State of West Bengal vs Union of India

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

Court: Supreme Court of India

Case Number: Suit No. 1 of 1961

Decision Date: 21 December, 1962

Coram: Bhuvneshwar P. Sinha, Syed Jaffer Imam, J.C. Shah, N. Rajagopala Ayyangar, J.R. Mudholkar, Subba Rao J.

In the matter titled State of West Bengal versus Union of India, the Supreme Court rendered its judgment on the twenty‑first day of December in the year 1962. The opinion was authored by Justice Bhuvneshwar P. Sinha, who also presided as Chief Justice, and was pronounced by a bench consisting of Justices Syed Jaffer Imam, J. C. Shah, N. Rajagopala Ayyangar, and J. R. Mudholkar. The case was cited in the 1963 Annual Report of the Indian Reports at page 1241 and in the 1964 Supreme Court Reporter (first series) at page 371, together with a series of citator references that include, for example, E 1963 SC1811 (104) and subsequent citations extending to the year 1992.

The petition was filed by the State of West Bengal challenging a proposal advanced by the Union of India under the Coal Bearing Areas (Acquisition and Development) Act of 1957, cited as Act XX of 1957. The Union sought to acquire certain coal‑bearing areas situated within the territorial limits of West Bengal. The State contended that the statutory provision did not extend to lands that were vested in, or owned by, the State itself, and further argued that, if the Act were to be applied to such lands, it would exceed the legislative competence of Parliament. The State’s contentions were couched in reference to several constitutional provisions, including Articles 13, 31, 73, 162, 245, 246, 248, 249, 254, 294, and 298, as well as the Seventh Schedule entries – List I entries 52, 54, 97; List II entries 23, 24; and List III entry 42 – which collectively delineate the distribution of legislative powers between the Union and the States.

The Court examined the language of the Coal Bearing Areas (Acquisition and Development) Act to ascertain whether its operative provisions were intended to reach lands that were owned or vested in a State. In doing so, the Court emphasized that a proper interpretation of the relevant sections of the Act revealed that the statutory scheme was indeed applicable to coal‑bearing areas irrespective of whether such areas were in private possession or held by a State. The Court rejected the State’s reliance on the preamble of the Act as a source of limitation, observing that the preamble did not support an interpretation that confined the Act’s operation solely to the rights of individuals. While the Court noted that the Statement of Objects and Reasons accompanying the Act appeared to favour the State’s view, it held that this extrinsic material could not be used to dictate the true meaning and effect of the substantive provisions contained within the legislation.

Having clarified the scope of the Act, the Court proceeded to consider the question of constitutional validity. Relying upon Entry 42 of List III of the Seventh Schedule, the Court held that Parliament possessed the authority to enact legislation for the acquisition of property belonging to a State. Consequently, the Court concluded that the Coal Bearing Areas (Acquisition and Development) Act of 1957 was not ultra vires the powers of Parliament and was therefore a valid exercise of legislative competence. The judgment was delivered by Chief Justice Sinha, joined by Justices Imam, Shah, Ayyangar, Mudholkar, and Subba Rao, who each concurred with the reasoning and the final determination that the Act could lawfully apply to coal‑bearing lands vested in the State of West Bengal.

In this case the Court observed that the Constitution of India does not possess a strictly federal character. The distribution of powers between the Union and the States, according to the Court, is based on the principle that only those functions that deal with local problems are placed with the States, while the residue – especially powers necessary for preserving the economic, industrial and commercial unity of the nation – is left to the Union. The Court rejected the proposition that sovereignty resides exclusively in the States. It held that Parliament, which has the authority to alter the boundaries of a State, cannot be said to be incompetent to acquire property owned by a State merely on the theory of absolute State sovereignty. Even assuming that the Constitution were a federation and that the States were sovereign in relation to the Union, the Court said that the Union’s power to legislate concerning property situated in the States would remain unrestricted.

The Court explained that the power conferred on Parliament by Entry 42 of List III, which is ancillary to the powers under Entries 52 and 54 of List I, is not limited by any provision of the Constitution and may be exercised with respect to State property as well. The Court noted that Article 294 vests property in the States and that Article 298 authorises the States to transfer that property, but it clarified that neither article contains a prohibition on the acquisition of State property. Consequently, because the Constitution permits a State to transfer its own property, the same property is capable of being acquired by legislation without requiring a constitutional amendment.

The Court referred to section 127 of the Government of India Act, 1933, which allowed the Central Government to require a Province to acquire private land on behalf of the Federation and to transfer provincial land to the Federation, with the provincial authority having no choice but to comply. The Court observed that such a provision was not regarded as an infringement of provincial autonomy at that time. The absence of a comparable provision in the present Constitution, the Court said, does not alter the analysis. Under the earlier Act, the power of compulsory acquisition was vested exclusively in the provinces, whereas the Constitution now vests a similar power in the Union as well.

Finally, the Court concluded that if other constitutional provisions, read broadly, grant the Union power to make laws for acquiring State property, that power cannot be defeated merely because the general power of acquisition does not expressly mention State property. The Court further explained that acquisition and requisition powers may be exercised concurrently by both the Union and the States, but any potential conflict is avoided by Articles 31(3) and 254. Moreover, the Court emphasized that fundamental rights under the Constitution may be asserted not only by individuals and corporations but also, in certain situations, by the State itself, and that property vested in the States is therefore subject to acquisition under a law made under Entry 42, provided the law satisfies the requirements of Article 31.

In the States, property may not be taken by a law enacted under Entry 42 of List III unless that law satisfies the conditions laid down in Article 31. The Court explained that the principle that a State is not bound by a statute unless it is expressly mentioned or necessarily implied is a rule of interpretation. When a constitutional document is being interpreted, provisions that grant legislative authority are to be read in a broad and liberal manner, giving them their fullest possible scope. The Court observed that the Constitution contains no indication that the term “property” in Entry 42 of List III should be given a narrow meaning; consequently, the term must be understood to embrace property that belongs to the States as well.

Justice Subba Rao held that the impugned Act, to the extent that it gave the Union the power to acquire lands owned by the States, including coal mines and coal‑bearing lands, was beyond the competence of Parliament. The Court noted that, under the Constitution of India, political sovereignty is divided between two constitutional entities – the Union and the States – each of which is a juristic personality possessing its own property and operating through the instruments created by the Constitution. The federal structure embodied in the Constitution distributes sovereign powers between these coordinate entities, the Union and the States. This distribution implies that one entity may not intrude upon the governmental functions or instruments of the other unless the Constitution expressly permits such interference.

The Court further explained that the legislative fields assigned to each entity contain subjects on which that entity may legislate, and those fields do not address the relationship between the coordinate entities while they are exercising their respective powers. The relationship between the Union and the States is governed by other constitutional provisions, and there is no provision that authorises one entity to deprive the other of its property except by agreement between them. The power to acquire a citizen’s property for a public purpose, the Court said, is an implied power of the sovereign. Because sovereignty under the Constitution is shared, this implied power must relate only to the property of the governed; a sovereign cannot acquire its own property. Moreover, the concepts of acquisition and requisition inherently require that they be made for a public purpose and that compensation be paid.

The Court observed that the word “person” in Article 31 does not include the State. If Entry 42 were interpreted to allow Parliament to acquire State property, the State would be denied the protection of Article 31 that is available to all other persons. Accordingly, Entry 42 of List III does not empower either Parliament or a State Legislature to enact a law that would acquire the property of the other. The Court also held that neither the residuary power in Article 248 nor Entry 97 of List I provides Parliament with any authority to acquire State property. The residuary legislative field cannot be stretched to cover inter‑State relations, because such relations are not allocated to the Union or the States through the legislative Lists. Finally, the Court remarked that when a specific provision is made for the acquisition of property, it would be inconsistent to use a residuary power to acquire State property, as doing so would create an anomalous situation.

To limit the scope of the constitutional entry in question to properties that do not belong to the States, it would be necessary to resort to the residuary legislative power for any acquisition of State property. Even if such a construction were adopted, the difficulty that the Union could acquire State property without paying compensation would remain unresolved. Neither Entry 24 of List II nor Entry 52 of List I gives a State Legislature any authority to act before Parliament declares that Union control of a particular industry is expedient in the public interest, nor does it empower Parliament, after making such a declaration, to pass a law that acquires State lands. Both entries deal solely with the regulation of an existing industry or one that may be started in the future and do not confer any power to acquire land. The Mines Regulation Act 12 of 1952 and the Mines Regulation Act 67 of 1957 are confined to the regulation of mines; the declarations contained in those statutes are expressly limited to the regulatory framework and therefore cannot be relied upon to uphold the validity of the Act under consideration. No guidance may be drawn from foreign constitutions or from decisions rendered under them when construing the express provisions of our Constitution, given the distinct constitutional structure. Consequently, the Union may acquire property belonging to a State only by agreement with that State.

The matter before this Court was an original‑jurisdiction suit, numbered Suit No. 1 of 1961, filed by the State of West Bengal against the Union of India. The plaintiff was represented by the Advocate‑General for West Bengal, S. M. Bose, together with B. Sen, S. C. Bose, Milon K. Bunerjee, P. K. Chatterjee and P. K. Bose. The defendant was represented by the Attorney‑General of India, M. C. Setalvad, along with H. N. Sanyal, Additional Solicitor General of India, Bishan Narain, N. S. Bindra, and R. H. Dhebar. Interveners were appeared before the Court through their respective counsel: Intervener No. 1 by B. N. Seib and I. N. Shroff; Intervener No. 2 by the Advocate‑General of Punjab, S. M. Sikri, assisted by R. Ganapathy Iyer and P. D. Menon; Intervener No. 3 by the Advocate‑General of Assam, B. C. Barua, and Naunit Lal; Intervener No. 4 by the Advocate‑General of Orissa, Dinabandhu Sahu, with B. K. P. Sinha and P. D. Ale; Intervener No. 5 by A. Ranganadhan Chetty and A. V. Rangam; Intervener No. 6 by Lal Narayan Sinha and D. Goburdhan; Intervener No. 7 by K. S. Hajela and C. P. Lal; Intervener No. 8 by P. D. Xenon; Intervener No. 9 also by S. M. Sikri and P. D. Xenon; and Intervener No. 10 by G. S. Pathak together with N. S. Bindra and R. H. Dhebar. The judgment was delivered on 21 December 1962. The case was heard by Chief Justice Sinha, joined by Justices Imam, Shah, Ayyangar and Mudholkar, with a separate opinion rendered by Justice Subba Rao. Chief Justice Sinha stated that the suit sought a declaration that Parliament does not possess the competence to enact a law permitting the Union Government to acquire land, or any rights in or over land, vested in a State.

In this case, the plaintiff, the State of West Bengal, sought a declaration that the Coal Bearing Areas (Acquisition and Development) Act of 1957—referred to as the Act—specifically sections four and seven, exceeded the legislative competence of Parliament, and that the Union of India should be restrained by injunction from exercising those provisions with respect to coal‑bearing lands vested in the plaintiff. The suit raised questions of great public importance because it required interpretation of a large number of constitutional articles. Recognising the significance of the issues, the Court issued notices to the Advocates‑General of all the States of India. In response, the States of Assam, Bihar, Gujarat, Madras, Orissa, Punjab, Rajasthan and Uttar Pradesh appeared before the Court either through their Advocates‑General or through other counsel. The National Coal Development Corporation Ltd., headquartered at Ranchi, Bihar, also intervened because of a pending litigation in which it was named as a defendant against the State of West Bengal. The Court heard counsel for the parties at length and recorded the factual basis of the plaintiff’s claim.

The plaintiff asserted that it is a State listed in the First Schedule of the Constitution, forming part of the Union of States, and that under Article 294 all property and assets previously vested in His Majesty for the Government of the Province of Bengal had become vested in the State of West Bengal for the purpose of the State. Exercising its exclusive legislative authority, West Bengal enacted the West Bengal Estates Acquisition Act, 1954, and by notification under the amended Act declared that all estates, rights of intermediaries and Ryots, and sub‑soil rights including mines and minerals, vested in the State free from encumbrances. Subsequently, Parliament enacted the impugned Act authorising the Union to acquire any land or any right in or over land anywhere in India. Acting under that authority, the Union issued two notifications dated 21 September 1959 and 8 January 1960, expressing its intention to prospect for coal lying in lands vested in the plaintiff. Disagreements arose concerning whether Parliament possessed the competence to enact the Act and whether the Union could acquire property belonging to a sovereign State. Although paragraph nine of the plaint raised the question of whether the proposed acquisition served a public purpose, the learned Advocate‑General of Bengal withdrew that contention during the hearing, rendering the issue no longer live.

In this case, the plaintiff alleged that notice under section 80 of the Code of Civil Procedure had been properly served on the defendant. The defendant’s written statement admitted the factual allegations set out in the plaint, but it expressly denied the correctness of every legal submission advanced by the plaintiff, especially those concerning Parliament’s legislative competence to enact the impugned Act and the Union’s authority to acquire any property belonging to a State. The defendant further denied that the State of West Bengal possessed the status of a sovereign authority. In paragraph twelve of its written statement, the defendant explained the policy motive behind the legislation, stating that rapid and planned industrialisation of the country required a substantial increase in coal production because coal was an essential input for industry. The defendant asserted that Parliament had declared, by law, that regulation of mines and development of minerals under Union control was expedient in the public interest, and that, consequently, acquisition of coal‑bearing areas by the Union was necessary both for effective regulation of mines and for boosting coal output in the public interest. The defendant indicated that it would rely on a list of documents annexed to the pleadings. From these pleadings, the Court identified five principal issues: first, whether Parliament possessed the legislative competence to enact a law permitting compulsory acquisition by the Union of land and other property vested in or owned by the State, as alleged in paragraph eight of the plaint; second, whether the State of West Bengal was a sovereign authority, as alleged in the same paragraph; third, assuming that West Bengal was sovereign, whether Parliament was authorised to enact a law for compulsory acquisition of its lands and properties; fourth, whether the Act or any of its provisions exceeded Parliament’s legislative competence; and fifth, whether the plaintiff was entitled to any relief and, if so, what relief should be granted. After the arguments on behalf of the plaintiff and the supporting States were completed, the plaintiff moved to amend the plaint by inserting a new paragraph labelled 9A. In that paragraph the plaintiff alternatively submitted that, on a true construction, the Coal Bearing Areas (Acquisition and Development) Act, 1957, did not apply to lands vested in or owned by the State of West Bengal, and that the notifications purportedly issued under the Act were void and ineffective. At the request of the Attorney‑General, the Court granted a short adjournment to consider whether the defendant would oppose the amendment. Since the amendment was not opposed, the Court allowed it and noted that an additional issue had consequently been raised, namely whether the 1957 Act, on its true construction, applied to lands vested in or owned by the plaintiff State.

The amendment to the plaint was allowed and, consequently, a further question was entered for determination. The question framed was whether the Coal Bearing Areas (Acquisition and Development) Act, identified as Act XX of 1957, when read in its true sense, is applicable to lands that are vested in or owned by the plaintiff State, namely West Bengal. The Court observed that the parties were not disputing any factual matter; rather, the entire controversy hinged upon the interpretation of the constitutional provisions that govern legislative competence and upon the scope and effect of the Act itself. Two principal issues therefore emerged from the pleadings. First, the parties were required to decide whether, on a true construction of the statutory provisions, the Act extends to lands vested in or owned by the plaintiff State. Second, conditional upon an affirmative answer to the first issue, the parties had to determine whether Parliament exercised the requisite legislative competence in enacting the impugned statute. The Court emphasized that the first issue – the scope and effect of the Act – was the more fundamental question, because its resolution would shape the ambit of the second issue. When the matter was first opened, the learned Advocate‑General of Bengal argued that the Act was intended to acquire the interests of the State and contended that Parliament lacked the authority to pass legislation that would affect or acquire State property. Subsequently, the same Advocate‑General advanced an alternative position, asserting that, on a proper construction, the Act does not affect the interests or property of the State. The other States that had entered appearance, through their respective counsel, echoed this stance and placed particular emphasis on certain provisions of the Act that, in their view, demonstrate that the legislation was not meant to acquire or otherwise affect State interests. In support of this argument, the counsel referred to specific paragraphs of the Statement of Objects and Reasons set out on pages sixteen and seventeen of the Paper Book. These paragraphs recounted the Industrial Policy Resolution of 1956, which declared that the future development of coal was the responsibility of the State; that all new units in the coal industry would be established by the State except in exceptional circumstances; that coal production in 1953 had been thirty‑eight million tons and that the target for the Second Five‑Year Plan was sixty million tons annually; and that of the additional twenty‑two million tons projected, twelve million tons were to be produced by the public sector while the balance would be allocated to the private sector for production from existing collieries and adjacent areas. The Statement further explained that to achieve the public‑sector increase of twelve million tons, the bulk – ten million tons per year – would have to come from the development of new coal fields such as Korba, Karanpura, Kathara, Jhilimili and Bisrampur, indicating the State’s predominant role in expanding coal production.

In the present matter, the coal‑bearing areas were largely held under mining leases granted to private individuals or to prospectors who possessed licences authorising a right to obtain a mining lease. The proposal therefore sought authority to acquire those unworked coal‑bearing tracts that were covered by such private leases or prospecting licences, where those areas were deemed surplus to the amount of coal production required from the private sector. The intention was that, after acquisition, the State Government itself would act as lessee and develop the coal resources in the acquired lands.

The acquisition of zamindari rights by the various State Governments had resulted in mineral rights becoming vested in the State Governments. Consequently, the Court observed that it would be inappropriate to invoke the Land Acquisition Act of 1891 for the purpose of acquiring mineral rights, especially because the Central Government had expressly indicated that it did not intend to take over the proprietary rights that were vested in the States. Moreover, there existed no other current Central or State legislation that conferred upon the Government the power to immediately acquire the lessee’s rights over coal‑bearing areas that the Government intended to secure for additional coal production. For this reason, the Court considered it necessary to create fresh legislative authority enabling the acquisition of lessees’ rights over unworked coal‑bearing areas, subject to the payment of reasonable compensation to those lessees, and without interfering with the State Government’s ownership of the minerals or the royalty payable to the State on those minerals. The Bill under consideration therefore provided for the payment of reasonable compensation for acquiring the rights of prospecting licencees and mining lessees.

