Deep Chand vs The State Of Uttar Pradesh

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 380 to 389, 391 to 399, 401, 429 and 431 to 434 of 1958

Decision Date: 15 January 1959

Coram: Natwarlal H. Bhagwati, Bhuvneshwar P. Sinha, K.N. Wanchoo, K. Subbarao, C.J. Das

In this appeal, the petitioner Deep Chand challenged the constitutionality of the Uttar Pradesh Transport Service (Development) Act, 1955, which had been passed by the State Legislature and had obtained the President’s assent. The case was decided on 15 January 1959 by a bench of the Supreme Court of India composed of Natwarlal H. Bhagwati, Bhuvneshwar P. Sinha and K. N. Wanchoo. The judgment is reported in the 1959 volume of the All India Reporter at page 648 and also in the Supreme Court Reports Supplement 2, page 8, with numerous citations to later decisions referencing its authority. The central issue concerned the validity of the Act and of the scheme of nationalisation of transport services that the State Government had framed under the Act, together with the notifications issued pursuant to Sections 3, 4 and 8 of that legislation.

The appellants, who were permit-holders under the Motor Vehicles Act, 1939, operated buses on various routes in Uttar Pradesh alongside buses owned by the State Government. The State Government issued a notification under Section 3 of the impugned Act directing that certain routes, together with others, should be served exclusively by State-run buses, and subsequently issued further notifications under Sections 4 and 8 to enforce the same. The appellants filed a petition in the High Court under Article 226 of the Constitution, challenging both the Act itself and the notifications made under it. The High Court dismissed their petitions, after which the Motor Vehicles (Amendment) Act, 1956 (Act 100 of 1956) was enacted, inserting Chapter IV A into the Motor Vehicles Act to provide for the nationalisation of transport services. The appellants raised three principal contentions: first, that the amendment rendered the Uttar Pradesh Transport Service (Development) Act, 1955, wholly void under Article 254(1) of the Constitution; second, that the scheme framed under the Act fell within Section 68B of the Amending Act and therefore ceased to be operative; and third, that even assuming the scheme was valid, it violated Article 31 as it existed before the Constitution (Fourth Amendment) Act, 1955. Additionally, they argued that, on the basis of the proviso to Article 254(2), the impugned Act was entirely repealed by the Amending Act because Section 68B excluded the operation of the General Clauses Act. The State, in response, contended that the amendment of Article 31 by the Fourth Amendment had removed the constitutional limitation that had previously applied to the legislature when it passed the 1955 Act, thereby validating the Act despite the earlier limitation. The Court, delivering a per curiam judgment, held that the Uttar Pradesh Transport Service (Development) Act, 1955, did not, on the passing of the Motor Vehicles (Amendment) Act, 1956 (100 of 1956),...

The petitioners argued that the Uttar Pradesh Transport Service (Development) Act, 1955, had become inoperative after the Motor Vehicles (Amendment) Act, 1956 was enacted, and that even if the impugned Act remained valid with respect to the scheme it authorized, it nevertheless contravened Article 31 of the Constitution as it existed before the Constitution (Fourth Amendment) Act, 1955. They further contended, relying on the proviso to Article 254(2), that the Amending Act had wholly repealed the impugned Act because Section 68B of the Amending Act excluded the operation of the General Clauses Act. On behalf of the State, it was submitted that the amendment of Article 31 by the Fourth Amendment, which removed the constitutional limitation that Article 31 had formerly imposed on the legislature at the time the impugned Act was passed, effectively validated that Act because it had been enacted while the limitation was still in force.

The Court held, per curiam, that the Uttar Pradesh Transport Service (Development) Act, 1955, did not become wholly void under Article 254(1) of the Constitution merely by the passage of the Motor Vehicles (Amendment) Act, 1956 (100 of 1956). Instead, the Act continued to be a valid and subsisting law that supported the transport scheme already framed under the Uttar Pradesh Act. The Court further observed that, even assuming the Amending Act operated to repeal the State Act under Article 254(2), such repeal could not extinguish the scheme already created because Section 6 of the General Clauses Act would preserve it. The Court also rejected the contention that the impugned Act, particularly Section II(5), violated the pre-amendment Article 31 by failing to provide adequate compensation. Per Das, C.J., and Sinha J., the doctrine of eclipse explained in Bhikaji Narain Dhakras v. The State of Madhya Pradesh, [1955] 2 S.C.R. 589, could also apply to a post-Constitution law that infringed a fundamental right granted only to citizens; such a law would remain effective for non-citizens while being shadowed for citizens. When the constitutional amendment removed the shadow, the law would apply to citizens without the need for re-enactment, as referenced in John M. Wilkerson v. Charles A. Rahrer, (1891) 140 U.S. 545; 35 L. Ed., 572 and Bhikaji Narain Dhakras v. The State of Madhya Pradesh, [1955] 2 S.C.R. 589. The Court noted, however, that the question whether a post-Constitution law infringing a fundamental right guaranteed to all persons—citizens and non-citizens alike—would be subject to the eclipse doctrine should remain open. Finally, the Court held, per Bhagwati, Subba Rao and Wanchoo JJ., that a combined reading of Articles 254, 246 and 13 of the Constitution made clear that both Parliament and a State Legislature could legislate only within the limits imposed by the Constitution, including Article 13.

In this case, the Court observed that the entries listed in the Seventh Schedule were expressly made subject to the provisions of the Constitution, including Article 13. The Court then explained that a clear distinction existed between the two clauses of Article 13. Under clause (1), any law that existed before the Constitution continued to be effective, but only to the extent that it did not conflict with the provisions of Part III, which contain the fundamental rights. By contrast, under clause (2), any law enacted after the Constitution that violated the provisions of Part III was a nullity from the moment of its enactment, to the extent of the violation. The expression “any law” in the second part of clause (2) was interpreted to mean an Act that had actually been passed despite the constitutional prohibition, and it did not assume that such an Act was ever valid. The Court stressed that this prohibition struck at the core of the State’s legislative power, rendering any law made in defiance of it a “still-born” statute. When construing the constitutional provisions that govern legislative authority, namely Articles 245 and 13(2), the Court held that no distinction should be drawn between an affirmative grant of power and a negative restriction, because both operate as limitations on legislative authority. The Court referred to the decision in K.C. Gajapati Narayan Deo v. State of Orissa [1954] S.C.R. 1, noting that while this principle applied uniformly, jurisprudence also recognised a separate distinction for assessing the effect of a law that transgressed the limits set by Articles 245 and 13(2). This distinction lies between a statute that is void ab initio and one that was valid when enacted but later became unconstitutional. The Court explained that the former cannot be validated by a power acquired after the fact, whereas the latter can take effect once the constitutional obstacle is removed. A review of the authorities and judicial decisions led the Court to confirm four propositions: (1) that a positive power to legislate on specific subjects and a negative prohibition against violating fundamental rights are two aspects of the same limitation on legislative competence; (2) that by expressly making the power to legislate on the Seventh Schedule entries subject to other constitutional provisions, that power is unquestionably bound by the limitations in Part III; (3) that consequently, any law that exceeds or derogates from that power is void from the beginning, either in whole or to the extent of the excess; and (4) that the doctrine of eclipse applies only to a law that was valid when made but later became invalid because of a subsequent constitutional inconsistency. The Court discussed the cases of Newberry v. United States (1912) 265 U.S. 232; John M. Wilkerson v. Charles A. Rahrer (1891) 140 U.S. 545; Carter v. Egg and Egg Pulp Marketing Board (1942) 66 C.L.R. 557; Keshavan Madhava Menon v. State of Bombay [1951] S.C.R. 228; Behram Khurshed Pesikaka v. State of Bombay [1955] 1 S.C.R. 589; Saghir Ahmed v. State of U.P. [1955] 1 S.C.R. 707; Ram Chandra Balai v. State of Orissa [1956] S.C.R. 28; and Pannalal Binjraj v. Union of India [1957] S.C.R. 233, all of which were referred to and examined in support of these principles.

In the matter before the Court, the test for determining repugnancy between two statutes—one enacted by Parliament and the other by a State Legislature—required an inquiry into three specific points. First, the Court examined whether a direct conflict existed between the provisions of the two statutes. Second, it considered whether Parliament had intended to establish an exhaustive code covering the entire subject-matter, thereby displacing the State’s legislation. Third, it assessed whether both statutes operated within the same legislative field. A detailed comparison of the relevant provisions of the Uttar Pradesh Transport Service (Development) Act, 1955, and the Motor Vehicles (Amendment) Act, 1956, revealed that both statutes were designed to function over the same subject matter and within the same field, but their operative scope differed with respect to timing. The State legislation was intended to apply only to schemes that had been initiated before the Amending Act came into force, whereas the Central legislation applied to schemes launched after the Amending Act, which was not given any retrospective effect. Consequently, the Court held that the State Act must yield to the Central Act to the extent that the latter governs schemes framed under it, rendering the State Act void only insofar as it conflicted with the Central Act concerning those later schemes. The principle articulated in Keshavan Madhava Menon v. The State of Bombay, [1951] S.C.R. 228, was applied to reach this conclusion.

The judgment recorded that the appeals arose under the civil appellate jurisdiction, specifically Civil Appeals Nos. 380 to 389, 391 to 399, 401, 429 and 431 to 434 of 1958. These appeals challenged the judgment and decree dated 19 December 1956 of the Allahabad High Court in a series of Civil Miscellaneous Writs numbered 1574, 1575, 1576, 1577, 1578, 1579, 1444, 1584, 1586, 1589, 1631, 1632, 1634, 1635, 1636, 1694, 1695, 1697, 1704, 1707, 3726, 1647, 1948, 1949 and 1956. Counsel appearing for the appellants included representatives for the groups of appeals numbered 380-385, 387-389, 391-399 and 401 of 1958, as well as separate representation for appeal 386/58 and for the group of appeals numbered 429 and 431-434/58. Counsel for the respondents was also listed. The judgment dated 15 January 1959 noted that the judgment of the Chief Justice Das and Justice Sinha had been delivered by Chief Justice Das, while the judgment of Justices Bhagwati, Subba Rao and Wanchoo had been delivered by Justice Subba Rao.

Chief Justice Das stated that after reviewing the judgment prepared by Justice Subba Rao, he concurred with the order proposed by the latter, namely that all of the listed appeals should be dismissed with costs, although he did not accept every reason advanced by Justice Subba Rao. He observed that the material facts and the various points raised by counsel for the appellants and petitioners had been fully set out in Justice Subba Rao’s judgment, and therefore it was unnecessary to repeat them. While refraining from endorsing every argument expressed by his learned brother, Chief Justice Das agreed with the following principal conclusion: that the Uttar Pradesh Transport Service (Development) Act, 1955 (Act IX of 1955), hereinafter referred to as the U.P. Act, did not become wholly void upon the passage of the Motor Vehicles (Amendment) Act, 1956 (100 of 1956), hereinafter referred to as the Central Act, under Article 254(1) of the Constitution. Instead, the U.P. Act continued to exist as a valid and subsisting law supporting the scheme that had already been framed under it.

