S, SHANKARA RAO BADAMI & Ors. v. STATE OF MYSORE & Anr.

Mysore State in recognition of the military ·services of Bakshi Bhima Rao. The inam included not only the income from the including excise and the lands but from every kind of revenue right to treat all lands newly brought into cultivation as persona! property of the Inmndars. The Mysore (Personal and Misce!laneous) Inams Abolition Act, 1954 (Mysore Act 1 of 1955) (hereinafter called the impugned Act) was passed by the Mysore Legislature and received the assent of the President on the 18th March, 1955 aind'published in the Mysore Gazette on 19th March, 1955. The Act was subsequently amended by Mysore Act 7 of 1956 which received the assent of the President on 28th June, 1956 and which was published in the Mysore Gazette on 5th July, 1956. By virtue of a notification dated 2nd October, 1956 under section 1 clause (iv) of the impugned Act, the two inam villages vested in the State of Mysore under section 3 of the impugned Act. Compensation of the various items was the subject matter of dispute between t!Jii petitioners and assess Special Deputy Commissioner who was appointed compensation under the machinery of the Act. Awards of compensation were made under sections 17 and 20 of the impugned Act by the Special Deputy Commissioner. The peti· tioners preferred Miscellaneous Appeals Nos. 89 and 130 in the High Court of Mysore under section 31 of the impugned Act. These appeals were heard and decided by the Mysore High Court by a consolidated order of the 27th October, 1960. Against that decision two appeals were brought to this Court in Civil Appeals 196 and 197 of 1965. These appeals were heard on 25th October, 1967. It was then pointed out by the Court that constitutional validity of the provisions of the Act cannot be challenged in the statutory appeals in view of the decision of this Court in K. S. Venkataraman & Co. v. State of Madras. (1 ) The petitioners thereafter filed these writ petitions challenging constitutional validity of the Act. The main contention raised by the petitioners is impugned Act docs not provide for adequate compensation for the property acquired, that the compensation provided for was not a "just equivalent", in other words, the market value of the property at the time of acquisition and there was hence a viola· ti on <>f the guarantee under Art. 31 ( 2) of the Constitution. The impugned A~t is entitled as an Act to provide for the "abolition of personal mams and certain miscellaneous inams in the State of Mysore except Bellary District". The preamble states that it is expedient. in the public interest to provide for the abolition of personal mams and certain miscellaneous inams in the State of Mysore except Bellary District and for other matters connected therewith. Section 1 ( 4) enacts that this section and (I) [19661 2 S.C.R. 229. 4 SUPREME COURT REPORTS (1969] 3 S.C.ll. sections 2, 27, 3 8 and 40 shall come into force in respect of any inam village, or minor inam in iwn unalienated village, on such date as the Government may by notification appoint. Section 3 provides for the consequences of the vesting of an inam in the State and states as follows : - " ( 1) When the notification ·under sub-section ( 4) of section 1 'in respect of any inam has beqn published in the Mysore Gazette, then notwithstanding anything contained in any contract, grallll or other instrument or in any other law for the time being in force, with effect on and from the date of vesting, and save as otherwise expressly provided in this Act, the following consequences shall ensue, namely : - (a) the provisions of the Land Revenue Code relating to alienated holdings shall, except as respects minor inams to which this Act is not applicable, be deemed to have been repealed in their application to the inam; and the provisions of the Land Revenue Code and all other enactments applicable to unalienated villages slrall apply to the said inam; (b) all rights, title and interest, vesting in inamdar including those in all communal lands, cultivat ed Jands uncultivated lands, whether assessed or not, waste lands, pasture lands, forests, mines a;nd minerals, quarries, rivers and streams, tanks and irrigation works, fisheries an\! ferries, shall case and be vested absolutely in the State of Mysore, free from all encumbrances; Section 9 enacts : inamdar : "Lands and buildings to vest in ( 1 ) Every inamdar shall, with effect on and from the registered as an date of vesting, be entitled to be occupant of all lands other than- (i) communal lands, waste lands, gomal lands, forest lands, tank beds, mines, quarries, rivers, streams, tanks and irrigation works; (ii) lands m respect of which any person is entitled to be registered under sections 4, 5, 6, 7 or 8; and (iii) lands upon which have been erected build ings owned by any person other than the inamdar. (2) Every building situated within the limits of the inam which was owned immediately before A B c D E F G .. r SHANKARA RAO v. MYSORE (Ramaswaml, J.) 5 A date of vesting by the inamdar shall, with effect on and from such date, vest in the inamdar. Exp/a111Jtion : Ln this section 