http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 50  

PETITIONER: STATE OF KARNATAKA AND ANR ETC.

       Vs.

RESPONDENT: SHRI RANGANATHA REDDY & ANR.  ETC.

DATE OF JUDGMENT11/10/1977

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. BEG, M. HAMEEDULLAH (CJ) CHANDRACHUD, Y.V. BHAGWATI, P.N. KRISHNAIYER, V.R. SINGH, JASWANT KAILASAM, P.S.

CITATION:  1978 AIR  215            1978 SCR  (1) 641  1977 SCC  (4) 471  CITATOR INFO :  R          1980 SC1955  (12)  F          1981 SC 234  (100)  RF         1981 SC1597  (3)  F          1983 SC 239  (19,20)  F          1983 SC 937  (33)  F          1984 SC 326  (6,24,25,33,57,61,64,66,71,73,  F          1984 SC 374  (18)  R          1984 SC 981  (8)  RF         1984 SC1130  (52)  RF         1986 SC 468  (26,31,34)  RF         1986 SC1466  (13)  RF         1988 SC1487  (32)  RF         1989 SC 509  (7)  F          1990 SC 123  (37)  C          1990 SC 781  (72)  R          1990 SC1277  (29)  R          1990 SC2072  (24,29,37,47)  RF         1992 SC 938  (22,31)

ACT: Constitution of India.  Article 31(2)-"Public purpose" Scope of,   Whether  includes  compulsory  acquisition  for   Road Transport   Corporation-Part  acquisition  of   undertaking, validity  of-"Amount" in lieu of acquired property,  quantum and  principles  of evaluation, whether  questionable  under Art. 31(2). Karnataka Contract Carriages (Acquisition) Act, 1976, vis-a- vis Constitution of India, Articles 31(2) and 39(b) and  (c) and  Schedule  List 1 Entry 42-Whether  on  acquisition  the State  Govt. can transfer counter signed portions of  Inter- State   permits   to  Road   Transport   Corporation-S.4(3), "deemed", whether introduces legal fiction-S.6(1),  fixation of  amount  by  arbitrator S. 6(1)    Schedule,  Para  1(1), Explanation-Interpretation of "acquisition cost".

HEADNOTE: The Karnataka State Road Transport Corporation published  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 50  

the Karnataka Gazette dated May 16. 1974 a draft scheme  for nationalisation  of contract carriages in the  State.  under Chapter  IV-A of the Motor Vehicles Act,  1939.   Objections were  preferred  by some of the respondents, but  the  State Government   and  the  Corporation  dropped  the   idea   of proceeding  with the scheme without concluding the  hearing. Later, on January 30, 1976 the State Government  promulgated an ordinance followed by a number of notifications by  which all  contract  carriages  operating in  Karnataka,  and  the permits specified in the notifications, vested in the State. Under  Clause 20(1) of the Ordinance, the  State  Government transferred  them  to  the  Corporation  which  seized   the vehicles  and the relative permits.  The High  Court  stayed the  seizure  of six vehicles operating tinder  Inter  State permits, and quashed some of the notifications, holding that the  ordinance  did  not  empower  the  acquisition  of  the vehicles  not  covered  by  valid  contract  permits.    The ordinance  was replaced by the Karnataka contract  carriages (Acquisition) Act, 1976, published in the Karnataka  Gazette dated   March  12.  1976.   The  Act  was   made   effective retrospectively  from January 30. 1976. and everything  done under  the Ordinance was deemed to have been done trade  the Act.  Writ Petitions were filed by various contract carriage operators,  fanciers  and  others including  those  who  had successfully  filed  the earlier Writ Petitions.   The  High Court  allowed  the writ petitions, struck down the  Act  as unconstitutional,  and quashed the notifications.  (Judgment reported in K.Jayaraj Ballal and Ors. v. State of  Karnataka and Ors. I.L.R. Karnataka 1976, Vol. 26, P. 1478). Allowing  the  appeals  and  upholding  the   constitutional validity of the Act on merits, the Court HELD : Per Untwatia, J. (Also on behalf of M. H. Be-,, C.J., V. Y. Chandrachud, and P. S. Kailasam, JJ.) 1.   Whether the law of ocquisition is for public purpose or not has to be gathered mainly from the statement of  Objects and Reasons of the Act and its preamble.  The matter has  to be examined with reference to the various provisions of  the Act  its  context and set up and then it has  to  be  judged whether  the acquisition is for a public purpose within  the meaning  of  Article 31(2) and the law  providing  for  such acquisition while establishing a Road Transport Corporation, the  State Government is obliged to keep in  mind  primarily the public interest.  The acquisition for the purpose of the Corporation was, therefore, in public interest. [648 C-E] H.   H.  Keshavananda Bharathi Sripadagalavaru v.  State  of Kerala [1973] Suppl.  S.C.R. 1, Applied. 642 The court observed : There  may  be many circumstances and facts to  justify  the acquisition of even a movable property for a public purpose. A particular commercial activity of the State may itself  be for  a public purpose.  In a larger sense one can  say  that augmentation  of  the  coffers of the State is  also  for  a public  purpose.  Acquisition of property either movable  or immovable, may in such a situation be for a public  purpose. [651 C-D] The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Ors. [1952] SCR 889, referred to. (2)  The scheme for the compulsory acquisition may be for  a part  of the undertaking also and that would mean a part  of the property of the under taking   or   a  branch   of   the undertaking [651 F-G] (3)  The  amount  payable for the acquired  property  either fixed by the legislature or  determined on the basis of  the principles  engrafted  in the law of acquisition  cannot  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 50  

wholly  arbitrary and illusory.  In some respects it may  be inadequate but that cannot be a ground for challenge of  the constitutionality of the law under Article 31(2). [653 B-C] H.   H.  Keshavananda  Bharati Sripadagalavaru v.  State  of Kerala, [1973] Suppl. SCR 1, applied. The  State  of West Bengal v. Mrs. Bala  Banerjee  and  Ors. [1954] SCR 558, P. Vajravelu Mudaliar v. The Special  Deputy Collector,  Madras [1965] 1 SCR 614, Union of India  v.  The Metal  Corporation of India Ltd. &- Anr. [1967] 1  SCR  255, State of Gujarat v. Shri Shantilal Mangaldas and Ors. [1969] 3 SCR 341 and Rusto covarjee Cooper v. Union of India [1970] 3 SCR 530, referred to. (4)  The  Karnataka  Contract Carriages  (Acquisition)  Act, 1976 does not seek to legislate in regard to any Inter-State trade  and commerce.  In pith and substance it is an Act  to provide for the acquisition of contract carriage, the Inter- State permits and the other properties situated in the State of  Karnataka.  Any incidental encroachment on the topic  of Inter-State  trade and commerce cannot invalidate  the  Act. [661 D-E] Prafulla  Kumar Mukherjee & Ors. and Bank of Commerce  Ltd., Khulna  v. Advocate Genera,’ of Bengal [1947] Federal  Court Reports  28,  Kerala  State  Electricity  Board  v.   Indian Aluminium  Co.,  [1976] 1 S.C.R. 552 S. K. Peseri  V.  Abdul Ghafoor and Ors., Civil Appeal No. 306/1964 decided on  4-5- 1964,  Narayanappa v. State of Mysore [1960] 3  S.C.R.  742, and  Tansukh  Rai  Jain v. Nilratan Prasad  Shaw  and  Ors., [1965] 2 S.C.R. 6 applied. A.   S.  Krishna  v.  State of  Madras  [1957]  S.C.R.  399, U.S.A., Plff. in Crr. v. Can Hill 63 Law Ed. 337, Claude  R. Wickard,  Secy. of Agriculture of the United States etal  v. Roscoe  C.  Filburn 87 Law Ed. 122 and  the  Steamer  Denial Ball,  Bayron D. Ball and Jessie Ganoe, Claimants, Aptt.  v. United States 19 Law Ed. 999 referred to. (5)  The  acquisition  of permits of the vehicles  kept  and registered  in the State of Karnataka, in respect  of  which initially Inter-State Permits had been granted by the State, would  be an acquisition of the permit operative within  the territory  of  the State.  Permits granted by  one  regional Authority  and counter-signed by another Regional  Authority either  in the same state or in different states are  really different  permits  rolled  into  one.   The  counter-signed portion  of  the  permit is in substance  and  in  effect  a separate permit authorising the permit holder to ply the bus in   another  State,  and  cannot  be  acquired.   Such   an acquisition   would   fall  within   the   extra-territorial operation  of the law.  The State Govt. on  acquisition  and the vesting of acquired permits, therefore, cannot  transfer their counter-signed portions to the Road Transport Corpora- tion.  Any particular vehicle which is kept and  registered, or is plying, on an initial permit granted by another State, also   could  not  be  acquired  under  the  Act   and   the notification issued, thereunder. [662 C-D, 663 B, C-D] M/s  Bundelkhand Motor Transport Company, Nowgaon v.  Behari Lal Chaurasia and Anr. [1966] 1 S.C.R. 485, and Punjab  Sikh Regular Motor Service, Mondhapara v. The Regional  Transport Authority, Raipur and Anr. [1966] 2 S.C.R. 221; applied. 643 The Bengal Immunity Co. Ltd. v. The State of Bihar and  Ors. [1955]  S.C.R. 603, R.M.D. Chamarbaugwala v. Union of  India and Ors. [1957] S.C.R. 930, Gulabhai Vallabhbhai Desai  etc. v. Union of India and Ors., [1967] 1 S.C.R. 602; and lit re. a Special Reference under Section 213 of the Govt. of  India Act, 1935 [1941] Federal Court Reports 12; referred to. (6)  Section  4(3)  of  the  Karnataka  contract   carriages

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 50  

(Acquisition)  Act,  1976,  is worded  with  the  object  of putting the challenge to the factum of public purpose beyond the  pale of any attack.  The use of the word "deemed"  does not  invariably and necessarily imply an introduction  of  a legal  fiction, but it has to be read and understood in  the context of the whole statute. [651 A-B] (7)  In  the absence of an agreement, the  State  Government shall appoint an arbitrator for fixing the amount payable in lieu  of  the acquired property.   The  arbitrator,  reading section  6(1) of the Karnataka Contract Carriages  (Acquisi- tion)  Act, as a whole, is not obliged to fix the amount  as specified in the Schedule, but he has to fix an amount which appears  to him just and reasonable on the totality  of  the facts and circumstances keeping primarily in mind the amount mentioned in the Schedule occurring in Sec. 6(1). [657  E-F, 658 D-E] Saraswati Industrial Syndicate Ltd., etc. v. Union of  India [1975], 1 S.C.R. 956, Illingworth v. Walnsley (1900) 2  Q.B. 142 and Perry v. Wright (1908) 1 K. B. 441; referred to. (8)  The correct meaning of "acquisition cost", used in  the Explanation  in the light of Para 1 (1) of the  Schedule  of Sec. 6 (1) of the Karnataka Act, would mean, the cost of the chassis  fixed  by the manufacturers for  their  dealers  to charge  from the purchasers.  The acquisition cost  qua  the purchaser  is the price which he pays to the  manufacturer’s dealer  from  whom he purchases and not  the  manufacturer’s actual  cost of manufacturing the chassis.  The  acquisition cost  of  the body of a schedule would be  the  actual  cost charged by the body builder. [659 B--C] Per Iyer.  J. (Also on behalf of P. N. Bhagwati and  Jaswant Singh, JJ.) (1)  The purpose of a public body to run a public  transport service  for the benefit of the, people, operating it  in  a responsible manner through exercise of public power which is controlled  and controllable by society through  its  organs like  the  legislature  and, at times, even  the  court,  is manifestly a public purpose.  If the purpose subserves  some public  use  or interest, or produces some  public  good  or utility  then  everything  considered  for  subserving  such public  purpose falls under the broad and expanding  rubric. If the purpose is a private or nonpublic one, the mere  fact that  the hand that acquires or requires is Government or  a public corporation, does not make the purpose  automatically a  public  purpose.   The  acquisition  of  road   transport undertakings  by  the  State will undoubtedly  be  a  public purpose, and it is a fallacy to deny the presence of  public purpose merely because its satisfaction by readily available private purchase is possible. [672 D-E, 673 B, 676 D] Black’s  Legal Dictionary, ’The Supreme Court of  India’  by Rajeev  Dhavan (Tripathi Publications), ’Words  and  Phrases Legally  defined’ II Edn.  P. 229; Sir  Alladi  Krishnaswami Ayyar’s  speech  in the Constituent  Assembly;  Mr.  Justice Mathew’s  speech  in  the  second  Kerala.   State  Lawyer’s Conference; H. F. Peti v. Secy. of State for India, 42  I.A. 44; The State of Bihar v. Maharjadhiraja Sir Kameshwar Singh of  Darbhanga & Ors. [1952] SCR 889; The State of Bombay  v. Ali  Gulshan,  AIR 1955 SC 810; A. K. Gopalan  v.  State  of Madras,  AIR 1950 SC 27; The State of West Bengal  v.  Anwar Ali Sarkar [1952] SCR 284 and The State of West Bengal v. S. B. Bose & Ors. [1954] SCR 587, referred to. (2)  The  amount Payable when private property is  taken  by the  State  is  a matter of legislative policy  and  not  of judicial fixation.  The 25th, Amendment of the Constitution, while restructuring Article 31 and bringing in Article  31C, has excluded judicial examination even of the principles  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 50  

evaluation.The  Court can only satisfy itself about  the amount not being a monstrousor   unprincipled  undervalue. The payment may be substantially less thanthe 644 market  value and the principles may not  be  all-inclusive, but the court can upset the taking only where the principles of  computation  are  too  arbitrary  and  illusory  to   be unconscionably  shocking.  The quantum of the amount or  the reasonableness  of the principles are out of bounds for  the court. [680 B, 682 C, 685 A, C, G, H.] H.   H.  Kesavanand  Bharati  Sripadagalavaru  v.  Stale  of Kerala  (supra) followed.  Speech by Mahatma Gandhi  at  the Round Table Conference; Fundamental Rights &  Socio-Economic Justice  by  K. P. Krishna Shetty pp. 123 and  127-128;  The 46th Report of the Law Commission and R. S. Cooper v.  Union of India (supra), referred to. (3)  Article   39(b)  fulfils  the  basic  purpose  of   re- structuring the economic order and undertakes to  distribute the  entire material resources of the community, as best  to subserve  the common good.  To exclude ownership of  private resources  from its coils, is to cipherise its very  purpose of redistribution the socialist way.  Article 39(b) is ample enough to rope in buses, as motor vehicles, are part of  the material  resources  of the operators.   Socially  conscious economists   will   find  little  difficulty   in   treating nationalisation of transport as a distributive progress  for the good of the community. [689 C-D, E-.F. 690 0] The Court observed : (1)  The State symbolises, represents and acts for the  good of society.  Its concerns are the ways of meeting the  wants of  the  community, directly or otherwise,  and  the  public sector in our constitutional system, is a strategic tool in’ the  national plan for transformation from stark Poverty  to social  justice,  transcending administrative  and  judicial allergies. [672 D-E] (2)  Serious constitutional problems cannot be studied in  a socioeconomic  vacuum, since socio-cultural changes are  the source of new values.  Our emphasis is on abandoning  formal legalistic  or sterile logomachy in assessing the  vires  of statutes  regulating  vital  economic  areas,  and  adopting instead,  a  dynamic,  goal-based approach  to  problems  of constitutionality.    Our  nation  has,  as   its dynamic doctrine, economic democracy sans which political  democracy is chimerical.  The Constitution ensouls such a value system in  Parts  III and IV and elsewhere, and the  dialectics  of social justice should not be missed if their synthesis is to influence  State action and Court  pronouncement.   Illusory compensation,  nexus doctrine and ’distributed  to  subserve the common good, should  not  reduce  lofty   constitutional considerations into hollow concepts. [666 F, 667 A] R.   S.  Cooper v. Union of India (Supra); Towne  v.  Eigner 245  U.S.  418= 62 L. ed. 372, 376; Dias  Jurisprudence  4th Edn.  p.  625 H. H. Kesavananda Bharati  Sripadagalavaru  v. State  of Kerala (supra); Legal Theory and Social  Evolution 5th Edn.  P. 81 and Dr. Ambedkar’s speech in the Constituent Assembly, referred to. (3)  Bills  without  sufficient  study  of  their  economic. project,  occasionally  result  in  incomprehensibility  and incongruity  of  the  law  for the lay  and  the  legal.   A radicalisation  of the methodology and, philosophy of  legal drafting,  and  ability  for  the  legislative  manpower  to express themselves in streamlined, simple,  project-oriented fashion is, therefore, essential. [667 C-E] ’Laws are not for laymen’-Guardian Miscellany dated May  29. 1975 referred to.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 50  

