http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 61  

PETITIONER: MAHARAO SAHIB SRI BHIM SINGHJI ETC. ETC

       Vs.

RESPONDENT: UNION OF INDIA AND ORS. ETC. ETC.

DATE OF JUDGMENT01/07/1985

BENCH: CHANDRACHUD, Y.V. ((CJ) BENCH: CHANDRACHUD, Y.V. ((CJ) KRISHNAIYER, V.R. BHAGWATI, P.N. TULZAPURKAR, V.D. SEN, A.P. (J)

CITATION:  1985 AIR 1650            1985 SCR  Supl. (1) 862  1986 SCC  (4) 615        1985 SCALE  (2)289  CITATOR INFO :  RF         1986 SC2030  (17)  R          1989 SC1796  (3)

ACT:      A. Urban  Land (Ceiling  and Regulation) Act, 1976 (Act XXXIII of  1976) -Whether  constitutionally valid  vis-a-vis Articles 39(b) and (c) of the Constitution.      B. Urban  Land (Ceiling  and Regulation) Act, 1976 (Act XXXIII of  1976),  section  2(g),-Artificial  definition  of family in  section 2(f),  whether offends against Article 14 of the Constitution.      C. Urban  Land (Ceiling  and Regulation) Act, 1976 (Act XXXIII of  1976),  section  11(6)  validity  of-Whether  the maximum limit of the amount of compensation payable fixed at Rupees two lakhs is illusory and confiscatory and therefore, violative of  Article 14  and 31(2)  of the Constitution, as amended by  the Twenty-fifth  Amendment Act,  1971-Effect of the Amendment.      D. Urban  Land (Ceiling and Regulation), Act, 1976 (Act XXXIII  of  1976),  section  23  validity  of-The  provision subserves the objectives of Articles 39(b) and (c) and hence protecte by  Articles 31  and C,  but the  governing test of disposal of  excess lands  being "social good", any disposal in any particular case or cases which does not subserve that purpose will be invalid.      E.  Urban  Land  (Ceiling  and  Regulation)  Act,  1976 section 27(1),  validity of-Whether  offends Articles 14 and 19(1) (f).      F. Interpretation  of statutes-Rule of reading down the provision, Permissibility as a part of the judicial process.      G. Constitution  of India, 1950 Articles 31 and 300 -A- Basic structure  of the  Constitution, thereby applicability of-Whether  right  to  property  is  a  part  of  the  basic structure of  the  Constitution-State’s  power  of  "eminent domain", and conditions precedent to exercise of that power, explained.      H.  Constitution   of  India,   1950-Part  IV-Directive Principles of  State Policy,  character and cognisability by the Courts. 863      1. Interpretation  of Constitution  and the approach to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 61  

be adopted, explained.      J.  Interpretation  of  statute-External  and  Internal Aids, use of      LK. Words  and Phrase-Concept  and meaning  of  "Public Purpose."

HEADNOTE:      The Urban  Land (Ceiling and Regulation) Act, 1976 (Act XXXIII of  1976) is  in force in 17 States and all the Union Territories in the country. It seeks to impose a  ceiling on vacant lands  in urban agglomerations having a population of two lakhs or more and for that purpose classifies such urban agglomerations in various cities and towns in all the States and Union  Territories into  four categories  and fixes  the ceiling limit for each such category.      The primary  object and purpose of the Act, as its long title  and   the  Preamble  show,  is  to  provide  for  the imposition  of   a  ceiling   on  vacant   land   in   urban agglomerations, for  the acquisition  of such land in excess of the  ceiling  limit,  to  regulate  the  construction  of buildings on  such land  for matters  connected there  with, with a view to preventing the concentration of urban land in the hands  of a few persons and speculation and profiteering therein  and  with  a  view  to  bring  about  an  equitable distribution of land in urban agglomerations to subserve the common good,  presumably in  furtherance  of  the  Directive Principles of  State Policy  contained in  Article 39(c) and (b) respectively.  The enactment  has also  been put  in the Ninth Schedule  as Item  132 by  the Constitution  (Fortieth Amendment) Act,  1976; in  other words, the enactment enjoys the benefit  of protective  umbrella of  both the  articles, Article 31-B  and 31-C as it stood prior to its amendment by the Constitution (Forty-second Amendment) Act, 1976.      By  these  writ  petitions  the  petitioners,  who  are holders of  vacant  land  in  the  urban  agglomerations  in various States,  are seeking  to challenge the vires of some of the  salient provisions  of the  Urban Land  (Ceiling and Regulation) Act,  1976 (XXXIII of 1976) and since, according to them,  some of  the impugned  provisions are  pivotal and non-severable, having  an impact  on its  entire scheme, the whole Act  is liable  to be struck down as being invalid and unconstitutional. The  petitioners have,  therefore,  prayed for  an  order  quashing  notices  issued  to  them  by  the concerned competent authorities under the Act and a mandamus directing the  respondents not  to implement  the provisions thereof against them.      Dismissing   the    petitions   and    upholding    the constitutional validity  save and  except section 27(1) by a majority of  4:1 (A-P.  Sen, J-  partially dissenting on the validity of sub-sections (1),(2), (3) and the opening  words of sub-section (4) of section 23), the Court. ^      HELD:  Permajarity:   (Y.V.  Chandrachud,   C.J.,  P.N. Bhagwati,  V.R,   Krishna  Iyer   and   an.Sen.   jj;   V.D, Tulzapurkar, J. dissenting). 864      1. The Urban Land (Ceiling and Regulation) Act, 1976 is constitutionally valid  save and  except section 27(1) in so far a  it imposes  a restriction on transfer of any urban of urbanisable land  with a  building or  of a  portion of such building. which is within the ceiling area. [877 E-F]      Per Chandrachud. C.J. and P.N. Bhagwati, J.      1. The Urban Land (Ceiling and Regulation) Act. 1976 is

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 61  

valid. The  vice from  which a provision here or a provision there of  the impugned  Act may  be shown to suffer will not justify the  conclusion that  the Act  is not intended to or does not,  by its  scheme; in  fact implement or achieve the purposes of  clauses (b)  and  (c)  of  Article  39  of  the Constitution.[878 C-D]      2. The  definition of  "family" in section, 2(f) of the Act, which in relation to a person means the individual, the wife or  husband, as the case may be, of such individual and their unmarried minor children, will not necessarily lead to concentration of  wealth in  the hands  of a  few persons or families. Such is not the intendment, nor the drive, nor the direct and  inevitable consequences  of  the  definition  of "family", [873 D-E]      3.  Section  11(6)  of  the  Urban  Land  (Ceiling  and Regulation) Act, 1976 which provides that the amount payable under sub-section  (I) or  sub-section  (5)  of  section  11 shall, in  no case, exceed two lakhs of rupees is valid. The amount thus  payable, is  not illusory  and the provision is not confiscatory  Rupees two  lakhs is  not like  a farthing even if the excess land may be a fortune. [879 F]      4.  Section   23  of   the  Urban   Land  (Ceiling  and Regulation) Act  is valid  and  does  not  suffer  from  any constitutional infirmity.  Sub-section (4)  of section 23 is the prepondering  provisio governing  the disposal of excess vacant land acquired under the Act. Though it is "subject to the  provisions  of  sub-section  (1)  (2),  and  (3)",  the provisions  of   sub-section  (1)   are  enabling   and  not compulsive  and  those  of  sub-sections  (2)  and  (3)  are incidental  to   the  provisions  of  sub-section  (1).  The disposal of  excess vacant  lands  must  therefore  be  made strictly in  accordance with  the mandate of sub-section (4) of section  23, subject  to this,  that in a given case such land may be allotted to any person, for any purpose relating to, or  in connection  with  any  "industry"  or  the  other purposes mentioned in sub-section (1), provided that by such allotment, a  common good  will be  subserved. The governing test of  disposal of  excess land  being "social  good", any disposal in  any particular  case or  cases which  does  not subserve that  purpose will  be liable, to be struck down as being contrary  to the scheme and intendment of the Act. The preamble to the Act ought to resolve interpretational doubts arising out of the defective drafting of section 23. "Common Good", being  the writing  on the  wall, any  disposal which does not serve that purpose will be outside the scope of the Act and, therefore, lacking in competence in diverse senses. Private property  cannot under  the Constitution be acquired or allotted  for private  purposes though  an enabling power like that contained in sub-section (I) of section 23 865 may be exercised in cases where the common good dictates the distribution of  excess  vacant  land  to  an  industry,  as defined in  clause (b)  of the  Explanation to  Section  23. [878’ G-H; 879 A-E]      5. Sub-section  (I) of section 27 of the Act is invalid insofar as  it imposes  a restriction  on  transfer  of  any urbanisable land  with a  building or a portion only of such building, which  is within  the ceiling  area. Such property will  therefore  be  transferable  without  the  constraints mentioned in  sub-section (I)  of Section  27  of  the  Act. Nothing usefully  can be  added to the Judgment delivered by Krishna Iyer,  J and  the reasons  given therein  are  fully agreed to. [879 G-H]      Per Krishna Iyer, J. (Concurring)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 61  

    1. The  legislation on  the Ceiling  and Regulation  of urban lands  is constitutionally valid, though section 27(1) is partially invalid. The legislation is obviously a measure for inhibiting  concentration of urban lands in the hands of a few persons and for equitable distribution of such land to subserve the  common good.  Article 39(b)  and  (c)  of  the Constitution  are   directly  attracted   and  the   fullest exploitation of  the material  resources  of  the  community undoubtedly requires  distribution of  urban land  geared to the common good. [880 E-F]      2, Family as defined in section 2(f) of the Act accords with the  current life  style in  urban  conditions  and  is neither artificial  nor arbitrary  nor violative  of Article 14. And  the courts,  in these  days of  family planning and self-reliance of the adult cannot condemn as arbitrary, by a process of judicial ratiocination, the legislative provision that a  family shall  be defined  as the  parents plus their minor children. [886 B-C]      3.1 The  payment, fixed  under section 11(6) of the Act of a sum of Rs. two lakhs whatever be the total value of the property in the market is not so fictitious and flimsy as to be a  farthing. There are no absolutes in law as in life and the compulsions  of  social  realities  must  unquestionably enter the judicial verdict. [881 G-H]      3.2 The various amendments to Article 31 culminating in the present  provision which provides for the payment of the "amount" disclose  a determined  approach by  Parliament  in exercise of  its  constituent  power  to  ensure  that  full compensation or  even fair compensation cannot be claimed as fundamental right  by the  private owner  and that  short of paying  a   "farthing  for   a  fortune"   the  question  of compensation is  out of bounds for the court to investigate. [881 D-F]      3.3 Having  regard to  the human  condition of  a large percentage of  pavement dwellers  and slum  dwellers in  our urban  areas   and  proletarian   miserables  in  our  rural vastnesses, any  one who  gets  Rs.  2  lakhs  can  well  be regarded as  having got something substantial to go by. In a society where half of humanity lives below the breadline, to regard Rs.  2 lakhs  as a  farthing is  farewell to poignant facts and  difficult to  accept. Therefore, section 11(6) is invulnerable and  does  not  contravene  Article  31(2)  the payment stipulated  is reasonable, neither a mere mockery or discriminatory. [884 E-F] 866      4.  The  whole  story  of  the  legislation,  the  long gestation of  pre-legislative   consideration, the  brooding presence of  Article 39(b)  and  (c)  and  the  emphasis  in Section 23(4)  on common  good as  the  guiding  factor  for distribution point  to public  purpose, national development and social  justice as  the cornerstone  of   the policy  of distribution. Any  transgression of Article 39(b) and (c) is beyond the  scope of  Section 23(1)  and  disposal  of  land thereunder  must  subserve  the  common  good  and  not  the reverse. This  limitation on the wide words of section 23(1) is a  matter of  semantics and  reading  down  the  judicial process. To  sustain a law by interpretation is the rule. To be trigger-happy  in shooting  at sight every suspect law is judicial legicide.  Courts can  and must interpret words and read their  meanings so  that public  good is  promoted  and power  misuse   is  interdicted.   The  wide  definition  of "industry" or the use of general words like "any person" and "any  purpose"   cannot  free  the  whole  clause  from  the inarticulate major  premise that  only a  public purpose  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 61  

subserve the  commom on  good and filing the bill of Article 39(b) and  (c) will be permissible. The touchstone is public purpose, community  good and  like criteria. If the power is used for favouring a private industrialist or for nepotistic reasons  the   oblique  act  will  meet  with  its  judicial Waterloo. To presume as probable graft, nepotism. patronage, political clout.  friendly pressure  or corrupt  purpose  is imper       missible. The law will be good, he power will be impeccable but  if the  particular act  of allotment is mala fide or  beyond the  statutory and constitutional parameters such exercise will be a casualty in court and will be struck down. The  power of  judicial review  to strike at excess or mala fides  is always  there for  vigilant exercise.  Hence, even the  crude drafting  of section  23(4) by  the unwanted "subject to"  will not  whittle  down  the  power,  why  the obligation, to  distribute vacant  land,  not  according  to personal, political or official fancy but strictly geared to the good set down in Article 39(b) and (c). [887 D-H; 888A; 889D]      5. Section 27(1) of the Act, is invalid, partially. [880 A]      6.1 The  question of  basic  structure  being  breached cannot  arise  when  examining  the  vires  of  an  ordinary legislation   as   distinguished   from   a   Constitutional amendment. Nor,  indeed, can  every breach of equality spell disaster as  a lethal  violation  of  the  basic  structure. Peripheral  inequality   is   invitable   when   large-scale equalization processes  are  put  into  action.  What  is  a betrayal of  the basic  feature is  not a  mere violation of Article 14  but a  shocking, unconscionable  or unscrupulous travesty  of   the  quintessence  of  equal  justice.  If  a legislation does  go  that  far  it  shakes  the  democratic foundation and  must suffer the death penalty. But to permit the Bharti  ghost  to  haunt  the  corridors  of  the  court brandishing fatal  writs for every  feature of inequality is judicial paralysation of parliamentary function. Nor can the constitutional fascination  for the basic structure doctrine be made  a Trojan  horse to penetrate the entire legislative camp fighting  for a  new social  order and to overpower the battle for abolition of basic poverty by the basic structure ’misslle. [889 E-H; 890A]      6.2  Right  to  property  is  not  part  of  the  basic structure even  his  right  to  develop  is  not  the  basic structure of  India for  ever. The  whole adventure  of  the Constitution is to remove poverty and in that process remove concentration of 867 property, not  for a  return, but  for almost  free, if  the justice of the situation commended itself to the legislation to take it that way.      Kesavanda Bharati  v. State  of Kerala [1972] Supp. SCR p. I referred to.      6.3 Part  IV which  seeks to  build  a  Social  Justice Society, is basic to our constitutional order. The Directive Principles of  State Policy being paramount in character and fundamental  in   the  country’s   governance,  distributive justice, envisaged  in Article  39(b) and (c) has a key role in the  developmental process of the Socialist Republic that India has adopted. [888 C; 880 G]      Per Tulzapurkar, J. (dissenting)      1. The  urban Land  (Ceiling and Regulation) Act, 1976, though purporting  to do  so, does not, in fact, further the directive principles  in Article  39(b) and (c). The measure was, undoubtedly,  taken in  hand with a view to achieve the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 61  

unexceptional objectives  underlying Article  39(b) and  (c) and supported  by several  State Legislatures  as per  their resolutions passed  under Article  252(1)  with  a  laudable object namely,  to clothe  the Parliament  with  legislative competence to  enact a  law for the imposition of ceiling on urban immovable property for the country as a whole, but the enacted provisions  misfire and produce the opposite results and also  damage or  destroy the essential features or basic structure of  the Constitution.  Section 2(f) in relation to prescription  of   ceiling  area   permits  unwarranted  and unjustified concentration  of wealth  instead of  preventing the same  and is  in teeth  of the  objective under  Article 39(c): Similarly section 23 produces results contrary to the objectives under  Article 39(b)  Therefore, the impugned Act is outside the protective umbrella of Article 31-C. Further, sections 2(f) 23 and 11(6) which puts a maximum limit on the quantum of  the amount  payable in respect of excess  vacant land acquired  from a  holder irrespective  of the extent of area held  by him-these  three provisions flagrantly violate those aspects  of Articles  14 and  31 which  constitute the essential and  basic features  of the Constitution and hence the protective  umbrella of Article 31-B is not available to the impugned  Act  inasmuch  as  the  Fortieth  Constitution Amendment Act,  1976 to  the extent  to which it inserts the Act in the Ninth Schedule is beyond the constituent power of the  Parliament.  Section  23  which  authorises  compulsory acquisition of property for private purposes is in breach of the doctrine  of eminent  domain  and  since  it  flagrantly violates Article  31(1) is ultra vires and unconstitutional. Similarly section  27 being  severable  is  partially  ultra vires and  unconstitutional, being  beyond  the ambit of the Act   and    also   violative   of   Article   14   of   the Constitution.[916 H, 917A-D]      The legislative  competence  of  the  Parliament  bring still  there,   a  well   drafted   enactment   within   the constitutional limitations  of  the  subject  would  be  the proper remedy.[198 G-H]      Union of  India v.  Valluri Basaviah Chowdhry, [1979] 3 SCR  802 referred to.      2.1 The  artificial definition  of "  Family" given  in section 2(f)  of(t) of  Act, when  considered in relation to the prescriptions of the ceiling area under 868 section 4(1) is clearly violative of and strikes at the root of the  equality clause  contained  in  Article  14  of  the Constitution. This  artificial definition  together with the double standard  adopted for  fixing the  ceiling area  runs through and  forms the  basis of  chapter III of the Act and the discriminatory  result or  inequalities produced thereby are bound  to have  an impact  on the scheme of that chapter and, therefore,  along with  it the  whole chapter  III must fall being violative of Article 14. [898 C-F]      2.2 The  classification made between minor children and major children  belonging to  a family  is not  based on any intelligible differentia  having  no  nexus  to  the  object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to the family. It has not  been shown  that so called nuclear families alleged by in  vogue have  replaced normal  families  which  include major sons or joint Hindu families in urban areas. [898 B-C]      Karimbil Kunhikoman  v. State  of Kerala [1962] Supp. 1 SCR 829;  A.P. Krishnasami Naidu v. State of Madras [1964] 7 S.R 82 followed.      2.3 Apart  from the  discriminatory  result  which  the artificial definition  of family  in section  2(f) produces,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 61  

the adoption  of the  artificial definition  of "family" and double standard  for fixing  ceiling area  one for  a family with minor  children and  another for  a family  with  major children and  completely ignoring the concept of Joint Hindu Family in  relation to  prescription of ceiling area clearly lead  to   results  which   run  counter  to  the  directive principles   contained    in   Article   39   (c)   of   the Constitution.[899 E-F]      3.1 Section  11(6) of  the Act,  which puts the maximum limit of  Rupees Two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent  of such  excess vacant  land held  by him is not merely  violative   of  Articles   14  and   32(2)  of   the Constitution,  but   would  be   a  piece   of  confiscatory legislation, because  vacant land  in excess of that portion which at  the prescribed  rates is  worth Rupees  Two  lakhs stands  confiscated   to  the   State  without  any  payment whatsover. [911 C-D]      3.2 The  enactments involving  large schemes  of social engineering like  abolition of  Zamindars, agrarian  reforms nationalisation of undertakings and businesses and the like, where avowedly  the benefit  of the  community or  public at large is the sole consideration are distinguishable from the instant case, where "industry" has been expressly defined to include business,  trade or profession in private sector and where power  has been  coffered upon the State Government to allot properties  acquired under the enactment to individual businessman, trader  or professional to enable him to  carry on his  private business,  trade or  profession, that  is to say, where  the legislation  is a  fraud on State’s power of eminent domain,  such a provision of putting a maximum limit on compensation  payable in respect of the acquired property irrespective of  its extent  will have  to  be  regarded  as confiscatory in nature. [911E 912 A-C] 869      However,  section   11  (6)   is  clearly  a  severable provision, and, therefore, ultra vires and unconstitutional. [913A]      State of  Kerala v. The Gwalior Rayon Silk Mfg.Co. Ltd. [1974] I SCR 671 distinguished.      4.1 Section  23 of  the Act which authorises compulsory acquisition of  property  for  private  purposes  flagrantly violates those  aspects of  Article 31  which constitute the essential or  basic features  of the  Constitution  and  is, therefore,  ultra   vires  and   unconstitutional.  Further, indispensably, it  is the  most  vital,  integral  and  non- severable part  of the  entire scheme  of urban  ceiling  as without it the scheme will merely remain a scheme for unjust and illegal  enrichment of  the State,  and  therefore,  the whole of  chapter III in which it occurs, must fall with it. [906 A-B]      4.2 Article  31 of  the Constitution  has more than one facet: it  undoubtedly confers  upon individuals  (including non citizens)  and corporate  bodies a  fundamental right to property and incorporates in our Constitution the concept of State’s power  of eminent  domain i.e.  power of  compulsory acquisition  of   private  property   and   prescribes   two conditions precedent  to the exercise of that power, namely, (i)   such acquisition cannot be except for a public purpose and (ii)  it must  be on payment of compensation (now termed amount") to  the claimant  having interest  in the property. But these  two conditions precedent are sine qua non for the exercise  of  the  State’s  power  of  eminent  domain  and, represent those  aspects of  the  right  to  property  under Article 31  which constitute the essential or basic features

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 61  

of our Constitution and for that matter these would be so of any  democratic   constitution  and,   therefore,  any   law authorising expropriation  of private  property in breach of anyone of those conditions would damage or destroy the basic structure of our Constitution. [903 H, 904A, B-E]      H.H. Kesavananda  Bharati v.  Union  of  India  &  Ors. [1973] Supp. SCR 1 referred to.      State of Bihar v. Kameshwar Singh, [1952]SCR 889 relied on.      4.3  It   is  extremely   doubtful  whether  compulsory acquisition of  all the  excess vacant  land  in  all  urban agglomerations throughout the country for a bald, indefinite and  unspecified   objective  like   "industry"  simpliciter without any  attempt at  dovetailing it  by having  a proper scheme for  industrial development  will constitute  a valid public purpose  for the  exercise of  the power  of  eminent domain" [905 C-D]      4.4 The  adoption  of  a  wide  definition  of  a  wide definition of  industry so as to include any business, trade or profession  in private sector not only makes a mockery of "public purpose", but also, in the context of eminent domain is clearly  suicidal.  What  is  worse  is  that  under  the priorities laid down such private 870 purposes are  to be  catered to  first and  then  comes  the disposal or  distribution thereof  to subserve  common good, which clearly  smacks of  depriving Peter of his property to give it  to Paul  and,  therefore,  clearly  amounts  to  an invalid exercise  of State’s power of "eminent domain". [905 F,G-H,906 A]      4.5 Besides,  the wide definition of "industry" and the priorities for  disposal or  distribution of  excess  vacant land laid  down in  sub-sections (1)  to  (5)  have  adverse impact on the directive principle contained in Article 39(b) in as  much as  private  purposes  receive  precedence  over common good.  The enactment  which contains  such provisions that  produce  contra  results  cannot  be  said  to  be  in furtherance of  the directive principle of Article 39(b) and cannot receive  the benefit  of the  protective umbrella  of Article 31-C. [906 C-D,G-H]      4.6 It  is well  settled that  it is only when there is ambiguity in the text of any provision in the enactment that the preamble  could  be  looked  into.  Here,  there  is  no ambiguity whatsoever  in section  23(1) and  (4).  Far  from there being  any ambiguity  there is  express  provision  in section 23(1)  and (4)  indicating  the  priorities  in  the matter of disposal or distribution of excess vacant land, in face of which, the Preamble cannot control, guide, or direct the disposal or distribution in any other manner. [907 A-C]      4.7 No rules framed under section 46(1), which empowers the Central  Government to  make rules  for carrying out the provisions of  the Act,  and the disposal or distribution of excess vacant  land can  override the  express provisions of section 23. Here, no rules have so far been framed. 907 C-D]      4.8 No  reliance can  be made  on  the  "Compendium  of Guidelines" issued by the Central Government in the Ministry of Works  and Housing  under the  Act either.  No doubt, the recommendations  made   by  the   9th  Conference  of  State Ministers of  Housing and  Urban Development seek to furnish improved  guidelines   but  in   the  process   reverse  the priorities given  in section 23 in the matter of disposal or distribution of  excess vacant  land. Hence,  the priorities given in section 23 and as have been summarised in para 3 of the Note  must prevail  over the priorities indicated in the guidelines contained  in para  4 of  the Note and the latter

