entry 33 of List I does not by itself create the duty to pay just compensation, then, according to the counsel for the petitioner, the phrase “subject to the provisions of entry 42 of List III” that follows entry 36 of List II necessarily introduces that duty. The counsel explained that a straightforward reading of entry 36 of List II shows that the power to legislate on the matters enumerated therein is “subject to” – that is, conditional upon – the exercise of legislative authority under entry 42 of List III. The concluding words, it was argued, therefore import into entry 36 of List II the obligation to provide compensation as laid down in entry 42 of List III, thereby expanding the scope of entry 36 so that it becomes a legislative head that includes the compound concept of taking property on just terms. A third alternative was also advanced. This alternative maintained that even if the word “acquisition” does not by itself carry the compensation obligation and even if the “subject to” clause does not import that obligation, entry 42 of List III should still be interpreted as granting 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 is exercised, the law-making power under entry 42 of List III must also be exercised, following the principle articulated by the House of Lords in Julius v. Lord Bishop of Oxford (1) L.R. 5 App. Cas. 214 and adopted by this Court in Chief Controlling Revenue Authority v. Maharashtra Sugar Mills Ltd. (2) [1950] S.C.R. The petitioner’s counsel further urged that the Bihar Legislature, having purported to exercise its authority to enact a law for compulsory acquisition of property under entry 36 of List II, failed to enact any law that defines a principle for determining what may be regarded as just compensation. On that basis, the Act was characterized as ultra vires and void. While acknowledging that the arguments advanced by the petitioner’s counsel displayed considerable ingenuity and apparent persuasiveness, the Attorney-General appearing for the State countered that the impugned Act was a law enacted with respect to matters listed in entry 18 of List II rather than under entry 36 of List II. He contended that the Act was essentially legislation aimed at land reform and the alteration of land tenures. It was highlighted that the Act eliminated the interests of all zamindars and intermediate tenure-holders so that the State and the actual tiller of the soil could be placed in a direct relationship. In addition to this primary objective, the acquisition of various interests in the land was noted as an incidental but necessary component of the reform scheme.

In this matter, the Court examined the authorities of The United Provinces v. Mst. Atiqa Begum and Others (1), Thakur Jagannath Baksh Singh v. The United Provinces (2) and Megh Raj and Another v. Allah Rakhia and Others (3). These decisions were cited to support the view that each entry in the legislative list, which represents a category or head of subject-matter, must be interpreted as broadly as possible so as to include all ancillary matters. This approach had been approved by Shearer J., but it was rejected by Reuben J. and S.K. Das J. The Court acknowledged that the term “land” in entry 18 of List II has indeed been given a very wide construction. However, the Court observed that if the expression “land” or “land tenures” in that entry were held to extend to the acquisition of land, then entry 36 of List II would become entirely redundant with respect to land acquisition, a result the Court was not prepared to accept. To give distinct meaning and content to the two legislative heads, the Court reasoned that entry 18 should be read as a legislative category covering land, land tenures and all matters connected therewith, except for the acquisition of land itself, which ought to be covered by entry 36. Moreover, the impugned Act sought to acquire all arrears of rent, and a law dealing with the acquisition of rent arrears could not be said to relate to the matters specified in entry 18, because it does not fall within the meaning of rent collection contemplated by that entry. On this point the Court agreed with the reasoning of Reuben J. and S.K. Das J. and could not accept the Attorney-General’s contrary arguments. Consequently, the Court held that the arguments of Mr. P.R. Das based on entry 36 of List II and entry 42 of List III could not be dismissed at the threshold; they had to be examined, and the Court proceeded to do so immediately. The Court affirmed that the obligation to pay compensation necessarily accompanies the State’s power to compulsorily acquire private property, a principle that cannot be disputed. The first crucial issue was whether this compensation obligation is implicit in the term “acquisition” as used in entry 36 of List II, meaning whether the duty to pay compensation can be inferred merely from the use of that term as part of its meaning. In Attorney-General v. De Keyser’s Royal Hotel Limited, Lord Dunedin 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, later being regulated by statutes of local and then general application. He noted that the Crown, as an assenting party to every statute, must be regarded as having consented to subject its prerogative to the payment of compensation as dictated by legislation. In that case, however, it was not contested that the taking itself stemmed from a prerogative right.

In the earlier authorities, the Crown’s original prerogative to take private property was a matter of negotiation between the Crown and the subject, but later statutes of local and then general application regulated that prerogative and required payment of compensation. Consequently, the Crown, as a party that assents to every statute, must be understood to have consented to the limitation that its prerogative be subject to compensation as defined by law. In those cases, the parties did not dispute that the taking itself was a matter of prerogative right. In the United States, the power of eminent domain was not originally granted by any provision of the Federal Constitution; rather, it has always been recognized as an inherent attribute of the sovereignty of the State. The Fifth Amendment, by providing that private property shall not be taken for public use without just compensation, gave constitutional recognition to the right of eminent domain and imposed a limitation to protect the subjects. This illustrates that the power of acquisition and the obligation to pay compensation are separate concepts, even though the payment obligation follows the acquisition power. If the obligation to pay compensation were an integral part of the concept of “taking,” the Fifth Amendment provision would have been unnecessary. Therefore, the term “acquisition” does not, by itself, imply any obligation to pay compensation. Counsel for the petitioner argued that entry 42 in List III implements the obligation that is implicit in entry 36 in List II and that the two entries are complementary. The petitioner further asked where, if the obligation is not implicit in entry 33 in List II, the duty to pay compensation could be located. The obvious answer is that the duty is found in article 31 (2) of Part III of the Constitution. The obligation to pay compensation may be incorporated as part of the legislative power itself, creating a composite power that includes the power to make law regarding acquisition together with the duty to provide compensation. For example, section 31 (XXXI) of the Commonwealth of Australia Constitution Act makes acquisition of property on just terms a head of legislative power of the Commonwealth Parliament. In that jurisdiction, the power is not merely to enact a law for acquisition but to enact a law for acquisition on just terms, indicating that the legislative power is circumscribed by the requirement to provide just terms. However, no overriding constitutional rule is known, nor has been pointed out to this Court, that makes the obligation to pay compensation an essential component of the power to acquire property.

In this case the Court observed that the duty to provide compensation was not a part and parcel of the legislative authority to enact a law concerning the compulsory acquisition of private property. The Court emphasized that such a duty depended upon the specific provisions of the Constitution that governed the matter. The Court then examined the Constitution and found that under article 246 Parliament possessed an exclusive power to legislate, inter alia, on matters enumerated in entry 33 of List I, which concerned “acquisition or requisitioning of property for the purposes of the Union.” Likewise, the State Legislatures had an exclusive power to legislate, inter alia, on matters enumerated in entry 36 of List II, which dealt with “acquisition or requisitioning of property except for the purposes of the Union,” subject to the provisions of entry 42 of List III. Furthermore, article 246 allowed both Parliament and the State Legislatures to legislate on matters set out in entry 42 of List III, namely, the principles for determining compensation and the form and manner of giving such compensation. By article 245, every such legislative power of Parliament or the State Legislatures was made “subject to the provisions of this Constitution.” One of those constitutional provisions was article 31 (2), which provided that no property could be taken possession of or acquired for public purposes under any law authorising such taking unless that law expressly provided for compensation, either by fixing the amount of compensation or by specifying the principles on which, and the manner in which, the compensation was to be determined and given.

The Court explained that the constitutional scheme deliberately separated three distinct elements: first, the power to make a law for acquisition of property, found in article 246 read with entry 33 of List I and entry 36 of List II; second, the obligation that any such law must provide for compensation, found in article 31 (2); and third, the power to make a law laying down the principles for determining that compensation, found in article 246 read with entry 42 of List III. Accordingly, the Court held that it was unnecessary to treat entry 33 of List I and entry 36 of List II, which were merely heads of legislative power, as containing within themselves any inherent obligation to provide compensation. In other words, the obligation to pay compensation was not implicit or inherent in those legislative heads because it was separately and expressly stipulated in article 31 (2). The Court cited the maxim “expressum facit cessare tacitum,” noting that it reflected a principle of logic and common sense rather than a mere technical rule of construction. Consequently, the express provision of article 31 (2) that a law of acquisition must contain a compensation clause necessarily excluded any suggestion of an implied compensation obligation.

In this case, the Court observed that the term “acquisition” appearing in entry 36 of List II could not be expanded to include an implied compensation obligation because article 31(2) expressly requires a law on acquisition to provide for compensation. Consequently, there was no space for reading any implication of compensation into the legislative heads themselves. The counsel for the petitioner alternatively argued that if the compensation duty was not inherent in the word “acquisition” used in entry 36 of List II, the duty would nevertheless be attracted to that entry by the clause stating “subject to the provisions of entry 42 of List III”. The counsel further pointed out that those words “subject to the provisions of entry 42 of List III” are absent from entry 33 of List I. According to that line of reasoning, the Court noted that an anomalous result would follow: the compensation obligation would become part of the legislative power under entry 36 of List II, but would not attach to the legislative power under entry 33 of List I. The implication of that view would be that Parliament, when enacting a law concerning acquisition of property under entry 33 of List I, would not be required to provide any compensation, unlike the State legislatures. The Court held that such an outcome could not be the intention of the Constitution’s framers. Moreover, the counsel interpreted the phrase “subject to” to mean “conditional upon” the exercise of the legislative power granted by entry 42 of List III, i.e., conditional upon satisfying the compensation duty and its modalities. The Court, agreeing with the observations of Justice S.K. Das, rejected that interpretation and explained that “subject to” does not convey a conditional meaning in this context. Rather, the Court explained that “subject to” functions as “but not,” indicating that the scope of entry 36 of List II is limited so that the subject matter of entry 42 of List III is excluded from it. The Court reasoned that if the words “subject to the provisions of entry 42 of List III” were read as incorporating entry 42 into the content of entry 36 of List II, then, under article 246, Parliament would lack competence to legislate on the principles governing compensation. To avoid that undesirable consequence, the Court observed that the legislature has deliberately excluded the subject matter of entry 42 of List III from entry 36 of List II by using the words “subject to…”. Consequently, Parliament may freely enact laws concerning matters that have been excluded from entry 36 of List II and may designate those matters as a separate and independent item in entry 42 of List III.