The Court held that, first, even if the Central Motor Vehicles (Amendment) Act, 1956 is interpreted, under Article 254(2), as having repealed the Uttar Pradesh Transport Service (Development) Act, 1955, such a repeal did not destroy or erase the scheme that had already been established under the Uttar Pradesh Act because the provisions of section 6 of the General Clauses Act preserved that scheme. Second, the Court found that the Uttar Pradesh Act did not violate the provisions of Article 31 of the Constitution as it existed before the Constitution (Fourth Amendment) Act, 1955, since the Uttar Pradesh Act, and especially section 11(5) of that Act, provided for the payment of adequate compensation. These two findings were considered sufficient to dispose of the arguments advanced by counsel Nambiyar and counsel Naunit Lal on behalf of their respective clients. Because the Court concluded that the Uttar Pradesh Act did not infringe the fundamental rights guaranteed by Article 31, it deemed it unnecessary to address two further questions: (a) whether the provisions of Part III of the Constitution, which enshrine fundamental rights, serve merely as checks or limitations on the legislative competence conferred on Parliament and the State Legislatures by Articles 245 and 246 read with the relevant entries in the Seventh Schedule, or whether they form an integral part of the very definition, prescription, and conferral of legislative competence; and (b) whether the doctrine of eclipse applies only to pre-Constitution laws or can also apply to any post-Constitution law that falls within Article 13(2). Although the learned brother chose to discuss these issues, the Court clarified that it does not accept the view that the doctrine of eclipse cannot apply to post-Constitution legislation. A post-Constitution law may infringe either a fundamental right that is granted solely to citizens or a fundamental right that is granted to any person, citizen or non-citizen. In the first situation, the law does not impede citizens from exercising that right and therefore has no operative effect on citizens, but it remains effective with respect to non-citizens. In such a case, the right casts a “shadow” over the law for citizens while the law remains on the statute book as a valid rule binding on non-citizens; if a constitutional amendment removes that shadow, the law instantly becomes applicable to citizens without needing to be reenacted. The decision in John M. Wilkerson v. Charles A. Rahrer (1) cited by the learned brother supports this proposition. Accordingly, the doctrine of eclipse, as explained by this Court in Bhikaji Narain Dhakras v. The State of Madhya Pradesh (2), also applies to a post-Constitution law of this kind. Whether a post-Constitution law of the other type—one that infringes a fundamental right guaranteed to all persons regardless of citizenship—should be regarded as a “still-born” law, having no operation at all and thus not subject to the doctrine of eclipse, remains a question for future discussion, but it is not necessary to consider it in the present case.

In this case the Court observed that a statute which, at the time it is enacted, cannot have any operative effect is to be regarded as a law that never came into existence; such a law is termed a still-born law and is therefore not subject to the doctrine of eclipse. The Court noted that whether this characterization is open to scholarly discussion may be debated, but given the findings arrived at in the present matter a further elaborate opinion was unnecessary, and it expressly reserved the right to deal with the issue if it later becomes necessary. The judgment then turned to the twenty-five appeals, which were filed by certificate under Articles 132 and 133 of the Constitution and were granted by the High Court of Judicature at Allahabad. These appeals raised the question of the validity of the scheme of nationalisation of the State Transport Service devised by the State Government and the consequent orders issued thereunder. The Court cited the authorities (1) (1891) 140 U.S. 545; 35 L. Ed. 572 and (2) [1955] 2 S.C.R. 589. The appeals originated from writ petitions filed in the Allahabad High Court by the appellants who challenged the constitutional validity of the Uttar Pradesh Transport Services (Development) Act, 1955, identified as Uttar Pradesh Act No. IX of 1955, together with the notifications issued under that Act. The High Court had consolidated all the appeals by order. The appellants had been engaged for many years as stage-carriage operators on various routes in Uttar Pradesh, operating under valid permits granted pursuant to the Motor Vehicles Act, 1939, and also ran buses owned by the Government. The Uttar Pradesh Legislature, after obtaining the President’s assent on 23 April 1955, enacted the Uttar Pradesh Act and duly published it on 24 April 1955. Under section 3 of the Act the Government issued a notification on 17 May 1955 directing that the specified routes, together with others, should be served exclusively by Government stage-carriages, thereby excluding private stage-carriages from those routes. Subsequently, on 12 November 1955 the State Government published a notification under section 4 of the Act outlining the scheme for the said routes among other matters. The appellants received notices under section 5 of the Act requiring them to lodge any objections to the scheme; after receiving the objections, they were informed that a Board would hear them on 2 January 1956. On that date the Board heard objections filed by operators other than those from the Agra region, while the inquiry concerning the Agra region was adjourned to 7 January 1956. The operators from the Agra region did not appear on the adjourned date. A notification issued under section 8 of the Act was published in the Uttar Pradesh Gazette on 23 June 1956, and on 25 June 1956 the Secretary to the Regional Transport Authority, Agra, sent an order that purported to …

The Transport Commissioner issued orders to the operators in the Agra region that prohibited them from running their stage carriages on the specified routes and informed them that their existing permits would be transferred to other routes. On 7 July 1956 a notice was dispatched inviting the filing of writ petitions in the Allahabad High Court to challenge the validity of the Uttar Pradesh Act and the notifications issued under it. The factual scenario in Civil Appeal No 429 of 1958 differs somewhat from the other appeals and can be summarised as follows: the appellant had applied for renewal of his permanent permit in 1953, but the application was rejected. The appellant appealed the rejection, and the State Transport Authority Tribunal allowed the appeal on 6 September 1956, directing that the permit be renewed for three years commencing 1 November 1953. Accordingly, the appellant’s permit was renewed effective from 1 November 1953 and remained valid until 31 October 1956. During the interval between the rejection of the renewal application and the Tribunal’s order, the scheme of nationalisation was initiated and ultimately approved. The appellant subsequently applied on 11 October 1956 for renewal of his permit, but the Road Transport Authority in Allahabad informed him that no further action could be taken on his application. The appellant contended, among other arguments, that the entire process had been conducted without his participation and therefore the nationalisation scheme should not bind him.

The appellants in thirteen separate appeals—namely Civil Appeals Nos 387 to 389, 391 to 394, 396 to 399, 401 and 429—were offered alternative routes. Although they tentatively accepted these offers, presumably because they considered them the lesser of two evils, they obtained an interim stay and continued to operate on their original routes. The appellants then filed applications seeking permission to raise new grounds in their appeals, grounds that had not been presented before the High Court. The new grounds were: (i) that the operation of the Motor Vehicles (Amendment) Act, No 100 of 1956, passed by Parliament and published in the Gazette of India Extraordinary on 31 December 1956, rendered the impugned Uttar Pradesh Act No IX of 1955 void; and (ii) that, pursuant to Article 254 of the Constitution of India, the same Uttar Pradesh Act, being repugnant and inconsistent with the Central Act No 100 of 1956, became void upon the latter’s commencement. The Allahabad High Court’s judgment, which forms the basis of these appeals, was delivered on 19 December 1956. Since the Amending Act of 1956 was not published until 31 December 1956, it is evident that the appellants could not have raised those new grounds before the High Court. Moreover, the asserted grounds raise a pure question of law that does not depend on further factual enquiry. In view of these circumstances, the Court considered the appropriate course of action.

The Court considered that the case was appropriate for allowing the appellants to raise fresh grounds, and accordingly it granted them permission to do so. Counsel for some of the appellants then presented three principal points. First, it was submitted that the Motor Vehicles (Amendment) Act, 100 of 1956, enacted by Parliament, was entirely repugnant to the provisions of the Uttar Pradesh Act and therefore the Uttar Pradesh Act became void under Article 254(1) of the Constitution. Consequently, there was no longer any valid law under which the Government could prohibit the appellants from exercising their constitutional right to carry on the business of motor transport. Second, counsel argued that the scheme framed under the Uttar Pradesh Act, being intended to operate in the future and on a day-to-day basis, fell within the meaning of section 68B of the Amending Act and therefore the provisions of the Amending Act should prevail over those of the scheme, rendering the scheme inoperative after the Amending Act came into force. Third, counsel contended that even if the Uttar Pradesh Act remained valid and continued to govern the scheme, it would violate Article 31 of the Constitution because, prior to the Constitution (Fourth Amendment) Act of 1955, the State had acquired the appellants’ interest in a commercial undertaking without providing the compensation mandated by that article. All other learned counsel, except for another counsel, adopted the same arguments. The other counsel, in addition to the first point, relied on the proviso to Article 254(2) rather than on Article 254(1). He claimed that, by reason of the Amending Act, the Uttar Pradesh Act was repealed in its entirety and, because of section 68B of the Amending Act, the operation of the General Clauses Act was excluded. He further argued that in Appeal No 429 of 1958, the scheme affecting the appellant’s route was defective because no notice had been given before its approval. Before addressing the arguments of counsel, the Court found it necessary to resolve the issue raised by the Advocate General, as that issue struck at the very heart of the matter; if decided in his favor, the remaining questions would become moot. The Advocate General’s question was whether an amendment to the Constitution that removes a constitutional limitation on a legislature’s power to make a particular law effectively validates an earlier law that was enacted while that limitation was in force. The present dispute illustrated the difficulty presented by that question, and the Uttar Pradesh Legislature’s actions were examined in that context.

The Uttar Pradesh Legislature enacted the Uttar Pradesh Act on 24 April 1955, authorising the State Government to formulate a scheme for the nationalisation of motor transport. After complying with the procedure prescribed in that Act, the State Government issued the scheme on 23 June 1956. The Constitution (Fourth Amendment) Act, 1955 received the President’s assent on 27 April 1955, and the State Government prepared the scheme under the Uttar Pradesh Act only after that amendment had been enacted. The Fourth Amendment altered clause (2) of Article 31 by inserting clause (2A). The amendment provides that, unless a law expressly transfers ownership or the right of possession of any property to the State or to a corporation owned or controlled by the State, the law shall not be construed as effecting compulsory acquisition or requisition of property within the meaning of clause (2) of Article 31. Consequently, where no such transfer of property occurs, the requirement in clause (2) that the law specify the amount of compensation or the principles and manner for determining and awarding compensation does not apply. If the amendment is applicable to the Uttar Pradesh Act, the absence of a transfer of property to the State means that no compensation issue arises. Conversely, if the unamended version of Article 31 governs the Uttar Pradesh Act, the question of compensation becomes a pivotal factor in determining the Act’s validity. The resolution of this dilemma depends on the legal effect of a constitutional limitation on legislative power when a law is made in contravention of that limitation.

The Advocate General distinguished between a law made beyond the powers conferred on a legislature by the relevant List in the Seventh Schedule and a law that violates the provisions of Part III of the Constitution. The former, according to the Advocate General, strikes at the core of the legislature’s authority, whereas the latter operates as a constitutional check on that authority; consequently, a law invalidated by the latter is unenforceable until the constitutional check is removed by amendment, at which point the law is revived and becomes operative from the date of the amendment. Counsel for the appellant advanced two propositions to support the contention that a law made in either circumstance is void ab initio. First, the supremacy of fundamental rights over all legislative powers in respect of every List in the Seventh Schedule is ensured by the dual process comprising the prohibition in Article 13(2) and the restrictions in Article 245, a protection that is stronger than the merely implied limitation arising from the division of powers under Article 246. Second, where any provision of an enactment passed by a legislature after 26 January 1950 is, wholly or partially, in conflict with the provisions of Part III, the statute, in whole or in part, is void ab initio.

The Court observed that where a provision of a statute is subject to the doctrine of severability and that provision conflicts with the guarantees contained in Part III of the Constitution, the entire statute, whether taken as a whole or in part, is void from the beginning. The issue had previously been examined by the Court, but before turning to the authorities that have addressed it, the Court found it useful to assess the principle directly on its foundational basis. Accordingly, the Court set out the relevant constitutional provisions.

Article 245 states that, subject to the Constitution, Parliament may enact laws for the whole or any part of India, and a State Legislature may enact laws for the whole or any part of the State. Article 246 delineates the distribution of legislative powers: clause (1) gives Parliament exclusive authority over matters listed in List I (the Union List); clause (2) provides that, notwithstanding clause (1), both Parliament and, subject to clause (1), a State Legislature may legislate on matters in List III (the Concurrent List); clause (3) reserves to a State Legislature exclusive power over matters in List II (the State List), subject to clauses (1) and (2); and clause (4) empowers Parliament to legislate for any part of India on matters not included in a State, even if such matters appear in the State List.