The Statement of Objects and Reasons accompanying the Bill set out the policy of the State regarding the coal‑mining industry and described the prevailing situation. It contained expressions on which the States relied, such as the assertion that “the Central Government does not intend to acquire the proprietary rights vested in the States” and that the acquisition would occur “without affecting the State Government rights as owners.” However, the Court noted that it is well settled that a Statement of Objects and Reasons, even when introduced in Parliament, cannot be used to determine the true meaning and effect of the substantive provisions of a statute. Such statements may be consulted only for a limited purpose of understanding the background and antecedent circumstances that led to the legislation. They cannot be employed as a tool for construing the enactment or to demonstrate that the legislature did not intend to acquire the proprietary rights vested in the State or to affect the State Governments’ ownership of minerals. A statute, once passed by Parliament, reflects the collective intention of the legislature as a whole, and any declaration made by an individual, including a Minister, regarding the objects of the Act cannot be allowed to narrow the general language employed in the statute. The Court further observed that it had been contended that the preamble of the Act was the key to understanding its scope and provisions, and that preamble read: “An act to establish in the economic interest of ….”

The Court read the preamble of the legislation, which declared the purpose “to establish in the economic interest of India greater public control over the coal mining industry and its development by providing for the acquisition by the state of unworked land containing or likely to contain coal deposits or of rights in or over such land, for the extinguishment or modification of such rights accruing by virtue of any agreement, lease, licence or otherwise, and for matters connected therewith.” The Court noted that particular emphasis had been placed on the final two lines of the preamble, which seemed to limit the extinguishment or modification of rights to those “accruing by virtue of any agreement, lease, licence or otherwise.” However, the Court observed that this interpretation ignored the preceding clause of the preamble, which also referred expressly to the “acquisition by the state of unworked lands containing or likely to contain coal deposits.” Before addressing the principal arguments, the Court considered a submission made by the Advocate‑General of Bengal, who argued that the reference to “State” in the phrase “acquisition by the State” was intended to mean the individual States of the federation, as opposed to the Union. The Court mentioned this submission only to reject it, holding that the entire object and purpose of the impugned Act was to vest authority in the Union Government to work coal mines, and therefore, in that context, the word “State” could only refer to the Union Government. Consequently, the preamble did not support the contention that the Act was meant solely to acquire the rights of private individuals arising from prospecting licences or leases, while excluding the rights of the States in coal‑bearing lands. The Court then turned to the operative provisions of the Act. Section 4, which dealt with the issuance of a preliminary notification of the intention to prospect for coal in a specified area, referred to “lands” without any qualifying phrase. Section 6, which operated consequentially on Section 4, set out the effect of such a notification on existing prospecting licences and mining leases. Section 7 also prescribed that the Government give notice of its intention to acquire the whole or any part of the land so notified, or any rights in or over such land. Section 9, which provided for a declaration of acquisition, employed the same expression “any land or any rights in or over such land.” The proviso to Section 9 read: “Provided that, where the declaration relates to any land or to any rights in or over land belonging to a State Government which has or have not been leased out, no such declaration shall be made except after previous consultation with the State Government.” The Court regarded this proviso as significant because, for the first time, it expressly referred to land or rights “belonging to a State Government.” Finally, Section 9A authorised the Central Government to dispense with the requirement of complying with the provisions of the subsequent section concerning the hearing of objections, thereby underscoring the legislative intent to give the Union Government comprehensive authority over both unworked lands and rights thereon.

Section 8 of the Act requires that any objections raised to a proposal to acquire land, which has been notified under section 7, must be heard. In the usual course, when the Central Government issues a notification indicating its intention to acquire the whole or any part of land or any right in or over land under section 4, any person who has an interest in that land may lodge an objection to the acquisition. If such an objection is made, the competent authority is obligated to provide an opportunity for the objection to be heard.

However, section 9‑A empowers the Central Government, if it is convinced that immediate acquisition of the whole or any part of the land, or any right in or over such land, is necessary, to issue a direction that section 8 shall not come into operation. By giving such a direction, the Government ensures that no proceedings under section 8 are available for hearing any objections.

Section 10 sets out the effect of a declaration of acquisition made under section 9. Upon such a declaration, the land or the rights in or over the land vest in the Central Government, free of all encumbrances. Sub‑section (2) further provides that where the acquired rights were granted under a mining lease by a State Government, the Central Government is deemed to become the lessee of that State Government. The Court noted that substantial argument was presented concerning the importance of the provision contained in section 10(2) and indicated that those arguments would be considered later in the judgment.

The Government may also, by a written order, direct that the land or the rights in or over the land, instead of vesting in the Central Government under section 10, shall vest in a Government Company that has expressed willingness to comply with the terms and conditions imposed by the Central Government. A “Government Company” is defined in section 617 of the Companies Act, 1956. When the land or the rights vest in such a Government Company, section 11(1) treats that company as having become a lessee of the State Government, as if the State Government itself had granted the mining lease.

Compensation matters are addressed in section 13 of the Act. This provision provides for compensation in cases where prospecting licences cease to have effect, where rights under a mining lease are acquired, or where land is acquired under section 9. The accompanying rules prescribe the procedure for determining the amount of compensation. A reading of the compensation provisions makes it clear that the Act does not provide any compensation for minerals that lie unworked underground. Sections 14 to 17 continue the exposition of related matters.

The Act contains provisions that lay down the method of determining compensation and other related matters concerning the payment of compensation. The remaining provisions of the Act are irrelevant to the present dispute and therefore are not discussed. A plain reading of the Act shows that the terms “any land” or “any rights in or over such land” appear to encompass every interest in land, irrespective of the person or authority who holds that interest, including interests owned by a State Government. Nevertheless, counsel for the respondents has argued that a careful examination of those provisions, together with general principles of statutory interpretation, leads to the conclusion that the Act does not extend to any property or interest in land that belongs to a State Government. It has already been noted that neither the statement of objects and reasons nor the preamble aid the plaintiff or the intervening States in asserting that property belonging to a State Government lies outside the scope and effect of the Act. Keeping in mind that the language of section 4 is comprehensive and unrestricted and is capable of covering lands “belonging to a State,” and that section 7 refers to lands notified under section 4(1), the Court now turns to the specific interpretative arguments that have been advanced to suggest the opposite conclusion. The first argument contends that the expression “any person” used in section 8 cannot be interpreted as including a State. This contention is intertwined with the broader question of whether Parliament has the competence to legislate with respect to property owned by a State. It is sufficient to point out that the explanatory note to section 8(1), particularly the phrase “undertaken by the Central Government or by any other person,” supports the Attorney‑General’s submission that the word “person” was intended in a generic sense to include both natural persons and juristic persons. The second argument relies on the wording of the proviso to section 9(1), asserting that whenever the Act intended to refer to a State Government it did so expressly in sections 9, 10, 11 and 18, and therefore the substantive provisions were not meant to apply to rights or interests vested in a State Government. While that argument appears plausible, it is not sound. Section 9 is the operative provision of the Act, providing that after the Central Government has examined the prospect of obtaining coal, after a notification under section 4 is issued, after expressing its intention to acquire the land covered by that notification under section 7, and after disposing of any objections under

In this case, the Court examined the effect of section 8 and the proviso to section 9(1) of the Act. After completion of the procedures listed in section 8, the Central Government must issue a declaration that the land identified is to be acquired. The proviso to section 9(1) requires that the Central Government consult the State Government concerned when that State Government is the owner of the land or has any interest in the land. The Court accepted the argument advanced on behalf of the Central Government that if no right or interest of a State Government is involved, it would be unnecessary to refer to that State Government at all. It was further submitted that unless lands belonging to a State Government or lands over which a State Government has an interest fall within the operative words of section 9(1), the provision for consultation in the proviso would be meaningless. The Court found force in this submission. The Court noted that consultation with the State Government is a condition precedent to the Central Government’s declaration regarding the proposed acquisition. However, the Court emphasized that consultation does not automatically imply consent; while consultation between two governments usually suggests cooperation and willingness to accept a proposal, the statute does not contemplate the interests of private persons in that sense. The parties suggested several alternative readings of the proviso, even proposing to rewrite the section and insert words that do not appear in the text so as to achieve a different meaning. The Court declined to adopt any of those alternative constructions, finding them inconsistent with the plain language of the provision. The plaintiff and intervening States also relied on section 10(2) to argue that the interests of a State Government are excluded from the Act. Their argument was based on the premise that if State Government rights were covered, it would be pointless to provide that the Central Government or a Government Company, as contemplated by section II, be deemed the lessee of the State Government for the acquired rights. The Court was unable to accept this construction. Sections 10(2) and 11 refer specifically to situations where the acquired property consists of rights under mining leases granted by a State Government. The Court observed, however, that beyond the categories covered by those sections, other kinds of property, such as coal‑bearing land, may be acquired in which the entire interest vests in the State Government. In such cases, there is no question of the Central Government or a Government Company becoming, or being deemed to become, a lessee of the State Government. The reference to the relevant provision underscores that the mention of a ‘State Government’ in that provision is consequential upon sections 10 and 11, which make the Central Government or a Government Company a lessee of the State Government by operation of the Act. When disagreements arise between the Central Government and a State Government concerning prospecting methods or compliance with the Mineral Concession Rules, the statute provides that such disputes shall be settled by arbitration or by any other method agreed upon by the governments concerned. Consequently, on a proper interpretation of the relevant provisions, the Court concluded that the Act neither expressly nor by necessary implication excludes the rights or interests of a State Government, nor does it exclude lands over which such rights exist. It is clear that the Act is intended to cover land or rights in or over land belonging either to the Union or to a State Government.

The Court explained that the reference to a “State Government” in section 1S is meaningful only because of the provisions of sections 10 and 11. Those sections make the Central Government or a Government Company become the lessee of a State Government by operation of the Act. Consequently, when the Central Government and a State Government disagree about the manner of prospecting or about the extent to which the Mineral Concession Rules should be applied, the dispute must be settled by arbitration or by any other method that the Governments agree to, as mandated by that section.

According to the Court, a proper reading of the relevant provisions shows that the Act does not, either expressly or by necessary implication, disregard the rights or interests of a State Government, nor does it exclude lands belonging to a State Government. The legislation is plainly intended to cover land or any interest in or over land that may belong to an individual or a juristic person. Such land may include surface rights as well as mineral rights. The land that the Central Government may acquire could be virgin soil without any existing prospecting licences or mining leases issued by the State or any intermediary, and the phrase “all interests below the State” is used to describe this situation.

The Court noted that interests of this kind might be vested wholly in the State, or different interests might be held by various persons through leases or licences granted by owners in permanently settled States or by tenure‑holders who have obtained mining rights expressly. For this reason, the Act employs the comprehensive expression “land or any interest in or over land” so that it can encompass the full range of rights and interests that the Central Government may need to acquire in order to have unrestricted authority to develop coal resources and to carry out coal mining in the public sector.

Although the drafting could have been more elegant, the Court held that, when read as it stands, it is clear that Parliament intended to acquire all rights and interests in coal‑bearing land for the purpose of prospecting and exploiting coal‑bearing mines. Accordingly, the auxiliary issue that arose from the amendment of the plaint, concerning the interpretation of the Act, must be decided against the plaintiff.

Having established that a correct construction of the Act’s provisions does not exclude the rights and interests of a State Government in coal‑bearing land, the Court proceeded to the next question for consideration, which comprises issues 3 and 4. The Court indicated that the competence of Parliament to enact the Act must be examined with reference to the specific provisions of the Constitution.

In this case, the Court examined the constitutional basis for Parliament’s power to acquire property, focusing on the entries in List I and List III of the Seventh Schedule. Entry 42 in List III, read with Article 246(3), conferred on both Parliament and the State Legislatures the authority to legislate concerning acquisition and requisition of property. At first sight, that provision appeared to allow Parliament to act upon any property, whether privately owned or owned by a State. However, the State of West Bengal and several intervening States argued that the very nature of a State’s property, held for governmental purposes, placed a limitation on the Union’s legislative power when the property in question belonged to a State. The State of Punjab, another intervening State, contended that if acquisition of property was necessarily incidental to the effective exercise of Parliament’s power under any entry in List I or List III, Parliament could legislate to affect the title of State‑owned property provided such legislation did not infringe upon the State’s own legislative competence. Counsel for the States advanced several lines of reasoning to support the contention that State property was beyond the reach of Parliament’s legislative authority. First, they observed that the Constitution embraced a federal structure in which the States shared sovereignty with the Union, and consequently Parliament’s power could not be used to pass laws that deprived a State of property vested in it as a sovereign entity; accordingly, the power to legislate under Entry 42 should be read as being implicitly restricted when it concerned State‑owned property. Second, they argued that property vested in the States by virtue of Article 294(1) could not be diverted to Union purposes by compulsory Parliamentary legislation. Third, they referred to the Government of India Act, 1935, which provided a special mechanism for acquiring State property through negotiation rather than compulsion, and indicated that the Central Legislature then lacked power to acquire State property by legislative enactment; although the Constitution did not contain a provision identical to section 127 of the 1935 Act, the counsel submitted that the implicit immunity recognised in that earlier Act should be deemed to continue under the Constitution, thereby limiting Parliament’s legislative competence. Fourth, they pointed out that the Australian Constitution did not expressly grant its federal legislature the power to acquire State property, and inferred that the framers of the Indian Constitution did not intend to confer such authority on Parliament under the general legislative heads.

In this case the Court observed that if the Union were to use the power conferred by Entry 42 of the Concurrent List to acquire property belonging to a State, then, by the same reasoning, a State would be able to use its own legislative competence to acquire property belonging to the Union and even to reacquire property that the Union had taken. Because the constitutional text supplies the same mechanism to both the Union and the States, the Court concluded that the Parliament could never exercise Entry 42 in a manner that would be effective against the States. The Court further explained that the framers of the Constitution could not have intended to give Parliament a power to legislate for the acquisition of State property that would make a State’s ownership rights more vulnerable than the rights of individuals or corporations. Individuals and corporations are protected by Article 31(2), which requires that any acquisition of their property be for a public purpose and that compensation be paid. Accordingly, Entry 42 must be interpreted in harmony with Article 31. Since fundamental rights under the Constitution protect only individuals and corporations against executive or legislative actions, and since States do not possess any comparable fundamental rights that are enforceable against the Union or other States, the Court held that the power to compel acquisition of State property cannot be exercised. Moreover, unless a statute expressly provides or necessarily implies such a power, a State is not bound by it. The Court applied the well‑recognised rule of constitutional interpretation that, in the absence of an express or necessary implication permitting the Union to acquire State property, any claim by the Union to such a power must be rejected. All of these arguments, apart from pure interpretation, are based on the premise that States retain full attributes of sovereignty within their allotted field, and that any assertion of Union legislative or executive authority that infringes upon that sovereignty is void.

The Court also traced the historical background of the Indian constitutional framework. It noted that, from the time the British Crown assumed authority under the statutes of 21 and 22 Vict. (1656) Chapter 106, the administration of British India was organized as a unitary and highly centralized system. The Governor‑General was vested with autocratic powers to govern the entire territory, and although the country was divided into provinces, the governors of those provinces derived their authority from the Governor‑General, who in turn was accountable to the British Parliament. This created a chain of responsibility in which provincial governments were subordinate to the central government, which was answerable to the Secretary of State. The Court acknowledged that the Government of India Act 1919 introduced certain measures aimed at decentralising power, but emphasized that these reforms did not alter the fundamentally unitary character of the administration. The later Government of India Act 1935 sought to create a federation that would unite the provinces with the Indian princely states, yet this federation could only be realised if a substantial number of the princely states consented to join. Because the princely states ultimately declined to become part of the federation, the provisions dealing with federation never came into effect, and the central government continued to operate in a form essentially similar to that established under the 1919 Act, albeit with some modifications in the provinces.

In this case the Court observed that a variety of factors prevented the Indian States from joining the federation that had been proposed under the Government of India Act, 1935, and consequently the portion of the Act dealing with the federation never became operative. The Central Government, as it had been originally constituted under the Government of India Act, 1919, continued to function, albeit with certain modifications. Within the Provinces, however, some changes were introduced. Specific departments were administered with the assistance of Ministers who were chosen by popular election and who, in effect, were accountable to the electorate. Nevertheless, the Governor retained the authority to act at his own discretion in certain matters without consulting his Ministers. The Governor’s authority was derived from the British Crown, and he was bound to follow directions issued by the Central Government for the purpose of implementing Acts of the Central Legislature that fell within the Concurrent List, for maintaining means of communication, and for dealing with any situation that posed a serious threat to the peace or tranquility of India or any part thereof. Despite these modifications, the administration continued to operate as an agent of the British Parliament.

The Court further explained that the Indian Independence Act, 1947 created a separate Dominion of India, and that section 6 of that Act authorised the Dominion’s Legislature, for the first time, to make laws for the Dominion. Those laws were not to be deemed void or inoperative merely because they conflicted with the law of England, with any existing or future Act of the United Kingdom Parliament, or with any order, rule or regulation made under such an Act. The Dominion’s Legislature also possessed the power to repeal or amend any such British enactment, order, rule or regulation. With the enactment of the Independence Act, the British Parliament ceased to bear responsibility for governing the territories that had previously been part of British India, and the Crown’s suzerainty over the Indian States terminated, together with all treaties and agreements that had existed between the Crown and the rulers of those States. The agency relationship that had bound the administration in India to function as an agent of the British Parliament was thereby dissolved, rendering the Dominion sovereign to that extent. The Court noted that the newly formed Dominion required a constitutional arrangement suitable for a vast territory, and that a wholly centralized democratic system would have been impractical and would have reversed the earlier trend toward decentralisation. Consequently, the Constitution had to be drafted in a manner that decentralized authority. At the time immediately preceding the Independence Act, partially autonomous units such as the Provinces existed, and the Indian States, while in a sense sovereign, saw their sovereignty extinguished by merger agreements entered into with the Government of India before the Constitution came into force. Through the process of integrating the various States, a centralized form of administration emerged in which the Governor‑General became the fountain‑head of executive authority.