The Court observed that the consideration of entry 42 in List III was irrelevant to entry 33 in List I, and that this explains why the words “subject to” were omitted from that particular entry. Counsel for the petitioner, Mr P R Das, finally contended that even if the obligation to provide compensation were not implicit in the term “acquisition” found in entry 36 of List II, and even if that obligation could not be read into entry 36 by reference to the words “subject to” placed at the end of the entry, the State would nevertheless be required, whenever it exercised its power to enact a law concerning acquisition of property under entry 36, to also legislate on the matters specified in entry 42 of List III. His argument was based on the principle that entry 42, by conferring a power on the Legislature to protect the interests of persons whose property is compulsorily acquired, must be regarded as coupled with a duty to exercise that power. The Court noted that no authority had been placed before it that either established or even suggested that the principle laid down by the House of Lords in Julius v. Lord Bishop of Oxford had been extended to the exercise of legislative power, and the Court was not prepared to assent to such a proposition. Further, the Court explained that Article 246 did not impose an obligation on Parliament or on State Legislatures to make a law under any of the entries listed in the Seventh Schedule, and consequently entry 42 in List III did not impose any duty on Parliament or on State Legislatures to enact legislation providing for compensation. The requirement that Parliament or a State Legislature, when making a law for compulsory acquisition of private property, must provide for compensation, fix the amount of compensation, or specify the principles and manner by which compensation is to be determined and given, derived from the clear provision of Article 31(2). Entry 42 in List III therefore merely constituted a legislative head under which Parliament or a State Legislature could make a law to give effect to the obligation expressly imposed by Article 31(2). In view of the unmistakable wording of that article, it was wholly unnecessary to read an implied duty on the Legislature into entry 42 on the basis of the House of Lords case. The Court further indicated that the fact that the obligation to provide compensation was not included in the content of the legislative power under entry 36 of List II, whether read alone or together with entry 42 of List III, would become even clearer upon close examination of clauses (4) and (5) of Article 31 and of Article 31-A. Article 31(4) protects a law of the description mentioned therein against the provisions of Article 31(2). It therefore follows that what is sought to be protected by Article 31(4) is a

The Court observed that a statute concerned with the acquisition or taking possession of property must, among other requirements, contain a provision for compensation, must fix the amount of compensation, and must specify the principles and the manner by which such compensation is to be determined and paid; otherwise there would be no reason for any protection under the Constitution. The Court then asked whether any entry in List III of the Seventh Schedule permits a State Legislature to enact a law for acquisition or taking possession of property that does not provide compensation. To examine the argument advanced by Mr P.R. Das and to avoid the difficulties that might arise from the residuary powers of Parliament under article 248 and entry 97 of List II, the Court considered a hypothetical law of acquisition made by a State Legislature that also falls within article 31(4). The Court asked whether any entry in List II authorises a State Legislature to make a law for acquisition without compensation or without a public purpose. The Court found that, apart from entry 36 in List II, there is no such entry. If entry 36, read either alone or together with entry 42 of List III, were to imply that a law made under entry 36 that lacks a compensation provision is beyond the legislative competence of the State, then no State Legislature could ever make such a law. Consequently, there would be no point in providing under article 81(4) protection against article 31(2) for a law that, on that basis, could not be enacted at all. Article 81(4) contemplates a law that offends article 31(2), and for the State Legislatures the only possible source of such an offending law would be entry 36 in List II. This situation makes it clear that entry 36, whether read alone or together with entry 42, does not carry the implication that the Court suggested. In the same way, the Court examined article 81(5)(b)(ii), which safeguards provisions of any law that a State may later make for the promotion of public health or for the prevention of danger to life or property. The Court noted that a law sought to be protected under this provision must also involve the acquisition of property without any compensation provision; otherwise there would be no need for protection against article 31(2). Such a law, insofar as it deals with acquisition, must necessarily be passed by a State Legislature, and the only possible entry for that purpose is entry 36 in List II. If Mr P.R. Das’s contention were correct, a law aimed at promoting health or preventing danger that required acquisition of property without compensation—exactly the type of law the Constitution seeks to protect from article 31(2)—could never be enacted.

In the present dispute the Court observed that a law seeking to acquire property without providing compensation could never be valid, because, according to the argument presented by the learned counsel, the requirement to pay compensation was said to be implicit in entry 36 of List II, either on its own or when read together with entry 42 of List III. The counsel further contended that there was no other constitutional entry that would permit a State Legislature to enact a law concerning acquisition of property. The Court considered it futile to try to overcome this apparent difficulty by suggesting that clauses (4) and (5)(b)(ii) of article 31 had been inserted in the Constitution as a matter of excess caution; if the counsel’s submission were correct, then no amount of precaution would be needed to protect a law that, by hypothesis, could not exist at all.

The Court noted that similar reasoning could be attempted on the basis of article 31-A, which also shields a law from the compensation requirement contained in article 31(2). It was argued that article 31-A presupposes the existence of a valid law made by a competent legislature within its legislative competence. According to that argument, if a State Legislature, when enacting a law for acquiring property for a public purpose under entry 36 of List II, must include a provision for compensation, then any law that complies with that presumed requirement would not need any protection from article 31(2). Consequently, article 31-A would become meaningless and unnecessary. The Court found this conclusion to be manifestly untenable.

The Court further held that clauses (4) and (5)(b)(ii) of article 31, together with article 31-A, clearly rejected the proposition put forward by the counsel. In its judgment, the Court concluded that the principal premise advanced by the counsel—namely, that the obligation to pay compensation was implicit in entry 36 of List II, either alone or in conjunction with entry 42 of List III—was unsound. The Court explained that the duty to provide compensation was, in its view, a specific provision of article 31(2) and was not implicit in, nor a part of, the legislative power granted by entry 36 of List II, whether read alone or together with entry 42 of List III. Accordingly, the impugned Act could not be challenged on the basis that it violated or was inconsistent with the rights conferred by clause (2) of article 31, that is, the requirement to provide compensation, under articles 31(4), 31-A and 31-B.

Finally, the Court stated that even if one were to assume that the compensation obligation set out in article 31(2) was also implicit in entry 36 of List II, either alone or read with entry 42 of List III, the respondents could still not be allowed to question the validity of the impugned Act on the ground that it failed to provide compensation. To do so would be to engage in the very conduct prohibited by article 31(4) and the newly added articles, which expressly forbid such a challenge.

Article 31(4) together with the subsequently added provisions prevents the respondents from challenging the validity of the Act on the basis that it violates, conflicts with, removes or curtails any of the rights that are conferred by the provisions contained in clause (2) of Article 31. The focus of those constitutional provisions is placed on the “provisions” themselves rather than on the numerical designation of the article or on the particular Part of the Constitution in which they appear. It is clear, therefore, that the essential purpose of Articles 31(4), 31-A and 31-B is to bar any attempt to attack the Act on the ground that it fails to provide for compensation. The requirement to pay compensation is indeed one of the provisions enumerated in Article 31(2); however, if, as argued by counsel, the same requirement can be located elsewhere in the Constitution—for example in entry 36 of List II or in entry 42 of List III—then that “provision” must also fall within the protective scope of Article 31(4) and the two added articles, lest those articles become ineffective. In the opinion of the Court, when two possible constructions of a constitutional provision exist, the construction that best effectuates the intention of the Constitution’s framers should be adopted, while the construction that would frustrate that intention must be rejected. Moreover, it is essential to remember that Article 31(4) operates “notwithstanding anything in this Constitution,” and therefore, by its very terms, shields the Act even against a claim of legislative incompetence that might arise from an alleged failure to comply with any implied requirements that could be read into entry 36 of List II or entry 42 of List III. Accordingly, the respondents are not entitled, by virtue of Articles 31(4), 31-A and 31-B, to question the Act on the ground that it does not provide for compensation, regardless of whether that ground is expressed as a breach of Article 31(2) or as a failure to satisfy any implied stipulation contained in the aforementioned legislative entries. The contention that the Act is unconstitutional rests on the assumption that the statute has omitted any principle for determining compensation as mandated by entry 42 of List III and that the compensation provision is therefore entirely illusory. In reality, Chapter V of the Act sets out a detailed scheme for assessing compensation. The scheme commences by treating the gross assets of the holder as synonymous with gross income, then permits certain deductions to be made in order to arrive at net assets. Compensation is thereafter calculated by applying a sliding scale of rates that range from twenty times to three times the net income. To the amount derived from this calculation, the statute adds a share of accumulated arrears of rent and other dues, as well as compensation for mines and minerals as specified in Section 25. On its face, it is evident that the Act does prescribe specific principles for determining the compensation payable to the proprietor or tenure-holder.