(4)  Sheer legalism cannot lightly upset legislative  wisdom or  efficiency  while passing on  the  constitutionality  of economic  legislation  based on  national  planning,  public finance,   private  investments,  cost  accounting,   policy decisions  historical factors and a host of  complex  social variables.  Raw realities like poverty id stark inequalities to  abolish which, Article 31(2), 31C. 38 and 39  have  been enacted, must inform legal interpretation.  The Courts  must be circumspect not to rush in where serious reflection  will make   them  fear  to  tread,  not  to  resort   to   adroit circumvention  because of economic allergy to  a  particular policy. [669 F, 670 A-B] 645 Burton  v.  Honan  1952, 86 CLR 169.  179;  Preface  to  the English  Leg Aid System by Seton Pollck  (Orient  Longmans); referred to. (5)  Part  IV of the Constitution, especially Article  39(b) and (c) is futuristic mandate to the State with the  message of  transformation of the economic and social  order.   Such change  calls  for  collaborative effort from  a  the  legal institutions  of the system: the legislature, the  judiciary and  the  administrative machinery.  The Court  and  counsel have  a  justice constituency with economic  overtones,  the manifesto  being  the constitution designed  to  uphold  the humanist  values of life, liberty and the equal  pursuit  of happiness, material and spiritual. [690 D-E] Lawyers  for Social Change; Perspectives on Public  Interest Law’ by Robert L.   Rabin, Standord Law Review Vol. 28,  No. 2 January 1976; Law in America p.  34  by Bernard  Schwartz; The nature of judicial Process by Cardozo, 1932. p.    170; The  Indian Constitution-by Granville Austin;  British  Coal Corporation v. The  Kind  1935 AC 500; Attorney  General  of Ontario v. Attorney General of     Canada  1947  AC  503;  1 Constituent Assembly Debates, p. 61. referred to.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal No.  1085  and 1522 1894/76. From  the Judgment and Order dt. 20th September 1976 of  the Karnataka  High Court in W. P. Nos. 817 and 818-826/76  etc. etc. L.   N.  Sinha,  R.  N. Byra  Reddy,  Adv.   Genl.,  Narayan Nettar, K., S. Puttawany (For A. 2 in CA.  Nos. 1085 & 1522) and Mr. Aruneshwar Gupta, Advs. for the appellants : A.   K. Sen, K. N. Bhatt, and M. R. V. Achar, for the Res- pondents  in  Civil Appeals Nos. 1537, 1538-48, 1549,  1551- 52, 1555, 1557-69.  1562,  1564-66 1967-68,  1569-72,  1574, 1576-80, 1586-89 1593-9  1597-1611, 1612-1613, 1618-24 1628- 29, 1631-329 1635-36 1638-42-,     1644, 1646-48 1660, 1662- 63, 1664-65, 1668, 1670-74, 1676, 1684-85, 1689 1695,  1697, 1700,  1701,  1703-4, 1710, 171216, 1724-27  1729-30,  1732, 1734-37, 1738-39, 1741, 1746, 1748-50, 1753, 1-59-60,  1761, 1763,  1765-66,  1768-69, 1771. 1774-76, 1786,  1785,  1803, 1805 (R-1) 1806-7, 1809, 1814-17, 1825, 1828, 1832,  1836-37 1840-41,  1844-46,  1850, 1858-59, 1863.  1865-66,  1868-71, 1873-77, 1879, 1882, 1884, 1887 & 1889/76 A.K.C.  Sen. A. T. M. Sampath, and M. R. V. Achar,  for  the Respondents in Civil Appeals Nos. 1677, 1758 & 1778/76 : G. L. Sanghi, S. K. Mehta, K. R. Nagraja & P. N. Puri and A. K. Sanghi, for the Respondents in Civil Appeals Nos. 1523-24 1528,  1530, 1532-33 1575, 1581. 1583, 1595-96, 1626.  1678- 83,  1686-88,  1691-94, 1996 (R-1) 1717, 1720,  1723,  1742. 1747,  1755-56, 1779-80, 1782-83, 1785, 1787-90 1792,  1798.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 50  

1810 1823, 1830, 1861 & 1878/76. S.   S.  Javali, A. K. Srivastava, and B. P. Singh, for  the Respondents In Civil Appeals Nos. 1630, 1656, 1657 & 1854/76 CA. 1085/76. Girish  Chandra,  (Not present) for Respondent No. 2  in  CA 1085/76,. S.   Narayana  Bhat (In persons) for Respondent in CA.   No. 1804/ 76: N.   Byra  Reddy,  Adv, Gnl.  Narayan Nettar. for  the  Adv. Genl/Karnataka. 646 The following Judgment were delivered UNTWALIA,  J.  This batch of 374 appeals by  certificate  is from  the decision of the High Court of Karnataka  given  in 374 Writ Petition filed by different persons having  various kinds of interest in the Contract Carriages which were taken over   by   the  State  of  Karnataka   Contract   Carriages (Acquisition) Ordinance, 1976 (Karnataka Ordinance No. 7  of 1976) (for brevity, hereinafter, the Ordinance) followed  by the  Karnataka  Contract Carriages (Acquisition)  Act,  1976 (Karnataka  Act No. 21 of 1976) (hereinafter to be  referred to as the Act).  The judgment of the High Court is  reported in  K. Jayaraj Ballal, and others v. State of Karnataka  and others.(1)  For the sake of convenience hereinafter in  this judgment,  reference  to the High  Court  judgment  wherever necessary will be made from the said report. FACTS The broad and the, common facts of the various cases are  in a  narrow  compass and not in dispute.  At  the  outset,  we shall  state them mostly from the High Court  judgment.   We were  not  concerned to go into the special  facts  of  some cases in these appeals.  They may have to be looked into, if necessary, by the, High Court in the light of this judgment. The Karnataka State Road Transport Corporation  (hereinafter called  the  Corporation)  was  established  by  the   State Government of Karnataka on August 1, 1961 under section 3 of the  Road  Transport Corporations Act, (Central  Act  64  of 1950).   The Corporation was a party respondent to the  writ petitions aid is an appellant before us alongwith the  State of  Karnataka.  We are stating the facts mostly  from  Civil Appeal No. 1985 of 1976 arising out of Writ Petition No. 817 of 1976.  The Corporation published in the Karnataka Gazette dated  May  16, 1974 a draft scheme for  nationalisation  of Contract  Carriages in the State under Chapter IV-A  of  the Motor   Vehicles  Act,  1939  (Central  Act  4   of   1939). Objections  were  invited.   Some  of  the  writ-petitioners preferred their objections. it appears the State, Government and the Corporation dropped the idea of proceeding with  the scheme  and without concluding the and the disposal  of  the objections   and  the  finalization  of  their  scheme   the Government came out with the Ordinance which was promulgated on  January 30, 1976.  As per clause 1(3) of the  Ordinance, it  applied  to "all contract carriage(s) operating  in  the State of Karnataka By a number of notifications issued under the  Ordinance  almost all the contract  carriages  and  the permits specified in the notifications vested in the  State. They were transferred to the Corporation under clause  20(1) of  the Ordinance.  The officers of the  Corporation  seized the  vehicles  and  the relative  permits  pursuant  to  the notifications  aforesaid  except  six  vehicles  which  were operating under Inter-State permits belonging to some of the writ petitioners.  The seizure of the said six vehicles  was stayed  by  the Order of the High Court made on  5th  April, 1976  in  some of the earlier writ petitions.   The  earlier writ  petitions were decided on February 26, 1976 and  March

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 50  

3, 1976 by a learned (1)  The  Indian  Law Reports (Karnataka)  1976  (Vol.  26). 1478. 647 single Judge of the High Court who field that the  Ordinance did not empower the acquisition of the vehicles not  covered by  valid contract permits and consequently quashed some  of the  notifications.   The Ordinance with  some  changes  was replaced  by  the  Act  which received  the  assent  of  the President  on  March  11, 1976 and  was  published  in  the; Karnataka   Gazette  dated  the  12th  March,  1976.    The, operation  of the Act was, however, made retrospective  from the  30th January, 1976-the day when the Ordinance had  been promulgated and come into force.  The Ordinance was repealed by  section  31 of the Act  and the saving  clause  in  sub- section (2) says               "Notwithstanding such repeal               (i)   anything done or any action taken  under               the  said Ordinance, shall be deemed  to  have               been  done  or taken under  the  corresponding               provisions of this Act;" Fresh  notifications were also issued under the  Act.   ’The combined  effect of all these actions was that whatever  was done  on  and from the 30th January, 1976 either  under  the Ordinance or under the Act was all deemed to have been  done or  done under the Act.  Fresh writ petitions numbering  374 were  filed  in  the  High Court  by  the  various  contract carriages  operators, financiers and others including  those who, had filed or succeeded in the earlier writ petitions. The  High Court has allowed all the writ  petitions,  struck down  the Act as unconstitutional and has declared  it  null and  void.   The  notifications  have  been  quashed.    The respondents  in  the writ petitions, namely  the  appellants before  us, were directed to restore, the vehicles with  the relative, permits and all other assets to the operators from whom  they were taken over.  Some  consequential  directives for determination of damages in some later proceedings  were also given. We  now proceed to state the findings of the High  Court  on the  various  points argued before it not in  the  order  as finally recorded in para 98 of its judgment at page 1530 but in  the  order the points were urged before us  by  Mr.  Lal Narayan Singh, learned counsel for the appellants.  They are as follows               (1)   The  acquisition  is not  for  a  public               purpose.               (2)   The compensation or the amount  provided               for or the principles laid down in the Act for               payment  in  lieu  of  the  various  vehicles,               permits  and other assets is  wholly  illusory               and arbitrary.               For  the  two reasons aforesaid,  the  Act  is               violative   of   Article   31   (2)   of   the               Constitution  and  is a fraud on it.   It  is,               therefore, null and void.               (3)   The  acquisition of  contract  carriages               with  Inter-State  permits  and  other  assets               pertaining  to such operators is  ultra  vires               the  legislative power and the  competence  of               the State Legislature.               648               Article 31 C does not bar the challenge to the               Act as being violative of Article 31(2) of the               Constitution  as  there is no  reasonable  and               substantial  nexus between the purpose of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 50  

             acquisitions   and  securing  the   principles               specified  in clauses (b) and (c)  of  Article               39. We now proceed to deal with the points aforesaid seriatim in the above order. PUBLIC PURPOSE It  is indisputable and beyond the pale of  any  controversy now as held by this Court in several decisions including the decision  in  the case of His Holiness  Kesavananda  Bharati Sripadagalaveru  v.  State of Kerala(1) popularly  known  as Fundamental   Rights   case-that  any  law   providing   for acquisition  of  property  must be, for  a  public  purpose. Whether the law of acquisition is for public purpose, or not is a justiciable issue.  But the decision in that regard  is not to be given by any detailed inquiry or investigation  of facts.  The intention of the legislature has to be  gathered mainly from the Statement of Objects and Reasons of the  Act and  its  Preamble.   The matter has  to  be  examined  with reference to the various provisions of the, Act, its context and set up, the purpose of acquisition has to be culled  out therefrom  and  then,  it  has  to  be  judged  whether  the acquisition  is for a public purpose within the  meaning  of Article  31(2) and the law providing for  such  acquisition. The   acquisition  of  the  vehicles  namely  the   contract carriages.  their permits and other assets for running  them for the purposes, of the Corporation could not be challenged as being not for a public purpose merely because it was  for the purposes of transferring them to the Corporation. Statement  of  Objects and Reasons for the impugned  law  as follows :               "A  large  number of contract  carriages  were               being  operated in the State to the  detriment               of  public interest and were also  functioning               stealthily  as stage carriages.  This had  to,               be  prevented.  Article 39(b) and (c)  enjoins               upon  the State to see that the ownership  and               control  of  the  material  resources  of  the               community  are  so  distributed  as  best   to               subserve   the  common  good  and   that   the               operation  of  the economic  system  does  not               result  in the concentration of wealth to  the               common detriment.               In  view  of the aforesaid it  was  considered               necessary  acquire the contract carriages  run               by private operators."               Accordingly  the Karnataka Contract  Carriages               (Acquisition) Ordinance, 1976 was promulgated.               The Bill seeks to replace the Ordinance." The  title  of  the Act- indicates that it  is  "An  Act  to provide  for the acquisition of contract carriages  and  for matters incidental, ancillary or (1)  [1973] Suppl.  S.C.R.1 649 subservient thereto."     In the Preamble it is stated :-               "Whereas contract carriages and certain  other               categories  of  public  service  vehicles  are               being operated in the State in a manner highly               detrimental   and   prejudicial   to    public               interest;               And  whereas  with  a view  to,  prevent  such               misuse  and also to provide better  facilities               for the transport of passengers by road and to               give effect to the policy of the State towards               securing that the ownership and control of the               material  resources  of the community  are  so

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 50  

             distributed  as  best to subserve  the  common               good  and that the operation of  the  economic               system  does not result in the,  concentration               of  wealth  and  means of  production  to  the               common detriment;               And  whereas for the aforesaid purposes it  is               considered   necessary  to  provide  for   the               acquisition of contract carriages and  certain               other categories of public service vehicles in               the   State   and  for   matters   incidental,               ancillary or subservient thereto: A declaration was also made in section 2 that the Act is for giving  effect to the policy of the State  towards  securing the  principles specified in clauses (b) and (c) of  Article 39.  A deep probe into and investigation of the facts stated in the Statement of Objects and Reasons and the Preamble  of the Act was neither permissible nor was it gone into by  the High Court.  Mr. A. K. Sen advanced the leading argument  on behalf  of the respondents followed by some other  Advocates and one of the respondents in person.  The main plank of the argument  advanced  on behalf of the  respondents  was  that acquisition of vehicles which are available for sale in  the market  cannot be said to be for a public purpose.   Counsel submitted that the scheme of nationalisation in Chapter IV-A of the Motor Vehicles Act was given up, whole Undertaking of the various operators was not acquired but what was acquired was  certain  assets  most of which were  available  in  the market.   Acquisition of chattels or movables can  never  be for  a  public purpose.  The High Court. in support  of  its view,  also  refers to the wordings of  sub-section  (3)  of section  4 of the Act wherein it has been provided that  the contract  carriage and other property vesting in the  State, Government  shall  "be deemed to have been  acquired  for  a public  purpose".   We are of the opinion that  neither  the argument  nor  the  decision  of the  High  Court  that  the acquisition is not for a public purpose is correct. On  the fact of the Statement of Objects and Reasons of  the Act  as  also  from its Preamble it  is  clear,  apart  from further  facts which were stated in the  various  affidavits filed  on  behalf  of the State,  that  the  operators  were misusing their permits granted to them as contract carriages permits.   In  many cases the vehicles were  used  as  stage carriages  picking  up and dropping passengers in  the  way. The  Legislature thought that to prevent such misuse and  to provide for better facilities to transport passengers and to the general public it is necessary to acquire the  vehicles, permits  and all rights, title and interest of the  contract carriage  operators in or over lands,  buildings,  workshops and other places and 650 all  stores, instruments, machinery, tools, plants  etc.  as mentioned  in sub-section (2) of Section 4 of the  Act.   It was  not a case where some chattels or movables were  merely acquired for augmenting the revenue of the State or for  its commercial  purposes.   Mr.  Sen heavily  relied  upon  some passages in the judgment of this Court in The State of Bihar v.   Maharajadhiraja  Sir Kameshwar Singh of  Darbhanga  and others(1) to strengthen his submission.  The, said  decision was concerned with the vires of the Bihar Land Reforms  Act, 1950  by which the Zamindaries or  intermediaries’  interest were  acquired by the State.  One of the provisions  in  the Act was for acquisition of arrears of rent due to the inter- mediaries  from their respective, tenants.   This  provision was  struck  down as being unconstitutional.   And  in  that connection, Mahajan, J, as he, then was, said at page 944 :