The Constitution of India was built upon the Government of India Act of 1935. Its basic structure remained largely unchanged in many important respects, and many provisions were taken verbatim from that earlier Constitution. In certain areas, the drafters sought greater economic unity by moving subjects that affected matters of common interest into the Union List. A comparison of the seventh schedule of the Constitution with the seventh schedule of the Government of India Act of 1935 showed that the Union’s powers had been expanded, especially in the area of economic unity. This expansion was intended to allow centralized control and administration in certain fields, which the framers believed were necessary for rapid economic and industrial development of the nation. For example, the subject of National Highways (Entry 24) and Inter‑State Trade and Commerce (Entry 42) were moved from List II of the Government of India Act to List I in the Constitution. A new entry concerning inter‑State rivers (Entry 56) was added, as was a new Entry 33 in the Concurrent List, which was transferred from List III. In addition, Part XIII contained comprehensive provisions aimed at making India a single economic unit for trade and commerce, subject to the overall authority of the Union Parliament and the Union Executive. The result was a Constitution that did not follow any traditional pattern of federation. There was no justification for assuming that the provinces were sovereign, autonomous units that voluntarily relinquished powers they deemed reasonable or proper for the Central Government to act for the common good. The underlying legal theory of the Constitution involved the withdrawal of all sovereign powers into the people of the country, followed by a distribution of those powers—except those reserved for the Union and the States by the provisions of Part III—between the Union and the States. A genuinely federal system envisions a compact or agreement among independent and sovereign units whereby they partially surrender their authority in matters of common interest to a Union, while retaining the remaining authority in the constituent units. Typically, each constituent unit possesses its own Constitution that governs all matters except those it has surrendered to the Union, and the Union’s Constitution mainly governs the relationship among the units. The Constitution in this case was not the product of such a compact or agreement. Instead, units that formed a unitary State and were non‑sovereign were converted, through the abdication of power, into a Union. The Constitution was supreme and could be altered only by the component units. However, the Constitution was indeed supreme, but only the Union Parliament possessed the authority to amend it; the units themselves lacked any power to change it.

In that case the Court observed that the distribution of powers between the Union and the States was intended to be coordinated yet independent, each exercising authority within its own sphere. The Court explained that the rationale for such a distribution was that matters of national importance, which required a uniform policy for the benefit of all units, were assigned to the Union, while matters of local concern were retained by the States. The Court further noted that the Constitution conferred upon the Courts the supreme authority to interpret its provisions and to invalidate any action that contravened the Constitution. It was emphasized that a federal Constitution inherently contains checks and balances and must provide mechanisms for resolving conflicts between the executive and legislative authorities of the Union and those of the States. The Court held that feature (d) – the supreme judicial authority – was fully present in the Indian Constitution, whereas features (a) and (b) – a compact among sovereign units and the inability of the Union alone to amend the Constitution – were absent. Although the Court acknowledged a clear legislative and executive division of powers between the Union and the States, it cautioned that such a division did not necessarily indicate political sovereignty. The Court stated that the exercise of legislative and executive powers in the assigned fields was subject to numerous restrictions, rendering the powers of the States not merely co‑ordinate with those of the Union and not wholly independent. The Court affirmed that legal sovereignty rested with the people of India, as expressed in the preamble, which proclaimed the intention to constitute India as a sovereign democratic republic. Political sovereignty, the Court explained, was shared between the Union and the States, but with a greater emphasis on the Union. Under Article 300, the Court observed that both the Government of India and the State governments possessed the status of quasi‑corporations, enabling them to sue and be sued in relation to their respective affairs. Article 299 permitted the Union and the States to enter into contracts in the exercise of their executive powers, while Article 298 authorised them, also in the exercise of executive powers, to engage in trade or business, to acquire, hold and dispose of property, and to make contracts. The Court explained that these provisions, together with the legislative allocation of exclusive and concurrent subjects and the corresponding executive authority, formed the foundation of the division of authority. Regarding judicial power, the Court noted that a single integrated system of courts – civil, criminal and revenue – adjudicated disputes arising under both State and Union legislation. The Court further observed that the exercise of executive authority by either the Union or a State, and the rights and obligations arising therefrom, were subject to the jurisdiction of the Courts, which exercised territorial jurisdiction over the cause of action. Finally, the Court pointed out that under Article 226 the High Courts were empowered to issue writs to any person or authority, including the Government, for the enforcement of rights conferred by Part III and for any other purpose, and that under Article 227 they exercised superintendence over all courts within their jurisdiction.

The Court observed that the High Court exercised supervisory authority over every subordinate court within the area of its jurisdiction. It further noted that the Supreme Court occupied the highest position in the judicial hierarchy, overseeing civil, criminal, revenue courts and also quasi‑judicial tribunals. The Court clarified that, unlike the United States, India did not maintain two separate systems of courts for federal and state matters. According to Article 247, the power to create courts for the more effective administration of statutes enacted by Parliament, or of existing laws relating to subjects listed in the Union List, was reserved to Parliament by legislation; however, the Court recorded that no such courts had yet been established. Article 73, the Court explained, declared the sovereignty of the Union in executive matters, providing that, subject to the Constitution, the Union’s executive power extended to those areas in which Parliament could legislate and to the exercise of rights, authority and jurisdiction that the Government of India could wield by virtue of any treaty or agreement. Nevertheless, the Court emphasized that this executive power could not, unless explicitly allowed by the Constitution or by a parliamentary statute, be extended to a State in matters over which the State Legislature also possessed legislative competence. Under Article 77, the Court stated that every executive action of the Government of India had to be taken in the name of the President. The Court further explained that Article 154 vested the executive power of a State in the Governor, who could exercise it directly or through subordinate officers in conformity with the Constitution. The appointment of the Governor, according to the Court, was made by the President, and the President was authorized to make such provisions as he thought fit for the discharge of the Governor’s functions in any contingency not covered by Chapter II of Part VI. Article 162, the Court observed, provided that, subject to constitutional provisions, the State’s executive power applied to subjects over which the State Legislature could make laws, but with the limitation that in matters listed in the Concurrent List of the Seventh Schedule, the State’s executive power was also subject to, and limited by, the executive power expressly conferred on the Union by the Constitution or by any parliamentary law. The Court recorded that the exercise of executive authority by the States was largely constrained by a variety of constitutional provisions, and that each State’s executive power had to be exercised in a manner that ensured compliance with parliamentary statutes and any existing laws applicable to that State, without obstructing or prejudicing the Union’s executive power. Finally, the Court noted that the Union’s executive power included the authority to issue directions to a State whenever the Government of India deemed such directions necessary for the purposes of constructing and maintaining means of communication declared to be of national importance.

In this passage the Court explained that the Union possesses the authority to declare highways or waterways to be of national importance, and that, upon such a declaration, the Union may exercise its powers to construct, maintain, and protect these means of communication, including those required for naval, military, and air‑force purposes. The Court noted that, under Article 258(1), the President may, with the consent of a State Government, assign to that Government or to its officers functions that fall within the scope of the Union’s executive power. Further, pursuant to Article 258(2), the Parliament may, by legislation enacted within its exclusive jurisdiction, confer powers and duties on a State, or on its officers or authorities, or authorize the delegation of such powers and the imposition of duties.

The Court then turned to Article 365, which empowers the President to determine that a situation has arisen in which a State Government cannot be carried on in accordance with the Constitution if the State fails to obey or give effect to any direction issued by the Union in the exercise of its executive power. These provisions, the Court observed, constitute the normal‑time limitations on the executive powers of the States. In a state of emergency, however, the power to override the executive actions of a State is vested in the Union.

According to the Court, because the field of legislative power is co‑extensive with the field of executive power, the restrictions that apply to legislative competence also apply to executive authority. The distribution of legislative powers is set out in Article 246. Under this article, matters listed in List I of the Seventh Schedule are subject to exclusive legislation by Parliament; matters listed in List II are exclusively within the competence of the State legislatures; and matters listed in List III may be legislated by both Parliament and State legislatures concurrently. The residuary powers, including the power to tax, are vested in Parliament by Article 248 and by item 97 of List I.

The Court explained that the underlying principle of this distribution is that only those powers that are suited to addressing local problems are assigned to the States, while the residual powers—especially those necessary to preserve the economic, industrial, and commercial unity of the nation—are retained by the Union. Under Article 123, the President may promulgate Ordinances on matters on which Parliament is competent to legislate during a recess of Parliament. Similarly, Article 213 confers on the Governor of a State the power to promulgate Ordinances on matters within the competence of the State legislature during a recess of that legislature. Nevertheless, even in normal times, the allocation of legislative powers and the consequent entrustment of authority to State legislatures are subject to the same restrictions. Finally, Article 249 authorises Parliament to legislate with respect to any matter in the State List when the Council of States, by a two‑thirds majority, determines that such legislation is necessary or expedient in the national interest.

Article 249 authorises Parliament to legislate on a matter that is listed in the State List if the Council of States passes a resolution, supported by not less than two‑thirds of the members present and voting, declaring that it is necessary or expedient in the national interest for Parliament to make laws with respect to that matter. Article 252 confers on Parliament the power to enact legislation for two or more States with their consent, even when Parliament would otherwise have no authority under Article 246 to make such laws for a State, except as provided by Articles 249 and 250. A law made under Article 252 may also be adopted by the legislature of any other State that wishes to follow it. Article 253 gives Parliament, notwithstanding any provision of Article 246, the authority to make law for the whole or any part of the territory of India in order to implement any treaty, agreement or convention with another country or countries, or any decision taken at an international conference, association or other body.

In the event of a conflict between a law made by Parliament and a law made by a State legislature in matters that fall within the Concurrent List, the Parliamentary law prevails to the extent of the inconsistency, regardless of whether the Parliamentary law was passed before or after the State law. The only exception to this rule is where a State legislature has passed a law on a Concurrent List matter that was reserved for the President’s consideration, has obtained the President’s assent, and contains a provision that is repugnant to an earlier Parliamentary law or to an existing Parliamentary law on the same subject; in such a case the State law continues to operate within that State.

The power of taxation that is granted to the States under various entries of List II is heavily constrained. While the Union retains the exclusive right to levy major taxes such as income tax, wealth tax, excise duties (except on certain specified articles), and customs duties, the States may levy taxes only in comparatively minor fields. Property belonging to the Union remains exempt from all taxes imposed by a State or by any authority within the State, unless Parliament by law provides otherwise. Article 286 provides that a tax on the sale or purchase of goods, where such transaction occurs outside the State or in the course of import into, or export out of, the territory of India, may be imposed only by Parliamentary legislation.

Additionally, a State is prohibited from imposing a tax on the consumption or sale of electricity that is consumed by the Government of India or used in the construction, maintenance or operation of any railway, unless Parliament by law authorises such a tax. Likewise, a State may not levy a tax on water that is consumed, distributed or sold by any authority created by an existing law or by any law made by Parliament for regulating or developing any inter‑State river or river valley, except to the extent that Parliament may by law permit such a tax.

The Court observed that the States depend largely on financial assistance from the Union because their own fiscal resources are limited by a narrow field of taxation. The States receive a share of several taxes that are levied and collected by the Union, including the tax on non‑agricultural income, duties on succession to property other than agricultural land, estate duty on property other than agricultural land, terminal taxes on goods or passengers carried by railway, sea or air, taxes on railway fares and freight, taxes on the sale or purchase of newspapers and on advertisements published therein, and taxes on the sale or purchase of goods other than newspapers when such transactions occur in the course of inter‑State trade or commerce. In addition, certain grants‑in‑aid may be given to the States of Assam, Bihar, Orissa and West Bengal in lieu of an assignment of any share of the net proceeds each year from export duty on jute and jute products. Union excise duties, except those on medicinal and toilet preparations, are collected by the Union but may be distributed, either wholly or partially, among the States according to principles of distribution that may be formulated. Under Article 275, Parliament may also determine grants‑in‑aid of revenue to any State that is deemed to be in need of assistance. The Court noted that because of these restrictions on their taxation powers, the States are manifestly dependent on the Union for financial help.

The Court further explained that the power of borrowing is available to the States under Article 293, but it may be exercised only with the consent of the Government of India when any portion of a loan made by the Government of India—or by its predecessor—remains outstanding, or when a guarantee for such a loan has been given by the Union or its predecessor. In situations of national political or financial emergency, the States may exercise only those legislative and executive powers that the Union permits. When a State emergency is declared, Parliament acquires the authority to enact laws for the whole or any part of India concerning any matter in the State List, and any such law prevails over a State law if there is a conflict. Moreover, if war, external aggression, or internal disturbances threaten the security of India or any territory, the President may proclaim a state of emergency, after which the Union’s executive power extends to directing the manner in which the States’ executive powers are to be exercised. During such an emergency, Parliament’s law‑making power also expands to include the authority to confer or authorize powers and impose duties upon the Union or its officers and authorities with respect to any matter, even if that matter is not enumerated in the Union List. The President may, in addition, suspend the operation of Articles 268 to 279 and require that all money bills be presented to the President for consideration after they have been passed by a State legislature.

The Court explained that, during an emergency, the President may suspend the operation of Articles 268 to 279 and may direct that every money Bill passed by a State Legislature be sent to the President for his consideration. The Court noted that, under normal circumstances, a State possesses a corporate existence which enables it to enter into contracts, to carry on trade or business, and to hold property. However, the Court cautioned that, when the basic features of the Constitution are taken into account, the executive, legislative and taxation powers of a State are subject to restrictions, and the State’s finances depend on the Union Government. Consequently, it would be inaccurate to say that a State retains absolute sovereignty. The Court illustrated this point by referring to several distinctive features of the constitutional framework. First, India does not recognize dual citizenship; every citizen is a citizen of India alone and not of any particular State in which the person may reside. Second, the States do not have independent constitutions; the only constitution governing them is the Constitution of the Union of India, specifically Chapter II, Part VI, covering Articles 152 to 237, which delineate the powers of State legislatures, executives and judiciaries. The Court further observed that the theory of State sovereignty is weakened by the extensive powers granted to Parliament to alter State boundaries and even to extinguish a State’s existence. The Constitution contains no guarantee protecting State boundaries. Article 2 empowers Parliament to admit new territories into the Union or to create new States on terms it deems fit, while Article 3 authorises Parliament, by law, to reorganise State territories by redistributing, uniting, increasing, diminishing, altering boundaries or changing names of States. When legislation profoundly affects the existence of a State, it must be introduced on the President’s recommendation, which in practice reflects the Union Ministry’s advice. If a Bill proposes to change the area, boundaries or name of a State, the President is required to refer the Bill to the concerned State Legislature solely for the purpose of obtaining its views. Accordingly, Parliament is legally empowered to modify any State’s boundaries, reduce its area, and even eliminate a State together with all its powers and authority. Given the breadth of Parliament’s authority, the Court held that it would be untenable to argue that Parliament, despite its capacity to abolish a State, is nevertheless barred by an assumption of absolute State sovereignty from acquiring State‑owned property through appropriate legislation.

In this case, the Court observed that the power of Parliament to enact legislation for acquiring property, subject only to the explicit provisions of the Constitution, is not limited. To suggest that this power is curtailed by any notion of political sovereignty that would render the States co‑ordinate with and independent of the Union would be to imagine a constitutional arrangement that does not exist either in law or in practice. A survey of the various constitutional provisions leads inevitably to the conclusion that the allocation of both legislative and executive authority does not support a theory of complete state sovereignty that would make the States immune from the legislative competence of the Union Parliament, especially with regard to acquiring State property. The Court noted that while Parliament ordinarily does not interfere with the normal exercise of the powers that belong to the States—both legislative and executive—in the fields assigned to them, this ordinary practice does not constitute a bar to Parliament exercising its authority to acquire property when it so chooses. It was contended that if the Union were held capable of acquiring State property, the result would be, as vividly described by the Advocate‑General of Bengal, that the Union could take possession of the very buildings in which the State Secretariat operates and thereby halt all governmental activity of the State. The Court rejected this as an exaggerated hypothetical, observing that even if a power could be misused, the mere possibility of abuse is not a legal ground for denying the existence of the power; the existence of a power must be determined on other, appropriate considerations. The Court further observed that the argument relied upon a revived form of the now‑discredited doctrine of immunity of instrumentalities, which originated in the observations of Chief Justice Marshall in McCulloch v. Maryland, and has since been expressly rejected by the Privy Council as inapplicable to the division of powers between the States and the Centre under the Canadian and Australian constitutions, as illustrated in Bank of Toronto v. Lambe and Webb v. Outrim, and has even been dismissed in United States jurisprudence. The Court then quoted a passage from Lord Hobhouse’s judgment in Lambe’s case, noting that although that decision addressed the opposite issue of not reading limitations into provincial power, it contained a useful observation: the appellant sought to read the Federation Act so narrowly that provincial legislatures under section 92 could not, even in a fanciful or extreme manner, interfere with the Dominion’s objectives under section 91. The Court emphasized that each case must be decided by construing the express words of the governing Act, which delineates an elaborate distribution of powers.

The Court explained that the Constitution allocates the entire field of legislative authority between two legislatures and, at the same time, establishes a carefully balanced framework for the federated provinces. The Court referred to three historical authorities – (1) (1819) 4 Wheat. 316, (2) (1887) 12 App. Cas. 575 and (3) [1907] A.C. 81 – to illustrate that neither centre nor province may enact laws for itself without the overall control exercised through the Governor‑General. The essential question, the Court observed, is to determine whether the central body or the provincial body possesses the power to make a particular law. If, after a proper construction of the relevant statute, a legislative power falls within section 92, it would be erroneous for a court to refuse to recognise that power merely because it might, in some extreme scenario, be misused or might limit the scope otherwise available to the Dominion Parliament.

The Court further noted that several entries in List I expressly permit the Union Parliament to legislate directly on property situated within a State, including property vested in the States themselves. Illustrative entries include: Railways (Entry 22); Highways declared by Parliament to be national highways (Entry 23); Shipping and navigation on inland waterways declared national waterways (Entry 24); Lighthouses and lightships (Entry 26); Ports declared major ports by law (Entry 27); Airways, aircraft and air navigation (Entry 29); Carriage of passengers and goods by rail, sea, air or national waterways in mechanically propelled vessels (Entry 30); Union property and its revenue, subject to parliamentary provision for property located in a State (Entry 32); Industries whose control the Union may deem expedient in the public interest (Entry 52); Regulation and development of oilfields, mineral oil resources, petroleum products and other dangerously inflammable substances (Entry 53); Regulation of mines and mineral development (Entry 54); Regulation and development of inter‑State rivers and river valleys (Entry 56); and ancient and historical monuments, records, archaeological sites and remains of national importance (Entry 67). The Court emphasized that these examples constitute some of the matters on which Parliament may directly legislate concerning property within the States. To deny Parliament the authority to legislate on such matters, while simultaneously granting it extensive legislative powers, would render the constitutional mechanism effectively inoperative. The Court also observed that, in the United States, Congress derives authority over a majority of comparable subjects from the “Commerce Clause,” a provision that is not interpreted as exclusive to the point of excluding State legislative competence in purely local matters.