In this case, the Court observed that the Act did prescribe a method for calculating compensation payable to a proprietor or tenure-holder. The Court noted, however, that the provision allowing a deduction of five to twenty percent of gross assets as a cost of management appeared arbitrary. It was argued that although it is commonly recognised that the proportion of management costs relative to income is higher for a small estate than for a large one, the Act nonetheless prescribed a deduction of twenty percent of gross assets for owners of larger estates and only five percent for owners of smaller estates. Further objection was raised to any deduction made under the heading of works of benefit to raiyats and also to the amount of such deduction. The Court held that, upon close examination, these contentions did not demonstrate that the Act failed to lay down any principle for determining compensation. Rather, the underlying implication of the submissions was that the principles, while present, might not yield compensation that could be described as fair. The Court expressed that it was not within its jurisdiction to assess the policy merits of the legislation; its task was merely to determine whether a principle, as required by entry forty-two of List III, had been established. The Court acknowledged that the percentage of management costs computed on the basis of the income of a large estate is indeed lower than that for a small estate, but it was clear that the Act had fixed the scale of deduction under both the management-cost head and the works-of-benefit head in accordance with the capacity of the proprietor or tenure-holder to bear such deductions. The Court found it impossible to conclude that the deduction for works of benefit to the raiyats lacked any supporting principle. A landlord was expected to incur expenditure on projects beneficial to his raiyats, such as constructing tanks, wells, irrigation facilities, charitable dispensaries, schools and similar works, and it was noted that some landlords did in fact make such expenditures. Consequently, the Court reasoned that there was nothing improper in allowing a deduction from the landlord’s gross income for amounts that the landlord was expected to, and often did, spend on such works. The Court saw no absence of principle in this provision. The rate of deduction, as previously indicated, had been fixed according to the financial capacity of the proprietors or tenure-holders. It had been demonstrated, and it was not disputed, that in many cases the calculation of net income using the principles laid down in the Act reduced the gross income to a very small net figure. For example, the gross annual income of the Darbhanga estate was about Rs 47,85,069, the deduction permitted by the Act was about Rs 44,88,585, and the net income computed according to the

In this case the Court observed that when the statutory formula contained in the Act is applied to the Darbhanga estate, the gross annual income of approximately Rs 47,85,069 is reduced by the deductions authorized under the Act, amounting to about Rs 44,88,585, and the resulting net income is calculated at roughly Rs 2,96,484, which may be rounded to Rs 3 lakh; consequently the compensation payable to the Maharajadhiraj of Darbhanga would be limited to Rs 9 lakh. The Court further noted that in at least one other instance, specifically the case of the Raja of Purnea, the same method of calculation produced a negative or deficit figure for compensation. The Court held that the occurrence of a single anomalous calculation does not demonstrate that the Act fails to lay down any principle for determining compensation. Rather, the Court found that in all other cases the principle set out in the Act does generate a compensation amount, even though some may regard that amount as insufficient. The Court explained that if a principle for computing compensation has indeed been established, then the requirement of entry 42 of List III of the Constitution is satisfied and there can be no allegation of legislative incompetence on that ground. The Court added that where the statutory principle produces no compensation in a rare case, or produces an amount that is not adequate, the correct criticism is not the absence of a principle but the inadequacy of the compensation produced by that principle. While such inadequacy might breach the standards of Article 31 (2), it does not violate entry 42 of List III, and, in view of Articles 31 (4), 31-A and 31-B, the Act cannot be struck down for non-compliance with Article 31 (2). The Court further observed that even if it were held that the Act failed to lay down any principle, such a finding would amount to a breach of both entry 42 of List III and the explicit requirement of Article 31 (2) that the law either fix the compensation or prescribe the principles and manner of its determination; this breach, however, could not be challenged because Articles 31 (4), 31-A and 31-B protect the law notwithstanding any other constitutional provision. The Court also emphasized that Article 31 (4), by its phrase “notwithstanding anything in this Constitution,” shields the Act from claims of legislative incompetence arising from alleged non-compliance with constitutional provisions on compensation or public purpose, including any implied requirement to produce actual compensation under entry 42 of List III. Accordingly, the Court concluded that the Act cannot be declared unconstitutional on the basis of legislative incompetence of the Bihar Legislature under entry 36 of List II or entry 42 of List III. The Court stated that the foregoing reasoning is sufficient to reject the first ground of attack raised against the Act by the petitioner.

In this case the Court observed that before addressing the second principal ground of attack it was proper to consider several subsidiary points that had been raised. One argument presented was that section 3 of the Act, which is described as the principal operative provision, did not contemplate or authorise the acquisition of arrears of rent, because the notification under that section referred only to the vesting of estates or tenures in the State. The Court, however, pointed out that the effect of issuing such a notification is that the arrears of rent, including those specified in clause (b) of section 4, also vest in the State and become recoverable by the State. This vesting of arrears of rent necessarily entails the transfer of the landlords’ or tenure-holders’ rights to the State, and that transfer must therefore be characterised as an acquisition of a right by the State. Consequently, the Act in substance does provide for the acquisition of arrears of rent by the State. The Court then addressed a contention relying on a passage from Willis’ Constitutional Law (page 816) which asserted that the power of eminent domain could not be exercised with respect to money and choses in action, except for certain unusual forms of property, a view said to be based on earlier American decisions. Referring to Nichols on Eminent Domain (volume I, page 99, paragraph 2) and to the case of Cincinnati v. Louisville & N.R. Co. (223 U.S. 390, 50 L.Ed. 481), the Court noted that contemporary authority accepts that the right of eminent domain may be exercised over choses in action. The Court therefore examined whether arrears of rent qualify as “property” within the meaning of the Constitution and established Indian law. Arrears of rent are simply rents that have become due but remain unpaid; they are not cash held by the landlord but a debt owed by tenants. As such they represent an actionable claim against the tenants, undeniably a form of “property” that can be assigned. Accordingly, the State can acquire such a claim as a species of property. Finally, the Court considered the submission that the Act contained no provision for compensation when this property is taken. It accepted that section 24 uses the term “compensation” in relation to the taking of estates, tenures, mines and minerals, but not expressly in connection with the fifty per cent addition of arrears of rent that is to be added to the compensation amount. Nonetheless, the Court observed that this addition of fifty per cent of arrears is found in the chapter titled “Assessment of Compensation,” and therefore the fifty per cent is incorporated as part of the compensation assessment process.

In this case, the Court examined the contention that when the State confiscates a lakh rupees and returns only fifty thousand rupees, it effectively provides no compensation and merely retains the remaining fifty thousand rupees without justification. The Court observed that this line of reasoning may appear plausible at first glance, but it lacks any sound legal principle. The argument originates from the fact that a half-share of the seized amount is refunded in the same form of money. The Court noted that if the compensation were to be given in a different form, such as a parcel of land whose value corresponds to the half-share of the money taken, the same objection could not be raised. The Court cited the authority reported at 223 United States Reports 390, 50 Lawyers' Edition 481, 127, stating that land given in such circumstances would not be considered just compensation because its value would not equal the amount compulsorily taken. In view of the constitutional provisions contained in articles thirty-one sub-paragraph four, thirty-one-A and thirty-one-B, that argument would be ineffective. The Court further held that there is no distinction in principle or law when the compensation for the acquisition of arrears is made in cash. If only a half-share of the arrears is returned, the obvious grievance would be that fifty thousand rupees is not a fair or adequate compensation for the removal of one lakh rupees, and such a grievance could have succeeded if the safeguards of articles thirty-one sub-paragraph four, thirty-one-A and thirty-one-B were absent.

The Court then turned to the nature of the arrears of rent themselves. It emphasized that arrears are not cash that the proprietor or the tenure-holder already possesses; rather, they constitute a debt owed by the tenants. The Court asked what the market value of such a book debt might be, noting that the debt must be realized, possibly through a suit and subsequent execution proceedings, which entail time, costs and the risk that a portion of the debt may never be recovered. Accordingly, the State assumes the risk of either realizing or failing to realize the arrears of rent. Irrespective of the outcome of those efforts, the statute adds a half-share of the arrears in a lump sum to the compensation payable. The Court concluded that this mechanism demonstrates that compensation is in fact being paid for the arrears of rent and rejected the allegation, advanced by Mr P.R. Das, that the payment of a half-share of the book debts amounts to an illusion of compensation. Even assuming that the compensation might be inadequate, the Court held that the grievance does not lie in the absence of any principle in the Act, as required by entry forty-two of List III, but rather in the insufficiency of the compensation calculated under that principle, which would, if it violated article thirty-one sub-paragraph two, constitute a breach. However, the Court stressed that such a defect cannot be pressed as a ground of attack because the constitutional safeguards of articles thirty-one sub-paragraph four, thirty-one-A and thirty-one-B already protect the validity of the Act.

On Ground B the counsel for the respondents contended that even if the Court were to decline the argument that the requirement to provide compensation is implicit in entry 36 of List II and entry 42 of List III, and even if the Court were to hold that, by virtue of articles 31(4), 31-A and 31-B of the Constitution, the respondents are barred from questioning the validity of the Act on the ground that it does not contain a compensation provision, the respondents would nevertheless retain the right to challenge the Act on the basis that it lacks a public purpose. The learned Attorney-General did not dispute that the existence of a public purpose is an essential prerequisite for the exercise of the power of compulsory acquisition. The respondents maintained that the necessity for a public purpose as a condition precedent to the compulsory acquisition of private property is not a “provision” of article 31(2) but rather a requirement emanating from entry 36 of List II or entry 42 of List III. Although the words “for public purposes” appear in article 31(2), it was argued that a distinction exists between a “provision” and an “assumption”. The counsel further urged that article 31(2) assumes the existence of a law authorising the taking of possession or acquisition of property for a public purpose and stipulates that such taking or acquisition cannot occur for that public purpose unless the law also provides for compensation. Consequently, it was concluded that the sole “provision” of article 31(2) is the requirement that the law permitting the taking of possession or acquisition of property for a public purpose must also provide compensation, and that this “provision” alone is insulated from attack on the Act by virtue of articles 31(4), 31-A and 31-B. This line of reasoning was endorsed by Justice Reuben and Justice S.K. Das. Justice S.K. Das, after referring to his own earlier judgment in Sir Kameswar Singh v. The Province of Bihar (1), observed: “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 does so by necessary implication.” (1) A.I.R. 1950 Pat. 392. The judge then quoted a passage from the judgment of his learned brother Justice Mukherjea in Chiranjit Lal Choudhury v. The Union of India & Others (1): “Article 31(2) of the Constitution prescribes a twofold limit within which such superior right of the State should be exercised. One limitation imposed upon the acquisition or taking possession of private property which is implied in the clause is that such taking away must be for public purpose. The other condition is that no property can be taken unless the law.”