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 50  

             "It has no connection with land reform or with               any public purpose.  It  stands  on  the  same               footing as other debts due to zamindars  or               their  other movable properties, which it  was               not the object  of  the  Act to  acquire.   As               already  stated, the only purpose  to  support               this  acquisition is to raise revenue  to  pay               compensation  to some of the  zamindars  whose               estates  are being taken.  This  purpose  does               not fall within any definition, however  wide,               of  the  phrase "public purpose" and  the  law               therefore to this extent is unconstitutional." Mukherjee  J., as he then was agreed with this view at  page 957.   Das  J.,as he then was and Chandrasekhara  Aiyar  J., also concurred in the same.  But the said decision given  in respect  of  the  debts  due to  the  Zamindars  from  their tenants, which were merely chooses in action is of no’  help to the respondents. In  these  appeals  we are not called upon  to.  decide  and express  any final opinion as to whether an  acquisition  of chattels  or  movables can be for a public purpose  or  not. What may only add that the preposition so broadly but is not quite correct.  There may be many circumstances and facts to justify  the  acquisition of even a movable property  for  a public  purpose.   It  may not be  universally  so  but  the converse is also not correct.  In the instant cases what has been  acquired  under  the  Act is  not  only  movables  and chattels  namely  the  vehicles but also  the  permits,  the workshops,  land  and  buildings  etc.  Although  the  whole transport  undertaking  of  any carriage  operator  was  not acquired,  the acquisition in no sense was of  more  movable properties  available  easily for purchase  in  the  market. Several  hundred  vehicles  were  acquired  by  the  various notifications. In substance it was a nationalisation of  the contract  transport  service  in  the  State  of  Karnataka. Undoubtedly it was for a public purpose.  We may just  quote a few lines from the judgment of Mahajan J., in the case  of The  State of Bihar v. Maharajadhiraja  Sir Kameshwar  Singh of Darbhanga and others (supra) occurring at page 941               "In  other  words, shortly  put,  the  purpose               behind  the Act is to bring about a reform  in               the land distribution system of Bihar for  the               general  benefit of the community as  advised.               The (1)  [1952] 3 S.C.R. 889 651               Legislature is the best judge of what is  good               for the community, by whose suffrage it  comes               into existence and it is not possible for this               Court to say that there was no public  purpose               behind  the  acquisition contemplated  by  the               impugned statute." The  language  of  section 4(3) of the Act is  not  for  the purpose  of introducing a legal fiction as observed  by  the High  Court but with the object of putting the challenge  to the factum of public purpose beyond the pale of any  attack. Tile  use  of the word ’.’deemed" does  not  invariably  and necessarily  implies an introduction of a legal fiction  but it has to be read and understood in the context of the whole statute. it may well be that the State is not authorised  to compulsorily  acquire  any property merely  to  augment  its revenue  although  in  a  larger  sense  one  can  say  that augmentation  of  the  coffers of the State is  also  for  a public purpose.  But it is not always correct to say that  a property cannot be acquired merely for a commercial need  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 50  

the  Government.  Under the Land Acquisition Act, 1894  land can be acquired for commercial purposes of the Government  a Public  Corporation  or a Company.  Why  can’t  movables  be acquired  for commercial purposes if the exigencies  of  the situation so require ?  A particular commercial activity  of the  State may itself be for a public purpose.   Acquisition of  property  either  movable or immovable  may  in  such  a situation be for a public purpose. Mr.  Sen  referred  to  section 19  of  the  Road  Transport Corporations Act and specially to clause (c) of  sub-section (2)  to lend support to his argument that without  acquiring the  whole undertaking only a portion of its assets  leaving out  the liabilities could not be acquired.  For  this  pur- pose,  he relied upon the provisions of Chapter IV-A of  the Motor  Vehicles  Act also.  The  nationalisation  of  routes under  the said Chapter of the Motor Vehicles Act  does  not necessarily   imply   the  acquisition  of   the   transport undertakings  of  the various operators, their  vehicles  or properties.    That  is  a  separate  and  distinct   method altogether.    In   section  19  of   the   Road   Transport Corporations   Act   are  enumerated  the  powers   of   the Corporation.   Sub-section  (2)  (c) gives a  power  to  the Constitution "to prepare schemes for the acquisition of, and to   acquire,  either  by  agreement  or   compulsorily   in accordance with the law of acquisition for the time being in force the state concerned and with such procedure as may  be prescribed, whether absolutely or for any period, the  whole or  any part of any undertaking of any other person  to  the extent  to  which  the activities  thereof  consist  of  the operation of road transport services in that State or in any area".   It  is  plain that the scheme  for  the  compulsory acquisition  may be for a part of the undertaking  also  and that would mean a part of the property of the undertaking or a branch of the undertaking.  Of course, the Corporation can purchase vehicles as provided for in clauses (a) and (g)  of sub-section  (2)  of  section 19.  But it  does  not  follow therefrom  that  in  all  cases it  is  obliged  to  do  so. Compulsory  acquisition is also provided for in clause  (c). Under section 3 of Act 64 of 1950 while establishing a  Road Transport  Corporation  the State Government is  obliged  to keep  in mind primarily the public interest as provided  for in clauses (a) to (c) thereof.  The acquisition in  question for the purpose of the Corporation was, therefore, in public interest. 5-951SCI/77 652 In  our judgment, therefore, the decision of the High  Court on  the  question of public purpose is erroneous.   We  hold that  the impugned law of acquisition and  the  acquisitions are for public purpose. AMOUNT TO BE PAID FOR THE PROPERTY ACQUIRED. The High Court in paragraph 92 at page 1527 has come to  the conclusion........  the scheme for payment for the  property acquired under the Act is wholly illusory and therefore  the Act  violates  the  fundamental rights  of  the  petitioners secured under Article 31 (2)." The  history  in  relation to the provision  of  payment  of compensation   or  the  amount  in  Article  31(2)  of   the Constitution  is  interesting  and clearly  points  out  the difference in the approach to the question by this Court and the Parliament resulting in the amendments in the provisions from  time  to time as and when some important  and  leading judgment  were banded down by this Court which according  to the  Constituent Body did not correctly lay down the law  as it  intended  the  Article to mean.  The word  used  in  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 50  

original  Article 31(2) was ’compensation’. In The State  of West Bengal v. Mrs. Bela Banerjee and others(1) compensation was  held  to mean a just equivalent of what the  owner  has been deprived of.  Then came an amendment in the Article  by the  Constitution  (4th  Amendment), Act,  1955  stating  in clause (2) of Article 31........ no such law shall be called in question in any court on the ground that the compensation provided  by  that  law is not adequate." In  spite  of  the amendment, this Court in some decisions-to with P. Yajravelu Mudaliar  v.  The Special Deputy Collector, Madras  (2)  and Union  of India v. The Metal Corporation of India  Ltd.  and Another (3) largely, if not fully, stuck to its view in Mrs. Bela  Banerjee’s  case (supra).  Then came the  decision  in State of Gujarat v. Shri Shantilal MangaldaS N Ors (4) where Shah J., as he then was in his leading judgment to which was appended a short concurring note by Hidayatullah C. J., made a   conspicuous  departure  from  the  views  expressed   in Vajravalu’s  case  and  the case of  The  Metal  Corporation (supra) and the said decisions were over-ruled.   Thereafter came  the decision of 11 Judges of this Court  the,  leading judgment being of Shah J., on behalf of himself and 9 others in  what  is  known as the Bank Nationalisation  ,  case  in Rustom  Cavasjee Cooper v. Union of India(5).   Although  in terms  the decision of this Court in the case  of  Shantilal Mangaldas (supra) was merely explained, in substance it  was over-ruled.    Thereafter,   by   the   Constitution   (25th Amendment) Act the word ’compensation was substituted by the word  ’amount?  in Article 31(2), which, as in the  case  of ’compensation’, may be fixed by the law of acquisition or be determined  in accordance with such principles and given  in such manner as may be specified in such law. law was  sought to  be  kept beyond the pale of challenge in  any  Court  by reiterating  in a slightly different form that it cannot  be assailed on the ground "that the amount (1)  [1954] S.C.R. 558. (2)  [1965] 1 S.C.R. 614. (3)  [1967] 1 S.C.R. 255. (4)  [1969] 3 S.C.R. 341. (5)  [1970] 3 S.C.R. 530. 653 so fixed or determined is not adequate or that the whole  or any  part ,of such amount is to be given otherwise  than  in cash".  In the Fundamental Rights case (supra) the change in the  phraseology of Article 31(2) came up for  consideration before the Bench of 13 Judges.  The ,High Court is not right in  saying  that decision in the Bank  Nationalisation  case still  holds  the  field  on  the  question  of  amount   or compensation  to  be  paid for  the  acquired  property.   A departure  has been made from the view expressed earlier  in the  light  of the 25th Amendment.  It is not  necessary  to pin-point the details of such departure.  For the purpose of deciding  the point which, falls for consideration in  these appeals,  it will suffice say that still  the  over-whelming view of the majority of judges in Kesavananda Bharati’s case is that the amount payable for the acquired property  either fixed  by the legislature or determined on the basis of  the principles  engrafted  in the law of acquisition  cannot  be wholly  arbitrary and illusory.  When we say so we  are  not taking  into account the effect of Article 31 C inserted  in the  ,Constitution  by the 25th Amendment (leaving  out  the invalid part as declared by the majority). Just  to support the principle of law culled out  above,  we may  refer  to  a  few lines in some  of  the  judgments  in Kesavananda  Bharati’s case.  Sikri C. J., has said at  page 197  : "Applying this to the fundamental right of  property,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 50  

Parliament  cannot empower legislatures to fix an  arbitrary amount  or  illusory  amount or  an  amount  that  virtually amounts   to   confiscation,   taking   all   the   relevant circumstances of the acquisition into consideration." Shelat and  Grover JJ., in addition to what they have said  earlier categorically  say at page 285 :       and further that  the "amount"  is  neither illusory nor it has been  fixed  arbi- trarily,  nor  at  such  a  figure  that  it  means  virtual deprivation of the right under Article 31(2).  The  question of  adequacy or inadequacy, however, cannot be  gone  into." Hedge,  and  Mukherjee  JJ., have observed  at  page  338  : "Therefore,  stated briefly, what the 25th  Amendment  makes non-justiciable is an enquiry into the question whether  the amount  fixed  or determined is an equivalent  value  of  or ’compensations for the property acquired or requisitioned It is difficult to believe that Parliament intended to  make a  mockery of the fundamental right conferred under  Article 31(2).  It cannot be that the Constitution while  purporting to preserve the fundamental right of the citizens to get  an "amount"  in lieu of the property taken for  public  purpose has in fact robbed him of all his right." Ray J., as he then was  goes point out at pages 446 and 447 the  Article  still binds the legislature to provide for the giving to the owner a sum of money either in cash or otherwise.  The legislature may either lay down principles for the determination of  the amount or may itself fix the amount. The Constitution does not allow judicial review of a law  on the  ground of adequacy of the amount and the manner  as  to how  such amount is to be otherwise than in cash."  At  page 555 is to be found the view of Jaganmohan Reddy J., in these words 654               "Once   the  Court  is  satisfied   that   the               challenge on the ground that the amount or the               manner of its payment is neither arbitrary  or               illusory........ Lastly we would refer to a passage occurring in the judgment of one of us (Chandrachud J.) at pages 992 and 993.  It runs thus:               "The  specific obligation to pay  an  "amount"               and  in  the alternative the use of  the  word               "Principles" for determination of that  amount               must mean that the amount fixed or  determined               to  be paid cannot be illusory.  If the  right               to  property  still  finds  a  place  in   the               Constitution,  you cannot mock at the man  and               ridicule his right.  You cannot tell him .  "I               will take your fortune for farthing."  As  already  stated the High Court took the view  that  the amount  payable  under the, Act for  the  property  acquired would be such that it will be wholly arbitrary illusory  and leave  the many operators in huge debts.  Many of them  were playing  their  contract  carriages having  taken  loans  of considerable  sums of money from the, various financiers  on hire-purchase  system, for whom also Mr. A. K. Sen  appeared and  argued before us.  They would not only be  paupers  but huge  liability  will  remain  on  their  shoulders  if  the interpretation  put  by the High Court were to  be  correct. Mr.  Lal Narayan Sinha, learned counsel for the  appellants, took  a  just and proper attitude in advancing  an  argument before us which would take away the basis of the High  Court Judgment  in  this regard.  With respect to each  and  every relevant section on the question of payment of the amount in lieu   of  the  property  acquired  he  suggested   such   a reasonable,  harmonious and just construction’ by the  rules

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 50  

of  interpretation that we found no difficulty in  accepting his argument-rather, were glad to do so.  The other side  on the  interpretation  so put, which we are going  to  mention hereinafter,  felt satisfied to a large extent.   Mr.  Sinha also advanced some argument with reference to the valid part of Article 31 C read with clauses (b) and (c) of Article  39 but very wisely did not choose to heavily rely upon it.   On the interpretation of the statute as canvassed by him, there hardly remained any necessity of it. Section  3  of  the  Act defines  in  clause  (a)  ’acquired property’ to mean the vehicles and other property vesting in the  State,  Government under section 4. The  definition  of ’contract  carriage  is an inclusive one with  reference  to certain provisions of Motor Vehicles Act.  Clause (h)  runs thus :               "Contract carriage operator’ means an operator               holding  one or more contract carriage  permit               and includes any person in whose name a public               service vehicle is registered and is specified               as  a contract carriage in the certificate  of               registration of such vehicle." ‘Permit’  in clause (m) means the permit granted  under  the Motor  Vehicles Act, authorising the use of a vehicle  as  a contract carriage Then comes the important clause (n)  which runs as follows: 655               ’Person   interested’  in  relation   to   any               acquired   property  includes   the   contract               carriage operator and any secured creditor  or               financier under a hire purchase agreement, who               has  a  charge, lien or any  interest  in  the               acquired property and any other person who  is               affected  by  the  vesting  of  the   acquired               property and claiming or entitled to claim  an               interest in the amount." Section  A provides for vesting of contract  carriages  etc. with the permit or the certificate of registration or  both absolutely  free  from  all  encumbrances.   Various   other properties mentioned in clauses (i) and (ii) of  sub-section (2) also vest on the issuance of the notification under sub- section  (1).  While providing that the property shall  vest absolutely free from all encumbrances, a safeguard has  been provided  for a person interested and having a claim to  the amount  in  respect of such property under the  Act.   Under section  5,  the  operators  are  to  furnish  the  required particulars.   Section 6 which deals with  determination  of the amount must be read in full.               "6.  Determination of the amount.-(1) For  the               vesting of the acquired property under section               4,  every person interested shall be  entitled               to receive such amount as may be in the manner               hereinafter set out and as specified               in the Schedule, that is to say-               (a)   where   the  amount  can  be  fixed   by               agreement   it   shall   ,be   determined   in               accordance with such agreement;               (b)   where no such agreement can be  reached,               the   State   Government  shall   appoint   as               arbitrator  a  person who is an  ,officer  not               below the rank of a Divisional Commissioner or               a District Judge;               (c)   the   State  Government  may,   in   any               particular  case, nominate a  person  having               expert  knowledge  as  to the  nature  of  ,he               acquired property to assist the arbitrator and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 50  

             where  Such  nomination is  made,  the  person               interested  may also nominate an assessor  for               the same purpose;               (d)   at  the commencement of the  proceedings               before  the :arbitrator, the State  Government               and the person interested shall state what  in               their   respective  opinion  is   the   amount               payable:               (e)   the arbitrator shall, after hearing  the               dispute, make an award determining the  amount               which  appears to him just and reasonable  and               also specifying the person or persons to  whom               the  amount shall be paid; and in  making  the               award   be   shall   have   regard   to    the               circumstances of each case and the  provisions               of the Schedule so far as they are applicable;               (f)   where  there  is any dispute as  to  the               person  or  persons who are  entitled  to  the               amount,  the  arbitrator  shall  decide   such               dispute and if the arbitrator finds that  more               persons  than one are entitled to the  amount,               he  shall apportion the amount,  amongst  such               persons;               656               (g)   nothing  in  the Arbitration  Act,  1940               (Central  Act  X  of  1940),  shall  apply  to               arbitrations under this section.               (2)   Every award made by the arbitrator under               clause(e)  of sub-section (1) shall also state               the   amount   of  costs   incurred   in   the               proceedings before him and by whom and in what               proportions such amount is to be paid." A  notice  under  section 7 is to be given  to  all  persons interested in respect of the amount determined under section 6.  Any  person interested and served with  a  notice  under section  7  can file a claim before the  authorised  officer under  sub-section  (1)  of  section  8.  The  language   of subsection  (2)  created some difficulty in  harmonising  it with the other provisions of the statute.  It runs thus :               "The  authorised  officer  shall  forward  the               claim made under sub-section (1) to the  State               Government  for the payment of the  amount  to               the person interested in the manner  specified               under section 11." Section  10  is  important  and  provides  for  the  various categories  of  the: amount liable to deduction  in  certain cases.  The nature of such amounts liable to be deducted are relatable  to  the  Employees’ Provident  Funds  and  Family Pension  Fund  Act, 1952, Employees’  State  Insurance  Act, 1948, salary, wags etc. due to an employee, taxes etc.   But the  important  item to be noticed is  mentioned  in  clause (iii) of subsection (3) which makes "the amount due  towards the  claims of secured creditors" deductible  under  section 10.  Sub-section (4) authorises the arbitrator to decide any dispute  regarding the sum to be deducted under  sub-section (3).  Then section 11(1) providing for the manner of payment of amount for the acquired property says               "The amount determined under section 6  shall,               after deduction, if any, made under this  Act,               be  given in cash by the State  Government  to               the person interested,-               (a)   in one lumpsum where the amount does not               exceed ten thousand rupees; and               (b)   in ten equal annual instalments in other               cases, the amount of each instalment  carrying