Article 13 imposes a limitation on legislative competence. Clause (1) declares that any law existing in India immediately before the Constitution’s commencement, to the extent that it is inconsistent with the provisions of Part III, shall be void. Clause (2) mandates that the State shall not make any law that takes away or abridges the rights guaranteed by Part III, and any law made in contravention of this clause shall be void to the extent of the contravention.

Article 31, as it stood before the Constitution (Fourth Amendment) Act, 1955, protected property rights. Clause (1) provided that no person could be deprived of property except by authority of law. Clause (2) required that no movable or immovable property, nor any interest therein or in a company owning a commercial or industrial undertaking, could be taken possession of or acquired for public purposes under any law unless that law provided compensation, either fixing the amount of compensation or specifying the principles and manner by which compensation would be determined and paid.

The Court concluded that the combined effect of these provisions is to establish that both Parliament and State Legislatures possess the authority to legislate on matters enumerated in the Seventh Schedule, but that this legislative power is expressly conditioned by the Constitution, particularly by the prohibitions and guarantees contained in Part III. Consequently, any law that infringes the rights protected by Part III, whether wholly or partially, must be considered invalid from its inception.

In the case before the Court, it was observed that the authority of a Legislature to enact statutes was listed in the Seventh Schedule, but that authority was expressly conditioned by the Constitution, including Article 13. Consequently, the power to legislate was subject to the limitations imposed by Part III of the Constitution, and the general legislative power was accordingly narrowed. The Court therefore held that a Legislature could not enact any law that contravened the injunction contained in Article 13. Article 13(1) dealt with laws that were already in force in the territory of India before the Constitution came into effect; it declared that such pre-Constitution statutes would become void only to the extent of their incompatibility with the provisions of Part III. This clause therefore recognized the continued validity of pre-Constitution laws, subject to their being consistent with Part III. In contrast, clause (2) of the same article imposed a prohibition on the State from making any law that would take away or abridge the rights guaranteed by Part III, and it provided that any law made in violation of this prohibition would be void to the extent of the contravention. The Court emphasized the clear distinction between the two clauses: while clause (1) allowed a pre-Constitution law to survive unless it conflicted with Part III, clause (2) barred the enactment of any post-Constitution law that conflicted with Part III, rendering such a law a nullity from its inception. When this distinction was kept in mind, the Court found that much of the confusion raised by the parties was removed. The Court further noted that the language of clause (2) was plain and unambiguous in stating that no State could make any law that would diminish the rights conferred by Part III. The State could not argue that the clause merely limited, rather than prohibited, legislative power, nor could it rely on analogies from other constitutions to dilute the effect of the provision. The Court rejected the contention that the phrase “any law” in the second sentence of Article 13(2) allowed a law made in violation of the prohibition to survive, arguing that a law could exist only if properly enacted, and that a law made contrary to the constitutional ban was, by definition, a still-born law. The Court concluded that a plain reading of the provision left no doubt that the prohibition struck at the very core of the State’s legislative authority, and that any statute enacted in defiance of that prohibition was void from the moment of its creation.

In the eighth edition of “Constitutional Limitations”, Volume I, the author explained on page 379 that the determination of whether a statute is constitutional is fundamentally a question of power. The author said that the court must examine whether, in the particular case, the legislature respected the constitutional limits with respect to the subject-matter of the act, the manner in which the intended objective was to be achieved, and the procedure by which the law was enacted. The Judicial Committee, referring to the case of The Queen v. Burah, noted on page 193 (citing the 1878 report L.R. 5 I.A. 178) that when a dispute arises about whether the prescribed limits have been exceeded, the established courts of justice are obligated to decide that issue. The Committee explained that the proper method for such a determination is to look at the instrument that created the legislative powers positively and that simultaneously restricts those powers negatively. The same Judicial Committee, later in Attorney-General for Ontario v. Attorney-General for Canada, stated at page 583 that when the statutory text is explicit, the text is conclusive both in what it commands and in what it forbids. Justice Mukherjea expressed the identical principle in K. C. Gajapati Narayan Deo v. The State of Orissa, page 11, observing that if a state constitution allocates legislative authority among various bodies, each body must operate within the spheres defined by specific legislative entries, and if the constitution imposes limitations in the form of fundamental rights, questions inevitably arise as to whether the legislature, in a given instance, has transgressed those limits either concerning the subject-matter of the statute or the method of its enactment. The judge clearly accepted that violating either the scope of a legislative entry or the limitation imposed by fundamental rights constitutes a breach of the State’s constitutional powers. Consequently, the judgment emphasized that, when construing constitutional provisions relating to legislative authority, no distinction can be drawn between an affirmative grant of power and a negative restriction, because both function as limits on legislative power. The constitution therefore both positively empowers the legislature to enact laws within the permissible entries and negatively bars it from passing laws that infringe fundamental rights. The cited authorities—(1) A.C. 571 (1912) and (2) [1954] S.C.R. 1—further assert that legislative authority is subject to the prohibition contained in Article 13(2). As a result, the legislature’s apparent wide-ranging power is curtailed to the extent of that prohibition. If Articles 245 and 13(2) together delineate the scope of legislative power, the question then arises as to the legal consequence of a law that exceeds that scope, a point on which American jurisprudence offers guidance.

In this passage the Court referred to the view expressed by Cooley in his work “Constitutional Limitations”, eighth edition, volume I, page 382, under the heading “Consequences if a statute is void”. Cooley is quoted as stating that when a court adjudges a statute to be unconstitutional, the effect is that the statute is treated as if it had never existed. He further observes that the same principle applies to any portion of a statute that is found to be unconstitutional; such a part is likewise regarded as having never possessed any legal force at any time.

The Court also cited several other American authorities that arrive at the same conclusion. In the treatise “Rottschaefer on Constitutional Law”, page 34, the author explains that the legal status of a legislative provision that violates the Constitution must be determined by the doctrine that courts ignore it as law in cases where its application would produce unconstitutional results. This doctrine implies that the provision never had legal force as applied to the relevant cases. “Willis on Constitutional Law”, page 89, is quoted to say that a judicial declaration of unconstitutionality does not annul or repeal the statute; rather, it causes the courts to disregard the statute for the purpose of determining the rights of private parties, rendering its effect as nothing, as if it had never been passed. “Willoughby on the Constitution of the United States”, second edition, volume I, page 10, similarly observes that the Court does not annul or repeal a statute that conflicts with the Constitution but simply refuses to recognize it, deciding the parties’ rights as though the statute had no application.

The passage continues by explaining that the validity of a statute must be tested against the constitutional power of the legislature at the time the statute was enacted. If, at that time, the legislature lacked the necessary power, the statute remains invalid even if a later constitutional amendment later confers the needed power. The Court stressed that an after-acquired power cannot, by its own force, validate a statute that was void when originally enacted. However, the Court noted an exception: when an act falls within the general legislative competence of the enacting body but is rendered unconstitutional because of an external circumstance—such as a federal statute pre-empting the state’s regulation, or a legislative silence indicating that regulation is prohibited—the act does not need to be re-enacted if the cause of its unconstitutionality is removed. For the first proposition the Court referred to the decision in Newberry v. United States (1), and for the second proposition it cited John M. Wilkerson v. Charles A. Rahrer (2).

In the case known as Newberry, the Court examined whether the Federal Corrupt Practices Act of 1910, as amended in 1911 to limit the amount a candidate could spend to obtain a nomination at a primary election or convention, was valid. When the statute was originally enacted, Congress did not possess the constitutional authority to pass such a law, but the adoption of the Seventeenth Amendment later granted Congress that power. The central issue therefore was whether a power acquired after the fact could cure a statute that was void at the time of its enactment. Justice McReynolds, delivering the opinion of the Court, explained that the criminal statute relied upon in the case predates the Seventeenth Amendment and must be evaluated according to the powers that existed when it was enacted. He quoted the principle that an after-acquired power cannot, ex proprio vigore, validate a statute that was void when it was passed, citing the decisions reported at (1) (1921) 256 U.S. 232; 65 L.Ed. 913 and (2) (1891) 140 U.S. 545; 35 L.Ed. 572. In the earlier Wilkerson case, the factual background was as follows: in June 1890 the petitioner, a United States citizen and an agent of Maynard, Hopkins & Co., received intoxicating liquor in sealed packages from his principal. Those packages had been shipped from the State of Missouri to various destinations in the State of Kansas and to other states. On August 9, 1890 the petitioner offered for sale, and sold, two of those packages while he was in Kansas. The liquor sold was exactly the same liquor that had been received in the original packages, and the sale was made in the same containers in which the liquor was delivered. The petitioner was subsequently prosecuted for violating the Kansas Prohibitory Liquor Law, which provides that any person who manufactures, sells, or barters intoxicating liquors is guilty of a misdemeanor. Importantly, on August 8, 1890, one day before the sales, Congress enacted a statute declaring that intoxicating liquors transported into any state must, upon arrival, be subject to the operation and effect of the laws of that state. From these facts it follows that, at the time Kansas enacted its liquor statutes, the statutes were valid but they could not reach liquor that entered Kansas as part of interstate commerce, because regulation of such commerce was within the exclusive power of Congress. After Congress passed its 1890 act, the Kansas statutes became applicable to the imported liquor from that date forward. The United States Supreme Court therefore held that it was unnecessary, after the passage of the federal act of August 8, 1890, to reenact the Kansas law of 1899 forbidding the sale of intoxicating liquors in order to make that state law operative with respect to the sale of imported liquor.

The judgment referred to a citation that could be found on page 578, namely the case reported at (1891) 140 U.S. 545; 35 L. Ed. 572. The Court explained that the situation under consideration was not an example of a statute enacted by a State while exercising a power that was exclusively reserved to the Parliament. Rather, it involved a statute that the State was fully competent to enact, but which could not affect certain articles until a federal statute was passed. The federal statute, once enacted, removed the obstacle that had prevented the State law from applying to the imported articles, and the Court saw no sufficient reason to require the State to reenact its law before it could exert the same effect on imported goods that it had always possessed with respect to domestic property.

By referring to the decisions previously mentioned, the Court highlighted in clear terms the distinction between two different categories of cases. From an examination of the two cited decisions it emerged that, in the first category, the statute was void from the beginning because the State lacked the power to legislate on the matter. In the second category, however, the statute was valid at the time it was made, but it could not operate upon certain articles that were imported as part of inter-State trade. The principle derived from this distinction is that a power acquired after the fact cannot, of its own force, validate a statute in one situation, whereas a law that was validly made will take effect once the impediment is removed. The same principle was articulated in the case of Carter v. Egg and Egg Pulp Marketing Board, reported at (1942) 66 C.L.R. 557.

The Court then turned to section 109 of the Australian Constitution, which provides that when a State law is inconsistent with a Commonwealth law, the latter shall prevail and the former shall, to the extent of the inconsistency, be invalid. Commenting on this provision, Chief Justice Latham, in his observation on page 573, explained that the section applies only where, apart from the operation of the section itself, both the Commonwealth and the State laws in question would otherwise be valid. If either law is invalid from the outset because of a lack of legislative competence, the question of inconsistency does not arise. Moreover, the term “invalid” in the section should not be understood to mean that a State law affected by the section becomes ultra vires in its entirety or in part; if the Commonwealth law were later repealed, the State law would become operative again.