The passage explained that, in the United States, the federal legislature possesses an authority that covers all aspects of commerce that cross state boundaries, while activities that are purely internal to a single state remain the domain of that state. The discussion cited Cooley’s work, Constitutional Limitations, eighth edition, page 1004, which reproduced Justice Hughes’s opinion in the case of Simpson v. Shepard. Justice Hughes is quoted as stating that the Constitution granted Congress a power “at all times adequate to secure the freedom of inter‑state commercial intercourse from State control, and to provide effective regulation of that intercourse as the national interest may demand.” The quotation continued by noting that the phrase “among the several States” distinguishes commerce affecting more than one state from commerce that is confined within a single state and does not impact other states. The passage further quoted Chief Justice Marshall, who observed that the character of the whole government is to act upon all external concerns of the nation and upon those internal concerns that affect the states, but not upon matters that are entirely internal to a particular state and do not affect any other state. Marshall’s view was that such completely internal commerce may be considered reserved for the state itself, and that this reservation is limited to authority that does not conflict with the grant to Congress. The text emphasized that there is no place in the constitutional scheme for a state to assert power that conflicts with the authorized exercise of federal power. It underscored that Congress’s authority extends to every part of inter‑state commerce and to every instrumentality or agency used to conduct it, and that the full control exercised by Congress over the subjects committed to its regulation cannot be denied or thwarted by the mingling of inter‑state and intra‑state operations. The passage clarified that this does not mean the nation may intervene in purely internal state matters, but rather that the execution by Congress of its constitutional power to regulate inter‑state commerce is not limited by the fact that intra‑state transactions may have become intertwined with inter‑state commerce, so that regulating the latter may incidentally control the former. This conclusion, it said, follows from the supremacy of the national power within its appointed sphere.

The discussion then turned to the Indian Constitution, stating that the Constitution does not recognise a similar distinction between the operation of a state law in matters that are local and those that are inter‑state. It observed that if a law falls within the Union List, then, irrespective of whether its operation is local, any state legislation inconsistent with it will, under Article 254(2), be struck down. The passage suggested that the issue could also be examined from another perspective. Even in constitutions that are truly federal, where the residuary powers recognise full sovereignty of the states in both executive and legislative fields, the power to use or “condemn” property of a state for Union purposes is not denied. In other words, the power to acquire land that the Union seeks to exercise is not barred, even though the land belongs to a state, because such power is compatible with the Union’s legislative competence.

In this dispute the State of West Bengal questioned the Union’s authority to acquire land under the powers conferred by sections 6, 7 and 9 of the Coal‑Bearing Areas (Acquisition and Development) Act, 1957. That statute was enacted to place greater public control over the coal mining sector and its development, reflecting the economic interests of India. It authorises the State to acquire land that contains, or is likely to contain, coal deposits, as well as to acquire rights in or over such land for the purpose of extinguishing or modifying those rights where they arise from any agreement, lease, licence or other arrangement, and it provides for matters connected with those acquisitions.

The constitutional basis for such legislation is found in Entries 52 and 54 of List I of the Seventh Schedule. Entry 52 empowers Parliament to legislate on “Industries, the control of which by the Union is declared by parliament by law to be expedient in the public interest.” Entry 54 authorises legislation on “Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.” Exercising the power under Entry 36 of the Government of India Act, 1935—which corresponds to Entry 52 of the Constitution—the Central Legislature enacted the Minerals and Mining (Regulation and Development) Act, 1948 (LIII of 1948). Section 2 of that Act declared it expedient in the public interest that the Central Government should assume control over the regulation of mines and oilfields and the development of minerals to the extent specified therein. The Act defined “mine” to include any excavation undertaken for the purpose of searching for or obtaining minerals and also covered an oil well. It stipulated that no mining lease could be granted after the Act’s commencement except in accordance with rules made under the Act, and section 13 made its provisions binding on the Government, whether exercising the rights of the Dominion or of a State. By the declaration in section 2, the minerals were rendered immovable. The Act remains on the Statute Book, and the declaration continues to operate as if made under Article 52 of the Constitution. After the Constitution came into force, Parliament enacted the Industries (Development and Regulation) Act, 1951 (65 of 1951). Section 2 of that Act similarly declared it expedient in the public interest that the Union should take under its control the industries listed in the First Schedule, which in item 3 includes “Coal, including Coke and other derivatives.” Subsequently, Parliament passed the Mines and Minerals (Regulation and Development) Act, 1957 (LXVII of 1957). Section 2 of this later Act reproduced a declaration comparable to that in the 1948 Act, dealing with all minerals except oil and incorporating certain amendments to the 1948 legislation.

The declaration made under item 52 gave Parliament exclusive power to enact legislation concerning the coal industry that was listed in the Schedule to Act 65 of 1951, and the State Government possessed no authority in that regard. Although the United States Constitution contained no specific provision granting Congress the power to acquire property for a public purpose, a long line of decisions had held that Congress could legislate on matters within its competence even when such legislation directly affected State rights to property. In the case of Oklahoma Ex Rel. Leon Co. Phillips v. Guy F. Atkinson Company, the Court held that when Congress enacted flood‑control legislation authorising the construction of a reservoir, it possessed the power to condemn lands owned by a constituent State. The Court observed, “The Tenth Amendment does not deprive the national government of authority to resort to all means for the exercise of a granted power which are appropriate and plainly adapted to the permitted end” (United States v. Darby, 312 U.S. 124). It further noted that because the construction of the dam and reservoir represented a valid exercise of Congress’s commerce power, there was no violation of State sovereignty. The Court also cited United States v. Appalachian Electric Power Co. (311 U.S. 428), stating that State ownership of land did not bar its condemnation by the United States, and affirmed Wayne County v. United States, 53 Ct. Cl. (F) 417, 252 U.S. 574. Similarly, in The Cherokee Nation v. The Southern Kansas Railway Co., the Court held that Congress could empower a corporation to build a railway through Cherokee Nation territory, because the United States could exercise eminent domain even within State limits when necessary to carry out powers granted to the general government by the Constitution. The Court explained that the power to effectuate legislative authority, which was entrusted in absolute terms and essential for executing those powers, did not depend on State consent and could not be obstructed by State opposition. Strong, J. described the extent of this power in Kohl v. United States, noting that “It has not been seriously contended during the argument that the United States Government is without power to appropriate lands or other property within the States for its own uses and to enable it to perform its proper functions. Such an authority is essential to its independent existence and perpetuity.” The Court concluded that the federal government’s constitutional powers required the ability to acquire land and other property across all States to fulfil essential governmental functions, and that this power could not be nullified by the unwillingness of private owners or by State prohibitions.

In this discussion the Court observed that the Constitution gives the General Government authority that necessarily includes the power to acquire land in every State. Such land is required for the construction and operation of forts, armories, arsenals, navy yards, lighthouses, custom‑houses, post offices, court‑houses and other facilities that serve public purposes. The Court warned that if the right to acquire property for these purposes were reduced to a theoretical right because owners refused to sell or because a State barred a sale to the Federal Government, the constitutional authority would become ineffective. In that situation the existence of the Government would depend on the goodwill of a State or of private individuals, which the Court deemed unacceptable. The Court noted that each State possesses the well‑known right of eminent domain, a right that is distinct from and superior to the notion of ultimate ownership. This right originates from the practical necessities of governance rather than from the manner in which land is held. It can be exercised even when the land is not held by a direct grant from the Government, whether immediate or intermediate, and regardless of whether the land would revert to the Government if the owners’ heirs failed. The Court explained that eminent domain is a product of political necessity and is inseparable from sovereign power unless a fundamental law expressly denies it.

The Court further explained that in the United States the power to take private property for public use is known as eminent domain. This power allows a State, upon payment of just compensation, to acquire any property needed for public purposes. It is regarded as an inherent attribute of sovereignty that exists independently of the Constitution and may be exercised over all property within the States to enforce the Union’s authority against both private and State property. The Court then referred to the decision in Attorney‑General for British Columbia v. Canadian Pacific Railway, where the Judicial Committee examined whether the powers conferred by sections 91 and 92 of the British North America Act, 1867—sections that grant the Dominion Parliament exclusive legislative authority over railways, canals, telegraphs and other works connecting provinces—could be used to permit the use of provincial Crown land for a railway. The Committee rejected the argument that the statutes should be interpreted to prevent the Dominion Parliament from disposing of provincial Crown lands for the stated purposes. It cited the earlier case of Canadian Pacific Ry. Co. v. Corporation of the Parish of Notre Dame de Bonsecours (1899 A.C. 367), which affirmed the Parliament’s authority to legislate for railways throughout all provinces traversed, including the use of Crown lands.

It was fully recognised that the principle was established in the earlier decision. In the case of Toronto Corporation v. Bell Telephone Co. of Canada (1) [1906] A.C. 204 (1905 A.C. 52), the matter involved a telephone company whose operations were not confined to a single province and which relied on the same constitutional sections. The Board gave full effect to the legislation of the Dominion Parliament with respect to the streets of Toronto that were vested in the municipal corporation. The Court explained that to interpret the provision in a way that would exclude Parliament’s authority over Provincial Crown lands would, in its view, be inconsistent with the language of the sections that must be interpreted, with the overall scope and purpose of the legislation, and with the principle applied in the Board’s earlier decisions. Accordingly, the Court held that the Dominion Parliament possessed complete power, if it so chose, to authorise the company to use provincial Crown lands for the purpose of constructing the railway.

The Court further observed that there is no inconsistency with a genuine federation such as Australia in having a provision like section 51(31) of the Commonwealth of Australia Act, 1900, which expressly empowers the Commonwealth to acquire State property when required for a Commonwealth purpose, subject to the payment of compensation. It noted that the Australian legislation contains a provision concerning the vesting of property in the States and in the Commonwealth that is somewhat analogous to Article 294 of the Indian Constitution. In Canada, the Privy Council has held that the Dominion’s acquisition of property for the implementation of Dominion legislation under the powers conferred on Parliament by section 91 does not conflict with the legislative sovereignty of the Provinces in the matters allocated to them by section 92. The Court also referred to the United States, describing it as a true federation where the Constitution makes no provision for State constitutions, which are governed by their own laws, and where it has been held that the power of eminent domain exercised by Congress for legislative purposes includes the authority to expropriate State property. In this context the Court was unable to accept the argument that, if a Constitution is a federation and the constituent units are States, such a status necessarily imposes a prohibition on the Union’s right to acquire State property for the purpose of giving effect to its legislative powers. Consequently, the Court affirmed that the Union’s power to legislate concerning property situated in the States remains unrestricted even if the States are regarded as sovereign entities within the Union, and that State property is not immune from Union legislation. By exercising the powers set out in the various entries previously discussed, the Union Parliament could legislate in a manner that affects the rights of the States in the property vested in them. If exclusion of State

If property were excluded from the reach of Union legislation under the entries in List I, the Union Government would find it difficult, if not impossible, to fulfill its duties concerning matters of national importance.

If the earlier mentioned entries are not subject to the restriction that has been suggested, there is no basis for assuming that Entry 42 of List III is limited only to property belonging to individuals or corporations and excludes State property.

Ultimately, the issue concerns the scope of legislative competence. The Court examined whether the authority granted by Entry 42 of List III, which is ancillary to the powers under Entries 52 and 54, can be exercised with respect to State property. The Constitution contains no explicit prohibition on such exercise, and to infer one would require assuming that the States possess a level of sovereignty that overrides the express legislative authority of the Union.

The constitutional division of legislative and executive powers between the Union and the States is not based on that premise, and the earlier analysis of Union superiority over the States negates that assumption.

Regarding point (2), Article 294(a) provides that all property and assets that, immediately before the Constitution came into force, were vested in the British Crown for the Dominion of India, were transferred to the Union, and that property held for the purposes of provincial governments was transferred to the respective States. Under the Government of India Act, all property intended for governmental purposes was vested in the British Crown; the Constitution consequently transferred that property to the Union and the States respectively. Clause (b) further states that the rights, liabilities and obligations of the Government of India and of the provinces devolved upon the Union and the respective States.

It was emphasized that Article 294 vested certain property in the States, and it was argued that, subject to the State’s right to transfer that property by agreement under Article 298, the Constitution intended the State to remain the owner, thereby implying that the Union does not have the right to acquire State‑owned property without the State’s consent.

The Attorney‑General observed that, concerning the plaintiff State of West Bengal, the State did not possess the coal‑bearing lands at the time the Constitution came into force; it obtained title to those lands later under the Bengal Acquisition of Estates Act, 1954 (West Bengal Act I of 1954), and therefore the subsequently acquired property does not fall within the ambit of Article 294. The Court expressed no doubt that this would be

In this case the Court noted that the argument presented by the plaintiff sought to obtain a judgment that would answer the plaintiff’s claim and, in particular, address the challenge to the validity of the present notification that was being contested. However, the Court expressed that it did not wish to base its decision on such a limited ground. The Court then set out the full text of Article 298, which provides: “298. The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose, Provided that – (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the States; and (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.” The plaintiff argued that the Constitution intended that property allotted to or vested in a State under Articles 294 or 296 would remain the property of that State unless, by virtue of the power given to the State by Article 298, the State chose to relinquish it. The plaintiff further contended that, without a constitutional amendment of those articles, such property could not be divested from the State.

The Court observed that this submission was based on a misunderstanding of the function of Articles 294 and 298 within the constitutional scheme. First, the Court explained that when Article 298 confers on a State the power to acquire or dispose of property, the reference is to the executive power of the State to acquire or dispose of any property, whether that property is vested under Article 294 or under Article 296 by escheat, lapse, bona vacantia, or acquired by any other means. The Court clarified that Article 298 is merely an enabling provision that gives the State, as owner of the property, the authority to dispose of it. Such an enabling provision cannot, on any reasonable construction, be read as negating the possibility that the State’s title to property may be lost by operation of other constitutional provisions. Consequently, Article 298 has no bearing on the proper construction of Article 294.

Turning to Article 294, the Court noted that this article is modelled on section 172 of the Government of India Act, 1935. The Court cited the decision of the Federal Court in In re the Allocation of Lands and Buildings in a Chief Commissioner’s Province (1), which explained that up to 1 April 1937, when the majority of the 1935 Act came into force, the Government of India was a unitary government to which all Provincial Governments were subordinate. Accordingly, all lands and buildings belonging to the Government or used for governmental purposes were vested in His Majesty for the purposes of the Government of India. This legal position had persisted since the Government of India Act, 1858. The Court therefore concluded that the earlier statutory scheme and its allocation of property cannot be ignored in interpreting the constitutional provisions, and that Article 294 must be understood in the historical context of the allocation of lands and buildings among the Union, the States and the Crown.

The Court observed that sections of the Government of India Act, including section 28(1) and 28(3), which were in force immediately before the 1935 Constitution, had to be interpreted in the context of the creation of a number of autonomous provinces that were independent of the Central Government. The Constitution divided the totality of executive and legislative powers in British India between the Central Government and these provinces, and it also separated the powers connected with the exercise of the Crown’s functions in its relations with the Indian States. From that date onward those Crown functions were to be exercised exclusively by His Majesty’s Representative appointed for that purpose, as noted in the 1943 F.C.R. 20 23. Because of this new constitutional arrangement, it became necessary to allocate among the three authorities—the Central Government, the provincial governments and His Majesty’s Representative—the lands and buildings that had previously been vested solely in His Majesty for the purposes of the Government of India. The allocation was effected, or at least attempted to be effected, by the provisions of section 172, sub‑section (1), paragraphs (a), (b) and (c) of the Government of India Act.

Section 172(1) provides that all lands and buildings which, immediately before the commencement of Part III of the Act, were vested in His Majesty for the purpose of the Government of India shall, from that date, be dealt with as follows: in the case of lands and buildings situated in a province, they shall vest in His Majesty for the purposes of the government of that province unless they were then being used—other than under a tenancy agreement between the Governor‑General in Council and the provincial government—for purposes that would thereafter become purposes of the Federal Government or of His Majesty’s Representative for the exercise of Crown functions in relation to Indian States; or unless they are lands and buildings formerly used for such purposes, are presently intended to be used for such purposes, or are certified by the Governor‑General in Council or, as the case may be, His Majesty’s Representative, as having been retained for future use for such purposes, or have been temporarily retained for more advantageous disposal by sale or otherwise.

The Court noted that section 172 is the forerunner of Article 294 of the Constitution, and that sections 174 and 175 are phrased in terms similar to Articles 296 and 298. Consequently, the right of the States to property that devolved upon them under Article 294(a) is no different from the right they enjoy over property acquired later. The Constitution does not draw a distinction between property acquired at the inception of the Constitution and property acquired through the exercise of executive authority. Article 294 contains no prohibition against the transfer of State property, and where such property is capable of being transferred by the State, it is also capable of being compulsorily acquired. The Court found the Canadian case Attorney‑General for Quebec v. Nipissing Central Railway Co. and Attorney‑General for Canada instructive in this context. It further observed that the Dominion legislation, specifically the Railway Act 1919 of Canada, provided for the expropriation of lands for railway purposes and for the payment of compensation for such lands.

Under the Railway Act, the statute provided that compensation must be paid for any lands taken, and section 189 of that enactment authorised the railway company, with the consent of the Governor General‑in‑Council, to acquire “Crown lands” for railway purposes. The British North America Act, section 109, which corresponds to Article 294, declared that all lands, mines, minerals and royalties belonging to the several Provinces of Canada, Nova Scotia and New Brunswick at the time of Union, together with any sums then due for such property, would belong to the respective Provinces—Ontario, Quebec, Nova Scotia and New Brunswick—in which the property was situated, subject to any existing trusts and to any interest other than that of the Province. The text of section 109 reads: “All lands, mines, minerals, and royalties belonging to the several Provinces of Canada, Nova Scotia and New Brunswick at the Union, and all sums then due or payable for such lands, mines, minerals, or royalties, shall belong … to the several Provinces of Ontario, Quebec, Nova Scotia and New Brunswick in which the same are situate or arise, subject to any trusts existing in respect thereof, and to any interest other than that of the Province in the same.” The right of the Provinces to continue to retain and enjoy the property vested in them was further reinforced by section 117, which states: “The several Provinces shall retain all their respective public property not otherwise disposed of in this Act, subject to the right of Canada to assume any lands or public property required for fortifications or for the defence of the country.” The Governor‑General of Canada referred to questions before the Supreme Court concerning the effect of these provisions and the competence of the Dominion Parliament in relation to Provincial Crown lands. It was observed that the lands in question were not required for fortifications or for the defence of the country within the scope of section 117.