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 50  

             interest at the rate of six per cent per annum               from the notified date." An  appeal  lies to the High Court from the,  award  of  the arbitrator  as  provided for in the 12th  section.   Certain powers  of  the  Civil  Court have  been  conferred  on  the arbitrator  and  the authorised officer  under  section  13. Section  19  enjoins the, State Government to  transfer  the whole of the acquired property in favour of the Corporation. The  permit  stands  transferred to  the  Corporation  under section 19(2).  Subsection (6) says :               "(a) All sums deducted by the State Government               under  sub-section  (3) of  section  10  shall               stand transferred to the corporation  referred               to in sub-section (1).               657               (b)   The  corporation shall credit  the  sums               transferred to the appropriate funds or if any               part  of the sums is payable to the  employee,               directly,  such  part  shall be  paid  to  him               directly." A  monopoly is created in favour of the Corporation  by  the 20th section. Then  comes  the  Schedule  spoken of  in  section  6  which provides for   principles for determination of the amount in relation  to the various properties acquired under the  Act. Para   1  deals  with  the  principle  and  the  manner   of determination   of  the  amount  for  the   vehicles.    The acquisition  cost  is  to be determined  first  and  then  a certain percentage is to be deducted in accordance with  the Table appended to sub-para (1).    The explanation says :               "For   the   purpose,   of   this    paragraph               "acquisition cost" shall be the aggregate cost               of  the  chassis as well as the  body  of  the               contract   carriage   as   charged   by    the               manufacturer  of  chassis  and  by  the   body               builder." In  respect  of  almost all other  properties  acquired  the amount  to be paid is by and large the market value. of  the property; vide paras, 2, 3,   and  4. Provisions  have  been also made for payment of the amount in  respect    of    the workshops in para 5 and in respect of stores in para 6. Some compensation has been provided in para 7 of the Schedule for every permit acquired under the Act, although the amount  so fixed may not be adequate. Now  by the harmonious and reasonable rules of  construction as  also  to save the Act from being  violative  of  Article 31(2) of the Constitution, we proceed to discuss and  accept in  a large measure the interpretation put and canvassed  by Mr.  Sinha.  If the amount is fixed by agreement,  well  and good.  In the absence of an agreement, the State  Government shall appoint an arbitrator who will be an officer of a high rank.   Two  assessors  having expert knowledge  as  to  the nature  of the acquired property--one by the Government  and one by the person interested, can be appointed to assist the arbitrator.  Both sides will state before the arbitrator  as to what should be the amount payable according to each.  The arbitrator  shall  hear  the  dispute  and  make  an   award determining  the  amount  which  appears  to  him  just  and reasonable.  He shall also specify the person or persons  to whom  the  amount shall be paid.  In making the  award,.  he shall have regard to the circumstances of each case and  the provisions of the schedule so far they are applicable.  Some difficulty at the outset arose in reconciling the expression "as  specified in the schedule" occurring in subsection  (1) of  section  6 and the underlined  expression  occurring  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 50  

clause (e) of that sub-section. The  content and purport of the expressions  "having  regard to" and "shall have regard to" have been the subject  matter of  consideration  in  various decisions of  the  Courts  in England  as  also in this country.  We may refer only  to  a few.  In Illingworth v. Welmsley(1) it was held (1)  (1900) 2 Queen’s Bench, 142. 658 by  the  Court  of Appeal, to quote a few  words  from  the, judgment  of  Romer C.J. at page 144 : "All  that  clause  2 means is that the tribunal assessing the compensation is  to bear  in  mind and have regard to the average  weekly  wages earned before and after the accident respectively.   Bearing that   in  mind,  a  limit  is  placed  on  the  amount   of compensation that may be awarded....... In another  decision of  the  Court of Appeal in Perry. Wright  (etc.  etc.)  (1) Cozens-Hardy M.R. observed at page 45 1 :"No mandatory words are  there used; the phrase is simply "regard may  be  had". The sentence is not grammatical, but I think the, meaning is this  : Where you cannot compute you must estimate, as  best as you can, the rate per week at which the workman was being remunerated, and to assist you in making an estimate you may have regard to analogous cases." It is worthwhile to quote a few words from the judgment of Fletcher Moulton L.J. at page 458.   Under  the phrase" "Regard may be had to"  the  facts which  the  Court may thus take cognizance of are to  be  "a guide,  and not a fetter." "This Court speaking through  one of  us  (Beg  J., as he then was), has  expressed  the  same opinion  in the case of Saraswati Industries Syndicate  Ltd. Etc.  v. Union of India(2). Says the learned Judge  at  page 959  : "The expression "having regard to" only  obliges  the Government to consider as relevant date material to which it must have regard." The  arbitrator, therefore, reading section 6(1) as a  whole is  not  obliged  to  fix the amount  as  specified  in  the Schedule.  But he has to fix the amount which appears to him just  and  reasonable  on  the totality  of  the  facts  and circumstances keeping primarily in mind the amount mentioned in the Schedule. Another apparent conflict was writ large on the  phraseology of subsection (2) of section 6 and the provisions  contained in  sections  10  and  11.   Section  10  provides  for  the deductions  of  the various amounts at the outset  from  the amount  determined by the arbitrator payable in  respect  of the acquired properties, including those due to the  secured creditors,  which undoubtedly, would include the  financiers of  the hire-purchase agreements.  The amount payable  under section 11 and the manner of its payment is, after deducting all  the amounts, provided in section 10.  To  that  extent, for the purpose of harmonious construction, sub-section  (2) of  section  8  must mean the payments  of  the  amounts  as mentioned  in section 10 and the balance to the operator  in the  manner  specified  under  section  11.   The  Act  thus interpreted  to  a large extent will satisfy  not  only  the claims on account of wages and tax etc. but also the  amount due  to  the secured creditors.  Surely the amount  due,  if any,’ to any unsecured creditor cannot be taken into account as   there  is  no  such  provision  made  in  section   10. Sufficient  power  has been conferred on the  arbitrator  to arrive at a just and reasonable figure of the amount payable for  the  property  acquired.   And  further,  a  procedural safeguard  has  been provided by making a provision  for  an appeal to the High Court from the award of the arbitrator. (1)  [1908] 1 King’s Bench, 441. (2)  [1975] 1 S.C.R. 956.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 50  

659 No attack with any reasonable justification could be made on paras  2  to 7 of the schedule.  But a difficulty  arose  in interpretation  of the term "acquisition cost" occurring  in sub-para  (1)  of  para  1.  The  literal  meaning  of  that expression  in sub-para (1) would have been the  acquisition cost  of the contract carriage operator or any other  person interested  therein.  But the difficulty created was by  the language  of the explanation appended thereto when  it  said that  "acquisition cost" shall be the aggregate cost of  the chassis  as  well as the body of the  contract  carriage  as charged  by  the manufacturer of chassis and  by  ,the  body builder."  Mr. Sinha rightly pointed out that the  true  and the correct meaning of the words used in the explanation  in the  light of sub-para (1) of para 1 would mean the cost  of the chassis fixed by the manufacturers for their dealers  to charge from the purchasers.  Really the acquisition cost qua the   purchaser   is  the  price  which  he  pays   to   the manufacturers’  dealer  from whom he purchases and  not  the manufacturer’s actual cost of manufacturing the chassis.  So far  the  acquisition  cost of the body of  the  vehicle  is concerned, no difficulty is created by the explanation.   It would be the actual cost charged by the body builder. On  the interpretations aforesaid which we have put  to  the relevant  provisions  of the Act,  it  was  difficult-rather impossible-to  argue  that  the  amount  so  fixed  will  be arbitrary   or  illusory.   In  some  respects  it  may   be inadequate but that cannot be a ground for challenge of  the ,constitutionality  of the law under Article 3 1  (2).   The respondents  felt  quite satisfied  by  the  interpretations aforesaid and could not pursue their attack on the vires  of the Act on that ground. Legislative  Competence  Re : Contract Carriages  Plying  on Inter-State Routes The  number of such carriages and such permits  compared  to the total number of vehicles acquired was very few.  It was about  20 to 25 ,only.  It is no doubt true that  under  the Ordinance  contract carriages with Inter-State permits  were not  sought to be acquired.  The Act, however, has  done  so and  with a r etrospective effect.  Question is whether  the State  Legislature of- Karnataka has gone beyond its  powers and  competence in making such a provision.  In that  regard it  was also canvassed before us whether it was possible  to read  down  certain provisions of the Act to  save  it  from constitutional  invalidity.  If so, to what extent  and  in what respect ? The  first  attack on the legislative  competence  was  that acquisition ,of such a contract carriage squarely fell under Entry  42  of  List  I  of  the  Seventh  Schedule  to   the Constitution   that  is  to  say,  "Inter-State  trade   and commerce."  In paragraph 97 of the judgment the High  ’Court seems to have rejected the contention that the Act  violated the  freedom of trade and commerce guaranteed under  Article 301  and 304.  But the High Court in the earlier portion  of its  judgment appears to have taken the view that an  Inter- State  permit  is,  in fact and in substance,  two  or  more permits  rolled into one.  The vehicle ply in the  different States.   The  permit originally granted  by  the  Karnataka authority   under   the  Motor  Vehicle  Act   has   to   be countersigned  by the authorities of the other States,  Some of the operators kept their 660 vehicles and have got their workshops in other States.   The law  made:  by the Karnataka Legislature cannot  have  extra territorial operation.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 50  

We,  do not think that the view expressed by the High  Court is  wholly  correct.  There are numerous  decisions  of  the Privy  Council,. the Federal Court and the Supreme Court  in support  of the proposition that the pith and  substance  of the  Act  has to be looked into and an  incidental  trespass would  not  invalidate the law, vide  for  example  Prafulla Kumar  Mukherjee and others and Bank of  Commerce  Limited,. Khulna  and  Advocate-General  of  Bengal(1);  Kerala  State Electricity Board v. Indian Aluminum Co.(2) The earlier case of  this  Court  is reported in A. S. Krishna  v.  State  of Madras(3).  Almost a direct decision on this point is to  be found  in  an  unreported decision of this Court  in  S.  K. Pasari  v.  Abdul  Ghafoor and Ors.  (4)  The  question  for consideration in that case was whether the State  Government had  power  under section 64A of the Motor Vehicles  Act  as introduced by the Bihar Amendment to deal with a revision in relation to an Inter-State permit.  The High Court had taken the  view  that it bad no such power, as such,  a  provision falls  within item 42 of List I of the Seventh  Schedule  to the  Constitution, namely, Inter-State trade  and’  commerce and not Entry 35 of List 111, namely, mechanically propelled vehicles.   This Court following the principle laid down  in the  case of Narayanappa v. State of Mysore(5) reversed  the view  of the High Court and held that the  impugned  section fell  within the legislative power of the State under  Entry 20 of List III of Schedule Seven, of the Government of India Act,  1935  corresponding  to Entry 35 of List  III  of  the Seventh Schedule to the Constitution.  The said decision has been followed by this Court in Tansukh Rai Jain v.  Nilratan Prasad Shaw and others(6). Mr. Sen submitted that the, portion of the Statute providing for acquisition of contract carriages running on Inter-State routes  is in reality legislating on the subject  of  Inter- State  trade  and  commerce.The State  Legislature  was  not competent  to  do so.  In support of his  argument,  learned counsel  referred  to some of the American  decisions,  viz. United  States  of America, Plff. in Err., v.  Dan  Hill(7); Claude  R.Wickard,  Secretary of Agriculture of  the  United States  etal  v. Roscoe C. Filburn(8);  The  Steamer  Daniel Ball,  Byron D. Ball and Jessie Ganoe, Claimants, Appit.  v. United  States(9).  In Dan Hill’s case (supra) it  was  held that  the  transportation of intoxicating  liquor  from  one State  to, another was in itself Inter-State  commerce,  and the Congress in the. (2)  [1976] 1 S.C.R. 552. (3)  [1957] S.C.R. 399. (4)  Civil Appeal No. 306 of 1964 decided on 4-5-1964. (5)  [1960] 3 S.C.R. 742. (6)  [1965] 2 S.C.R. 6 (7)  63 Law Ed. 337. (8)  87 Law Ed. 122. (9)  19 Law Ed. 999. 661 exercise  of  its plenary authority to regulate  the  Inter- State  transportation of intoxicating liquors. may  prohibit such transportation even into a State which permits it.   In the  case  of Claude R. Wickard (supra) the  question  arose entirely  in a different context.  A Federal  regulation  of the  production  of  wheat  not intended  in  any  part  for commerce but wholly for consumption on the farm was held  to be  within the power conferred by the commerce clause  where the,  purpose of such regulation was to control  the  market price of wheat in Inter-State commerce.  In the case of  The Steamer  Daniel  Ball (supra) the question was  whether  the impugned  Act  applicable to a steamer engaged as  a  common

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 50  

carrier  to carry goods in a navigable river between  places in  the  same  State  when  a  portion  of  the  merchandise transported  by  her is destined to places in  other  States could  control  such a steamer under the  authority  of  the Congress to regulate an agency employed in commence  between the States.  It was held that it could be so done. In  our judgment it is difficult to apply the principles  of any  of the cases aforesaid to the facts and the  provisions of  the Act.  It is not an Act which deals with  any  Inter- State  trade and commerce.  Even assuming for the  sake  off argument  that carriage of passengers from one State to  the other  is in one sense a part of the Inter-State  trade  and commerce,  the  impugned  Act is not  one,  which  seeks  to legislate in regard to the said topic.  Primarily and almost wholly  it  is  an act to provide  for  the  acquisition  of contract  carriages, the Inter-State permits and  the  other properties situated in the State of Karnataka.  In pith  and substance  it  is  an  act of  that  kind.   The  incidental encroachment   on  the.  topic  of  Inter-State  trade   and commerce, even assuming there is some, cannot invalidate the Act.   The Motor Vehicles Act, 1939 was enacted under  Entry 20 of List III of Schedule Seven of the Government of  India Act,  1935  corresponding  to Entry 35 of List  III  of  the Seventh Schedule to the Constitution.  The subject being  in the  Concurrent List and the Act having received the  assent of  the President, even the repugnancy, if any, between  the Act and the Motor Vehicles Act stands cured and cannot be  a ground  to invalidate the Act.  Entry 42 of List  III  deals with acquisition of property.  The State has enacted the Act mainly under this entry.  It does not in any way violate  or militate  against  the  provisions  of  the  Road  Transport Corporation Act either, as argued by Mr. Sen. Now  we  proceed to refer to some of the provisions  of  the Motor ’Vehicles Act, to repel Mr. Sen’s arguments even  with reference to that Act.  But it cannot be rejected fully.   A portion  of it for the reasons to be hereinafter stated  has got to be accepted. Under Section 23, every owner of a Motor Vehicle has got  to cause  his  vehicle  to  be  registered  by  a   registering authority  in  the State in which he has  the  residence  or place  of  business  where the  vehicle  is  normally  kept. Almost  all  the Inter-State vehicles (there may  be  a  few exceptions) are registered in the State of Karnataka.   They are  normally  kept there.  If a vehicle registered  in  one State has been kept in another State for a period  exceeding 12  months,  then  the registration has  to  be  changed  in accordance with section 29.  Under the 662 second  proviso to section 45(1) if it is proposed to use  a vehicle in two or more regions lying in different States, an application  for  a permit has to be made  to  the  Regional Transport  Authority  of the region in which  the  appellant resides  or has his in principal Place of business.   Almost all the Inter-State permits were initially granted by the Karnataka authority.  Section 63(1) says :               "Except  as  may be  otherwise  prescribed,  a               permit  granted  by  the  Regional   Transport               Authority of any one region shall not be valid               in  any  other region, unless the  permit  has               been  countersigned by the Regional  Transport               Authority  of that other region, and  a,permit               granted in any one State shall not be valid in               any  other State unless countersigned  by  the               State Transport Authority of that other  State               or   by  the  Regional   Transport   Authority

