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PETITIONER: KRISHNA BHIMRAO DESHPANDE

       Vs.

RESPONDENT: LAND TRIBUNAL, DHARWAD AND ORS.

DATE OF JUDGMENT03/11/1992

BENCH: [LALIT MOHAN SHARMA AND K. JAYACHANDRA REDDY, JJ.]

ACT:      Constitution of India, 1950:      Article 252  read with  Schedule VII,  List n Entry 18- Legislation by Parliament Requirement-Central Law on ceiling on urban  immovable   property in pursuance of Resolution of State Legislature  State Laws  on other  matters relating to the subject-matter of resolution-Legality of.      Constitution of India, 1950:      Article 252, Schedule VII, list II, Entry 18-Urban Land (Ceiling and   Regulation)  Act,  1976  and  Karnataka  Land Reforms Act  as amended  in 1974  Object and application of- Whether any conflict between the Acts.

HEADNOTE: In the  year 1972  the Karnataka  Legislature passed  a resolution under  Article 252 of the Constitution imposing a ceiling on  urban immovable  property and the acquisition of such property  in excess  of the ceiling is limit for public purposes and  all the  matters connected  therewith shall be regulated in the State by Parliament by law. On 1.4.74  the Karnataka  Land Reforms  (Amendment) Act was enacted and under the Act the tenant of the land covered by the  Act was  entitled to  the grant  of occupancy rights after making  an application   under  the Act.  The Act came Into force  with effect  from 2.1.85. But for the purpose of grant of occupancy rights, 1.4.74 was the relevant date. In the  year 1975  the  Karnataka  Urban  Agglomeration Ordinance was  passed,  whereunder  all  lands  between  the periphery of  8 K.Ms.  of the   municipal  limits  of  Hubli Dharwad were declared as urban agglomeration land. The Parliament  passed  the  Urban  Land  (Ceiling  and Regulation) Act,  1976 for  imposition of  ceiling on  urban properties and  the  Ceiling  Act  was  made  applicable  to Karnataka also in view of the resolution passed by the State Government. The lands involved in the present cases were covered by the development  plan by  the  Belgaum  City  Town  Planning authority as  per the Master Plan and they were included and declared as  urban agglomeration  in the City of Hubli under the provisions of the Ceiling Act. The owners  of the  agglomeration lands  challenged the order of  the Land  Tribunal  under  the  Land  Reforms  Act conferring occupancy  rights on  the tenants before the High Court. They  contended that  the lands involved in the cases were within  the purview  of the  Ceiling Act and  therefore the provisions of the Land Reforms Act had no application to such lands  on the ground that the provisions of the Ceiling

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Act. The writ  petitions were  dismissed by  the High Court. The owner’s  writ appeals  were also  dismissed by  a common judgment by  the Division  Bench  of  the  High  Court.  The Division Bench  held that  there was no conflict between the two enactments. The judgment  of the  Division Bench  was challenged in S.L.P. (Civil) No. 16041-42/88. Many of  the similar  writ petitions  that were pending before the  High Court  were transferred to the Land Reforms Appellate Tribunal. The Appellate  Tribunal dismissed  the petitions  by  a common order following the judgment of the Division Bench of the High  Court. Several  Civil revision  petitions filed by the land  owners against the order of the Appellate Tribunal were dismissed  by the High Court. Some of the special leave petitions were  filed against the order of the High Court in the said civil revision petitions. The petitioners-land  owners  contended  that  when  in pursuance of  the resolution of the State Legislature passed under  Article   252  of  the  Constitution  the  Parliament legislated  in   respect  of   the  topic   covered  by  the resolution. The Parliamentary law repealed or superseded the existing State  legislation on  the topic and therefore such law could  not be  enforced thereafter;  and that vesting of tenanted land  in the  State  and  conferment  of  occupancy rights under  the provisions  of the State Act directly fall under the  subject of  imposing ceiling  on land holding and other matters  incidental or  ancillary to the main topic of imposing ceiling  and therefore  they were  fully covered by the Ceiling  Act passed  by the  Parliament and    the  same superseded the State enactment in respect of such lands. The respondents  submitted that "imposition of ceiling" was a  distinct and  separately identifiable subject and the Parliament was empowered to legislate; that the power of the State to  legislate in  respect of the remaining part of the subject-matter was  unaffected;  that  when  two    distinct powers came into existence, vesting law making competence in the State and Parliament, the pith and substance of the laws made by  each of  them had to be examined to see whether any one of them encroached the field set apart as falling within the competence  of the  other body;  that in  any event  the provisions of Chapter III of the Karnataka Land Reforms  Act had nothing  to do  with the  imposition of  ceiling on  the urban land  and that  conferring of occupancy rights etc. to the tenants  under Chapter III of the Karnataka Land Reforms Act  did  not  come  under  the  category  of  "the  matters connected  therewith  or  ancillary  or  incidental  to  the imposition of ceiling" on urban immovable property. Dismissing the special leave petitions, this Court, HELD: 1.01.  Article 252  empowers  the  Parliament  to legislate for  two or more States on any of the matters with respect of  which the  Parliament has  no power  to make law except as provided under Articles 249 and 250. This power to legislate is  vested in  the Parliament only if two  or more State  Legislatures think it desirable to have a law enacted by  Parliament on such matters in List II, i.e. with respect to which  the Parliament  has no  power to  make law for the State.  The   passing  of   the  resolutions  by  the  State Legislatures  is  a  condition  precedent  for  vesting  the Parliament with such power. [339-C-D] 1.02. The  scope of  Entry 18 is very wide and the land mentioned therein  may be  agricultural or  non-agricultural and may  be rural or urban. The subject-matter carved out of Entry 18  under the  resolutions passed by The various State

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Legislatures related  to only "urban immovable property" and by virtue  of the  resolution the law that can be enacted by the Parliament  should be  a law "imposing a ceiling on such urban immovable property." [340-B, C] 1.03. From the resolution it is clear that the subject- matter that  was resolved  to be entrusted to the Parliament was the  one imposing  a ceiling on urban immovable property and acquisition  of such  property in excess of the ceiling. This subject-matter  is the topic that falls within Entry 18 of List  II of  Schedule VII  to the  Constitution  and  the subject-matter of  Entry 18  has been  originally kept apart for the  State Legislature to make law and Parliament had no competence in  respect of  those matters  falling under  the wide scope  of Entry 18. By virtue of this resolution a part of the  area falling  under Entry  18 is  transferred to the domain of  Parliament to  make law  relating to  the matters within the transferred area. [339-G, H; 341-A] 2.01. The  primary object  and the purpose of the Urban Land (Ceiling  and Regulation)  Act, 1976  is to provide for the  imposition   of  ceiling   on  vacant   land  in  urban agglomeration and  for acquisition  of such lands in  excess of the  ceiling limit  and to  regulate the  construction of buildings on such lands and for matters connected therewith. [340-H; 341-A] 2.02. The Karnataka Land Reforms Act as amended in 1974 is a  welfare legislation. The object of the Act was to have a uniform  law in  the    State  of  Karnataka  relating  to agrarian  reforms,   conferment  of  ownership  on  tenants, ceiling on  land holdings  and  for  certain  other  matters contained therein. [342-D] 2.03. In  respect of imposing ceiling on the land under urban agglomeration  the provisions of the Ceiling Act alone are applicable  and to that extent the provisions of Chapter IV of  the Karnataka  Land Reforms  Act which also deal with the imposition of ceiling would not be applicable. [344-C] 2.04. The  land in  the instant  case comes  under  the urban agglomeration  the imposition  of the  ceiling  should naturally be  under the  provisions of the Urban Ceiling Act and not under the Karnataka Land Reforms Act. [344-B, C] 2.05. Imposition of ceiling on urban land is a distinct and independent subject as compared to imposition of ceiling on owning  or to hold agricultural land or any other kind of property which  do not  attract the Urban Ceiling Act. These are  two  distinct  powers  and  therefore  the  law  making competence can  be  in  two  different  legislative  bodies. Consequently it  is difficult to hold that the provisions of Chapter III  of the  Karnataka Land  Reforms Act are outside the legislative competence of the State  Legislature. [350-C, D] 2.06.  The   one  topic  that  is  transferred  in  the resolution  passed    under  Article  252  as  distinct  and separately identifiable  and does  not include the remaining topics under  Entry 18  in respect  of which the State alone has the power to legislate. [351-D] 2.07. The  legislative power  of the  State has  to  be reconciled with  that of  the Parliament  and that  in their respective fields  each is  supreme. Even  assuming that the State  enactment  has  same  effect  on  the  subject-matter falling within  the Parliament’s legislative competence that by itself  will not  render such law invalid or inoperative. [350-G-H] 2.08. There  is no conflict between the Ceiling Act and the State  Act. The imposition of ceiling on urban immovable property is an independent topic  and cannot be construed as

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to nullify the other subject left in the domain of the State Legislature under Entry 18 inasmuch as imposition of ceiling is a  distinct and  separately identifiable subject and does not  cover   the  other   measures  such  as  regulation  of relationship of  landlord and tenant in respect of which the State Legislature has competence to legislate. [351-C-D] 2.09. There  is a ceiling provision under Section 45(2) of the  Karnataka Land Reforms Act providing for computation of the  area in  respect of  which the tenant may be granted occupancy rights. But it is clear that ceiling on the area in  this context is only for the purpose of Section 45. [351-F] 2.10. Provisions  in the  Chapters II, III, V, VI to XI of the  Karnataka Land  Reforms Act deal with the conferment of occupancy  rights on  the respective  tenants and they do not in  any way conflict with the subject matter transferred to the  Parliament by  the resolution  passed under  Section 252. [351-E,F] Thumati Venkaiah  and others v. State of Andhra Pradesh and of  others, [1980]  4 SCC 295; Union of India and others v. Valluri Basavaiah Chowdhary and others, [1979] 3 SCC 324; Calcutta Gas  Company (Proprietory)  Ltd. v.  State of  West Bengal and  others, AIR  1962 SC 1044 and Kannan Devan Hills Produce Company Ltd. v. The State of Kerala etc., AIR 1972 SC 2301 referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) Nos. 16041-42/88.      From the  Judgment and  Order dated  27.7.1988  of  the Karnataka   High Court  in  W.P.  No  9173/86  and  W.A.  No 2707/85.                             WITH      SLP (C) Nos. 12258, 12254, 12260/90 & 8608/91      R.N. Narasimhamurthy,  S.S. Javali,  S.N. Bhat and Ravi P. Wadhwani for the Petitioners.      M.S.  Nesargi,   R.  Jagannath  Goulay,  M.K.  Dua,  M. Veerappa, K.H. Nobin Singh, S.K. Kulkarni and Surya Kant for the Respondents.      The following Order of the Court was delivered by      K. JAYACHANDRA  REDDY, J.  In all  these special  leave petitions the  common question that arises for consideration is whether the provisions of the Karnataka Land Reforms Act, 1961 as  amended in  1974 (‘Act’  for  short)  cease  to  be applicable in all respects to the lands which came within the purview  of the Urban Land (Ceiling and Regulation) Act, 1976 (’Ceiling  Act’ for short). The lands involved in these matters are  covered by  the development plan by the Belgaum City Town  Planning authority as per the Master Plan for the said City  and they  are  included  and  declared  as  urban agglomeration in  the City  of Hubli under the provisions of the Ceiling  Act. In the year 1972 the Karnataka Legislature passed a resolution under Article 252 of the Constitution to the effect  that  imposing  a  ceiling  on  urban  immovable property and  the acquisition of such property in excess  of the ceiling  limit for  public purposes  and all the matters connected therewith  shall be  regulated  in  the  State  by Parliament Qby  law. The  State  Legislature  thus  divested itself of the legislative competence to enact law in respect of subject-matter of the resolution. On 1.4.74 the amended Karnataka Land  Reforms Act  was enacted  and under the said Act the tenant of the land covered by the Act is entitled to the grant  of occupancy  rights after  making an application