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 61  

are of no avail. [907 F-G-H, 908 A-B]      4.9 Section  23 by  no stretch deals with the objective of Article  39(c) at  all but  only deals with the objective underlying the  directive principle of Article 39(b) and its provisions clearly run counter to that objective and as such the enactment  which contains  such provisions  must forfeit the benefit of the protective umbrella of Article 31-C. [908 C-D]      4.10 The  definition of "industry" in section 23 cannot be read  down by  the Court  so as  to confine  the same  to industries is  public sector  or co-operative  sector or the like where  benefit to community or public at large would be the sole  consideration, so  that allotment of excess vacant land acquired  under the  Act to  private entrepreneurs  for private purposes which runs counter to the 871 doctrine of  eminent domain  would be  completely  eschewed, because Parliament  has for the purpose of section (i.e. for purposes of  disposal or  distribution of such excess vacant land) deliberately  and in express terms adopted a very wide definition  which  includes  within  its  scope  not  merely trading or  manufacturing activity  but also any business or profession in private sector and reading down the definition would be doing violence to the Parliament’s intention stated in express terms. [908 G-H, 909A]      4.11 Nor  can sub-section  (1) of section 23 of the Act be read  as containing  merely an  enabling  provision;  the scheme of  sub-sections (1)  to (4)  read  together  clearly shows that the disposal of excess vacant land is first to be done under  sub-section (1)  and disposal  under sub-section (4) comes  thereafter. The opening words of sub-section (4), "subject to sub-sections (1), (2) and (3)" cannot be read as constituting a  non obstante  clause  giving  an  overriding effect to sub-section (4) nor can sub-section (4) be read as if the  opening words  were absent.  By  indulging  in  such interpretative  acrobatics,   the  Court  cannot  reach  the opposite result  than is  warranted by the plain text of the provision. Further,  to say  that every  disposal of  excess vacant land  under sub-section  (1) must be for ’common good is to  read into  that sub-section  something which  is  not there; it  amounts  to  rewriting  that  sub-section,  which cannot  be   done,  the   preamble   notwithstanding.   Such interpretations require  the  restructuring  of  the  entire section-a function legitimately falling within the domain of legislature. Moreover, sub-sections (1), (2), (3) and (4) of section 23  are integral  parts of  the whole scheme dealing with the  disposal of  excess vacant land acquired under the Act and  as such  cannot be  severed from  one another.  The attempt to  salvage section 23, either wholly or in part, by seeking to  free it  from the  two  vices,  namely  (i)  the adoption of  the wide  definition of "industry" and (ii) the priorities  mentioned  therein  governing  the  disposal  of excess vacant  land acquired under the Act, must, therefore. fail. [909 C-G]      5.1 Though  the authorisation  was  for  imposition  of ceiling on  whom immovable  property Parliament deliberately kept out built up properties from the purview of the Act and the Act seeks to impose ceiling only on vacant land in urban agglomerations; that being so any restriction on transfer of built  up   properties  or  part  thereof  (including  flats therein)  standing   on  urban   land  falling   within  the permissible ceiling area would be outside the purview of the Act. [915 E-F]      5.2 Such a provision, as in Section 27 of the Act would not be  incidental or  ancillary to the ceiling contemplated

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 61  

by the Act and would not fall within the phrase "for matters connected therewith"  occurring in the Preamble and the long title  of   the  Act,   for  the  words  "matters  connected therewith"  occurring   in  the  concerned  phrase  must  be correlated to  what precedes  the phrase, namely, "an Act to provide for  ceiling on vacant land in urban agglomerations, for the  acquisition of  such land  in excess of the ceiling limit, to  regulate the  construction of  buildings on  such land",  and   therefore,  the   words   "matters   connected therewith" must  mean matters  in relation  to  the  ceiling imposed by  the Act. A reference to objectives under Article 39(b)(c) 872 (for the  achievement of  which the  enactment is  allegedly taken in  hand) in the Preamble or long title cannot enlarge the ambit  or scope  of the  Act. Any restriction imposed on built-up properties  falling within  the permissible ceiling area left  with the  holder would, therefore, be outside the ambit and scope of the Act. [914 G-H, 915A]      5.3 In  the absence  of any guidelines for the exercise of the power and in the absence of any standards having been laid down by the Legislature for achieving the objectives of prevention of concentration, speculation and profiteering in urban land  and urban property, it cannot be said that there three  broad   objectives  recited  in  the  Preamble  could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the  permission under  section  27  and  is  bound  to produce arbitrary  or discriminatory  results. Further,  the provision  for   appeal  under   section  33  the  Appellate Authority and  a revision  under section  34  to  the  State Government  would   not  be  of  much  avail  to  preventing arbitrariness in the matter of granting of refusing to grant the permission. Section 27 which does not adequately control the arbitrary  exercise of  the power to grant or refuse the permission sought, is clearly violative of Article 14 of the Constitution and  as  such  the  requirement  of  permission contained therein is ultra vires and unconstitutional, [915 G-H,916A-B]      Per A.P. Sen, J. (concurring)      1.1 Sub-sections  (2) and  (3) of  Section 23  and  the opening words subject to the provisions of sub-sections (1), (2) and (3) "in section 23(4) of the Urban Land (Ceiling and Regulation) Act,  1976 are ultra vires of the Parliament and these provisions  are not  protected under  Article 31-B and 31-C of  the Constitution.  Sub-section (1) of section 27 of the Act  is invalid in so for as it imposes a restriction of transfer of  urban property  for a  period of ten years from the commencement  of the  Act, in relation to vacant land or building thereon,  within the  ceiling limits. The remaining provisions of  the Act, including sub-section (4) of section 23 being  in conformity with Part IV of the Constitution and Article 31(2)  are valid  and constitutional.  The Act is in furtherance of  the directive principles under Article 39(b) and (c)  and has the protection of both Article 31-B and 31- C. [946 B-F]      1.2 To  strike down  the whole Act would be against the national interest. Unless it becomes clear beyond reasonable doubt that  the legislation  in  question  transgresses  the limits of  the organic  law of  the Constitution, it must be allowed to  stand as  the true  expression of  the  national will. Here, the invalidity of the provisions of sub-sections (1) to  (3) of  section 23 and the opening words "subject to the provisions  of sub-sections (1), (2) and (3)" in section 23(4) cannot  affect the  validity of the Act as a whole, in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 61  

as much as the said provisions are not inextricably bound up with the  remaining provisions  of  the  Act.  Further,  the legislature  would   have  enacted   what  survives  without enacting the part that is ultra vires. The Act still remains the Act  as it  was passed  i.e. an  Act for  imposition  of ceiling on urban land [935 D-E, 9.6 A-B]      Attorney-General for  Alberin v.  Attorney General  for Canada [1947] AC-505 at 518 quoted with approval. 873      1.3  In   determining  the   effect  of  law  upon  the individual’s right to property, the Court must take judicial notice of  the fact  of vast  inequalities in   the existing distribution of property in the Country. The Court’s concern lies not  merely  with  applying  the  preexisting  sets  of theories, concepts,  principles and  criteria with a view to determining what  the law  is on  a  particular  point.  The proper approach  should be  to view  the principles with the realisation that the ultimate foundation of the Constitution finds its  ultimate roots  in the  authority of  the people. And, constitutional  questions should  not be  deter-  mined from a  doctrinaire approach,  but  viewed  from  experience derived from  the life  and experience  or actual working of the community,  which takes  into account  emergence of  new facts of  the community’s social and economic life affecting property rights  of the  individual, whenever,  among there, the  validity   of   a   law   prescribing   preference   or discrimination is  in question  under the "equal protection" guarantee. [936 B-E]      2. The artificial definition of family in section 2 (f) of  the  Act  is  valid.  As  a  result  of  the  artificial definition of "family" in section 2(f), a Joint Hindu family is excluded  from the  purview of  section 2 of the Act, but such a total exclusion of Joint Hindu Family does not render the Act  void and  unconstitutional as  violative of Article 14. Parliament deliberately excluded a joint family from the purview of  the section as it was beset with difficulties in imposing a  ceiling. The  Act applies to Hindus, Mohammedans and Christians  alike. By  the exclusion  of a  Joint  Hindu Family the members of a Joint Hindu family, whether governed by the  Mitakshara  school  or  the  Dayabhaga  school  were brought at  par with  others. Therefore,  there  is  nothing wrong in the exclusion. [937E-H, 938A, C-E]      3.1 The contention that the amount fixed by sub-section (6) of  section (1) of the impugned Act is totally arbitrary and illusory  since there  is no  nexus between the value of the property  and  the  amount  fixed  and,  therefore,  the maximum amount  fixed under  sub-section (6)  makes the  Act confiscatory in  total abrogation  of the  fundamental right guaranteed under Article 31(2) cannot be accepted. [938 F-A]      3.2  The  Constitution  (Twenty-fifth  Amendment)  Act, 1971, has  placed the  matter of  adequacy  of  compensation beyond the  pale of  controversy by  substituting the word " amount" for  the word  "compensation" in  Article 31(2)  and made the  adequacy of  the amount payable for acquisition or requisition of  the property  nonjusticiable. When the Court has no  power to  question the  adequacy of the amount under Article 31(2), it cannot be said, that the amount determined according to  the principles  laid down  in sub-section  (1) subject to  the maximum  fixed under sub-section (6) thereof is illusory merely because of inadequacy. The legislature in its wisdom  has laid down the principles and fixed a ceiling on the  maximum amount payable and considers that Rupees Two Lakhs is  a fair  and just recombines. That is a legislative judgment and  the Court has no power to question it. [938 G, 939 FG, 942 E-F,G]

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 61  

    H.H. Kesavananda  Bharati v.  State  of  Kerala  [1973] Supp. SCR  P.I; R.C.  Cooper v.  Union of India [1970] 3 SCR 531; State of Kerala v. Gwalior Rayan 874 Silk Manufacturing  Co. [1974] 1 SCR 671; State of Karnataka v. Ranganatha  Reddy [1978] 1 SCR 641 followed.      4.1 Sub-sections (1), (2) and (3) of section 23 and the opening words  "subject to  the provisions  of  sub-sections (1), (2) and (3)  in sub-section (4) of section 23 are ultra vires of the Parliament [935 B-C]      4.2 Apart  from the  five pillars  or the Constitution, namely, Sovereign  Democratic Republic,  Equality of  status and opportunity,  Secularism, Citizen s right to worship and the Rule  of  law-,  the  concept  of  social  and  economic justice-to build  a welfare State-, is equally a part of the basic  structure   or  the   foundation   upon   which   the Constitution rests.  The provisions  of sections  23(1), (2) and (3) and the opening words in sections 23(4) are the very antithesis of  the idea  of a  welfare State based on social and  economic   justice.  Since   these  provisions   permit acquisition of property under the Act for private purposes, they  offend against  the Directive  Principles of State Policy  of  Article  39  (b)  and  (c)  and  are  also violative of  Article 31(2)  and  therefore,  not  protected under Article 31-B, [934 G-H 935 A-B]      Indira Nehru  Gandhi  v.  Raj  Narain,  [1976]2SCR  347 relied on      H.H. Kesavananda  Bharyti v.  State  of  Kerala  [1973] Supp. SCR p.1 explained.      4.3  It   is  extremely   doubtful  whether  compulsory acquisition of  all the  excess vacant  land  in  all  urban agglomeration throughout  the country for a bold, indefinite and unspecified  objective  like  ’  industry",  simpliciter would be  a valid  exercise of  the power of eminent domain. [928H-929A]      4.4  Although  the  impugned  Act  is  enacted  with  a laudable object  to subserve the common good, in furtherance of the  Directive Principles  of State  Policy under Article 39(b) and  (c), in terms of sub-sections (1), (2) and (3) of section 23 it would be permissible to acquire vacant land in urban agglomerations and divert it for private purposes, the whole emphasis being on industrialisation. The opening words in section  23 (4) "subject to the provisions of sub section (1), (2)  and (3)"  make the  provisions  of  section  23(4) subservient to  section 23(1),  which make it lawful for the allottee that  is the  industrialist to  hold such  land  in exceess of the ceiling limit. [928 D-F]      4.5 The  provisions of  sub-section(1), (2)  and (5) of section 23  cannot be  read in  the light of the Preamble of the Act  or the Directive Principles under Article 39(b) and (c). [929 B-C]      When the language of the section is clear and explicit, its meaning  cannot be controlled by the Preamble. It is not for the  Court to restructure the section. The restructuring of a statute is obviously a legislative function. The matter is essentially of political expediency and as such it is the concern of  the statements and, the therefore, the domain of the legislature and not the judiciary. [929 C-E] 875      The use of the words "subject to the provisions of sub- sections (1),  (2) and  (3)" in section 23(4) takes away the compulsion  on   the  State  Government  to  adhere  to  the Directive Principles  under Article 39 (b) and (c) in making allotment of  the vacant  lands in an urban aggolomereration acquired  under   the  Act.   The  words  "-subject  to  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 61  

provisions of  sub-sections (1),  (2) and  (3)" in   section 23(4), appearing  in the  context means  " in addition to if anything is  left over  after the  allotment  under  section 23(1)"[929 F-G]      A legislation  built on the foundation of Article 39(b) and (c)  permitting acquisition  of private property must be for a  Public purpose.  that is  to subserve the common good Sub-sections (1),  (2) and  (3) of  section 23  of  the  Act negate that  principle. Furthermore,  Article 31(2) consists of three  prerequisites, namely,  (i) the  property shall be acquired by  or under a valid law; (ii) it shall be acquired only for  a public  purpose,  and  (iii)  the  person  whose property has  been acquired shall be given an amount in lieu thereof. The definition of ’industry ’ in Explanation (b) to section 23(1)  is wide enough to include any business, trade or vocation  carried on  for private  grain. There cannot be "mixed purpose  of public  and  private  to  substain  under legislation Article  39(b) and  (c) The vice lies in section 23(1) and  the Explanation  (b) thereto, which on a combined reading, frustrate  the he  very object  of the legislation. [930 A-C]      4.6 The concept of "public purpose" necessarily implies that it  should be  a law for the acquisition or requisition of property  in the  interest of the general public, and the purpose of  such a law directly and vitally subserves public interest. If  In reality the object of the acquisition under the Act  is to set up industries in the private sector as is permissible from the provisions of section 23(1) of the Act, nothing prevents  the State  from taking recourse to section 40 of  the Land  Acquisition Act, 1894, for which there must be quid  pro quo  that is, payment of compensation according to the market value. [930 F-G]      4.7 The  guidelines issued  by the Government of India, Ministry of  Works and  Housing clarifying  the  intent  and purpose of  the provisions  of the   Act cannot supersede or alter any  of the  provisions of  the Act  or the rules made thereunder. The  Guidelines cannot  alter  the  "priorities" laid in  the sections. The guidelines are nothing but in the nature  of   Executive  Instructions  and  cannot  obviously control the plain meaning of the section. [930 G-H, 932E]      Where the  language of  the Act  is clear and explicit, the Courts  must give  effect to  it, whatever  may  be  the consequences for in that case the words of the statute speak the intention  of the  legislature.  Therefore,  the  courts cannot be  called  upon  the  interpret  the  provisions  of section 23  of the Act in the light of the Guidelines issued by the  Government of  India, Ministry of Works and Housing. 932 E-F]      4.8 The  provisions of sub-sections (1), (2) and (3) of section 23  and the opening words "subject to the provisions of sub-sections  (1), (2)  and (3)  in section  23(4)  which makes the setting up of industries the dominent object for 876 the acquisition of vacant land in urban agglomerations under the Act  are not in keeping with Part IV of the Constitution and, therefore, not protected under Article 31-C. [932 G-H]      4.9 A  legislation which  directly runs  counter to the Directive Principles  of State  Policy enshrined  in Article 39(b) and  (c) cannot  by the  mere inclusion  in the  Ninth Schedule receive  immunity under Article 31-B. The Directive Principles are  not mere  homilies. Though  these Directives are not  cognizable by  the Courts  and if the Government of the day  fails to  carry out these objects no court can make the Government  ensure them , yet these principles have been

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 61  

declared to be fundamental to the governance of the country. In short,  the Directives emphasise, in amplification of the Preamble, that  the goal of the Indian policy is not laissez faire, but  a welfare  State, where the State has a positive duty to  ensure to  its citizens social and economic justice and  dignity  of  the  individual.  It  would  serve  as  an "Instrument of  Instructions" upon  all future  governments, irrespective of their party creeds. 933A-B, E-F]      5.1 The provisions of sub-section ( 1) of section 27 of the Act  is invalid  in so  far  as  it  seek  to  affect  a citizen’s right to dispose of his urban property in an urban agglomeration within the ceiling limits. [946 B-C]      5.2 The  right to acquire, hold and dispose of property guaranteed to  a citizen under Article 19(1)(f) carries with it the  right not  to hold  any property. As such a, citizen cannot be compelled to own property against his will [945 G- H]      There is  no justification  at all  for the freezing of transactions by  way of  sale, mortgage,  gift or  lease  of vacant land  or building for a period exceeding ten years or otherwise for  a period  of ten  years from  the date of the commencement of  the Act,  even though such vacant land with or without building thereon falls within the ceiling limits. [945 E-F]      If vacant  land owned  by a  person  falls  within  the ceiling limits  for an urban agglomeration he is outside the purview of  section 3  of the  Act. That  being so,  such  a person is  not governed by any of the provisions of the Act. [946A]      Excel Wear v. Union of India and Ors. [1979] 1 SCR 1009 relied on.

JUDGMENT:      ORIGINAL JURISDICTION:  Writ Petition  No. 350/ of 1977 etc.      Under Article 32 of the Constitution of India.      S.K. Jain and S.S. Khanduja for the Petitioners.      R.N. Poddar and Ms. A. Subhashini for the Respondents.      The following Judgments were delivered 877      CHANDRACHUD, C.J.:  A large  group of  persons  holding vacant  lands  in  different  urban  agglomerations  in  the country had  filed writ petitions in this Court, challenging the validity of some of the key provisions of the Urban Land (Ceiling  and  Regulation)  Act,  33  of  1976.  Those  writ petitions were  disposed  of  on  November  13,  1980  by  a Constitution  Bench   consisting   of   Krishna   Iyer   J., Talzapurkar J.,  A.P.Sen J.,  and the two of us. Each of our three  learned   Brethren  delivered  a  full  judgment.  We delivered a  short judgment  and stated  that fuller reasons will follow later.      We had  discussed with  one another  the several points arising in  the writ petitions. But, we were running against time, not  an unusual predicament, since Krishna Iyer J. was due to retire on November 15, 1980, Tulzarpurkar J. differed from all  of us,  holding  that  the  impugned  Act  is  not protected under Article 31-C or under Article 31-B since, it did  not  further  the  Directive  principles  contained  in clauses (b)  and (c)  of Article 39 of the Constitution. The learned Judge  held further  that since  Chapter III  of the Act, comprising the substratum of the very scheme of the Act was invalid  the  entire  Act  had  to  be  struck  down  as unconstitutional. A.P.  Sen J.  agreed with  us on  all  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 61  

points except  that according  to him,  subsections (1), (2) and (3) of section 23 and the opening words of section 23(4) of the  Act are  unconstitutional, not  being  protected  by Articles 31-B  and 31-C of the Constitution. Krishna Iyer J. concurred with  us in  holding that  the entire Act is valid save and  except section  27(1),  insofar  as  that  section imposes  restrictions  on  the  transfer  of  any  urban  or urbanisable land  with a  building  or  a  portion  of  such building, which is within the ceiling area. We took the view that the  impugned Act  was intended  to  and  did  in  fact implement or  achieve the  purpose of clauses (b) and (c) of Article 39 and that, the vice from which a few provisions of the Act  could be  shown to  suffer,  would  not  justify  a contrary conclusion.      We are  free to  confess that  if the  full text of the judgment  of   Krishna  Iyer   J.  were   available  to   us sufficiently in  advance  we  would  not  have  delivered  a separate order  stating  that  fuller  reasons  will  follow later. The  judgment had  to be  pronounced on  November 13, 1980 since,  Krishna Iyer  J. was  due to  retire  two  days later. As  we have  stated earlier,  all of  us had together discussed the  various points  arising in these cases and we knew the conclusions to which we had respectively come. But, it is  not possible  to express  agreement with  the line of reasoning of a judgment, without examining 878 the judgment carefully. That opportunity became available to us latter.  We have  gone through Krishna Iyer J.’s judgment closely and  find that there is nothing that we can usefully add to it.      The only  further order which we propose to pass now is say that  we agree  fully with  the reasons given by Krishna Iyer J. in his judgment reported in 1981(1) S.C.C. 166.      CHANDRACHUD, C.J. We have perused the judgment prepared by Brother  Tulzapurkar with  care but, with respect, we are unable to  agree with  him that  the Urban Land (Ceiling and Regulation) Act  33 of  1976, does not further the Directive Principles of State Policy in clauses (b) and (c) of Article 39 of the Constitution. The vice from which a provision here or a  provision there  of the  impugned Act  may be shown to suffer will  not justify  the conclusion that the Act is not intended to or does not, by its scheme, in fact implement or achieve the purposes of clauses (b) and (c) of Article 39.      The definition  of ’family’  in section  2(f), which in relation to  a person  means the  individual,  the  wife  or husband, as  the case  may be, of such individual, and their unmarried minor  children,  will  not  necessarily  lead  to concentration of  wealth in  the hands  of a  few person  or families. Such is not the intendment, nor the drive, nor the direct  and   inevitable  consequence   of   the   aforesaid definition of ’family’.      Section 23  of the Act is in our opinion valid and does not suffer from any constitutional infirmity. The definition of the  word ’industry’  in clause (b) of the Explanation to that section  is undoubtedly  unduly wide  since it includes "any   business,    profession,   trade,    undertaking   or manufacture". If sub-section (1) of section 23 were to stand alone, no  doubt could  have  arisen  that  the  Urban  Land Ceiling Act  is a facade of a social welfare legislation and that its  true, though  concealed,  purpose  is  to  benefit favoured private individuals or associations of individuals. But the  preponderating provision  governing the disposal of excess vacant  land  acquired  under  the  Act  is  the  one contained in  sub-section (4)  of   section 23  whereby, all vacant lands  deemed to  have been  acquired  by  the  State