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 22 of 50  

             concerned :" This  Court  has  expressed the view in  the  case  of  M/s. Bundelkhand  Motor Transport Company, Nowgaon v. Behari  Lal Chaurasia  and  another(1) followed in Punjab  Sikh  Regular Motor   Service,   Modhapara  v.  The   Regional   Transport Authority, Raipur and another(2) that permits granted by one Regional  Authority and counter-signed by  another  Regional Authority  either in the same State or in  different  States are  really  different  permits rolled  into  one.   If  the initial  granting  authority does not renew the  permit  for plying  the  vehicle  within the,  jurisdiction  of  another authority  the  latter by mere  counter-signing  the  permit cannot  empower the permit holder to ply the bus  either  in their  region  or another State.  None  of  the  Inter-State permits  in  these  cases has been  issued  by  any  central authority  in  accordance  with section  63A  of  the  Motor Vehicles Act. In  the case of The Bengal Immunity Company Limited  v.  The State of Bihar and others(3) Venkatarama Ayyar J., delivered his  separate  judgment.  Although he  dissenting  from  the majority view in regard to the main controversy in the case, in  his  judgment from page 811 onwards  he  discussed  very lucidly, if we may say so with respect, the concept of extra territorial operation of a law.  It has two connotations  as pointed  out by the learned Judge at page 814  :  It........ means a law of a State with reference to its own citizens in respect  of  acts  or events which take  place  outside  the State.    In   discussing  questions  relating   to   extra- territorial  operation,  it is desirable that the  two  con- notations   of  the  words  should  be  kept  distinct   and separate".   Two other connotation is the operation  of  the law  itself to subjects or properties outside the  territory of the State which has made the law. For  the  reasons stated above by and large the law  is  not invalid.  But to maintain its constitutionality in full,  on the well-known principles of law established and noticed  in several  decisions, such as, in The Hindu Women’s Rights  to Property Act 1937. and the Hindu Women’s (1) [1966] 1 S.C.R. 485. (2)[1966] 2 S.C.R. 221. (3)  [1955] 2 S.C.R. 603, 663 Rights  to  Property (Amendment) Act, 1938,  and  A  Special Reference under section 213 of the Government of India  Act, 1935:  (1) R.M.D. Chamarbaugwalla v. The Union  of  India(2) and  Gulabhai  Vallabhbhai Desai etc. v. Union  of  India  & Ors(3)  a  reading  down  of  some  of  the  provisions   is permissible.   And  that reading down will be only  to  this effect.  Vehicles  kept  and  registered  in  the  State  of Karnataka  in  respect of which initially  the  Inter  State permit  has  been granted by this State  have  validly  been acquired.  The permit acquired in respect of those  vehicles will  be  the permit operative within the territory  of  the State  of  Karnataka.   The counter-signed  portion  of  the permit,  which  as pointed out above on the  authorities  of this  Court is in substance and in effect a separate  permit authorising  the  permit holder to ply the  bus  in  another State,  cannot be acquired.  Such an acquisition  will  fall within  the  second connotation,  of  the  extra-territorial operation  of the law, as referred to above from the  Bangal Immunity case.  The State Government on acquisition and  the vesting  of  the  acquired  property  cannot  transfer   the countersigned portion of the permit to the Corporation.  The Corporation in view of the transfer under section 19 will be able to  utilize  the unexpired portion of  the  permit  for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 23 of 50  

plying the vehicle  only in the Sate of Karnataka until  and unless  it gets it signed by the Transport authority of  the other State or States in accordance with the Motor  Vehicles Act or take steps in accordance with section 20 of the  Road Transport  Corporations  Act.   This  portion  of  the  law, although  it is a very minor one, has got  extra-territorial operation in the connotation and sense which did not  permit the  Karnataka Legislature to enact such a law.  If  on  the facts  of a particular case it be found that any  particular vehicle  is kept and registered or is plying on  an  initial permit  granted by another State, such a vehicle also  would not  stand  acquired  under the Act  and  the  notifications issued  thereunder.  Since the High Court has not gone  into the  details of the facts, we were not concerned to go  into them.   The Constitution Bench was formed merely  to  decide the constitutional issues. At  the end we may also indicate that under sub-section  (6) of  section  19 all sums deducted by  the  State  Government under  sub-section (3) of section 10 which include the  sums payable  to the secured creditors stand transferred  to  the Corporation which is obliged to credit the sums  transferred to  the  appropriate funds.  The said provision  would  take within  its  ambit the liability of the Corporation  to  pay forthwith the sum found due to the secured creditors.  Since we  have  upheld the constitutional validity of the  Act  on merits  by  repelling the attack on it by a  reasonable  and harmonious  construction of the Act, we do not  consider  it necessary  to express any opinion with reference to  Article 31C  read  with  clauses (b) and (c) of Article  39  of  the Constitution.   Our  learned brother Krishna  Iyer  J.,  has prepared  a separate judgment. specially dealing  with  this point.  We must not be understood to agree with all that  he has said in his judgment in this regard. (1) [1941] 1 S.C.R. 485. (2)  [1957] S.C.R. 931. (3)  [1967] 1 S.C.R. 602. 664 For  the reasons stated above, we allow the appeals and  set aside  the judgment of the High Court.  It will be  open  to any  of the writ petitioners to file a petition in the  High Court  either in the same writ petition or a fresh  one  for adjudication  and  decision  of  the  special  facts  of   a particular  case,  if  necessary,  in  the  light  of   this judgment.   It  is  hoped that since  the  matter  has  been considerably  delayed  by now, very  early  and  expeditious steps  would be taken for determination and payment  of  the amounts  in respect of the acquired property to the  persons interested  in accordance with the Act in the light of  this judgment.  We shall make no order as to costs in any of  the appeals. KRISHNA  IYER,  J.-We  go wholly with  our  learned  brother Untwalia J.    Then why a separate afterword ? Because,  to  put it simplistically, a legislation  for  the nationalisation  of  contract  carriages  by  the  Karnataka State,  where provision has been made for fair  compensation under  present circumstances, has still been struck down  by the  High  Court  on the surprising grounds  of  absence  of public purpose, illusoriness of compensation State take-over being beyond the orbit of Article 39(b) and the like, and to express  ourselves emphatically in reversal on the  obvious, yet  basic,  issue we itemise below which  is  necessary  to obviate constitutional derailment again.  The public sector, in our constitutional  system, is so strategic a tool in the national  plan  for  transformation from  stark  poverty  to social  justice,  transcending administrative  and  judicial

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 24 of 50  

allergies,, that the questions raised and    rulings thereon are  of  larger import for the country than  one  particular legislation and its vires and one particular government  and its policies.  What are those disturbing interrogatories ? If  the  State, to subserve the objects of  governmental  or other like agencies, compulsorily takes movable property  or realty  of private citizens, the like of which  are  readily available in the open market. does the law authorising  such taking violate the limitation of ’public purpose’ imposed by Article 31(2) of the Constitution, in the absence of urgency which brooks no delay whatever 9 Further, does the  prospect of  easy purchase elsewhere, negate the presence of  ’public purpose’,   implying  thereby  the  resort   to   compulsory acquisition  within  the  framework  of  Article  31(2)   is interdicted  save where there is ’State  necessity’  coupled with scarcity’ of supplies in the market ? Secondly, does  a legislation qualify for immunity under Article 31C read with Article  39(b), only where the scheme is to divide and  deal out  to  a  plurality of persons, to  disperse,  diffuse  or scatter  ownership and control of material resources of  the community  compulsorily taken by the State ? Or does it  em- brace  ’distribution with a wider connotation  of  ’removal’ from the private sector and allocation in the public sector, dividing and arranging. separating and allocating, acquiring from individuals and making over to collective  institutions or  State  organs, acting for and in the  interest  of  the, community,  according, to the State Plan or policy  decision on  the scheme of distribution and allocation  of  resources among the different sectors of economic activity so as  best to  subserve the public good ?  How, in short, do we  decode ’distribute’ in Article 39(b) illumined by Article, 38 ?  As permitting or proscribing holding of ’resources by 665 the State or its designated organ monopolistically, for  the better production and/or distribution of goods and  services to   the  community,  for  participative  control   by   and distribution  of  profits among workers and  for  all  those other  benefits  claimed to flow out  of  public  ownership, social  control,  commitment  to  community,   parliamentary accountability and vaster capability ? Does R. C.  Cooper(1) remain  a  legal  tender even after  demonetisation  on  the question of acquisition vis-a-vis compensation, by the  25th (Constitution)  Amendment  ?  Can the  theory  of  ’illusory compensation’  be apocryphal or be exaggerated to  apply  to diminished  compensation  as  a  revised  reincarnation   of ’adequate   compensation’   still   menacing   projects   of nationalisation   ?   How  do  we   conceptulise   ’material resources’  and  ’public  purpose’ in  our  current  consti- tutional  setting  ?   When cryptic  phrases  expressive  of constitutional, culture and aspirational future, fundamental to  the  governance of the nation, call  for  interpretative insight, do we merely rest content to consult the O.E.D. and alien  precedents,  or  feel the philosophy  and  share  the foresight  of  the  founding fathers  and  their  telescopic faculty ? Is the meaning of meanings an artless art ? Holmes (2) J. in lovely language,, stated ’what oft was thought but never so well expressed’ :                "A  word  is  not  crystal,  transparent  and               unchanged;  it is the skin of  living  thought               and  may  vary greatly in colour  and  content               according to the circumstances and the time in               which it is used."               Jerome  Frank adopted a quotation from  Holmes               which drives home the same point :               "We must think things not words, or at  least,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 25 of 50  

             we  must constantly translate our  words  into               the  facts for which they stand if we  are  to               keep to the real and the true. (3) " Be   the   High  Court’s  judgment  right  or   wrong,   its socioeconomic and jurisprudential repercussions for a social Welfare  State  or a ’Socialist Republic’  are  sufficiently profound to explain why, from us too, an afterword. Is it otiose to ponder over these matters articulately  even though  we generally concur in the reasoning and  conclusion of our learned colleagues ? Some economic issues of  moment, quiet  in  their  legal look but  critical  in  their  later portent,  come before the Court as has happened  now,  when, regardless  of assent or dissent, the spelt-out  opinion  of the  judges  sitting  on  the  same  bench,  separately   or conjointly,  becomes the right of the citizen, read  in  the context of the pregnant provision in Article 141. When major juristic    problems    of   futuristic    import    involve constitutional probes, a plurality of opinions may bring out if  we  may mix metaphors-morefacets,  shifts  in  emphasis, finer  notes,  fresh vistas and seeds  of  development,  not necessarily   verbal   re-hash  or  medley   of   repetitive prolixity.   A  hundred  noetic flowers  and  some  cerebral briars are not a confusing crowd of colours. Judicial perspective vis a vis constitutionality of economic legislation. (1)  [1970] 3 S.C.R. 530. (2)  Towne V.Eigner,245U.S..418=62L.ed. 372,376 (3)  Dias Jurisprudence, 4th Edn. p. 625 666 When confronted by serious constitutional problems, judicial statesmanship   drops  the  craft  of  a  legal  tinker   or lexicographic  borrower but transforms itself into  that  of social  engineer who ’beholds the future in the present  and his thoughts are the germs of the flower and fruit of latest time’.   He gives conscious expression, in juristic  tongue, to  the  Constitution’s  implicit purpose  grounded  on  the permanent  in terests of man as a  progressive.  being-here, the  little  yet  large  man of India  breaking  out  of  an iniquitous system, yet reaching out to a human society, shot with  distributive  justice. The presence  of  this  people- oriented perspective in the court, as the interpreter of the Constitution  and its imperatives and the laws  designed  to inaugurate a Human Tomorrow, compels us in all humility  and aware of inadequacy, to lend our pen to the reversal of  the decision under appeal which de facto proceeds on  fastidious societal  values  of  vanishing  validity.  in  the  changed setting, and is partly founded on exotic juridical doctrines (eminent  domain) incongruous with the legitimate  realities of the emerging Indian Order as are writ into Article 31 (2) and more unmistakably in Article 31C read (in the manner  of Keshvananda  Bharati)  (1) along side of Article  39(b)  and (c). The  social philosophy of the Constitution  shapes  creative judicial  vision  and orientation.  Our nation has,  as  its dynamic  doctrine,, economic democracy sans which  political democracy   is   chimerical.    We  say   so   because   our Constitution,  in Parts III and IV and  else-where,  ensouls such  a  value  system  and the debate  in  this  case  puts precisely this soul in peril. Friedman   has  said  in  his  ’Legal  Theory   and   Social Evolution’.               ’The  lawyer cannot afford to isolate  himself               from the social process.  His independence can               never be more than relative, and it is only  a               clear  awareness of the political, social  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 26 of 50  

             constitutional foundations of, his function in               general   as  well  as  of  particular   legal               problems  that enables him to find the  proper               balance between Stability and progress."(2) Our  thesis is that the dialectics of social justice  should not be missed if the synthesis of Part III and Part IV is to influence    State   action   and   court    pronouncements. Constitutional  problems  cannot  be  studied  in  a  socio- economic vacuum, since socio-cultural changes are the source of  the new values,, and sloughing off old legal thought  is part  of the process of the new equity-loaded  legality.   A judge  is a social scientist in his role  as  constitutional invigilator  and  fails  functionally  if  he  forgets  this dimension in his complex duties.      The credal essence of the Constitution consists in  its Preamble,Articles  38, 39(b) and (c), 31 and the  bunch  of Articles 31A, 31Band 31C (We do not deem it necessary  to refer in this case to the42nd   Constitution  Amendment Act). (1)  [1973] Supp S.C.R. 1 (2)  Legal Theory and-Social Evolution, p. 81, 5th Edn. 667 Our emphasis is on abandoning formal legalistics or  sterile logomachy  in  assessing the vires  of  statutes  regulating vital  economic  are-as, and adopting  instead  a  dynamic,, goal-based approach to problems of constitutionality.  It is right  that the rule of law enshrined in  our  ,Constitution must  and  does reckon with the roaring  current  of  change which  shifts  our  social values and  shrivels  our  feudal roots, invades our lives and fashions our destiny.  The  key issues  argued  at learned length in  these  appeals  cannot suffer  ’judicial separation’ from the paramount  principles in the Preamble and in Article 39(b) and (c).  So we have to view  the  impugned  provisions from the  vantage  point  of socio-legal perception. The semantic sin of dubious legislating drafting Before  entering  the  thorny  thicket  of  debate  on   the questions arising in this batch of appeals a cautionary word may  be  uttered, without disrespect,  about  the  unwitting punishment  of  the community by our  legislative  draftsmen whose  borrowed  skills of Westminster vintage  and  hurried bills  without sufficient study of their  economic  project, occasionally  result in incomprehensibility and  incongruity of  the law for the lay and the legal.  Francis  Bennion,(1) commenting on the Renton Committee Report, writes :               "The  Renton  Committee points  out  that  the               problem of obscure statute law is important to               every citizen.  "There  is  hardly any part of  our  national               life or of ourpersonal  lives  that  is  not               affected by one statute or another.The               affairs  of  local  authorities,  nationalised               industries, publiccorporations and  private               commerce  are regulated by  legislation.   The               life  of the ordinary citizen is  affected  by               various  provisions of the statute  book  from               credle to grave."               The  committee might have added that the  rule               of law and parliamentary democracy itself               are  imperilled if laws are  incomprehensible.               They  did  say  that  it  is  of   fundamental               importance  in  a free society  that  the  law               should be readily ascertainable and reasonably               clear, and that otherwise it is oppressive and               deprives  the  citizens of one  of  his  basic