The Supreme Court of Canada held that the provision applied to Provincial lands and that it had been validly enacted by the Dominion Parliament. Sir John Simon, appearing for the appellant Province, advanced two submissions. First, he argued that a proper construction of the Railway Act would restrict its application to Crown lands vested in the Dominion and not to Provincial Crown lands, relying heavily on the requirement in section 189 of the impugned Act that the consent of the Governor‑General‑in‑Council be obtained. Second, he contended that because Provincial Crown lands were vested in the appellant by section 109 of the Imperial Act, read together with section 117, the Provinces were entitled to retain any of their property that was not expressly disposed of by the Act, and that the purpose of the Railway Act did not fall within the limited circumstances of section 117, which permitted the Dominion Government to take property only for fortifications or defence. Consequently, if the Railway Act, when properly construed, interfered with Provincial lands, such interference would be unconstitutional. The respondent Dominion argued that when section 117 of the British North America Act vested the Dominion with the power to take Dominion land for defence, it referred only to executive action, not legislative authority, and that the section was not intended to guarantee that the Provinces retain their public property forever but merely to effect a distribution of public property as of the date of Confederation.

Viscount Cave, after addressing the question of how section 189 should be interpreted, explained that the provision applies to every parcel of Crown land that lies along the railway route, and it does not distinguish between lands owned by the Dominion and those owned by the Provinces. He regarded the argument that the reference to the Governor‑General‑in‑Council meant that only Dominion property was intended to fall within the section as not very material and therefore dismissed it. Turning to the principal constitutional challenge concerning the validity of taking Provincial property, Viscount Cave observed that this was not the first time the Privy Council had considered the effect of Dominion legislative power under section 91 of the British North America Act on land vested in the Provinces. He referred to the earlier decision in Attorney‑General for British Columbia v. Canadian Pacific Railway Co. (1906 A. C. 204), where it had been contended that the Dominion’s legislative authority should not be interpreted so as to deprive the Provinces of the proprietary interest in the lands vested in them by the British North America Act. Viscount Cave then quoted the passage from that judgment, stating: “It was argued that the effect of ss. 109 and 1.17 of the British North America Act was to vest in each of the Provinces the beneficial interest in the Crown land situate in the Province, subject only to the right of Canada under the reservation contained in s. 117 to assume lands required for purposes of defence. But the reservation in question appears to refer to executive, and not to legislative, action; and while the proprietary right of each Province in its own Crown lands is beyond dispute, that right is subject to be affected by legislation passed by the Parliament of Canada within the limits of the authority conferred on that Parliament… where the legislative power cannot be effectually exercised without affecting the proprietary rights both of individuals in a Province and of the Provincial Government, the power so to affect those rights is necessarily involved in the legislative power.”

The power to acquire land was placed under the Government of India Act, 1935 by Entry 9 in List II of the Seventh Schedule, giving exclusive authority to the Central Government with respect to the Provinces. For any matter over which the Central Legislature was competent to enact law, the Central Executive could require a Province to acquire land on behalf of, and at the expense of, the Union. This arrangement, however, did not imply that the power to affect the rights of citizens, corporations, or Provinces in land was unavailable simply because the legislation concerned railways, ports, lighthouses, or similar subjects. As already observed, even in constitutional systems where a larger share of sovereignty remains with the component units—such as the United States of America—the central legislative power includes the authority to legislate in a manner that can affect rights in State property.

The Court observed that legislation dealing with matters assigned to the Central or national subjects inherently includes the authority to enact laws that may extinguish rights in State property. Under the Government of India Act, 1935, the Central Government possessed the power to direct a Province to acquire private land on behalf of the Union and, where the land belonged to the Province, to transfer that land to the Union. The Provincial Government had no discretion to refuse compliance with such a direction, and the provision concerning the fixation of compensation did not alter the essential nature of the right that the Central Government could exercise.

In broad outline, the Court explained that the constitutional framework governing the relationship between the Union and the States is modelled on the relationship that existed between the Central Government and the Provinces under the Government of India Act, 1935, and that, in this respect, the Constitution has largely borrowed from the earlier constitutional document. Even though the Provinces enjoy autonomy within the spheres allotted to them, and even though there is a distribution of property and assets between the Central Government and the Provinces under Part III of Chapter VII that mirrors the provisions found in the corresponding Articles 294 and 298, it was not regarded as an infringement of provincial autonomy to vest the power of compulsory acquisition in the Central Government. Section 127 of the Government of India Act provided that “The Federation may, if it deems it necessary to acquire any land situated in a Province for any purpose connected with a matter with respect to which the Federal Legislature has power to make laws, require the Province to acquire the land on behalf, and at the expense, of the Federation or, if the land belongs to the Province, to transfer it to the Federation on such terms as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India.” Consequently, property vested in a Province under Section 172 could be required to be transferred to the Central Government when needed for a central purpose. It follows that the right of the Centre to require a Province to part with property for the effective performance of central functions does not diminish provincial autonomy. The Court emphasized that the presence of Section 127 in the enactment empowered the Central Government to require the Provinces to part with property owned by them if such property was needed for the purposes of the Government of India. Although it was suggested that the compulsory acquisition of provincial property by the Central Government was a special provision and that the absence of such a provision would make a material difference, the Court held that this view rested on a merely superficial analysis. A closer examination of the scheme of distribution of legislative power concerning compulsory acquisition of property under the Government of India Act reveals that, though the...

In this case, the Court observed that although the authority to compulsorily acquire property was assigned exclusively to the Provinces under the earlier statutory scheme, the Central Government was nevertheless able to meet its own property requirements for central purposes by making use of the provincial administration. Consequently, a specific provision was necessary whereby the Provinces, acting under the direction of the Central Government, would be required to transfer provincial property. The Court found it difficult to understand how the existence of a provision in the Government of India Act that provided for the assessment of compensation when the Provinces were compelled to transfer land at the request of the Central Government, and the subsequent omission of that provision in the Constitution, could have any impact on the power vested in the Union Parliament. The Court further noted that the Australian Constitution contains an express power authorising the Parliament of Australia to legislate for the acquisition of State property, whereas the constitutions of the United States of America and Canada contain no such explicit provision. Nevertheless, the Court held that the power of the Union Parliament to enact legislation affecting the title of the constituent States to property vested in them is not excluded by the absence of an express clause. The Court reasoned that if other provisions of the Constitution, with sufficient breadth, confer the authority to legislate for the acquisition of State property, that authority cannot be defeated simply because the general power to acquire property does not specifically refer to State property. The Court then turned to the original scheme of the Constitution of India, which had provided a detailed distribution of powers concerning acquisition and requisition of property. Under the original text, List I, entry 33 dealt with the acquisition or requisition of property for Union purposes; List II, entry 36 dealt with acquisition or requisition of property, except for Union purposes, subject to the provisions of entry 42 of List III; and List III, entry 42 set out the principles for determining compensation for property acquired or requisitioned for the purposes of the Union, a State, or any other public purpose, and prescribed the manner in which such compensation was to be paid. The Court explained that the Constitution (Seventh Amendment) Act, 1956 repealed those three entries and replaced them with a single entry, entry 42, placed in the Concurrent List, described as “Acquisition and Requisition of property.” Since that amendment, the power to acquire or requisition property may be exercised concurrently by both the Union and the States. The Court observed that this concurrent jurisdiction precludes any possibility of conflicting exercises of the power. The Court reviewed Article 31(2), which governs the acquisition of all property. According to that provision, two conditions must be satisfied: first, the acquisition or requisition must be for a public purpose; second, the law under which the property is taken must provide for payment of compensation, either fixed by the law itself or determined according to principles specified therein. Clause (3) of Article 31 further stipulates that a law made by a State legislature relating to acquisition shall have effect only if it has been reserved for the President’s consideration and has obtained his assent. The Court noted that the President exercises this authority.

In this case the Court observed that the Constitution did not permit the Union and a State to exercise the power of acquisition over the same subject matter at the same time, nor could a State acquire property after the Union had legislated on the same matter; such a situation could not arise in practice. The Court further explained that Article 254 excluded the possibility of conflicting legislation. Under clause (1) of that article, if a law made by a State legislature conflicted with any provision of a law validly made by Parliament, the State law was void, subject to the exception in clause (2). Clause (2) allowed a State law on a matter in the Concurrent List to retain limited validity even if it conflicted with an earlier Parliamentary law, but only if the State law had been reserved for the President’s consideration and had received his assent. The proviso to this clause reserved to Parliament the power to repeal a State law even when it enjoyed that limited validity. Consequently, the Court held that the President could not realistically give assent to a State law that intended to nullify a Parliamentary law authorising acquisition of State property for Union purposes, because such assent lay beyond the realm of practical possibility. The Court then turned to the contention raised in reference (6) that Article 31 did not apply to the acquisition or requisition of State property. It rejected this contention as lacking any solid foundation and identified three grounds on which the argument had been advanced. First, it was argued that fundamental rights were declared for the benefit of citizens and others against legislative or executive action of the Government of India, Parliament, State governments and all local authorities, and not for the benefit of States against Union action. Second, it was claimed that Article 31 protected the rights of “persons” and that a State did not qualify as a “person” within that provision. Third, it was asserted that Entry 42 in the Concurrent List, by virtue of Articles 13 and 245, was subject to Article 31, thereby permitting the acquisition of private property in accordance with constitutional prohibitions while allowing State property to be acquired without a public purpose or compensation. The Court found these arguments unconvincing. It held that the Constitution did not preclude the State from invoking fundamental rights, and that Article 13 (1) rendered any pre‑constitutional law inconsistent with Chapter III void, while clause (2) prohibited the State from enacting any law that took away or abridged fundamental rights, making such laws void. Although fundamental rights are primarily intended to protect individuals and corporations against governmental action, the Court emphasised that they also apply to the State’s actions, and any law existing before the Constitution or enacted thereafter that conflicted with these rights must be considered void to the extent of the inconsistency.

In this case, the Court observed that certain fundamental rights are expressed in a positive form but are nevertheless subject to restrictions that permit the State to enact laws which diminish the full extent of the protection afforded by those rights. The Court listed examples of such provisions, namely Article 15(4), Article 16(3), Article 16(4), Article 16(5) and, further, Articles 19(2), 19(3), 19(4), 19(5), 19(6), 22(3), 22(6), 23(2), 25(2), 28(2) and 28(3). The Court also identified a group of articles that merely declare rights without attaching any qualifying language; these include Article 17, Article 25(1), Article 26, Article 29(1) and Article 30(1). In addition, there are provisions that are purely prohibitory in nature and do not refer to any right of a person, body or agency that could be enforced, such as Article 18(1), Article 23(1), Article 24 and Article 28(1). Prima facie, the Court held, these declarations impose an obligation not only on the State but on every individual to respect the rights that have been proclaimed, and the rights are enforceable against any person or agency unless the surrounding context expressly indicates a different limitation.

The Court further explained that a right expressed only as a prohibition must be accompanied by a positive element; without such a positive component the prohibition would be ineffective. Consequently, any person or agency may seek relief from the High Court or from this Court for infringement of a prohibitory right, unless the statute expressly confines the protection to actions of the State. The Court also noted the existence of articles that do not confer rights but instead impose fundamental disabilities, for example Article 18(2), Article 18(3) and Article 18(4). Moreover, certain provisions such as Article 19(g), Part II of the Constitution and Article 24(2) appear to recognise affirmative rights of the State itself.

Turning to Article 31, the Court observed that this article is framed in negative language but nevertheless acknowledges a crucial power inherent in every sovereign State, a power that arises not from the Constitution but from the very existence of the State. This power is the authority to acquire property for public purposes upon payment of compensation, a concept described by American jurists as “eminent domain”. Article 31(2) sets out the conditions under which this eminent‑domain power may be exercised. For the matter before the Court, it was unnecessary to decide whether Article 31(1) also embraces the police power of the State.

The Court recounted the historical debate that existed before the amendment effected by the Constitution (Fourth Amendment) Act, 1955. At that time, there was a divergence of opinion within the Court regarding the relationship between clauses (1) and (2) of Article 31. Some judges contended that both clauses dealt with eminent domain, while other judges maintained that clause (1) pertained to the police power and clause (2) to eminent domain. A number of judges did not express a definitive view. After the Fourth Amendment, the Court noted that clauses (1), (2) and the newly added clause (2A) of Article 31 read as follows: “(1) No person shall be deprived of his property save by authority of law. (2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and”

Clause (2) of Article 31 required that any law providing compensation must also prescribe the manner in which that compensation was to be determined and given, and it barred any court from questioning the adequacy of such compensation. Clause (2A) added that a statute which did not transfer ownership or the right to possession of any property to the State or to a corporation owned or controlled by the State would not be deemed to provide for compulsory acquisition or requisition, even if the statute nevertheless deprived a person of his property. In the decision of Kavalappara Kottarathil Kochuni v. State of Madras, the Court observed that the amended clauses (1) and (2) of Article 31 granted only a limited protection against the exercise of various governmental powers. By virtue of clause (2), property was protected against compulsory acquisition or requisition, and the protection extended to the broadest possible range of property. The Court noted that the text of the Article did not limit the protection to property belonging exclusively to individuals or corporations. Although the word “person” appeared in clause (1), it was absent from clauses (2) and (2A), and the surrounding context did not support an interpretation that the protection was unavailable to State property. The Court further explained that any alternative construction would imply that properties belonging to municipalities or other local authorities—entities that fall within the definition of State in Part III—could either never be acquired or could be taken without any compensation, an outcome that the Constitution intended to avoid.

The Court then turned to the relationship between Entry 42 of List III and clause (2) of Article 31, noting that both provisions operated within the same legislative field. Entry 42 defined the content of legislative power, while clause (2) imposed restraints on the exercise of that power. Consequently, when assessing whether a challenged law dealing with acquisition or requisition of property was within the legislature’s competence, the two provisions must be read together. Both form part of a single legislative pattern concerning the exercise of what may be conveniently described as the power of eminent domain, and therefore the term “property” must bear the same meaning in each provision for the purpose of defining the scope of power and the accompanying restrictions. In other words, clause (2) of Article 31 limited the use of the legislative power conferred by Entry 42 of List III. Property that was vested in the State could not be acquired under a statute enacted under Entry 42 unless that statute complied with the requirements laid down in the relevant clauses of Article 31. The Court also cited Director of Rationing and Distribution v. The Corporation of Calcutta, where it held by a majority that the law applicable to India before the Constitution, as laid down authoritatively by the Privy Council in L.R. 73 I.A. 271, had not been altered by the Constitution, and that the principle that the State is not bound by a statute unless expressly or necessarily implied remained good law.

The Court indicated that statutes which were in force before 26 January 1950 would remain valid in the present constitutional order, except to the extent that they conflicted with the express provisions of the Constitution. It reaffirmed that the rule of statutory interpretation, according to which the State is not bound by a statute unless the statute expressly provides so or binds the State by necessary implication, continues to be good law. At page 172 the Court observed that governmental immunity from the operation of certain statutes, particularly criminal statutes, rests on the fundamental notion that the Government or its officers cannot be parties to a crime, analogous to the royal prerogative that the King can do no wrong. The Court noted that although the historical origin of this rule may lie in monarchical practice, the rule has been adopted in India on public‑policy grounds as a rule of statutory interpretation, and that it is not peculiar or confined to a monarchical form of Government (1) [1961] 1 S.C.R. 158. The judgment approved the principle of sovereign exemption from the general words of a statute as earlier expressed by the Judicial Committee in Province of Bombay v. Municipal Corporation of Bombay. According to that authority, the general principle for deciding whether the Crown is bound by the general words of a statute is well established, and early common law held that no statute bound the Crown unless the Crown was expressly named therein, expressed by the Latin maxim “Roy nest lie par ascun statute si il ne soit expressement nosme.” However, the rule admits an exception: the Crown may be bound by “necessary implication” when the terms of the statute manifest that the Legislature intended the Crown to be bound, producing the same effect as an express naming. In that situation, it must be inferred that the Crown, by assenting to the law, accepted the obligation to comply with its provisions. The Court reiterated that the rule that the State is not bound unless expressly named or bound by necessary implication is a matter of interpretation, requiring the Court to consider the true meaning of the words employed by the Legislature. To ascertain that meaning, the Court must examine the aim, object and scope of the entire statute, not merely the individual clause under consideration. The Court must therefore compare the clause with other parts of the law and with the context in which the clause occurs. Furthermore, when interpreting a constitutional document, provisions that confer legislative power must ordinarily be read liberally and given their widest amplitude, as noted in the citation to Navinchandra Mafatlal v. The Commissioner of Income‑Tax (1) (1946) L.R., 73 I.A. 271, 274.

In this case the Court observed that Entry 42 of List III, referred to as “Bombay City (1)”, on its face does not contain any indication that the term “property” should be given a narrow construction, and that no other constitutional provision, for the reasons already explained, suggests a restricted meaning for that expression. The Court further held that the notion of an absolute sovereignty of the States that could not be infringed by the acquisition of property vested in the States through Parliamentary legislation has no foundation in law. It was additionally noted that if the Union Parliament were denied the power to legislate on subjects allocated to it, where such legislation would affect property vested in a State, the effect would be to render Parliamentary legislation virtually ineffective. The Court found that no constitutional provision had been placed before it that would imply a limited meaning of the word “property” when considered in the context of legislative authority. Considering the extensive powers that the Union Parliament and the Executive possess for the utilisation of State property in the larger public interest, the Court concluded that there is no suggestion in the Constitution that those powers do not extend to the acquisition of State property. By making the required declarations under Entry 54 of List I, the Union Parliament assumed the authority to regulate mines and minerals and consequently to deny agencies that are not under Union control the right to work those mines. The Court could scarcely imagine that the Constitution‑makers, while intending to confer an exclusive power to work mines and minerals on the Union, would simultaneously prevent the effective exercise of that power by making it impossible to compulsorily acquire land that belongs to the States and contains minerals. The Court explained that, if this argument were accepted, the effective exercise of the power would depend not merely on issuing a notification under Entry 54 but on the willingness of the State in whose territory the mineral‑bearing land is situated. The Court further held that the power to legislate for the regulation and development of mines and minerals under Union control, as affirmed in [1955] 1 S.C.R. 829, by necessary implication includes the power to acquire those mines and minerals. Accordingly, the power to legislate for the acquisition of property vested in the States cannot be denied to Parliament provided such legislation is consistent with the protection afforded by Article 31. The Court then recorded its findings on the issues: Issue 1 was found in the affirmative; Issue 2 was held not to disenfranchise the Union Parliament from exercising its legislative power under Entry 42 of List III; Issue 3 was answered by reference to the answer on Issue 2; Issues 4 and 5 were found in the negative; the additional issue was found in the affirmative. Consequently, the suit was dismissed with costs. Justice Subba Rao expressed regret that he was unable to agree with the majority. He noted that the summary of pleadings and the issues raised had been set out in the judgment of the learned Chief Justice and required no further repetition. The learned Advocate‑General of West Bengal contended that the State of West Bengal and the Union of India are sovereign authorities within the respective spheres allocated to them by the Constitution.