Proceeding to examine the decisions of this Court, the judgment sought to determine whether the aforementioned principles had been accepted or departed from. The earliest authority examined was Keshavan Madhava Menon v. The State of Bombay. In that case, the issue was whether a prosecution instituted under the Indian Press (Emergency Powers) Act, 1931, before the adoption of the Constitution, could continue after the Constitution came into force. The contention raised was that the statute was inconsistent with the fundamental rights guaranteed by the Constitution and therefore should be void. To resolve this, the Court was required to consider the effect of Article 13(1) of the Constitution on statutes that had been enacted prior to its commencement. By a majority, the Court held that Article 13(1) did not render pre-existing laws that were inconsistent with fundamental rights void ab initio, but rather affected their operation only to the extent that they conflicted with the guaranteed rights.

In this passage the Court explained that Article 13 (1) of the Constitution does not declare pre-Constitution statutes void from their inception. Instead, the provision merely renders such statutes ineffective and null with respect to the exercise of the fundamental rights after the Constitution came into force, and it does not operate retrospectively. Justice Das, who was then serving as a judge, observed at page 233 that the clause merely provides that all existing laws which are inconsistent with the provisions of Part III shall, to the extent of that inconsistency, be void. He added that every statute is presumed to be prospective unless it is expressly or necessarily made retrospective. At page 234 the judge further explained that the laws are not void for all purposes; they become void only to the extent that they clash with the fundamental rights. In other words, after the Constitution commenced, no existing law may be allowed to obstruct the exercise of any fundamental right, and the voidness of the law is confined to the future exercise of those rights. The judge stressed that such statutes continue to govern past transactions and to enforce rights and liabilities that accrued before the Constitution’s commencement. At page 235 the same principle was restated in different words, indicating that Article 13 (1) has the effect of nullifying or rendering all inconsistent existing laws ineffective and devoid of any legal force only with respect to the exercise of fundamental rights after the Constitution began. At page 236 the judge concluded that, with respect to past acts, the law remains effective, even though it ceases to exist for the future exercise of fundamental rights. Justice Mahajan, delivering a separate judgment, expressed the same view at page 251, describing the effect of Article 13 (1) as solely prospective, operating only against freedoms infringed after the Constitution’s commencement, while past acts that fell within the mischief of the law then in force are not affected by Part III. When counsel cited American jurisprudence to argue that pre-Constitution statutes were void, the learned judge responded at page 256 by noting that a statute repugnant to the Constitution is void from its birth, and any act done under it is likewise void and illegal. He observed that American courts have followed this logical rule, setting aside convictions under unconstitutional statutes by appropriate writs, and that anything done under a void statute—whether completed, incomplete, or merely commenced—would be illegal.

In discussing the consequences of an unconstitutional statute, the Court observed that any act carried out under such a statute would be entirely illegal and that the affected person must receive some form of relief. However, the Court stressed that this principle does not apply to statutes that were already in force and were deemed constitutional under the Government of India Act, 1935. The Court then explained that any law enacted after 25 January 1950 which conflicts with the Constitution must be dealt with in the same manner as in the United States; that is, Indian courts must set aside convictions obtained under such a law by invoking the powers conferred on this Court by the Constitution.

Mukherjea J., speaking in the earlier decision of Behram Khurshed Pesikaka v. The State of Bombay, articulated a similar view. He remarked that it is mistaken to think that the constitutional provisions contained in Part III of the Constitution merely serve as a limitation on legislative action. He stated that when a written fundamental law limits the law-making authority of a State, any statute that is inconsistent with that fundamental law exceeds the legislature’s competence and is therefore a nullity. He further observed that the two statements of unconstitutionality – one based on excess of power and the other on inconsistency with the fundamental law – are essentially the same, representing two aspects of a lack of legislative authority. He noted that the legislative powers granted to Parliament and to the State Legislatures by articles 245 and 246 are themselves curtailed by the chapter on fundamental rights. A reference to article 13(2) together with articles 245 and 246 is sufficient to show that neither Parliament nor a State Legislature may enact a law that clashes with Part III after the Constitution has come into force. The Court then summarized the effect of that earlier decision. It pointed out that the judges had not finally resolved the impact of article 13(2) on statutes enacted after the Constitution because the law under challenge was a pre-Constitution law. Article 13(1) was held to operate prospectively, so it did not disturb pre-existing statutes for acts performed before the Constitution’s commencement. For the period after the Constitution’s commencement, article 13(1) rendered any existing law that conflicted with fundamental rights ineffective, void, or without legal force. The Court explained that past acts continued to be valid even though the statutes could not be used to justify future exercises of the rights. Regarding pre-Constitution statutes, the decision contained the early expression of the doctrine of eclipse, later developed by the Chief Justice in Bhikaji Narain Dhakras v. The State of Madhya Pradesh, wherein it was held that a pre-Constitution law that was validly enacted continues to exist for certain purposes.

Even after the Constitution came into force, the same principle continued to apply. However, that principle could not be used to save any law that was enacted after the Constitution and that infringed the fundamental rights, because such a law would be void from its inception, either in its entirety or to the extent that it conflicted with the guaranteed rights. The observations recorded by the judges in the earlier decision highlighted the clear distinction between statutes that existed before the Constitution and statutes that were made after the Constitution, when both categories of statutes were inconsistent with the Constitution, and they explained how Article 13 operated on each category. In the case of Behram Khurshed Pesikaka (2), this Court examined the legal consequence of a declaration that had been made in the earlier decision of State of Bombay v. F.N. Balsara (3). The Court concluded that clause (b) of section 13 of the Bombay Prohibition Act (Bombay XXV of 1949) was void under Article 13(1) of the Constitution insofar as that clause regulated the consumption or use of liquid medicinal or toilet preparations containing alcohol. Consequently, the Court held that the portion of section 13(b) of the Bombay Prohibition Act was rendered inoperative, ineffective, and therefore unenforceable. Justice Bhagwati, referring to page 620 of the report, quoted extensively from standard textbooks on constitutional law and appeared to accept the proposition that an Act which is found to be unconstitutional is, for all legal purposes, treated as if it had never been enacted. Justice Jagannadhadas, on page 629, observed the difference between the two limbs of Article 13, namely clauses (1) and (2). After quoting a passage from the commentary “Willoughby on the Constitution of the United States,” the judge explained: “These and similar extracts from other treatises relate, however, to situations where the whole legislation is unconstitutional from the very moment of its enactment, a circumstance that falls within the ambit of Article 13(2) of our Constitution. They do not directly address a scenario that falls within Article 13(1).” The Court then posed the question of what effect Article 13(1) has on a pre-existing statute that is otherwise valid but contains a severable provision that violates fundamental rights. According to Article 13(1), that severable provision becomes void from the commencement date of the Constitution, while the remaining provisions of the statute continue to be valid. Two possible consequences of such voidness were identified: first, the offending severable part may become unenforceable yet remain formally part of the Act; second, the offending part may be removed from the Act, leaving the statute amended pro tanto and otherwise operative. The first consequence seemed to be the view adopted by Justice Venkatarama Aiyar, who relied on certain American decisions, and I expressed a tentative inclination to agree with that view. Nonetheless, this point was not fully developed by either party and emerged only as a suggestion from the bench during argument. The Court noted that it had not received the complete material that the counsel for both sides could have presented. The second consequence—complete removal of the offending provision—formed the basis of the arguments presented by the opposing counsel.

In the preceding discussion the Court indicated that it was necessary and desirable to decide the case on the assumption that the severable portion of the legislation, although still part of the Act, became unenforceable. This statement reveals that the Judge’s tentative opinion was that the severable part would remain within the statute but could not be enforced. The Judge also observed incidentally that the American position applied only to situations covered by Article 13(2) of the Constitution, where the entire enactment would be unconstitutional from the moment of its commencement. Justice Venkatarama Aiyar therefore based his reasoning on a broader foundation. At page 639 of the judgment he remarked: “Another point of distinction noticed by American jurists between unconstitutionality arising by reason of lack of legislative competence and that arising by reason of a check imposed on a competent Legislature may also be mentioned. While a statute passed by a Legislature which had no competence cannot acquire validity when the Legislature subsequently acquires competence, a statute which was within the competence of the Legislature at the time of its enactment but which infringes a constitutional prohibition could ‘be enforced’ proprio vigore when once the prohibition is removed.” Relying on this distinction, the Judge concluded that Article 13(1) functions only as a check on a legislature that possessed competence, and therefore the term “void” in that provision should be understood as “relatively void”, meaning that the law is declared invalid as against the individual but not removed from the statute book. To support this interpretation, he cited a passage from Willoughby on the Constitution of the United States. A comparison of the cited passage with the textbook version shows that an essential sentence had been omitted: “An after-acquired power cannot ex proprio vigore validate a statute void when enacted.” The remaining paragraph and the case law on which the Judge relied did not substantiate his conclusion, because the cited decision concerned a situation where a State law remained dormant until a federal statute eliminated the conflict, not a circumstance where the State lacked authority to enact the law at all. By analogy that decision may illuminate Article 13(1) concerning laws validly enacted before the Constitution, but it cannot be applied to a statute that was void at the time of its enactment. Subsequently, this Court ordered a review and reopened the matter so that a larger Bench could examine the constitutional issues raised by the earlier judgments. The matter was then placed before a Constitutional Bench, where Chief Justice Mahajan, who had participated in the decision in Keshavan Madhava Menon’s case, explained the majority view on the meaning of the word “void”.

The Court examined the meaning of the word “void” in article 13(1) as discussed on page 651 of the judgment. It observed that the majority opinion held that, with respect to laws that already existed when the Constitution came into force, the term “void” could not be interpreted to erase those laws from the statute book or to render them completely void. The majority reasoned that article 13 had not been given any retrospective effect. However, the majority also concluded that after the Constitution became operative, article 13(1) acted on laws that were repugnant to the Constitution by nullifying them, rendering them ineffective, nugatory and devoid of any legal force or binding effect. The Court further noted that, in one of the judgments representing the majority view, it was pointed out that the American rule—under which a statute that conflicts with the Constitution is void from its inception—does not apply to situations involving obligations incurred or rights accrued under an existing law that was constitutional when it was enacted. The Court clarified that if a law was enacted after 26 January 1950 and is repugnant to the Constitution, the American rule would apply in India. Consequently, the pronouncement meant that the portion of an existing law that is unconstitutional is not law; it is null and void. For the purpose of determining citizens’ rights and obligations, the part declared void should be treated as if it has been removed from the statute for all practical purposes, even though it may remain written in the statute book and may be considered a good law when questions arise concerning rights and obligations that arose before 26 January 1950 or concerning persons who were not granted fundamental rights by the Constitution. The Court therefore rejected the introduction of the term “relatively void,” a expression coined by American judges, as it is unsuitable for interpreting a Constitution drafted in different language and with different implications.

The learned Judge, as previously indicated, dismissed the distinction made by Venkatarama Aiyar, J., between a lack of legislative power and the abridgement of fundamental rights. Although that specific issue did not arise directly, the learned Judge expressed his view on the scope of article 13(2) on page 653. He explained that the authority conferred by articles 245 and 246 to make laws on subject matters in the various legislatures is qualified by the declaration made in article 13(2). Accordingly, the power to legislate can be exercised only subject to the prohibition contained in article 13(2). The Court observed that there was no disagreement between the majority and the minority in Keshava Madhava Menon v. The State of Bombay regarding the construction of article 13(2). The divergence of opinion existed solely on the construction of article 13(1), where some held that the article could not retrospectively invalidate laws that were constitutional at the time of their enactment.