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 27 of 50  

             rights.   It is also needlessly expensive  and               wasteful.  Reed Dicerson, the famous  American               draftsman, said it cost the government and the               public "many millions of dollars annually." It  must  be said in fairness to both sides  that  Shri  Lal Narain Sinha whole heatedly agreed with Shri Asoke Sen (they appeared  on  opposite  sides>  that  the  legislation   was illdrafted and made a big drift on the creative  imagination and  linguistic  tolerance of the judges, to  reconcile  the verbal deficiencies and semantic difficulties besetting  the text.   Shri Sinha told the Court that a clarification  bill was  going before the House shortly as an amending  exercise in this behalf.  Our draftsmen (1)  Laws  are not for laymen-Guardian  Miscellany  May  29, 1975. 6-951SCI/77 668 handle  foreign know-how meant for different  circumstances, and  without  full grasp of the economic regulation  or  the leisure and facilities for such study. In a country where the people are, by and large, illiterate, where  a  social  revolution  is  being  pushed  through  by enormous  volume  and variety of legislation and  where  new economic  adventures requiring unordhoodoz jural  techniques are  necessitous,  if legal drafting is to be equal  to  the challenge of change, a radicalisation of its methodology and philosophy and an ability for the legislative manpower to ex- press  themselves in streamlined,  simple,  project-oriented fashion  is  essential. In the hope  that  a  role-conscious court  communicates  to a responsive Cabinet, we  make  this observation. What  is the battle about? Back  to  the  challenging problems thrown up  by  the  High Court’s  decision.   The  facts are  there  in  the  leading judgment   and   the   formulation   of   the   controverted propositions  also needs no reiteration.  Broadly  speaking, we  strike no note of dissensus but seek to bring  out  some social, nuances even in consensus.  Let us project the  pegs on which our discussion may hang.  Incidentally,  conceptual differences about the dimensions of the change visualised by Article  31C  read with Article 39(b) and (c) are  bound  to exist among judges who, after all, professionally  objectify the  social  philosophy  of  the  Constitution  through  the subjective prism of their own mentalism. 1.What  is  a ’public purpose’, set as  a  constitutional limitation   in   Article  31(2),  compliance   with   which conditions  the immunity from attack based on Article  19(1) (f) or inadequacy of recompense when any person is  deprived of his property ? 1.   (a)  What  is the degree of nexus  between  the  public purpose  and the acquisition desiderated by  Article,  31(2) ? 1  (b) Can Cooper (supra) be judicially resurrected,  draped differently  but  with the same  ’compensation’  soul,  even after the amendment of Article 31 (2) ? 2. What are the pervasive ambience and progressive amplitude of the ’directive principle’ in Article 39(b) and (c) in the context of nationalisation of public utilities ? 2(a) Can State monopoly by taking over private property be a modus  operandi of distribution of ownership and control  of the  material  resources of the community  to  subserve  the common good, within the framework of Article 39(b) ? 2(b)  Are distribution and nationalisation  antithetical  of overlapping ? 2(c)  What  is the connotation of the  expression  ’material

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 28 of 50  

resources’  ?   Can private buses be  regarded  as  material resources of the community ? 669 These  and  cousin  issues  are  the  legal-economic  points canvassed before us and are sure to occupy the centre of the stage  when  management and control of growth  in  effective measure  for common weal expand the frontiers of public  law with a view to implement the ’distributive justice’ embodied in  Articles 38 and 39 and, by Article 37, made  fundamental in  the governance of the country.  Dr. Ambedkar,  in  words significant, said :               "In  enacting  this  part  (Part  IV)  of  the               Constitution,  the Assembly is giving  certain               directions  to the future legislature and  the               future  executive to show in what manner  they               are to exercise the legislative and  executive               power  they will have.  Surely it is  not  the               intention  to  introduce in  this  part  these               principles as mere pious declarations.  It  is               the intention of this Assembly that in  future               both the legislature and the executive  should               not merely pay lip-Service to those principles               but that they should be made the basis of  all               legislative and executive action that they may               be  making  hereafter  in the  matter  of  the               governance of the country." The Directive Principles, being the spiritual essence of the constitution, must receive sweeping signification, being our socio-economic Magna Carta, quiddities apart. They   key  etc.  thought  of  the  Constitution   and   the interpretative response. The  role of nationalisation of essential services  for  the better  life of the people, an item on the country’s  urgent developmental agenda, must be gathered before the wide range of  the  companion  set of constitutional  articles  can  be spanned by the court in interpretative terms.  Codified  law is legislatively crystallised politico-economics and so  the search  of  the  jurist  has to  be  wider  and  deeper  and interlaced.   Take  care of the basics, the  specifics  will take care of themselves.  So we have to go behind the  legal facade to respond to the rhythm of the pulsating text of the Constitution  which casts heavy developmental  responsibili- ties  on the Welfare State.  Roscoe Pound’s remark  reflects this thought : "All he social sciences must be co-workers, and emphatically all must be co-workers with jurisprudence." Moreover,  sheer legalism cannot lightly  upset  legislative wisdom or efficiency while passing on the  constitutionality of  economic legislation based on national planning,  public finance,   private  investments,  cost  accounting,   policy decisions, historical factors and a host of complex.  social variables, Dixon C.J.(1) in a different context observed :               "These   matters  of  incidental  powers   are               largely   questions   of   degree,   but    in               considering them we must not lose sight of the               fact  that once the subject matter  is  fairly               within the province of the Federal legislature               the justice and wisdom of the provisions which               it  makes in the exercise of its  powers  over               the  subject matter are matters  entirely  for               the legislature and not for the Judiciary." (1) Burton v. Honan : 1952, 86 C.L.R. 169, 179. 670 This  is no argument for abdication of judicial  power;  for where  legislation is colourable, measures  make-believe  or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 29 of 50  

orders  mala  fide,  the  judges  are  the  masters  of  the situation,  and this Court, under Article 141, declares  the law in that supreme spirit.  But courts must be  circumspect not to rush in where serious reflection will make them  fear to  tread nor to resort to adroit circumvention  because  of economic allergy to a particular legislative policy. At  this  stage, a glance at the raw realities,  to  abolish which Article 31(2), Article 31C and Articles 38 and 39 have been enacted, is necessary.  Poverty has, for ages, been the omnipresent reality of Indian life.  Stark inequalities have been  chronic  and  the ’hidden  hunger’  (to  use  Myrdal’s phrase)  of  the  people have pushed  the  Freedom  Movement forward  in the socialistic direction toward a better  life. The  fasciculus  of  clauses in  the  Constitution  we  have referred  to  is  calculated to prevent  the  revolution  of rising  expectations  from becoming a revolution  of  rising frustrations.    These   compulsions   must   inform   legal interpretation.  For, in the words of Seton Pollock,               "The  law  itself, though  of  crucial  social               importance,  is only one element in the  total               human  task.  That task is to meet and               master those frustrations that diminish man in               this humanity and obstruct the realisation  of               his  freedom and fulfilment within  the  human               society.    Those   frustrations   stem   from               ignorance,   poverty,   pain,   disease    and               conflicts  of interest both within the  person               (the  field  of  psychological  medicine)  and               between  persons (the territory of  the  law).               These  manifold and  interacting  frustrations               cannot  be met by any one discipline but  only               by  a  coordinated  attack  upon  the  problem               through     enlightened     political      and               administrative initiatives and by educational,               medical, psychological and legal remedies.               Our  concern is with the human  condition  and               the imperative need to improve it through such               resources as we can develop.  We are beginning               to  see  more clearly the need for  a  unitary               view  which is, in essence, spiritual  in  its               character, reaching down to the realities that underlie our fragmented disciplines.               The  burning  issue of our times  is  how  our               resources  can  be developed and  combined  to               achieve  the fulfilment of the human task  and               the  improvement  of  the  human   condition."               (Preface to ’The English Legal Aid System’  by               Seton Pollock Orient Longmans) The  Father  of  Nation long ago argued  for  ’the  art  and science  of  mobilising the entire  physical,  economic  and spiritual  resources  of  all the various  sections  of  the people  in  the  service of the common good  of  all’.   Sir Leslie  Scarman developed this new dimension of law  in  the English climate when he said :               "I  shall endeavour to show that there are  in               the  contemporary  world  challenges,  social,               political and economic,               671               which,  if the system cannot meet  them,  will               destroy it.  These challenges are not  created               by   lawyers;   they  certaintly   cannot   be               suppressed  by  lawyers; they have to  be  met               either by discarding or by adjusting the legal               system.  Which is to be ?" A panoramic sociological view-not a narrow legal  peep-alone

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 30 of 50  

can invest judicial power with capability to help solve  the myriad problems of Mankind and Mother Earth. We have divagated to drive home the pertinence and power  of poverty  to  change our social order through  law,  and  the necessity  of  the constitutional court to  appreciate  this fundamental  logos before voiding any ’law’.  Ideas  of  the Old Order on ’public purpose’, illusory compensation,  nexus doctrine  and  ’distributed  to subserve  the  common  good’ should  not reduce lofty constitutional considerations  into ’hollow concepts, tea-cup debates and impotent ideas (which) debase   modern  jurisprudence’  and   are   ’intellectually subversive’, to use the indignant expressions of John  Batt. Nietzsche  once  said  :  ’The great  problems  are  in  the streets’.   Abraham Lincoln warned that ’the dogmas  of  the quiet  past are no longer adequate to the  stormy  present.’ Our   legal   doctrines,  canons   of   interpretation   and constitutional  attitudes  must therefore take not  of  this adaptational potential and response to The scheme of the impugned statute Coming now to the concrete provisions of the Act, tested  on the anvil of Article 31(2) and 39(b) and (c), we have to get a  hang  of  the legislative project.   Its  purpose  is  to acquire  contract  ages  from a,]].  private  sources.   The reason for this measure of nationalisation is set out in the ’whereas’  paragraphs.   In  broad  terms,  it  is....  that private  contract carriages are being operated in the  State in a manner highly detrimental and prejudical to the  public interest. it is further claimed that with. a view to prevent such  misuse and also to provide better facilities  for  the transport of passengers and ’to give effect to the policy of the State towards securing that the ownership and control of the  material resources of the community are so  distributed as  best to subserve the common good and that the  operation of the economic system does not result in the  concentration of wealth and means of production to the common  detriment,’ acquisition of contract carriages is being resorted to.  The requisite  declaration contemplated in Article 31C  is  thus made in the preamble as well as in Section 2 of the Act.  Of course,  in  the  light of  the  Keshavananda  Bharati  Case (supra)  there is in this Court a power-and if  demanded,  a duty-to  examine  whether there is real  nexus  between  the legislation  and  Article  39(b)  and  (c)  or  whether  the ritualistic declaration is cutely but colourably designed to ward  off attack from Article 14, 19 and  31,  Make-believes cannot  make-do.   But  if there is  a  reasonable  relation between  the  two, the Court cannot constitute itself  as  a super  administrator and suggest that there are better  ways of achieving the object than what the legislature has chosen to adopt.  ’Quo modo’ is not for the court. 672 The  anatomy  of  the Act has been set out  in  the  leading judgment and we adopt it. Let us now examine the fatal constitutional vices,  embedded in the Act and discovered at the High Court level.  One such lethal  feature  which appealed to the High Court,  and  has been  repeated before us by Shri Asoke Sen with  insistence, is  that  there  is  no  public  purpose  involved  in   the acquisition  of contract carriages and so the  enactment  is not invulnerable under Article 31(2).  The statutory purpose was to acquire contract carriages in private ownership,  and transfer them to the State Road Transport Corporation  which was  to  enjoy the exclusive privilege of  running  contract carriages.  The expected shower of benefits was  elimination of  misuse  of  contract  carriages  in  private  hands  and augmentation  of public good by plying these vehicles  under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 31 of 50  

prolic  ownership  and  direction.  The  first  question  is whether  such taking from a private person and vesting in  a public  body  is not a public purpose.  There are  two  sub- issues  which  are distinct and mu-it be  kept  distinct  if ideational confusion is not to vitiate our conclusion :  (a) Is  there a public purpose ?; and (b) If there is, what  are the  ways  to  fulfil that purpose ?   The  ends  cannot  be telescoped  into  the  means.   Once  this  perspicacity  in thinking  is  present, it is unarguably  obvious  that  the, State  Government’s or the State Corporation’s purpose is  a public  ’purpose.  Putting aside the  possible  distortions, historically  proved,  of  class domination  of  the,  State apparatus  and  assuming the values  of  our  constitutional order,  the  State symbolizes, represents and acts  for  the good  of society.  Its concerns are the ways of meeting  the wants of the community, directly or otherwise.  The  purpose of a public body to run a public transport service for  the benefit of the people, operating it in a responsible  manner through  exercise  of public power which is  controlled  and controllable   by  society  through  its  organs  like   the legislature  and, at times, even the court, is manifestly  a public  purpose.  Does the purpose subserve some public  use or interest or produce some public good or utility ?  If  it does,  the purpose becomes public.  ’Public’  qualifies  the object.  Black’s Legal Dictionary elucidates the  expression :               "The   term  is  synonymous  with   government               purpose,  (State  V. Dizon).  As  employed  to               denote  the  objects for which  taxes  may  be               levied,  it has no relation to the urgency  of               the public need or to the extent of the public               benefit  which  is to  follow;  the  essential               requisite  being that a public service or  use               shall  effect the inhabitants as a  community,               and  not merely as individuals. (Stevenson  v.               Port of Portland).  A public purpose or public                             business has for its objective the promotion o f               the  public  health, safety,  morals,  general               welfare, security, prosperity, and contentment               of  all the inhabitants of residents within  a               given  political  division, as,  for  example,               state,  the  sovereign  powers  of  which  are               exercised  to promote such public  purpose  or               public   business.   (Green   v.    Frazier)."               (underscoring ours) There may be many processes of satisfying a public purpose. wide range of choices may exist.          The State may walk into  the  open  market  and  buy  the  items,  movable  and immovable, to fulfil the public 673 purpose;  or it may compulsorily acquire from  some  private person’s  possession  and ownership the articles  needed  to meet the public purpose; it may requisition, instead of  re- sorting  to acquisition; it may take, on loan or on hire  or itself manufacture or produce.  All these steps are  various alternative means to meet the public purpose.  The State may need chalk or cheese, pins, pens or planes, boats, buses  or buildings, carts, cars, or eating houses or any other of the innumerable  items to run a welfare-oriented  administration or  a public corporation or answer a community  requirement. If the purpose is for servicing the public, as  governmental purposes  ordinarily  are, then everything  desiderated  for subserving  such  public purpose falls under the  broad  and expanding rubric.  The nexus between the taking of  property