'inamdar' means an inamdar other than a holder of a mi, oor inam referred to in section 7". B Section 17 provides as follows : - "Amount of compensation payable : ( 1) Save as otherwise provided in section 26, the total compensa- tion payable in respect of any inam shall be the aggre- gate of the sums specified below : (i) a sum equal to twenty times the amoW}t of land revenue payable in. respect of land held by kadim tenants and permanent tenants entitled to be registered under section 4 and section 5, respectively. Explanation : Where the land revenue is paid in kind, the amount of land revenue for purposes of this clause shall be determined on the basis of the market value prevailing on the 1st day of January, 1954, of the crop or crops paid as land revenue; (ii) a sum equal to seventyfive per centum of the amount payable by the quasi-permanent tonants of the inamdar under sub-section (2) of section 6 in respect of lands of which they are entitled to be registered as occupants under sub-section (1 ) of the said section 6; (iii) a sum calculated at the rates specified below in respect of lands referred to ~ clause (iii) of sub- secti(lll ( 1 ) of section 7 or section 9; (a) seventyfive rupees per acre within the munici- pal limits of the Cities of Bangalore, Mysore and Davangere and within an area of one mile from such limits; (b) forty rupees per acre within the municipal limits of the towns of Kotar, Tumkur, Chitaldrug, Shimoga, Bhadravati, Chickmagalur, Hassan Mandya and the limits of the Kolar Gold Fields Sani- tary Board Arer, and within an area of one mile from such limits; and ( c) twenty rupees per acre in all other areas; (iv) a sum equal to twenty times the jodi, quit- rent or other amo11I1t, if any, of like nature; derived by the inamdar concerned from persons holding minor inams under such inamdar; and c D E F G H SUPREME COURT REPORTS [1969] 3 s.c.R. (v) a sum equal to ten times the average net annual income derived ~ the i&Damdar during a period of five years immediately preceedin~ the date of vesting, from lands other than lands dause (Hi) and lands in respect of which any person is entitled to be registered under sections 4, 5, 6, 7, 8 and 9; re erred to Provided that (a) the income from sandalwood or any other forest produce shall not be included in the annual income from forests unless the thereto was expressly conferred on the inamdar by a competent authority; (b) the. income from royal~ on minerals or from mining lease shall not be inclu ed in the annual in- come unless the right to such minerals or mines was expressly ~erred on the inamdar by a competent authori~ and such right was recognised under section 38 of e Land Revenue Code; ( c) .the income from ferries shall not be included unless the right to such ferries was expressly granted to the inamdar by a competent authority. On behalf of the petitioners learned co~el stressed argument that the inamdar of the estate was completely deprived of any sort of compensation in regard to the category of lands mentioned in section 9 (1 ) ( i). It was said that iin regard to the permanent tenants, the compensation was fixed at 20 times of the land revenue, but in the case of quasi-permanent tQlllllltS the compensation is 75 per cent of the value payable by quasi-permanent tenants under section 6(2). That is to say, the Government recovers a premium ~er section 6(2) at 40 times the land revenue and hands over 75 per cent as compensation to the holder of the inam estate. It was contended that compen sation was not fixed on the basis of the market value Q!l the date "Of acquisition and that the guarantee embodied in Article 31 (2) -of the Constitution has been violated. In support of this argument reference was made decision of this Court in The State of West Bengal v. Mrs. Bela Banerjee & Ors.,(') in which this Court observed that while under Entry 42 List III the Legislature was given discretionary :(I) [1954) S.C.R. 558. A B ; .. J c c 1 D E F G H A B D E F G H - SHANKARA RAO v. MYSORE (Ramaswami, J.) 7 required power to lay down the principles which should govern determi nation of the amount to be given to the owner of the property appropriated, Article 31 (2) of the Constitution such principles must ensure what is determiru:d as payable must be 'compensation', i.e. a just equivalent of what the owner has been deprived. Whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected is a justiciable issue to be adjudicated by the Court. The Court, there fore, held in that case that the West Bengal Land Development and Planning Act, 1948 which was enacted primarily settlement of immigrants who had migrated into West Bengal due to communal disturbances in East Bengal and which by section 8 provided that the compensation to be awarded compulsory acquisition to the owner of the land was not exceed ·the market value of the land on 31st December, 1946 was ultra vires of the Constitution and void under Article 31 (2) of the Constitution. At page 564 of the report the Court observ ed as follows:- "Turning now to the provisions relating to compen sation under the impugned Act, it will be seen that the latter part of the proviso to section 8 limits the amount of compensation so as not to exceed the market value of the land on December 31, 1946, no matter when the land is acquired. Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force, the fixing of the market value on December 31, 1946 as the ceiling on the land at the time of the acquisition is arbitrary and cannot be regarded as due compliance requirement of Article in letter and spirit with the 31 (2)". In our opinion, this principle cannot apply in validity of the impugned Act in the present case. Article 31 (2) before its amendment by the Constitution (4th Amendment) Act reads as follows : - testing "(2) No property, movable or immovable, includ ing any interest in, or in any company, owning, any commercial or industrial undertaking, shall be possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for com pensation for the property taken possession of or acquired and either fixes the amount of the compen sation, or specifies the principles on which, and manner in which, the compensation is to be deter mined and given". 8 SUPREME COURT REPORTS' [1969] 3 S;C.ll. But Article 31 A was added in the ·Constitution with retros pective effect by section 4 of the Constitution (1st Amendment) Act, 1951 which provides as follows : - "4. After Article 31 of shall be following article deemed always to have been inserted, namely : the Constitution, inserted, and shall be anything in 31 A. Saviag of laws providing for acquisition of estates, etc.-( 1) Notwithstanding foregoing provisions of this Part, no law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modifica tion of any such rights shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by, any pro visions of this Part : Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received hiS assent. ( 2) In this article- (a) the expression 'esiate' shall, in relation to any local area, have the same meaning as that expres the existing Jaw sion or its local equivalent has in relating to land tenures in force in that area, and shall also include any jagir, inam or maufi or other similar grant; ( b) the expression to an 'rights' estate, shall include any rights vesting in a proprietor, tenure-holder or sub-proprietor, under-proprietor, other intermediary and any rights or privileges in res· pect of land revenue". relation Article 31 A was amended again by section 3 of the Constitution (4th Amendment)· Act, 1955 with retrospective effect. Section 3 of the Constitution (4th Amendment) Act reads, as follows : - "(a) for clause (1), the following clause shall be, and shall be deemed always to have been substituted, namely:- ( 1) Notwithstanding anything contained in article 13, no Jaw providing for- ( a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modifica tion of any such rights, or ; l B c D E F G H • A B c D E F G H SHANKARA RAO v. MYSORE (Ramaswami, J.) II (b) the taking over of the management of any property by the State for a limited period either in the public interest or the proper management ol' the property; or in order to secure ( c) the amalgamation of two or more corpora tions either in the public interest or in order to secure the proper management of any of the corporations, or ( d) the extinguishment or modification of any rights of m!IQ:Jaging agents, secretaries and treasurers, managing directors, directors or managers or corpora tions, or of any voting rights of shareholders thereof, or ( e) the extinguishment or modification of any rights accruing by virtue of any agreemtmt, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the . premature termina tion or cancellation ol' any such agreement, lease or licence, shall be deemed that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31; to be void on the ground Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such Jaw, having been reserved for the consideration of the President, has received his assent; and (b) in clause (2),- (i) in sub-clause (a), after the word 'grant' the words 'and in the States of Madras and Travancore Cochin, any janmam right' shall be, and shall be deemed always to have been inserted. (ii) iin sub-clause (b), after the word 'tenure holder' the words 'raiyat, under-raiyat' shall be, and shall be deemed always to have been, inserted". In the present case, it is plain that under Article 3 lA as introduced by the 1st Amendment to the Constitution or as altered by the 4th Amendment, the impugned Act is protected from attack in any Court on the ground that it contravenes the provisions of Article 31 (2) of the Constitution. The reason is that the impugned Act is a law providing for the acquisition by the State ol' any estate or of any rights ex~guishment or modification of such rights as contemplated by Article 31A of the Constitution. The impugned Act provides therein or for L7 Sup. C.I./69-2 10 SUPREME COURT REPORTS (1969] 3 s.c.R. 11,. for acquisition of the rights of inamdars in inam estates in Mysore State and it is intended to abolish all intermediate holders who were termed as· Superior holders and to establish direct relation- ship between the Government lll!ld occupants. of land in the Iruun