Das, J., who sat as a judge at the time, wrote a dissenting judgment that differed from the majority on several issues, but he did not appear to depart from the observations earlier expressed by Mahajan, C. J., concerning the scope of the Keshava Madhava Menon case and the interpretation of the term “void” in Article 13(1) of the Constitution. Consequently, that judgment serves as authority on two propositions and offers a significant comment on a third proposition. First, when a State’s legislative power is limited by a written fundamental law, any statute that conflicts with that fundamental law exceeds the State’s authority and is consequently a nullity. Second, even if a statute falls within the ambit of Article 13(1) and remains formally on the statute book, when a dispute arises involving rights and obligations that originated before 26 January 1950, the portion of the statute declared void must be treated as completely removed from the provision for all practical purposes. Third, with respect to the construction of Article 13(2), any law enacted in violation of that clause is a nullity from the moment of its inception. The next case directly addresses the same point and is Sagir Ahmad v. State of U.P. In that matter, the Uttar Pradesh Road Transport Act (11 of 1951) was enacted to permit the State to operate stage-carriage services on designated routes to the exclusion of others. Under the Act, the State Government issued a declaration extending the Act to a specific area and published a notification describing the scheme for operating stage-carriage services on certain routes. At the time the Act was passed, the State did not possess the power to deprive a citizen of his right to conduct his own transport service, as noted in [1955] 1 S.C.R. 707. Subsequently, Article 19(1) was amended by the Constitution (First Amendment) Act 1951, which enabled the State to carry on any trade or business, either directly or through corporations owned or controlled by the State, to the exclusion of private citizens wholly or in part. One of the questions presented was whether the constitutional amendment could be invoked to validate the earlier legislation. The Court held that the Act, being unconstitutional at the time of its enactment, was “still-born” and could not be revived or “vitalised” by the later amendment that removed the constitutional objection; instead, the Act would have to be re-enacted. At page 728, Mukherjea, J., then delivering the judgment of the Court, explained the reasoning, citing Professor Cooley’s treatise on Constitutional Limitations (Vol. 1, p. 304) that a statute void for unconstitutionality is dead and cannot be revived by a subsequent constitutional amendment but must be re-enacted. The Court affirmed that this principle constitutes sound law and formed the basis of its conclusion.

The Court observed that the legislation under challenge infringed the appellants’ fundamental right guaranteed by article 19(1)(g) of the Constitution and that, at the time of its enactment, the legislation was not shown to be protected by clause (6) of the same article; consequently, the law must be declared void under article 13(2) of the Constitution. This pronouncement constitutes a direct authority on the issue, expressed without any dissent, and therefore the Court is bound by it. The learned Advocate General relied heavily on the decision rendered in Bhikaji Narain’s Case, which the Court identified as a controlling precedent. The factual background of that case, as briefly set out, involved the C. P. & Berar Motor Vehicles (Amendment) Act, 1947 (C. P. III of 1948) amending the Motor Vehicles Act, 1939 (Central Act IV of 1939). The amendment conferred expansive powers on the Provincial Government, enabling it to establish a monopoly over motor transport to the exclusion of all other operators. The affected parties contended that, on account of article 13(1) of the Constitution, the Act had become void. The State, however, argued that the Constitution (First Amendment) Act, 1951, together with the Constitution (Fourth Amendment) Act, 1955, removed the inconsistency, thereby reviving the 1948 amendment. The Court unanimously accepted the State’s submission. It was noted, however, that the Bhikaji Narain decision concerned the construction of article 13(1) and did not address the construction or scope of article 13(2). The reasoning for that decision was extracted from page 598 of the judgment, which explained that after the Constitution commenced, any existing law that became inconsistent with article 19(1)(g) read with clause (6), as it then stood, could not be allowed to obstruct the exercise of that fundamental right. Article 13(1) could not be interpreted as entirely erasing the operation of the inconsistent law from the statute book. Rather, article 13(1) rendered such a law ineffective, nugatory and devoid of legal force solely with respect to the exercise of the fundamental right from the date of the Constitution’s commencement. Accordingly, between 26 January 1950 and 18 June 1951, the impugned Act could not impede the citizen’s right under article 19(1)(g). The Court described the effect as the law being “eclipsed” temporarily by the fundamental right. It further observed that American authorities addressed only post-Constitution statutes that were inconsistent with constitutional provisions.

The Court observed that certain statutes had never actually become operative; they were, in effect, still-born. Nevertheless, those statutes were not entirely dead. They continued to have legal effect for matters that arose before the Constitution was adopted, such as pre-Constitutional rights and liabilities. Even after the Constitution came into force, the provisions remained applicable in relation to non-citizens, while they were in a dormant or moribund state when applied to citizens. The passage restates the principle earlier articulated in Keshavan Madhava Menon’s case (1) and reaffirmed in Pesikaka’s case (2), and it extends that principle to a different factual scenario. As Justice Das had expressed, a pre-Constitutional law persists despite not being available for the future exercise of fundamental rights. This decision applied the doctrine of eclipse to that principle, holding that because the law existed on the statute book to support actions taken before the Constitution, it was temporarily eclipsed by one of the fundamental rights. When the constitutional amendment removed the “shadow” of that right, the impugned Act was restored to a state free of any defect or infirmity.

The Court further held that the Legislature possessed the authority to enact the law in question at the time Pesikaka’s case (2) was decided; there was no deficiency of legislative power when the Act was passed, only a situation where later circumstances cast a cloud over a valid law. The observations of American authorities, as well as the opinions of Mahajan J. in Pesikaka’s case and Mukherjea J. in Saghir Ahmad’s case (3), were applicable to the class of matters governed by Article 13(2). In the facts of Bhikaji Narain’s case (4), the principle laid down in Keshavan Madhava Menon’s case again applied. The learned judges’ remarks were considered sufficiently broad to encompass cases falling under Article 13(2) of the Constitution, and a logical extension of the principle would also cover such cases. The Court noted, however, that apart from the distinction between pre-Constitutional and post-Constitutional statutes, it need not rest its decision on that point, and that the cited American authorities could not be applied to our Constitution. All laws, whether existing or future, that are inconsistent with the provisions of Part III of the Constitution are, by the express terms of Article 13, void to the extent of such inconsistency. Nonetheless, those laws were not dead for all purposes; they remained operative for pre-Constitutional rights and liabilities and continued to apply to non-citizens, while being dormant with respect to citizens.

In this passage the Court considered the earlier observation that described the statutes as being in a “moribund condition.” The first portion of that observation, the Court noted, merely restates the plain meaning of articles 13 (1) and (2) of the Constitution, namely that such provisions render a law void only to the extent of its inconsistency with the Constitution. The second portion of the observation, the Court explained, applies directly only to a situation covered by article 13 (1). In that part the learned judges had held that the statutes continued to exist for the purpose of pre-Constitution rights and liabilities and that they remained operative even after the Constitution came into force as to non-citizens. The Court observed that this statement could not logically be extended to post-Constitution legislation. Nevertheless, the argument was advanced that, by a parity of reasoning, post-Constitution statutes should also be deemed void to the extent of their repugnancy; consequently, the law concerning non-citizens would remain on the statute book and, applying the doctrine of eclipse, the same result would follow in its case as well. The Court found some plausibility in that line of reasoning but pointed out that it ignored a crucial principle – namely, that the existence or non-existence of legislative competence at the time a law is made governs its status. The Court stressed that there is no scope to apply the doctrine of eclipse where a law is void ab initio, either wholly or partially. Moreover, in the present matter the Court did not base its decision on that principle; instead, it held that article 31 (1), which the Act violated, applies to every person irrespective of citizenship, and therefore the entire statute was void from the outset. Consequently, the earlier judgment did not support the respondent because it dealt only with the construction of article 13 (1). The Court then referred to Ram Chandra Palai v. State of Orissa, where it followed the decision in Bhikaji Narain’s case concerning a pre-Constitution Act, and to Pannalal, where Justice Bhagwati, quoting Keshavan Madhava Menon’s case, affirmed that article 13 (1) nullifies only those existing laws that are inconsistent with fundamental rights after the Constitution’s commencement. The Advocate General relied on several decisions to argue that the word “void” in articles 13 (1) and 13 (2) means merely “unenforceable” against persons asserting fundamental rights, and that the law continues to exist in the statute book despite infringing those rights. He also cited observations of Mukherjea, J., in Chiranjit Lal Chowdhuri v. Union of India, stating that article 32 is concerned with enforcing fundamental rights rather than directly determining the constitutional validity of a particular enactment, and he referred to the judgment of Das, J., in State of Madras v. Srimathi Champakam Dorairajan, which held that directive principles, though unenforceable under article 37, cannot override the enforceable provisions of Part III secured by article 32. Using these observations, the Advocate General contended that infringements of either directive principles or fundamental rights should not render the law invalid.

In support of his submission, the Advocate General observed that the enforcement sought under article 32 arises from an act of the executive or the legislature, and that the rights capable of being enforced under article 32 must ordinarily be the rights of the petitioner himself who alleges an infringement of such rights and approaches the court for relief. He further relied upon the decision of Das, J., as he then was, in State of Madras v. Srimathi Champakam Dorairajan, where the learned judge, at page 531, stated that “the directive principles of State policy, which by article 37 are expressly made unenforceable by a Court, cannot override the provisions found in Part III which, notwithstanding other provisions, are expressly made enforceable by appropriate writs, orders or directions under article 32.” Basing his argument on these two observations and on the authorities cited as (1) [1957] S.C.R. 233, (2) [1951] S.C.R. 228, (3) [1950] S.C.R. 869, 899 and (4) [1951] S.C.R. 525, he contended that, regarding both the directive principles and the fundamental rights, the infringement of either does not invalidate the law but merely renders the law unenforceable. The Court indicated that this argument conflates the constitutional invalidity of a statute with the procedural mechanism for enforcing an individual’s fundamental rights. The constitutional validity of a statute depends upon the existence of legislative power in the State, whereas a person’s right to approach the Supreme Court depends upon his possession of a fundamental right; consequently, a person cannot seek enforcement of a right unless that right is infringed by a law. The cases previously considered established that any law, whether enacted before or after the Constitution, becomes void and nugatory to the extent that it infringes fundamental rights. The Court found no relevance in the reference to the directive principles, observing that the legislative power of a State is only guided by the directive principles of State policy, and that the principles, even if disobeyed, cannot affect the State’s legislative power because they are merely directory in scope and operation. From this discussion the Court summarized several propositions: (i) whether the Constitution positively confers power on the legislature to make laws on particular subjects or negatively prohibits it from infringing any fundamental right, both situations reflect limits on legislative power; (ii) the Constitution expressly subjects the legislature’s power to make laws within the entries of the Seventh Schedule to the other provisions of the Constitution, thereby circumscribing that power by the limitations laid down in Part III; (iii) consequently, a law made in excess of that power is void ab initio, either wholly or to the extent of the contravention; and (iv) the doctrine of eclipse can be invoked only in the case of

A law may be valid when it is enacted, but a later constitutional or statutory inconsistency can cast a shadow over it. If that shadow is later removed, the challenged Act is restored and becomes free of any blemish or infirmity. Applying these principles to the present matter, the Court held that the Act’s validity could not be assessed on the basis of the Constitution (Fourth Amendment) Act, 1955. Instead, the validity had to be examined according to the relevant constitutional articles as they stood before the amendment. The Court then turned to the first contention raised by counsel for the petitioner, Mr. Nambiar. Mr. Nambiar argued that the Motor Vehicles (Amendment) Act, 100 of 1956, enacted by Parliament, was wholly repugnant to the provisions of the Uttar Pradesh Act. He contended that because of this repugnancy, the Uttar Pradesh law became void under Article 254(1) of the Constitution. Consequently, he maintained that at present no valid law existed under which the State could prohibit the appellants from exercising their constitutional right to carry on motor transport business. Counsel for the respondent, Mr. Naunit Lal, based his argument on the proviso to Article 254(2) rather than on clause (1). He asserted that the Amending Act repealed the Uttar Pradesh Act in its entirety and that Section 68B excluded the saving provisions of the General Clauses Act. The learned Advocate General sought to counter both contentions by urging the Court to find that no repugnancy existed between the central legislation and the Uttar Pradesh Act. He further submitted that, consequently, the Uttar Pradesh Act had neither become void nor been repealed by necessary implication of the central Act. Accordingly, the Court proceeded to examine the text of Articles 254(1) and 254(2).