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 32 of 50  

and the public purpose springs necessarily into existence if the former is capable of answering the latter.  On the other hand,  if  the purpose is a private or non-public  one,  the mere  fact  that  the  hand that  acquires  or  requires  is Government  or  a  public corporation,  does  not  make  the purpose automatically a public purpose.  Let us  illustrate. If  a  fleet  of cars is desired for  conveyance  of  public officers, the purpose is a public one.  If the same fleet of cars  is  sought  for fulfilling the  tourist.  appetite  of friends  and relations of the same public officers, it is  a private  purpose.   If  bread  is  ’seized’  for  feeding  a starving  section of the community, it is a  public  purpose that  is  met  but, if the same bread  is  desired  for  the private dinner of a political maharajah who may pro tem fill a  public office, it is a private purpose.  Of  course,  the thing  taken must be capable of ’serving the object  of  the taking.   If you want to run bus transport you  cannot  take buffaloes. A public purpose is vastly wider than public necessity, even as a mere purpose is more pervasive than an urgency.   That which one sets before him to accomplish; and end,  intention or  aim,  object, plan, project-is  purpose  (Black’s  Legal Dictionary).   A  need or necessity is  compulsive,  urgent, unavoidable.   In  purpose, there is  dires;  in  necessity, there is imperative demand.  ’The presumption is that a  use is  public, if the legislature has declared it to  be  such, and the decision of the legislature must be treated with the consideration  due  to  a  co-ordinate  department  of   the government of the state’.  It-, effect is not conclusive but considerable’   ’Public   purpose’   should   be   liberally construed, not whittled down by logomachy. The concept of ’public purpose’ has been considered in  some academic writings and judicial rulings and a glance at  them may  give  theoretical nourishment to juridical  ideas.   We have  to remember that neither socialist  jurisprudence  nor capitalist  legal culture can govern the concept  of  public purpose  in  India’s  mixed  economy  and  expanding  public sector,   in  the  context  of   progressive   developmental programmes.   Even the Privy Council, way back in  1914,  in Framjee Patit 42 I.A. 44 approved of the wide definition  of ’public  purpose.’ This court has also taken a liberal  view of  ’Public  purpose’.  In a host of  cases  beginning  with Kameshwar   AIR  (1952  SC  889).   Agrarian  reform,   slum clearance  to  house the homeless, procuring a house  for  a diplomat  (Bombay  v. Ali Gulshan : AIR 1955 SC 810)  or  an office  for  the State Trading Corporation,  acquisition  of land  to  construct a dharmashala, houses for members  of  a cooperative society housing scheme, 674 houses  for  workmen or for a Mahatma  Gandhi  Memorial,  as pointed out by an Indian Jurist (Rajeev Dhavan, in his study of  ’The,  Supreme  Court of  India’  (Tripathi)  have  been regarded in decided cases as public purposes.’ Conceptually, it has a home-spun texture altho’ that public transport is a public  purpose is self-evidence anywhere.  The dynamics  of development must inform interpretation in this area. There is a touch of swadeshi about a country’s jurisprudence and  so  our  legal notions must bear the  stamp  of  Indian Developmental  amplitude  linked  to  constitutional  goals. Counsel  for the appellant, from his angle, produced  before us  the  Industrial Policy Resolution of the  Government  of India   of  April  6,  1948  and  April  30,  1956   wherein considerable importance was attached to the national economy securing  a continuous increase in production and  equitable distribution.  This 1948 Resolution itself pointed out  that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 33 of 50  

the  State  must  play an increasingly active  role  in  the development  of industries.  Many other items were  included for a progressive participation by the State by the time the 1956   Resolution  was  made.   This  fresh   statement   of Industrial  policy took note of the constitutional  preamble which, inter alia aimed at securing justice-social, economic and political.  Articles 38 and 39 were also adverted to  so that  a  precise direction might be given to  the  socialist pattern  of society as the objective of social and  economic policy.   In particular, it was explicitly stated that  ’the State  will progressively assume the predominant and  direct responsibility  from setting up new industrial  undertakings and  for  developing ’transport  facilities’.   Indeed,  the State  was to become the agency for planned  national  deve- lopment  and  the  socialistic pattern  of  society  as  the national  objective required that all industries,  of  basic and strategic importance, or in the nature of public utility services  should  be in the public sector’.   ’There  was  a division and distribution, in a broad manner, of  industries and  utilities  between the private and the  public  sector. Stress  was  laid  on the need to  improve  the  living  and working conditions of workers a,., well as their  efficiency and a schedule in which road transport figures (Schedule  B) was  appended  setting out those categories which  would  be progressively  State-owned  and  in which  the  State  would therefore generally take the initiative in establishing  new undertakings. When we ascertain the content of ’public purpose, we have to bear  the above factors in mind which mean that  acquisition of road transport Indeed, even inEngland,          ’public purposes’ have been defined to mean such ’purposes’of the administration of the government of the country (p.    228, Words & Phrases Legally defined, II Edn.). Theoretically, or even  otherwise, there is no warrant for linking  up  public purpose  with State necessity, or in the court throwing  off the  State’s  declaration  of public  purposes  to  make  an economic research on its own. it is indeed significant  that in  Section  40(b) of the Land Acquisition  Act,  1894,  the concept  of  ’public  use’  took  in  acquisition  for   the construction of some work even for the benefit of a company, provided such work as likely to prove useful to the  public. Even  the American Constitution, in the Vth Amendment,  uses the expression ’Public use and it has been held in India  in Kameshwar that ’public purpose’ is 675 wider  than  ’public  use’.  Mahajan J.  (as  he  then  was) observed ill that case :               "The   phrase  ’public  purpose’  has  to   be               construed  according  to the  times  in  which               particular  legislation  is  enacted  and   so               construed, the acquisition of the estates  has               to  be  held to have been made  for  a  public               purpose." (p. 942)               In the ’same judgment, the learned judge  went               on to state :               "The legislature is the best judge of what  is               good  for the community, by whose suffrage  it               comes  into existence and it is  not  possible               for this court to say that there was no public               purpose behind he acquisition contemplated  by               the impugned statute." (P. 941) We have no doubt that this wider approach necessarily  means that  a comprehensive signification has to be, given to  the expression ’public purpose’. It  is true that Cooley and Willoughby and Willis and  other

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 34 of 50  

American  writings  and rulings and theories  like  ’eminent domain  and ’police powers’ have been eruditely referred  to in the early days of this Court.  However useful they may be in  helping to understand the scope of ’public  purpose,  we have  to  be  guided by the Directive  Principles  of  State Policy   while  decoding  the  cryptic  expression   "public purpose’.   Even in Kameshwar the Court referred to  Article 39  and the preamble to the Constitution and the  obligation to   secure  its  citizens  justice  Social,  economic   and political.   The reference, here and there, in the  separate judgments delivered in that case to the ’necessities of  the State’ cannot cut back upon the ambit of the concept. It  is  significant  that Das J. (as he  then  was)  has  in Kameshwar observed :               "We  have  been  referred  to  some   American               authorities  for ascertaining the meaning  and               implication  of  ’public  use’  an  expression               which  obviously is of a more  limited  import               than  the expression ’public purpose  used  in our Constitut ion." The  learned Judge explains that the notion of ’public  use’ is-rapidly  changing  in America, for in  the  modern  view, ’public use’ means ’useful to the public.’ It  is  right to remember, what has been mentioned  in  Shri Justice  Das’  judgment,  that  modern  conditions  and  the increasing  inter-dependence of the different human  factors in  the  progressive  complexity of the  community  make  it necessary  for  the  government  to  touch  upon  and  limit individual activities at more points than formerly. In  Cor- pus  Juris the meaning of the term is stated to be  flexible and  varying with time and circumstances.  All that  can  be said  is that it embraces public utility,  public  advantage public interest or object. 676               "It  is thus quite clear that a fresh  outlook               which  places  the  general  interest  of  the               community above the interest of the individual               pervades   our  Constitution....   The   words               ’public   purpose’  used  in   Article   23(2)               indicate  that  the  Constitution  used  those               words  in  a very large sense.  In  the  never               ending  race, the law must keep pace with  the               realities   of   the  social   and   political               evolution  of the country as reflected in  the               Constitution.  If, therefore, the Sate has  to               give  effect  to this avowed  purpose  of  our               Constitution,   we  must  regard  as   ’public               purpose’  all  that  will  be  calculated   to               promote the welfare of the people as envisaged               in these Directive Principles of State  policy               whatever else that expression may mean." This new outlook, in the words of Das J. brings in  economic justice  regarded yesterday as a fantastic formula,  but  is today a directive principle of State policy. To  conclude  this branch of the discussion,  there  ’is  no validity  in  Shri Sen’s contention that  because  the  Road Transport   Corporation,  Act,  1950,  speaks  of   business principles  as guiding State Transport  Services,  therefore taking  over of private buses is not a public purpose.   Nor is  there  any  force in reading compulsive  need  or  State necessity  of some imperative urgency as a component of  the concept of public purpose.  Speaking for ourselves,  nothing that  has  been  stated in the judgment of  the  High  Court discussing  the  doctrine of ’eminent  domain’,  and  allied matters, or/in the submissions of Shri Sen conjuring  up..,I

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 35 of 50  

grim  picture  of government acquiring even  paper,  pencil, ink.  furniture. spares and tyres and cars and buses  merely because they do not want to pay market price even when these items are abundantly available, does not deffect us from the conclusion  that  a  Government which  seeks  to  serve  the community  is entitled even for its commercial  purposes  to invoke  its  power  of compulsory purchase,  even  when  not driven  by  necessitous circumstances.   We  cannot  confuse between  abuse  of  public power and  limitation  of  public purpose. The  nexus  between  ’public purpose’ and Part  IV  is  also relevant.   Sir Alladi Krishnaswami Ayyar in his  speech  in the  Constituent Assembly said : ’No Government  responsible to  the  people  can afford  lightheartedly  to  ignore  the provisions  in Part IV of the Constitution.  As early as  A. K.  Gopalan  (1950 SC 27), Chief Justice Kania  state,  with reference  to Directive Principles, that ’it represents  not the temporary will of a majority in the Legislature but  the deliberate  wisdom  of  the nation’.   Shri  Justice  Mathew explained  this  idea at the Second  Kerala  State  Lawyers’ Conference thus :               ". . . State is not an end in itself, but only               an  instrumentality, to be evaluated in  terms               of  its  contribution to the  welfare  of  the               political  community.   The  concept  of   the               laissez faire of the nineteenth century  arose               from a philosophy that general welfare is best               promoted when the intervention of the State in               economic  and  social matters is kept  to  the               lowest  possible  minimum. The  rise  of  the               welfare  State  proceeds  from  the  political               philosophy that the greater economic               677               and social good of the greater number requires               greater intervention of the Government and the               adoption  of public measures aimed at  general               economic  betterment.  Today, people  cry  for               intervention of Government when anything  goes               wrong in any front.  They demand  interjection               of  Government in every aspect and  sphere  of               life." Will ’public purpose’ run riot ? The   consternation  that  if  anything  can   be   acquired compulsorily  for  a public purpose everything  will  be  so acquired is understandable only if we readily grant that the Legislature and the Cabinet are the veils and vestments worn by   a  callous  body  irresponsible  to  the   people   and irresponsive to justice.  There is a general presumption  in favour of honest and reasonable exercise of power (State  of West  Bengal  v. Anwar Ali Sarcar, 1952 SCR, 284,  301,  per Patanjali  Sastry  J.). of course not that  gross  abuse  of power  and demoniac departure from legal norms are  unknown; even   so  we  should  have  faith  in   Parliament   which, ultimately,  is  responsible  to the people  who  cannot  be ignored  by  it  for all time  without  imperilling  it  own existence.  Repelling the argument of likely abuse of power, Das J. observed (1954, SCR 587) :               "What  is  abnormal if  our  Constitution  has               trusted  the  legislature, as  the  people  of               Great Britain have trusted their Parliament  ?               Right  to  life and personal liberty  and  the               right to private property still exist in Great               Britain   in   spite  of  the   supremacy   of               Parliament.  Why should we assume or apprehend               that  our  Parliament  or  State  legislatures

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 36 of 50  

             should  act Eke mad men and deprive us of  our               property  without any rhyme or reason ?  After               all our executive government is responsible to               the   legislature  and  the   legislature   is               answerable   to  the  people.   Even  if   the               legislature  indulges in occasional  vagaries,               we have to put up with it for the time  being.               That  is the price we must pay for  democracy.               But  the apprehension of such vagaries can  be               no  justification for stretching the  language               of the Constitution to bring it into line with               our  notion  of  what  an  ideal  Constitution               should  be.  To do so is not to interpret  the               Constitution but to make a new Constitution by               unmaking  the  one which the people  of  India               have  given to themselves.  That I  apprehend,               is  not  the function of the  Court.   If  the               Constitution, properly construed according  to               the cardinal rules of interpretation,  appears               to  some to disclose any defect or lacuna  the               appeal  must be to the authority competent  to               amend the Constitution and not to the court."               (1954 SCR 587; 654; Subodh Gopal Bose) To  take  Sri Sen’s illustration, if  a  law  authorises--or government does-resort to compulsory acquisition of all  its requirements of stationary or routine needs of public sector undertakings,  with a view to pay nominal sum and  get  away with  it, that Legislature or Government will,  without  the Court’s services, go the way world history 678 has  blown  away gross misrule.  The court is not  the  only sanctuary in a democracy against caprise dressed in  ’little brief   authority.   If  the  act  becomes   so   shockingly iniquitious to violate the law of life, the Court will  have enough reserve power under the Constitution to speak for law and  to  save the government from  itself.     These  extreme lurid,  recondite picturisations cannot be transformed  into probabilities  and realities, especially in a case where  we find little to complain in fairness of procedure or delivery of  the  end  product.  Of course,  in  a  ’radical  change’ situation, certain classes, invoking varnishing values,  may cry ’wolf’ and in any welfare legislation stray injustice is unavoidable.  Perfection is God’s property, to aim at its is human progress.  We find no legal flaw in the measure  under attack. We  think  it is a fallacy to deny the  presence  of  public purpose   merely  because  its  ’satisfaction   by   readily available private purchase is possible in the circumstances. It  is for the State to decide whether it should pay  market price and buy or resort to Article 31 (2) and pay an  amount which  may  be administratively feasible but less  than  the market  price.  It may take on hire and not buy at  all,  it may requisition without paying full compensation.  These are the means which cannot be confounded with the ends and it is egregious  error  to roll up the two together.   The  entire object  of Article 31(2) is defeated if such  a  constricted construction  or  cramped meaning were to be  given  to  the provision.  It is a social welfare handicap, a  jurispruden- tial  error and a truncation of the  State’s  constitutional power  to  rule that it shall not ’seize’  private  property within  Article  31 (2) unless it proves  beyond  reasonable doubt   a  scarcity  situation,  a  public   necessity   and unavailability in the open market and the like.  Yet this is the  ‘ reasoning’ which has had a fascination for  the  High Court.   The specious submission is tersely put by the  High

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 37 of 50  

Court thus :               "It was argued that for compulsory taking over               of the vehicles with permits and other effects               of the contract carriage operators, there  was               no necessity or need or, in other words, there               was  no nexus between the public  purpose  and               the  taking over of the particular  property."               (ILR 1976 Karnataka 11478, 1512) The  accent  was on need or necessity.  The Court  felt  the pell  of  this ratiocination and erroneously  argued  itself into convincing conclusiveness:               "State  necessity  or  need  for  taking   the               particular  property of a citizen is the  very               foundation  for the exertion of the  power  of               Eminent   Domain.   If  there  is   no   State               necessity or need for the particular property,               then,  in  my opinion, the  power  of  Eminent               Domain cannot be exerted.  Let me assume  that               the law provides for paying just  compensation               for taking the property of a citizen but there               is  no  state necessity for taking  over  that               property.   In  such an  event.  the  property               cannot be taken in an exercise of the power of               Eminent  Domain.   The  ambit  of  legislative               power conferred by               679               Entry  42 of List 11 of the Seventh  Schedule,               Acquisition or requisitioning of property’, in               my  opinion, cannot comprehend the. taking  of               private property by the state even on  payment               of  just  compensation if there  is  no  state               necessity.   If there is no nexus between  the               taking  over  or private  property  and  State               necessity  such a power cannot be exerted.   I               am  of  opinion  that even if  Article  31  is               deleted from Part III of the Constitution, the               State cannot acquire property of a citizen  or               make a law for acquisition of private property               if  the taking over has no relation  to  State               necessity.   Such a legislation will be  ultra               vires of the powers of the State Legislature."               material  in the Act itself to show  that  the               Legislature was conscious of the fact that the               acquisition  under  section  4 is  not  for  a               public   purpose..................  When   the               purpose of the acquisition is ’deemed’ to be a               public  purpose, the only meaning possible  is               that whereas the purpose of the acquisition is               not  in reality a public purpose,,  the  State               Legislature requires the purpose to be treated               as if it were a public purpose.  It is  rather               an  admission on the part of  the  Legislature               that  the purpose of the acquisition is not  a               public purpose." (pp. 1515-16) If  this  were good law and logic,  the  States’  operations might shrink into midget size with large spaces for  laissez faire  economics.  The flaw and fallacy of the law and  the- fetter  on the State in this  constitutional  interpretation goes  far  beyond  this Act and to mortality.   We  have  no hesitation in visualising a wider horizon of public  purpose as  outlined by us earlier and consequentially  to  overrule the view of the High Court.  The people in our welfare State await  State undertakings in a wealth of ways most of  which involve  compulsory  talking of private  property  and  this futurism  argues for a wider connotation of public  purpose.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 38 of 50  