In the judgment, the Court observed that the remarks of Mukherjea J did not lend support to the contention raised by Mr P R Das that the requirement of a public purpose was not contained in article 31(2) but was merely an inherent condition of any law dealing with compulsory acquisition of private property. The Court noted that Mukherjea J had expressly stated that article 31(2) “prescribes” a two-fold limit, and emphasized that a limit which is “prescribed” by the Constitution must itself be regarded as a provision of that article. The Court further explained that whatever is implied in a constitutional clause must nonetheless be regarded as a provision of the clause, because the term “provision” is sufficiently broad to encompass both express and implied elements. Consequently, the Court was prepared to go beyond this observation and to hold, for reasons it would later set out, that the necessity of a public purpose as an essential prerequisite to compulsory acquisition is, in fact, a provision of article 31(2) and forms an integral part of that clause.

The Court then turned to a broader discussion of article 31, noting that it belongs to Part III of the Constitution, which is headed “Fundamental Rights,” and that the article confers a fundamental right by protecting private property against State interference. Clause (1) of article 31, the Court explained, shields the owner from deprivation of his property except by “authority of law.” By recasting the negative language of clause (1) into a positive form, the Court showed that the clause would read: “Any person may be deprived of his property by authority of law.” The only limitation on State action, therefore, is the requirement that such deprivation must be authorized by law. This limitation, the Court said, provides the owner with a measure of protection, for the owner will not be deprived of his property unless a lawful authority exists. The negative phrasing of the clause, the Court observed, was intended to emphasize this immunity as a fundamental right. In the same way, clause (9) of article 31 is expressed in negative terms to underline the fundamental right it embodies.

According to the Court, the articulation of a fundamental right necessarily requires a clear statement of the ambit and scope of State action. To delineate that scope, it is essential to specify the limitations that bind the State, because those limitations constitute the measure of the right. The Court therefore examined clause (2) of article 31, and, omitting words that were not necessary for the current analysis, rendered it in positive language as follows: “Any property may be taken possession of or acquired for public purposes under any law authorising the taking of …” (the continuation of the provision appears in the subsequent portion of the judgment). This positive formulation, the Court indicated, made evident the three distinct limitations that are imposed on State power: (1) the taking must be for a public purpose; (2) the taking must be carried out under a law that authorises such taking; and (3) the law must provide for compensation for the property taken. These three limitations, the Court concluded, constitute the protection granted to the owner and define the measure of his fundamental right under article 31. The Court affirmed that, unless these limitations are recognised as provisions of the article, the article would offer no immunity at all, and thus held that the public-purpose requirement is an essential and integral part of the constitutional provisions governing compulsory acquisition.

The Court observed that when the clause is expressed in the form “such possession or such acquisition if the law provides for compensation for the property taken possession of or acquired …”, it becomes unmistakably clear that the Constitution imposes three separate limitations on the State’s power of compulsory acquisition. The first limitation requires that any taking of possession or acquisition of property must be for a public purpose. The second limitation mandates that such taking or acquisition must be carried out under a law that authorises the taking or acquisition. The third limitation insists that the law must provide compensation for the property that is taken or acquired. These three conditions together constitute the protection granted to the owner of the property and therefore constitute the measure of his fundamental right under this clause. The Court stressed that, had these limitations not been part of the article, the provision would have bestowed no immunity at all upon the owner. Consequently, the Court was of the opinion that the existence of a public purpose as a prerequisite to the exercise of the power of compulsory acquisition is an essential and integral component of the “provisions” of clause 2 of article 31. The Court explained that if the requirement of a public purpose were not a provision of article 31(2), it would lead to an untenable conclusion whereby Parliament, using its residuary powers under article 248 and entry 97 of List I of the Seventh Schedule, could enact a law acquiring private property without any public purpose. Moreover, such a scenario would produce the absurd result that Parliament would be obliged to provide compensation under article 31(2) for acquisitions made for a public purpose, yet would not be required to make any compensation provision for acquisitions made without a public purpose. The Court held that the framers of the Constitution could never have intended such an outcome. Because the public purpose requirement is therefore a “provision” of article 31(2), any infringement of that provision cannot, under articles 31(4), 31-A and 31-B, be invoked as a ground for questioning the validity of the Act. The Court then turned to the second line of argument advanced by Mr P.R. Das, which contended that the necessity of a public purpose is implicit in entry 36 of List II and that entry 42 of List III, which is incorporated into entry 36 by the words “subject to” appearing at the end of that entry, also makes public purpose a requirement. Mr Das concluded that, in the absence of a public purpose, the Bihar Legislature lacked legislative competence under those two entries to enact the impugned Act, and that this ground of attack remained available notwithstanding the protections afforded by articles 31(4), 31-A and 31-B.

In this case the Court observed that the petitioner’s counsel did not invoke any other provision of the Constitution to impose a requirement that a public purpose must exist before private property can be compulsorily acquired. The Court explained that Entry 36 in List II permits acquisition for any purpose other than that of the Union and is therefore not confined to a public purpose. The argument that the phrase “subject to” at the end of Entry 36 imports the provisions of Entry 42 in List III into Entry 36 was rejected as unfounded; the Court pointed to Entry 33 in List I, which contains no such “subject to” language, and concluded that the alleged public-purpose requirement found in Entry 42 cannot be said to be incorporated into Entry 33. Consequently, whereas Entry 36 in List II, read together with Entry 42 in List III because of the “subject to” wording, limits a State Legislature to making laws for compulsory acquisition only for a public purpose, Parliament, under Entry 33 in List I—which does not attract Entry 42—may enact a law for compulsory acquisition without a public purpose. The Court noted that such a result could not have been intended by the Constitution. Turning to Entry 42 in List III, the Court found nothing to support the petitioner’s counsel’s contention. The words “acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose” merely describe the preceding term “property”. Entry 42 deals with the principles for determining compensation and the method of providing compensation for property that has been described as acquired or requisitioned for those purposes; it is not a legislative head for acquisition and does not impose a public-purpose condition. Accordingly, the Court held that Entry 42 provides no assistance to the petitioner’s counsel on this point. Moreover, the reasons for rejecting the counsel’s earlier arguments that compensation obligations were implied in Entry 36, either alone or read with Entry 42, apply equally to this contention and need not be repeated. In short, the requirement of a public purpose contained in article 31(2) precludes the implication that a public-purpose condition can be read into Entry 36 in List II or Entry 42 in List III.

In this case the argument that the Act is invalid because it allegedly contravenes the “provision” of clause (2) was raised. Clause (2) of Article 31 requires a public purpose as a prerequisite for compulsory acquisition of property. The petitioner suggested that this requirement might be implied in entries 36 of List I and 42 of List III. The Court observed that Articles 31(4), 31-A and 31-B, and especially Article 31(4) which states “notwithstanding anything in this Constitution,” would protect the Act from any implied limitation, for the reasons already explained. Consequently, the petitioner’s second principal contention was deemed untenable.

The Court then considered a hypothetical assumption: if the need for a public purpose were not a provision of Article 31(2) but only a provision of entry 36 of List I or entry 42 of List III, and if, under that assumption, Articles 31(4), 31-A and 31-B did not bar the respondents from challenging the Act on the ground of legislative incompetence due to the absence of a public purpose, the question would still arise as to whether a public purpose, as understood in the Constitution, actually exists to support the Act. The Court noted that the Act itself contains no explicit statement of any public purpose, yet it was conceded that this omission does not, by itself, render the Act invalid. Nevertheless, the petitioner argued that the lack of any such recital indicates that the Legislature, at the time of enacting the statute, did not have a public purpose in mind. It was further claimed that, beyond the missing recital, none of the operative provisions of the Act reveal any indication of a public purpose.

The Court observed that it is undisputed that, as a result of the enactment, a substantial amount of money that tenants would otherwise pay as current rent and arrears to their landlords will instead be intercepted by the State. The petitioner relied on passages from Cooley’s Constitutional Limitations, 8th Edition, Vol. II, p. 1118 (Footnote 1) and Professor Willis’s Constitutional Law, p. 817, contending that the power of taxation, rather than the power of eminent domain, is the legitimate means of increasing public revenue. To demonstrate the absence of a public purpose, the petitioner argued that Bihar has approximately 1,335,919 recorded proprietors; assuming four persons per family, nearly five and a half million individuals would be adversely affected by the legislation. Moreover, the actual cultivators of the land would receive no benefit, as they would remain in place and continue to pay rent, not to their former landlords but to the State, which, according to the petitioner, would function as a merciless machine devoid of humane consideration.