Villages in respect of which notifications had been issued. The legislation was undertaken as a part of agrarian reform which the Mysore State Legislature proposed to bring about in former State of Mysore. The impugned statute, therefore, falls under the protection of Article 3 lA oi the Coin.stitution and can- not be challenged on the ground that Article 31 has been violat- ed, that no principle of compensation has been provided or that the compensation provided for is illusory or inadequate. the B ) } regard to in which the question was raised with On behalf of the petitioners Mr. Krishnamurthi. in support of his argument referred to the ·decision of this Court in State in which of Madras v. D. Namasivaya Mudaliar and Ors. (1 Madras Lignite (Acquisition of Land) Act (Madras Act XI of 1953) was held invalid on the ground that the provisions of the Act relating to compensation violated Article 31 (2) of Constitution as it stood before the Constitution (4th Amendment) Act, 1955 and that the principle laid down in The State of West Bengal v. Mrs. Bela Banerjee & Ors.( 2 ) was applicable. Refe rence was also made to another decision of this Court P. Vajravelu Mudaliar v. Special Deputy Collector, Madras & Anr.,( 8 validity of Land Acquisition, Madras Amendment Act, 1961 (Madras Act 23 of 1961). In that case the petitioners' lands were notified for acquisition for the purpose of housing schemes and the object of the acquisition was slum clearance. In case also it was held by this Court that the principle of Bela Banerjee's(~-) case should be applied a\fld by virtue of Article 31 (2) the Legislature in making the law of acquisition must provide for a "just equivalent" oi what the owner has been deprived of or specify the principles for the purpose of ascertain ing such "just equivalent". It was pointed out that the compara tive study of the principal Act and the Amending Act showed that if land was acquired for a housing scheme under the Amend ing Act, the claimant would get a lesser value than what he would get for the same or similar land acquired for some public purpose under the Principal Act. The discrimination between persons whose lands were acquired for housing schemes and those whose lands were acquired for other public purposes could not be sustained on the principle of reasonable cl.assification and the Amending Act clearly violated Article 14 of the Constitution and was void. In our opinion, the ratio of the two decisions in State of Madras v. (I) [1964] 6 S.C.R. 936. (2) [!9541 S.C.R. 558. (3) [1965! I S.C.R. 614. • c D E F G H A B c D E F G H SHANKARA RAO v. MYSORE (Ramaswami, /.) 11 D. Namasivaya Mudaliar & Ors.(') and P. Vajravelu Mudaliar v. Special Deputy Collector, Madras and Anr.(2 ) has no application to the present case because those. cases related to legislation not dealing with agrarian reform and the protection of Article 3 lA of the statutes the Constitution was not available to either of challenged in those cases. intended. We pass on to consider the next question raised on behalf of the petitioners, namely, whether the impugned Act was beyond the legislative competence of the Mysore Legislature under Entry 36 .of List II to the 7th Schedule and Entry 42 of List III as Entries stood before the 7th Amendment of the Constitution. The argument may be summarised thus : Bntry 36 of List II read with Article 246(3) of the Constitution was obviously authorise the State Legislature to exercise the right of eminent domain i.e., right of compulsory acquisition of private property. The exercise of such power has been recognised in Anglo-Saxon jurisprudence as conditioned by public necessity and payment of compensation. All legislation in this country authorising acquisition of property from Re~ulation 1 of 1824 to Land Acquisition Act 1894 proceeded on that footing. The existence of public purpose and the obligation to pay compensation are, there fore, necessary concomitants of compulsory acquisition of private property, and so, the term "acquisition" must be construed as importing by necessary implication the aforesaid two condition•. It is also a recognised rule for the construction of statutes that, unless the words of the statute clearly so demand, a statute is not to be construed so as to take away the property of a subject with out compensation : Attorney-General v. De Keyser's Raya! Hotel.(';) The power to take compulsorily raises by implication payment : Central Control Board v. Cannon a Brewery('). The words "subject to the provisions of entry 42 in List III" in entry 36 reinforce the argument, as these words n{ust be t~k~!l to mean that the power to ma!re a law with respect acqu1s1t10n of property should be exercised subject to the condi tion that such Jaw should also provide for the matters referred to two-fold restriction as to public in entry 42, in other words, a (both of which are purpose and payment of compensation referred to in entry 42) is imposed on the exercise of the making power under entry 36. Entry 36 at the material time read as follows: "Acquisition or requisition of property, except for the purposes of the Union, subject to the