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 61  

Government under the Act "shall be disposed of...to subserve the common  good". The  provisions of  sub-section  (4)  are "subject to  the provisions of sub-sections (1), (2) and (3) "but the provisions of sub-section (1) 879 are enabling  and not  compulsive and  those of sub-sections (2) and  (3) are incidental to the provisions of sub-section (1). The  disposal of  excess vacant lands must therefore be made strictly  in accordance with the mandate of sub-section (4) of  section 23,  subject to  this, that  in a given case such land  may be  allotted to  any person;  for any purpose relating to,  or in  connection with,  any ’industry’ or for the other  purposes mentioned  in sub-section  (1), provided that by  such allotment,  common good will be subserved. The governing test  of disposal  of excess  land  being  ’social good’, any  disposal in  any particular  case or cases which does not  subserve that  purpose will be liable to be struck down as  being contrary  to the  scheme and intendment of he Act.  The   Preamble   to   the   Act   ought   to   resolve interpretational  doubts   arising  out   of  the  defective drafting of  section 23,  It shows  that the  Act was passed with the object of preventing concentration of urban land in the hands of a few persons and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good. ’Common good’ being the writing on the wall,  any disposal  which does  not serve  that purpose will be  outside the  scope of the Act and therefore lacking in competence  in diverse  senses. Private  property  cannot under our  Constitution be  acquired or allotted for private purposes though  an enabling  power like  that contained  in sub-section (1)  of section  23 may  be exercised  in  cases where the  common good  dictates the  distribution of excess vacant land  to an industry, as defined in clause (b) of the Explanation to section 23.      Section 11(6)  which provides  that the  amount payable under sub-section  (1) or  sub-section  (5)  of  section  11 shall, in  no case, exceed two lakhs of rupees is valid. The amount thus payable is not illusory and the provision is not confiscatory. Rupees  two lakhs  is not like a farthing even if the excess land may be a fortune.      Finally, we  are of  the opinion that subsection (1) of section 27  of the  Act is invalid in as far as it imposes a restriction on  transfer of  any urban  or urbanisable  land with a building or a portion only of such building, which is within the  ceiling area.  Such property  will therefore  be transferable  without  the  constraints  mentioned  in  sub- section (1) of section 27 of the Act.      The Writ Petitions are accordingly dismissed except for the restricted  striking down  of section  27(1) of the Act. There will be no order as to costs 880      Fuller reasons will follow latter.      KRISHAN IYER, J. I agree with the learned Chief Justice both regarding  the constitutionality of the legislation and regarding  the   partial  invalidation   of   s.   27   (1). Nevertheless, I  consider  it  necessary  to  strike  a  few emphatic notes  of concordance  having special regard to the discordance of  my learned  brother Tulzapurkar,  J. I  have carefully perused  the judgment  of Tulzapurkar, J, but must express  my   deferential  disagreement  because  on  a  few fundamentals there is sharp divergence between us.      I proceed  to turn  the focus  only  on  three  issues, namely, the  alleged artificiality of "family’ as defined in s. 2  (f) of  the Urban  Land (Ceiling  and Regulation) Act, 1976 (for  short, the  Act), the  invalidity of s. 23 of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 61  

Act as  discriminatory and,  therefore, unconstitutional and the invalidity of s. 11 (6) of the Act on the score that the compensation offered  is illusory  and, therefore, violative of Art. 31 (2) of the Constitution.      The legislation, as its title indicates, is obviously a measure for  inhibiting concentration  of urban lands in the hands of  a few  persons and fore quitetable distribution of such land  to subserve  the common  good. Article 39 (b) and (c) of  the Constitution are directly attracted and there is no doubt  that the  fullest  exploitation  of  the  material resources of the community undoubtedly requires distribution of urban  land geared  to the  common good.  It  is  also  a notorious fact  that concentration  of urban land in private hands is an effective forbiddance of the maximum use of such land for industrial purposes at a critical juncture when the nation is  fighting for  survival through industrialisation. It needs  no argument  to conclude that the objective of the legislation as  set  out  in  the  long  title  and  in  the statutory  scheme  is  implementation  of  Part  IV  of  the Constitution. The Directive principles of State policy being paramount in  character and  fundamental  in  the  country’s governance, distributive  justice envisaged  in Art.  39 (b) and (c)  has key  role in  the developmental  process of the socialist Republic that India has adopted. The conclusion is inevitable that  is a broad measure of State policy, ceiling on and  regulation of  urban land ownership is an imperative of economic  independence and is, therefore, on the national agenda  of   planned  development.   Indeed,  there  was  no controversy on  this question  before us.  One of the points which has been argued and has found approval with my learned brother 881 Tulzapurkar,  J.,   turns  on   the  gross   inadequacy   of compensation fixed  under s.  11 (6)  of the Act. There is a specific case  before us  that urban land worth a few crores will fall  a prey  to acquisition under this Act, but thanks to s.  11 (6),  "the amount"  payable in return to the owner shall not  exceed Rs.  2 lakhs. This, it is contended, is an illusory compensation  in reckless  disregard of  the market value of  the property  acquired. I  am unable to agree with this submission.      The taking over of large conglomerations of vacant land is a  national necessity  if Art.  39  is  a  constitutional reality. "Law  can never  be higher  than the economic order and the  cultural development  of society brought to pass by that economic  order." (Marx).  Therefore, if Art. 38 of the Constitution which  speaks of  a social  order  informed  by economic  justice,  is  to  materialise,  law  must  respond effectively and  rise to  the needs  of  the  transformation invisioned by the founding fathers. But it is contended that any legislation  which violates  Art. 31  (2) or Art. 19 (1) (f) (both  of them  have since  been  deleted  by  the  44th Amendment to  the Constitution although on the relevant date they were  part of  part III)  must fail notwithstanding the fact that  Arts. 31B  and 31  C shield  the  legislation  in question. It  is said  that the  Act is  vulnerable for  the reason that  right to  property armoured  by the  above  two Articles is  inviolable unless  the taking  is for  a public purpose in contrast to a private industry and the payment in return, even  if not  an equivalent, is be fair enough so as not to  be castigated as illusory. The various amendments to Art. 31  culminating in the present provision which provides for  the  payment  of  an  "amount"  disclose  a  determined approach by  parliament in exercise of its constituent power to ensure  that full  compensation or even fair compensation

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 61  

cannot be  claimed as  a fundamental  right by  the  private owner and  that short  of paying  a ’farthing for a fortune’ the question  of compensation is out of bounds for the court to investigate.      The question  is whether  in the  light of  Kesavananda Bharati (especially  the observations  of Chandrachud, J), a sum of Rs. 2 lakhs in s. 11 (6) is a farthing for a fortune. I repudiate  the proposition  that payment of a sum of Rs. 2 lakhs, whatever  the total  value of  the  property  in  the market may  be is  so fictitious  and  flimsy  as  to  be  a farthing. There  are no  absolutes in law as in life and the compulsions of  social realities  must unquestionably  enter the judicial verdict. 882 What is the dimension of Indian penury? What is the basis of our constitutional  order? What is the goal of the Republic? What is the meaning of the egalitarian ethos of our society? What do  we mean  by "We, the people of India"? Unless these profound  roots  of  our  social  constitutional  order  are probed, we  can never  reach an  effective answer  to  legal formal issues.  The roots and fruits of our National Charter depend on  a clear grasp of the constitutional fundamentals. In this  context, it is important to remember what, right at the beginning  even as  the proceedings  of the  constituent Assembly were culminating, Nehru had warned:           If we  cannot solve  this problem  soon,  all  our      paper   constitutions    will   become    useless   and      purposeless. If  India goes  down, all will go down; if      India thrives, all will thrive; and if India lives, all      will live. He had repeated with emphasis:           The first  task of  this Assembly is to free India      through a new constitution, to feed the starving people      and to  clothe the  naked masses,  and  to  give  every      Indian  the  fullest  opportunity  to  develop  himself      according to his capacity. Indeed, the  tryst with  destiny that  India  made  when  it became free  found expression  in a  historic speech  by the then Prime Minister, Jawahar Lal Nehru:           The service  of India  means the  service  of  the      millions who suffer. It means the ending of poverty and      ignorance and  disease and  inequality of  opportunity.      The ambition  of the greatest man of our generation has      been to  wipe every  tear from  every eye.  That may be      beyond  us,   but  as  long  as  there  are  tears  and      suffering, so long our work will not be over.      We must  notice the  Indian  human  condition.  "Indian poverty, to  many who  have an  acquaintance with poverty in similar societies  is unique",  writes Segal in his book The Crisis of  India: "It  is unique  in its depths, which seems incapable of supporting life at all; unique in its blatancy, for it  is everywhere,  in city  and village,  and concealed among chimneys or trees, not isolated like an epidemic in an 883 inaccessible slum,  but everywhere, on the movement of one’s feet, always some where in the circle of one’s sight; unique in its  sheer magnitude  for in India the poor are not to be numbered in  hundreds  of  thousands,  but  in  hundreds  of millions; unique  in the  quality of  its submission,  which registers a  kind of  glazed pride."  In this context we may also read  what  Rajen  Babu  stated  as  a  framer  of  the Constitution:           To all  we give  the assurance that it will be our      endeavour to end poverty and squalor and its companions      hunger and  disease,  to  a  abolish  distinctions  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 61  

    exploitation and to ensure decent conditions of living. We may have to remember that a galaxy of Constitution-makers like Sardar  Patel and  B. Pant  and Rajagopalachari, not to speak of  Jawahar Lal  Nehru, where doubtful about the court being given  the power  to pronounce  upon the  question  of compensation when the State acquired property. Indeed, it is revealing to  read the  debates in  condensed form  given by Granville Austin:           Sardar Patel  closed the debate with a speech that      sounded  like  a  requiem  for  land-lords....What  did      ’public use’  mean he wondered. Pant then said: Suppose      the  government  acquires  zamindari  rights  and  then      abolishes them.  Or what  if the  Government takes over      Connaught Place  (the central  shopping and office area      of New  Delhi) and  then redistributes the buildings to      the tenants?  The first stage is acquisition. Does that      come  under   this  clause?   To  Ayyar’s   answer   of      ’Certainly’, Pant  replied that  he opposed the wording      if it  means that  the government  would not be free to      determine the  compensation it  would have  to pay.  If      this  clause  covers  all  cases  of  acquisition  said      Rajagopalachari, then  the question  of the justness of      compensation will  go to  the courts  ’with the  result      that  government   functioning  will   be   paralysed’.      Panikkar suggested that they should take out the ’just’      so that  it would not be justiciable. Pant replied that      if this  covered acquisition for social purposes, ’then      I submit  payment of  compensation should  not even  be      compulsory’. Patel concluded the discussion. 884      ’If the  word ’just’ is kept,’ he said, ’we come to the      conclusion that  every case  will  go  to  the  Federal      Court.’  Therefore   "just"  is   dropped   ........The      Assembly greeted the committee’s actions favourably. We need  not go  into the  details except to state that even Gandhiji took the view that anything like compensation could possibly not  be given  when property  was  taken  from  the property owners  by  the  State  for  community  benefit.  I mention this   only  to drive  home the  point that right to property  is   not  part  of  the  basic  structure  of  the Constitution even  as right  to poverty  is  not  the  basic structure of  India for  ever. The  whole adventure  of  the Constitution is to remove poverty and in that process remove concentration of  property, not for a return, but for almost free, if  the justice  of the situation commended it self to the legislation  to take it that way. Of course, it may be a deception to say that an "amount" is paid if nothing is paid except a  tittle. So what we have to consider is whether the amount of  Rs. 2  lakhs is  so utterly deceptive and totally nominal as  to be  discarded as  a farthing  with  contempt. Having regard  to the  human condition of a large percentage of pavement  dwellers and  slum dewllers  in our urban areas and proletarian  miserables in our rural vastnesses, any one who gets  Rs. 2  lakhs can  well be  regarded as  having got something substantial  to go  by. In a society where half of humanity lives below the breadline, to regard Rs. 2 lakhs as a farthing  is farewell  to poignant  facts and difficult to accept. In my view, with the greatest respect for my learned brother, I  am unable  to assent  to the view that s. 11 (6) contravenes Art.  31 (2) because the Payment stipulated is a mere mockery.      To put  a ceiling  on the  maximum amount  payable when property  is   taken  is   reasonable  and  does  not  spell discrimination unless  the maximum  itself is  a hoax, being trivial.  In   a  Constitution  which  creates  a  Socialist

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 61  

Republic egalite  is  the  rule  of  life  and  where  gross inequalities  mar   the  economic   order,  a   measure   of equalization is  but one  strategy of promoting equality and has to  be viewed as part of the dynamics of social justice. Indeed, even  in the  Income Tax  Act, at  a certain  stage, almost all  the income  is taken away by a steep rate of tax leaving next  to nothing to the income earner. We have to be pragmatic and show empathy with the values 885 of the  Constitution. Chief  Justice Earl Warren’s statement is apposite as a reminder to our judicial conscience:           Our  judges  are  not  monks  or  scientists,  but      participants in the living stream of our national life,      steering the law between the dangers of rigidity on the      one hand  and of  formlessness on the other. Our system      faces no  theoretical dilemma  but a  single continuous      problem: how  to apply  to ever-changing conditions the      never-changing principles of freedom. I have no hesitation in holding s. 11(6) as invulnerable.      ’Family’ as  defined in s.2(f) has been held invalid by my  learned   brother  Tulzapurkar,   J,  as  an  arbitrary, artificial creation  of the  statute inconsistent  with  the natural unit  prevalent in  the country.  Here again. I must emphasise that  law is  never static and must respond to the challenges of change:           The law  is not  an end  in itself,  nor  does  it      provide ends.  It is preeminently a means to serve what      we think  is right  .....Law is here to serve! To serve      what? To  serve, insofar  as law  can properly  do  so,      within  limits   that  I  have  already  stressed,  the      realization of  man’s ends,  ultimate and  mediate, Law      cannot stand aside from the social changes around it. It is  possible that  in  the  last  century  the  prevalent concept of  family was  of a certain pattern. Indeed, in the diversity of Indian social structure the concept of ’family’ has varied  from region to region and even from community to community and  we cannot  postulate any  parameters in  this behalf. Moreover,  fission, not  fusion, is the modern trend and wherever  might have  been the situation in Indian rural life in  the 1950s  there is  no doubt that nuclear families are becoming the vogue in the late 1970s and 1980s of Indian urban  life.  In  the  Western  countries  the  family  unit consists of  the parents  and their  minor children  and the West has invaded the East in life-style 886 atleast in  our cities. Whatever may be the pastoral life of old or  the idyllic  picture we may cherish the social facts tell a  different tale  in contemporary India of the cities. There is  hardly space for a unclear family to live in urban conditions and  to think  of large  joint  families  as  the natural unit  is to  resurrect by gone ways of life and turn the blind eye to the rapid growth of the small family of man and wife-’we  two and  we shall have two’ is the desideratum and social  factum. In  these days  of family  planning  and self-reliance of  the adult  we cannot condemn as arbitrary, by a  process of  judicial  ratiocination,  the  legislative provision that a family shall be defined as the parents plus their minor  children. I,  therefore, hold  that ’family’ as defined in  s. 2(f)  of the  Act accords  with  the  current lifestyle in  urban conditions and is neither artificial nor arbitrary nor  violative of  Act 14.  It is  noteworthy that many agrarion legislations have been upheld by this court in a spate  of recent cases where the definition of ’family’ is substantially the same.      I may  permit myself a few observations on s. 23 of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 61  

Act and  the  grounds  of  invalidation  relied  on  by  the challengers. The  section has  been loosely  or ambivalently drafted and runs thus:      23. Disposal of vacant land acquired under the Act.           (1) It shall be competent for the State Government      to allot,  by order, in excess of the ceiling limit any      vacant land  which is  deemed to  have been acquired by      the State  Government under  this Act or is acquired by      the State  Government under any other law to any person      for any purpose relating to, or in connection with, any      industry or  for providing residential accommodation of      such type as may be approved by the State Government to      the employees  of any  industry and  it shall be lawful      for such  person to  hold such  land in  excess of  the      ceiling limit.      Explanation-For the purposes of this section,                (a) where  any land  with a building has been           acquired by  the State  Government under any other           law  and   such  building  has  been  subsequently           demolished by  the State  Government,  than,  such           land shall  be deemed  to be  vacant land acquired           under such other law: 887                (b)   "industry"    means    any    business,           profession, trade, undertaking or manufacture.                ...            ...            ...           (4) Subject to the provisions of sub-sections (1),      (2) and  (3), all  vacant lands  deemed  to  have  been      acquired by  the State  Government under this Act shall      be disposed  of by the State Government to subserve the      common good  on such  terms and conditions as the State      Government may deem fit to impose.      Certain basics  must be remembered as ideological tools of legal  interpretation.  The  purpose  of  the  enactment, garnered from  the Preamble,  is to  set a ceiling on vacant urban land,  to take over the excess and to distribute it on a  certain  basis  of  priority.  The  whole  story  of  the legislation,   the   long   gestation   of   pre-legislative consideration, the  brooding presence  of Art. 39(b) and (c) and the  emphasis in  s. 23(4) on common good as the guiding factor for  distribution point  to public  purpose, national development and  social justice  as the  cornerstone of  the policy  of   distribution.  It  is  not  and  never  can  be compulsory taking  from some  private owners  to  favour  by transfer other  private owners.  The prevalent  pathology of corrupt use  of public  power cannot be assumed by the court lest the  same charge  be levelled against its echelons. The wide definition  of ’industry’  or the  use of general words like ’any  person’ and  ’any purpose’  cannot free the whole clause from  the inarticulate  major  premise  that  only  a public purpose  to subserve  the common good and filling the bill of  Art. 39(b)  and (c)  will be  permissible.  Even  a private industry  may be  for a  national need and may serve common good.  Even  a  medical  clinic,  legal  aid  bureau, engineering consultant’s  office, private  ambulance garage, pharmacist’s shop  or even  a funeral  home may  be a public utility. Professions for the people, trade at the service of the community  and industry  in the  strategic sector of the nation’s development  may well  be in  private hands  in the transitional stage  of our  pluralist economy  undergoing  a fabian transformation.  Why should  lands allotted  to  such private  industries   or  professionals  be  condemned?  The touchstone  is  public  purpose,  community  good  and  like criteria. If  the power  is used  for  favouring  a  private industrialist or for nepotistic reasons the oblique act will

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 22 of 61  

meet with  its judicial  Waterloo. To  presume  as  probable graft, nepotism, patronage, political cloth, 888 friendly pressure  or corrupt  purpose is impermissible. The law will  be good,  the power  will be impeccable but if the particular act  of allotment  is mala  fide  or  beyond  the statutory and  constitutional parameters  such exercise will be a  casualty in  court and  will be  struck down.  We must interpret wide  words used in a statute by reading them down to fit  into the constitutional mould. The confusion between the power  and  its  oblique  exercise  is  an  intellectual fallacy we must guard against. Fanciful possibilities, freak exercise  and  speculative  aberrations  are  not  realistic enough  for  constitutional  invalidation.  The  legislature cannot be stultified by the suspicious improvidence or worse of the Executive.      I wholly  agree with  the  perspective  of  my  learned brother Sen,  J. that  Part IV which seeks to build a Social Justice Society,  is basic  to our constitutional order. Any transgression of  Art. 39(b)  and (c) is beyond the scope of s. 23(1)  and disposal  of land thereunder must subserve the common good and not the reverse. This limitation on the wide words of  s. 23(1) is a matter of semantics and reading down meanings  of   words  with   loose  lexical   amplitude   is permissible as  part of  the judicial  process. To sustain a law by  interpretation is  the rule.  To be trigger-happy in shooting at  sight every  suspect law  is judicial legicide. Courts can  and must interpret words and read their meanings so  that  public  good  is  promoted  and  power  misuse  is interdicted. As  Lord Denning said: "A judge should not be a servant of  the words used. He should not be a mere mechanic in the  power-house of  semantics". May  Lord  Denning  live long, and his shadow never grow less."      The power  of judicial  review to  stricke at excess or mala fides is always there for vigilant exercise untrammeled by the  narrow precedents of Victorian vintage. Prof. H.W.R. Wade’s note  of judicial  activism,  in  his  recent  Hamlyn Lectures, will set the sights right:           Brainwashed though  British lawyers  are in  their      professional  infancy   by  the  dogma  of  legislative      sovereignty, they ought to excuse rather than criticise      the logical  contortions and  evasions to  which Judges      must resort in their struggle to preserve their powers.      I do not see how 889      they can  fairly be  accused, to  borrow words  used by      Lord Devlin,  of moving  too far  from their base. They      would be  much more  open to criticism if they remained      content with  the wretchedly  narrow base to which they      confined  themselves  30  years  ago,  when  they  took      clauses of  the "if  the minister is satisfied" type at      face value.  For judicial  control,  particularly  over      discretionary power,  is a  constitutional fundamental.      In their self-defensive campaign the judges have almost      given  us   a  constitution,  establishing  a  kind  of      entrenched provision to the effect that even Parliament      cannot deprive  them of their proper function. They may      be discovering  a deeper  constitutional logic than the      crude absolute of statutory omnipotence.      I have no doubt even the crude drafting of s. 23 (4) by the unwanted  ’subject to’  will not whittle down the power, why the obligation, to distribute vacant land, not according to personal, political or official fancy but strictly geared to the good set down in Art. 39 (b) and (c)      The question  of basic  structure being breached cannot

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 23 of 61  

arise when  we examine  vires of  an ordinary legislation as distinguished from  a constitutional  amendment. Kesavananda Bharati cannot  be the last refuge of the proprietariat when being legislation  takes away  their ’excess’  for  societal weal. Nor,  indeed,  can  every  breach  of  equality  spell disaster as  a lethal  violation  of  the  basic  structure. Peripheral  inequality   is  inevitable   when   large-scale equalisation processes  are but  into  action.  If  all  the judges of  the Supreme  Court  in  solemn  session  sit  and deliberate for  half a  year to  produce a  legislation  for reducing glaring  economic inequality  their genius will let them  down   if  the  essay  is  to  avoid  even  peripheral inequalities  Every  large  cause  claims  some  martyr,  as sociologists will know. Therefore, what is a betrayal of the basic feature  is not  a mere  violation if  Art. 14  but  a shocking, unconscienable  or unscrupulous  travesty  of  the quintessence of equal justice. If a legislation does go that far it  shakes the democratic foundation and must suffer the death penalty.  But to permit the Bharati ghost to haunt the corridors of  the court  brandishing fatal  writs for  every feature of 890 inequality  is   judicial  paralysation   of   parliamentary function. Nor  can the  constitutional fascination  for  the basic  structure   doctrine  be   made  a  Trojen  horse  to penetrated he  entire legislative  camp fighting  for a  new social order  and to  overpower the  battle for abolition of basic poverty  by the  ’basic structure’  missile. Which  is more basic?  Eradication of  die-hard, deadly  and pervasive penury degrading  all human rights or upholding of the legal luxury   of   perfect   symmetry   and   absolute   equality attractively presented  to preserve  the status quo ante? To use the  Constitution to defeat the Constitution cannot find favour whit  the judiciary I have no doubt that the strategy of using  the missile  of ’equality’  to preserve  die-hard, dreadful societal  inequality is  a stratagem  which must be given  short  shrift  by  this  court.  The  imperatives  of equality and  development are  impatient for  implementation and judicial  scapegoats must never be offered so that those responsible for  stalling  economic  transformation  with  a social justice  slant may be identified and exposed of. Part IV is  a basic  goal of  the nation  and now  that the court upholds the  urban  ceiling  law,  a  social  audit  of  the Executive’s implementation a year or two later will bring to light the  gaping gap  between verbal  valour of the statute book and  the executive  slumber of law-in-action. The court is not the anti-hero in the tragedy of land reform urban and agrarian.      After all, in a rapidly changing society running on the rails  of   the  rule  of  law  and  operated  according  to constitutional paradigms,  the  proprietariat  is  bound  to suffer but  the  country  cannot  defer  the  transformation because, then,  hunger will know no law. This is the root of the matter. And then comes the irony of continual litigative Clamour and the periodic chorus for property.           Dosn’t thou  ’ear  my  ’erse’s,  as  they  canters      awaay? Proputty, proputty, proputty-than’s what I ’ears      ’em saay. And holders and hoarders of wealth may pensively reflect:           Few rich  men own their own property. The property      owns them. 891      I have  not had  the leisurely  advantage of my learned brothers’  full  judgments  save  some  discussions  but  my impending  retirement  impels  a  hurried  recording  of  my