It was submitted that the Constitution envisioned each sovereign authority as capable of acquiring the other's property only through a mutual agreement, making the notion of unilateral acquisition inconceivable. Moreover, the argument posited that a proper reading of entry 42 of List III, in light of the constitutional scheme and particularly article 31, demonstrated that the Union could not invoke this entry to acquire State land. The counsel representing the States of Madhya Pradesh, Orissa, Assam and Madras endorsed the position of the Advocate‑General of West Bengal. The Advocate‑General of Punjab, while supporting the same line, also advanced a secondary contention that if the acquisition of State property proved necessarily incidental to the effective exercise of any power conferred on Parliament under Lists I and III of the Seventh Schedule, Parliament could legislate for such acquisition provided it did not interfere with the State’s governmental functions; he further observed that the power to acquire State land was not inevitably incidental to the regulation of mines. The Government pleader for the State of Bihar aligned with the Union of India, asserting that Parliament could enact a law for acquiring State property pursuant to entry 42 of List III. The Attorney‑General, appearing for the Union of India, argued that the natural and grammatical construction of entry 42 of List III sustained the challenged legislation; he also sought to reinforce this view by referencing entries 52 and 54 of List I and entry 33 of List II. He further maintained that, in any event, Parliament could enact the impugned law under article 148 of the Constitution and entry 97 of List I. Additionally, he questioned the proposition that the Union and the States were sovereign in their respective fields and advanced the theory that, under the Constitution, the States were subordinate to the Union. Before proceeding to interpret the relevant constitutional provisions, the Court found it useful to outline the constitutional framework pertinent to the present inquiry, since the arguments were, to some extent, linked to the scope and nature of Union and State powers. The Constitution, as enacted by the people of India, declared India to be a sovereign democratic republic and a Union of States. Its preamble indicated that political sovereignty rested with the people, while legal sovereignty was divided between the constitutional entities of the Republic of India, namely the Union and the various States. Part V dealt with the Union and the instruments by which it functioned, including the legislature, the executive and the judiciary.

In this case, the Court observed that Part V of the Constitution allocated to the Union the three branches of government – the legislature, the executive and the judiciary – thereby defining the institutional framework through which the Union exercised its functions. Correspondingly, Part VI set out the constitutional scheme for the States, providing that each State could operate its own legislature, executive and judiciary. The Court then turned to Part XI, which governed the relationship between the Union and the States. This part distributed legislative authority between the two levels, regulated the administrative interaction between them, and prescribed various mechanisms for resolving any disputes that might arise in the exercise of their respective powers. Article 246, according to the Court, demarcated the fields of legislation with exactitude and underscored the exclusive competence of either the Union or the States to enact laws on matters that were listed in the Seventh Schedule and assigned to one or the other. With respect to the executive power, the Court noted that Articles 73 and 162 delineated the distinct spheres in which the Union and the States could act. Chapter 11 of Part XI, the Court explained, provided for Union control over the States in certain situations that were specifically enumerated.

The Court further explained that Part XII dealt with finance, property, contracts, rights, liabilities, obligations and suits, and it allocated revenue between the Union and the States. It also authorized the allocation of particular taxes collected by the Union, created two separate consolidated funds – the Consolidated Fund of India and the Consolidated Fund of the State – and incorporated various exemptions, such as exemption of State property from Union taxation and exemption of Union property from State taxation. Moreover, Part XII empowered both the Union and the States to borrow money on the security of their respective properties, subject to prescribed limitations. Chapter III of Part XII concerned the acquisition of property, assets, rights, liabilities and obligations in certain cases. In this regard, the Court quoted Article 294, which stated that from the commencement of the Constitution (a) all property and assets that immediately before that date were vested in His Majesty for the purposes of the Government of the Dominion of India, and all property and assets that were vested in His Majesty for the purposes of the Government of each Governor’s Province, would thereafter vest respectively in the Union and in the corresponding State; and (b) all rights, liabilities and obligations of the Government of the Dominion of India and of each Governor’s Province, whether arising out of any contract or otherwise, would become the rights, liabilities and obligations of the Government of India and of the Government of the respective State. Under Article 296, the Court noted that any property that accrued by escheat, lapse or as bona vacantia and was situated in a State would vest in that State, while any such property elsewhere would vest in the Union. Article 297 vested all lands, minerals and other valuable things underlying the ocean within the territorial waters of India in the Union. Finally, the Court mentioned Article 298, which had been amended by the Constitution (Seventh Amendment) Act, 1956, and which extended the executive power of both the Union and each State to carry on any trade or business, to acquire, hold and dispose of property, and to make contracts for any purpose, all subject to the legislative competence of the respective Union or State.

In this case, the Court explained that the Constitution authorised the making of contracts for any purpose that fell within the legislative competence of either the Union or a State, as appropriate to the subject matter. Article three hundred provided that the Government of India and the Government of a State could both sue and be sued in their respective names, that is, they could be parties to legal proceedings as juridical persons. Chapter one of Part fourteen dealt with the recruitment procedures and the regulation of service conditions for the various services that operate under the Union and under the States. Part fifteen established an independent machinery to conduct elections to the Parliament and to the State legislatures. Part eighteen contained the emergency provisions, specifying that the President could, by proclamation, declare an emergency when the security of India or any part of its territory was threatened by war, external aggression or internal disturbances, when the constitutional machinery of a State failed, or when the financial stability or credit of India or any part thereof was endangered; the proclamation, subject to prescribed safeguards, empowered the Centre to assume the administration of the concerned State, wholly or partially, for a limited period. Article three hundred sixty‑eight dealt with the amendment process for the Constitution and provided that certain provisions, such as the entries in the Seventh Schedule and the representation of the States in Parliament, required ratification by a resolution passed by the legislatures of not less than one‑half of the States. The Court further observed that, under the scheme of the Constitution, sovereign powers were allocated between the Union and the States within the fields assigned to each. The Union exercised its sovereign powers throughout the entire territory of India, whereas each State exercised its sovereign powers within its own territory limited to the fields enumerated for it. Both the State legislatures and the Parliament were elected on the basis of adult franchise. The legislative domain of the Union was considerably broader than that of the States, and in the event of a conflict in a field that was common to both, the law made by the Union would normally prevail over the law made by a State. Concerning Bills that had been passed by a State legislature, the Court noted that the Governor could, and in the case of Bills that sought to reduce the jurisdiction of the High Court must, reserve such Bills for the President’s consideration; although this provision theoretically limited the State’s legislative power, in practice the Governor acted on the advice of the ministry that commanded the confidence of the legislature. Apart from Bills that affected the powers of the High Court, the Court said it was unlikely that a Governor would forward a Bill to the President against the advice of the responsible ministry. The Court also mentioned that in a limited number of legislative instances involving inter‑State elements or conflicts of

In this discussion the Court explained that where legislation touches on matters that involve both Union and State jurisdictions, the Constitution requires the President’s sanction as a condition precedent for the law’s validity, referring to Articles 200, 254 and 304 as examples. Turning to the executive branch, the Court noted that both the Union and each State are administered by ministers who are accountable to their respective legislatures, which are elected on the basis of adult suffrage. The executive authority of the Union as well as that of the States extends to all subjects over which they possess legislative competence. Accordingly, the Union executive may issue directions to a State in order to secure compliance with statutes enacted by Parliament and with any other applicable law that operates within that State. Simultaneously, a State is bound to exercise its executive powers in a manner that does not hinder or limit the Union executive’s functions, and the Union executive is vested with the power to issue further directions to the State whenever such instructions are necessary to prevent obstruction. The Court further observed that the Union executive may also give instructions to a State concerning the construction, upkeep and management of means of communication that have been declared to be of national importance. Moreover, the Union is authorized to confer additional powers upon the States in respect of matters that fall within the ambit of Union executive authority. By and large, except for limited exceptions, both the Union and the State executives operate within their own exclusive domains, and any directives issued by the Union executive are intended to facilitate the achievement of Union objectives. Regarding the judiciary, the Court pointed out that each State possesses its own judicial system, headed by a High Court of judicature. The expenses of the State judiciary are charged to the consolidated fund of the respective State, while the judges of the High Court are appointed by the President of India. Appeals from the High Courts lie to the Supreme Court of India in specified categories of cases, and the Supreme Court also possesses extraordinary jurisdiction to entertain further appeals and to issue writs for the enforcement of fundamental rights. Both the High Courts and the Supreme Court interpret statutes enacted by the Union and the States and settle any conflicts that may arise between them. The Constitution therefore establishes an integrated judicial system in which judicial control functions in both directions, although the ultimate authority rests with the Supreme Court. The Court remarked that this arrangement does not, by itself, undermine the federal principle, noting that even in Australia certain appeals may be made to the Privy Council from decisions of the High Court of Australia under particular circumstances. In financial matters, the Court observed, although both the Union and the States maintain separate consolidated funds, the fiscal resources allocated to the States are comparatively modest whereas the Union’s resources are more stable and recurring. The States depend on the Union for the distribution of revenues collected by the Union as well as for grants. While the Union does not exercise direct control over the States’ financial fields, there exists an inherent indirect pressure because the Union controls the national treasury. Consequently, the Union, as the holder of the purse strings, can inevitably influence the States, even if it does so in a manner described as persuasive rather than coercive.

In this discussion, the Court observed that the Union may be called upon to take the advice of the States. It further noted that, when emergencies arise—such as war, external aggression, internal disturbances, a failure of the constitutional machinery, or financial instability—extraordinary powers are granted to the Union. These powers are subject to certain limitations and enable the Union to interfere with the administration of the States. However, the Court stressed that the constitutional provisions dealing with emergencies function essentially as safety valves intended to safeguard the nation’s future. The Court also recorded that Parliament possesses the authority to alter the boundaries of existing territories or to create new territories, but that this power is likewise an extraordinary measure meant to address exceptional situations.

The Court then turned to the structure of Parliament, explaining that it is composed of the President and two Houses, namely the Council of States and the House of the People. It specified that, aside from the twelve members nominated to the Council of States, the Council may contain up to two hundred and thirty‑eight representatives drawn from the States and Union territories. Consequently, a portion of Parliament is made up of representatives of the State Legislatures. Although the powers of the Council of States are not co‑equal with those of the House of the People, the Court indicated that, to the extent that the Council exercises its legislative functions, the States retain a measure of control over the Union. The Court further pointed out that the States are entitled to be consulted on the amendment of certain constitutional provisions, referring specifically to Article 368.

According to the Court, the foregoing summary of constitutional provisions presents a clear picture: the political sovereignty rests with the people of India, while legal sovereignty is divided between two constitutional entities—the Union and the States—each of which is a juristic personality possessing property and operating through the mechanisms created by the Constitution. The Court observed that the Union’s jurisdiction, although confined to certain subjects, extends throughout the whole of India, whereas a State’s jurisdiction is limited to its own territorial boundaries. Within their respective spheres, in both legislative and executive matters, each entity is supreme, and their relationship with one another is governed by specific constitutional provisions. The Court emphasized that the relationship between the Union and the States cannot be discerned merely from the legislative categories set out in the Lists; rather, it is found in the particular constitutional provisions that create links between them. The Court added that the Union’s emergency powers, which are activated to meet extraordinary situations, do not impinge upon the Union’s exclusive fields of operation during ordinary times.

Finally, the Court compared the Indian Constitution with that of the United States and noted that scholars have argued that the Indian Constitution lacks several important criteria that characterize a federation. The Court quoted a description of American federalism that identifies several elements: the union of autonomous political entities for common purposes; the division of legislative powers between a national government with enumerated powers and constituent states with residual powers; and the direct operation of each governmental center within its assigned sphere over all persons and property within that sphere. The Court indicated that these elements, while present in the American Constitution, form part of the basis for arguments concerning the nature of Indian federalism.

In the discussion of the features of a federal system, the Court listed several elements, including the existence of territorial limits, the provision for each centre of government to have a full law‑enforcement apparatus comprising both executive and judicial branches, the supremacy of the national government within its assigned sphere over any conflicting claim by a state, and the concept of dual citizenship. The Court observed that these elements are undeniably found in the Constitution of the United States. However, the Court held that it cannot be said that a constitution ceases to be federal merely because it does not contain every one of those criteria. The Court noted that, on paper, the American Constitution appears to be a classic federation. In practice, however, the United States Supreme Court has, through the development of numerous legal doctrines and the assertion of implied powers, endowed the federal government with extensive authority that enables it to intervene indirectly in matters that traditionally belong to the states. Regarding judicial power, the Court explained that although the Supreme Court was originally intended to be a federal court dealing only with federal statutes, it now routinely interprets state laws when those laws clash with federal statutes. Consequently, the Court concluded that even in the United States there is no federation in the strict, orthodox sense of the term.

The Court then turned to other constitutional arrangements. It observed that the Constitution of Australia explicitly delineates the exclusive fields of the Commonwealth and the states and zealously protects state rights, yet in reality the states have been reduced to the role of agencies of the Commonwealth because of the financial dominance exercised by the centre, as noted in scholarly commentary. By contrast, the Court explained, the Canadian situation is essentially opposite. Although Canada maintains distinctive lists of powers for the central government and the provinces, the central government possesses limited powers of control over the ten provincial governments, and the residuary powers are assigned to the centre rather than to the provinces. The Court recognised that, despite the presence of some unitary features in these systems, constitutional practice has nevertheless produced a de facto federal state. It quoted an author’s statement that no dominion government attempting to emphasize unitary elements at the expense of federal ones could survive. From this, the Court inferred that every federal constitution contains, either expressly or by convention, certain unitary elements. The Court set out the proper test for determining whether a constitution embraces the federal principle: the constitution must allocate powers so that the general (national) and regional governments operate within their own spheres with substantial independence from one another. The Court added that reserving residual powers or granting the union authority to intervene in state affairs during emergencies may alter the balance of power in a federation, but such provisions do not destroy its federal character. The Court observed that some constitutions are biased toward the centre, others toward the states, yet all accept the federal principle as their foundation. Finally, the Court remarked that although some scholars, using the American Constitution as a benchmark, label constitutions with a central bias as “quasi‑federations,” the Court did not consider that description to be inappropriate.

In this passage the author observes that every constitution which substantially embraces the federal principle may be described as a federation. Applying that criterion, the author affirms without doubt that the Constitution of India qualifies as a federation because, in ordinary circumstances, the constituent units exercise exclusive sovereign powers within the subjects assigned to them. The author then distinguishes the Indian Constitution from the American Constitution on the basis of each country's historical development. In the United States, the pre‑existing sovereign states were brought together under a federal system, whereas in India the Constitution conferred certain powers on the existing administrative units or on units that were newly constituted after the Constitution came into force. The author stresses that the status of a political entity under a given constitution does not depend on its historical background but on the actual provisions contained in that constitution. Accordingly, a constitution may allocate little or no significant power to formerly independent states, while it may grant extensive authority to newly created states under a different constitutional scheme. The purpose of a federal structure, the author explains, is chiefly to harmonise existing conflicting interests and to guard against the emergence of future conflicts. India, described as a sub‑continent, is a vast country that, before the adoption of the Constitution, comprised various provinces that in practice enjoyed a considerable degree of autonomy and a multitude of states whose forms of government ranged from outright autocracy to guided democracy. These territories also differed in language, race, religion and other characteristics, and there existed foreign enclaves that were expected to be incorporated into the main territory at a later stage. In view of these circumstances, the Constitution adopted a federal framework that carries a strong bias toward the centre. Under this arrangement the central government remains powerful so as to prevent the development of secessionist tendencies, while the states are effectively autonomous in normal times within the spheres of authority allocated to them. Having set out this background, the author proceeds to address the arguments presented by counsel. The first argument relates to entry 42 of List III, which deals with the acquisition and requisitioning of property. The provisions relevant to that issue are set out as follows: Article 245(1) provides that, subject to the Constitution, Parliament may make laws for the whole or any part of the territory of India, and a State legislature may make laws for the whole or any part of that State; Article 245(2) adds that no law made by Parliament shall be held invalid merely because it has extra‑territorial operation. Article 246(1) states that, notwithstanding anything in clauses 2 and 3, Parliament has exclusive power to legislate on any matter enumerated in List I of the Seventh Schedule (the Union List). Article 246(2) provides that, notwithstanding anything in clause 3, both Parliament and, subject to clause 1, a State legislature have the power to make laws on any matter enumerated in List III of the Seventh Schedule (the Concurrent List). Finally, Article 246(3) declares that, subject to clauses 1 and 2, a State legislature has exclusive power to make laws on any matter enumerated in List II of the Seventh Schedule (the State List).

In the Constitution, the State and any part of it were given authority to legislate with respect to matters listed in the State List, which is identified as List II A in the Seventh Schedule. Before the Constitution (Seventh Amendment) Act of 1956, the provisions that dealt with acquisition of property were set out in three separate entries. Entry 33 of List I authorised the Union to acquire or requisition property for Union purposes. Entry 36 of List II permitted a State to acquire or requisition property for purposes other than those of the Union, subject to the limitation imposed by entry 42 of List III. Entry 12 of List III laid down the principles for determining compensation for property taken for the purposes of the Union, a State, or any other public purpose, and also prescribed the form and manner in which such compensation should be paid. The Seventh Amendment removed both entry 33 of List I and entry 36 of List II, and substituted a new entry 42 in List III, which now simply states “Acquisition and requisitioning of property”. This amendment therefore consolidated the power of acquisition under a single constitutional provision.