provisions of entry 42 of List III". Entry 42 was to the following effect : (I) [1964] 6 S.C.R. 936. [1920] A.C. 508, 542. (J) (2) (4) [1965] I S.C.R. 614. [1919JIA.C. 744. I • 12 SUPREME COURT REPORTS [1969] 3 s.c.R. • "Principles on which cqmpensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given''. A By the Constitution (7th Amendment) Act, 1956, Entries 36 of List II, 33 of List I were omitted and Entry 42 of List III was B altefe4 and the altered entry reads as follows : "Acquisition aind requisitioning of property". It was however pointed out on behalf of the petitioners that the amendment was not retrospec- tive and the validity of the impugned Act must be tested by the language of entries 36 of List II and 42 of List III as they stood at the material time. c implication, and In our opinion, there is no substance in. the argument. It is true that under the common law of emiinent domain as recognised in Anglo-Saxon jurisprudence the State cannot take the property of its subject unless such property is required for a public pur pose and without compensating the owner for its loss. But, when in Article 31 ( 2) these limitations are expressly provided and it is further enacted that no law shall be made which takes away or abridges these safeguards, and any such law, if made, shall be void, there can be no room for words "acquisition of property" in entry 36 must be understood in their natural sense of the act of acquiring property, without importing into the phrase an obligation to pay compensation or a condition as to the existence of a public purpose. In other words, it is not correct. to treat the obligation to pay compensation as implicit in the legislative entry 33 of List I or legislative entry 36 of List II for it is separately and expressly provided for in Article 31 (2). The well-known maxim expressum facit cessare taciturn is indeed a principle of logic and commonsense and not merely a technical rule of construction. The express provision in Article 31 (2) that a law of acquisition in order to be valid must provide for compensation will, therefore, necessarily exclude all suggestion of an implied obligation to provide for compensation sought to be imported into the meaning of the word "acquisition" in entry 36 of List II. In the face of the express provision of Article 31 (2), there remains no room for reading any such legislative heads. The entries in the Lists of the Seventh ..Schedule are designed to define and delimit the respective areas of legisla- tive competence of the Union and State Legislatures. Such a context is hardly appropriate for the imposition of implied restric tions on the exercise of legislative powers, which are ordinarily matters for positive enactment in the body of the Constitution. implication in It was said that the words "subject to the provisions of entry 42 of List III" must be taken to mean that the law-making power · under entry 36 could be exercised subject to the two conditions as D E F G H SHANKARA RAO v. MYSORE (Ramaswami, J.) 13 A B c D E to public purpose and payment of compensation both of which are referred to in entry 42. In our opinion, the contention is un legislation and are sound. The two entries are merely heads of neither interdependent nor ·complementary to each other. These words in entry 36 mean no more than that any law made under entry 36 by a State Legislation can be displaced or overridden by ill. the Union Legislation making a law under entry 42 of List It is important to notice that similar words do not occur in entry 33 of List I which confers on Parliament the power to make laws with respect to acquisition of property for the purpose of Union. For if these restrictive conditions as to public purpose and payment of compensation are to be derived only from those words, then it must follow that in the absence of those words, Parliament can make law, authorising acquisition of property without a public purpose and without a provision for compensa- tion. No reason was suggested why Parliamentary Legislation with respect to such acquisition of property is to be free such restrictive condition, while State Legislation should be subject to them. The true inference is that the power to make law belonging to both Parliament and the State Legislatures can be exercised only subject to the aforesaid two restrictions not by reason of anything contained in the legislative entries themselves but by reason of positive provisions contained in Article 31 (2). But as legislation falling within Article 3 lA cannot be called in question in a Court of law for mm-compliance with those pro- visions such legislation cannot be struck down as unconstitutional and void. In our opinion, counsel on behalf of the petitioners i~ unable to make good his argument that the impugned Act was beyond the legislative competence of the Mysore Legislature at the time when it was enacted. For these reasons we hold that the petitioners have made out the Constitution. F These writ petitions accordingly fail and are dismissed with costs. no case for grant of relief under Art. 32 of There will be one set of hearing fee. V.P.S. Petitions dismissed.