The Court then read the full text of Article 254(1), which states: (1) If any provisions of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. The Court then read the text of Article 254(2), which reads: (2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail, in that State. Provided that nothing in this clause shall prevent Parliament from enacting at any time. Having examined the language of both clauses, the Court proceeded to apply them to the facts of the present dispute.

Article 254(1) sets out the general rule that when a law made by a State legislature conflicts with a law made by Parliament on a matter enumerated in the Concurrent List, the Parliamentary law will prevail to the extent of the conflict and the State law will be void to that same extent. Clause (2) creates an exception to this rule, and the proviso qualifies that exception. Under the exception, if a State legislature passes a provision that is repugnant to a Parliamentary provision, that State provision will prevail only if the State legislation has obtained the President’s assent. Nevertheless, even after a State law has received presidential assent, Parliament retains the power to amend, vary, or repeal that State law. In the case before the Court, the Uttar Pradesh Legislative Assembly obtained the President’s assent on 23 April 1955 and enacted the Uttar Pradesh Act. Subsequently, Parliament enacted the Motor Vehicles (Amendment) Act, 100 of 1956. Consequently, both clauses of Article 254 are applicable to the factual situation. The initial issue for determination is whether the provisions of the Union law, namely the Motor Vehicles (Amendment) Act, are repugnant to the provisions of the Uttar Pradesh Act, and if so, the extent of such repugnancy.

Before analysing the two statutes, the Court found it useful to recall the principles governing the doctrine of repugnancy. Nicholas, in his work Australian Constitution (2nd ed.), page 303, identifies three tests for inconsistency or repugnancy: (1) a direct inconsistency in the terms of the competing statutes; (2) a situation where, although there is no direct clash, a State law becomes inoperative because the Commonwealth law or the award of the Commonwealth Court is intended to be a complete and exhaustive code; and (3) a conflict that arises even without any expressed intention when both the State and the Commonwealth attempt to exercise authority over the same subject matter. The Court, referring to Ch. Tika Ramji v. State of Uttar Pradesh, accepted these three criteria as useful guides for testing repugnancy. In Zaverbhai Amaidas v. State of Bombay, a similar test was articulated, and at page 807 the judgment observed: “The principle embodied in section 107(2) and Article 254(2) is that when there is legislation covering the same ground both by the centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State.” Accordingly, the Court outlined three principles for ascertaining repugnancy between two statutes: (1) whether there is a direct conflict between the two provisions; (2) whether Parliament intended to lay down an exhaustive code on the subject; and (3) whether the laws of Parliament and the State legislature occupy the same field.

The Court identified three questions for testing repugnancy: whether Parliament has enacted a comprehensive code on the subject that supersedes the State legislation; whether Parliament intended to replace the State Act on that subject; and whether the statutes of Parliament and the State occupy the same field. Accordingly, the Court proceeded to examine the provisions of the two Acts in detail to determine the degree of incompatibility between them. The scheme of the Uttar Pradesh Act, as cited in (1) [1956] S.C.R. 393 and (2) [1955] 1 S.C.R. 799, may be summarised as follows. Under the Uttar Pradesh Act, the term “State Road Transport Service” is defined to mean a transport service provided by a public service vehicle owned by the State Government. Section 3 provides that where the State Government is of the opinion that, in the interests of the general public and for the common good, or for maintaining and developing an efficient road-transport system, it may, by a notification in the Official Gazette, declare that road-transport services in general, or any particular class of such service on any route or portion thereof, shall be run and operated exclusively by the State Government; or by the State Government in conjunction with the railways; or be run and operated partly by the State Government and partly by others, all in accordance with the provisions of the Act. After the notification under section 3 is published, the State Government, or the Transport Commissioner if directed by the State Government, must publish a scheme for the State Road Transport Service in the manner prescribed. The scheme must address all matters enumerated in clause (2) of section 4. Clause (2) of section 4 directs that, among other things, the scheme shall specify the particulars of the routes or portions thereof over which the State Transport Service will commence operation, the date of commencement, the roads on which private persons may be permitted to operate, the routes that will be served by the State Government in conjunction with the railways, and any curtailment of routes covered by existing permits or the transfer of permits to other routes. Section 5 obliges the Transport Commissioner to give notice to each permit-holder requiring a written statement as to whether the permit holder agrees to the transfer of the permit. Clause (2) of section 5 provides that if the permit holder accepts the transfer, he is not entitled to any compensation; however, if he refuses the transfer, his permit will be cancelled, subject to his right to compensation under the Act. Section 6 allows any person whose interests are affected by the scheme to file objections within thirty days of the scheme’s publication. Such objections must be filed before the Transport Commissioner, who is required to forward them to the Board constituted under section 7. The Board consists of the Commissioner of a Division, the Secretary to the Government in the Transport Department, and the Transport Commissioner, and it is charged with considering the objections.

When any objections were forwarded under section 6, the Board consisting of three officers—appointed by the State Government—had the authority to either confirm, modify, or alter the scheme that had been proposed. Once the Board made its decision, the scheme, whether confirmed, modified, or altered under section 7, was required to be published in the Official Gazette. Any scheme that had subsequently been published under section 8 could, at any later time, be cancelled, modified, or altered by the State Government. Section 10 set out the legal consequences that followed the publication of a scheme under section 8. Section 11 dealt with the payment of compensation where permits were cancelled prematurely or where routes were curtailed; the amount of compensation was to be determined according to the principles laid down in Schedule 1. Schedule 1 specified that compensation would be payable as follows: for every complete month, or for a part of a month exceeding fifteen days, of the unexpired period of the permit, the amount would be one hundred rupees; for a part of a month not exceeding fifteen days of the unexpired period of the permit, the amount would be fifty rupees; and, notwithstanding these rates, the compensation could never be less than two hundred rupees. Section 12 empowered the State Government, in cases where a permit had been cancelled, to purchase the motor vehicle covered by that permit if the permit holder offered to sell, provided that the sale was on the terms and conditions laid down in Schedule 11, that the vehicle was of a type, make, and model notified by the State Government, and that the vehicle was mechanically sound or otherwise declared fit by the Transport Commissioner or his nominee. Sections 13 through 18 established a State Machinery for the development of the motor-transport industry, while sections 19 through 22 contained consequential provisions that gave effect to the earlier sections.

In summary, under the Uttar Pradesh Act the State Government could initiate a scheme for the nationalisation of road transport, either wholly or partially. Persons whose interests were affected by the scheme could file objections, which were heard by the Board of three officers appointed by the State Government. After considering those objections, the Board could confirm, modify, or alter the scheme, and the resulting scheme could later be cancelled, modified, or altered by the State Government following the same procedure that had been used to frame the original scheme. Permit holders whose permits were cancelled could be offered new permits if they chose to accept them; if they declined, they were entitled to compensation as prescribed by the Act. The Amendment Act 100 of 1956 inserted a new chapter into the Motor Vehicles Act 1939 and introduced a different procedural framework. Under section 68-A of that Act, the term “State Transport Undertaking” was defined to include any undertaking providing road-transport service that was carried on by (i) the Central Government or a State Government; (ii) any Road Transport Corporation established under section 3 of the Road Transport Corporation Act 1950; (iii) the Delhi Transport Authority established under section 3 of the Delhi Road Transport Authority Act 1950; or (iv) any municipality, corporation, or company owned or controlled by the State Government. Section 68-C then referred to the State Transport Undertaking, but the present excerpt ends at that point.

In this case, the Court explained that a State Transport Undertaking may initiate a scheme when it believes that, for the purpose of providing an efficient, adequate, economical and properly coordinated road-transport service, it is necessary in the public interest that road-transport services generally, or a particular class of such services on any area, route or portion thereof, should be operated by the State Transport Undertaking, either exclusively or partially, to the exclusion of other persons. Section 68D provides that any person who is affected by the scheme may file objections to the scheme before the State Government; after considering those objections and after affording an opportunity to the objectors or their representatives as well as to the representatives of the State Transport Undertaking to be heard, the State Government may either approve the scheme or modify it. The Court noted that a scheme that has been published may at any time be cancelled or modified by the State Transport Undertaking following the same procedure, and that, for the purpose of giving effect to the scheme, the Regional Transport Authority may, among other powers, cancel existing permits or modify the terms of existing permits. Section 68G sets out the principles and method for determining compensation, stating that compensation is payable at the rate of two hundred rupees for every completed month or for a part of a month exceeding fifteen days of the unexpired period of a permit, and at the rate of one hundred rupees for a part of a month not exceeding fifteen days of the unexpired period of the permit. The Court further observed that, under the Amending Act, the essential feature is that the scheme is initiated by a State Transport Undertaking that is carried on by any of the four institutions mentioned in section 68A, including the State Government; objections are filed by the parties affected by the scheme, and both the affected parties and the undertaking are heard by the State Government, which after hearing the objections may approve or modify the scheme. The Court pointed out that the legislation contains no provision for transferring permits to other routes or for the State Government to purchase the buses, and that the compensation payable under the Amending Act is twice the amount fixed under the Uttar Pradesh Act. An important observation made by the Court is that the Uttar Pradesh Act is prospective, meaning that it becomes effective only from the date of the passage of the Amending Act, and that its prescribed procedure applies only to schemes initiated under the provisions of the Uttar Pradesh Act. By comparing the relevant provisions of the Uttar Pradesh Act and the Amending Act, the Court concluded that both statutes are intended to operate on the same subject matter in the same field. The Court noted that the original Motor Vehicles Act of 1939 did not contain any provision for the nationalisation of transport services, but that the States introduced amendments to implement a scheme of nationalisation of road transport. Accordingly, the Court inferred that Parliament, with the aim of introducing a uniform law throughout the country and avoiding practical defects, enacted the Amending Act by inserting Chapter IV-A into the Motor Vehicles Act, 1939, and that this objective would be frustrated if the contrary approach were adopted.

In this case the Court observed that the suggestion that both the Uttar Pradesh Act and the Amending Act could continue to operate for schemes that were created after the Amending Act had become law was accepted. However, the Court noted a number of material distinctions between the two statutes. Under the Uttar Pradesh Act a scheme is started by the State Government, whereas under the Amending Act the scheme is proposed by the State Transport Undertaking. The Court explained that the fact that a particular undertaking may be managed by the State Government does not equate the undertaking with the State Government itself, because section 68A of the Amending Act provides that the undertaking may be carried out not only by the State Government but also by five other distinct institutions. Consequently, the Amending Act makes the undertaking a statutory authority that has the power to initiate a scheme and that must be heard by the State Government when objections are filed by persons affected by the scheme. By contrast, under the Uttar Pradesh Act a Board hears the objections, while under the Amending Act the State Government itself decides the disputes. The Court further pointed out that the substance of the scheme, the principles governing compensation and the mode of payment of that compensation differ in the two enactments. Because of these differences, the Amending Act occupies the same legislative field for any scheme that is initiated after the Amending Act came into force, and therefore, to that extent, the State legislation must give way to the Central legislation. The Court, however, made clear that this displacement does not apply to schemes that were framed under the Uttar Pradesh Act before the Amending Act became effective.