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under the  Act. This  Act came  into force  with effect from 2.1.85. But  for the  purpose of  grant of  occupancy rights 1.4.74 was  the relevant date. While so in the year 1975 the Governor  of   Karnataka  passed   the  Urban  Aggolmeration Ordinance whereunder  all lands  between the  periphery of 8 K.Ms. of the municipal limits of Hubli Dharwad were declared as urban agglomeration land. In the year 1976 the Parliament passed the  Ceiling Act  for imposition  of ceiling on urban properties and the Act was made applicable to Karnataka also in view  of the  resolution passed  by the  State Government referred to  above. The order of the Land Tribunal under the Act  conferring   occupancy  rights   on  the   tenants  was challenged before  the High  Court contending that the lands involved in  these cases  were within  the  purview  of  the Ceiling Act and therefore the provisions of the Land Reforms Act had  no application to such lands on the ground that the provisions of the State Act were repugnant to the provisions of the Central Act namely the Ceiling Act. The writ petition was dismissed  by the  High Court. The owners preferred writ appeals and they were also dismissed by a common judgment in Writ Appeal  Nos. 2707  and 2361/85  etc. The Division Bench held that  there is no conflict between the two enactment in certain respect i.e. atleast so far as the implementation of the provisions  of Chapter  III of the Act are concerned and that provisions  of this  Chapter of the Act do not cease to apply to the agricultural lands coming within the meaning of urban agglomeration  in the Ceiling Act. The judgment of the Division Bench  is challenged  in S.L.P.(Civil)  No.  16041- 42/88. Many  of the similar writ petitions that were pending before the  High Court  were transferred to the Land Reforms Appellate Tribunal.  The Appellate  Tribunal  dismissed  the petitions by  a common  order following  the judgment of the Division Bench  of the  High Court in Writ Appeal No.2707/85 and connected  matters. Several  civil  revisions  petitions filed by  the land owners against the order of the Appellate Tribunal were  dismissed by  the High  Court.  Some  of  the special leave  petitions are  filed against the order of the High Court  in the  said civil revision petitions. Therefore all these  special leave  petitions can  be disposed of by a common order.      It was urged before us that the resolution of the State Legislature passed  under Article  252 of  the  Constitution shifted the  topic covered by the resolution from List II of Schedule VII  to the  Constitution and vested the competence to make  the law  in  respect  of  the  said  topic  in  the Parliament and that thereafter the State enactment ceased to have efficacy in respect of said topic. Alternatively it was urged  that,   when  in  pursuance  of  the  resolution  the Parliament legislates in respect of the topic covered by the resolution, the Parliamentary law, repeals or supersedes any existing State  legislation on  the topic and therefore such law cannot be enforced  thereafter.      We shall  first extract some of the relevant provisions of the  Constitution of India and the respective enactments. Article 246 of the Constitution  reads thus:      "246. Subject-matter  of laws  made      by   Parliament   and   by      the      Legislatures     of      States-(l)      Notwithstanding     anything     in      clauses (2) and (3), Parliament has      exclusive power  to make  laws with      respect  to   any  of  the  matters      enumerated  in   List    I  in  the      Seventh    Schedule     (in    this      Constitution referred  to   as  the

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    "Union List").      (2) xx    xx                  xx      (3) Subject to clauses (1) and (2),      the Legislature  of any   State has      exclusive power  to make  laws  for      such State  or   any  part  thereof      with respect  to any of the matters      enumerated  in   List  II   in  the      Seventh    Schedule     (in    this      Constitution  referred  to  as  the      "State List").      (4)xx           xx         xx " 2      Entry 18  in List  II namely  the State List of the VII Schedule to the Constitution is in the following terms:      "18. Land,  that is  to say, rights      in  or   over  land,  land  tenures      including the  relation of landlord      and tenant,  and the  collection of      rents, transfer  and alienation  of      agricultural land; land improvement      and       agricultural       loans;      colonization." Article 252  of the  Constitution  reads thus:      "252.  Power   of   Parliament   to      legislate for  two or  more  States      by consent  and  adoption  of  such      legislation by any  other State-(1)      If it  appears to  the Legislatures      of  two  or    more  States  to  be      desirable that  any of  the matters      with   respect to  which Parliament      has no  power to make laws for  the      States  except   as   provided   in      Articles  249  and  250  should  be      regulated   in   such   States   by      Parliament   by    law,   and    if      resolutions  to   that  effect  are      passed by  all the  Houses  of  the      Legislatures of  those  States,  it      shall be  lawful for  Parliament to      pass an  Act  for  regulating  that      matter accordingly,  and any Act so      passed shall  apply to  such States      and to  any other State by which it      is adopted afterwards by resolution      passed in  that behalf by the House      or, where  there are two Houses, by      each   of   the   Houses   of   the      Legislature of that State.      (2) Any Act so passed by Parliament      may be  amended or   repealed by an      Act of Parliament passed or adopted      in like   manner  but shall not, as      respects  any  State  to  which  it      applics, be  amended or repcaled by      an Act  of the  Legislature of that      State."      Article 252  empowers the  Parliament to  legislate for two or  more States  on any  of the  matters with respect of which the  Parliament has  no power  to make  law except  as provided under Articles 249 and 250. This power to legislate is vested  in the  Parliament only  if  two  or  more  State Legislatures think  it desirable  to have  a law  enacted by

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Parliament on  such matters  in List II i.e. with respect to which the Parliament has no power to make law for the State. The passing  of the resolutions by the State Legislatures is a condition  precedent for  vesting the Parliament with such power. The  relevant portion of the resolution passed by the State Legislature under Article 252 reads thus:      "Now, therefore,  in  pursuance  of      clause (1)  of Article  252  of the      Constitution, this  Assembly hereby      resolves that  the  imposition of a      ceiling on urban immovable property      and F  acquisition of such property      in excess  of the  ceiling and  all      matters  connected   therewith   or      ancillary and  incidental   thereto      should be regulated in the State of      Karnataka by  Parliament by law."      The resolution states that the imposition of ceiling on urban immovable    property  and  the  acquisition  of  such property in  excess of  the ceiling  limit with  a  view  to utilising such excess property for public purposes and all other matters  connected therein or incidental thereto shall be regulated  in this  State by Parliament by law. The basic question that  arises is  what is  the actual content of the subject-matter  that   was  resolved   to  be  entrusted  to Parliament by the State Legislature under Article 252 of the Constitution. From  the resolution  it  is  clear  that  the subject-matter that  was resolved  to be  entrusted  to  the Parliament was the one imposing a ceiling on urban immovable property and  acquisition of  such property in excess of the ceiling. It  is true  that this  subject-matter is the topic that falls within Entry 18 of List 11 of Schedule VII to the Constitution and  the said  subject-matter of  Entry 18  has been originally kept apart for the State Legislature to make law and  Parliament had  no competence  in respect  of those matters falling  under the  wide scope  of Entry  18. Now by virtue of  this resolution  a part of the area falling under Entry 18  is transferred to the domain of Parliament to make law relating to the matters within the transferred area. The scope of  Entry 18  is very  wide  and  the  land  mentioned therein may  be agricultural  or non-agricultural and may be rural or  urban. The  subject-matter carved  out of Entry 18 under  the   resolutions  passed   by  the   various   State Legislatures related to only- "urban immovable property" and by virtue  of the  resolution the law that can be enacted by the Parliament  should be  a law "imposing a ceiling on such urban   immovable property.  The  learned  counsel  for  the petitioners, however, urged that vesting of tenanted land in the State  and conferment  of  occupancy  rights  under  the provisions of  the State Act directly fall under the subject of  imposing  ceiling  on  and  holding  and  other  matters incidental or  ancillary  to  the  main  topic  of  imposing ceiling and  therefore they are fully covered by the Ceiling Act passed  by the  Parliament and  the same  supersedes the State enactment in respect of this land. The learned counsel appearing for the respondents on the contrary submitted that "imposition  of   ceiling"  is  a  distinct  and  separately identifiable subject and is the power carved out of Entry 18 and vested in the Parliament to legislate and that the power of the  State to  legislate in respect of the remaining part of the  subject-matter   is unaffected  and  that  when  two distinct powers have come into existence, vesting law making competence  in  the  State  and  Parliament,  the  pith  and substance of  the laws  made by  each  of  them  has  to  be examined to see whether any one of them encroaches the field