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 24 of 61  

reasons for  subscribing  to  the  order  passed  just  now. ’Tomorrow to  fresh woods and pastures new’, but to-day must be fulfilled before tomorrow arrives, and so, I deliver this judgment as is my duty to do,      TULZAPURKAR,   J.   By   these   writ   petitions   the petitioners, who  are holders  of vacant  land in  the urban agglomerations in  various States,  are seeking to challenge the vires  of some  of the  salient provisions  of the Urban Land (Ceiling  and Regulation)  Act, 1976  (33 of  1976) and since, according  to them,  some of  the impugned provisions are pivotal  and non-severable,  having  an  impact  on  its entire scheme,  the whole Act is liable to be struck down as being invalid  and unconstitutional.  The petitioners  have, therefore, prayed  for an  order quashing  notices issued to them by  the concerned  competent authorities  under the Act and a  mandamus directing  the respondents  not to implement the provisions thereof against them.      The  impugned   enactment  has   its  genesis   in  the resolutions passed  by eleven  sponsoring States  under Art. 252 (1)  of the  Constitution.  The  State  Legislatures  of Andhra  Pardesh,   Gujarat,   Haryana,   Himachal   Pradesh, Karnataka,  Maharashtra,   Orissa,  Punjab,  Tripura,  Uttar Pradesh and  West Bengal  considered it desirable to have an uniform legislation enacted by Parliament for the imposition of ceiling  on urban property for the country as a whole and as required  by the  first part  of  Art.  252  (1)  of  the Constitution passed  a resolution to that effect. Parliament accordingly enacted  the Urban Land (Ceiling and Regulation) Act, 1976.  It received  the  assent  of  the  President  on February 17,  1976 and,  in the first instance, it come into force on  that day  in all  the Union Territories and the 11 States which  had passed  the requisite resolution under the first part  of Art.  252  (1).  Subsequently,  the  Act  was adopted, by  passing resolutions  under the  second part  of Art. 252 (1) by the State Legislatures of Rajasthan on March 9, 1976, Manipur on March 12, 1976, Assam on March 25, 1976, Bihar on  April 1,  1976, Meghalaya  on April  7,  1976  and Madhya Pradesh  on September 9, 1976. Thus, the enactment is in force  in 17  States and all the Union Territories in the country. It seeks to impose ceiling on vacant lands in urban agglomerations having  a population of two lakhs or more and for that  purpose classifies  such urban  agglomerations  in various  cities  and  towns  in  all  the  State  and  Union Territories into four categories 892 and fixes the ceiling limit for each of the categories thus: Ceiling limit  on vacant land is fixed at 500 sq. metres for the urban agglomerations of the metropolitan areas of Delhi, Bombay, Calcutta  and Madras  having a  population exceeding ten lakhs  falling under  category ’A’,  at 1,000 sq. metres for urban  agglomerations with a population of ten lakhs and above, excluding  the four metropolitan areas, falling under category ’B’,  at 1,500  sq. metres for urban agglomerations with a  population between three lakhs and ten lakhs falling under category  ’C’ and  at 2,000 sq. metres for urban agglo merations with  a population  between two  lakhs  and  three lakhs  falling  under  category  ’C’:  vide  s.4  read  with Schedule I  of the  Act. The  said Schedule does not mention the urban agglomerations having a population of one lakh and above but  if a  particular State  which passed a resolution under Art.  252  (1)  (first  part)  or  if  a  State  which subsequently adopts  the Act  by passing  a resolution under Art. 252  (1) (second  part) wants to extend the Act to such areas, it  could do  so by a Notification under s. 2 (n) (A) (ii) or  s. 2  (n) (B),  as the case may be, after obtaining

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 25 of 61  

the previous  approval of  the Central  Government.  Chapter III, being  the main  Chapter, comprising ss. 3 to 24, deals principally with  imposition and limits of ceiling on vacant land, acquisition  and vesting  in the  State Government  of vacant land  in excess  of the ceiling limits, payment to be made to the holders for such acquisition, disposal of excess vacant  land   so   acquired   and   exemptions   from   the applicability of  this Chapter. Chapter IV comprising ss. 25 to 30 deals with regulation of transfer and the use of urban property; while Chapter V which includes ss. 31 to 47, deals with appeals,  revisions, offences and punishments and other miscellaneous matters.      The primary  object and purpose of the Act, as its long title  and   the  Preamble  show,  is  to  provide  for  the imposition  of   a  ceiling   on  vacant   land   in   urban agglomerations, for  the acquisition  of such land in excess of the  ceiling  limit,  to  regulate  the  construction  of buildings on  such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands  of a few persons and speculation and profiteering therein  and  with  a  view  to  bring  about  an  equitable distribution of land in urban agglomerations to subserve the common good,  presumably in  furtherance  of  the  Directive Principles of  State policy contained in Art. 39 (c) and (b) respectively. The  enactment has  also been but in the Ninth Schedule  as   Item  132   by  the   Constitution  (Fortieth Amendment) Act,  1976, in  other words, the enactment enjoys the benefit of protective umbrella 893 of both  the articles, Art. 31B and 31C as it stood prior to its amendment  by the  Constitution (Forty-second Amendment) Act, 1976.      Dealing with  these two articles, namely, Arts. 31B and 31C and  the protective  umbrella provided  by them  in  the context of  the decision  in Kesavananda Bharati’s case this Court in  Waman Rao  and others  v. Union of India & others, has by its order passed on May 9, 1980, held thus:           "In Kesavananda Bharati decided on April, 24, 1973      it was  held by  the majority  that Parliament  has  no      power to  amend the  Constitution so  as to  damage  or      destroy  its   basic  structure.   We  hold   that  all      amendments to  the Constitution  which were made before      April 24,  1973 and  by which  the 9th  Schedule to the      Constitution was  amended from  time  to  time  by  the      inclusion of  various Acts and Regulations therein, are      valid   and    constitutional.   Amendments    to   the      Constitution made  on or  after April 24, 1973 by which      the 9th  Schedule to Constitution was amended from time      to  time   by  the   inclusion  of   various  Acts  and      Regulations therein,  are  open  to  challenge  on  the      ground that  they, or  any one  or more  of  them,  are      beyond the  constituent power  of the  parliament since      they damage  the basic  or essential  features  of  the      Constitution  or   its  basic   structure.  We  do  not      pronounce  upon   the  validity   of  such   subsequent      constitutional amendments except to say that if any Act      or  Regulation  included  in  the  9th  Schedule  by  a      constitutional amendment  made after  April 24, 1973 is      saved by Article 31C as it stood prior to its amendment      by the 42nd Amendment, the challenge to the validity of      the relevant Constitutional Amendment by which that Act      or Regulation is but in the 9th Schedule, on the ground      that the  Amendment damages  or  destroys  a  basic  or      essential feature  of the  Constitution  or  its  basic      structure as  reflected in  Articles 14, 19 or 31, will

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 26 of 61  

    became otiose. 894           Article 31C of the Constitution, as it stood prior      to its amendment by section 4 of the Constitution (42nd      Amendment) Act,  1976, is  valid to the extent to which      its  constitutionality   was  upheld   in   kesavonanda      Bharati.  Article   31C,  as  it  stood  prior  to  the      Constitution (42nd  Amendment) Act  does not damage any      of the  basic or essential features of the Constitution      or its basic structure." Since the impugned Act has been put in the Ninth Schedule by the Constitution  (Fortieth Amendment) Act, 1976 i. e. after April 24,  1973, the  said Constitutional Amendment would be open to  challenge on the ground that the same is beyond the constituent power  of  the  Parliament  if  it  damages  the essential features  or basic  structure of the Constitution; but at  the same  time the  impugned  Act  has,  apparently, received the  protective umbrella  of Art.  31C as  it stood prior to  its amendment by 42nd Amendment Act inasmuch as it seems to  have been  enacted in furtherance of the Directive Principles contained  in Art. 39 (b) and (c) with the result that in  order to succeed in their challenge the petitioners will have to cross two hurdles. In the first place they will have to  establish that  the Act  is outside the pale of the protective umbrella of Art. 31C which they can do by showing that though  purporting to  do so,  it does  not,  in  fact, further any  of the said Directive Principles. A scrutiny of the Directive  Principles contained  in Art.  39 (b) and (c) clearly shows that the basic postulate underlying the former obviously is  that diffusion of ownership and control of the material resources  of the  community is  always  in  public interest and  hence the  State is  directed to  ensure  such distribution (equitable)  there of  as best  to subserve the common good,  while  the  postulate  underlying  the  latter obviously is  that concentration  of wealth as well as means of production  in the  hands of few is detrimental to common interest and  hence the  State is  directed to  ensure  such economic   system    to   operate    which   prevents   such concentration. It  would, therefore, be clear that if by the impugned  enactment   the  aforesaid   objectives  of  these Directive Principles  are not furthered or if the provisions of the  enactment run  counter to  these objectives  the Act would lose the benefit of the protective umbrella of Art. 31 C. Secondly,  after crossing  this hurdle,  the  petitioners will have  to show  further that  the 40th  Amendment Act by which the  impugned Act  was included  in the Ninth Schedule was beyond  the constituent power of the Parliament since it has damaged the basic structure or the 895 essential features of the Constitution as reflected in Arts. 14, 19  and 31,  which of course, they will be able to do by showing that  the impugned  Act itself  flagrantly  violates aspects of  Arts. 14,  19 and  31 which constitute the basic structure or the essential features of the Constitution.      It may  be stated  that  Counsel  for  the  petitioners principally attacked four provisions of the impugned Act (a) artificial definition  of ’family’  given in  s.  2  (f)  in relation to  the prescription of ceiling area, (b) provision contained s.  11 relating  to amounts  payable in respect of excess vacant  land acquired  by  the  State  (c)  provision containedins. 23  relating to disposal of excess vacant land acquired by  the State and (d) prohibition or restriction on transfer of  a building or a part thereof or a flat therein, though  unconcerned   with  excess   vacant  land,   without permission, as  being flagrantly  violative of those aspects

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 27 of 61  

of the  petitioners’ fundamental  rights under  Arts. 14, 19 and  31  as  constitute  the  essential  features  or  basic structure of  the Constitution.  Counsel for the petitioners also  contended   that  some   of  the   aforesaid  impugned provisions which  are pivotal  and have  an  impact  on  the entire scheme  of the  Act, in  fact,  run  counter  to  the Directive Principles of Art. 39 (b) and (c) and, there fore, but the  entire Act  outside  the  pale  of  the  protective umbrella  of   Art.  31C   of  the   Constitution.  Counsel, therefore, urged  that both the 40th Amendment to the extent it inserted  the impugned  Act in the Ninth Schedule and the impugned Act deserve to be struck down.      On  the   other  hand,  the  learned  Attorney  General appearing on  behalf of  the Union  of India and counsel for the concerned  States of  Rajasthan, Andhra  Pradesh,  Uttar Pradesh and  for the  concerned competent  authorities under the Act,  refuted the  contentions urged  on behalf  of  the petitioners. It  was denied  that any  provision of  the Act runs counter  to the Directive Principles of Art. 39 (b) and (c) of  the  Constitution.  It  was  pointed  out  that  the impugned Act  having been  put in  the  Ninth  Schedule  and having been  enacted in  further of the Directive Principles of the  State policy contained in Art. 39 (b) and (c) of the Constitution was  protected both  under Art.  31B and 31C of the Constitution.  It was disputed that any provision of the Act violated the petitioners’ fundamental rights under Arts. 14, 19  and 31  and, it was contended that even if there was any such violation, the Act and its provisions could not be 896 challenged by  the petitioners on that ground because of the protective umbrella  of Art. 31B and 31C of the Constitution and, therefore, the petitions were liable to be dismissed.      I shall  first deal  with those  impugned provisions of the Act,  which according  to the  petitioners,  not  merely violate their  fundamental rights  but also  have an adverse impact on  the protective  umbrella afforded  by Art. 31C of the Constitution. In this behalf counsel for the petitioners referred to  two provisions,  namely. s. 2(f) which gives an artificial   definition   of   ’family’   in   relation   to prescription of  ceiling  area  and  s.  23  which  contains provision  relating   to  disposal  of  excess  vacant  land acquitted by the State.      Re: s.  2(f) in  relation to  prescription  of  ceiling           area.      It is  by s.  3 of  the Act  that the ceiling on vacant land in  any urban  agglomeration is  imposed. That  section runs thus:           "3. Except  as otherwise  provided in this Act, on      and from  the commencement in this Act, on person shall      be entitled  to hold  any vacant  land in excess of the      ceiling limit  in the  territories to  which  this  Act      applies under sub-section (2) of section 1." The ceiling  limits referred  to in  the above  section,  as stated earlier, have been fixed at 500 sq. metres, 1,000 sq. metres, 1,500  sq. metres  and 2,000  sq. metres  for vacant lands in  urban agglomerations  falling in  categories A,B,C and D  respectively under  s.  4(1).  Section  2(i)  defines ’person’ as  including an  individual, a  family, a  firm, a company, or  not association or body of individuals, whether incorporated or not; while s. 2(f) defines ’family’ thus:           "Family",  in  relation  to  a  person  means  the      individual, the wife or husband, as the case may be, of      such individual and their unmarried minor children." And the Explanation to this clause states that "minor" means a person  who has  not completed  his or her age of eighteen

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 28 of 61  

years. There  is no  doubt that  the aforesaid definition of ’family’ is  an artificial  one inasmuch as is evcludes from its scope major children two 897 are normally included in the concept of a family; it further completely ignores  the normal  Joint Hindu  Family. Counsel for the  petitioners pointed  out that  if  this  artificial definition of  ’family’ is  considered  in  the  context  of ceiling  limits   prescribed  under   s.  4(1)  it  produces discriminatory  results   because  of   adoption  of  double standard for fixing the ceiling limit-one for the artificial family as  defined and  another for  a normal  family  which includes major  children or  for Joint Hindu Family governed by Mitakshara Law obtaining in several parts of the country. For  instance,  in  an  urban  agglomeration  falling  under category ’A’  where the  ceiling limit  is prescribed at 500 sq. metres, a family of a father, mother and say three minor sons (being in all five) together will be entitled to retain for itself  only 500  sq. metres  of vacant  land whereas  a family of  a father  and four major sons (being in all five) will be  entitled to  retain for  itself 2,500 sq. metres of vacant land  (500 sq.  metres for father as a person and 500 sq. metres  each for  four sons  as persons).  Counsel urged that such  discrimination  or  inequality  arises  from  the classification  made   between  minor   children  and  major children belonging  to a  family but  such classification is not based  on any  intelligible differentia having any nexus to the  object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to a family  and as  such the same is clearly violative of Art. 14 of  the Constitution.  Counsel strongly  relied upon  two decisions of this Court in this behalf, namely, decisions in Karimbil Kunhikoman  v. State of Kerala and A.P. Krishnasami Naidu etc.  v. State  of Madras, where on similar ground the whole of  Chapter III of Kerala Agrarian Relations Act, 1961 and the  whole of  Chapter II  of the  Madras  Land  Reforms (Fixation of  Ceiling on  Land) Act, 1961, respectively were struck  down  by  this  Court  inasmuch  as  the  artificial definition  of  family  together  with  adoption  of  double standard for  fixing ceiling  limit formed  the basis of the concerned Chapter  in each Act. I find considerable force in counsel’s contention.      I may  point out  that when  the  agricultural  ceiling matters were  argued before  us counsel  for the petitioners therein had  raised a  similar contention  in the context of the artificial  definition of  ’family’ and  the adoption of double standard  for fixing  ceiling limits obtaining in the several concerned  Acts and  in support  of such  contention counsel had  placed reliance  on the aforesaid two decisions of this 898 Court but  we rejected  the contention  on the  ground  that ample material had been produced before the Court justifying the adoption of artificial definition of ’family’ and double standard for  fixing  the  ceiling  limits  in  those  Acts. Production of  such justifying  material  distinguished  the agricultural ceiling  matters before  us from  the said  two decisions relied  upon by counsel but in the instant case no material whatsoever  has been placed before the Court by the respondents  justifying   the  adoption  of  the  artificial definition of  ’family’ in  s. 2(f)  and double  standard of fixation of  ceiling in  the impugned  Act. It  has not been shown that the so-called nuclear families allegedly in vogue have replaced  normal families  which include  major sons or joint Hindu  families in urban areas. Besides, if the object

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 29 of 61  

of the  impugned Act  is to  acquire excess  vacant land  in urban agglomerations  after leaving permissible ceiling area to a  family the  classification made between minor children and major  children belonging  to  a  family  has  no  nexus whatsoever to  that  object.  In  my  view,  therefore,  the artificial definition  of ’family’  given in  s.  2(f)  when considered in  relation to  the prescription  of the ceiling area under  s. 4(1)  is clearly  violative of and strikes at the root  of the equality clause contained in Art. 14 of the Constitution. It  cannot be  disputed that  this  artificial definition together  with the  double standard  adopted  for fixing the  ceiling area  runs though and forms the basis of Chapter III  of the  Act and  the discriminatory  results or inequalities produced thereby are bound to have an impact on the scheme of that Chapter and, therefore, along with it the whole Chapter III must fall as being violative of Art. 14.      There is  yet one more aspect which needs consideration in  connection   with  this   adoption  of   the  artificial definition of  ’family’ given  in s.2  (f)  and  the  double standard  for   fixing  ceiling   area.   Apart   from   the discriminatory results  which it  produces the  question  is what is its impact in the context of the directive principle contained in  Art. 39  (c) of  the Constitution?  As  stated earlier  the   postulate  underlying   the  said   directive principle in  that concentration  of wealth  in the hands of few is deterimental to common interest and as such the State should ensure  such  economic  system  which  prevents  such concentration and  the Act  has been put on the Statute book professedly to  achieve that objective. But, by adopting the artificial definition  of ’family’  in s.  2(f)  and  having double standard  for fixing  ceiling limit a contrary result is  obtained   inasmuch  as  the  Act  actually  permits  an unwarranted and unjustified concentration of 899 wealth (urban  vacant land)  in the hands of a family having major sons  in it  as compared  to the  family having  minor children. In  the illustration  given above  a family  of  a father with four major sons is allowed to retain with itself 2,500 sq.  metres of  vacant land while a family of a father mother and  three minor sons is permitted to retain only 500 sq. metres.  The position becomes more glaring if I take the illustration of  a Joint  Hindu Family  consisting  of  five brothers, each  having five  major sons,  as, in such a case the said  Joint Hindu  Family will  be  entitled  to  retain 15,000 sq.  metres of  vacant land as against 500 sq. metres permitted to be retained by the artificial family. It cannot be said that large joint Hindu families are unknown in urban agglomerations in  various cities  and towns  of the country and instances  more glaring  than the preceding illustration could  be  multiplied.  In  other  words,  by  adopting  the artificial definition  of ’family’  and double  standard for fixing the  ceiling area  the Act  enables  unwarranted  and unjustified concentration  of wealth  in the  hands  of  few rather than  preventing the same and this certainly would be in  teeth  of  and  not  in  furtherance  of  the  directive principle of  Art. 39(c);  in fact, it is a negation of that principle. It  is not  possible to  take the  view that  the Parliament out of inadvertance ignored joint Hindu Family or forgot the  possible concentration  of vacant  land  in  the hands of  major  members  of  large  joint  Hindu  families, because in another context the concept of Joint Hindu Family was present to the mind of the draftsman as is clear from s. 4(7) of  the Act. In my view, therefore, the adoption of the artificial definition  of ’family’  and double  standard for fixing ceiling area one for a family with minor children and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 30 of 61  

another for  a family  with major  children  and  completely ignoring the  concept of  Joint Hindu  Family in relation to prescription of  ceiling area  clearly lead to results which run counter  to the  directive principle  contained in  Art. 39(c) of  the Constitution.  The  Act  which  contains  such provision being  in teeth  of that  directive principle must fall outside the pale of protective umbrella of Art. 31C.      Re: s.23  relating to  disposal of  excess vacant  land acquired under the Act.      It may  be stated  that under  s.6 every person holding vacant  land   in  excess   of  the  ceiling  limit  at  the commencement of  the Act  is required  to  file  within  the period prescribed a statement before the competent authority having jurisdiction giving full particulars there of 890 and also specifying the vacant land within the ceiling limit which he  desires to  retain. Sections  8 and  9 provide for preparation of  draft statement  as regards vacant land held in excess  of the  ceiling limit,  holding of  an inquiry in that behalf  and preparation  of final statement and service thereof on  the concerned person by the competent authority, Section 10 provides for acquisition of excess vacant land by the concerned  State Government  and determination of claims of all  persons interested  in such  excess vacant-land  and under sub-s.(3)  it is provided that upon the publication of a notification in that behalf such excess vacant land as may be specified  therein shall  be deemed to have been acquired by the  State Government  and the same shall vest absolutely in the  State Government  free from  all  encumbrances  with effect from  the date  specified in  the notification.  Then comes s.23  which deals  with disposal of such excess vacant land acquired by the State Government under the Act. It runs as follows:           "23.(1)  It  shall  be  competent  for  the  State      Government to allot, by order, in excess of the ceiling      limit, any  vacant land,  which is  deemed to have been      acquired by  the State  Government under this act or is      acquired by  the State  Government under any other law,      to any  person for  any  purpose  relating  to,  or  in      connection  with,   any  industry   or  for   providing      residential  accommodation  of  such  type  as  may  be      approved by  the State  Government to  the employees of      any industry  and it shall be lawful for such person to      hold such land in excess of the ceiling limit.      Explanation,-For the purposes of this section,-      (a)  Where any  land with  a building has been acquired           by the  State Government  under any  other law and           such building  has been subsequently demolished by           State Government,  then, such land shall be deemed           to be vacant land acquired under such other law;      (b)  "Industry" means  any business, profession, trade,           undertaking or manufacture.      (c)  In making  an order of allotment under sub-section           (1),  the   State  Government   may  impose   such           conditions 901           as may  be specified therein including a condition           as to  the period  within which the industry shall           be put  in operation  or, as  the case may be, the           residential accommodation shall be provided for:                Provided that if, on a representation made in           this behalf  by the allottee, the State Government           is satisfied  that the  allottee could not put the           industry in  operation, or provide the residential           accommodation, within  the period specified in the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 31 of 61  

         order of  allotment, for  any good  and sufficient           reason,  the  State  Government  may  extend  such           period to such further period or periods as it may           deem fit.           (3) Where  any condition  imposed in  an order  of      allotment is  not complied  with by  the allottee,  the      State Government  shall, after giving an opportunity to      the allottee  to be  heard in  the matter,  cancel  the      allotment  with  effect  from  the  date  of  the  non-      compliance of  such condition  and  the  land  allotted      shall revest  in the  State Government  free  from  all      encumbrances.           (4) Subject to the provisions of sub-sections (1),      (2) and  (3), all  vacant lands  deemed  to  have  been      acquired by  the State  Government under this Act shall      be disposed  of by the State Government to subserve the      common good  on such  terms and conditions as the State      Government may deem fit to impose.           (5)  Notwithstanding  anything  contained  in  sub      sections (1)  to (4),  where the  State  Government  is      satisfied that it is necessary to retain or reserve any      vacant land,  deemed to  have  been  acquired  by  that      Government under  this Act,  for  the  benefit  of  the      public, it  shall be competent for the State Government      to retain or reserve such land for the same." Five or six aspects or peculiar features emerge clearly from the provisions  contained in  s. 23  in the  context of  the entire Act. In the first place unlike agrarian ceiling which deals with  land as means of production, urban ceiling under the impugned Act deals with vacant 902 land in  urban agglomerations  not as  a means of production but as  a part  of the  holder’s wealth  or  capital  asset. Secondly, unlike agrarian ceiling which has the objective of distributing surplus  agricultural  land  straightway  among landless persons,  under the impugned Act excess vacant land in urban  agglomerations is  acquired by  and vests  in  the State to be disposed of as indicated in the section; clearly a legislation  in exercise  of the  State’s power of eminent domain (i.e.  power of  compulsory  acquisition  of  private property). Thirdly, such excess vacant land thus acquired is to be  disposed of  by the State Government "for any purpose relating to  or connected  with industry  or  for  providing residential accommodation to the employees of any Industry". Fourthly, under  cl. (b)  of the Explanation, ’industry’ has been very widely defined for the purposes of this section to mean  any   business,  profession,   trade,  undertaking  or manufacture; the  word ’any’ clearly suggests that business, profession,  trade,   undertaking  or  manufacture  even  in private sector  is  included.  Fithly.  sub-s.  (1)  confers absolute power  and discretion  on the  State Government  to allot any  amount of  such excess  vacant land to any person for any  industry. Reading  the  fourth  and  fifth  aspects together,  it  is  clear  that  it  is  open  to  the  State Government to allot any extent of such excess vacant land to any professional person, say a lawyer a medical practitioner or even  an astrologer  for the  purpose of  carrying on his private  profession.   Sixthly,  the   section  contemplates utilisation  of   such  excess  vacant  land  by  the  State Government in  three ways:  (a) allotment  for industry  (b) allotment to  subserve the  common good and (c) retention or reservation  for   the  benefit  of  the  public,  but,  the priorities in the matter of disposal or distribution of such excess vacant land have been peculiarly fixed in the section these priorities,  as indicated  in  sub-ss.  (1)  and  (4),

