Zamindar Of Ettayapuram vs The State Of Madras.(And Connected...

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 170 to 176 and 178 to 183 of 1953

Decision Date: 5 February 1954

Coram: B.K. Mukherjea, Mehar Chand Mahajan, Vivian Bose

In the matter titled Zamindar of Ettayapuram versus the State of Madras and connected appeals, the Supreme Court of India delivered its judgment on the fifth day of February, 1954. The opinion was authored by Justice B. K. Mukherjea, who sat on a bench together with Justices Mehar Chand Mahajan and Vivian Bose. The petitioners were identified as the Zamindar of Ettayapuram, while the respondent was the State of Madras. The case has been reported in the Indian law reports as 1954 AIR 257 and in the Supreme Court reports as 1954 SCR 761, and it also appears in the citator under the reference F 1954 SC 605 (2). The central statutory provision under consideration was the Madras Estates (Abolition and Conversion into Ryotwari) Act, commonly referred to as Act XXVI of 1948, whose constitutional validity was examined in light of Article 31(6) of the Constitution of India.

The headnote of the judgment recorded that the Madras Estates (Abolition and Conversion into Ryotwari) Act had been enacted by the Provincial Legislature of Madras while the province operated under the Government of India Act 1935. The Act received the formal assent of the Governor-General of India on the second day of April, 1949. Subsequent to the coming into force of the Constitution, the legislation was placed before the President for certification, a procedural step that was completed on the twelfth day of April, 1950. The Court held that, because of the provisions contained in Article 31(6) of the Constitution, the validity of the Act could not be successfully contested on the basis that it infringed Section 299(2) of the Government of India Act 1935. In reaching this conclusion, the Court referred to earlier authorities, namely Shankari Prasad Singh Deo v. Union of India ([1952] SCR 89), The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh ([1952] SCR 889), and Narayan Deo v. The State of Orissa ([1954] SCR 1).

The judgment concerned civil appellate jurisdiction over a series of consolidated appeals numbered fourteen in total, specifically Civil Appeals Nos. 170 to 176 and 178 to 183 of 1953. These appeals arose from a judgment and order dated the twenty-second of August, 1952, delivered by the Madras High Court in a collection of civil miscellaneous petitions numbered 13386, 13388, 13390, 7812, 12003, 13188, 13262, 7822, 13123, 13347, 13341, 12997, and 12494 of 1950, together with an order dated the eighth of September, 1952, in Civil Miscellaneous Petition No. 13936 of 1950. For the appellants, counsel consisted of K. S. Krishnaswamy Iyengar, assisted by K. G. Champakesa Iyengar. Representing the State of Madras in Appeals Nos. 170 to 176 and 178 to 181 was V. K. T. Chari, the Advocate-General of Madras, aided by R. Ganapathy Iyer and V. V. Raghavan. For the State of Andhra, appearing in Appeals Nos. 182 and 183, counsel was M. Seshachalapathi.

Justice Mukherjea delivered the Court’s opinion on the fifth of February, 1954. The consolidated appeals were directed against a single judgment of a Division Bench of the Madras High Court dated the twenty-third of August, 1952, which had dismissed the petitions of a number of land-holding appellants filed under Article 226 of the Constitution. The appellants were identified as zamindars who possessed estates within the State of Madras. In their petitions, they sought writs of mandamus that would compel the State of Madras to refrain from issuing notifications and from taking possession of the estates in question, and also to…

The petitioners asked the Court to set aside the notifications that had already been issued under the Madras Estates (Abolition and Conversion into Ryotwari) Act, also known as Act XXVI of 1948. The appellants challenged the constitutional validity of that Act. The statute had been enacted by the Provincial Legislature of Madras while the province was governed under the Government of India Act, 1935, and it received the assent of the Governor-General of India on 2 April 1949. The declared purpose of the Act was to abolish the zamindari system by repealing the Madras Permanent Settlement Regulation of 1802, to acquire the rights of landholders in the permanently settled and other estates, and to replace the existing tenure with a Ryotwari system throughout those estates. After the Constitution of India came into force, the Act was placed before the President for certification, and the certification was granted on 12 April 1950.

In the writ petitions filed by the appellants, a multitude of grounds were raised to contest the validity of the legislation. The petitioners described the Act as confiscatory and as infringing the fundamental right to property that they enjoyed under the Permanent Settlement Regulation in their zamindaris. While these petitions were pending, Parliament enacted the Constitution (First Amendment) Act of 1951 on 1 June 1951, inserting Articles 31-A and 31-B into the Constitution. The purpose of the amendment was to shield laws dealing with the acquisition of estates from being challenged under the fundamental rights provisions of Part III. Article 31-B specifically lists certain statutes in the Ninth Schedule and declares that none of those statutes shall be held void on the ground that they violate any fundamental right, regardless of any contrary finding by a court or tribunal. Madras Act XXVI of 1948 is expressly included in that schedule. The validity of the First Amendment itself had earlier been questioned before this Court in Shankari Prasad Singh Deo v. Union of India, but the challenge was rejected. Consequently, the principal bases on which the petitioners had sought relief were largely neutralised. By the time the applications were finally heard, the petitioners' arguments had shifted. Rather than seeking to invalidate the whole Act, they contested specific provisions, contending that there was no public purpose for acquiring certain properties and that the compensation clauses represented a colourable use of legislative power, amounting to a fraud on the Constitution of 1935. These contentions were advanced solely on the authority of the majority opinion in the earlier Bihar case.