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set apart  as falling  within the  competence of  the  other body. The  learned counsel  for  the  respondents,  however, submitted that in any event the provisions of Chapter III of the Act have nothing to do with the imposition of ceiling on the urban  land and that conferring of occupancy rights etc. to the  tenants under  Chapter 111  of the  Act do  not come under the  category of  "the matters  connected therewith or ancillary or  incidental to  the imposition  of ceiling"  on urban immovable property.      Now we  shall refer  to the  provisions  of  the  Urban Ceiling Act.  The Statement  of Objects  and  Reasons  under Preamble to  the said Act would show that the primary object and the  purpose is to provide for the imposition of ceiling on vacant land in urban agglomeration and for acquisition of such lands  in excess  of the  ceiling limit and to regulate the      Marwaha and  others. [1974]  1  SCR      165; Miss Neelima  Shangla v. State      of Haryana and others, [1986] 4 SCC      268, or  Jitendra Kumar  and others      v.  State  of  Punjab  and  others:      [1985] 1 SCR 899."      If we  have regard  to the  above  enunciation  that  a candidate who  finds  a  place  in  the  select  list  as  a candidate selected for appointment to a civil post, does not acquire an  indefeasible  right  to  be  appointed  in  such posting the  absence of  any specific Rule entitling him for such appointment  and he  could be  aggrieved  by  his  non- appointment only  when the  Administration  does  so  either arbitrarily or  for no  bona fide  reasons, it  follows as a necessary concomitant  that such  candidate even  if  has  a legitimate expectation  of being appointed in such posts due to  his   name  finding  a  place  in  the  select  list  of candidates, cannot  claim to have a right to be heard before such select  list is  cancelled  for  bona  fide  and  valid reasons and not arbitrarily:  In  the  instant  case,  when  the  Chandigarh Administration  which  received  the  complaints  about  the unfair and  injudicious  manner  in  which  select  list  of candidates for appointment as conductors in CTU was prepared by the  Selection Board  constituted for  the purpose, found those complaints  to be  well founded on an enquiry got made in that  regard, we  are unable  to find that the Chandigarh Administration had  acted either arbitrarily or without bona fide and  valid reasons  in cancelling  such 0dubious select list. Hence,  the contentions of the learned counsel for the Respondents as  to the sustainability of the Judgment of CAT under  appeal   on  the   ground  of   non-affording  of  an opportunity of hearing to the Respondents (candidates in the select list)  is a  misconceived  one  and  is  consequently rejected.      In the  result, we  allow this  appeal, set  aside  the Judgment under   appeal, and reject the applications made by Respondents before  CAT, Chandigarh.  However, in  the facts and circumstances  of this  appeal, we  make no  order as to costs.  G.N.                                 Appeal allowed. FOOD CORPORATION OF INDIA V. KAMDHENU CATTLE FEED INDUSTRIES NOVEMBER 3, 1992 [J.S. VERMA, YOGESHWAR DAYAL AND  N. VENKATACHALA, JJ.] Constitution of India, 1950: Article  14-Contractual   transactions  of   State  or   its

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instrumentality-Essential      requisites-Non-arbitrariness, fairness in  action  and  due  consideration  of  legitimate expectation-Ignoring  the   highest  bid-  Negotiations  for higher offer and acceptance thereof-Validity of.  Administrative Law: Doctrine  of   legitimate  expectation-Forms   part  of  non arbitrariness and  Rule of  Law- To  be  determined  in  the larger public interest Open to judicial review.      The appellant-Corporation  invited tenders  for sale of stocks of  damaged food-grains. The respondent’s bid was the highest. Since  the appellant  was not  satisfied about  the adequacy of  the amount  offered even in the highest tender, it  invited   all  the   tenders  to   participate  in   the negotiations,  instead  of  accepting  the  highest  tender. During the course of negotiations, the respondent refused to revise the  rates in  its offer. On the basis of the highest bid made  during the negotiations, the appellant disposed of the stocks of damaged foodgrains, rejecting the highest tenders. The  respondent,  whose  tender  was  the  highest, challenged the  decision of  the appellants by filing a Writ Petition before  the High  Court. It  was contended that the action of the appellant was arbitrary and hence violative of Art. 14  of the  Constitution. The  High Court  accepted the contention and allowed the Writ Petition. Being aggrieved by the  High   Court’s   decision   the   appellant-Corporation preferred the present appeal.      It was  contended on behalf of the appellant that there being no  right in  the person submitting the highest tender to claim  acceptance thereof,  and since  all tenderers were given equal  opportunity to  participate in the negotiations and to  revise the  bid before acceptance, the action of the appellant was not arbitrary.      The Respondent  contended that  since no cogent reasons were  indicated  for  rejecting  all  the  tenders  and  for deciding to  dispose of  the stock  by negotiating  with the tenderers for  procuring a higher price, such a decision was arbitrary.      Allowing the appeal, this Court,      HELD: 1.1.  In contractual sphere as in all other State actions, the  State and  all its  instrumentalities have  to conform to  Article 14  of the  Constitution of  which  non- arbitrariness is a significant facet. There is no unfettered discretion in  public  law.  A  public  authority  possesses powers   only to  use them for public good. This imposes the duty to  act fairly  and  to  adopt  a  procedure  which  is ‘fairplay in action’. Due observance of this obligation as a part  of   good  administration   raises  a   reasonable  or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this  element forming  a   necessary component  of  the decision making  process in  all State  actions. To  satisfy this requirement  of non-arbitrariness in a State action, it is  necessary  to  consider  and  give  due  weight  to  the reasonable-or legitimate  expectations of the persons likely to be  affected by  the decision  or else that unfairness in the exercise  of the  power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a  given case.   The decision so made would be exposed to challenge on  the ground  of arbitrariness. Rule of law does not completely  eliminate  discretion  in  the  exercise  of power, as it is unrealistic, but provides for control of its exercise by judicial review. [328-A-D]      12. The  mere reasonable or legitimate expectation of a citizen, in  such a  situation,  may  not  by  itself  be  a distinct enforceable right, but failure to consider and give

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due weight to it may render the decision arbitrary, and this is how  the requirement of due consideration of a legitimate expectation  forms   part   of   the   principle   of   non- arbitrariness, a  necessary concomitant  of the rule of law. Every legitimate expectation is a  relevant factor requiring due consideration in a fair decision making process. Whether the expectation  of the claimant is reasonable or legitimate in the  context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant’s  perception but  in  larger  public  interest wherein other  more important  considerations  may  outweigh what would otherwise have been the legitimate expectation of the claimant.  A bona  fide decision of the public authority reached in this manner would satisfy the requirement of non- arbitrariness and withstand judicial scrutiny. [328-E-G]      2.1. Even  though the  highest tenderer  can  claim  no right to  have his   tender  accepted, there  being a  power while inviting  tenders to  reject all the tenders, yet that power cannot  be exercised  arbitrarily and  must depend for its validity  on the  existence of  cogent reasons  for such action. The  object of  inviting tenders  for disposal  of a commodity is to procure the highest price while giving equal opportunity to  all  the  intending  bidders  to    compete. Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund. Accordingly, inadequacy of the price offered in the highest  tender would be a cogent ground for negotiating with the  tenderers giving  them equal opportunity to revise their bids  with a  view to  obtain  the  highest  available price. Retaining the option to accept the highest tender, in case the   negotiations  do not yield a significantly higher offer would  be fair to the tenderers besides protecting the public interest.  A  procedure  wherein  resort  is  had  to negotiations   with    the   tenderers   for   obtaining   a significantly higher  bid during  the period when the offers in the  tenders remain  open for acceptance and rejection of the tenders  only in  the event  of a significant higher bid being obtained  during negotiations would ordinarily satisfy this requirement.  This procedure involves giving due weight to the  legitimate expectation of the highest bidder to have his tender  accepted unless  outbid by  a higher  offer,  in which case  acceptance of  the highest offer within the time the offers  remain open  would be  a reasonable  exercise of power for public good. [329-E-H; 330-A]      Shanti Vijay  & Co.  etc. v.  Princess Fatima  Fouzia & Ors. etc., [1980] I S.C.R. 459, relied on.      Council of  Civil Service Unions and Others v. Minister for the  Civil Service,  1985 A.C.  374 (H.L.),  and  In  re Preston, 1985 A.C. 835 (H.L.), referred to.      22. In  the  instant  case,  the  respondent’s  highest tender was  super seded  only by  a significantly higher bid made during  the negotiations with all tenderers giving them equal opportunity  to compete  by revising  their bids.  The fact that  it was  a significantly  higher bid  obtained  by adopting the  right course is sufficient to demonstrate that the action  of the  appellant satisfied  the requirement  of non-arbitrariness, and it was taken for the cogent reason of inadequacy of the price offered in the highest tender, which reason was  evident to  all tenderers invited to participate in the negotiations and to revise their bids. The High Court was in error in taking the contrary view. [330-D-E]      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4731 of  1992.      From the Judgment and Order dated 21.7.92 of the C.W.N. 7419 of 1992.

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    Y.P. Rao for the Appellant.      Ashok Sen,  H.L. Aggarwal,  and K.K. Gupta (NP) for the Respondent.      The Judgment of the Court was delivered by      VERMA, J. Leave granted.      The appeal  by special  leave under  Article 136 of the Constitution is against the judgment and order dated 21.7.92 by which  the Civil Writ  Petition No. 7419 of 1992 has been allowed by  the Punjab  & Haryana  High Court  directing the appellant  Food   Corporation  of  India  to  allot  to  the respondent the  necessary stocks  of damaged  rich for which the tenders  had been  invited by  the appellant,  since the respondent was the highest bidder.      The appellant  invited tenders  for sale  of stocks  of damaged  foodgrains   in  accordance   with  the  terms  and conditions contained  in the  tender notice  (Annexure ‘A’). The tenders  were required to be submitted upto 2.45 p.m. on 18.5.92; the  tenders were  to be  opened on 18.5.92 at 3.00 p.m.; and offers were to remain open for acceptance upto and inclusive of  17.7.92. The  respondent submitted  its tender for a  stock of damaged rice  within the time specified, but the respondent’s  tender was conditional and the full amount of  earnest  money  required  by  the  terms  was  also  not deposited. It  is, however,  not necessary  to  mention  the particulars of these two deficiencies in respondent’s tender since they  appear to  have been waived by the appellant and are not  relied on  before us  to  support  the  appellant’s action. The  respondent’s bid  in the  tender was admittedly the highest  as found  on opening,  the tenders.  lt appears that the  appellant was  not satisfied about the adequacy of the amount  offered in  the highest  tenders for purchase of the stocks  of damaged foodgrains and, therefore. instead of accepting  any  of  the  tenders  submitted,  the  appellant invited all  the tenderers to participate in the negotiation on 9.6.92.  The  respondent  refused  to  revise  the  rates offered in  its tender.  It was  Rs.  245  per  quintal  for certain lots  of this  stock;, while  the highest offer made during  the   negotiations  was   Rs.  275.72  per  quintal. Similarly, as  against the respondent’s offer of Rs. 201 per quintal in  respect of  some other  lots, the  highest offer made during  the negotiation  was Rs. 271.55 per quintal. On this basis,  the appellant  was  to  receive  an  additional amount of  Rs. 8  lakhs by  accepting the highest offer made during the negotiations over the total amount offered by the respondent for  the stock  of  damaged  rice.  Overall,  the appellant was  offered an  excess amount of Rs. 20 lakhs for the entire  stock of damaged foodgrains in the highest offer made during  the negotiations, inasmuch as against the total amount   Rs.90 lakhs which the appellant would have received by acceptance  of the  highest tenders, the appellant was to receive the  amount of Rs. 1 crore 10 lakhs by accepting the highest offers made during the negotiations in which all the tenderers,  including   the  respondent,  were  given  equal opportunity to participate.      The respondent  filed the  above Writ  Petition in  the High Court challenging the appellant’s refusal to accept the highest tender submitted by it for the stock of damaged rice claiming that the appellant having chosen to invite tenders, it could  not thereafter  dispose of  the stocks  of damaged foodgrains by subsequent negotiations rejecting the highest tenders on  the ground  that a  higher bid  was obtained  by negotiations. This  action of  the appellant, was alleged to be arbitrary  and, therefore,  in  substance,  violative  of Article 14  of the  Constitution.  The  High  Court  by  its impugned order  accepted this  contention of  the respondent