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 32 of 61  

are:=(i) allotment  for the  purpose of  an industry, namely any business,  profession, undertaking trade or manufacture, (ii) allotment for the purpose of construction of houses for the employees of an industry specified in item (i) above and (iii) disposal  to subserve  the  common  good  which  would include allotment of vacant land for governmental purpose or local authorities  or for  institutions etc. In other words, it is  after the  disposal of  such excess  vacant land  for items (i)  and (ii)  above that  the balance  thereof can be disposed of  "to  subserve  the  common  good"  which  means private purposes  have precedence  over public purposes, and this is  clear from  the fact that disposal under sub-s. (4) is "subject  to" the  prior disposal  under sub-s.  (1)  for purposes of  industry. In  fact, disposal  of excess  vacant land  for   subserving  the  common  good  is  last  in  the priorities Sub. s (5) undoubtedly has an 903 overriding effect over sub-ss. (1) to (4) but that provision deals not  with disposal  or distribution  of excess  vacant land but  with retention and reservation of such vacant land by State  Government for  the benefit  of  the  public  like social housing and provision for basic arenities etc.      Having regard  to the  aforesaid peculiar features that energe from  a consideration  of the provisions contained in s.23,  counsel   for  the  petitioners  contended  that  the acquisition of  excess vacant  land in  urban agglomerations cannot be  said for  a public  purpose at  all and hence the ehactment which  is primarily  for compulsory acquisition of private property  runs counter  to a  valid exercise  of the State’s power  of ’eminent  domain’. He  pointed out that no scheme  for   any  industrial   development  for  any  urban agglomeration has  been indicated  in the  Act, nor any such scheme seems  to have  been prepared by any State Government or even  by the  Union  Government  before  undertaking  the legislative measure  in hand  and no definite public purpose of industrialisation  with any  plan or  blue print with set specifications or  standards seems  to have  been within the contemplation  of   the  sponsoring   States  or  the  Union Government; at  any rate no material in that behalf has been placed on  record before the Court and, therefore, according to counsel, compulsory acquisition of all excess vacant land in all urban agglomerations throughout the Union Territories and the  17 States  of the  country for  achieving  a  bald, indefinite and  unspecified objective of an ’industry’ would not be  a valid  exercise of  the power  of eminent  domain. Alternatively,  counsel  contended  that  even  if  it  were assumed for  the purpose of argument that a bald, indefinite and unspecified objective of ’industry’ is a public purpose, when that  concept of  ’industry’ is widely defined so as to include any business, trade or profession in private sector, the purpose  sheds its  character as  a real public purpose, which position  is further  componded by the priorities laid down in  the section and the acquisition becomes acquisition for private  purpose amounting to an invalid exercise of the States’s power  of eminent domain. Counsel, therefore, urged that  s.   23  flagrantly  violates  Art.  31  (2)  and  is, therefore, ultra  vires and unconstitutional and since it is a pivotal  provision having  an impact on the entire Ceiling scheme and  at the  same a  non-severable provision from the rest of  the provisions contained in that chapter, the whole of Chapter III must fall with it.      Article 31 of the Constitution has more than one facet, it undoubtedly  confers  upon  individuals  (including  non- citizens) and 904

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 33 of 61  

corporate bodies a fundamental right to property but because of conflict  of views  in Keshavanada Bharati’s case (supra) it may  be debatable  whether that right forms part of basic structure or  not, but  that apart,  Art. 31 incorporates in our Constitution  the concept  of State’s  power of  eminent domain i.  e. power  of compulsory  acquisition  of  private property and  prescribes two  conditions  precedent  to  the exercise of  the power,  namely, (i) such acquisition cannot be except  for a  public purpose  and (ii)  it  must  be  on payment  of   compensation  (now  termed  ’amount’)  to  the claimant having  interest  in  the  property.  In  Kameshwar Singh’s case  this position has been clarifie where Mahajan, J., after  referring to  some authoritative books has summed up the  definition of  the  concept  in  one  sentence  thus "Authority  is   universal  in   support  of  the  amplified definition of ’eminent domain’ as the power of the sovereign to take  property for public use without the owner’s consent upon making  just compensation,"  The  requirement  of  just compensation  under  the  latter  condition  is  diluted  to payment of  non-illusory amount  under the 25th Amendment of the Constitution and subsequent decisions of this Court. But it is  well settled  that these two conditions precedent are sine qua  non for  the exercise  of  the  State’s  power  of eminent domain’  and, in my view, represent those aspects of the right  to property  under Art.  31 which  constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any  law  authorising  expropriation  of  private property in  breach of  any one  of those  conditions  would damage or destroy the basic structure of our constitution.      It is extremely doubtful whether a bald, indefinite and unspecified objective  like ’industry’  simpliciter  without any attempt  at dovetailing it by having a proper scheme for industrial  development   will  constitute  a  valid  public purpose for  the exercise  of the power of ’eminent domain’. It is  because of  the absence  of any  definite scheme  for industrial development  with plans  or blue  prints with set specifications  or   standards  for   any   of   the   urban agglomerations that  wide power  has been  conferred on  the State Government  under sub-s.  (1) in  vague terms to allot any extent  of such excess vacant land to any person for any industry. I  am conscious  that in  Kameshwar  Singh’s  case (supra) this  Court speaking  through Mahajan,  J., observed that "the phrase ’public purpose’ has to be 905 construed according  to the  spirit of  times in  which  the particular  legislation   is  enacted"   and  held  that  so construed,  acquisition   of  estates  for  the  purpose  of preventing the  concentration of  huge blocks of land in the hands  of   a  few   individuals  and   to  do   away   with intermediaries was for a public purpose. But that case dealt with three  statutes (the  Bihar Land Reforms Act, 1950, the M. P.  Abolition of  proprietory Rights Act, 1950 and the U. P. Zamindari  Abolition and  Land Reforms  Act,  1950),  the common aim  of which,  generally speaking,  was  to  abolish zamindaries and other proprietory estates and tenures in the three States, so as to eliminate the intermediaries by means of compulsory  acquisition of their rights and interests and to bring  the raiyats  and other occupants of lands in those areas  into   direct  relation   with  the   Government  and therefore, that  case is distinguishable and its ratio would not  apply   to  the  instant  case  where  the  purpose  of acquisition  of   excess  vacant  (urban)  land  is  a  bald objective  like  ’industry’  simpliciter,  surely  different considerations would  apply. In  my  view  it  is  extremely

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 34 of 61  

doubtful whether  compulsory acquisition  of all  the excess vacant land  in  all  urban  agglomerations  throughout  the country for  a bald,  indefinite and  unspecified  objective like ’industry’ simpliciter would be a valid exercise of the power of  ’eminent domain’. However, it is not necessary for me to decide this larger question inasmuch as in my view the alternative  submission   of  counsel  for  the  petitioners clinches the  issue in  this  case.  Assuming  that  a  bald objective  of   ’industry’  simpliciter   partakes  of   the character of  a public  purpose, what Parliament intended by the said  objective has  been expressly clarified by cl. (b) of the  Explanation where  ’industry’ has  been very  widely defined so  as to  include any business, trade or profession in private  sector which  makes a  mockery  of  such  public purpose. Whatever  be the  merits  or  demerits  of  a  wide definition of ’industry’ for the purposes of industrial-cum- labour relations,  adoption of  such wide  definition of the concept  in   the  context  of  eminent  domain  is  clearly suicidal. By adopting such definition for the purposes of s. 23 the  State Government has been empowered under sub-s. (1) to allot  any extent  of such  excess  vacant  land  to  any businessman, trader  or  professional  man  like  a  lawyer, doctor and  astrologer to enable him to carry on his private business, trade  or profession.  In other words, acquisition of excess  vacant land  in urban agglomeration would clearly be for  private purposes and what is worse is that under the priorities laid down such private purposes are to be catered to first and then comes the disposal or distribution thereof to subserve  common good.  This clearly  smacks of depriving peter of his property to give it to Paul 906 and, therefore,  clearly amounts  to an  invalid exercise of State’s power  of ’eminent  domain’. Section  23, which thus authorises compulsory  acquisitions of  property for private purposes flagrantly  violates those aspects of Art. 31 which constitute  the   essential  or   basic  features   of   the Constitution   and    is,   therefore,   ultra   vires   and unconstitutional.  Further,  indisputably  it  is  the  most vital, integral  and non-severable part of the entire scheme of urban ceiling as without it the scheme will merely remain a scheme for unjust and illegal enrichment of the State and, therefore, the  whole of  Chapter III,  in which  it occurs, must fall with it.      Apart from the unconstitutionality of s.23 as indicated above, it  is clear  that the  wide definition of ’industry’ and the  priorities for  disposal or  distribution of excess vacant land  laid down  therein have  adverse impact  on the directive principle  contained in  Art.39(b). In  the  first place   instead    of    confining    the    objective    of industrialisation to public sector or cooperative sector and the like where benefit to community or public at large would be the  sole consideration, the concept is widely defined to include any  business, trade or profession in private sector which enables  the disposal or distribution of excess vacant land for private purposes and sub-s.(1) authorises the State Government to  allot any  extent of such land to individuals or bodies  for private purposes. Secondly, the priorities in the matter  of disposal or distribution of the excess vacant land under  sub-sections (1) and (4) are as indicated above, which show  that disposal  or distribution  of excess vacant land for  subserving the  common  good  comes  last  in  the priorities. I  have already  indicated  that  the  postulate underlying the  directive principle  of Art.  39(b) is  that diffusion of ownership and control of the material resources of the  community is  always in  the  public  interest  and,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 35 of 61  

therefore, the State is directed to ensure such distribution (equitable) thereof  as best to subserve the common good but the priorities  prescribed in sub-ss. (1) and (4) of s.23 in regard to distribution of material resource produce contrary results or  results in  the opposite  direction inasmuch  as private purposes  receive precedence  over common  good. The enactment which contains such provisions that produce contra results cannot be said to be in furtherance of the directive principle of  Art. 39(b)  and cannot  receive the benefit of the protective umbrella of Art. 31C.      Counsel for the respondents, however, relied upon three aspects to counter-act the aforesaid result flowing from the priorities 907 given in s. 23(1) and (4). It was urged that the disposal of excess vacant  land acquired by the State under the Act will be guided  by the Preamble which says that enactment was put on the  Statute Book  with a  view  to  bringing  about  the equitable distribution  of land  in urban  agglomerations to subserve the  common good.  In the  first place,  it is well settled that it is only when there is some ambiguity in test of any provision in the enactment that the preamble could be looked at  and here  there is  no  ambiguity  whatsoever  in s.23(1)  and   (4).  Secondly,  far  from  there  being  any ambiguity there  is express  provision in  s.23(1)  and  (4) indicating the  priorities in  the  matter  of  disposal  or distribution of  excess vacant  land, in  face of which, the preamble cannot  control, guide  or direct  the disposal  or distribution in  any other manner. Next, reliance was placed on s.  46(1) which  empowers the  Central Government to make rules for  carrying out  the provisions  of the  Act and the disposal or  distribution of  excess vacant  land  could  be prescribed by rules. It may, however be stated that no rules under s.46 have so far been framed by the Central Government and, in  any event, no rules framed thereunder can over-ride the express  provisions of s.23. Lastly, reliance was placed on certain  guidelines issued  by the  Central Government in its Ministry  of Works and Housing under the Act and at page 83 of  the "Compendium  of Guidelines"  (a  Govt.  of  India publication dated  February  22,  1977)  a  note  containing guidelines on  utilization of  excess vacant  land  acquired under the  Act is  published. Paragraphs 3 and 4 of the said Note deal  with the  topic of  priorities.  In  para  3  the disposal or  distribution of  excess vacant  land as per the priorities in  s. 23 has been set out (which are the same as given above)  while  para  4  sets  out  the  priorities  in accordance  with   the  recommendations   made  by  the  9th Conference  of   State  Ministers   of  Housing   and  Urban Development held  at Calcutta  on the  17th, 18th  and  19th December,  1976,   which  considered   the  matter  and  the priorities indicated  are: (i) Retention/reservation for the ’benefit of  the Public’  like social  housing, provision of basic amenities,  etc. (ii)  Disposal  ’to  subserve  common good’  which  may  include  allotment  of  vacant  land  for Government purposes,  local authorities,  institutions’ etc. (iii) Allotment  for the  purpose of  construction of houses for the  employees of  industries specified  in item  (iv) A below (v)  Allotment for  the purpose of industry, viz., any business, profession  trade,  undertaking  of  non-polluting manufacture; cottage  and small  scale and wherever possible ancillary industry;  manufacture. It  will appear clear that the recommendations  made by  the 9th  Conference  of  State Ministers of Housing and Urban Development seek to furnish 908 improved  guidelines   but  in   the  process   reverse  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 36 of 61  

priorities given in the section in the matter of disposal or distribution of  excess vacant  land. It is obvious that the priorities given  in s.  23 and  as have  been summarised in para  3  of  the  Note  must  prevail  over  the  priorities indicated in  the guidelines contained in para 4 of the Note and the  latter are  of no  avail. It is thus clear that the priorities as  given in  s. 23(1)  and (4)  in the matter of disposal or  distribution of  excess  vacant  land  acquired under the  Act run  counter to  and in  a sense  operate  to negate the directive principle of Art.39(b).      It  was   then  faintly   argued  by  counsel  for  the respondents that  the law in order to receive the protection of Art.  31C need  not fulfil  the objectives  of both  Art. 39(b) and  (c) and  even if  it fulfils  the objective under Art. 39(c)  and not under Art. 39(b) it will be protected by Art. 31C.  But here  s. 23  by no  stretch  deals  with  the objective of  Art. 39(c)  at all  but only  deals  with  the objective underlying  the directive  principle of Art. 39(b) and its provisions as discussed above clearly run counter to that objective and as such the enactment which contains such provisions  must  forfeit  the  benefit  of  the  protective umbrella of Art. 31C.      Faced  with   the  situation  that  the  constitutional invalidity of  s. 23 was likely to have adverse repercussion not only  on Chapter  III in which it occurs but also on the entire Act,  counsel for  the  respondents  made  a  valiant effort  to   salvage  the   said  section  by  indulging  in interpretative acrobatics with a view to relieve it from the two vices  attaching to  it, namely, (i) the adoption of the wide definition  of ’industry’ in cl. (b) of the Explanation which makes a mockery of the Public purpose indicated by the bald objective  like ’industry’  simpliciter  and  (ii)  the priorities  mentioned  therein  governing  the  disposal  or distribution of  excess vacant  land acquired under the Act. It was suggested that the definition of ’industry’ should be read down  by the  court  so  as  to  confine  the  same  to industries in  public sector  or co-operative  sector or the like where  benefit to community or public at large would be the sole  consideration, so  that allotment of excess vacant land acquired  under the  Act to  private entrepreneurs  for private purposes  which runs  counter  to  the  doctrine  of eminent  domain   would  be   completely  eschewed.   It  is impossible  to  read  down  the  definition  in  the  manner suggested because  parliament has  for the  purposes of  the section (i.e. for purposes of disposal or distribution 909 of such  excess vacant  land) deliberately  and  in  express terms adopted  a vary  wide definition which includes within its scope  not merely  trading or manufacturing activity but also any  business  or  profession  in  private  sector  and reading down  the definition  as suggested  would  be  doing violence to  the Parliament’s  intention stated  in  express terms. It was then submitted that sub-s. (1) of s. 23 should be construed  as an  enabling provision which merely permits the State  Government to  allot excess  vacant land  for the purposes of  industry, while  the  real  obligation  in  the matter of disposal of excess vacant land arises under sub-s. (4) which  speaks of  disposal of such land "to subserve the common good";  in other words, the disposal under sub-s. (4) should over-ride  the disposal under sub-s. (1); at any rate the "common  good" spoken  of in  sub-s. (4) should permeate the disposal under sub-s. (1). It is impossible to read sub- s. (1)  of s.23  as containing merely an enabling provision; the scheme  of sub-ss.  (1) and  (4) read  together  clearly shows that  the disposal  of the excess vacant land is first

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 37 of 61  

to be  done under  sub-s.(1) and  disposal  under  sub-s.(4) comes thereafter. The opening words of sub-s.(4) "subject to sub-ss.(1), (2)  and (3)"  cannot be  read as constituting a non obstante  clause giving  an over-riding effect to sub-s. (4) nor  can sub-s.(4)  be read as if the opening words were absent. By  indulging in  such interpretative acrobatics the Court cannot  reach the opposite result than is warranted by the plain  text of the provision. Further, to say that every disposal of  excess vacant  land under sub-s.(1) must be for "common good"  is to  read into  that sub-section  something which is  not there;  it amounts  to  re-writing  that  sub- section, which cannot be done, the Preamble notwithstanding. It is  the conferral  of such  unrestricted power  (not  its oblique exercise)  that is  being  attacked  and  hence  the submission to  read into  sub-s.(1) this kind of limitation. These submissions  require the  re-structuring of the entire section a function legitimately falling within the domain of the Legislature.  Moreover, sub-ss.(1),  (2), (3) and (4) of s.23 are  integral parts  of one  whole scheme  dealing with disposal of excess vacant land acquired under the Act and as such cannot  be severed  from one  another. The  attempt  to salvage s.23,  either wholly  or in part, by seeking to free it from the two vices must, therefore, fail.      The next  provision challenged  by the  petitioners  as being violative  of their  fundamental rights  is s.  11 (6) which  puts   the  maximum   limit  of   Rs.  two  lakhs  on compensation (called  ’amount’) payable  to  the  holder  of excess vacant land irrespective of the extent of such excess vacant land. For the purpose of determining the 910 quantum of  compensation s.11  (1) divides  vacant  land  in urban   agglomerations into  two categories -(i) vacant land from which income is derived and (ii) vacant land from which no income  is derived  and in  regard to the former category cl, (a) of sub-s. (1) fixes the quantum payable at an amount equal to  eight and  one third  times the net average annual income actually  derived from such land during the period of five consecutive  years immediately  preceding the  date  of publication of  the notification  issued under s. 10 (1) and the net  average annual  income is  to be  calculated in the manner and  in accordance  with the  principles set  out  in Schedule II,  while in  respect of  the latter category, cl. (b) of  sub-s. (1)  fixes the  quantum payable  at an amount calculated at  a rate not exceeding-(i) Rs. 10 per sq. metre in the  case of vacant land situated in urban agglomerations falling with  categories A  and B and(ii) Rs.5 per sq. metre in the  case of vacant land situated in urban agglomerations falling within  categories C  and D.  In  other  words,  for vacant land  yielding income the method of capitalisation of the income  for certain number of years is adopted while for vacant land yielding no income maximum rates of compensation for A and B categories at Rs. 10 per sq. metre and for C and D categories  at  Rs  5  per  sq.  metre  have  been  fixed. Compensation (called ’amount’) once determined is payable to the holder under s. 14 (2) in a certain manner, namely, 25 % there of  will be  paid in  cash  and  the  balance  75%  in negotiable  bonds   redeemable  after  expiry  of  20  years carrying interest at 5% per annum. Section 11 (6) which puts the maximum  limit of  two lakhs  on the  quantum payable in respect of  excess vacant  land acquired  under the Act runs thus:           "11 (6)-Notwithstanding anything contained in sub-      section (1) or sub-section (5) the amount payable under      either of  the said  sub-sections shall,  in  no  case,      exceed two lakhs of rupees."