The Court observed that the State, if it acted as a mere ruthless machine insensitive to any humane feeling, could not be justified in taking private property without a clear and immediate public purpose articulated in the legislation. It held that a public purpose must be definite, tangible and immediate, and that the statute itself must contain some indication of such purpose; the State could not acquire private land today and defer consideration of the public purpose to a later time. Consequently, the Court turned to an examination of the meaning of “public purpose” as used in the Constitution. It noted that reference had been made to certain American authorities in order to determine the meaning and implication of the term “public use,” an expression that is evidently narrower in scope than the constitutional phrase “public purpose.” The Court further explained that a review of standard textbooks, such as the Constitutional Law by Professor Willis, pages 817 and following, made it evident that the concept of “public use” in the United States was undergoing rapid evolution. Historically, “public use” had been understood to mean a use by the public; in contemporary American jurisprudence the term had come to signify something useful to the public. The Court cited a passage from Cooley’s Constitutional Limitations, volume II, pages 1139-40, 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.” The passage explained that judicial attempts had produced two contrasting theories. One theory limited “public use” to matters of employment or occupation, while a broader, more flexible theory treated the term as synonymous with “public advantage” or “public benefit.” The Court observed that any definition would inevitably exclude some matters that ought to be included and include some matters that ought to be excluded from the operation of the words “public use.” It noted that the more restrictive approach had been characteristic of earlier cases, whereas the broader approach had become necessary because of complex conditions arising from recent civilizational developments and the growing density of the population. The Court further remarked that, given the modern conditions and the increasing inter-dependence of various human factors within a progressively complex community, the Government was compelled to intervene in and limit individual activities at more points than in earlier times. To reinforce this view, the Court referred to observations contained in Corpus Juris, volume XX, article 39, pages 552-53, under the heading “What is a public use.” Those observations stated that no universal definition could be formulated regarding the degree of public good required to satisfy constitutional requirements for a “public use,” because each case presented a question of public policy. The term, the passage explained, was flexible and not confined to a fixed conception of public use at any particular moment; in general it covered a use affecting the public at large or a significant segment of the public, as distinguished from the interests of particular individuals. The Court noted that some courts had even adopted a liberal construction that treated “public use” as synonymous with “public benefit,” “public utility,” or “public advantage,” thereby authorising the exercise of eminent domain to promote such benefits, especially where the interests involved were of considerable magnitude and the aim was to allow the fullest development of natural resources and local advantages in the interest of general welfare.

In discussing the scope of the term “public use”, the Court observed that some authorities had taken a very broad approach, treating “public use” as equivalent to “public benefit”, “public utility” or “public advantage”. Such a liberal construction permitted the use of eminent domain to further these benefits, particularly when the matters involved were of great magnitude and when the purpose was to develop the natural resources and advantages of a locality to the fullest extent for the general welfare. After noting this expansive view, the Court turned to the more limited interpretation of the expression. It recorded that counsel had drawn its attention to the Judicial Committee’s decision in Hamabai Framjee Petit v. Secretary of State for India (1915) L.R. 42 I.A. 44, a case in which the Committee was required to interpret the phrase “public purposes” contained in a nineteenth-century lease. Even in the year 1914, the Committee refrained from attempting a precise definition of “public purpose”. Instead, it endorsed the passage from the judgment of Batchclor J., who said that general definitions should be avoided where possible and that no exact definition of “public purposes” was necessary. He explained that the phrase must, in his view, include an object or aim that directly and vitally concerns the general interest of the community, as opposed to the particular interest of individuals. The Court agreed that the absence of a rigid definition was appropriate, because the concept of “public purpose” has been rapidly evolving in every country. The cited passage emphasized that the presence of the community’s general interest within an object or aim converts that object or aim into a public purpose. From this reasoning the Court concluded that any action that advances the general interests of the community, rather than the private interest of a single individual, must be regarded as a public purpose. The Court further noted that, as civilization progresses, the understanding of the community’s general interest is expanding, and the older, narrower view that protected private interests above all else can no longer contain the forward-moving tide of social change. Consequently, the emphasis is unmistakably shifting from the individual to the community. This modern trend in social and political philosophy, the Court observed, is reflected in the Constitution, which seeks not to ignore the individual but to harmonise individual interests with the paramount interest of the community.

The Court explained that, as it had previously held in Gopalan’s case (1) and again in Chiranjit Lal’s case (supra), the Constitution protected the freedom of every citizen under article 19(1)(a) to (e) and (g). However, the Constitution also empowered the State, even while those freedoms existed, to impose reasonable restrictions on them in the interest of the State, public order, morality or the general public as specified in clauses (2) to (6). The Court further observed that the moment such regulated individual freedom became incompatible with, or threatened, the freedom of the community, article 21 authorised the State to deprive a person of life or personal liberty in accordance with a procedure established by law, subject to the safeguards of article 22. In the same way, the Constitution secured the right to private property under article 19(1)(f) but not absolutely; it allowed reasonable restrictions to be imposed by law in the interest of the general public, as noted in the decision reported in [1950] S.C.R. 88 and under clause (5). Moreover, the Court stressed that when the interest of the community required it, article 31 permitted the State to deprive a property owner of his property by authority of law, provided that compensation was paid if the deprivation occurred through acquisition or requisition by the State. From these provisions, the Court concluded that a fresh outlook permeated the Constitution, one that placed the general interest of the community above the interest of the individual. It observed that statements which once seemed merely idealistic slogans had become enshrined in the Constitution’s preamble, wherein the people of the country solemnly resolved to secure to all citizens justice—social, economic and political—and equality of status and opportunity. The Court noted that ideas previously regarded as fanciful formulas were now accepted as directive principles of State policy, prominently set out in Part IV of the Constitution. Under article 38, the Constitution envisioned a State that must constantly strive to promote the welfare of the people by establishing, as effectively as possible, a social order in which social, economic and political justice informed all institutions of national life. Article 39 further directed the State to orient its policy toward, among other goals, the distribution of ownership and control of the community’s material resources so as to serve the common good, and to prevent the economic system from concentrating wealth and means of production to the detriment of the community. The Court pointed out that the expression “public purposes” in article 23(2) was intended to be given a very wide meaning. In this never-ending race, the Court held, law must keep pace with the social and political evolution of the country as reflected in the Constitution, and therefore, if the State were to give effect to the Constitution’s avowed purposes, it must regard as a public purpose all measures calculated to promote the welfare of the people as envisioned in these directive principles.

In order to fulfil the declared objectives of the Constitution, the Court explained that every measure calculated to advance the welfare of the people, as set out in the directive principles of State policy, must be regarded as being pursued for a public purpose, irrespective of any other possible meaning of the term. Viewed from this perspective, the Court asked what the State seeks to achieve by adopting measures for the acquisition of zamindaris and the interests of intermediaries. The Court answered that the State’s aim is to serve the common good by bringing under State ownership or control the land that provides food, sustains the community, and generates wealth through its forests, minerals and other resources. Such State ownership or control of land is a necessary preliminary step for giving effect to the directive principles and, therefore, cannot be anything but a public purpose. The Court emphasised that the directive principles contained in Part IV of the Constitution are not the programme of any single political party; rather, they are constitutional principles intended to guide State policy regardless of which party governs. It further observed that the purpose of the impugned Act is not to permit isolated acquisitions of particular properties for a narrow public purpose, but to bring the great mass of wealth-producing land under State ownership or control by abolishing a land-tenure system that had been judged archaic and not conducive to the general interest of the community.

The Court noted that the Act also establishes a Land Commission to advise the State Government on agrarian policy as it evolves. It rejected the notion that the Act lacks a public purpose, pointing out that the Bihar Act in question was placed before the Constituent Assembly, which passed Article 31(4) and later amended the Constitution specifically to preserve the Act. The Court asked whether the Constituent Assembly would have chosen to protect such legislation unless it were convinced that the Act served the general interest of the community. Aligning with the observations of Justice Reuben and Justice S.K. Das, the Court held that these circumstances clearly show that the Constituent Assembly considered the Act to be supported by a public purpose. The Court warned that a narrow construction of “public purpose” would defeat the overarching aim of the Constitution and the immediate purpose of recent amendments. It cautioned against interpreting contemporary constitutional measures through the lens of early-nineteenth-century ideas about the sanctity of individual rights. Consequently, the Court agreed with the High Court that the impugned Act was enacted for a public purpose. The Court then turned to the narrow argument presented by counsel, noting that the counsel assumed, for the sake of argument, that the Act contained…

The Court observed that the contention that a general public purpose exists for the compulsory acquisition of zamindaries and tenures, yet no public purpose can be found for the provisions authorising the seizure of rent arrears or the deduction of four to twelve and one-half per cent of gross assets, was untenable. The argument relied on the premise that landlords were presumed to spend the deducted percentage of their gross income on works benefiting the rayats of the estates, and therefore that portion of the Act exceeded the legislative competence of the Bihar Legislature. The Court rejected this view on several grounds. Firstly, it held that the existence of a public purpose is a condition set out in Article 31(2); consequently, any alleged absence of such purpose with respect to rent arrears cannot be invoked as a ground of attack under Articles 31(4), 31-A or 31-B. Secondly, the Court cautioned against isolating a single element from the broader land-reform scheme and declaring that element unsupported by a public purpose, comparing such an approach to denying public purpose in the acquisition of forests or undeveloped mines, which would similarly be misplaced. The appropriate method, the Court said, is to consider the entire scheme of acquisition and determine whether the whole scheme serves a public purpose.

Thirdly, the Court explained that the deduction of four to twelve and one-half per cent of gross assets should not be characterized as acquisition or confiscation. Rather, it is a component of the principle established by the Act for calculating the amount of compensation required under Article 31(2) and Entry 42 of List III. Finally, the Court found no reason to conclude that the taking of rent arrears, in the context of acquiring zamindaries, lacks a public purpose. It reiterated that the acquisition of zamindaries and tenures constitutes a comprehensive agrarian-reform programme aimed at improving the conditions of tenants. The programme intends, inter alia, to place the tillers of the soil in direct relationship with the State, liberating them from oppressive landlords and making them owners of their holdings while obligating them to pay dues to the State. The Court noted that a large proportion of tenants are habitually in arrears; when arrears accumulate, tenants struggle to meet current rent after liquidating part of the old arrears, thereby justifying the inclusion of arrears recovery within the public-purpose framework of the reform scheme.

The Court noted that when rent falls into arrear, the situation worsens for tenants. According to annexure B (2) to the affidavit of Lakshman Nidhi, affirmed on January 22, 1951, the total Raiyati rent due from tenants in the various circles of the Darbhanga Estate alone would exceed three hundred thousand rupees. The Court observed that it was not entirely clear whether all of these arrears were owed by the actual rayats, meaning the genuine tillers of the soil. Nevertheless, for the purpose of the present discussion, the Court excluded from consideration the rent arrears that tenure-holders owed to their immediate superior tenure-holder or to the zamindar. In doing so, the Court concluded that the great majority, if not all, of the actual rayats or tillers of the soil were habitually and perpetually in arrear with the rent on their holdings because of severe financial strain arising from chronic indebtedness.