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and allowed the Writ Petition. Hence, this appeal.      It is  not disputed  that according  to the  terms  and conditions on  which the  appellant had invited tenders, the appellant had  reserved the  right to reject all the tenders and, therefore,  the highest  tender was  not  bound  to  be accepted. Learned  counsel for  the appellant submitted that there being  no right  in the  person submitting the highest tender to claim acceptance of the tender, in a case like the present. where  all the  tenderers including the respondent, were invited  for negotiation and given equal opportunity to participate and  to revise  the bid before acceptance of the highest bid  offered during  negotiation which  resulted  in obtaining an  additional amount of Rs. 8 lakhs for the stock relating to  respondent’s tender  and an overall gain of Rs. 20  lakhs  in  disposal  of  the  entire  stock  of  damaged foodgrains, the  action of the appellant could not be termed arbitrary. In  reply, Shri A.K. Sen, learned counsel for the respondent contended  that even though the appellant had the right to  reject any  tender, including  the highest tender, and thereafter  negotiate with  all the tenderers to procure the highest  price for  the commodity, yet this right has to be exercised  reasonably and not arbitrarily, otherwise, the credibility of  the procedure  of sale  by inviting  tenders would be  lost. Shri Sen submitted that the  decision not to accept any  tender and to negotiate thereafter for obtaining a higher  price than  that quoted in the highest bid, cannot be taken  on the whim and caprice of the concerned authority and can  be only  for cogent  reasons indicated while taking the decision,  or else,  the decision would be arbitrary. On this basis,  Shri Sen  further submitted that in the present case, no cogent reasons were indicated for rejecting all the tenders  and   deciding  to  dispose  of  the  commodity  by negotiation with the tenderers for procuring a higher price. He also  added that  the mere  fact that  a higher price was obtained by negotiation would not justify the decision if it was not  taken in  the manner permissible. This was the only submission of  Shri Sen  to support the decision of the High Court.      In our  view, Shri  A.K. Sen is right in the first part of  his  submission.  However,  in  the  present  case,  the respondent does  not get  any benefit  therefrom.  The  High Court’s decision  is based  on the  only  ground  that  once tenders have  been invited  and the  highest bidder has come forward to  comply with  the conditions  stipulated  in  the tender notice,  it is  not permissible  to  switch  over  to negotiation with  all the  tenderers and  thereby reject the highest  tender.   According  to  the  High  Court,  such  a procedure is  not countenanced  by the  rule of law. This is not the same, as the submission of Shri Sen which is limited to permissibility  of such  a course  only on cogent grounds indicated while  deciding to switch over to the procedure of negotiation after  receiving  the  tenders  to  satisfy  the requirement of non arbitrariness, a necessary concomitant of the rule  of law.  The proposition  enunciated by  the  High Court which forms the sole basis of its decision is too wide to be  acceptable and  has  to  be  limited  in  the  manner indicated hereafter.      In contractual  sphere as  in all  other State actions, the State  and all  its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant  facet. There  is no  unfettered discretion in public law:  A public authority possesses powers only to use them for public good. This impose the duty to act fairly and to adopt  a procedure  which is  ‘fairplay in  action’.  Due observance  of   this  obligation   as  a   part   of   good

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administration raises a reasonable or legitimate expectation in every  citizen to  be treated  fairly in  his interaction with the  State and its instrumentalities, with this element forming a necessary component of the decision making process in all  State actions.  To satisfy  this requirement of non- arbitrariness in a State action, it is, therefore, necessary to consider  and  give  due  weight  to  the  reasonable  or legitimate expectations of the persons likely lo be affected by the  decision or  else that unfairness in the exercise of the power  may amount  to an  abuse or excess of power apart from affecting  the bona  fides of  the decision  in a given case. The  decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion  in the  exercise of  power, as  it  is unrealistic, but  providers for  control of  its exercise by judicial review.      The mere  reasonable or  legitimate  expectation  of  a citizen, in  such a  situation,  may  not  by  itself  be  a distinct enforceable  right, but  failure to   consider  and give due weight to it may render the decision arbitrary, and this is  how the  requirement  of  due  consideration  of  a Legitimate expectation  forms part  of the principle of non- arbitrariness, a  necessary concomitant  of the rule of law. Every legitimate  expectation is a relevant factor requiring due consideration  a fair  decision making  process. Whether the expectation  of the claimant is reasonable or legitimate in the  context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant’s  perception but  in  larger  public  interest wherein other  more important  considerations  may  outweigh what would otherwise have been the legitimate expectation of the claimant.  A bona  fide decision of the public authority reached in  this manner  would satisfy  the   requirement of non-arbitrariness  and   withstand  judicial  scrutiny.  The doctrine of  legitimate expectation  gets assimilated in the rule of  law and operates in our legal system in this manner and to this extent.      In Council  of  Civil  Service  Unions  and  Others  v. Minister for  the Civil  Service, 1985  A.C. 374  (H.L.) the House of  Lords indicated the extent to which the legitimate expectation  interfaces   with  exercise   of  discretionary power. The impugned action was upheld as reasonable, made on due consideration  of all  relevant  factors  including  the legitimate  expectation   of  the   applicant,  wherein  the considerations of  national security  were found to outweigh that  which   otherwise  would   have  been  the  reasonable expectation of  the applicant. Lord Scarman pointed out that ‘the controlling  factor in determining whether the exercise of prerogative  power is  subject  to judicial review is not its source  but its  subject-matter’. Again in In re preston 1985 A.C. 835 (H.L.) it was stated by Lord Scarman that ‘the principle of  fairness has  an important place in the law of judicial review’  ant ‘unfairness  in the purported exercise of a  power can  be such  that it  is an  abuse of excess of power’. These decisions of the House of Lords give a similar indication of the significance of the doctrine of legitimate expectation. Shri  A.K. Sen  referred to  Shanti Vijay & Co. etc. v.  Princess Fatima Fouzia & Ors. etc., [1980] 1 S.C.R. 459,  which   holds  that   court  should   interfere  where discretionary power  is not exercised reasonably and in good faith.      From the  above, it  is  clear  that  even  though  the highest tenderer  can claim  no right  to  have  his  tender accepted, there  being a  power while  inviting  tenders  to reject all  the tenders,  yet the  power to  reject all  the

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tenders cannot  be exercised arbitrarily and must depend for its validity  on the  existence of  cogent reasons  for such action. The  object of  inviting   tenders for disposal of a commodity is to procure the highest price while giving equal opportunity  to   all  the  intending  bidders  to  compete. Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund. Accordingly, inadequacy of the price offered in the highest  tender would be a cogent ground for negotiating with the  tenderers giving  them equal opportunity to revise their bids  with a  view to  obtain  the  highest  available price. The  inadequacy may  be for  several reasons known in the commercial field. Inadequacy of the prince quoted in the highest tender  would be  a question  of fact  in each case. Retaining the  option to  accept the highest tender, in case the negotiations  do not  yield a significantly higher offer would be fair to the tenderers besides protecting the public interest. A  procedure wherein resort is had to negotiations with the  tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance  and rejection  of the  tenders only  in  the event of  a significant  higher bid  being  obtained  during negotiations would ordinarily satisfy this requirement. This procedure involves  giving  due  weight  to  the  legitimate expectation  of  the  highest  bidder  to  have  his  tender accepted unless  outbid by  a higher  offer, in  which  case acceptance of  the highest  offer within the time the offers remain open would be a reasonable exercise  power for public good.      In the present case, the last date upto which the offer made in  the tender  was to  remain open  for acceptance was 17.7.92. After opening the tenders on 18.5.92, the appellant decided to  negotiate with  all the tenderers on 9.6.92 when significantly  higher  amount,  as  indicated  earlier,  was offered above  the amount  quoted in  the highest tender. In such a  situation, if  the negotiations  did not  yield  the desirable result  of obtaining a significantly higher price, the appellant  had the  option to  accept the highest tender before the  last date,  viz., 17.7.92  upto which  the offer made therein  was to  remain open  for acceptance.  In  this manner, the  respondent’s higher  tender was superseded only by a  significantly higher  bid made during the negotiations with all  tenderers giving them equal opportunity to compete by revising their bids. The fact that it was a significantly higher bid obtained by adopting this course is sufficient in the facts of the present case to demonstrate that the action of  the   appellant  satisfied   the  requirement   of  non- arbitrariness, and  it was  taken for  the cogent  reason of inadequacy of the price offered in the highest tender, which reason was  evident to all  tenderers invited to participate in the negotiations and to revise their bids. The High Court was in error in taking the contrary view. Consequently, this  appeal is allowed. The impugned judgment of the  High Court  is set  aside, resulting in dismissal of the respondent’s writ petition, No costs,  G.N.                                      Appeal allowed. KRISHNA BHIMRAO DESHPANDE v. LAND TRIBUNAL, DHARWAD AND ORS. NOVEMBER 3, 1992 [LALIT MOHAN SHARMA AND K. JAYACHANDRA REDDY, JJ.]      Constitution of India, 1950:      Article 252  read with  Schedule VII,  List n Entry 18- Legislation by Parliament Requirement-Central Law on ceiling on urban  immovable   property in pursuance of Resolution of