The Court then examined the argument advanced by Mr Nambiar that, since both statutes operate in the same field concerning the nationalisation of bus transport, the Uttar Pradesh Act should be rendered void under article 254(1) of the Constitution. The Court stressed that article 254(1) provides that a law made by Parliament prevails over a law made by a State legislature “to the extent of the repugnancy,” meaning that only the inconsistent portion of the State law is void, not the entire Act. The Court explained that the identity of the field may relate to the pith and substance of the subject-matter as well as to the period of its operation. Where both the subject-matter and the period coincide, the repugnancy is complete and the whole State enactment is invalid; where the Union law is intended to operate only prospectively, the State law continues to be effective for matters that were already completed. The Court observed that sections 68C, 68D and 68E, introduced by the Amending Act, are expressly concerned only with schemes that are initiated after the Amending Act became law, and none of those sections, either expressly or by necessary implication, requires that already finalised schemes be reopened or that fresh schemes be framed under the new procedure. Accordingly, the Court concluded that, under article 254(1), the Uttar Pradesh Act remains valid for supporting schemes that were framed under it, and it becomes void only to the extent that it conflicts with schemes created under the Central Amending Act.

The Court observed that the provisions of the Amending Act, whether expressed explicitly or inferred from necessary implication, required that any schemes already finalized under the Uttar Pradesh Act be reopened and that new schemes be prepared in accordance with the procedure laid down in the Amending Act. Consequently, the Court held that, pursuant to Article 254(1) of the Constitution, the Uttar Pradesh Act continues to operate to support the schemes that were framed under it, and it becomes ineffective only with respect to schemes that are framed under the Central legislation.

The Court then turned to a comparable issue concerning the operation of Article 13(1) where a law enacted before the Constitution conflicted with fundamental rights guaranteed by the Constitution. Referring to Keshavan Madhava Menon’s case, the Court recalled that the question before that earlier decision was whether the Indian Press (Emergency Powers) Act, 1931, was void for contravening Article 13(1). The Court had held that the 1931 Act remained valid and could be used to sustain a prosecution for conduct that occurred before the Constitution came into force. Citing the judgment of Justice Das, the Court quoted that “such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution,” and added that “as far as the past acts are concerned the law exists, notwithstanding that it does not exist with respect to the future exercise of fundamental rights.”

Having established this principle, the Court noted that Article 13(1), for the purpose of the present inquiry, is pari-materia with Article 254(1). While Article 13(1) declares all pre-Constitution statutes void to the extent of their inconsistency with Part III, Article 254(1) declares a State law void only to the extent of its repugnancy with a law made by Parliament. The Court reasoned that if a pre-Constitution law continues to operate for past transactions after the Constitution, then, by the same reasoning, a State law that was later superseded by a Central law can continue to operate for transactions that occurred before the Central law took effect. Thus, the two statutes may coexist, each governing a different temporal period.

The Court further addressed the question of whether the nullity of a law would invalidate all transactions already completed under it. Referring to the observations of Justice Mahajan, the Court distinguished a void statute from a repealed one. Justice Mahajan explained that the term “void” does not have a broader effect on a statute than the term “repeal.” Under common-law principles, a repeal eradicates a statute entirely as if it had never been enacted, thereby affecting past transactions unless a saving clause or statutory provisions such as those in the Interpretation Act, 1889, or the General Clauses Act, 1897, intervene. In contrast, a provision that declares a law void only from a specified date, limited to the extent of its repugnancy, does not operate retrospectively and therefore does not affect past transactions.

In the present case the Court observed that a declaration that a statute is void could not influence prosecutions or other proceedings that were already pending under that statute. Because of this limitation there was no need to insert any saving clause, nor was it required to rely on a legislative provision such as those contained in the Interpretation Act or the General Clauses Act. The Court explained that to hold that a prospective finding of voidness would affect pending matters would amount to giving the declaration an indirect retro-active effect, which would conflict with the clear language used in the various articles of Part III of the Constitution. This principle applied directly to the situation created by Article 254(1). Since the Uttar Pradesh Act became void from the date on which the Amending Act was enacted, any actions taken before that date could not be disturbed. Viewed from any angle the Court was satisfied that the scheme already established continued to operate and that the State law remained available to support it even after Parliament passed the later law. Consequently the Court rejected the contention advanced by Mr Nambiar that Article 254(1) required a different result.

The Court then turned to the alternative argument presented by Mr Naunit Lal. It was not disputed that, according to the proviso to Article 254(2), Parliament possessed the power to repeal a law made by a State legislature, and that such a repeal could be effected either expressly or by necessary implication. Assuming, for argument’s sake, that Parliament’s enactment of the Amending Act—being repugnant to the State law on the subject of road-transport nationalisation—had the effect of implicitly repealing the State legislation, the Court asked whether such a repeal would erase the scheme already framed. If a repeal had occurred, the provisions of section 6 of the General Clauses Act, 1897 would automatically apply. Section 6 states that when an Act or any Central Act or regulation repeals a previous enactment, the repeal shall not, unless a different intention appears, (a) revive anything that was not in force at the time the repeal takes effect, or (b) affect the prior operation of any repealed enactment or anything duly done or suffered under it. The Court noted that the words in clause (b) unmistakably encompass the scheme that had been framed under the repealed Act, because that scheme was “a thing duly done” under that Act.

The Court further considered a comparison of section 6 with section 24, which deals with the continuation of orders, schemes, rules, forms or bye-laws made or issued under a repealed act. Section 24, however, applies only to the repeal of a Central Act and not to the repeal of a State Act. Consequently the argument that the scheme should be excluded on the basis that both sections apply only to Central legislation could not be sustained in the present context. The Court concluded that, with respect to the repeal of a State Act, the plain language of section 6 must be followed, and that language clearly includes a scheme already framed. A further contention relied on section 68B, which the Court examined for any indication of a different intention contrary to section 6. Section 68B reads: “The provisions of this Chapter and rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force.” The Court held that this provision did not alter the effect of section 6 in preserving the existing scheme.

In this context, a reasonable way to read the provision is to exclude anything that is specifically mentioned from the general language of section 6. Any justification that might be offered for such an exclusion disappears when the discussion concerns the repeal of a State enactment to which section 24 does not apply. Accordingly, the court must examine the literal wording of section 6 and decide whether that wording is wide enough to encompass a scheme that has already been prepared. The court is convinced that a scheme that has been prepared constitutes an act carried out under the repealed enactment. Another argument was put forward relying on section 68B, alleging that that section demonstrates a different intent within the meaning of section 6 of the General Clauses Act. Section 68B states: “The provisions of this Chapter and rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force or in any instrument having effect by virtue of any such law.” This provision merely declares that the provisions of the present Act shall prevail even if they conflict with any other law. The court has previously observed that the provisions of the present Act operate prospectively, and therefore none of the sections already examined conflict with the State law as it applies to transactions that were completed under that law. Assuming, without deciding, that the word “instrument” in section 68B could include a scheme, the court sees no conflict between that provision and a scheme that was framed under the State Act. The provisions beginning with section 68C contemplate only schemes that are initiated after the amending Act has come into force, and consequently they cannot be inconsistent with a scheme that was already framed under the State Act before the amending Act became effective. For these reasons, the court holds that section 6 of the General Clauses Act preserves the scheme that was framed under the Uttar Pradesh Act. The counsel for the petitioner further argued that because a scheme is a prescription for future actions, it continues to operate even after the amending Act became law, and consequently there would be no valid law to support the scheme after the amendment. The court does not need to consider that argument, because it has already held that the State law remains in force after the amending Act and therefore continues to support actions taken under the former law. This leads to the argument of the Advocate General that, even if the Constitution (Fourth Amendment) Act, 1955 could not be used to uphold the validity of the Uttar Pradesh Act, the appellants did not suffer a deprivation of property within the meaning of the Court’s earlier decisions in The State of West Bengal v. Subodh Gopal Bose and Dwarkadas Shrinivas of…

In the earlier authorities of Bombay v. The Sholapur Spinning & Weaving Co. Ltd. (2) and Saghir Ahmad’s Case (3), the Court held that clauses (1) and (2) of Article 31 of the Constitution concern the same subject matter. The Court explained that even where the State does not actually transfer ownership of property, an act of the State that substantially dispossesses an individual, seriously impairs his right to use and enjoy the property, or materially reduces the property’s value, must be treated as an acquisition or taking possession within the meaning of clause (2). After a brief attempt by the learned Advocate General to argue otherwise, the Advocate General conceded that the decision in Saghir Ahmad’s Case prevented him from persisting in the claim that the State had not deprived the petitioners of their interest in a commercial undertaking. In Saghir Ahmad’s Case the Court had expressly held that the Uttar Pradesh Transport Act, 1951, which effectively barred the petitioners from carrying on their motor-transport business, deprived them of their property or interest in a commercial undertaking within the meaning of Article 31(2). Mukherjea J., then speaking, observed at page 728 that it was not seriously disputed that the appellants’ right to ply motor vehicles for profit constituted an interest in a commercial undertaking and that the appellants had indeed been deprived of that interest. He further observed at page 729 that, in view of the majority decision, it must now be regarded as settled law that clauses (1) and (2) of Article 31 are not mutually exclusive; they should be read together as addressing the same concern, namely the protection of property rights by limiting State power, with the deprivation contemplated in clause (1) being essentially the acquisition or taking possession described in clause (2). The Advocate General accepted this as the correct legal position after the cited pronouncements of the Court.

The Court noted that the mere fact that the government had not physically acquired the buses owned by the appellants was irrelevant to the analysis. Property of a business may include both tangible assets, such as the buses themselves, and intangible assets, such as the right to operate a bus-hiring service on public roads. While the statute might not have directly taken away the buses or any other tangible property, it nonetheless deprived the appellants of the business of running buses for hire, which is a substantial impairment of their commercial interest. Consequently, the Court concluded that, under these circumstances, the legislation conflicted with the provisions of Article 31(2) of the Constitution because the statutory scheme failed to comply with the requirements of that clause. Since the statutory requirements had not been satisfied, the legislation should be declared invalid on that ground. The Court described these observations as clear and unambiguous and stated that they left no room for further argument on the subject.

In this matter, the Court observed that if the Uttar Pradesh Act fails to contain any provision for compensation, the Act must be held void because it would be in direct conflict with the requirements of Article 31(2) of the Constitution. The next issue that the Court considered was whether, prior to the enactment of the Constitution (Fourth Amendment) Act of 1955, the conditions laid down in Article 31(2) had actually been satisfied. Article 31(2) provides that no property may be taken possession of or acquired unless it is for a public purpose and unless the taking is authorized by a law that expressly provides compensation for the acquired property, either by fixing the amount of compensation or by specifying the principles and the manner by which the compensation is to be determined and paid. In the earlier decision of The State of West Bengal v. Mrs. Bela Banerjee, Chief Justice Patanjali Sastri explained the meaning of “compensation” at length. He held that while the legislature may decide the principles governing the amount payable to a proprietor whose property is appropriated, those principles must ensure that the amount awarded constitutes a genuine equivalent of the loss suffered by the owner. Within this fundamental requirement of full indemnification, the Constitution permits the legislature to exercise discretion in selecting the guiding principles, but it remains a matter for the courts to decide whether those principles have taken into account all elements that constitute the true value of the appropriated property and have excluded irrelevant considerations. This principle was not contested by the parties. Relying on this formulation, counsel for the petitioners argued that the Uttar Pradesh Act does not contain any provision that would give the operator who is deprived of his business interest a just equivalent of what he has lost, nor does it lay down any principles to determine the amount of such compensation. According to that argument, the Act only provides for compensation limited to the unexpired portion of the permit, and nothing more. In contrast, counsel for the State maintained that the appellants are entitled only to a compensation that corresponds to the interest they are deprived of—that is, the commercial interest in the bus undertaking—and that the combined effect of the various provisions of the Uttar Pradesh Act ultimately furnishes a compensation that is equivalent to that interest. Since it is generally accepted that the Act should provide a genuine compensation for the operator’s commercial interest, the Court decided to examine the specific provisions of the Uttar Pradesh Act in order to determine whether those provisions indeed supply a quid pro quo for the interest that the operator loses.