In these circumstances, the Court explained, if only the zamindaries and tenures were acquired under the Act while leaving the zamindars and tenure-holders free to recover the huge rent arrears from the cultivating tenants through legal processes, the result would inevitably be the sale of the tenants’ holdings or, at the very least, the loss of their right, title and interest in those holdings. Such sales could occur through court-ordered sales in execution of decrees or through private sales forced upon the tenants. Consequently, the vast majority of the actual tillers of the soil would become landless labourers, and the whole scheme of land reform intended by the Act would be rendered completely ineffective.

The Court further held that if the acquisition of zamindaries and tenures was, as it believed, motivated by the legitimate public purpose of improving the economic and political conditions of the actual tenants, the same public purpose might require the acquisition of the rent arrears in order to prevent the undesirable but inevitable consequences described above. The Court observed that the Bihar Legislature evidently thought that tenants in arrear would receive more humane and reasonable treatment from the State, which would act under the guidance of the Land Commission, than 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 quickly as possible, without any mercy or accommodation. The same reasoning, the Court said, applied to the acquisition of decrees for rent arrears.

According to the Court, the overriding public purpose of improving the conditions of the cultivating rayats may have led the Legislature to treat rent arrears and the corresponding decrees differently from other movable properties of the zamindars or tenure-holders, such as bank deposits, jewellery or ornaments, which have no relevance to the rayats. The Legislature therefore provided for the acquisition of the arrears and the decrees. In this context, the Court noted that the second principal ground of attack raised by counsel for the petitioner, Mr P R Das, was therefore to be considered.

The Court observed that the submission challenging the Act had to be rejected. Nevertheless, the Court admitted that, were it possible to agree with counsel for the petitioner that the impugned provisions lacked a public purpose, it would have been extremely difficult to repudiate the further contention that the entire Act was invalid. The difficulty lay in the presumption that, if the Bihar Legislature had been aware that certain provisions might be held void for lacking a public purpose, it could nevertheless have enacted the remaining portions of the Act in a truncated form. The acquisition of arrears of rent, the Court held, formed an integral component of the legislative scheme and was inextricably interwoven with the overall purpose of agrarian reform. Indeed, the Legislature may have concluded that the reform programme could not be effectively implemented by the State without acquiring such arrears of rent. Since the Court had already decided that no part of the Act was void for want of a public purpose, it saw no need to explore the issue of severability or to refer to the judicial authorities cited by counsel on either side.

Regarding the third ground raised by counsel for the petitioner, the Court noted that the argument alleged the Act to be a fraud on the Constitution. In other words, while the statute appeared to conform to constitutional requirements, it was, in effect, alleged to subvert them. According to the petitioner, the Act ostensibly complied with constitutional mandates by stipulating principles for determining compensation and by prescribing the form and manner of such compensation, yet in practice it devised a scheme for the non-payment of compensation. The petitioner maintained that the legislation purported to return fifty percent of the arrears of rent as compensation while, in reality, it confiscated the remaining fifty percent without any compensation. Furthermore, under the pretense of deducting four to one hundred twenty-one and one-half percent of gross income, the State was, in effect, appropriating a substantial sum. The petitioner concluded that this amounted to nothing more than a pretence, a mere shift, and a contrivance for the confiscation of private property. The Court explained that, when properly understood, this argument amounted to an attack on the legislative competence of the Bihar Legislature to enact the Act. Ultimately, the contention was that, although the Act pretended to provide compensation, it failed to do so, and the absence of a provision for just and adequate compensation rendered the Act invalid. The petitioner relied on the view that the legislative powers conferred by entry thirty-six of List II and entry forty-two of List III required the inclusion of such a compensation provision, and that failure to satisfy this constitutional condition invalidated the legislation.

In the present case, the Court explained that a law may fail to meet constitutional requirements either openly or secretly. When the failure is open, the law is plainly unconstitutional and is described as ultra vires. When the failure is hidden, the Court characterises it as a fraud on the Constitution because the Legislature pretends to act within its authority while actually exceeding that authority. Thus, describing a violation as a fraud on the Constitution is simply a vivid way of saying that the law does not comply with constitutional mandates. The Court then examined the specific allegation that the provision allowing the acquisition of arrears of rent constitutes a fraud on the legislative power granted by the Constitution. It asked why such a provision should be labelled a fraud and observed that the Constitution contains no prohibition against acquiring arrears of rent. Consequently, there is no need for any covert device to achieve something that the Constitution does not forbid. The Court further noted that, within a comprehensive land-reform scheme like the one embodied in the Act, the acquisition of arrears of rent can legitimately accompany the acquisition of zamindari estates and tenures. The notion of fraud therefore does not arise from the mere existence of the provision. The Court identified the grievance that a portion of the arrears is taken without compensation, and held that this grievance, not the provision itself, is the source of the complaint. The Court turned next to the question of acquiring properties that do not presently generate income. It asked whether labeling such acquisition a fraud on the Constitution was justified and found that the Constitution does not prohibit taking such property. The alleged fraud, according to the Court, stems from the Act’s scheme of providing compensation solely on the basis of income. As a result, properties that are currently non-income-yielding but possess significant potential are taken without any compensation. The Court observed that the same line of reasoning applies to the deduction of four to twelve and a half per cent of the gross assets under the heading “Works of Benefit to the Rayats.” In the Court’s view, the ultimate criticism of the Act is that it fails to fulfil the constitutional requirement to provide compensation for the acquisition of property, and therefore it is ultra vires. This argument, the Court held, is essentially the same as the argument that the Act lacks a provision for just compensation, expressed in more colourful language. The Court reiterated that the duty to provide compensation does not arise automatically from entry 36 in List II or entry 42 in List III of the Seventh Schedule. Rather, the obligation is found only in article 31 (2) of the Constitution, and the Act’s compensation principles, even if they sometimes result in no or inadequate compensation, do not constitute a constitutional defect that would render the legislation invalid.

The Court noted that entry 42 in List III required the legislation to lay down a principle for determining compensation, and that this principle was incorporated in article 31 (2) of the Constitution. Consequently, the Court held that there was no question of legislative incompetence on the ground that the Act failed to comply with any implied requirement in those constitutional entries. The Court further explained that, although in rare instances the principles laid down by the Act might fail to produce any compensation or might result in inadequate compensation, such a failure could amount to a breach of 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), expressly exempted the Act from being attacked on that basis, the Court could not consider the alleged lack of compensation as a valid ground of attack, even though the petitioners described it as a “fraud on the Constitution.” Accordingly, the Court rejected this contention. The Court also observed that even if a different view had been adopted, the same difficulty concerning the inseverability of the various provisions of the Act would have persisted, as previously indicated.

With respect to the fourth ground raised by the petitioner, the Court observed that the petitioner’s argument that section 32 (2) of the Act was unenforceable because it provided for compensation in forty equal instalments without specifying the interval between instalments was not pursued further during the hearing; therefore, no detailed refutation was necessary. Turning to the fifth and final ground, the petitioner contended that the Act had impermissibly delegated essential legislative functions to the Executive Government, rendering it invalid. The Court reiterated that article 31 (2) mandates that any law authorising the acquisition of land for public purpose must either fix the amount of compensation or set out the principles and the manner in which compensation is to be determined and paid. Entry 42 in List III likewise requires the specification of the principles, form and manner of compensation. The petitioner argued that the Bihar Legislature, by way of sections (22) of the Act, merely stipulated that compensation could be paid in cash, in bonds, or partly in each, that the bonds might be negotiable or non-negotiable and non-transferable, and that they were to be payable in forty equal instalments, without laying down a decisive provision and leaving the matter for the State Government to decide. The Court concluded that this approach did not amount to a failure to discharge the constitutional duty, and therefore the contention of improper delegation was rejected.

In this matter, the counsel for the petitioner argued that the Legislature had avoided its responsibility by delegating an essential legislative power to the State Government, which was to be exercised through rules made under its rule-making authority in section 43(2)(p). The propriety and legality of such a delegation had recently been examined by this Court in In re The Delhi Laws Act, 1912 etc. (1) [1951] S.C.R. 747. If the Court were to decide the issue according to its own personal view, it would have dismissed the petitioner's contention at the threshold, observing that the Legislature had not abandoned or eliminated itself in the manner explained in the earlier decision. However, after considering the principles laid down in that case by the late Chief Justice and the opinions of the learned brothers to which the counsel had referred, the Court found it necessary to reject the petitioner’s submission. Section 32 of the Bihar Act clearly shows that the Legislature had contemplated the problem and had articulated a principle that compensation could be paid in cash, in bonds, or partially in cash and partially in bonds, and that when bonds were used they might be either negotiable or non-negotiable and non-transferable. Having set this principle, the Legislature, by a rule made under section 43(3)(p), entrusted the Executive with the task of determining the proportion of compensation payable in cash versus bonds and the manner of such payment. The Court noted that these details depend on special circumstances such as the Government’s fiscal capacity, the needs of the proprietors, and other considerations with which the Executive would be more familiar than the Legislature. Consequently, the Court could not accept the counsel’s argument that this amounted to a delegation of an essential legislative function within the meaning of the earlier decision. Another counsel argued that the Land Acquisition Act, 1894, continued by the Constitution and extended by a 1899 notification to Ramgarh State, should govern compensation, claiming that the central Act occupied the field and therefore the impugned Bihar Act could not determine compensation. The Court observed that the compensation provision in the 1894 Act applied only to lands acquired under that Act and had no effect on lands acquired under other statutes; hence the doctrine of occupied field was inapplicable. Finding no merit in either contention, the Court allowed the appeals.