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State Legislature  State Laws  on other  matters relating to the subject-matter of resolution-Legality of.      Constitution of India, 1950:      Article 252, Schedule VII, list II, Entry 18-Urban Land (Ceiling and   Regulation)  Act,  1976  and  Karnataka  Land Reforms Act  as amended  in 1974  Object and application of- Whether any conflict between the Acts.      In the  year 1972  the Karnataka  Legislature passed  a resolution under  Article 252 of the Constitution imposing a ceiling on  urban immovable  property and the acquisition of such property  in excess  of the ceiling is limit for public purposes and  all the  matters connected  therewith shall be regulated in the State by Parliament by law.      On 1.4.74  the Karnataka  Land Reforms  (Amendment) Act was enacted and under the Act the tenant of the land covered by the  Act was  entitled to  the grant  of occupancy rights after making  an application   under  the Act.  The Act came Into force  with effect  from 2.1.85. But for the purpose of grant of occupancy rights, 1.4.74 was the relevant date.      In the  year 1975  the  Karnataka  Urban  Agglomeration Ordinance was  passed,  whereunder  all  lands  between  the periphery of  8 K.Ms.  of the   municipal  limits  of  Hubli Dharwad were declared as urban agglomeration land.      The Parliament  passed  the  Urban  Land  (Ceiling  and Regulation) Act,  1976 for  imposition of  ceiling on  urban properties and  the  Ceiling  Act  was  made  applicable  to Karnataka also in view of the resolution passed by the State Government.      The lands involved in the present cases were covered by the development  plan by  the  Belgaum  City  Town  Planning authority as  per the Master Plan and they were included and declared as  urban agglomeration  in the City of Hubli under the provisions of the Ceiling Act.      The owners  of the  agglomeration lands  challenged the order of  the Land  Tribunal  under  the  Land  Reforms  Act conferring occupancy  rights on  the tenants before the High Court. They  contended that  the lands involved in the cases were within  the purview  of the  Ceiling Act and  therefore the provisions of the Land Reforms Act had no application to such lands  on the ground that the provisions of the Ceiling Act.      The writ  petitions were  dismissed by  the High Court. The owner’s  writ appeals  were also  dismissed by  a common judgment by  the Division  Bench  of  the  High  Court.  The Division Bench  held that  there was no conflict between the two enactments.      The judgment  of the  Division Bench  was challenged in S.L.P. (Civil) No. 16041-42/88.      Many of  the similar  writ petitions  that were pending before the  High Court  were transferred to the Land Reforms Appellate Tribunal.      The Appellate  Tribunal dismissed  the petitions  by  a common order following the judgment of the Division Bench of the High  Court. Several  Civil revision  petitions filed by the land  owners against the order of the Appellate Tribunal were dismissed  by the High Court. Some of the special leave petitions were  filed against the order of the High Court in the said civil revision petitions.      The petitioners-land  owners  contended  that  when  in pursuance of  the resolution of the State Legislature passed under  Article   252  of  the  Constitution  the  Parliament legislated  in   respect  of   the  topic   covered  by  the resolution. The Parliamentary law repealed or superseded the existing State  legislation on  the topic and therefore such law could  not be  enforced thereafter;  and that vesting of

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tenanted land  in the  State  and  conferment  of  occupancy rights under  the provisions  of the State Act directly fall under the  subject of  imposing ceiling  on land holding and other matters  incidental or  ancillary to the main topic of imposing ceiling  and therefore  they were  fully covered by the Ceiling  Act passed  by the  Parliament and    the  same superseded the State enactment in respect of such lands.      The respondents  submitted that "imposition of ceiling" was a  distinct and  separately identifiable subject and the Parliament was empowered to legislate; that the power of the State to  legislate in  respect of the remaining part of the subject-matter was  unaffected;  that  when  two    distinct powers came into existence, vesting law making competence in the State and Parliament, the pith and substance of the laws made by  each of  them had to be examined to see whether any one of them encroached the field set apart as falling within the competence  of the  other body;  that in  any event  the provisions of Chapter III of the Karnataka Land Reforms  Act had nothing  to do  with the  imposition of  ceiling on  the urban land  and that  conferring of occupancy rights etc. to the tenants  under Chapter III of the Karnataka Land Reforms Act  did  not  come  under  the  category  of  "the  matters connected  therewith  or  ancillary  or  incidental  to  the imposition of ceiling" on urban immovable property.      Dismissing the special leave petitions, this Court,      HELD: 1.01.  Article 252  empowers  the  Parliament  to legislate for  two or more States on any of the matters with respect of  which the  Parliament has  no power  to make law except as provided under Articles 249 and 250. This power to legislate is  vested in  the Parliament only if two  or more State  Legislatures think it desirable to have a law enacted by  Parliament on such matters in List II, i.e. with respect to which  the Parliament  has no  power to  make law for the State.  The   passing  of   the  resolutions  by  the  State Legislatures  is  a  condition  precedent  for  vesting  the Parliament with such power. [339-C-D]      1.02. The  scope of  Entry 18 is very wide and the land mentioned therein  may be  agricultural or  non-agricultural and may  be rural or urban. The subject-matter carved out of Entry 18  under the  resolutions passed by The various State Legislatures related  to only "urban immovable property" and by virtue  of the  resolution the law that can be enacted by the Parliament  should be  a law "imposing a ceiling on such urban immovable property." [340-B, C]      1.03. From the resolution it is clear that the subject- matter that  was resolved  to be entrusted to the Parliament was the  one imposing  a ceiling on urban immovable property and acquisition  of such  property in excess of the ceiling. This subject-matter  is the topic that falls within Entry 18 of List  II of  Schedule VII  to the  Constitution  and  the subject-matter of  Entry 18  has been  originally kept apart for the  State Legislature to make law and Parliament had no competence in  respect of  those matters  falling under  the wide scope  of Entry 18. By virtue of this resolution a part of the  area falling  under Entry  18 is  transferred to the domain of  Parliament to  make law  relating to  the matters within the transferred area. [339-G, H; 341-A]      2.01. The  primary object  and the purpose of the Urban Land (Ceiling  and Regulation)  Act, 1976  is to provide for the  imposition   of  ceiling   on  vacant   land  in  urban agglomeration and  for acquisition  of such lands in  excess of the  ceiling limit  and to  regulate the  construction of buildings on such lands and for matters connected therewith. [340-H; 341-A]      2.02. The Karnataka Land Reforms Act as amended in 1974

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is a  welfare legislation. The object of the Act was to have a uniform  law in  the    State  of  Karnataka  relating  to agrarian  reforms,   conferment  of  ownership  on  tenants, ceiling on  land holdings  and  for  certain  other  matters contained therein. [342-D]      2.03. In  respect of imposing ceiling on the land under urban agglomeration  the provisions of the Ceiling Act alone are applicable  and to that extent the provisions of Chapter IV of  the Karnataka  Land Reforms  Act which also deal with the imposition of ceiling would not be applicable. [344-C]      2.04. The  land in  the instant  case comes  under  the urban agglomeration  the imposition  of the  ceiling  should naturally be  under the  provisions of the Urban Ceiling Act and not under the Karnataka Land Reforms Act. [344-B, C]      2.05. Imposition of ceiling on urban land is a distinct and independent subject as compared to imposition of ceiling on owning  or to hold agricultural land or any other kind of property which  do not  attract the Urban Ceiling Act. These are  two  distinct  powers  and  therefore  the  law  making competence can  be  in  two  different  legislative  bodies. Consequently it  is difficult to hold that the provisions of Chapter III  of the  Karnataka Land  Reforms Act are outside the legislative competence of the State  Legislature. [350-C, D]      2.06.  The   one  topic  that  is  transferred  in  the resolution  passed    under  Article  252  as  distinct  and separately identifiable  and does  not include the remaining topics under  Entry 18  in respect  of which the State alone has the power to legislate. [351-D]      2.07. The  legislative power  of the  State has  to  be reconciled with  that of  the Parliament  and that  in their respective fields  each is  supreme. Even  assuming that the State  enactment  has  same  effect  on  the  subject-matter falling within  the Parliament’s legislative competence that by itself  will not  render such law invalid or inoperative. [350-G-H]      2.08. There  is no conflict between the Ceiling Act and the State  Act. The imposition of ceiling on urban immovable property is an independent topic  and cannot be construed as to nullify the other subject left in the domain of the State Legislature under Entry 18 inasmuch as imposition of ceiling is a  distinct and  separately identifiable subject and does not  cover   the  other   measures  such  as  regulation  of relationship of  landlord and tenant in respect of which the State Legislature has competence to legislate. [351-C-D]      2.09. There  is a ceiling provision under Section 45(2) of the  Karnataka Land Reforms Act providing for computation of the  area in  respect of  which the tenant may be granted occupancy rights. But it is clear that ceiling on the area in  this context is only for the purpose of Section 45. [351-F]      2.10. Provisions  in the  Chapters II, III, V, VI to XI of the  Karnataka Land  Reforms Act deal with the conferment of occupancy  rights on  the respective  tenants and they do not in  any way conflict with the subject matter transferred to the  Parliament by  the resolution  passed under  Section 252. [351-E,F]      Thumati Venkaiah  and others v. State of Andhra Pradesh and of  others, [1980]  4 SCC 295; Union of India and others v. Valluri Basavaiah Chowdhary and others, [1979] 3 SCC 324; Calcutta Gas  Company (Proprietory)  Ltd. v.  State of  West Bengal and  others, AIR  1962 SC 1044 and Kannan Devan Hills Produce Company Ltd. v. The State of Kerala etc., AIR  1972 SC 2301 referred to.