Section 5 of the Act deals with the procedure to be followed when a scheme published under section 4 proposes either the cancellation of an existing permit granted under Chapter IV of the Motor Vehicles Act, 1939, or the transfer of that permit to one or more different routes. In such a situation, the Transport Commissioner is required to serve a notice on the permit-holder concerned and on any other persons whom, in his opinion, should receive special notice. The notice must also require the permit-holder to submit a written statement within a specified time, stating whether he agrees to the proposed transfer of the permit. If the permit-holder consents to the transfer and the transfer is eventually effected, the permit-holder forfeits any right to claim compensation under section 11; the transfer itself is treated as compensation in full discharge of the State Government’s liability. Conversely, if the permit-holder does not agree to the transfer, the permit may be cancelled, but this cancellation does not prejudice the permit-holder’s right to claim compensation under section 11.

Section 11 sets out the entitlement to compensation when, pursuant to a scheme published under section 8, an existing permit granted under Chapter IV of the Motor Vehicles Act, 1939, is cancelled, deemed cancelled, or when the route(s) covered by the permit are curtailed or deemed curtailed. Except where the permit-holder has agreed to transfer the permit under subsection (2) of section 5, the holder is entitled to receive compensation from the State Government for the premature cancellation or curtailment, the amount being determined according to the principles specified in Schedule I. The compensation becomes due from the date of the order effecting the cancellation or curtailment. The State Government must also pay interest on the compensation amount at the rate of two and one-half per cent per annum, calculated from the date of the cancellation or curtailment order to the date the compensation is determined. Compensation is to be paid in cash. The Transport Commissioner is responsible for fixing the amount of compensation under subsection (1) and must offer this amount to the permit-holder as full satisfaction of the liability under the Act. If the permit-holder finds the offered amount unacceptable, the Commissioner may, within a prescribed time and manner, refer the dispute to the District Judge, whose decision on the matter shall be final and shall not be subject to challenge in any court.

In this matter the Court set out the provisions of Section 12 of the Motor Vehicles Act, 1939 as they applied to a permit that had been issued under Chapter IV and later cancelled or whose route had been reduced pursuant to a scheme published under Section 8. The provision allowed the State Government, when the holder of such a permit expressed a willingness to sell, to elect to purchase the motor vehicles that were covered by the permit. The purchase could be made only on the basis of the terms and conditions specified in Schedule II. The first condition required that any vehicle offered for purchase must belong to a type, manufacture and model that had been formally notified by the State Government. The second condition mandated that the vehicle must be in a mechanically sound condition and must be declared fit by the Transport Commissioner or a person nominated by the Commissioner. These requirements were intended to ensure that the State acquired only vehicles that met the prescribed standards and were suitable for continued operation.

The Court then explained the detailed compensation scheme contained in Schedule I. Paragraph 1 dealt with compensation payable under section 11 for the cancellation of a contract-carriage, stage-carriage or public-carrier permit as specified in clause (e) of sub-section (1) of section 10. The compensation for each vehicle covered by the permit was to be calculated as follows: for every complete month or any part of a month that exceeded fifteen days of the unexpired period of the permit, the amount of one thousand five hundred rupees was payable; for a part of a month that did not exceed fifteen days of the unexpired period, the amount of five hundred rupees was payable. The provision also stipulated that, irrespective of the calculation, the compensation could never be less than two hundred rupees. Paragraph 2 addressed compensation for the curtailment of the route or routes covered by a stage-carriage or public-carrier permit as provided in clause (d) of sub-section (1) of section 10. The amount was to be determined by the formula Y × A ÷ R, where Y represented the number of miles by which the route was reduced, A denoted the amount computed under Paragraph 1, and R indicated the total length in miles of the original route covered by the permit. The Court described these provisions as forming an integrated scheme for paying compensation to a permit holder whose permit was cancelled. It summarised the scheme by noting that the State could cancel a permit, reduce its route or transfer it to another route. If the operator accepted a transfer, no compensation was payable; if the operator refused the transfer, compensation with interest was to be paid for the premature cancellation or for any curtailment. The amount of compensation was to be fixed by the Transport Commissioner in accordance with the Act, and where the permit-holder did not accept the amount offered, the Commissioner could, within the prescribed time and manner, refer the dispute to the District Judge for a final determination.

The judgment explained that the statute contained a provision allowing the Government to purchase the motor vehicles covered by a permit, provided the permit holder offered to sell them and the vehicles met the specifications set out in the Act. The Court then asked whether these provisions amounted to a quid pro quo for the petitioners’ interest in their motor-transport business. To answer this question, the Court examined the situation as if it were a commercial transaction. It observed that when a transport business is sold, the seller receives the value of the assets after deducting liabilities and also receives payment for goodwill. Under the scheme created by the Act, however, the assets remained with the permit holder, and the State could purchase them only under certain conditions. Because the scheme was implemented in phases, the Court held that it could not be said that the assets could never be sold to other operators, even though practical difficulties might arise. The Court further noted that if a permit is not cancelled but merely transferred to another route, it may be presumed that a permit holder who voluntarily accepts the transfer is satisfied that the new route is essentially equivalent to the one on which he previously operated. Conversely, if the holder rejects the transfer and opts for compensation, the Court asked whether the compensation prescribed in section 11 of the Act was equivalent to, or a proper quid pro quo for, the commercial interest that the State would acquire.

The Court observed that, had clause (5) of section 11 not existed, it would have been easy to conclude that a flat compensation rate of one hundred rupees or less, irrespective of the actual loss suffered by the permit holder, could not satisfy the requirement of compensation under Article 31(2). In the Court’s view, however, clause (5) altered the entire compensation analysis. That clause permitted a permit holder who was dissatisfied with the amount awarded by the Transport Commissioner to ask that the matter be referred to the District Judge for a determination of whether the compensation was adequate, and the Judge’s decision would be final. The Court explained that the clause could be interpreted narrowly, meaning that the District Judge could only award compensation within the limits already set by section 11(1) and the Schedule, or more liberally, as argued by the learned Advocate General, allowing the Judge to adjust the amount without contravening the language of the provision and thereby giving effect to the legislature’s intention. The Court noted that if the Judge’s role were confined merely to calculating figures, the clause would become meaningless. Finally, the Court reiterated that section 11 together with the Schedule specified the compensation rates, the applicable interest rates, and the period for which interest would be payable.

The Court observed that the responsibility for calculating the compensation amount rests with the Transport Commissioner, who is a senior government officer. It noted that any simple computational error made by the Commissioner could be corrected if the permit-holder brought the mistake to his attention. The Court then questioned whether the legislature intended to provide a remedy allowing a permit-holder to approach a District Judge merely to correct such calculation errors. It found it more reasonable to conclude that the legislature’s purpose was to grant an initial compensation at a fixed rate, while recognizing that this fixed rule might not suit every situation; therefore, the final determination of compensation was entrusted to a judicial officer of the rank of District Judge. The Court held that the provisions of section 11(5) support an interpretation that carries out the legislature’s intent as reflected in the overall scheme of the provisions. It emphasized the pivotal words, “if the amount so offered is not acceptable to the permit-holder.” The amount offered is undeniably the sum calculated pursuant to section 11(1), but the statute imposes a duty on the Transport Commissioner to refer the matter to a District Judge whenever the offered amount is not acceptable to the permit-holder. The Court explained that the term “acceptable” has a broad meaning and does not confine the objection solely to a miscalculation under section 11(1). A permit-holder may reject the amount on the ground that the compensation is inadequate and does not compensate for the interest to which he is deprived. Consequently, it is for the District Judge, after considering the evidence presented by both parties, to determine the appropriate compensation payable for the right lost due to the cancellation of the permit. The Court further stated that the language of section 11(5) not only admits this construction but also fulfills the legislature’s purpose, since the legislature cannot be said to have intended to deprive a valuable interest by granting a nominal sum to the permit-holder. Although section 11(5) mentions a time limit within which a reference may be made to the District Judge, the Court noted that no such rule had been brought to its attention. It expressed confidence that, without relying on any technicality, the Transport Commissioner, when required, will refer the compensation matter to the District Judge. Finally, the Court concluded that, when viewed in its entirety, the compensation scheme provided by the Act satisfies the requirement of adequate compensation for the interest acquired, as understood under Article 31(1) of the Constitution. The Court also referred to the claim that, out of twenty-five appeals, the appellants in thirteen had accepted transfers of permits to different routes, but it observed that the appellants denied that such acceptance was unequivocal and final, asserting instead that it was conditional.

In fact, the records show that the appellants have continued to run their buses on the original routes rather than on the routes to which the permits were transferred. Consequently, the Court cannot conclude that the appellants have accepted the alternative routes offered to them. Should any of the appellants voluntarily decide to accept an alternative route, they may do so, but such acceptance would preclude them from claiming any compensation for the loss of their original interest.

The counsel representing the appellants further argued that clause (2) of section 3 of the Uttar Pradesh Act violates their fundamental right under article 31(2) because it bars them from challenging the validity of the scheme on the ground that it does not serve a public purpose. Section 3 provides that (1) when the State Government is of the opinion that it is necessary in the interest of the general public, for the common good, or for maintaining and developing an efficient road-transport system, it may, by notification in the official Gazette, declare that road-transport services in general, or a particular class of such service on any specified route or portion, shall be run and operated exclusively by the State Government, or by the State Government in conjunction with railways, or partly by the State Government and partly by others in accordance with the provisions of the Act; and (2) that such a notification shall constitute conclusive evidence of the facts stated therein. The Court observed that the counsel’s interpretation of this provision appears to have been raised only at this late stage, and the case record does not show that the appellants ever attempted to question the factual basis of the notification before the Government, nor that they were prevented from doing so by clause (2) of section 3. Accordingly, the Court was not prepared to permit the appellants to introduce this contention for the first time before it.

The final submission, which is unique to Civil Appeal No. 429 of 1958, contended that at the critical time when the nationalisation scheme was being implemented, the appellant was not in possession of a permit because his permit had been cancelled by an order of the appropriate tribunal. After the scheme was completed, that tribunal order was retrospectively set aside by the Appellate Tribunal, and therefore the State Government’s order made thereafter, apparently without the appellant’s knowledge, should not bind him. Moreover, the appellant’s permit was not renewed by the Regional Transport Authority. In response, the appellant filed an appeal before the State Transport Tribunal. By an order dated 6 September 1956, the Tribunal allowed the appeal and directed that the appellant’s permit be renewed for a period of three years commencing on 1 November 1953. While disposing of the appeal, the Tribunal observed, “We are told that in the meantime this route has been notified and the Government buses are plying on it. The effect of this order will be that the appellant shall be deemed to be …”

The Tribunal observed that, as a result of the order, the appellant would be deemed to be in possession of a valid permit and that he would have to be displaced only after complying with the procedure prescribed by the Uttar Pradesh Road Transport Services Development Act. Pursuant to the Tribunal’s direction, the Regional Transport Authority issued a renewal of the appellant’s permit on 11 October 1956, with the renewal being back-dated to take effect from 1 November 1953 and to continue until 31 October 1956. In view of the fact that the petitioner was not the holder of a permit at the time the Government issued its order, the Court held that the petitioner could not obtain any relief in the present appeal. The Court further clarified that the present order would not bar the appellant in Civil Appeal No 429 of 1958, should he possess any right, from instituting appropriate proceedings against the State Government. Accordingly, the Court dismissed all the appeals, ordered that the State of Uttar Pradesh bear one set of costs, and recorded that the appeals were dismissed.