Justice AIYAR observed that the factual background giving rise to the present proceedings had already been set out in full in the opinion recently delivered by his brother Justice Mahajan, and therefore there was no need to repeat those facts. He further stated that he agreed with the conclusions reached by Justice Mahajan and by Justice Mukherjea, and that ordinarily he would have concluded his contribution with a simple statement of concurrence. However, because the question raised in the appeals was of great importance and because the interests involved were substantial, he felt it necessary to add some additional comments on several of the points that had been discussed. He began by referring to Article 31(1) of the Constitution, which declares that “No person shall be deprived of his property save by authority of law.” He explained that the Constitution contemplates three distinct modes by which a person’s property may be taken: (a) destruction, (b) acquisition, and (c) requisition. He clarified that the mode of destruction is relevant only where property is destroyed for reasons of public health or to prevent danger to life or property, a situation that was not before the Court. He then described acquisition as involving a permanent taking of property, whereas requisition involves a temporary taking, but emphasized that apart from this temporal distinction both modes are treated alike concerning the relationship between the State’s powers and the rights of private individuals. He noted that, under the Constitution, a taking—whether by acquisition or requisition—may be made for a purpose of the Union, for a purpose of a State, or for any other public purpose. He referred to Entry 33 in List I (the Union List) of the Seventh Schedule, which authorises the acquisition or requisition of property for Union purposes. He also pointed out Entry 42 in List III (the Concurrent List), which provides that “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.” Justice AIYAR observed that the concept that a government may compulsorily acquire private property for a public purpose has long been recognized by law and is commonly referred to as the law of eminent domain. Nonetheless, he stressed that the universal principle of law requires that such acquisition be accompanied by the payment of just compensation. To illustrate this principle, he quoted from the second volume of “Story on the Constitution,” page 534, paragraph 1790, which discusses the concluding clause of the Fifth Amendment of the United States Constitution. The quoted passage affirms that private property shall not be taken for public use without just compensation, describing this rule as a fundamental doctrine of common law, founded on natural equity and regarded as a universal principle of law. The passage further observes that in a free government, all other rights would become meaningless if the government possessed unchecked power over every citizen’s private fortune, and that a primary objective of good government is the administration of justice, a purpose that would be futile if all property were subject merely to the whims of the legislature or the rulers.

In this case, the Court explained that the power of the State to acquire property could not be exercised arbitrarily according to the will or caprice of the legislature or the rulers, and that payment of compensation formed an essential part of a valid exercise of that power. The Court referred to the leading English decision in Attorney-General v. De Keyser’s Royal Hotel, Ltd, where Lord Dunedin described compensation as a necessary concomitant of a compulsory taking. The Court also cited the judgment of Bowen L.J. in London and North Western Railway Co. v. Evans, which stated that, absent clear legislative language indicating otherwise, the legislature could not be presumed to intend that a person’s property be taken for the benefit of others or the public without providing compensation for the portion taken. The Court noted that Parliament, despite its legislative supremacy, could only disregard this ordinary principle if it expressed such an intention unmistakably. This doctrine was reflected in article 31(2) of the Constitution, which expressly forbade the taking or acquisition of any movable or immovable property, including any interest in a commercial or industrial undertaking, for public purposes unless the law providing for such taking also made provision for compensation, either by fixing the amount or by prescribing the principles and manner for determining and delivering the compensation. The Court said it would not discuss sub-clauses (3) and (4) of that article, nor articles 31-A and 31-B introduced by the First Amendment, because they would be considered later. The Court accepted that Shri P.R. Das had correctly argued that compensation was a concomitant obligation when the State compulsorily acquired property, but rejected his further contention that this obligation was implicitly contained in entry 42 of the Concurrent List. The Court explained that entries in the Concurrent List merely provided headings for legislation; to determine the scope, extent, or ambit of the law and the rights and duties it created, one must examine the legislation itself or rely on well-recognised principles of jurisprudence. The Court emphasized that nothing implicit or hidden could be invoked when the statute made an express provision on the same subject. Since compensation must be paid when property is taken for a public purpose, the legislation must set out the principles for assessing compensation and the form and manner of its payment. Accordingly, entry 42 was described as nothing more than a legislative power to achieve this end, not an inherent duty to pay compensation.

The Constitution confers on the legislature a power to prescribe the principles for determining compensation, but it does not impose a mandatory duty to actually provide compensation. When one asserts that payment of compensation is an essential condition for the acquisition of property for a public purpose, the authority for such a claim must be found in the Constitution itself. That authority is contained in Article 31(2), which expressly requires compensation for property acquired by the State. The respondent, Mr Das, was forced to adopt the untenable position that Entry 42 of the Concurrent List, by its very terms, creates an implicit obligation to pay compensation. He could not otherwise overcome the obstacles presented by the provisions of Article 31(3) and Article 31(4) together with the newer provisions introduced by Articles 31-A and 31-B. In response, the Attorney-General argued that legislation enacted under Entry 42 might set principles that would ultimately result in the non-payment of any compensation, and he relied on the decision in Atiqa Begum’s case as support for this view. The Court found this argument to be as unsound as Mr Das’s claim that an obligation to pay compensation was implicit in the entry. Since acquisition cannot occur without compensation, the language of Entry 42 merely empowers the legislature to define the principles and to specify the form and manner in which compensation should be paid. If those principles were drafted so as to eliminate payment altogether, the legislature would be flagrantly evading the law rather than merely interpreting it covertly.

There is no basis in the Atiqa Begum case for the contention that compensation may be omitted. That case concerned the head “payment of rent,” where the Court held that the legislature could enact statutes providing for remission of rent because rent is not a universal legal obligation attached to every tenure. By contrast, compensation for State acquisition is a primary prerequisite universally recognized by law, a distinction that must be borne in mind when applying the cited authority. The concluding words of Entry 42—“form and the manner in which such compensation is to be given”—clearly indicate that the principles to be framed under this entry must inevitably lead to the payment of some compensation. To craft principles that completely negate compensation would contradict the explicit terms of the entry and could not be ascribed to the framers of the Lists. Nonetheless, this reasoning does not advance Shri P.R. Das’s position. The first major impediment to his argument is Article 31(4), which states: “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 Bill that later became

The Court observed that the Bihar Land Reforms Act, 1950 was a statute that was pending at the commencement of the Constitution in the legislature of the State, that after being passed by that legislature it was reserved for the consideration of the President and thereafter received his assent. Consequently, the limitation contained in article 31(4) of the Constitution became applicable, meaning that the Act could not be called into question in any court on the ground that it contravened the provisions of clause (2). While sub-clause (2) of article 31 requires that compensation be provided when property is acquired, sub-clause (4) creates an exception that removes the right to challenge the validity of the Act on the basis that no compensation has been provided or that the compensation is illusory or inadequate. The Court further noted that two additional statutory obstacles had been erected by subsequent constitutional amendments, namely articles 31-A and 31-B. Article 31-A, sub-clause (1), reads: “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 to be 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: Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.” Article 31-B provides: “Validation of certain Acts and Regulations: 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 provisions thereof shall be deemed to be void, or even to have 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 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.” The Court pointed out that the very first entry in the Ninth Schedule to the Amending Act is the Bihar Land Reforms Act, 1950. In view of these formidable barriers, Shri P.R. Das candidly conceded that he could not press any argument concerning the adequacy or illusory nature of the compensation afforded by the Act unless he first succeeded in convincing the Court that the Act could be challenged on grounds other than those enumerated in Part III of the Constitution, and that there existed in entries No. 36 of the State List and No. 42 of the Concurrent List a combined obligation on the State Legislature to provide just or proper compensation, the non-observance of which would entitle a challenge to the Act’s constitutionality.

Reading the two lists together, the Court observed that they imposed on the State Legislature an obligation to make payment of just or proper compensation, and that any failure to fulfil this obligation gave the affected person a right to challenge the validity of the Act as unconstitutional. The Court reiterated that acquisition of property could be made only for a public purpose. It further explained that under the Land Acquisition Act of 1894, a declaration by the Government that land was needed for a public purpose was deemed conclusive evidence that such a purpose existed, and that courts were not permitted to examine whether the public purpose had actually been established. The Court noted that no provision of the Constitution dealt with this point directly. While sub-clause (2) of article 31 referred to property being acquired for public purposes, sub-clause (4) of the same article only barred a challenge on the ground of non-compliance with the compensation requirement contained in clause (2). The compensation requirement was confined to the portion of clause (2) that stated, “Unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given.” The Court correctly assumed that the existence of a public purpose was an inherent component of the law itself and not a condition imposed by article 31(2). Accordingly, the condition prescribed by article 31(2) concerned only compensation, and article 31(4) prohibited a constitutional challenge on that ground alone, leaving open the possibility of reviewing whether any public purpose existed at all or whether the purpose asserted by the legislature was sufficient. The Court held that when the legislature declared a public purpose, its words must be respected, but the courts could still examine the validity of that declaration. The object of the Act in question was to extinguish the interests of intermediaries such as zamindars, proprietors and estate- and tenure-holders, and to bring the actual cultivators into a direct relationship with the State Government. To realise this objective, the Act contained several provisions for the transfer and vesting of such interests in the State with respect to various categories of property. While the Court acknowledged that the Act was undeniably motivated by a public purpose, it emphasized that the remaining issue was whether the specific taking over of particular items could be said to further that purpose. In that regard, the Court identified two specific provisions – the taking over of “arrears of rent” under section 4, clause (b), and the taking over of the “cost of works of benefit to the raiyats” under section 23, clause (f) – as matters that required careful consideration. The Court observed that the acquisition of arrears of rent did not appear to bear even a remote connection to the objectives of land reform.