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    CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) Nos. 16041-42/88.      From the  Judgment and  Order dated  27.7.1988  of  the Karnataka   High Court  in  W.P.  No  9173/86  and  W.A.  No 2707/85.                             WITH      SLP (C) Nos. 12258, 12254, 12260/90 & 8608/91      R.N. Narasimhamurthy,  S.S. Javali,  S.N. Bhat and Ravi P. Wadhwani for the Petitioners.      M.S.  Nesargi,   R.  Jagannath  Goulay,  M.K.  Dua,  M. Veerappa, K.H. Nobin Singh, S.K. Kulkarni and Surya Kant for the Respondents.      The following Order of the Court was delivered by      K. JAYACHANDRA  REDDY, J.  In all  these special  leave petitions the  common question that arises for consideration is whether the provisions of the Karnataka Land Reforms Act, 1961 as  amended in  1974 (‘Act’  for  short)  cease  to  be applicable in all respects to the lands which came within the purview  of the Urban Land (Ceiling and Regulation) Act, 1976 (’Ceiling  Act’ for short). The lands involved in these matters are  covered by  the development plan by the Belgaum City Town  Planning authority as per the Master Plan for the said City  and they  are  included  and  declared  as  urban agglomeration in  the City  of Hubli under the provisions of the Ceiling  Act. In the year 1972 the Karnataka Legislature passed a resolution under Article 252 of the Constitution to the effect  that  imposing  a  ceiling  on  urban  immovable property and  the acquisition of such property in excess  of the ceiling  limit for  public purposes  and all the matters connected therewith  shall be  regulated  in  the  State  by Parliament Qby  law. The  State  Legislature  thus  divested itself of the legislative competence to enact law in respect of subject-matter of the resolution. On 1.4.74 the amended Karnataka Land  Reforms Act  was enacted  and under the said Act the tenant of the land covered by the Act is entitled to the grant  of occupancy  rights after  making an application under the  Act. This  Act came  into force  with effect from 2.1.85. But  for the  purpose of  grant of  occupancy rights 1.4.74 was  the relevant date. While so in the year 1975 the Governor  of   Karnataka  passed   the  Urban  Aggolmeration Ordinance whereunder  all lands  between the  periphery of 8 K.Ms. of the municipal limits of Hubli Dharwad were declared as urban agglomeration land. In the year 1976 the Parliament passed the  Ceiling Act  for imposition  of ceiling on urban properties and the Act was made applicable to Karnataka also in view  of the  resolution passed  by the  State Government referred to  above. The order of the Land Tribunal under the Act  conferring   occupancy  rights   on  the   tenants  was challenged before  the High  Court contending that the lands involved in  these cases  were within  the  purview  of  the Ceiling Act and therefore the provisions of the Land Reforms Act had  no application to such lands on the ground that the provisions of the State Act were repugnant to the provisions of the Central Act namely the Ceiling Act. The writ petition was dismissed  by the  High Court. The owners preferred writ appeals and they were also dismissed by a common judgment in Writ Appeal  Nos. 2707  and 2361/85  etc. The Division Bench held that  there is no conflict between the two enactment in certain respect i.e. atleast so far as the implementation of the provisions  of Chapter  III of the Act are concerned and that provisions  of this  Chapter of the Act do not cease to apply to the agricultural lands coming within the meaning of urban agglomeration  in the Ceiling Act. The judgment of the Division Bench  is challenged  in S.L.P.(Civil)  No.  16041- 42/88. Many  of the similar writ petitions that were pending

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before the  High Court  were transferred to the Land Reforms Appellate Tribunal.  The Appellate  Tribunal  dismissed  the petitions by  a common  order following  the judgment of the Division Bench  of the  High Court in Writ Appeal No.2707/85 and connected  matters. Several  civil  revisions  petitions filed by  the land owners against the order of the Appellate Tribunal were  dismissed by  the High  Court.  Some  of  the special leave  petitions are  filed against the order of the High Court  in the  said civil revision petitions. Therefore all these  special leave  petitions can  be disposed of by a common order.      It was urged before us that the resolution of the State Legislature passed  under Article  252 of  the  Constitution shifted the  topic covered by the resolution from List II of Schedule VII  to the  Constitution and vested the competence to make  the law  in  respect  of  the  said  topic  in  the Parliament and that thereafter the State enactment ceased to have efficacy in respect of said topic. Alternatively it was urged  that,   when  in  pursuance  of  the  resolution  the Parliament legislates in respect of the topic covered by the resolution, the Parliamentary law, repeals or supersedes any existing State  legislation on  the topic and therefore such law cannot be enforced  thereafter.      We shall  first extract some of the relevant provisions of the  Constitution of India and the respective enactments. Article 246 of the Constitution  reads thus:      "246. Subject-matter  of laws  made      by   Parliament   and   by      the      Legislatures     of      States-(l)      Notwithstanding     anything     in      clauses (2) and (3), Parliament has      exclusive power  to make  laws with      respect  to   any  of  the  matters      enumerated  in   List    I  in  the      Seventh    Schedule     (in    this      Constitution referred  to   as  the      "Union List").      (2) xx    xx                  xx      (3) Subject to clauses (1) and (2),      the Legislature  of any   State has      exclusive power  to make  laws  for      such State  or   any  part  thereof      with respect  to any of the matters      enumerated  in   List  II   in  the      Seventh    Schedule     (in    this      Constitution  referred  to  as  the      "State List").      (4)xx           xx         xx " 2      Entry 18  in List  II namely  the State List of the VII Schedule to the Constitution is in the following terms:      "18. Land,  that is  to say, rights      in  or   over  land,  land  tenures      including the  relation of landlord      and tenant,  and the  collection of      rents, transfer  and alienation  of      agricultural land; land improvement      and       agricultural       loans;      colonization." Article 252  of the  Constitution  reads thus:      "252.  Power   of   Parliament   to      legislate for  two or  more  States      by consent  and  adoption  of  such      legislation by any  other State-(1)

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    If it  appears to  the Legislatures      of  two  or    more  States  to  be      desirable that  any of  the matters      with   respect to  which Parliament      has no  power to make laws for  the      States  except   as   provided   in      Articles  249  and  250  should  be      regulated   in   such   States   by      Parliament   by    law,   and    if      resolutions  to   that  effect  are      passed by  all the  Houses  of  the      Legislatures of  those  States,  it      shall be  lawful for  Parliament to      pass an  Act  for  regulating  that      matter accordingly,  and any Act so      passed shall  apply to  such States      and to  any other State by which it      is adopted afterwards by resolution      passed in  that behalf by the House      or, where  there are two Houses, by      each   of   the   Houses   of   the      Legislature of that State.      (2) Any Act so passed by Parliament      may be  amended or   repealed by an      Act of Parliament passed or adopted      in like   manner  but shall not, as      respects  any  State  to  which  it      applics, be  amended or repcaled by      an Act  of the  Legislature of that      State."      Article 252  empowers the  Parliament to  legislate for two or  more States  on any  of the  matters with respect of which the  Parliament has  no power  to make  law except  as provided under Articles 249 and 250. This power to legislate is vested  in the  Parliament only  if  two  or  more  State Legislatures think  it desirable  to have  a law  enacted by Parliament on  such matters  in List II i.e. with respect to which the Parliament has no power to make law for the State. The passing  of the resolutions by the State Legislatures is a condition  precedent for  vesting the Parliament with such power. The  relevant portion of the resolution passed by the State Legislature under Article 252 reads thus:      "Now, therefore,  in  pursuance  of      clause (1)  of Article  252  of the      Constitution, this  Assembly hereby      resolves that  the  imposition of a      ceiling on urban immovable property      and F  acquisition of such property      in excess  of the  ceiling and  all      matters  connected   therewith   or      ancillary and  incidental   thereto      should be regulated in the State of      Karnataka by  Parliament by law."      The resolution states that the imposition of ceiling on urban immovable    property  and  the  acquisition  of  such property in  excess of  the ceiling  limit with  a  view  to utilising such excess property for public purposes and all other matters  connected therein or incidental thereto shall be regulated  in this  State by Parliament by law. The basic question that  arises is  what is  the actual content of the subject-matter  that   was  resolved   to  be  entrusted  to Parliament by the State Legislature under Article 252 of the Constitution. From  the resolution  it  is  clear  that  the subject-matter that  was resolved  to be  entrusted  to  the Parliament was the one imposing a ceiling on urban immovable

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property and  acquisition of  such property in excess of the ceiling. It  is true  that this  subject-matter is the topic that falls within Entry 18 of List 11 of Schedule VII to the Constitution and  the said  subject-matter of  Entry 18  has been originally kept apart for the State Legislature to make law and  Parliament had  no competence  in respect  of those matters falling  under the  wide scope  of Entry  18. Now by virtue of  this resolution  a part of the area falling under Entry 18  is transferred to the domain of Parliament to make law relating to the matters within the transferred area. The scope of  Entry 18  is very  wide  and  the  land  mentioned therein may  be agricultural  or non-agricultural and may be rural or  urban. The  subject-matter carved  out of Entry 18 under  the   resolutions  passed   by  the   various   State Legislatures related to only- "urban immovable property" and by virtue  of the  resolution the law that can be enacted by the Parliament  should be  a law "imposing a ceiling on such urban   immovable property.  The  learned  counsel  for  the petitioners, however, urged that vesting of tenanted land in the State  and conferment  of  occupancy  rights  under  the provisions of  the State Act directly fall under the subject of  imposing  ceiling  on  and  holding  and  other  matters incidental or  ancillary  to  the  main  topic  of  imposing ceiling and  therefore they are fully covered by the Ceiling Act passed  by the  Parliament and  the same  supersedes the State enactment in respect of this land. The learned counsel appearing for the respondents on the contrary submitted that "imposition  of   ceiling"  is  a  distinct  and  separately identifiable subject and is the power carved out of Entry 18 and vested in the Parliament to legislate and that the power of the  State to  legislate in respect of the remaining part of the  subject-matter   is unaffected  and  that  when  two distinct powers have come into existence, vesting law making competence  in  the  State  and  Parliament,  the  pith  and substance of  the laws  made by  each  of  them  has  to  be examined to see whether any one of them encroaches the field set apart  as falling  within the  competence of  the  other body. The  learned counsel  for  the  respondents,  however, submitted that in any event the provisions of Chapter III of the Act have nothing to do with the imposition of ceiling on the urban  land and that conferring of occupancy rights etc. to the  tenants under  Chapter 111  of the  Act do  not come under the  category of  "the matters  connected therewith or ancillary or  incidental to  the imposition  of ceiling"  on urban immovable property.      Now we  shall refer  to the  provisions  of  the  Urban Ceiling Act.  The Statement  of Objects  and  Reasons  under Preamble to  the said Act would show that the primary object and the  purpose is to provide for the imposition of ceiling on vacant land in urban agglomeration and for acquisition of such lands  in excess  of the  ceiling limit and to regulate the construction of  buildings on  such lands  and  for  matters connected therewith.  Section 21(n) of the Urban Ceiling Act defines "urban  agglomeration" and  the material  part of it reads thus:      "(n) "urban agglomeration"      (A) in  relation to  any  State  or      Union territory specified in column      (1) of  Schedule 1,  means (i)  the      urban  agglomeration  specified  in      the corresponding  entry in  column      (2)  thereof   and   includes   the      peripheral area  specified  in  the      corresponding entry  in column  (3)