Article 31 of the Constitution now governs the deprivation of property. Clause 1 provides that no person shall be deprived of his property except by authority of law. Clause 2 adds that compulsory acquisition or requisition of property is permissible only for a public purpose and only under a law that either fixes the amount of compensation or sets out the principles and procedure for determining and delivering such compensation; furthermore, a court may not question the adequacy of the compensation prescribed by that law. Clause 2A clarifies that a law which does not effect a transfer of ownership or possession to the State or to a State‑controlled corporation is not regarded as authorising compulsory acquisition, even if it deprives a person of his property. Clause 3 provides that a law of this kind made by a State legislature will not take effect unless it has been reserved for, or considered by, the President and has obtained his assent. The Court has already observed that sovereign powers are divided between the Union and the States, and that one of those powers is the authority to acquire or requisition a citizen’s property for a public purpose. The doctrine of eminent domain, as defined by Willis, is the legal capacity of a sovereign or its agents to take private property for public use upon payment of just compensation. Nicholas, in his work on eminent domain, describes it as a sovereign power to take property for public use without the owner’s consent. In the case of Chiranjit Lal Chowdhri v. Union of India, Justice Mukherjea affirmed this definition, stating that it is a right inherent in every sovereign.

The Court observed that the authority to take and appropriate private property belonging to individual citizens for public use had been defined in American law as eminent domain. It described this authority as comparable to the power of taxation, an offspring of political necessity, and explained that it rested on an implied reservation by the Government that private property, acquired by its citizens under governmental protection, could be taken or its use controlled for public benefit irrespective of the owner’s wishes. The Court stated that this power to acquire a citizen’s property for a public purpose was therefore one of the implied powers of the sovereign.

The Court explained that, prior to the Constitution (Seventh Amendment) Act, 1956, this sovereign power was divided between the Union and the States. By virtue of entry 33 of List I, the Union could acquire property for Union purposes, and by virtue of entry 36 of List II, a State could acquire property for State purposes. Consequently, a State could not acquire a citizen’s property for a Union purpose, and the Union could not acquire a citizen’s property for a State purpose. To remove this difficulty, entries 33 of List I and 36 of List II were omitted and the present entry 42 of List III was substituted for the earlier entry 42 in the same List. The Court noted that, as a result, both Parliament and a State Legislature could now make laws providing for the acquisition and requisitioning of property for Union or State purposes. However, the Court emphasized that the power of acquisition by a sovereign must relate only to the property of the governed, because a sovereign cannot acquire its own property. Accordingly, the sovereign power of eminent domain under the Constitution was held to be conferred upon, or divided between, the Union and the States. Prima facie, entry 42 of List III therefore meant the acquisition and requisitioning of private property by a State. The Court added that the concept of acquisition or requisitioning implicitly required that such taking be for a public purpose and that just compensation be paid. This concept had acquired a well‑defined meaning both in foreign jurisdictions from which it was borrowed and in the legislative history of India. Accordingly, the Constitution expressly provided that any law made must not violate fundamental rights. One such right, enshrined in Article 31(2), provided that no property could be compulsorily acquired or requisitioned except for a public purpose and except by authority of law that provided for compensation. The Court held that the scope of entry 42 of List III became clear when read together with Article 31(2), unless it were held that Article 31(2) also applied to a law providing for the acquisition of State property by the Union.

The Court observed that if entry 42 of List III were interpreted without regard to Article 31, the logical result would be that Parliament could enact a statute authorising the acquisition of a State’s property for a purpose that is not a public purpose and without the requirement of paying compensation, whereas such a power could not be exercised for the acquisition of private property. Consequently, if Article 31 does not govern the law relating to the acquisition of a State’s property, it would imply that entry 42 of List III does not concern acquisition of State property at all; otherwise the situation would create an anomaly whereby a State’s property could be acquired by a parliamentary law without the safeguards that are inherent in the doctrine of eminent domain. The learned Attorney‑General therefore sought to persuade the Court to hold that Article 31(2) also applies to a law providing for acquisition of a State’s property. He argued that, after the Constitution (Fourth Amendment) Act, 1955, Article 31(1) was separated from Article 31(2) and that the wording of Article 31(2), when read independently, is sufficiently wide to encompass acquisition of a State’s property. To support this position, he relied on the judgment of this Court in Kavalappara Kottarathil Kochuni v. The State of Madras (1960) 3 S.C.R. 887. In that case, the Court held that after the Constitution (Fourth Amendment) Act, 1955, clauses (1), (2) and (2A) of Article 31 dealt with different subjects—clause (2) and clause (2A) relating to acquisition and requisitioning, and clause (1) relating to deprivation of property with authority of law. The Court clarified that the decision in that case does not affect the construction of clause (2) of Article 31 in the context of acquiring State property. The Court further noted that the observation that the two clauses of the Article address distinct subjects does not mean that clause (1) has no bearing on the interpretation of clause (2) of the same Article. Clause (2) of Article 31 states: “No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate.” Clause (2A) adds: “Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.” The Court acknowledged that clause (1) begins with the words “no person,” whereas clause (2) does not repeat that expression; however, in the context, the Court found it difficult to hold that clause (1) deals only with the property of a person and that clause (2) deals with property of the State.

In this case the Court observed that clause (2) of Article 31 concerns both the property of individuals and the property of States. Article 31 itself guarantees a fundamental right relating to property, with clause (1) protecting a person against deprivation of his property and clause (2) dealing with the acquisition of property. Because clause (1) expressly states that the protected property must belong to a person, the Court explained that it is unnecessary to repeat the requirement that the property acquired under clause (2) should also be a person’s property. The notion of “compulsory acquisition” and “requisitioning” embedded in clause (2) therefore signifies that the acquisition or requisition is undertaken by a State of a person’s property. This interpretation is reinforced by clause (2A), which mandates that any law providing for acquisition must prescribe the transfer of ownership or the right of possession of any property to the State or to a corporation owned or controlled by the State. Consequently, the transfer is directed to the State, and the transferor must be someone other than the State itself. In the context of the provision, the only logical transferor is the “person” referred to in clause (1). Moreover, the use of the definite article “the State” further indicates that the clause was not intended to contemplate a transfer of property between one State and another State, or between the Union and a State; had that been the intention, the provision would have expressly provided for such inter‑State transfer. The learned Attorney‑General argued that a State could also be regarded as a “person”. While the Constitution does not define the term “person”, a careful examination of the various provisions of Part III shows that “person” is consistently employed in contrast to “State”. Most fundamental rights are granted to a person or citizen against infringement by the State, and the term “person” in Articles 14, 18, 20, 21, 22, 25 and 27 cannot and does not include a State. No other article in this part uses “person” to denote a State, so prima facie the expression “person” in Article 31 does not encompass the State. The Court found no justification for giving the term a strained meaning, especially since the article aligns with the established concept of eminent domain and fits neatly within the scheme of fundamental rights. The argument that excluding the State from the definition would consequently exclude corporations or companies was also addressed. Although the Constitution lacks a definition of “person”, the General Clauses Act, 1897 defines “person” to include any company, association or body of individuals, whether incorporated or not. Even this expanded definition does not bring the State within the meaning of “person”. The Court further noted that whether the term should be taken to include a corporation is not a question that needed to be decided in the present case. In this context, the Court referred to two earlier decisions of this Court for guidance, beginning with Director of Rationing and Distribution v. The Corporation of Calcutta, where a relevant principle was articulated.

In the judgment, the Court reiterated the well‑settled rule of statutory interpretation that a State is not bound by a statute unless the statute expressly states so or it is necessarily implied. The Court observed that, although this rule originally arose in the context of ordinary legislation, there is no justification for applying a different principle when construing the provisions of the Constitution. Consequently, when the same rule is applied to Article 31(2) of the Constitution, the Court concluded that because the rule does not, either expressly or by necessary implication, provide for the acquisition of property belonging to the State, such State property cannot fall within the ambit of Article 31(2). The Court then referred to another decision, namely The State of Bihar v. Rani Sonabati Kumari, to examine the contention that the term “person” includes a State. In that earlier case, the Court had held that when the State disobeyed an injunction issued by a court, the injunction could be enforced against the State under Order XXXIX, Rule 2(3) of the Code of Civil Procedure. The Court explained that a plaintiff may seek a temporary injunction to restrain a defendant from committing the alleged injury, and that Order XXXIX, Rule 2(3) authorises the court, in case of disobedience or breach, to attach the property of the person guilty of such disobedience or breach and, if necessary, to order that person’s detention in civil prison for a period not exceeding six months, unless the court later directs his release. Upon examining the language of clauses (1) and (3) of Rule 2 of Order XXXIX, the Court held that the expression “person” in Rule 2(3) is used in a comprehensive sense to cover the defendant, his agents, servants and workmen, and is not intended to exclude any defendant against whom the injunction is originally directed. However, the Court simultaneously clarified that the detention provision does not apply to the State, because the State is not a “person” who can be detained. This interpretation, the Court stressed, is based on the specific phrasing of the two clauses of Order XXXIX, Rule 2, and does not create a general rule that the term “person” everywhere includes a State. Finally, the Court considered the historical background of Article 31 and entry 42 of List III, concluding that neither source supports a construction whereby the acquisition of State property is contemplated under entry 42. The Court noted that under the Government of India Act, 1935, the power of acquisition was a provincial subject, being entry 9 of List III, and quoted Section 299 of that Act which states: “No person shall be deprived of his property in British India save by authority of law…”

The judgment first reproduced the relevant provisions of the Government of India Act, 1935. Section 299 of that Act provided that no person could be deprived of his property in British India except by authority of law. Sub‑section (2) added that neither the Federal nor any Provincial Legislature had power to enact a law that authorised the compulsory acquisition for public purposes of any land, any commercial or industrial undertaking, any interest therein, or any company owning such an undertaking, unless the law mandated payment of compensation for the property acquired and either fixed the amount of compensation or set out the principles and manner by which the amount was to be determined. The court observed that clauses (1) and (2) of section 299 corresponded respectively to clauses (1) and (2) of Article 31 of the Constitution. Under the 1935 Act the Federal Legislature could not pass a law acquiring provincial land because the subject of land acquisition was exclusively provincial. However, section 127 of the same Act made provision for a contingency in which the Federation might require a Province to acquire land on its behalf and at its expense, or, if the land belonged to the Province, to transfer it to the Federation on agreed terms or, failing agreement, on terms determined by an arbitrator appointed by the Chief Justice of India. The court explained that a combined reading of these provisions showed that, although the Federal Legislature could not empower the Federation to acquire provincial land directly, the Federation could compel a Province to transfer such land to it, but only under an agreement between the parties or, in the absence of agreement, under an arbitral award. Thus, under the Government of India Act, transfer of provincial lands to the Federation could occur only through a consensual agreement or a judicially determined award.

The judgment then turned to the constitutional framework that existed before the 1956 amendment. At that time both Parliament and the State Legislatures possessed authority to enact laws for the acquisition of land for their respective purposes—Parliament for Union purposes and State legislatures for State purposes. The court noted that, on its face, entry 33 of List I and entry 36 of List II related only to the acquisition of private lands for the purposes of the Union or the State respectively. When the Union or a State wished to obtain land that was held by the other, the only mechanism available was Article 298(1) as it then stood. That article provided that the executive power of the Union and of each State extended, subject to any law made by the appropriate legislature, to the grant, sale, disposition or mortgage of any property held for the purposes of the Union or the State, and to the purchase or acquisition of property for those purposes, as well as to the making of contracts. The court emphasised that the language of Article 298(1) clearly indicated that land held by the Union or a State for its own purposes could be transferred to the other only in the manner prescribed by that article. The subsequent Seventh Amendment of 1956 relocated the subject of acquisition and requisitioning of land to List III as entry 42, deleted entries 33 of List I and 36 of List II, and replaced Article 298 with a new provision, but the court held that these later changes were not material to the point being considered. Consequently, the court concluded that, under the Government of India Act, 1935, compulsory acquisition of land was a provincial subject, and, in the original constitutional scheme, Parliament could legislate for acquisition of land only within its own domain, while acquisition of land belonging to a State required compliance with the provisions of Article 298(1).

The Court explained that the language of Article 298(1) authorized only the grant, sale, disposition or mortgage of property held for Union purposes or for State purposes, and also authorised the purchase or acquisition of such property and the making of contracts. This wording indicated that land owned by the Union for Union purposes or by a State for State purposes could be transferred to the other only in the manner prescribed by Article 298(1). The Constitution (Seventh Amendment) Act of 1956 moved the matter of acquisition and requisition of land to List III as entry 42, deleted entry 33 of List I and entry 36 of List II, and replaced Article 298 with a new provision. The Court held that the changes in Article 298 were irrelevant to the question before it. Consequently, it was clear that under the Government of India Act, 1935, compulsory acquisition of land was a provincial matter; under the original Constitution, Parliament could legislate for acquisition of property for Union purposes and a State legislature could do so for State purposes, each relying on different entries. After the amendment, both Parliament and State legislatures could legislate on acquisition of such property by relying on entry 42 of List III. However, the Court noted that if the Federation or a province under the 1935 Act, or the Union or a State under the Constitution, desired property owned by the other, such a transfer could be effected only through an agreement and not otherwise. This arrangement demonstrated that neither a Union law nor a State law could provide for the acquisition of property owned by the other. Accordingly, the Court held that Parliament could not enact a law under entry 44 of List III to acquire property owned by a State. The petitioners then relied on Article 248 of the Constitution, read with entry 97 of List I of the Seventh Schedule, to argue for a broader parliamentary power. Article 248(1) states that Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or the State List, and clause (2) adds that this power includes making any law imposing a tax not mentioned in those lists. Entry 97 of List I likewise covers any matter not enumerated in List II or List III, including any tax not mentioned in those lists. It was contended that if acquisition of State property did not fall under entry 42 of List III, it must fall under entry 97 of List I. Emphasis was placed on the words “any matter” in Article 248, with the argument that this phrase possessed the widest possible meaning and therefore empowered Parliament to legislate on any subject, including the acquisition of State‑owned property.

The Court explained that the contention that Parliament may acquire the property of a State by relying on the residuary power is subject to two principal objections. First, the residuary entry cannot extend beyond the constitutional allocation of legislative authority between the Union and the States. The Constitution divides the sovereign legislative competence into separate domains, assigning certain matters to the Union and others to the States. This allocation is achieved by enumerating subjects in the respective legislative lists. The residuary provision and the corresponding entry are devices intended to vest in the Union any subject that has been omitted, either inadvertently or otherwise, from the enumeration. Consequently, the residuary field of legislation cannot logically encompass matters relating to inter‑State relations, because such matters are not distributed between the Union and the States through the legislative lists. Moreover, where the Constitution makes a specific provision for the acquisition of property, it would be incongruous to limit that provision to the acquisition of private property only and then resort to the residuary power to acquire property owned by a State. If the power of acquisition were construed to apply solely to property situated in a State and not to property belonging to the State itself, the acquisition power would have to be confined to that narrow scope. The Court further observed that if Article 31(2) were held to apply only to a law dealing with the acquisition of private property, as previously decided, then a similar anomaly would arise if the same clause were not applied to entry 42 of List III and likewise to entry 97 of List II. Hence, the Court concluded that Parliament cannot legislate for the acquisition of State property by invoking entry 97 of List I. Accepting the Union’s contention would create numerous inconsistencies in the operation of the Constitution.

The Court next turned to the consequences of placing “acquisition and requisitioning” in the Concurrent List. Because the subject lies in the Concurrent List, both Parliament and a State Legislature are competent to enact laws concerning the acquisition of property, whether the property belongs to the Union or to a State. Under a law made by Parliament, the Union could acquire State property, after which the property would become Union property. Subsequently, a State could, under its own law, reacquire the same property now owned by the Union. The Court held that such a vicious circle is not permissible under the Constitution. Reference was made to Article 31(3), which provides that a law of a State relating to acquisition, as covered by clause (2), shall have effect only after being reserved for the President’s consideration and receiving his assent. However, the Court reaffirmed its earlier holding that Article 31(2) does not apply to a law providing for the acquisition of State property; consequently, clause (3) of Article 31 would also be inapplicable to such a law. Even assuming Article 31(3) were applicable, the Court observed that nothing would prevent the President from granting his consent to a State law acquiring Union property, although the Union executive would ordinarily be expected not to exercise such authority. The Court emphasized that the validity of the proposition must be examined on legal possibilities rather than on the presumed actions of any particular executive, and therefore Article 31(3) cannot be relied upon to invariably prevent the conflict described.

In the argument presented, the focus was on what the Constitution permits as legal possibilities, rather than on the particular actions that any executive might undertake. Accordingly, it was observed that Article 31(3) does not invariably prevent the type of conflict that had been described. The discussion then turned to Article 254(1), which is sometimes said to settle such disputes by giving priority to a law made by Parliament. However, the Court explained that Article 254(1) can only give effect to a parliamentary law when that law is directly repugnant to a law made by a State Legislature. In the example under consideration, there was no direct repugnancy because the parliamentary statute authorised the acquisition of property belonging to a State, whereas the State statute authorised the acquisition of property that was already owned by the Union. Once a piece of State property is taken over by the Union, it becomes Union property. Hence, under those circumstances the two statutes do not clash, even though the purpose of the Union law might be frustrated by the exercise of power under the State law. The Court also noted that Article 254(2) preserves State laws where the President has previously given his consent, and while such presidential consent is legally possible, it is normally expected that the central executive would withhold it. The Constitution, the Court held, could not have intended to leave an unresolved conflict between the Union and the States.

The second line of reasoning considered the consequence if the Union’s contention were accepted. It was pointed out that Parliament could, in theory, enact a law that allowed it to acquire the entire property of a State without paying compensation. Such a law could effectively cripple the functioning of a State by taking over the buildings used for official offices, and by removing the very material foundation of the State’s jurisdiction, including public‑use buildings and works. Although it is unlikely that Parliament would deliberately create such a situation, nothing in the Constitution expressly prohibits it. The Court emphasized that a construction of the Constitution that would prevent a State from functioning cannot be justified unless it is clearly articulated within the constitutional text itself. The argument was also made that Parliament already possesses a broader power under Article 3 to “destroy” a State, and therefore no additional threat could arise from the limited power discussed. However, the Court clarified that Article 3 only authorises Parliament to make laws regarding the formation of a new State, alteration of a State’s boundaries, increase or decrease of its area, or change of its name. These powers, while expressly granted, do not extend to the acquisition of a State’s property. Finally, the Court observed that when the Constitution created distinct legal entities and allocated sovereign powers among them, it would be unreasonable to interpret ambiguous provisions so as to generate conflicts between those entities or to render one merely a creature of the other.