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 38 of 61  

    Counsel for  the petitioners  contended that  s. 11 (6) which puts  the maximum limit of Rs. two lakhs on the amount payable to  a claimant  irrespective of  the extent  of  the excess vacant  land acquired  under  the  Act  is  not  only arbitrary but  also results in illusory payment and violates Arts. 14 and 31 (2) respectively. Counsel pointed out that a person holding  excess vacant  land which  at the prescribed rates is  of the value of Rs. two lakhs and a person holding such excess  vacant land  which even  at the same prescribed rates 911 is of the value of Rs. two crores are treated alike, that is to say,  both will get compensation (termed ’amount’) of Rs. two lakhs  only and  is this  sense prescribing  a limit  of maximum of  Rs. two  lakhs is clearly arbitrary and violates Art. 14.  Similarly, for  a person  who holds  excess vacant land which  even at  the prescribed rates it of the value of Rs. two crores a payment of Rs. two lakhs only (i.e. 1/100th of the value at the prescribed rates) must, by any standard, be regarded  as illusory  and, therefore,  the  fixation  of maximum limit  at Rs.  two lakhs under s. 11(6) irrespective of the  extent of  excess  vacant  land  held  by  a  person violates Art. 31(2) of the Constitution. I find considerable force  in   both  the   submissions  of   counsel  for   the petitioners. In  fact, in my view, this provision which puts the maximum  limit of Rs. two lakhs on the amount payable to a holder  of excess  vacant  land  acquired  under  the  Act irrespective of  the extent  of such excess vacant land held by him  is not merely violative of Arts. 14 and 31(2) of the Constitution in  the manner  indicated above, but would be a piece of  confiscatory legislation,  because vacant  land in excess of  that portion  which at  the prescribed  rates  is worth Rs.  two lakhs stands confiscated to the State without any payment  whatsoever. I  do not  suggest that a provision putting a  maximum limit  upon compensation  payable to  the owner or  holder irrespective  of the extent of the property acquired whenever  or wherever is found in any enactment has to be  regarded as a confiscatory provision. I am aware that in enactments  involving large schemes of social engineering like   abolition   of   Zamindar   is,   agrarian   reforms, nationalisation of undertakings and businesses and the like, such a  provision might  be justifiably  made. In  State  of Kerala v.  The Gwalior Rayon Silk  Mfg. Co. Ltd., this Court upheld the  validity of  Kerala Private  Forest (Vesting and Assignment) Act, 1971 where  under private forest lands held on  janman  right  were  acquired  without  payment  of  any compensation on  the ground  that such  acquisition was  for implementing a  scheme of agrarian reform by assigning lands on registry  or by  way of  lease to  poorer sections of the rural agricultural population, the enactment being protected under Art. 31A (1) of the Constitution. Again the Coal Mines (Nationalisation Act,  1973 whereunder  the right, title and interest of  the owners  in relation  to  their  coal  mines specified in  the schedule  to the  Act stood transferred to and became  vested absolutely in the Central Govt. free from encumbrances  in   exchange  of  payment  of  fixed  amounts specified in that schedule was upheld by this Court. 912      But  such  cases  involving  large  schemes  of  social engineering where  avowedly the  benefit of the community or public   at    large   is   the   sole   consideration   are distinguishable from  the instant case, where ’industry’ has been  expressly   defined  to  include  business,  trade  or profession in  private  sector  and  where  power  has  been conferred upon  the State  Government  to  allot  properties

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 39 of 61  

acquired under  the  enactment  to  individual  businessman, trader or professional to enable him to carry on his private business, trade  or profession,  that is  to say,  where the legislation is  a fraud  on State’s power of eminent domain, such a  provision of putting a maximum limit on compensation payable in  respect of the acquired property irrespective of its extent  will have  to be  regarded  as  confiscatory  in nature.      An instance  in point  is available  on the  record  of these writ  petitions. In  writ petition No. 350 of 1977 the petitioner who happens to be the ex-Ruler of the former Kota State has  averred in  paragraphs 17  and 20 of the petition that the urban vacant land owned and possessed by him in the city of Kota admeasures 918. 26 acres and that the Assistant Director, Lands  and Buildings  Tax, Kota  in his assessment order dated  20.12. 1976  had valued the same at market rate of Rs.  15.12 per  sq. metre  at Rs 3,98,05021.84 (say about Rs. four  crores) and inclusive of other items of properties the total  value was  put down  at Rs. 4.12 crores and these averments  are   substantially  admitted   in  the  counter- affidavit filed  by S.  Mahadeva Iyer on behalf of the Union of India where in para 9 he has stated thus:           "In reply to para 20 of the writ petition I submit      that the  total assessment of the entire property comes      to Rs. 4.56 crores." In other words, in the case of this petitioner the fact that he owns  urban vacant  land of  the value  of about Rs. four crores in  the city  of Kota  stands admitted. Now, under s. 11(6) for  all this  urban vacant land worth nearly Rs. four crores the  petitioner will  get only  rupees two  lakhs, it works out  to a  princely sum  of eight  annas for  property worth Rs.  100, which  would clearly be an illusory payment. In fact,  all his  vacant land,  in excess  of that  portion which is  worth Rs. two lakhs at the prescribed rates, shall stand conficated  without any  payment  whatsoever.  Such  a glaring  instance,   available  on   the  record   of  these petitions, brings out in bold relief how flagrantly s. 11(6) 913 violates  Arts.   14  and  31(2)  of  the  Constitution;  it highlights the  aspect that  such acquisition takes place in breach of  the other  condition precedent  attaching to  the power of  eminent domain  namely,  payment  of  non-illusory compensation. However,  s.  11(6)  is  clearly  a  severable provision, and  that alone  is liable  to be  struck down as being ultra vires and unconstitutional.      The next  provision challenged by the petitioners is s. 27 occurring in Chapter IV to the extent to which it imposes restriction on  transfer of an urban land with building or a flat therein  though unconcerned  or  unconnected  with  the excess vacant  land as  unconstitutional  being  beyond  the legislative authorisation  as also violative of petitioners’ fundamental rights  under Arts 14 and 19(1) (f). Section 27, as its  marginal note  indicates, deals  with the subject of prohibition of  transfer of  urban property  and sub-s.  (1) thereof runs thus:           "27. (1)  Notwithstanding any  thing contained  in      any other  law for the time being in force, but subject      to the  provisions of  sub-section (3) of section 5 and      sub-section (4) of section 10, no person shall transfer      by way  of sale,  mortgage, gift,  lease for  a  period      exceeding  ten   years,  or  otherwise,  any  urban  or      urbanisable land  with a  building (whether constructed      before or  after the  commencement of  this Act)  or  a      portion only of such building for a period of ten years      of such  commencement or  from the  date on  which  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 40 of 61  

    building is  constructed, whichever  is  later,  except      with  the   previous  permission   in  writing  of  the      competent authority." Inter alia, the aforesaid provision is clearly applicable to a building or a portion of such building which would include a flat  therein standing  on any  urban or  urbanisable land falling within  the permissible  ceiling area which a holder of a  vacant land  is entitled  to retain  with himself  and under this provision any transfer of such property by way of sale, mortage,  gift or lease for ten years or otherwise, is prohibited for the period of ten years from the commencement of the Act except with the previous permission in writing of the competent  authority. Under  sub-s. (2) if the holder of such property falling within the permissible ceiling area is desirous of effecting a transfer of the type indicated above has to  apply in  writing for  permission from the competent authority and under sub-s.(3) the 914 competent authority  has been  authorised after  making such inquiry as  it deems  fit to  grant the permission or refuse the same,  but a  refusal has  to be  accompanied by written reasons, copy whereof is to be furnished to the holder. Sub- s. (4)  provides that if within sixty days of the receipt of the application  refusal is not communicated, the permission shall be  deemed to  have  been  granted  by  the  competent authority.      Counsel for  the petitioners  made two  submissions  in regard  to  aforesaid  restriction  as  made  applicable  to transfers of built-up properties that fall within the limits of ceiling  area permitted  to  be  retained  by  a  holder. Firstly, such  restriction would  be outside the legislative authorisation conferred  upon  the  Parliament  as  well  as beyond the  ambit and scope of the Act which has assiduously kept built-up  properties outside  the pale of imposition of ceiling. Secondly,  such  restriction  requiring  permission from the  competent authority  is arbitrary and violative of Art.14 in as much as the power to grant the permission or to refuse it  is unguided  and untrammeled  which is  bound  to produce arbitrary  results. In  my view both the submissions have substance in them.      It cannot be disputed that though the authorisation was for  imposition  of  ceiling  on  urban  immovable  property Parliament deliberately  kept out  built-up properties  from the purview  of the  Act and the Act seeks to impose ceiling only on  vacant land  in urban agglomerations; that being so any restriction  on transfer of built-up properties or parts thereof (including  flats therein)  standing on  urban  land falling within the permissible ceiling area would be outside the purview  of the  Act. It  was urged  for the respondents that such  a provision  would be  incidental or ancillary to the ceiling  contemplated by  the Act  and would fall within the phrase  "for matters  connected therewith"  occurring in the Preamble  and the  long title  of the  Act.  It  is  not possible to  accept the  contention, for, the words "matters connected therewith"  occurring in the concerned phrase must be co-related  to what precedes that phrase, namely, "an Act to  provide   for  ceiling   on   vacant   land   in   urban agglomerations, for  the acquisition  of such land in excess of the  ceiling  limit,  to  regulate  the  construction  of buildings on  such land" (emphasis supplied) and, therefore, the words "matters connected therewith" must mean matters in relation to  the ceiling  imposed by the Act. A reference to objective under  Art. 39(b)  and (c) (for the achievement of which the  enactment is  allegedly taken  in  hand)  in  the Preamble or long title cannot enlarge

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 41 of 61  

915 the ambit  or scope  of the  Act. Any restriction imposed on built-up properties  falling within  the permissible ceiling area left  with the  holder would, therefore, be outside the ambit and scope of the Act.      The next  question is  whether  the  restriction  which requires the  holder of  such property to seek permission of the  competent   authority  before  effecting  any  transfer thereof by  way of sale, mortgage or gift, etc. is violative of Art.  14 of  the Constitution. The contention is that the requirement in  the absence  of any guidelines governing the exercise of the power on the part of the competent authority in  the   matter  of  granting  or  refusing  to  grant  the permission is highly arbitrary, productive of discriminatory results and, therefore, violates the equality clause of Art. 14. Counsel  for the  respondents fairly  conceded that  the section itself  does not  contain any  guidelines but  urged that   the    objectives   of   "preventing   concentration, speculation and  profiteering in  urban land" recited in the Preamble  would   afford  the  requisite  guidance  for  the exercise of  the power  to grant the permission sought or to refuse the  same. Firstly,  which of  the  three  objectives mentioned in the Preamble should guide the exercise of power by the  competent authority  in any  given case is not clear and in any case no standard has been laid down for achieving the objectives of preventing concentration, speculation, and profiteering in  urban land  or urban  property and  in  the absence of any standard being laid down by the Legislature-a purely legislative  function, it  will be  difficult to hold that these  broad objectives  recited in  the Preamble could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the  permission and  in the  absence of guidelines the exercise of  the power  is bound  to  produce  arbitrary  or discriminatory results.  It was  also said  that against the order passed  by the  competent authority  under  s.  27  an appeal to  the Appellate  Authority has  been  provided  for under s.  33 and revision lies to the State Government under s. 34  and in view of such provision for appeal and revision the exercise  of the  power  or  discretion  vested  in  the competent authority  cannot be  regarded  as  unfettered  or arbitrary. Here  again I  feel that  in the  absence of  any guidelines for  the exercise of the power and in the absence of any  standards having  been laid  down by the Legislature for achieving the objectives of prevention of concentration, speculation  and   profiteering  in  urban  land  and  urban property, the provision for appeal and revision would not be of much  avail to  preventing arbitrariness in the matter of granting or refusing to 916 grant the  permission. Section  27 which does not adequately control the  arbitrary exercise  of the  power to  grant  or refuse the  permission sought,  is clearly violative of Art. 14 of  the Constitution  and  as  such  the  requirement  of permission contained  therein will have to be struck down as being ultra vires and unconstitution.      In the  result, in  view of the aforesaid discussion. I would like to indicate my conclusions thus:      (1). The impugned Act, though purporting to do so, does not, in  fact, further  the directive  principles in Art. 39 (b) and  (c). Section  2(f) in  relation to  prescription of ceiling  area,  as  shown  above,  permits  unwarranted  and unjustified concentration  of wealth  instead of  preventing the same  and is in teeth of the objective under Art. 39(c); similarly, s.  23,  as  discussed  above,  produces  results

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 42 of 61  

contrary to  the objective  under Art. 39(b). Therefore, the impugned Act  is outside the pale of the protective umbrella of Art. 31C.      (2)  Section   2(f)  which   contains  the   artificial definition of  ’family’ in  relation to  the prescription of ceiling  area,   s.  23   which  deals   with  disposal   or distribution of excess vacant land acquired under the Act as per priorities  laid down  therein and s. 11(6) which puts a maximum limit  on the  quantum  of  the  amount  payable  in respect  of  excess  vacant  land  acquired  from  a  holder irrespective of  the extent  of area held by him these three provisions flagrantly  violate those aspects of Arts. 14 and 31 which  constitute the essential and basic features of our Constitution and  hence the  protective umbrella of Art. 31B is not  available to  the impugned  Act inasmuch as the 40th Constitution Amendment  Act 1976  to the  extent to which it inserts the impugned Act in the Ninth Schedule is beyond the constituent power of the Parliament as the said Amending Act has the effect of damaging or destroying the basic structure of the Constitution.      (3). The  artificial definition of ’family’ given in s. 2(f) in  relation to  prescription of  ceiling area under s. 4(1) is  clearly violative  of Art.  14 and as such is ultra vires and unconstitutional. Similarly, s. 23 which authories compulsory acquisition  of property  for private purposes is in breach  of the  doctrine of  eminent domain  and since it flagrantly  violates   Art.  31(2)   is  ultra   vires   and unconstitutional.      (4). Since  s. 2(f)  together with  adoption of  double standard for  fixing ceiling  area runs  through  and  forms basis of  the whole  Chapter III and since s. 23 is a vital, Integral and non-severable part 917 of the  entire scheme  of urban  ceiling  envisaged  by  the Chapter III, the whole of Chapter III has to fall along with those two  provisions and   as  such that  Chapter  is  also declared to be ultra vires and unconstitutional. Further, it cannot be disputed that Chapter III comprises the substratum of the  entire scheme  of urban  ceiling contemplated by the enactment incorporating  its main provisions while the other Chapters deal  with arcillary  or incidental  matters  which from the  decorative frills  of  the  main  fabric.  If  the substratum is  found to  be diseased, invalid and bad in law the entire  Act has  to go and is accordingly struck down as void and unconstitutional.      (5).  Section   11(6),  a  severable  provision,  being violative of petitioners’ fundamental right under Art. 31 is declared to be ultra vires and unconstitutional.      (6). Section  27, being  severable,  is  also  declared ultra vires  and unconstitutional  to the  extent  indicated above as  being beyond the ambit of the Act and violative of Art. 14 of the Constitution.      Before parting with the matter I would like to refer to the manner  in which  this important and complicated measure came to  be enacted.  It  cannot  be  doubted  that  the  11 sponsoring State Legislatures passed their resolutions under Art. 252(1)  with a  laudable object,  namely to  clothe the Parliament with  legislative competence  to enact  a law for the imposition  of ceiling  on urban  immovable property for the country  as a  whole Though initially a model bill based on the  recommendations made  by the  Working Group  in  its Report dated  July 25,  1970 had been prepared where ceiling was proposed to be imposed on urban property on the basis of monetary  value,  Parliament  later  on  realized  that  the implementation of  that  proposal  was  beset  with  several

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 43 of 61  

practical  difficulties  indicated  in  the  Approach  Paper prepared by  a Study  Group, and,  therefore, it  was though that ceiling  in respect  of built-up  properties should  be brought about  through some  fiscal and  other measures  and ceiling on  vacant land in urban agglomerations on the lines of the  impugned Act  should be  undertaken. In other words, State wise deep consideration and consultation for over five years had  preceded the  preparation of  the draft  Bill and this Court in V.B. Chowdhari’s (1) 918 case has  upheld the legislative competence of Parliament to enact   such a  measure as  a first  step  towards  eventual imposition of ceiling on immovable properties of every other description. However,  after the introduction of the Bill on the floor of the house on January 28, 1976, the enactment as drafted in  its present  form  seems  to  have  been  rushed through the  attenuated Parliament  during the  Emergency in less than  seven hours  on February  2, 1976.  The Lok Sabha debates clearly  show: (a) that the Bill was moved and taken up for  consideration at 11.17 hours on that day, (b) that a motion moved by a member that the Bill be circulated for the purpose of  eliciting opinion  thereon by  May 15,  1976 was negatived, (c)  that another motion supported by quite a few members that the Bill be referred to a Select Committee with a view to improve the same by removing defects, deficiencies and  omissions  therein  with  instructions  to  the  Select Committee to  report by  April 1,  1976, was also negatived, (d) that  though over 150 amendments had been moved (some of which were  received by  the members  on  the  very  day  as speeches were  in progress),  an earnest request to postpone the second  reading of  the Bill  to the  following  day  to enable the  members to  consider those  amendments (many  of which  were   neither  formal   nor  clarificatory   but  of substance) was  also turned  down, and (e) that the original time schedule of six hours fixed by the Speaker for the Bill was adhered  to and  the entire  process (including  general discussion, clause  by clause reading, consideration  of the several amendments  and the  third reading) was completed in undue haste by 18.01 hours. In Rajya Sabha also a request to refer the  Bill to  a Select Committee went unheeded and the entire process  was completed  in one day, February 5, 1976. The result  is that it has, in the absence of adequate study or discussion  about the  implications of various provisions thereof, turned  out to  be an ill-conceived and ill-drafted measure. The  measure was, undoubtedly, taken in hand with a view to achieve the unexceptional objectives underlying Art. 39(b) and  (c), but  as shown  above, the enacted provisions misfire and  produce the opposite results and also damage or destroy the  essential features  or basic  structure of  the Constitution and hence duty-bound I am constrained to strike down  this   impugned  piece   of  purported   socioeconomic legislation. The  legislative competence  of the  Parliament being still  there a    well-drafted  enactment  within  the constitutional limitations  on  the  subject  would  be  the proper remedy.      I would,  therefore, allow  the  petitions  and  direct issuance of the appropriate writs sought. 919 SEN  J.  These  writ  petitions  under  Article  32  of  the Constitution seek  to challenge  the constitutional validity of the  Urban Land  (Ceiling and  Regulation) Act,  1976  on various grounds.  The Act has been placed as item No. 132 in the Ninth  Schedule by the Constitution (Fortieth Amendment) Act, 1976. Questions involved are of far-reaching importance affecting the national interest.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 44 of 61  

    The history of the legislation is well-known. The State Legislatures of eleven States, namely, all the Houses of the Legislatures of  the  States  of  Andhra  Pradesh,  Gujarat, Haryana, Himachal  Pradesh, Karnataka,  Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable  to   have  a   uniform  legislation   enacted  by Parliament for the imposition of a ceiling on urban property in the  country as a whole and in compliance with clause (1) of Article  252 of  the Constitution  passed a resolution to that effect.  Parliament accordingly  enacted the Urban Land (Ceiling and  Regulation) Act,  1976. In the first instance, the Act,  came into force on the date of its introduction in the Lok  Sabha   that is, January 28, 1976 and covered Union Territories and  the eleven  States which had already passed the  requisite   Resolution  under  Article  252(1)  of  the Constitution.  Subsequently,  the  Act  was  adopted,  after passing resolutions under Article 252(1) of the Constitution by the  State of Assam on March 25, 1976, and those of Bihar on April  1, 1976,  Madhya Pradesh   on  September 9,  1976, Manipur on  March 12,  1976, Meghalaya  on April 7, 1976 and Rajasthan on  March 9,  1976. Thus,  the Act  is in force in seventeen States  and  all  the  Union  Territories  in  the country.      The legislative  competence of  Parliament to enact the Urban Land  (Ceiling and  Regulation) Act,  1976 having been upheld by  this Court  in Union  of India  etc-  v.  Valluri Basavaiah Chaudhary,(1)  there remains  the question  of its constitutional validity.      Schedule  I   to  the   Act  lists   out  all   States, irrespective of whether or not they have passed a resolution under Art.  252(1) authorizing the Parliament to enact a law imposing a  ceiling on  urban immovable  property,  and  the urban agglomerations in them having a population of two lace or more. The ceiling limit of vacant 920 land of  metropolitan areas  of Delhi,  Bombay, Calcutta and Madras having  a population exceeding ten lacs falling under category ’A’  is 500 sq. metres, urban agglomerations with a population  of  ten  lacs  and  above,  excluding  the  four metropolitan areas  falling under  category ’B’  is 1000 sq. meters agglomerations  with a  population between three lacs and ten  lacs falling  under category ’C’ is 1500 sq. metres and urban  agglomerations with a population between two lacs and three  lacs falling  under  category  ’D’  is  2000  sq. metres.  The   schedule   does   not   mention   the   urban agglomerations having a population of one lac and above; but if a  particular state  which passed a resolution under Art. 252(1), or  if a  State which  subsequently adopts  the Act, wants to  extend the  Act to such areas, it could do so by a notification under  s.2(n) (B)  or s.2  (n) (A) (ii), as the case may  be, after  obtaining the  previous approval of the Central Government.      The primary  object and  the purpose  of the Urban Land (Ceiling and  Regulation) Act,  1976, ’the  Act’ as the long title  and   the  preamble  show,  is  to  provide  for  the imposition  of   a  ceiling   on  vacant   land   in   urban agglomerations, for  the acquisition  of such land in excess of the  ceiling  limit,  to  regulate  the  construction  of buildings on  such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands  of a few persons and speculation and profiteering therein, and  with a  view to  bringing about  an  equitable distribution of land in urban agglomerations to subserve the common good,  in furtherance  of the Directive Principles of State Policy under Art. 39(b) and (c).

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 45 of 61  

    The Statement,  of objects and Reasons accompanying the Bill reads as follows:           "There has been a demand for imposing a ceiling on      urban property also, especially after the imposition of      a  ceiling   on  agricultural   lands  by   the   State      Governments.  With   the  growth   of  population   and      increasing urbanisation, a need for orderly development      of urban  areas has  also been  felt. It is, therefore,      considered necessary  to take  measures for  exercising      social control  over the  scarce resource of urban land      with a  view to  ensuring  its  equitable  distribution      amongst  the  various  sections  of  society  and  also      avoiding speculative  transactions relating  to land in      urban agglomerations. With a view to ensuring 921      uniformity in  approach Government  of India  addressed      the State  Governments in  this regard,  eleven  States      have   so far  passed resolutions  under Art. 252(1) of      the Constitution  empowering  Parliament  to  undertake      legislation in this behalf."      The Act  consists of  five Chapters. Chapter I contains the short  title  and  the  extant  clause  and  Chapter  II contains section 2, which is the definition section. Chapter III deals with ’Ceiling on vacant Land Chapter IV deals with ’Regulation of transfer and use of urban land’ and Chapter V contains miscellaneous provisions,      There can  be no  doubt that the legislative intent and object of  the impugned  Act was to secure the socialisation of vacant  land in  urban  agglomerations  with  a  view  to preventing the  concentration of urban lands in the hands of a few  persons, speculation  and profiteering  therein,  and with a  view to  bringing about an equitable distribution of land in  urban agglomerations to subserve to common good, in furtherance of  the Directive  Principles  of  State  Policy under Art.  39 (b)  and (c). The Act mainly provides for the following:      (i)  imposition of  a ceiling  on  both  ownership  and           possession of  vacant land in urban agglomerations           unders. 3,  the ceiling  being on  a graded  basis           according  to  the  classification  of  the  urban           agglomerations under s.4;      (ii) acquisition of the excess vacant land by the State           Government under  s.10(3), with  powers to dispose           of the vacant land with the object to subserve the           common good under s.23;       (iii) payment  of an amount for the acquisition of the           excess land  in cash  and in bonds under s. 14(2),           according to  the principles  laid down in s.11(I)           subject to the maximum specified in s.11(6 )      (iv) granting exemptions  in respect  of vacant land in           certain cases under ss.20 and 21;      (v)  regulating the  transfer of vacant land within the           ceiling limits under s.26; 922      (vi) regulating the  transfer of  urban or  urbanisable           land with any building (whether constructed before           or after the commencement of the Act, for a period           of ten  years from  the commencement of the Act or           the construction  of  the  building  whichever  is           later under s.27;       (vii) restricting the plinth area for the construction           of future residential buildings under s.29; and    (viii) other procedural and miscellaneous matters.      The Act  is thus  intended  to  achieve  the  following objectives:  (I)  to  prevent  the  concentration  of  urban

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 46 of 61  

property in  the hands  of a few persons and speculation and profiteering therein;  (2) to  bring about  socialisation of urban land  in urban  agglomerations to  subserve the common good to ensure its equitable distribution, (3) to discourage construction  of   luxury  housing  leading  to  conspicuous consumption of  scarce building materials. and (4) to secure orderly urbanisation.  Thus the  dominant object and purpose of the  legislation is to bring about socialisation of urban land.      In order  to appreciate  the rival  contentions, it  is necessary to  set out  the relevant  provisions:  Section  3 which is  all  important  for  the  purpose  of  these  writ petitions, provides:           "3. Except  as otherwise  provided in this Act, on      and from  the commencement of this Act, no person shall      be entitled  to hold  any vacant  land in excess of the      ceiling limit  in the  territories to  which  this  Act      applies under sub-section (2) of section 1."      Section 4  divides the  urban agglomerations  into four broad categories,  categories A,  B, C  and D, and fixes the ceiling limits  varying from  five  hundred  sq.  metres  in Category A to two thousand sq. metres in Category D thereof. The word ’person’ is defined in s.2(i) as:           "2(i) "person" includes an individual, a family, a      firm,  a   company,  or   an  association  or  body  of      individuals, whether incorporated or not." 923 The definition  of the  word ’family’  in s.2(f)  is in  the following terms:           "2(f) "family"  in relation to a person, means the      individual, the wife or husband, as the case may be, of      such individual and their unmarried minor children." In order  that the  burden of  compensation,  that  is,  the amount  payable   for  such   excess  vacant  lands  by  the Government, may not be high, the Act incorporates a specific provision, namely,  sub-section (1)  of s.11 which fixes the amount broadly  on the  following basis:  (1) eight and one- third of the annual net income from the land during the last five years or where such annual income is not being derived, at rates not exceeding Rs. 10 per sq. metre or Rs. 5 per sq. metre  in   Categories  A   and  B,   and  C   and  D  urban agglomerations respectively,  and classifying  the area into different zones.  There is  also a  ceiling on  the  maximum amount payable  in any  single case placed by subsection (6) of s.11.  Sub-section (1)  s.27 provides for the freezing of all transfers  of urban  land with  or without a building or portion of  a building in all agglomerations for a period of ten years  from the  date of  the commencement of the Act or from the date on which the building is constructed.      The constitutional  validity of  the Act which has been placed in  the Ninth  Schedule by the Fortieth Amendment, is challenged principally  on the  ground that,  firstly, it is violative of  the fundamental  rights guaranteed  under Arts 14, (19(1)(f)  and 31(2), since it seeks to alter the "basic structure" of  the Constitution  as formulated by this Court in His  Holiness Kesavananda  Bharti v. State of Kerala and; therefore, has  not the  protective umbrella of Art.31B, and secondly that it is a law in negation of, and in furtherance of the  Directive Principles of State Policy under Art.39(b) and (c) and is, therefore, not protected under Art.31C.      In Waman  Rao &  Ors. v. Union of India Ors. this Court by its  order, in the context of the decision in Kesavananda Bharati’s case, has laid down.           "Amendments to  the Constitution  made on or after      April 24,  1973  by  which  the  9th  schedule  to  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 47 of 61  