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    thereof; and      xx                xx        xx"      Section 2(o) defines "urban land" which reads thus:      "(o) "urban land" means, -      (i) any  land situated  within  the      limits of  an  urban  agglomeration      and referred  to  as  such  in  the      master plan; or      (ii) in  a case  where there  is no      master plan,  or where  the  master      plan does  not refer to any land as      urban land,  any  land  within  the      limits of  an  urban  agglomeration      and situated  in any  area included      within  the   local  limits   of  a      municipality  (by   whatever   name      called), a notified area committee,      a town  area committee,  a city and      town  committee,   a   small   town      committee, a  cantonment board or a      panchayat,      but does  not include any such land      which  is   mainly  used   for  the      purpose of agriculture.      Explanation-  For  the  purpose  of      this clause and clause (q)-      (A)   xx       xx        xx      (B) land  shall not be deemed to be      used  mainly  for  the  purpose  of      agriculture, if  such land  is  not      entered  in  the  revenue  or  land      records before the appointed day as      for the purpose of agriculture;      xx      xx         xx      (C)    notwithstanding     anything      contained in  clause  (B)  of  this      Explanation,  land   shall  not  be      deemed to  be mainly  used for  the      purpose of  agriculture if the land      has been  specified in  the  master      plan  for   a  purpose  other  than      agriculture;"      For the  purpose of  the instant  case it  is enough to note that  Hubli-Dharwad is  shown in the Schedule and there is also  a master plan prepared for the area and the land in question also  is undoubtedly within the urban agglomeration and  therefore   there  is  no  doubt  that  in  respect  of imposition of  ceiling on this area comes within the purview of the  Urban Ceiling  Act.  But  the  question  is  whether granting occupancy  rights under  Chapter III of the Act are in any  manner affected.  The Karnataka  Land Reforms Act as amended in  1974 is a welfare legislation. The object of the Act was  to have  a uniform  law in  the State  of Karnataka relating to  agrarian reforms,  conferment of  ownership  on tenants, ceiling  on land  holding  and  for  certain  other matters contained  therein. Section  34 of  the Act  defines "tenant" thus:      "(34)     "tenant"     means     an      agriculturist    who     cultivates      personally the  land  he  holds  on      lease   from    a   landlord    and      includes,-      (i) a  person who is deemed to be a      tenant under Section 4;      (ii) a  person  who  was  protected

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    from eviction  from any land by the      Karnataka    Tenants     (Temporary      Protection  from   Eviction)   Act,      1961;      (iia)  a   person  who   cultivates      personally any  land on lease under      a lease  created  contrary  to  the      provisions of  section 5 and before      the date  of  commencement  of  the      Amendment Act;      (iii) a  person who  is a permanent      tenant; and      (iv) a  person who  is a  protected      tenant.      Explanation- A  person who takes up      a contract  to  cut  grass,  or  to      gather the  fruits or other produce      of any  land,  shall  not  on  that      account only  be  deemed  to  be  a      tenant."      The provisions  of Chapter  III of  the Karnataka  Land Reforms Act  deal with  conferment of  ownership on tenants. Section 45  occurring in  this Chapter  in particular  deals with conferring  of occupancy  rights on the tenants subject to certain  conditions. The  relevant portion  of Section 45 reads as under:      "45. Tenants  to be  registered  as      occupants  of   land   on   certain      conditions-(1)   Subject   to   the      provisions   of    the   succeeding      sections  of  this  Chapter,  every      person who  was a permanent tenant,      protected tenant or other tenant or      where a tenant has lawfully sublet,      such sub-tenant  shall with  effect      on and  from the date of vesting be      entitled to  be  registered  as  an      occupant in respect of the lands of      which he  was a  permanent  tenant,      protected tenant or other tenant or      sub-tenant  before   the  date   of      vesting  and   which  he  has  been      cultivating personally.      (2) If  a tenant  or  other  person      referred to in sub-section (1)-      (i) holds  land partly as owner and      partly as  tenant but  the area  of      the land  held by  him as  owner is      equal to  or exceeds a ceiling area      he shall  not  be  entitled  to  be      registered as  an occupant  of  the      land held by him as a tenant before      the date of vesting;      (ii) does  not hold  and  cultivate      personally any  land as  an  owner,      but holds  land as tenant, which he      cultivates personally  in excess of      a  ceiling   area,  he   shall   be      entitled to  be  registered  as  an      occupant to the extent of a ceiling      area;      (iii)    holds    and    cultivates      personally as  an owner of any land      the area  of which  is less  than a      ceiling area,  he shall be entitled

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    to be  registered as an occupant to      the extent  of such area as will be      sufficient to  make up  his holding      to the extent of a ceiling area.      xx           xx             xx      The provisions under Chapter III which exclusively deal with conferment  of occupancy rights on tenants have nothing to  do  with  the  imposition  of  ceiling  on  holdings  of agricultural land  under the  Act. It  is only Chapter IV of the said  Act which deals with ceiling on land holdings. Now that the  land in  the instant  case comes  under the  urban agglomeration the imposition of the ceiling should naturally be under  the provisions  of the  Urban Ceiling  Act and not under the  Karnataka  Land  Reforms  Act.  The  High  Court, however, did  not deal  with  this  aspect.  Perhaps  it  is necessary for  us to  make  it  clear  that  in  respect  of imposing ceiling  on the  land under urban agglomeration the provisions of  the Ceiling  Act alone  are applicable and to that extent  the provisions  of Chapter  IV of the Act which also deal  with the  imposition  of  ceiling  would  not  be applicable. As  a matter  of fact  in Thumati  Venkaiah  and Others v.  State of  Andhra Pradesh and Others, [1980] 4 SCC 295 to  which we will refer to at a later stage in detail on the main point, this Court observed thus:      "It is  no doubt  true that  if the      Andhra Pradesh  Act seeks to impose      ceiling on  land falling  within an      urban agglomeration,  it  would  be      outside the area of its legislative      competence, since it cannot provide      for imposition  of ceiling on urban      immovable property."      However, the  crucial  question  in      the instant  case with which we are      concerned is whether the provisions      of Chapter  III  of  the  Act  also      become inoperative by virtue of the      resolution passed under Article 252      and particularly on the ground that      it is  a matter  of  imposition  of      ceiling  on  urban  land  or  other      matters  connected   therewith   or      ancillary and incidental thereto.      A  plain   reading  of  the  above  provisions  in  the background of  the objects  underlying these  two enactments clearly shows  that the  two Acts  operate in  two different fields to  a large  extent. This  Court had  an occasion  to consider these aspects in a few cases. In Union of India and others v.Valluri  Basavaiah Chowdhary  and others,  [1979] 3 SCC 324  this Court,  in respect  of  effect  of  passing  a resolution under  Article 252  of the  Constitution  by  the Andhra Pradesh Legislature, observed thus:      "The effect  of the  passing  of  a      resolution  under   clause  (1)  of      Article  252   is  that  Parliament      which has  no  power  to  legislate      with respect to the matter which is      the  subject   of  the  resolution,      becomes entitled  to legislate with      respect to  it. On  the other hand,      the  State  Legislature  ceases  to      have a power to make a law relating      to that matter."      It was further observed that:      "....It is  not disputed  that  the

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    subject-matter of Entry 18, List II      of the Seventh Schedule i.e. ‘land’      covers  ‘land  and  buildings’  and      would,    therefore,    necessarily      include    ‘vacant    land’.    The      expression     ‘urban     immovable      property’  may   mean,   land   and      buildings   or    ‘buildings’    or      ‘lands’. It  would take in lands of      every       description       i.e.,      agricultural land,  urban  land  or      any other  kind and  it necessarily      includes vacant land."      With regards  the concept of ceiling on urban immovable property and the object underlying in passing the resolution by the  several State  Governments under  Article 252 it was further observed in the above judgment thus:      "....A    Working     Group     was      constituted under  the Chairmanship      of  the   Secretary,  Ministry   of      Works,    Housing     and     Urban      Development.  The   report  of  the      Working  Group   shows   that   the      proposal was to impose a ceiling on      urban immovable  property.  In  the      report  the   said  Working   Group      defined ‘urban area’ to include the      area within  the territorial limits      of municipalities  or  other  local      bodies and also the peripheral area      outside  the   said  limits.   Such      inclusion of  the peripheral limits      in an  urban area  was accepted  by      the Government  and  a  model  bill      prepared in  pursuance thereof also      contained such a definition. A copy      of  each   of  the  report  of  the      Working Group  and the  Model  Bill      referred to was placed on the table      of the  Parliament on  December 15,      1970    and    March    22,    1972      respectively.  The  said  documents      were   forwarded   to   the   State      Government   of   Andhra   Pradesh,      besides  other  State  Governments,      for  consideration   by  the  State      Legislatures before  they passed  a      resolution     authorising      the      Parliament to make a law in respect      of urban  immovable property. Their      intention was  to include the lands      within the  territorial area  of an      urban area  and also its peripheral      areas. The  concept of  ceiling  on      urban immovable  property  and  the      nature   and   content   of   urban      agglomeration ultimately defined by      Section 2(n)  of the  impugned  Act      was, therefore,  fully, under stood      by the State Governments."      Some more observations in the above judgment read thus:      "It is  but axiomatic that once the      legislatures of two or more States,      by a resolution in terms of Article      252(1),   abdicate or surrender the

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    area,   i.e.    their   power    of      legislation on a State subject, the      Parliament is  competent to  make a      law relating  to  the  subject.  It      would indeed  be  contrary  to  the      terms of Article 252(1) to read the      resolution  passed   by  the  State      legislature    subject    to    any      restriction.    The     resolution,      contemplated under  Article  252(1)      is not  hedged in  with conditions.      In   making   such   a   law,   the      Parliament was not bound to exhaust      the whole  field of legislation. It      could make  a law, like the present      Act, with  respect  to  ceiling  on      vacant    land    in    an    urban      agglomeration,  as   a  first  step      towards the  eventual imposition of      ceiling on  immovable  property  of      every other description."      One other  decision also  arose from  State  of  Andhra Pradesh. In  Thumati Venkaiah’s  case  Andhra  Pradesh  Land Reforms (Ceiling  on Agricultural  Holdings)  Act  which  is analgous to Karnataka Land Reforms Act was challenged on the ground that  the subject  matter of the said law was covered by the topic of the legislation transferred to Parliament by the resolution  under  Article  252  passed  by  the  Andhra Pradesh Legislative  Assembly and  that  provisions  of  the Ceiling Act  alone covered that subject and therefore Andhra Pradesh Land  Reforms (Ceiling on Agricultural Holdings) Act was unenforceable.  In  this  context  Supreme  Court  again reiterated  the  same  in  the  said  decision.  This  Court proceeded to observe as under:      "The   effect    of   passing    of      resolutions  by   the   Houses   of      Legislature of  two or  more States      under this constitutional provision      is  that   Parliament   which   has      otherwise  no  power  to  legislate      with respect to a matter, except as      provided in  Articles 249  and 250,      becomes entitled  to legislate with      respect  to  such  matter  and  the      State  legislatures   passing   the      resolutions cease  to have power to      make law  relating to  that matter.      The    resolutions    operate    as      abdication  or   surrender  of  the      powers of  the  State  legislatures      with respect to the matter which is      the subject  of the resolutions and      such matter  is placed  entirely in      the   hands   of   Parliament   and      Parliament alone can then legislate      with respect  to it.  It is  as  if      such matter  is lifted  out of list      II and  placed in  List  I  of  the      Seventh     Schedule     to     the      Constitution."      It was further observed that:      "The result  was that  at the  date      when the  Andhra  Pradesh  Act  was      enacted,   Parliament   alone   was      competent to legislate with respect