The Court observed that the taking of arrears of rent bears no connection with any question of land reform and that it rests on a footing no better than if the statute attempted to appropriate the cash held by zamindars, proprietors or tenure-holders in their hands or banks. It noted that it was merely accidental that the rents in dispute had not been realised before the enactment of the statute, and that whether realised or not, those sums represented money due from the ryots to the landlord. The Court further stated that the consequences of vesting estates must relate in some way to the tenures themselves and must have at least a remote connection with the agrarian reforms that have been undertaken or contemplated. Assuming a statute were to declare that it was necessary to abolish rent collectors, to apportion and distribute land equitably among the tillers, to confer permanent occupancy rights on them and to bring them directly under the State, and that all monies which the proprietors had collected as rent from their estates for the three years preceding the commencement of the Act shall vest in and be payable to the State, the Court asked whether any public purpose could reasonably be said to justify the taking of those monies. It concluded that arrears of rent stand on no better footing and that any public purpose in their acquisition is plainly absent. The Court found it evident that the arrears were used either to augment the State’s financial resources or to pay compensation to smaller proprietors out of that particular acquisition. It emphasized that the State cannot appropriate private property under the power of eminent domain merely to increase its revenues; taxation is the recognised method for that purpose. If the true object was revenue enhancement, the Court observed that compulsorily taking one person’s property in order to give it to another in discharge of the Government’s obligations does not constitute a legitimate exercise of the acquisition power. Sub-clause (1) of section 21 provides that fifty per cent of the arrears of rent shall be added to the amount of compensation, which the Court interpreted as indicating one of two possibilities: either the remaining fifty per cent is taken without any compensation, amounting to virtual confiscation, or the fifty per cent represents the consolidated value of the arrears as a lump-sum payment for the acquisition of choses in action or actionable claims. In either case the Court found it difficult to discern any public purpose. The Court further noted that whether money can be compulsorily acquired by a State at all is a contested issue, and quoted Willis’s Constitutional Law, page 816, stating: “While, as stated above, any and all property is in general subject to the exercise of the power of eminent domain, there are certain rather unusual forms of private property which cannot thus be taken. These are.”

In discussing the kinds of property that may be taken under the power of eminent domain, the author lists “corpses, money, choses in action, property used by the government in its governmental capacity, property to be used for a mere substituted ownership unless such substituted ownership is a more necessary use, and perhaps trust property dedicated to a State, mortgage liens, and suits to quiet title.” Under the heading “what property is subject to the right,” Cooley remarks in Volume II of his treatise on Constitutional Limitations, page 1117, that the foregoing list must except money—or that which in ordinary usage is considered money and which the Government can obtain by taxation—as well as rights in action, which exist only when they can be converted into money. Cooley adds that neither money nor rights in action need be taken under the power of eminent domain. In a footnote Cooley explains that appropriating money under the eminent-domain power, when the compensation must ultimately be paid in money, would amount to nothing less than a forced loan, justifiable only as a last resort in an extreme emergency where neither government credit nor taxation could be employed.

Nicols, writing on the subject of eminent domain, does not disagree with Cooley’s observation. He notes, at page 100 of Volume I, paragraph 2.1(3), that the question of whether money may be taken by eminent domain has been answered, at least insofar as a State or a private corporation is concerned, that such taking is not permissible. According to Nicols, the objection does not arise from an implied inherent limitation on governmental power but from the practical difficulty of taking money in a manner that would serve the public without violating the Constitution. He observes that even when the public purpose is genuine, compensation must be paid in money, and if not paid in advance, it must be provided as rapidly as practicable. Therefore, the seizure of money without compensation, or the offer of payment in notes, bonds, or merchandise—a forced sale or loan—cannot be constitutionally justified, even if the taking is claimed to be necessary under dire circumstances.

The learned Attorney-General attempted to justify the acquisition in this case on the ground that it was a compulsory taking of choses in action. The Court noted, however, that choses in action are essentially the same as money, perhaps of even less value than coin or currency notes. Accordingly, the Court observed that choses in action likewise cannot be taken under the eminent-domain power, referring again to Cooley’s observations. The Court further stated that the two cited cases—Long Island Water Supply Company v. City of Brooklyn and City of Cincinnati v. Louisville & Nashville Railroad Company—do not support a contrary view. In the former case, a water-supply company was operating under a contract to furnish water to the town of New Lots, which later merged into the City of Brooklyn.

In the first example, the Long Island Water Supply Company had entered into a contract to supply water to the town of New Lots, which later became part of the city of Brooklyn. Under the agreement, the town agreed to pay for the installation and supply of hydrants, and the contract was to last for twenty-five years. When the merger occurred, the city of Brooklyn received authority to either purchase the company’s property or to condemn it within two years, but the city chose to do nothing during that period. In 1892 the state legislature enacted a new statute that again authorised the city to condemn the company’s property, on the condition that any condemnation proceeding be started within one year of the statute’s passage. The statute itself set out the procedure to be followed for the acquisition. The city subsequently exercised the power granted by the statute, and the amount of compensation to be paid was fixed by the Commissioners at a specific figure.

The water-supply company objected to the condemnation on two constitutional grounds. First, it relied on Article I, Paragraph 10 of the United States Constitution, which prohibits any State from passing a law that impairs the obligations of contracts. Second, it claimed that the taking violated the due-process requirement of the Fourteenth Amendment. The United States Supreme Court, however, affirmed the condemnation and rejected the company’s contention that the contract had been impaired. Justice Brewer explained that the contract was merely incidental to the physical property that was being taken. The condemnation targeted the tangible property that had been adapted for public use, not the contract itself; any alleged impairment of the contract was simply a consequence of the appropriation of the physical property.

The Court observed that, in the present matters, it would be untenable to argue that the taking of rent arrears is a natural outgrowth of the acquisition of the underlying estates. In a second illustration, a railroad company brought a suit to condemn a right-of-way for an elevated railroad track across a public landing at Cincinnati. The city contended that the landing had already become property dedicated to the public under an earlier contract, and that permitting condemnation under an Ohio statute would impair that contract, which was prohibited by Section 10 of Article I of the United States Constitution. Justice Lurton held that the constitutional prohibition on state laws impairing contracts does not restrict the power of eminent domain. He stated that a contract’s obligations are not impaired when the contract is appropriated for a public purpose and appropriate compensation is provided. Such an exercise of power does not challenge the contract’s validity nor impair its obligations; it is a taking, not an impairment of the contract’s obligations, and when compensation is paid no constitutional right is violated.

From these decisions, the Court concluded that neither case involved the compulsory acquisition of choses in action. The Court further noted that choses in action that are not tied to any tangible property may still be useful for a public purpose.

The Court held that money and choses in action become vulnerable to compulsory acquisition only after they are transformed into cash, and that arrears of money constitute a clear illustration of such a transformation. It explained that the exemption of money and choses in action from compulsory acquisition is not based on their status as movable property, but rather on the general principle that there is ordinarily no public purpose served by acquiring them. The Court then examined the provisions of section 23, sub-clause (f), which authorise a deduction of four to twelve and a half per cent of the gross assets on the basis of a “cost of works of benefit to the raiyats.” The Court described this deduction as an obvious device intended to lower the calculated gross assets to the smallest possible figure. It observed that the Act does not define the deducted amount as expenditure on works of benefit or on improvements that the zamindars and proprietors were legally obliged to carry out, nor does it specify how the deducted sum will be used in the future. Consequently, the deduction was characterised as an arbitrary figure imposed by the legislature, a mere contrivance designed to diminish compensation and amounting to a colourable or fraudulent exercise of legislative power that subtracts a fanciful sum from the gross-asset calculation. Stripped of any protective language, the provisions concerning “arrears of rent” and the “cost of works of benefit” were said to amount to naked confiscation. The Court further noted that when a legislative measure is arbitrary in the sense that it bears no reasonable relation to the purpose it purports to achieve, the legislature exceeds the limits of its authority. Under the pretense of legislating for acquisition, the legislature cannot enable the State to perpetrate confiscation; if it does, the offending portion of the Act must be declared unconstitutional and void. However, the Court clarified that because the void portion is not inseparably interwoven with the rest of the Act, the entire statute does not have to be struck down. The Court also observed with satisfaction that both the Madhya Pradesh Abolition of Proprietory Rights Act of 1950 and the Uttar Pradesh Zamindari Abolition and Land Reforms Act of 1950, which were also under consideration, do not contain the defect of reaching into arrears of rent due for any period before the date of vesting. Accordingly, the appeals were allowed and Petition No. 612 was dismissed. Counsel for the appellant (State of Bihar) appeared, as did counsel for the respondents in Cases Nos. 339, 319, 327, 330, 332 of 1951; Cases Nos. 309, 326, 328, 336, 337, 344 of 1951; Cases Nos. 310, 311, 329 of 1951; Case No. 315 of 1951; Cases Nos. 307, 313, 320, 321, 322 of 1951; and Case No. 331 of 1951. Counsel for the petitioner in Petition No. 612 of 1951 also appeared, together with counsel for respondent No. 2 in Petition No. 612 of 1951.

The final entry in the record consists solely of the name Mehta, which identifies the counsel who acted for the State of Bihar as the appellant. Earlier in the judgment the list of agents had explicitly named P. A. Mehta as the representative of the appellant, and this concluding line reiterates that identification by presenting only the surname Mehta. No further commentary, argument, or additional information accompanies the name; it functions simply as a signature or confirmation of the individual who provided legal representation for the State of Bihar. By terminating the roster of counsel with the name Mehta, the document completes its enumeration of the parties’ legal representatives, confirming that the appellant’s advocacy was undertaken by the person previously mentioned as P. A. Mehta. This solitary appearance of the name therefore serves to affirm the participation of Mehta in the proceedings and to close the section that lists the agents for both the appellant and the respondents.