    Constitution was  amended from  time  to  time  by  the      inclusion of 924      various Acts  and  Regulations  therein,  are  open  to      challenge on  the ground  that they, or any one or more      of them,  are  beyond  the  constituent  power  of  the      Parliament since  they damage  the basic  or  essential      features of the Constitution or its basic structure. We      do not  pronounce upon  the validity of such subsequent      amendments except  to say that if any Act or Regulation      included  in  the  9th  Schedule  by  a  constitutional      amendment made after April 24, 1973 is saved by Article      31.C as  it stood  prior to  its amendment  by the 42nd      Amendment,  the   challenge  to  the  validity  of  the      relevant Constitutional  Amendment by which that Act or      Regulation is  put in  the 9th  Schedule, on the ground      that the  Amendment damages  or  destroys  a  basic  or      essential feature  of the  Constitution  or  its  basic      structure as  reflected in  Articles 14, 19 or 31, will      become otiose.           Article 31-C  of the  Constitution,  as  it  stood      prior to its amendment by Section 4 of the Constitution      (42nd Amendment)  Act, 1976,  is valid to the extent to      which its  constitutionality was  upheld in Kesavananda      Bharati  Article   31-C,  as  it  stood  prior  to  the      Constitution (42nd  Amendment) Act  does not damage any      of the  basic or essential features of the Constitution      or its basic structure."      The validity  of the impugned Act is challenged on four grounds Namely  the inclusion of an artificial definition of ’family’ in  s.2 (f)  results in  total exclusion of a joint Hindu family  from the  purview  of  the  Act  and  also  in adoption of  double standard  between a  family  with  major sons, each  of whom  is a  separate unit  by himself,  and a family with  minor children, which constitutes a family unit for fixing  a ceiling  and thus  s.3  of  the  impugned  Act offends against  the equal  protection clause  in Art.14, as persons similarly situate are differentially treated without any rational  basis; (2)  the impugned  Act is  inconsistent with,  takes   away  and   abridges  the  fundamental  right guaranteed under Art. 31 (2) inasmuch as the fixation of the maximum amount payable under sub-s. (6) of Sec 11, makes the Act  confiscatory   or  at  any  rate,  the  amount  payable illusory; (3) sub-section (1) of s. 27 of 925 he Act  freezing all  transfers by  way of  sale,  mortgage, gift, lease  for a  period exceeding ten years or otherwise, of any  urban or  urbanisable land  with a building (whether constructed before or after the commencement of the Act), or a portion  of such  building, for a period of ten years from such commencement  or from the date on which the building is constructed, whichever  is later,  except with  the previous permission in  writing  of  the  competent  authority,  even though such  vacant land in an urban agglomeration is within the ceiling  limits, is  an unreasonable  restriction on the fundamental right  to property guaranteed under Art. 19 (1); and (4)  the ’priorities’  laid down in s.23 of the impugned Act are not in keeping with part IV of the Constitution and, therefore, liable  to be struck down. It is urged upon these grounds that  the impugned  Act is  flagrantly violative  of those aspects  of the  petitioners’ fundamental rights under Arts. 14,  19 and  31 as  constitute the  basic structure or framework of  the Constitution,  and therefore,  it  is  not protected under Art. 31B or 31C.      Land in  urban  areas  is  a  vital  physical  recourse

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 48 of 61  

capable of  generating and  sustaining economic  and  social activities. It  should be properly utilised by the community for social  good. But  the attraction of urban areas has led to profiteering  and racketeering  in land  in these  areas. There is  also mis-application  of this  scarce resource  of urban  land   for   undesirable   purposes.   Therefore,   a comprehensive policy  of effective  control of land covering its use.  distribution amongst  the various  sections of the society and  individuals and  for different social purposes, and its  disposal by  owners subject  to their  sharing  the profits with  the community  at large, has been evolved. The Act has  been designed to benefit the weaker sections of the community. It  also grants  exemptions in  favour of  public institutions and  co-operative housing.  The  imposition  of ceiling on  land and  plinth area  of future dwelling units, and regulation  of transfer of urban property under the Act, seeks to  achieve the  objective of  social control over the physical resources  of land.  A unique feature of the Act is that  it   covers  seventeen   States  and   all  the  Union Territories and  provides for  aggregation  of  holdings  in urban agglomerations  in the  different States where the law is applicable  for purposes  of  ceiling  limits.  In  other words, persons  holding vacant  lands or  vacant  and  other built-up property  with dwelling  units therein in different urban agglomerations  throughout the  country will  have  to make a  choice of  retaining only  one piece  of vacant land within the  ceiling limit  and surrender excess vacant lands else-where. 926 Since the Act applies to firms, companies, and undertakings, future   construction of  industrial or  commercial premises requiring large  areas cannot  take place  in  the  notified urban agglomerations  without obtaining  the requisite  land from the Government. This enables Government to regulate and canalise the location of industries and thus serve the broad policy approach  in dispersal of economic activity. Hoarding of land  by industrialists  based on prospects for expansion in the distant future, is thus sought to be avoided.      The fundamental issue is: Whether s. 23 of the impugned Act  impairs   the  basic  structure  or  framework  of  the Constitution being violative of Art. 39 (b) and (c) and Art, 31 (2)  of the Constitution and is, therefore, not protected under Arts. 31-B and 31-C.      The  impugned   Act  is  designed  as  a  law  for  the imposition  of   a  ceiling   on  vacant   land   in   urban agglomerations, for  the acquisition  of such land in excess of  the  ceiling  limit  to  regulate  the  construction  of buildings on  such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons, and speculation and profiteering therein, and  with a  view to  bringing about  an  equitable distribution of land in urban agglomerations to subserve the common good,  in furtherance  of  the  Directive  Principles under Art. 39 (b) and (c). The constitutional validity of s. 23 of  the Act  depends on  whether in  truth and  substance these objectives  have been  translated into action. Section 23 of the Act reads:           "23. (1)  It shall  be  competent  for  the  State      Government to allot, by order, in excess of the ceiling      limit any  vacant land  which is  deemed to  have  been      acquired by  the State  Government under this Act or is      acquired by  the state  Government under any other law,      to any  person for  any  purpose  relating  to,  or  in      connection  with,   any  industry   or  for   providing      residential  accommodation  of  such  type  as  may  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 49 of 61  

    approved by  the State  Government to  the employees of      any industry  and it shall be lawful for such person to      hold such land in excess of the ceiling limit.      Explanation.-For the purpose of this section,- 927           (a) where  any  land  with  a  building  has  been      acquired by  the State  Government under  any other law      and such  building has  been subsequently demolished by      the State  Government, then,  such land shall be deemed      to be vacant land acquired under such other law;           (b) "industry"  means  any  business,  profession,      trade, undertaking or manufacture.           (2) In  making an  order of  allotment under  sub-      section (1),  the  State  Government  may  impose  such      conditions as  may be  specified  therein  including  a      condition as  to the  period within  which the industry      shall be  put in  operation or,  as the case may be the      residential accommodation shall be provided for:           Provided that if, on a representation made in this      behalf  by   the  allottee,  the  State  Government  is      satisfied that  the allottee could not put the industry      in operation, or provide the residential accommodation,      within the  period specified in the order of allotment,      for  any   good  and   sufficient  reason,   the  State      Government may  extend  such  period  to  such  further      period or periods as it may deem fit.           (3) Where  any condition  imposed in  an order  of      allotment is  not complied  with by  the allottee,  the      State Government  shall, after giving an opportunity to      the allottee  to be  heard in  the matter,  cancel  the      allotment  with  effect  from  the  date  of  the  non-      compliance of  such condition  and  the  land  allotted      shall revest  in the  State Government  free  from  all      encumbrances.           Subject to the provisions of sub-sections (1), (2)      and (3),  all vacant lands deemed to have been acquired      by  the  State  Government  under  this  Act  shall  be      disposed of  by the  State Government  to subserve  the      common good  on such  terms and conditions as the State      Government may deem fit to impose. 928           (5) Notwithstanding  anything  contained  in  sub-      sections (1)  to (4),  where the  State  Government  is      satisfied that it is necessary to retain or reserve any      vacant land,  deemed to  have  been  acquired  by  that      Government under  this Act,  for  the  benefit  of  the      public, it  shall be competent for the State Government      to retain or reserve such land for the same."      The submission  is that  though  the  impugned  Act  is designed as  a law for the imposition of a ceiling on vacant land in  urban agglomerations,  to subserve the common good, in furtherance of the Directive principles under Art. 39 (b) and (c),  the dominant  object of  the impugned  Act for the acquisition of  vacant land in urban agglomerations under s. 23  of  the  Act,  was  to  facilitate  the  setting  up  of industries in the private sector and, therefore, the Act was not in  furtherance of  part IV of the Constitution and void being violative  of Art.  31 (2). It was urged that s. 23 of the  impugned   Act  must,  therefore,  be  struck  down  as unconstitutional, it  being not  in keeping  with part IV of the Constitution  was not  protected under Art. 31C and that it cannot  also have  the protective umbrella of Art. 31B as it seeks to alter the basic structure of the Constitution.      Although the  impugned Act  is enacted  with a laudable object, to  subserve the  common good, in furtherance of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 50 of 61  

Directive Principles  of state  policy under Art, 39 (b) and (c), it appears from the terms of sub-ss.(1), (2) and (3) of s. 23 that it would be permissible to acquire vacant land in urban agglomerations  and divert it for private purpose. The whole emphasis  is on industrialisaton. The opening words in s. 33  (4) "subject  to the  provisions of sub-sections (1), (2) and (3)" make the provisions of s. 23 (4) subservient to s. 23  (1) which enables the Government to allot vacant land in an  urban agglomeration  to any  person for  any  purpose relating to,  or in  connection with,  any industry  or  for providing residential  accommodation of  such type as may be approved by  the state  Government to  the employees  of any industry. It  further makes  it lawful for the allottee that is, the  industrialist, to  hold such  land in excess of the ceiling limit.  The definition  of the  word  ’industry’  in Explanation (b)  to s.  23 (1) is wide enough to include any business, profession, trade, undertaking or manufacture, and necessarily includes  the private  sector. The proviso to s. 23  (2)   fortifies  that   construction  of   mine.  It  is incomprehensible   that    vacant   lands   in   all   urban agglomerations throughout the country should be acquired for the 929 purpose of  setting up  industries. More  so, that it should permissible to  allow setting  up of  industries for private gain. There is no material placed before us showing that the Government has prepared any blue print for industrialisation of all  the urban  agglomerations in  India  in  the  public sector.      In  fact,  faced  with  this  difficulty,  the  learned Attorney  General   attempted  to   justify  the  provisions contained in s.23 by submitting that the opening words in s. 23(4) "subject  to the  provisions of  sub-sections (1), (2) and (3)"  must, in  the context  of  the  preamble  and  the Directive Principles  under Art  39(b) and (c), be construed to mean  "notwithstanding anything to the contrary contained in subsections  (1), (2)  and (3)"   According  to him,  the "brooding spirit’,  of the  Preamble permeates  through  the entire section, and, therefore-the provisions of s.23 of the Act should  be read  in  the  light  of  the  preamble.  The contention cannot  be accepted.  When the  language  of  the section  is  clear  and  explicit,  its  meaning  cannot  be controlled by  the preamble.  It is not for the Court to re- structure the  section. The  re-structuring of  a statute is obviously a  legislative function. The matter is essentially of political  expediency, and  as such  it is the concern of the statesmen  and, therefore, the domain of the legislature and not the judiciary.      It was,  however, urged that s.23(1) of the Act is only an enabling provision, and the real power was under s.23(4), and if  there is  ambiguity in  the language of s 23, it was possible to  read the  section in  the light of the preamble and the Directive Principles under Art. 39(b) and (c) and as such s.23(1)  is subject  to s.23(4).  The use  of the words "subject to the provisions of sub-sections (1), (2) and (3)" in s.23(4) takes away the compulsion on the State Government to adhere  to the  Directive Principles under Art. 39(b) and (c) in  making allotment  of the  vacant lands  in an  urban agglomeration acquired  under the Act. The words "subject to the provisions  of subsections (1), (2) and (3)" in s.23(4), appearing in  the context  of s.23(1) means ’in addition to; if anything is left over after the allotment under s.23(1)’. I cannot,  therefore, read the provisions of sub-ss.(1), (2) and (3)  s.23 of  in  the  light  of  the  preamble  or  the Directive Principles under Art. 39(b) and (c). By no rule of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 51 of 61  

construction can  the operation  of sub-s(1)  of s.23 of the Act be controlled by the operation of sub-s.(4). 930      A legislation built on the foundation of Art. 39(b) and (c) permitting acquisition of private property must be for a public purpose,  that is, to subserve the common good. In my view, sub-ss.  (1), (2)  and (3)  of s.23  of the Act negate that principle.  Furthermore, Art.  31(2) consists  of three pre-requisites namely  (i) the property shall be acquired by or under  a valid  law, (ii) it shall be acquired only for a public purpose, and (iii) the person whose property has been acquired shall  be given  an amount  in  lieu  thereof.  The definition of’  industry’ in  Explanation (b) to s. 23(1) is wide enough  to include  any  business,  trade  or  vocation carried on for private gain. There cannot be ’mixed purpose’ of public  and private  to sustain  a legislation under Art. 39(b) and (c). The vice lies in s. 23(1) and the Explanation (b) thereto, which on a combined reading, frustrate the very object of the legislation.      One is  left with the feeling that sub-ss. (1), (2) and (3) of  s. 23  of the  impugned Act are meant to promote the interests of the business community and further professional interests. While  setting up  of an  industry in the private sector may,  at times,  be for the public good, there cannot be  acquisition   of  private  property  for  private  gain. Acquisition can  only be  for a  public purpose’. That is to say, a  purpose, an  object or  aim  in  which  the  general interest of  the community  as  opposed  to  the  particular interest  of   the  individual,   is  directly  and  vitally concerned.  The  concept  of  ’public  purpose’  necessarily implies that  it should  be a  law for  the  acquisition  or requisition of  property in  the  interest  of  the  general public, and  the purpose  of such a law directly and vitally subserves public  interest. If  in reality the object of the acquisition under  the Act  is to  set up  industries in the private sector  as is  permissible from the provisions of s. 23(1) of  the Act,  nothing prevents  the State  from taking recourse to  s. 40  of the  Land Acquisition  Act, 1894, for which there  must be  quid pro  quo,  that  is,  payment  of compensation according to the market value.      Our attention was drawn to the Guidelines issued by the Government  of   India,  Ministry   of  Works   and  Housing clarifying the  intent and  purpose of the provisions of the Act. It  may be  stated here  that these  Guidelines  cannot supersede or  alter any  of the provisions of the Act or the rules made thereunder. The Guidelines issued under s. 23 are in these terms: 931           "Section  23   of  the  Urban  Land  (Ceiling  and      Regulation) Act, 1976, governs, inter alia, disposal of      vacant land  acquired under  the Act.  In  brief,  this      Section enables  the  State  Government  to  allot  any      vacant land  for the  purpose  of  an  industry  or  to      subserve the  common good, or to retain or reserve such      land for the benefit of the public.           2. For  the purpose  of the Section ’industry’ has      been given a wider meaning so as to cover any business,      profession, trade, undertaking or manufacture.           3. The  section also  enables Government  to allot      land for  providing residential  accommodation of  such      type as  may be approved by the State Government to the      employees of  any industry. Thus the excess vacant land      acquired by  the State  Government under the Act can be      dealt with in the  following manner:      (i)  allotted for  the purpose  of an  industry namely,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 52 of 61  

         any business,  profession, trade,  undertaking  or           manufacture;      (ii) allotted for the purpose of construction of houses           for the  employees of  an  industry  specified  in           item(i) above;      (iii) disposed of to subserve the common good which may           include allotment  of vacant  land for  Government           purpose, for institutions, etc., and      (iv) retained/reserved for the benefit of the public" It  appears   that  the   Government  issued  the  following guidelines  pursuant   to  the  recommendations  made  at  a conference  of   State  Ministers   of  Housing   and  Urban Development  with   a  view   to  implement  the  policy  of socialisation of urban land:           "The 9th  Conference of State Ministers of Housing      and Urban  Development held  at Calcutta  on the  17th,      18th and 19th December, 1976, considered the matter and 932      recommended  that,  in  order  to  bring  about  social      objectives of the Act more prominently, the utilisation      of the  excess vacant  land should  be according to the      priorities set  down below  subject to  the  prescribed      land uses:      (i)  Retain/reserve for  the benefit  of the public for           social housing, provision of basic amenities, etc.      (ii) Dispose of  to  subserve  common  good  which  may           include allotment  of vacant  land for  Government           purposes, local authorities, institutions, etc.       (iii) Allot  for the purpose of construction of houses           for the  employees of industries specified in item           (iv) below.      (iv) Allot for  the  purpose  of  industry,  viz.,  any           business, profession,  trade, undertaking  of non-           polluting manufacture; cottage and small scale and           wherever     possible      ancillary     industry,           manufacture."      It is  significant to  notice that there was an attempt made in these aforesaid Guidelines to alter the ’priorities’ laid  down  in  s.  23.  The  Guidelines  cannot  alter  the ’priorities’ laid  down in  the section.  The Guidelines are nothing but  in the  nature of  Executive  Instructions  and cannot obviously  control the  plain meaning of the section. Where the  language of     the Act is clear and explicit, we must give  effect to  it, whatever  may be the consequences, for in  that  case  the  words  of  the  statute  speak  the intention of  the legislature.  The Court  cannot be  called upon to  interpret the provisions of s. 23 of the Act in the light of  the Guidelines  issued by the Government of India, Ministry of Works and Housing.      I  am,   therefore,  constrained   to  hold   that  the provisions of  sub-ss. (1),  (2) and  (3) of  s. 23  and the opening words  "subject to  the provisions  of  sub-sections (1), (2)  and (3)"  in s. 23(4) which make the setting up of industries the dominant object for the acquisition of vacant land in  urban agglomerations  under the  Act,  are  not  in keeping with Part IV of the Constitution and, therefore, not protected under Article 31-C. 933      A  legislation  which  directly  runs  counter  to  the Directive Principles of State Policy enshrined in Art. 39(b) and (c)  cannot by  the mere inclusion in the Ninth Schedule receive immunity  under Art.  31B. The  Directive Principles are not  mere homilies.  Though  these  Directives  are  not cognizable by  the Courts  and if  the Government of the day fails to  carry out  these objects  no Court  can  make  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 53 of 61  

Government ensure  them,  yet  these  principles  have  been declared to be fundamental to the governance of the country. Granville Austin  considers these  Directives to be aimed at furthering the  goals of  the social revolution or to foster this revolution by establishing the conditions necessary for its achievement. He explains:           "By establishing these positive obligations of the      State, the  members of the Constituent Assembly made if      the responsibility of future Indian governments to find      a middle  way between individual liberty and the public      good, between preserving the property and the privilege      of the  few and bestowing benefits on the many in order      to  liberate   ’the  powers  of  all  men  equally  for      contributions to the common good’."      In short, the Directives emphasise, in amplification of the preamble,  that the  goal of  the Indian  polity is  not laissez   faire, but  a welfare State, where the State has a positive duty  to ensure to its citizens social and economic justice and  dignity of the individual. It would serve as an ’Instrument of  Instructions’ upon  all future  governments, irrespective of their party creeds.      Article 38  requires that  the  State  should  make  an effort to  promote the welfare of the people by securing and protecting as  effectively as it may a social order in which justice, social,  economic and  political, shall  inform all the institutions  of the  national life. In other words, the promise made by the Constitution to the citizens of India in its Preamble  is directly  included in  one of the Directive Principles of  State Policy.  Article 39,  cl. (a)  requires that all  citizens shall  have a  right to adequate means of livelihood. Article  39(b)  enjoins  that  the  State  shall ensure that  the  ownership  and  control  of  the  material resources of the community are so distributed as best to 934 subserve the  common good.  Article 39(c)  mandates that the State shall  direct its  policy towards  securing  that  the operation of  the economic  system does  not result  in  the concentration of  wealth and  means  of  production  to  the common detriment.  Dr. P.B.  Gajendragadkar in ’Law, Liberty and Social Justice’, observes:           "These  directive  principles  very  briefly,  but      eloquently,  lay  down  a  policy  of  action  for  the      different State Governments and the Central Government,      and in  a sense, they embody solemnly and recognize the      validity of  the charter  of demands  which the  weaker      sections of the citizens suffering from social-economic      injustice would  present to  the respective governments      for immediate relief."      Chandrachud J.  (as he  then was) in Smt. Indira Gandhi v. Raj  Narain(1) after  observing that  the  ratio  of  the majority  in   Kesevananda   Bharti’s   case   were   merely illustrative of what constitutes the basic structure and are not intended to be exhaustive, observes:           I  consider  it  beyond  the  pale  of  reasonable      controversy that  if there  be any unamendable features      of the of the Constitution, on the score that they form      a part of the basic structure of the Constitution, they      are that: (i) India is a Sovereign Democratic Republic;      (ii)  Equality  of  status  and  opportunity  shall  be      secured to all its citizens, (iii) The State shall have      no religion of its own and all persons shall be equally      entitled to  freedom of conscience and the right freely      to profess,  practise and  propagate religion  and that      (iv) the  Nation shall  be governed  by a Government of      laws, not  of men. These in my opinion, are the pillars