The Court observed that in the earlier decision of The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh (2) the Supreme Court had declared two provisions of the Bihar Land Reforms Act, 1950—legislation comparable in nature to the Madras Act of 1948—to be unconstitutional. The learned Judges of the High Court, however, rejected these arguments when hearing the petitions. They held that the principles set out by the majority in the Bihar case were not applicable to the provisions of the Madras Act that were challenged, and consequently they dismissed all of the petitions. Nevertheless, the High Court issued certificates to the petitioners under article 132(1) of the Constitution, as recorded in (1) [1952] S.C.R. 89 and (2) [1952] S.C.R. 889, and it was on the basis of those certificates that the present appeals were brought before this Court.

Counsel appearing in support of the appeals relied entirely on the doctrine of “colourable legislation” as articulated by the majority in the Bihar case mentioned above. He deliberately avoided any argument concerning the lack of a public purpose for any of the items acquired, because the prevailing view of the Court—explained in Narayan Deo v. State of Orissa (1)—is that the existence of a public purpose is not a justiciable issue when a law satisfies the conditions of clause (4) of article 31 of the Constitution and therefore enjoys constitutional protection. The substance of counsel’s submissions was that sections 27(i) and 30 of the impugned Madras Act were colourable legislative provisions enacted in fraud upon the Constitution Act of 1935.

The Court noted that, in order to determine the compensation payable under the Act for an acquired estate, the first step is to ascertain the “basic annual sum” applicable to that estate. The basic annual sum consists of several components specified in section 27 and the following sections of the Act. The total compensation due to a proprietor is calculated on the basis of the amount determined for the basic annual sum in accordance with those provisions. Counsel argued that section 27(i) mandates that, in computing the basic annual sum, only one-third of the gross annual Ryotwari demand of certain categories should be considered. He described this requirement as a colourable provision that disregards the actual income generated by the property and substitutes an artificial and arbitrary standard for determining income or profit, a standard that bears no relation to the factual circumstances.

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The Court explained that, for the purpose of calculating the basic annual sum under section 30, the figure is not to be derived from the average net annual income actually received by the proprietors from the sources specified in the Act while they possessed the estates. Instead, the figure is based on the income that the Government might be able to obtain from those sources in the years following the date of notification. Consequently, if, because of mismanagement or any other reason, the Government fails to obtain any income from those sources, the proprietor would receive no compensation under that head. It was contended that such provisions amount to mere devices intended to confiscate private property and that they neither establish nor rest upon any principle of compensation. While the merits of these contentions could be debated, the Court found an initial and decisive difficulty in applying the authority of the majority decision in State of Bihar v. Maharajadhiraja Sir Kameshwar Singh to the present facts. The Bihar Land Reforms Act involved in that case was legislation pending when the Constitution came into force, was reserved for the President’s consideration, and later received his assent. Accordingly, under clause (4) of article 31 of the Constitution, the Act was insulated from judicial review on the ground that the compensation it provided was inadequate or unjust. However, the Court held that two provisions of that Act—sections 4(b) and 23(f)—were void because they did not fall within entry 42 of List III of Schedule VII of the Constitution, which governs the principles for determining compensation for property acquired or requisitioned for public purposes and the manner of its payment. The Court noted that entry 42 defines a legislative head, and in determining a law’s competence under this entry, the Court does not examine the fairness of the compensation principles or the mode of payment. Nevertheless, the law must be founded upon some principle of granting compensation; it cannot be based on a non-existent or factually unrelated basis that would have no conceivable impact on any principle of compensation. This requirement created the initial difficulty in attempting to invoke the doctrine from the Bihar case in the circumstances of the present matter.

In this case, the Court observed that the statute challenged had been enacted by the Madras Provincial Legislature while it operated under the Government of India Act, 1935. The Court further noted that none of the lists attached to that Act contained an entry corresponding to entry 42 in List III of the Indian Constitution. The only provision in the 1935 Act that related to this matter was entry 9 of List I, which merely referred to compulsory acquisition of land. The language of that entry did not inherently impose a duty to pay compensation or to prescribe any principle for determining compensation. The guarantee of compensation under the 1935 Constitution was set out in section 299, clause (2) of the Act. It stated that neither the Federal Legislature nor a Provincial Legislature could make a law authorising compulsory acquisition for public purposes unless the law provided for payment of compensation. The provision required the law either to fix the amount of compensation or to specify the principles and manner for its determination. The appellants might have relied upon this guarantee if it had not been barred by the provision of article 31(6) of the Constitution. Article 31(6) provided that any State law enacted not more than eighteen months before the commencement of the Constitution could, within three months of such commencement, be submitted to the President for certification. If the President certified the law by public notification, it could not be challenged on the ground that it violated clause (2) of article 31. It also could not be questioned for contravening sub-section (2) of section 299 of the Government of India Act, 1935. The Court found that the Madras Act XXVI of 1948 satisfied all of the conditions described in article 31(6) and therefore could not be questioned on the ground raised by the appellants. Consequently, the Court declined to allow the appellants to advance the arguments presented by their counsel and ordered the appeals to be dismissed without any order as to costs. The judgment recorded the dismissal of the appeals and identified the agents for the parties as S. Subramanian for the appellants and R. H. Dhebar for the respondents.