It was argued that if the Union were not granted the authority to acquire State property, the States might refuse to cooperate with the Union in executing policies formulated for the entire nation. The submission indicated that such a concern could be pertinent in jurisdictions such as the United States or Australia, where the constituent States enjoy substantial powers under their own constitutions. However, the Court observed that under the Indian Constitution the States were, in many respects, practically dependent on the Union, and therefore the argument lacked relevance to the present constitutional scheme. The Court noted that in the United States it had been necessary to evolve implied powers in order to implement national policies, whereas in India the Constitution itself had already conferred ample legislative and executive powers on the Union to achieve that purpose. In view of this background, the Court expressed that it should be exceedingly cautious before curtailing the already limited powers of the States, and it should not, by interpretative construction, convert the federal structure into a unitary system of government, a transformation that the Constitution expressly rejected.

The Court then turned to another contention raised by the learned Advocate‑General for West Bengal. He maintained that Article 294 of the Constitution vested all coal mines that had formerly been in the possession of His Majesty for the purposes of the Province in the State of West Bengal from the commencement of the Constitution. Accordingly, he argued, unless the Constitution expressly provided for divesting those mines, Parliament could not acquire them by legislation. The Court indicated that it would consider the authorities cited by the parties at a later stage. The Court further explained that, if the Union’s argument were correct—that Parliament possessed a legislative power to acquire State property—then Article 294 could not obstruct a Union law that provided for such acquisition. Moreover, the Court clarified that Article 294 applied only to property that was vested in the State at the commencement of the Constitution and did not extend to property subsequently acquired by the State. In the present matter, the zamindari estates on which the coal mines were situated had been vested in the State of West Bengal after the Constitution came into force, by operation of a State enactment. The Advocate‑General contended that although the surface soil of the zamindari was owned by the zamindars, the coal mines themselves had vested in His Majesty before the Constitution and therefore continued to vest in the State at the Constitution’s commencement. The Court rejected that contention, noting that it was contrary to a series of decisions of the Privy Council, namely Harinarayan Singh Deo v. Sriram Chakravarti, Durga Prasad Singh v. Brajnath Bose, Sashi Bhushan Misra v. Jyoti Prasad Singh Deo, Rajkumar Thakur Girdhari Singh v. Megh Lal Pandey, and Raghunath Roy Marwari v. Durga Prasad Singh. Although those cases arose in disputes between zamindars and their tenants, some observations within them ran counter to the Advocate‑General’s argument. The Advocate‑General had not placed before the Court any authority to support his position; alternatively, he suggested that although the estates containing the coal mines may have belonged to the zamindars, the reversionary interest in those estates lay with His Majesty and subsequently with the State.

The Court observed that the contention that the reversionary interest in the lands lay with the State conflicted with the doctrine of permanent settlement. Under the permanent settlement, the British Government had granted the zamindars a permanent, hereditary right to their lands for all time and had fixed a moderate assessment of public revenue on those lands, a assessment that could not be raised under any circumstances. The sanad issued under the permanent settlement did not retain any reversionary right in favour of the Government. The Court noted that even if any interest had vests in the State, such an interest could be removed by an act of a competent legislature, provided the Constitution confers the necessary power; however, the Court declined to express a final view on that particular question.

The Court then turned to the question of the constitutional validity of the impugned Act. The argument in support of the Act relied on several early twentieth‑century authorities, namely the decisions reported in (1) 1910 I.L.R. 37 Cal. 723, (2) 1916 I.L.R. 44 Cal. 585, (3) 1912 I.L.R. 39 Cal. 696, (4) 1917 I.L.R. 45 Cal. 87, and (5) 1919 I.L.R. 47 Cal. 95, as well as on entry 52 and entry 54 of List I of the Seventh Schedule to the Constitution. Entry 52 of List I states that “Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest” are within Union competence. Entry 54 of List I provides that “Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest” also falls within Union competence.

The Court indicated that a proper construction of these provisions required reference to entries 23 and 24 of List II, the State List. Entry 23 of List II reads “Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.” Entry 24 of List II states “Industries subject to the provisions of entries 7 and 52 of List I.” A combined reading of the four entries shows that, ordinarily, both industries and the regulation of mines and mineral development are matters for the State. However, where Parliament enacts a law declaring that a particular industry or the regulation of particular mines should be placed under Union control because it is expedient in the public interest, the corresponding State entries yield to the Union entries.

Under the Industries (Development and Regulation) Act, 1951 (Act 65 of 1951), Parliament declared that “it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule,” a schedule that includes coal. On that basis, it was argued that the coal industry had been placed under Parliament’s jurisdiction and that the impugned Act, which effected the acquisition of coal‑bearing lands, was within Parliament’s constitutional power. The Court, however, identified a fallacy in that argument. It observed that while a declaration under entry 52 of List I unquestionably enables Parliament to legislate concerning an industry, the declaration alone does not empower either the State Legislature before the declaration or Parliament after the declaration to make a law for the acquisition of land. Acquisition of land would, in such circumstances, have to rely on entry 42 of List III, a power that the Court had previously held does not permit Parliament to acquire State property. Consequently, the Court concluded that entry 52 of List I could not be used to justify the acquisition provision in the impugned Act.

The Court observed that Parliament may enact legislation concerning an industry that already exists or an industry that may be established in the future. Similarly, before any such declaration, a State Legislature could have legislated on an industry relying on entry twenty‑four of List II. However, neither entry twenty‑four of List II nor entry fifty‑two of List I confers the power either on a State Legislature before the declaration or on Parliament after the declaration to acquire land. If either the State Legislature before the declaration or Parliament after the declaration wishes to acquire land, the only source of authority is entry forty‑two of List III. The Court had previously held that entry forty‑two of List III does not empower Parliament to pass a law that provides for the acquisition of property belonging to a State; consequently, entry fifty‑two of List I cannot be invoked for that purpose. The Union also relied on the Coal Mines (Conservation and Safety) Act, 1952 (Act XII of 1952) to argue that the declaration contained therein gave effect to entry fifty‑four of List I and thus sustained the impugned Act. Section 2 of that Act states: “It is hereby declared that it is expedient in the public interest that the Central Government should take under its control the regulation of coal mines to the extent hereinafter provided.” The Court answered that this declaration was confined solely to the control and regulation of coal mines as set out in that Act, and its limited scope could not be extended to support the impugned legislation.

The Court further explained that under the entry “regulation of mines” a law cannot be made for the acquisition of coal‑bearing lands themselves, especially when a specific entry for acquisition exists. The Mines and Minerals (Regulation and Development) Act, 1957 (Act LXVII of 1957) could not be successfully invoked because that Act, which contains a declaration that it is expedient in the public interest for the Union to control the regulation of mines and the development of minerals to the extent provided therein, was enacted on 28 December 1957, whereas the impugned Act was passed on 8 June 1957. Moreover, the declaration in the 1957 Act was limited to the regulation specified in that legislation and therefore could not be relied upon for purposes beyond its ambit. Accordingly, Parliament could not rely on the declarations in any of the three Acts—Act LXV of 1951, Act XII of 1952, or Act LXVII of 1957—to sustain the impugned law, which was enacted solely for the purpose of acquiring coal‑bearing areas. The Union’s attempt to draw support from American, Australian and Canadian decisions, asserting that a federal law may provide for the acquisition of property owned by a State, was therefore rejected.

Before referring to the decisions of a foreign court, the Court observed that it was essential to recognise the fundamental differences between the Constitution of that foreign country and the Constitution of India. The Court noted that in the United States there was no express power granted to Congress to enact a law that would enable the acquisition of any property for public purposes. Moreover, the United States Constitution did not contain a concurrent List that would provide a common field of operation for the Federal and the State governments. The Court explained that the power of acquisition in the United States had developed through judicial decisions that invoked the doctrine of implied powers. Consequently, the Court held that the law of the United States was of limited relevance for interpreting the provisions of the Indian Constitution that confer express powers on the different governmental units. The Court further observed that the foreign decisions cited on behalf of the Union did not lend any support to the Union’s contention.

The Court then examined the decision in State of Oklahoma Ex. Bel. Leon C. Philips v. Guy F. Atkinson Company (1). In that case the Flood Control Act of 1938 had authorised the construction of the Denison Reservoir on the Red River as part of a comprehensive scheme for controlling floods in the Mississippi River and its tributaries. The Court explained that the Act had been enacted by Congress in the exercise of its commerce power. The construction of the dam and reservoir for flood‑control purposes on a stream that ran between two States resulted in the inundation of lands in one State. The United States Supreme Court had held that the fact that the land was owned by a State did not constitute a barrier to its condemnation by the United States. The Court also recorded that the Supreme Court observed that a State Government could not prevent the Federal Government from exercising its power of eminent domain for flood‑control purposes merely because the flooding would obliterate a State boundary. The Court quoted the passage from the decision: “Since the construction of this dam and reservoir is a valid exercise by Congress of its commerce power, there is no interference with the sovereignty of the State… The fact that land is owned by a State is no barrier to its condemnation by the United States… Nor can a State call a halt to the exercise of the eminent domain power of the Federal Government because the subsequent flooding of the land taken will obliterate its boundary.” The Court noted that, although the language was broad, the report did not clearly state that the land submerged or the territory obliterated was State‑owned property or State territory. Assuming that State property had been submerged because of the Federal law, the Court concluded that the decision established only the limited proposition that Congress, in exercising its commerce power, could enact a law that incidentally encroached upon State property, as reflected in the citation (1940) 85 L. ed. 1487, 1505. The Court then turned to the decision in The Cherokee Nation v. The Southern Kansas Railway Company (1). It held that this decision did not advance the matter further, because it merely affirmed that Congress had the power to authorise a corporation to construct a railroad through the Cherokee territory.

The Court observed that the Cherokee Nation did not constitute a sovereign nation because it was under the political control of the United States government. Consequently, the Court held that the right of eminent domain within Cherokee territory could not be limited to exercise by the Cherokee Nation alone; the United States also retained the authority to exercise that power. The Court quoted the earlier decision, stating that “the lands in the Cherokee territory, like the lands held by private owners everywhere within the geographical limits of the United States, are held subject to the authority of the general government to take them for such objects as are germane to the execution of the powers granted to it; provided only, that they are not taken without just compensation being made to the owner.” On that basis, the case proceeded on the premise that the entire Cherokee territory was directly under Federal control and that the Federal Government could therefore exercise its eminent‑domain power over that territory. The Court further noted that the decision in Kohl v. United States (2) did not support the defendant’s position. In Kohl, the Court had held that the United States could acquire lands in Cincinnati for a post office and other public buildings under its eminent‑domain power, but the property involved was private property located within a State, and that decision offered little guidance on the present issue. The Court explained that the decisions of the United States Supreme Court are clear that, in exercising the power granted to Congress—expressly or by implication—a law may be enacted to acquire private property in a State for a federal purpose, as shown in the cited authorities (1) (1889) 34 L. ed. 295. 302. and (2) (1875) 23 L. ed. 449. However, those cases do not address whether such a law may provide for the condemnation of property owned by a State. The Court cited Nichols on Eminent Domain, 3rd edition, volume at page 160, which states that despite the Fifth Amendment’s language that “private property” shall not be taken for public use except upon payment of just compensation, there is no implied limitation preventing the federal government from taking public property, and that the federal government may acquire property belonging to a State, an agency of a State, or a subdivision of a State. The passage further explained that, although the federal government possesses this power, the relative positions of the federal and state governments suggest that the United States could not, merely for convenience, take State property that is devoted to public use when such loss would seriously impair the State’s ability to perform its functions. In circumstances of necessity, as distinguished from mere convenience, the Court indicated that the State would be required to yield its property.

In this case the Court noted that a property belonging to a State that is held for a public purpose may be acquired, whereas property that is merely owned by a State for a public purpose generally cannot be taken by the federal government. The Court explained that these principles do not stem from any specific power granted to Congress; rather, they developed in the United States as a pragmatic response to concrete problems that arose there. Because the United States Constitution enumerates powers with particular specificity, the Court held that such a pragmatic approach has no relevance to the Indian Constitution, where powers are described with particularity. The Court referred to a passage in Willoughby on the Constitution of the United States, Vol. 1, p. 180, which states that “in cases of conflict, the power of eminent domain of the States must yield to the constitutionally superior power of eminent domain of the United States is well settled.” The Court clarified that this passage deals with the resolution of a conflict between the eminent‑domain powers of the Union and the States when both seek to acquire property within a State, and it is based on the constitutional supremacy of the United States government in matters within its sovereign jurisdiction. Accordingly, the Court observed that American law on the question presented is uncertain, and because of the acknowledged differences in constitutional provisions, it would be unsafe to rely on American jurisprudence to interpret provisions of the Indian Constitution.

The Court further observed that decisions from other federal systems were of no assistance. It pointed out that section 51 of the Australian Constitution expressly empowers the Commonwealth to make a law for acquiring property on just terms from any State or person, as noted in Wynes’ Legislative, Executive and Judicial Powers in Australia, p. 441. The Court interpreted this provision to indicate that, in a federal form of government, one sovereign unit may not acquire the property of another unless the Constitution expressly authorises such acquisition. Turning to Canada, the Court remarked that the Canadian Constitution contains no concurrent list that expressly confers eminent‑domain power on both the Union and the provinces. The Court mentioned the Privy Council decision in Attorney‑General for the Dominion of Canada v. Attorney‑General for the Provinces of Ontario, Quebec and Nova Scotia, and explained the relevant framework of the British North America Act, 1867. Under sections 91 and 92, legislative powers were divided between the Dominion and the provinces. Section 108 transferred certain items of property, including “rivers and lake improvements, and public harbours,” to the Dominion, while any proprietary rights not transferred by section 108 and Schedule III remained with the provinces, subject to sections 109 and 117. The remaining legislative jurisdiction not covered by sections 91 and 92 was vested in the Dominion. The Court identified the specific questions before the Privy Council: whether the river was transferred to the Dominion under section 108, and whether the Dominion could legislate under section 91 to affect fisheries. The Court indicated that these Canadian authorities did not provide a clear answer applicable to the present case.

In the matter of fishing rights in the river, the Privy Council ruled that the proprietary rights over the river had vested in the Province at the time the British North America Act, 1867 came into force, and that section 108, although it transferred rivers and lake improvements, did not transfer the underlying proprietary rights in the rivers. Regarding the second issue, the Council held that section 91 gave the Dominion the authority to enact legislation imposing a tax on the right to fish in those rivers. Lord Herschell, speaking for the Council, drew a clear distinction between proprietary rights and legislative jurisdiction. He observed that the mere fact that legislative jurisdiction over a particular subject matter was assigned to the Dominion Legislature did not indicate that any proprietary rights concerning that subject had been transferred to the Dominion. The judgment quoted at page 730 states: “If, however, the Legislature purports to confer upon other proprietary rights where it possesses none itself, that, in their Lordships’ opinion, is not an exercise of the legislative jurisdiction conferred by section 91. If the contrary were held, it would follow that the Dominion might (1) [1898] A.C. 700 practically transfer to itself property which has, by the British North America Act, been left to the provinces and not vested in it.” This decision therefore serves as authority for the principle that when the Constitution vests certain property in one governing unit, the other unit cannot appropriate that property by legislation, because permitting such a transfer would undermine the balance of federal powers. The Court noted that this principle supports the broad argument advanced by the learned Advocate‑General of West Bengal, namely that property vested in a State cannot be taken over by the Union merely by invoking a legislative power. The Court also recorded that the extensive scope of this principle has been somewhat limited by a later decision of the Judicial Committee in Attorney‑General for British Columbia v. Canadian Pacific Railway Company (1). In that case, the Committee held that sections 91 and 92, when read together, authorised the Dominion to dispose of provincial Crown lands, including a provincial foreshore, for the benefit of a trans‑continental railway that traversed several provinces. The Committee reached this conclusion by relying on its earlier authorities in Canadian Pacific Railway Co. v. Corporation of the Parish of Notre Dame de Bonsecours (2) and Toronto Corporation v. Bell Telephone Co. of Canada (3). Although Crown lands remained vested in the province, the Constitution Act expressly empowered the Dominion to pass legislation for inter‑state purposes that affected those Crown lands. The Privy Council reaffirmed this view in Attorney‑General for Quebec v. Nipissing Central Railway Company and Attorney‑General for Canada (4). Consequently, the Canadian authorities do not endorse the broader contention of the learned Attorney‑General that property vested in a State may be acquired by Union legislation under either entry 42 of List III or entry 52 of List I of the Indian Constitution. Moreover, the relevant provisions of the foreign constitutions are not, as noted, directly applicable (1) [1906] A.C. 204.

The Court noted that the authorities cited in (2) [1899] A.C. 367, (3) [1905] A.C. 52 and (4) [1926] A.C. 715 dealt with matters that were similar in nature to issues arising under the Indian Constitution, but none of them provided a definitive authority that could support either of the two rival contentions before the Court. In those circumstances, the Court held that it would be inappropriate to draw any inspiration from foreign constitutions or from decisions rendered under those constitutions when construing the express provisions of the Indian Constitution, which operates in a different constitutional framework. The reference to those foreign decisions was made solely out of respect for the arguments advanced by the parties. The Court then concluded that the Indian Constitution embraces a federal concept and allocates sovereign powers between two co‑ordinate constitutional entities, namely the Union and the States. This allocation means that one entity may not intrude upon the governmental functions or instrumentalities of the other unless the Constitution expressly authorises such interference. The legislative subjects assigned to each entity cover matters that each may legislate upon, but they do not regulate the relationship between the two co‑ordinate units while they operate within their respective fields; that relationship is governed by other constitutional provisions, and there is no provision that permits one unit to deprive the other of its property except by agreement. The Court emphasized that the future stability of the nation, with its unity in diversity, depends upon strict adherence to the federal principle that the framers of the Constitution deliberately incorporated. Accordingly, the Court affirmed that it possessed both the constitutional power and the corresponding duty, a delicate and difficult task, to prevent any overt or covert encroachment by the Union upon the State field or vice versa, thereby preserving the balance of the federation.

Applying this principle to the present dispute, the Court held that the impugned Act, insofar as it empowered the Union to acquire land owned by the State, including coal mines and coal‑bearing lands, was beyond the Union’s constitutional authority and therefore ultra vires. The Court found that the Union was liable on issues one, two and three presented in the suit, and consequently declined to express any opinion on the additional issue raised. Based on these findings, the Court ordered a decree in favour of the plaintiff on the basis of clauses (a), (c) and (d) of paragraph eleven of the plaint and awarded costs to the plaintiff. By the Court’s order, and in accordance with the majority judgment, the suit was dismissed with costs, and the appeal was likewise dismissed.