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    to  ceiling   on  urban   immovable      property and  acquisition  of  such      property in  excess of  the ceiling      and  all  connected,  ancillary  or      incidental matters,  and the Andhra      Pradesh Legislature  stood  denuded      of its  power to  legislate on that      subject."      On the effect of ceiling this Court      stated thus:      "It will  thus  be  seen  that  the      Central Act  imposes a  ceiling  on      holding   of    land    in    urban      agglomeration other than land which      is mainly  used for  the purpose of      agriculture and agriculture in this      connection  includes  horticulture,      but   does not  include raising  of      grass,   dairy   farming,   poultry      farming, breeding of live-stock and      such cultivation  or the growing of      such plants as may be prescribed by      the Rules,  and moreover,  in order      to fall  within the  exclusion, the      land must be entered in the revenue      or land record before the appointed      day for  the purpose of agriculture      and  must   also  not   have   been      specified in  the master plan for a      purpose other than agriculture."      Considering the  contention that  the whole  of  Andhra Pradesh Land  Reforms Act  was ultra  vires this  Court held thus:      "The argument  of  the  landholders      was that  the  Andhra  Pradesh  Act      sought to impose ceiling on land in      the   whole   of   Andhra   Pradesh      including  land  situate  in  urban      agglomeration  defined  in  Section      2(n) of  the  Central  Act  was  an      expansive concept and any area with      an existing or future population of      more  than   one  lakh   could   be      notified    to    be    an    urban      agglomeration,  the  whole  of  the      Andhra Pradesh  Act was ultra vires      and  void   as  being  outside  the      legislative   competence   of   the      Andhra  Pradesh  Legislature.  This      argument, plausible  though it  may      seem,   is    in    our    opinion,      unsustainable. It is not doubt true      that  if  the  Andhra  Pradesh  Act      seeks to  impose  ceiling  on  land      falling     within     an     urban      agglomeration, it  would be outside      the   area   of   its   legislative      competence, since it cannot provide      for imposition  of ceiling on urban      immovable property.  But  the  only      urban agglomerations  in the  State      of Andhra Pradesh recognised in the      Central Act  were those referred to      in Section 2(n)(A)(i) and there can      be no  doubt that,  so far as these

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    urban agglomerations are concerned,      it was  not within  the legislative      competence of  the  Andhra  Pradesh      Legislature    to    provide    for      imposition  of   ceiling  on   land      situate    within    these    urban      agglomerations.  It   is,  however,      difficult to  see  how  the  Andhra      Pradesh Act  could be  said  to  be      outside the  legislative competence      of the  Andhra Pradesh  Legislature      insofar  as  land  situate  in  the      other areas  of the State of Andhra      Pradesh is concerned. We agree that      any other  area  in  the  State  of      Andhra Pradesh with a population of      more  than   one  lakh   could   be      notified as  an urban agglomeration      under Section  2(n) (A) (ii) of the      Central Act,  but until  it  is  so      notified it  would not  be an urban      agglomeration   and    the   Andhra      Pradesh  Legislature   would   have      legislative competence  to  provide      for imposition  of ceiling  on land      situate within such area. No sooner      such area  is  notified  to  be  an      urban  agglomeration,  the  Central      Act would apply in relation to land      situate within such area, but until      that happens,  the  Andhra  Pradesh      Act would continue to be applicable      to determine the ceiling on holding      of land  in such  area. It  may  be      noted that  the Andhra  Pradesh Act      came into  force on January 1, 1975      and it  was with  reference to this      date that  the surplus  holding  of      land in  excess of the ceiling area      was required  to be  determined and      if there was any surplus, it was to      be   surrendered   to   the   State      Government. It  is therefore  clear      that in  an area  other  than  that      comprised     in      the     urban      agglomerations   referred   to   in      Section 2(n)(A)(i),  land held by a      person in  excess  of  the  ceiling      area  would   be   liable   to   be      determined as  on January  1,  1975      under the  Andhra Pradesh  Act  and      only land  within the  ceiling area      would be  allowed  to  remain  with      him. It  is only in respect of land      remaining with a person, whether an      individual or  a family unit, after      the operation of the Andhra Pradesh      Act, the  Central Act  would apply,      if and when the area in question is      notified    to    be    an    urban      agglomeration     under     Section      2(n)(A)(ii) of  the Central Act. We      fail to  see how  it can  at all be      contended that  merely  because  an      area may  possibly in the future be

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    notified as  an urban agglomeration      under Section  2(n)(A)(ii)  of  the      Central  Act,  the  Andhra  Pradesh      Legislature  would  cease  to  have      competence   to    legislate   with      respect to  ceiling on land situate      in such  area, even  though it  was      not an  urban agglomeration  at the      date of  enactment  of  the  Andhra      Pradesh Act.  Undoubtedly, when  an      area  is   notified  as   an  urban      agglomeration     under     Section      2(n)(A)(ii), the  Central Act would      apply to  land situate in such area      and the  Andhra Pradesh  Act  would      cease to  have application,  but by      that time  the Andhra  Pradesh  Act      would  have   already  operated  to      determine the ceiling on holding of      land falling  within the definition      of Section  3(j) and situate within      such  area.  It  is  therefore  not      possible to  uphold the  contention      of the  landholders that the Andhra      Pradesh Act is ultra vires and void      as being  outside  the  Legislative      competence of  the  Andhra  Pradesh      Legislature."      The above  observations throw  a flood  of light on the question involved  before us.  It can  be seen  that  entire power to  legislate in  respect of  several matters  falling under the wide scope of Entry 18 List II is not transferred. The power  transferred is  only in  respect of imposition of ceiling on  urban immovable  property. There  can be several topics in  respect of  the  subject  matters  of  regulatory legislations  governing   the  lands   or  other   immovable properties. The  imposition of ceiling on owning property is one such  topic and  there can be laws regulating ceiling on owing the  property,  relationship  of  lessor  and  lessee, payment of rent, manner of granting the lease, conferment of ownership on  the lessee etc. It is the concept of a welfare State  which  is  the  underlying  object  in  such  welfare legislations. When  viewed from  that angle  it is axiomatic that imposition  of ceiling  on urban land is a distinct and independent subject  as compared to imposition of ceiling on owning or  holding agricultural  land or  any other  kind of property  which  do  not  attract  the  Urhan  Ceiling  Act. Likewise it  cannot be  said that  the pith and substance of the law governing the conferment of ownership of land on the tenant is a law regulating the imposition of ceiling on land holding. Equally  it  cannot  be  said  that  the  pith  and substance of  the law  imposing the  ceiling on land holding covers the  subject of  conferring ownership  of land on the tenant. These  are two distinct powers and therefore the law making  competence  can  be  in  two  different  legislative bodies. Consequently  it  is  difficult  to  hold  that  the provisions of  Chapter III of the Karnataka Land Reforms Act are  outside   the  legislative   competence  of  the  State Legislature. In  Calcutta Gas  Company (Proprietory) Ltd. v. State of West Bengal and others, AIR 1962 SC 1044 this Court observed as under:      "The entries in the three Lists are      only legislative heads or fields of      legislation;  they   demarcate  the      area  over  which  the  appropriate

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    Legislatures  can  operate.  It  is      also  well   settled  that   widest      amplitude should  be given  to  the      language of  the entries.  But some      of the  entries  in  the  different      Lists 1  or in  the same  Lists may      overlap  and   sometimes  may  also      appear to  be  in  direct  conflict      with each  other. It  is  then  the      duty of this Court to reconcile the      entries  and  bring  about  harmony      between them."      It is  well settled  that the  legislative power of the State has  to be  reconciled with that of the Parliament and that in  their  respective  fields  each  is  supreme.  Even assuming that  the State  enactment has  same effect  on the subject matter  falling within  the Parliament’s legislative competence, that  by itself will not render such law invalid or inoperative.  In Kannan  Devan Hills Produce Company Ltd. v. The  State of  Kerala etc.,  AIR 1972  SC 2301 this Court held as under:      "It seems  to  us  clear  that  the      State has legislative competence to      legislate on  Entry 18, List II and      Entry  42   List  III.  This  power      cannot be denied on the ground that      it has  some effect  on an industry      controlled under  Entry 52  List 1.      Effect is  not the  same  thing  as      subject matter.  If  a  State  Act,      otherwise valid,  has effect  on  a      matter in  List I it does not cease      to be a legislation with respect to      an entry in List II or List III."      However, in  the instant  case, we  are clearly  of the view that there is no conflict. The imposition of ceiling on urban immovable  property is an independent topic and cannot be construed  as to  nullify the  other subject  left in the domain of  the State  Legislature under Entry 18 inasmuch as imposition  of   ceiling  is   a  distinct   and  separately identifiable subject  and does  not cover the other measures such as regulation of relationship of landlord and tenant in respect of  which the  State Legislature  has competence  to legislate. Thus  the one  topic that  is transferred  in the resolution  passed   under  Article   252  is  distinct  and separately identifiable  and does  not include the remaining topics under  Entry 18  in respect  of which the State alone has the power to legislate. An examination of the various provisions of  the State  Act makes  this aspect  clear. The object underlying  the Act  is to  make a uniform law in the State  of   Karnataka  relating   to   agrarian   relations, conferment of ownership on tenants, ceiling on land holdings etc. Chapter  II of  the  Act  contains  general  provisions regarding   tenancy,    deemed   tenancy,    regulation   of relationship between landlord and tenant etc. Sections 44 to 62 of  Chapter III  provide for vesting of tenanted lands in the State  Government with effect from 1.3.74 and conferment of occupancy  rights on  the tenants. Chapter V controls the eligibility  to  purchase  or  possess  agricultural  lands. Chapters VI  to XI  have  many  other  provisions  regarding agrarian reforms.  We, however,  find  a  ceiling  provision under Section 45(2) providing for computation of the area in respect of which the tenant may be granted occupancy rights. But it  is clear that ceiling on the area in this context is only for  the purpose  of Section  45. These  are all topics

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regarding  the   conferment  of   occupancy  rights  on  the respective tenants  and they do not in any way conflict with the subject  matter transferred  to the  Parliament  by  the resolution passed  under  Section  252.  Consequently  these Special Leave Petitions are dismissed. Petitions dismissed.