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 54 of 61  

    of our constitutional philosophy, the pillars therefore      of the basic structure of the Constitution."      According to  him, the  pillars of the Constitution are Sovereign  Democratic   Republic,  Equality  of  Status  and Opportunity,  Secularism,   Citizen’s  right   to  religious worship, and the Rule of Law. With respect, I would add that the concept  of  social  and  economic  justice-to  build  a Welfare State-is equally a part of the basic structure or 935 the  foundation  upon  which  the  Constitution  rests.  The provisions of  sub-ss. (1),  (2) and  (3) of  s. 23  and the opening words  "subject to  the provisions  of  sub-sections (1), (2) and (3)" in s. 23(4) are the very antithesis of the idea of  a  Welfare  State  based  on  social  and  economic justice.  Since   these  provisions  permit  acquisition  of property under  the Act  for private  purposes, they  offend against the  Directive Principles  of State  Policy of  Art. 39(b) and  (c) and  are also  violative of  Art.  31(2)  and therefore, not protected under Art. 31B.      I would, therefore, declare that the provisions of sub- sections (1),  (2) and  (3) of  s. 23  and the opening words "subject to the provisions of sub-sections (1), (2) and (3)" in s. 23(4) are ultra vires of the Parliament.      With the  striking down  of the invalid provisions what remains, that  is, the  remaining provisions of the impugned Act, including  s. 23(4)  thereof being  in conformity  with Part IV  of the  Constitution and  Article 31(2),  are valid and, therefore,  the impugned Act has the protection of both Article 31-B and Article 31-C.      I find no justification to strike down the whole Act as it would be against the national interest. Unless it becomes clear  beyond  reasonable  doubt  that  the  legislation  in question transgresses  the limits  of the organic law of the Constitution it  must  be  allowed  to  stand  as  the  true expression of  the national  will. The provisions of sub-ss. (1), (2)  and (3)  of s 23 and the opening words "subject to the provisions  of sub-sections  (1), (2)  and  (3)"  in  s. 23(4), which  are, in  my view,  invalid, cannot  effect the validity of  the Act as a whole. The test to be applied when an argument  like the  one addressed in this case is raised, has been  summed up by the Privy Council in Attorney-General for Alberta v. Attorney-General for Canada in these words:           "The real  question is  whether what remains is so      inextricably bound  up with  the part  declared invalid      that what  remains cannot  independently survive or, as      it has  sometimes been put, whether on a fair review of      the whole matter it can be assumed that the legislature      would have  enacted what  survives without enacting the      part that is ultra vires at all." 936 It is  quite clear  that the  provisions of sub-ss. (1), (2) and (3)  of s.  23 and  the opening  words "subject  to  the provisions of  sub-sections (1),  (2) and  (3)" in  s. 23(4) struck down  by me  are not  inextricably bound  up with the remaining provisions of the Act, and it is difficult to hold that the  legislature would  not have enacted the Act at all without including  that part  which is  found  to  be  ultra vires. The Act still remains the Act as it was passed, i.e., an Act for imposition of ceiling on urban land.      In  determining   the  effect   of  the  law  upon  the individual’s right to property, the Court must take judicial notice of  the fact  of vast  inequalities in  the  existing distribution of property in the country. The Court’s concern lies not  merely with  applying  the  pre-existing  sets  of theories, concepts,  principles and  criteria with a view to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 55 of 61  

determining what  the law  is on  a  particular  point.  The proper approach  should be  to view  the principles with the realisation that the ultimate foundation of the Constitution finds its  ultimate roots  in the  authority of  the people. This demands  that constitutional  questions should  not  be determined from  a doctrinaire  approach,  but  viewed  from experience derived  from the  life and  experience or actual working of the community, which takes into account emergence of new  facts of  the community’s  social and  economic life affecting property rights of the individual, whenever, among others, the  validity of  a law  prescribing  preference  or discrimination is  in question  under the "equal protection" guarantee.      It should  be remembered  that the Directive Principles cannot be  regarded only  as idle  dreams  or  pious  wishes merely by  reason of  the fact that they are not enforceable by a  court of law. A rule of law in facts does not cease to be such  because there  is no  regular  judicial  or  quasi- judicial machinery  to enforce  its commands.  An attempt to create a truly social Welfare State also carries with it the idea that in a country like India concentration of wealth in the country  must be  done away with and its distribution on an equitable  basis effected  in order  to  bridge  the  gap between the  rich and the poor. The very purpose of creating such a state is to benefit the weaker and poorer sections of the community to a much greater extent than the rich persons so that  the living  standards of  the people in general may improve. In  fact, in  such a  State, all welfare schemes in their operation generally tend to benefit the poor people to a much  greater extent  than others.  If an equal protection guarantee  were   enough   to   invalidate   such   schemes, improvement in the economic 937 and social  conditions of  the country  would be impossible. One should  not be  swayed away  by emotions  but should  be guided by the real needs of the country. Hence a paradoxical situation should  be avoided  by refusing  to perpetuate the existing inequality  among the  social classes  and maintain that gap to the same extent as before by intending to pay to the rich  compensation at the same full rates as in the case of the poorer sections of the community.      The impugned Act is meant to remove inequalities with a view to  promote ’the  greatest happiness  of  the  greatest number’. During  the last thirty years much has been done to implement   the   State’s   policy   of   socialisation   of agricultural land by imposition of a ceiling on agricultural holding. There  is much that still remains to be done. There is need  for prevention  of concentration of wealth in a few hands in  the urban  areas  and  to  provide  for  equitable distribution  of   vacant  land   among  others.  The  great disparity between  the rich  and the poor is more visible in the urban areas particularly in the great cities. A majority of the  people in  the urban  areas  are  living  in  abject poverty. They  do not  even have  a roof  over their  heads. Concentration of  wealth in  a few hands is not conducive to the national well-being.      The  challenge   to  the  validity  of  the  artificial definition of  ’family’ in  s.2(f) of  the impugned Act must fail. The  Court has  recently upheld  the  validity  of  an identical definition  of ’family’ appearing in the different State laws relating to imposition of ceiling on agricultural land. Some marginal hardship is inevitable in the working of the  legislation.   The  ultimate   object  is   to   reduce inequalities in  the larger  interest. That  takes us to the question whether the definition of ’family’ in s.2(f) of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 56 of 61  

Act results in the exclusion of a joint Hindu family.      The definition  of ’family’  contained in  s.2(f) is in the following terms:           "2.(f) "family" in relation to a person, means the      individual, the wife or husband, as the case may be, of      such individual and their unmarried minor children." As a  result of  the artificial  definition of  ’family’  in s.2(f), there  is no  denying the  fact that  a joint  Hindu family is excluded from the purview of the Act. Section 3 of the Act provides that no person, on 938 and from  the commencement  of the Act, shall be entitled to hold any  vacant land  in excess of the ceiling limit in the territories to  which the  Act applied. The word ’person’ is defined in s.2(i) as:           "2.(i) "person"  includes an individual, a family,      a firm,  a  company,  or  an  association  or  body  of      individuals, whether incorporated or not;"      The question  is whether  the total  exclusion of joint Hindu family  renders the  Act void  and unconstitutional as violative of  Art.14. I  do  not  think  that  this  is  so. Parliament deliberately  excluded a  joint Hindu family from the purview  of s.3  of the impugned Act. As already pointed out in Vasavaiah Chaudhary’s case, Parliament was beset with difficulties  in  imposing  a  ceiling  on  urban  immovable property. While dealing with imposition of ceiling on vacant urban land  it was presumably faced with another difficulty, viz., the  institution of a joint Hindu family. According to the Mitakshara  School of  Hindu Law,  there is community of interest and  unity  of  possession.  Under  the  Mitakshara School a copartner cannot predicate the extent of his share, while under  the Dayabhaga  school a  member of  joint Hindu family takes  as a  tenant in  common. We, therefore, do not find anything  wrong in  excluding a joint Hindu family. The impugned Act  applies to  Hindus, Mohamedans  and  Christian alike. By  the exclusion of a joint Hindu family the members of a  joint Hindu family, whether governed by the Mitakshara School or  the Dayabhaga  School, were  brought at  par with others. The contention that the impugned Act offends against Art.14 must, therefore, fail.      The contention  that the  amount fixed  by sub-s.(6) of s.11 of  the impugned  Act is totally arbitrary and illusory since there  is no  nexus between  the value of the property and the  amount fixed  and, therefore,  the  maximum  amount fixed under  sub-s.(6) makes  the Act  confiscatory in total abrogation  of   the  fundamental   right  guaranteed  under Art.31(2)  cannot   be  accepted.   The  Constitution  (25th Amendment) Act,  1971, which  came into  force on  April 20, 1972, by  s.2(a) substituted  the word ’amount’ for the word ’compensation’ in the new Art.31(2), which reads:           "31(2) No  property shall be compulsorily acquired      or requisitioned  save for a public purpose and save by      authority of a law which provides for acquisition or 939      requisitioning of  the property for an amount which may      be fixed  by such  law or  which may  be determined  in      accordance with  such  principles  and  given  in  such      manner as may be specified in such law; and no such law      shall be  called in question in any court on the ground      that the  amount so fixed or determined is not adequate      or that  the whole  or any part of such amount is to be      given otherwise than in cash." Under the  original Art.31(2), no property could be acquired for a  public purpose  under any law, unless it provided for compensation of,  or acquired and either fixed the amount of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 57 of 61  

the compensation,  or specified the principles on which, and the manner  in which,  the compensation was to be determined and given.      It will be seen that Art.31(2) provides for acquisition or requisitioning of the property for an amount which may be fixed by  such law, or which may be determined in accordance with such  principles and  given in  such manner  as may  be specified in such law. No such law can be called in question on the  ground that  the amount is not adequate, or that the whole or  any part  of it  is to  be given otherwise than in cash. Section  2(b) of the 25th Amendment Act inserted a new clause (2B) to Art.31 which provides:           "31.(2B) Nothing  in sub-clause  (f) of clause (1)      of article  19 shall affect any such law as is referred      to in clause (2)." The substitution  of the  neutral word ’amount’ for the word ’compensation’  in   the  new   Art.31(2)  still  binds  the legislature to  give to  the owner a sum of money in cash or otherwise.  The   legislature  may   either  lay   down  the principles for the determination of the amount or may itself fix the  amount. The  choice open to the legislature is that the amount  should be  directly fixed  by or  under the  law itself or  alternatively, the  law  may  fix  principles  in accordance with which the amount will be determined.      Sub-section (1) of s.11 reads:      "11(1) Where  any vacant  land is  deemed to  have been      acquired by any State Government under sub-section (3) 940      of section  10, such  State Government shall pay to the      person or persons having any interest therein,-           (a) in  a case where there is any income from such      vacant land,  an amount  equal to  eight and  one-third      times the  net average  annual income  actually derived      from such  land during  the period  of five consecutive      years immediately  preceding the date of publication of      the  notification   issued  under  sub-section  (1)  of      section 10; or           (b) in a case where no income is derived from such      vacant  land,  an  amount  calculated  at  a  rate  not      exceeding-           (i) ten  rupees per  square metre  in the  case of      vacant land  situated in an urban agglomeration falling      within category,  A or category B specified in Schedule      1; and           (ii) five  rupees per  square metre in the case of      vacant land  situated in an urban agglomeration falling      within category  C or  category D   specified  in  that      schedule." In order  that the  burden of  compensation,  that  is,  the amount payable  under Art.31(2)  for taking over vacant land in excess  of the ceiling limit in sub-s. (3) of s.10 by the government may  not be high, the Act incorporates a specific provision in  sub-s. (6)  of s.11  to fix  a ceiling  on the maximum amount  payable in  any single case. The sub-section reads:           "11(6) Notwithstanding  anything contained in sub-      section (1)  or sub-section  (5),  the  amount  payable      under either  of the  said sub-sections  shall,  in  no      case, exceed two lakhs of rupees." It is  not suggested  that sub-s.(1)  of s.  11 does not lay down any  principles for determination of the amount payable for  the   taking  of   excess  vacant  lands  in  an  urban agglomeration or  that the principles laid down in sub-s.(1) are  not  relevant  for  the  determination  of  the  amount payable. It is also not suggested that payment of the amount

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 58 of 61  

at the rate of Rs. 10 per sq. metre and Rs. 5 per sq. metre, 941 for the  vacant land  in categories  and B, and categories C and D  respectively, makes  the amount  illusory or  the Act confiscatory. The  submission is  that the  fixation of  the maximum amount  payable at  Rs. 2  lacs in  a single case by sub-s.(6) makes  the amount  payable under  sub-s (1) wholly illusory and,  therefore,  the  Act  is  confiscatory.  That cannot be so, because the fixation of ceiling on the maximum at Rs.  2 lacs  under s.11(6)  implies that  it would affect only persons  owning 20,000  sq. metres  of vacant  land  in metropolitan cities  like Delhi, Calcutta, Bombay and Madras or large cities like Hyderabad, Bangalore, Poona, Kanpur and Ahmedabad falling  in categories  A and B, or persons owning 40,000 sq.  meters in  big cities  like Lucknow,  Allahabad, Nagpur, Jaipur  etc. falling  in categories  C and D. One is left to  wonder how many own such vast tracts of vacant land in such  cities. If any, very few indeed. Even if there are, the amount  cannot be  related to  the value of the property taken. It  is pure  arithmetics. Twenty  thousand sq. metres would make  23,920 sq.  yards and  forty thousand sq. metres 47,840 sq. yards. In a city like Delhi, Calcutta, Bombay and Madras the  value of  a square  yards of  vacant land  would depend upon  the situation  of the  land.  If  that  be  the criteria, then  there can  be no  ceiling on  vacant land in urban  agglomerations,   much  less   geiling  on  immovable property in  such cities,  when it  comes to be imposed. The State has  not the  capacity to  bear  the  burden.  If  the contention  were   to  prevail,   then  no   law   for   the implementation of  the Directive  Principles of State Policy under Art. 39(b) or (c) can ever be implemented.      We may recall the words of Pandit Jawaharlal Nehru, who while introducing  the Constitution  (Fourth Amendment) Act, 1955, said in Parliament:           "If we  are aiming,  as I  hope we  are aiming and      verepeatedly say  we are  aiming,  at  changes  in  the      social structure,  then inevitably  we cannot  think in      terms of giving what is called full compensation. Why ?      Well,  firstly  because  you  cannot  do  it,  secondly      because it would be improper to do it, unjust to do it,      and it should not be done even if you can do it for the      simple reason  that in  all those  social matters, laws      etc.,  they   are  aiming  to  bring  about  a  certain      structure of  society different  from  what  it  is  at      present. In that different structure among other things      that will  change is  this, the big, difference between      the have’s  and the  havenot’s. Now,  if we  are giving      full 942      compensation, the  have’s remain  the  have’s  and  the      have-not’s, have-not’s.  It does not change in shape or      form if  compensation takes  place. Therefore,  in  any      scheme of  social engineering,  if I  may say  so,  you      cannot give  full compensation-apart  from  the  patent      fact that  you are  not in  a position-nobody  has  the      resources-to give it."      There can  be no  scheme  for  nationalisation  of  any industry, there  can be no socioeconomic measures enacted if the concept  of ’just equivalent’ were to be introduced even after the  25th Amendment.  To emphasise  the point that the amount of Rs. 2 lacs fixed under sub-s.(6) of s.11 makes the Act confiscatory,  our attention  was drawn to the fact that the petitioner  in writ  Petition No.  350 of  1977, Maharao Saheb shri  Bhim Singhji,  the former Maharana of Kotah owns 971.50 acres of vacant land appurtenant to and covered under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 59 of 61  

his Umed  Bhawan Palace  in the  city of  Kotah, which is an urban agglomeration  falling under  category ’D’,  and which stands  requisitioned  under  s.23(1)  of  the  Defence  and Internal Security  of India  Act, 1971.  There is no dispute that the property of the Maharana is valued for the purposes of the  Rajasthan Lands  and Buildings Tax Act, 1964, at Rs. 4,12,27,726.84. Does  it mean  that  the  amount  should  be geared to  the value  of the  vacant land taken under sub-s. (3) of  s 10?  When the  Court has  no power to question the adequacy of  the amount under Art.31(2), can it be said that the amount fixed determined according to the principles laid down in  sub-s.(1) of  s.11, subject  to the  maximum  fixed under  sub-s.(6)  thereof  is  illusory  merely  because  of inadequacy?      Who are  we to  say that  it should  be 10  per cent or less, or  50 per cent or more. The legislature in its wisdom has laid  down the  principles and  fixed a  ceiling on  the maximum amount  payable. That  is a legislative judgment and the Court  has no power to question it. Seeravai in his book on Constitution,  2nd Ed.,  vol.I, p.656, while dealing with the Fourth  Amendment states  that in permitting ’inadequate compensation’ the  4th Amendment  removed a fixed yard-stick and made  all discussion  about ’relevant’  and ’irrelevant’ principles meaningless. The learned author says:           "If the  questions were  asked, why  has  the  law      fixed compensation  amounting to 60 per cent and not to      70 or 50 per cent of the market value, the answer would      be that in the legislative judgment the amount fixed by      the law was 943      a fair  and just  compensation for  the acquisition  of      property  under  the  at  law,  and  if  a  law  fixing      compensation at  amounts ranging from 90 to 50 per cent      or less,  of the market value of the property acquired,      cannot be  struck down  by a Court, equally, principles      of compensation cannot be struck down when they produce      the same result. The consequences of the transformation      brought about  by the 4th Amendment is that ’principles      of compensation’  do not mean the same thing before and      after the 4th Amendment." As the  learned author  explains, ’considerations  of social justice are imponderable and, therefore no fixed money value can be  put on  them by  any principle’,  and goes on to say ’The question  whether the  Court can  go into  the question whether the  amount is illusory is difficult to answer’. The legislature considers  a maximum amount of Rs.2 lacs to be a fair and  just recompense  for  the  acquisition  of  excess vacant land in an urban agglomeration. By no standard can an amount of Rs.2 lacs be considered to illusory.      The 25th Amendment has placed the matter of adequacy of compensation beyond  the pale of controversy by substituting the word  ’amount’ for  the word ’compensation’ in Art.31(2) and made  the adequacy of the amount payable for acquisition or requisition of property nonjusticiable.      In Kesavananda  Bharti’s case,  the  Court  upheld  the constitutional validity of the 25th Amendment. The impact of the new  Article 31(2)  was also  considered as  well as the content and  meaning of  the word ’amount’. According to the majority, the  amount fixed  or determined to be paid cannot be illusory.  But one  thing is  clear the meaning which the Court placed  on the  word ’compensation’  in R. C, Cooper’s case of  adequacy of compensation and on relevant principles has been held to have been nullified by the 25th Amendment.      The two  decisions directly  in point  are the State of Kerala &  Anr. v.  The Gwalior Rayon Silk Mfg. Co. and State

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 60 of 61  

of Karnataka  v. Ranganatha  Reddy. In  Gwalior Rayon’s case the Court upheld 944 the validity  of the  Kerala Private  Forests  (Vesting  and Assignment) Act,  1971, which  provided for  the vesting  of private forest  lands held  in Janman  rights,  even  though there was  no provision  for payment  of  compensation.  The Court held that since the Act envisaged a scheme of agrarian reform, it  was protected  under Art.31A  and could  not  be challenged on  the ground  that it  take aways, a bridges or abrogates the  fundamental rights  guaranteed by Arts.14, 19 and 31. In Ranganatha Reddy’s case the Court upheld a scheme for nationalisation  of contract  carriages  in  the  State, since it  laid down  the principles for the determination of the  amount  payable  under  Art.31(2)  and  they  were  not irrelevant for  the determination of the amount. Untwalia J. speaking for the majority observed:           "On the  interpretations aforesaid  which we  have      put to  the relevant  provisions of  the  Act,  it  was      difficult rather impossible-to argue that the amount so      fixed will  be arbitrary  or illusory. In some respects      it may  be inadequate  but that  cannot be a ground for      challenge of  the constitutionality  of the  law  under      Article 31(2)." Krishna Iyer  J. in a separate but concurring judgment after deducing the  discernible principles  from the  decision  in Kesavananda Bharati’s  case, held  that the  25th  Amendment bars the Court’s jurisdiction to investigate the adequacy of the amount.  In view  of these two decisions, the contention that fixation  of maximum  amount by  sub-s. (6)  of  s.  11 renders the  amount payable  under sub-s. (1) illusory or in the  alternative   makes  the  Act  confiscatory  cannot  be accepted.      There  still   remains  the  contention  regarding  the invalidity of sub-s. (1) of s. 27, which reads:           "27. (1) Notwithstanding anything contained in any      other Law  for the  time being in force, but subject to      the provisions of sub-section (3) of section 5 and sub-      section (4)  of section 10, no person shall transfer by      way  of  sale,  mortgage,  gift,  lease  for  a  period      exceeding  ten   years,  or  otherwise,  any  urban  or      urbanisable land  with a  building (whether constructed      before or  after the  commencement of  this Act)  or  a      portion only of such building for a period of ten years      of such  commencement or  from the  date on  which  the      building is constructed, whichever 945      is  later,  except  with  the  previous  permission  in      writing of the competent authority."      It is  urged that sub-s. (1) of s. 27 confers arbitrary and uncontrolled  powers on the competent authority to grant or refuse  permission for transfer and that the conferral of such  uncontrolled   and  uncanalised   power  without   any guidelines  renders  the  provision  illegal  and  void  and unenforceable being an unreasonable restriction on the right to acquire,  hold and  dispose of  property guaranteed under Art. 19(1(f). It is said that the matter is left to the whim and fancy  of the  competent authority,  and  the  power  so conferred is  capable of misuse and thus be an instrument of great oppression. The learned Attorney General tried to meet the contention  by urging  that there was no reason to think that  the   competent  authority   would  refuse   to  grant permission where  the transaction is bona fide. According to him, the  competent authority would be justified in refusing to grant  permission where  the transaction is calculated to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 61 of 61  

defeat the  provisions of the Act. It is said that the whole object of freezing of the transactions was to hold the price line of  urban land. He drew our attention to the guidelines issued by  the Government  of India,  Ministry of  Works and Housing to  the various State Governments directing that all applications for  grant of permission under sub-s. (1) of s. 27 of the Act should be dealt with expeditiously with a view to prevent  any inconvenience  to the  members of the public and further  that permission  should be granted, as a matter of  course,  within  three  days  of  the  receipt  of  such application.      In my  judgment, there  is no  justification at all for the freezing  of transactions  by way of sale mortgage, gift or lease  of vacant  land or building for a period exceeding ten years,  or otherwise, for a period of ten years from the date of the commencement of the Act, even though such vacant land with  or without  building  thereon  falls  within  the ceiling limits.  In Excel  Wear v. Union of India & Ors. the Court held  that the right to carry on a business guaranteed under Art.  19(1) (g) carries with it the right not to carry on business.  It  must  logically  follow,  as  a  necessary corollary, that  the right  to acquire,  hold and dispose of property guaranteed to a citizen under Art. 19(1)(f) carries with it  the right not to hold any property. It is difficult to appreciate  how could  a  citizen  be  compelled  to  own property against his will. 946      If vacant  land owned  by a  person  falls  within  the ceiling limits for an urban agglomeration, he is outside the purview of  s. 3 of the Act. That being so, such a person is not governed  by any of the provisions of the Act. When this was pointed  out to  the learned  Attorney General,  he  was unable to  justify the imposition of the restriction imposed by sub-s.  (1) of  s. 27  in case of land falling within the ceiling  limits   as  a  reasonable  restriction.  It  must, accordingly, be  held that the provision of sub-s. (1) of s. 27 of  the impugned  Act is  invalid insofar  as it seeks to affect a citizen’s right to dispose of his urban property in an urban agglomeration within the ceiling limits.      I would  for the  reasons stated,  declare sub-sections (1) (2) and (3) of section 23 and the opening words "subject to the  provisions of  sub-sections (1),  (2)  and  (3)"  in section 23(4)  of the  Urban Land  (Ceiling and  Regulation) Act, 1976  as ultra  vires of  the Parliament and that these provisions are not protected under Articles 31-B and 31-C of the Constitution,  and further  declare that sub-section (1) of section  27 of the Act is invalid insofar as it imposes a restriction on  transfer of  urban property  for a period of ten years  from the  commencement of the Act, in relation to vacant land or building thereon, within the ceiling limits.      Having struck  down sub-sections  (1) (2)  and  (3)  of section 23  and the opening words "subject to the provisions of Sub-sections  (1), (2)  and (3)"  in section 23(4) of the Act, I  would declare  the remaining provisions of the Urban Land (Ceiling  and Regulation)  Act,  1976,  including  sub- section  (4)   of  section   23   thereof   as   valid   and constitutional.      In the result, the writ petitions, except to the extent indicated, must  fail and  are dismissed.  There shall be no order as to costs. S.R.       Petitions dismissed. 947