The aware court must remember the hint of Francis Bacon that ’it is a hard thing to torture the laws so that they torture men-poor  men hopefully looking forward for benignant  State action.  After all, ordinarily, the legislature will acquire compulsorily  only  if it considers it a proper  measure  to promote public good. Compensation vis a vis the 25th Amendment The  constitutional  salvoes of Shri Sen were fired  on  the target of illusory compensation granted according to him, by the  impugned Act.  The amendment and recasting  of  Article 31(2)  would stand stiutified if the High Court  were  right that payment which is less than the dealer’s price inclusive of  sales-tax  or  does  not make  good  the  loans  of  the operators or spreads payments over long years awarding  only 6% interest, is illusory and unconstitutional. We  are  not  dealing with the  details  of  the  arithmetic arranged  by  the  statute for payment  of  the  amounts  to persons  interested in the acquired properties since  it  is fairly  clear, as explained by Shri Lal Narain  Sinha,  that the  Act awards, through the arbitrator, an amount which  is just  and  reasonable for those who  suffer  deprivation  of their 680 property.   Even  so,  the law  bearing  on  Article  31(2), particularly  in  view  of  the  exceptionable  construction adopted   by   the  High  Court,  needs  to   be   clarified unambiguously and declared decisively.  Indeed, if the  High Court were right in its holding on, this branch, 27 years of decisions  and amendments and decisions and amendments  have taken us back to square one  Full compensation with a formal difference.    The  Court will not  question  the  ’adequacy’ directly, but ’interpret’ the amended articles into the same desideratum.   In  this  condition of the law,  we  deem  it proper to dive to the beginning briefly. Right  from the start the framers of the  Constitution  have been clear in their minds, as the, debates, drafts,  reports and  resolutions show. that the amount payable when  private property  is taken by the State is a matter  of  legislative policy and not of judicial fixation.  Speaking with a  sense of  history, the Father of the Nation used prophetic  words, as far back as the time of the Round Table Conference, while dealing with the issue of compensation :               "If  the  national  government  comes  to  the               conclusion  that  the  step  is  necessary  no               matter what interests are concerned, they will               be dispossessed and they will be dispossessed.               I  might  tell you, without  any  compensation               because  if  you want this Government  to  pay               compensation,  it will have to rob  Peter  to               pay Paul, and that would be impossible."               He reminded the British masters again               "I have in mind many things I would have to do               in order to equalise conditions.  I am  afraid               that for years together India would be engaged               in  passing legislation in order to raise  the               downtrodden,  the fallen, from the, mire  into               which they have been sunk by the  capitalists,               by  the  land-lords, by the  so-called  higher               classes    and    then,    subsequently    and               scientifically by the British rulers."               "If we are to lift these people from the  mire               then  it  would  be the bounden  duty  of  the               National  Government of India in order to  set               its  house  in  order,  continually  to   give               preferences to these people and even tree them

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 39 of 50  

             from  the  burden under which they  are  being               crushed.               And  if the landlords,  zamindars,  monied-men               and those who are today enjoying  privileges-I               do  not  care  whether they  are  European  or               Indian-if    they   find   that    they    are               discriminated against, I shall sympathise with               them, but I will not be able to help them.  It               will  therefore be a battle between the  haves               and the have-nots." Speaking  as one of the foremost jurists of the country  and with  a sense of far-sightedness, Alladi Krishnaswami  Iyer, in   the  Constituent  Assembly,  argued   for   legislative autonomy,  without  forensic intervention in the  matter  of fixation of compensation and the principles in 681 that behalf.  He rightly stressed that by their very  nature the  principles  of compensation could not be  the  same  in every species of acquisition :               "Law, according to me, if it is to fulfil  its               larger purpose, must serve as an instrument of               social   progress.    It  must   reflect   the               progressive social tendencies of the age.  Our               ancients  never  regarded the  institution  of               property as an end in itself.  Property exists               for  dharma,  dharma and the, duty  which  the               individual owes to the society from the  whole               basis of social framework.  Dharma is the  law               of  social well-being and varies from yuga  to               yuga.   Capitalism as it is practised  in  the               West  came  in  the  wake  of  the  Industrial               Revolution  and is alien to the root  idea  of               our   civilisation.   The  sole  end  of   the               property  is  yagna  and  to  serve  a  social               purpose."               (Quoted  from  Fundamental  Rights  &   Socio-               Economic  Justice-by K. P. Krishna  Shetty-pp.               127-128) Shri Jawaharlal Nehru, speaking in the Constituent  Assembly with reference to determination and payment of  compensation emphasized  that it was left to Parliament to determine  the various aspects thereof and               "there   is  no  reference  in  this  to   any               judiciary  coming  into  the  picture.    Much               thought  has  been given to it and  there  has               been  much  debate as to where  the  judiciary               comes in. Eminent lawyers have told us that on               a proper construction of this clause, normally               speaking,  the judiciary should not  and  does               not come in.  Parliament fixes either the com-               pensation its--If or the principles  governing               that  compensation  and  they  should  not  be               challenged  except for one reason where it  is               thought  that there has been a gross abuse  of               the law, where in fact there has been a  fraud               on the Constitution.  Naturally the  judiciary               comes  in to see if there has been a fraud  on               the   Constitution  or  not.    But   normally               speaking,  one  presumes that  any  parliament               representing  the  entire  community  of   the               nation  will certainly not commit a  fraud  on               its  own  Constitution and will be  very  much               concerned with doing justice to the individual               as      well      as      the       community.               (P. 123, Krishna Shetty, supra)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 40 of 50  

When   complications   arose   on   account   of    judicial interpretation  of Article 31 not being in accord with  what the  framers of the Constitution fancied, amendments to  the Constitution  came in.  Shri Jawaharlal Nehru,  speaking  on the  4th  Amendment,  which has since been  upheld  by  this Court, said in Parliament :               "If we are aiming, as I hope we are aiming and               we repeatedly say we are aiming, at changes in               the  social  structure,  then  inevitably   we               cannot think in terms of giving what is called               full   compensation.   Why?    Well,   firstly               because               682               you cannot do it, secondly because it would be               improper  to  do it, unjust to do it,  and  it               should  not be done even if you can do it  for               the  simple  reason that in all  these  social               matters,  laws etc., they are aiming to  bring               about a certain structure of society different               from what it is at present.  In that different               structure, among other things that will change               is this, the big difference between the have’s               and  the  have-not’s.  Now, if we  are  giving               full  compensation,  the  have’s  remain   the               have’s  and  the have-not’s,  have-not’s.   It               does   not   change  in  shape  or   form   if               compensation  takes place.  Therefore, in  any               scheme of social engineering, if I may say so,               you cannot give full compensation, apart  from               the  patient  fact  that  you  are  not  in  a               position-nobody  has  the  resources--to  give               it." The divergence of thinking between those who framed the Con- stitution and amended it and the summit judiciary showed  up glaringly  in Cooper’s case and then came  the  Constitution 25th Amendment Bill devoted primarily to overcome the effect of  Cooper.  While moving, the Constitution  25th  Amendment Bill  which  brought in Article 31C, the then  Law  Minister emphasized :               "Critics of the present measure seek to invest               property rights with an aura of  sacrosanctity               by regarding it as a primordial institution of               the law of nature.  It is this approach  which               led   the   Supreme   Court   in   the    Bank               Nationalisation case to seek help from the now               archaic   and  long-past  dead   theories   of               Blackstone who regarded property as a  natural               right.   Such a view is not only out  of  tune               with the juristic approach to the  institution               of  private property in modern  jurisprudence,               but  it  is not in tune even with  the  native               genius  of  ancient and  traditional  juristic               thought  in India.  The individual’s right  to               private  property must yield second  place  to               the  supervening-right of society  to  acquire               the  property for a public purpose.   That  is               the   eminent  and  dominant  basis   of   the               amendment  which the House is called  upon  to               consider today." The  Law Commission also had, in its 46th Report,  supported Article  31-C  in the sense that Cooper’s case  was  not  in keeping  with  what they regarded as the intendment  of  the Constitution :               "Nehru   described   this  position   in   his               characteristically lucid words by observing :

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 41 of 50  

             "The service of India means the service of the               millions  who suffer.  It means the ending  of               poverty   and   ignorance  and   disease   and               inequality  of opportunity.  The  ambition  of               the greatest man of our generation has been to               wipe  every tear from every eye.  That may  be               beyond us, but as long as there are tears  and               suffering, so long our work will not be over."               683               The  view of the Commission has a  bearing  on               our  understanding of the provision  and  were               referred  to in the parliamentary debates  and               so  we excerpts portions thereof.   Wrote  the               Commission :               "Reverting  then, to clause 2 of the Bill,  it               would  be noticed that sub-clause (a) of  this               clause  deletes  the word  ’compensation’  and               introduces  in its place the word ’amount’  in               order  to  avoid  any  controversy  about  the               adequacy  of the amount which  Parliament  may               direct to be paid in the mannerspecified               by the clause, where property belonging toa               citizen    is   compulsorily    acquired    or               requisitioned.   It  also  provides,  as   did               Article 31(2) in the unamendedform,  that   a               law  passed by virtue of the powers  conferred               by  Article  31(2)  shall  not  be  called  in               question  in any Court on the ground that  the               amount so fixed or determined is not adequate;               and  it adds that the said law cannot also  be               challenged on the ground that the whole or any               part  of such amount is to be given  otherwise               than in cash.               Sub-clause  (b)  of  clause,  2  of  the  Bill               inserts  clause (2B) after clause (2A) in  the               existing  Article,  and  it  lays  down   that               nothing  in  sub-clause (f) of clause  (1)  of               Article  19  shall effect any such law  as  is               referred to in clause (2).  In other words, an               additional  safeguard  has  been  provided  by               clause  (2B) which is sought to be  introduced               by the Bill to prevent any attack against  the               law passed under Article 31 (2) on the  ground               that  any  of its  provisions  contravene  the               fundamental rights guaranteed by Article 19(1)               (F)." Specific  mention is made of the Bank  Nationalisation  Case and its poignant pertinence consists in the High Court still clinging to Cooper: On a careful reading of the several opinions of the  learned Judges  in  Keshavananda Bharati’s case, I am of  the  clear opinion that the law laid down in Cooper’s case holds good." (ILR 1976 Kar. 1478, 1522) The Commission remarks               "Every  student  of Constitutional  Law  knows               that Parliament thought that it was  necessary               to make these provisions because of the recent               decision  of  the  Supreme  Court  in   Rustom               Covasjee  Cooper & Another v. Union of  India.               Parliament  presumably thought, and  we  think               rightly,  that  the effect  of  this  majority               decision   of   the  Supreme  Court   was   in               substance,  to make compensation provided  for               by  the impugned legislation  justiciable  and               subject it to the test of reasonableness under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 42 of 50  

             article  19(5); and, to that extent  the  said               decision  is inconsistent with the view  taken               by the               -7-951SCI/77               684               Supreme Court in State of Gujarat v. Shantilal               Mangaldass & others.  Indeed, ever since.  the               Supreme Court had generally interpreted clause               (2) of Article 31 to mean that the adequacy of               compensation directed to be paid by laws pass-               ed  under the said clause was not  justiciable               as we have explained earlier, except in  cases               where it reasonably appeared to the Court that               the  compensation  was illusory  or  that  the               whole legislative exercise was a fraud on  the               Constitution.   But,  in  Cooper’s  case,  the               majority  view appeared to strike  a  somewhat               different note; and that, according to Parlia-               ment,  made  it  necessary  to  introduce  the               amended  clause (2) in Article 31.   We  think               that,  in the circumstances to which  we  have               just  referred,  Parliament  is  justified  in               introducing the amendment in question." A  seminal  aspect  of  the  changes  wrought  by  the  25th Constitution  Amendment Act is the immunization of  ’Article 39 enactments’ from the viral attack of certain  fundamental rights  (the  attackers were almost never  the  poor).   The Commission commented :               "By introducing this clause (31-C), Parliament               is taking the first major and significant step               towards implementing two  of   the   Directive               Principles enshrined in clause (b) and (c)  of                             Article 39 in Part IV of the Constitution, and ,               in thatsense,     the     clause     under               consideration  can be appropriately  described               as historic.  After it is adopted,  Parliament               will have heralded a new era in the pursuit of               the  goal  placed  before the  nation  by  the               Constitution to establish social and  economic               justice in this country.  The Commission is in               full agreement with this object of the clause.               In the two decades after the Constitution  was               passed,   the   inter-relation   between   the               Directive  Principles and  Fundamental  Rights               have  been  often considered  by  the  Supreme               Court.  The Directive Principles enshrined  in               Part  IV  are, in terms, declared to  be  non-               justiciable  and yet, Article 37, which  makes               this  declaration, emphatically adds that  the               said  principles are nevertheless  fundamental               in  the  governance  of  the  country  and  it               ordains that it shall be the duty of the State               to apply these principles in making laws."               ’In  the  Directive Principles,  however,  one               finds an even clearer statement of the  social               revolution.   They  aim at making  the  Indian               masses  free in the positive sense, free  from               the passivity engendered by- centuries of  co-               ercion by society and by nature, free from the               abject physical conditions that had  prevented               them from fulfilling their best selves." The  High Court has referred to Cooper’s case the  ratio  of which to put it tersely-goes to the extent of saying that if any of the relevant consideration in ascertaining the market

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 43 of 50  

value  were  not included.  It ceased to  be  ’compensation’ within the meaning of Article 685 31.Then  came the scenario--the 25th Amendment deleting  the expression ’compensation’ and substituting the neutral  word ’amount’  and  restructuring  the  Article  effectively   to exclude  judicial  examination  even of  the  principles  of evaluation, the, challenge. to the constitutionality of that constitutional  amendment and the elaborate  Bharati  ruling upholding,  by  a majority, the vires of the  Amending  Act. And yet, the I-High Court has, after selectively culling out passages  from  the bunch of opinions in Bharati  come  full circle to Cooper again.  This about-turn is untenable in our view  and  it  is necessary to run rapidly but  in  a  short compass  through  the multiple views expressed by  the  many judges who heard and pronounced. Bharati-the  majority  opinion-blinds  us.   What,  on   the question  of payment for taking was the preponderant view  ? Sikri  C.J. permitted a narrow area for judicial  inspection and  readily  accepted  that full  compensation  was  not  a fundamental  right.   The Court could  satisfy  itself  only about  the  amount  not being a  monstrous  or  unprincipled under-value.   Cooper  was dead by this test.   The  learned Chief, Justice said               "  .  .  What meaning is to be  given  to  the               expression ’the amount so fixed’.  The amount               has to be fixed by law but the amount so fixed               by  law must also be fixed in accordance  with               some principles because it could not have been               intended  that if the amount is fixed by  law,               the   legislature   would   fix   the   amount               arbitrarily.  It could not, for  example,  fix               the amount by a letter.               If  I  were  to interpret Article  31  (2)  as               meaning that even an arbitrary or illusory  or               a  grossly low amount could be given,  which               would  shock not only the judicial  conscience               but  the conscience of every reasonable  human               being, a serious question would arise  whether               Parliament has not exceeded its amending power               under  Article 368 of the  Constitution.   The               substance   of  the  fundamental   right   ,to               property, under Article 31, consists of  three               things  : one, the property shall be  acquired               by  or under a valid law; second, it shall  be               acquired  only  for  a  public  purpose;   and               thirdly,  the person whose property  has  been               acquired  shall  be given an  amount  in  lieu               thereof, which, as I have already said, is not               arbitrary,   illusory  or  shocking   to   the               judicial  "conscience  or  the  conscience  of               mankind."                                          (196-197 pp) The payment may be substantially less than the market value, the principles may not be all-inclusive, but the court would not,  because it could not, upset the taking save where  the principles of computation were too arbitrary and illusory to be unconscionably shocking. Shri  Justice Shelat, with the concurrence of  Shri  Justice Grover, put his viewpoint thus "It  is  significant that the amount can  be  determined  in accordance with specified principles, if it is not fixed ’by the 686               law itself.  Moreover, its adequacy cannot  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 44 of 50  

             questioned  in a court.  The use of  the  word               ’principles’  and the question ,of  inadequacy               can  only arise if the amount has  some  norm.               If  it has no horm no question  of  specifying               any  principles  arises nor can there  be  any               occasion   for   the  determination   of   its               adequacy.   The  very fact that the  court  is               debarred  from  going  into  the  question  of               adequacy   shows  that  the  amount’  can   he               adequate   or  inadequate.   Even  if  it   is               inadequate,  the fixation or determination  of               the  amount is immune from any challenge.   It               postulates  the existence of some standard  or               norm  without which any enquiry into  adequacy                             becomes wholly unnecessary and irrelevant." (p .               283) (emphasis, added).               "It is true that the ’amount’ to be paid to an               owner may not be the market value.  The  price               of the property might have increased owning to               various  factors to which no contribution  has               been made by the owner.  The element of social               Justice   may   have   to   be   taken    into               consideration..........    The   Court    will               certainly give due weight to legislative judg-               ment.   But  the  norm or  the  principles  of               fixing  or determining the ’amount’ will  have               to be disclosed to the Court.  It will have to               be satisfied that the ’amount’ has  reasonable               relationship  with the value of  the  property               acquired  or requisitioned and one or more  of               the relevant principles have been applied  and               further that the ’amount’ is neither  illusory               nor it has been fixed arbitrarily, nor at such               a  figure that it nor Virtual  deprivation  of               the right under Article 31(2), The question of               adequacy  or  inadequacy, however,  cannot  be               gone into" (pp. 284-85) (emphasis; added). Hegde   J.  discussed  the  question   from   lexicographic, political and social angles and held :               "The market value of a property is the  result               of  an interaction of various forces.  It  may               not have, any reasonable relationship with the               investment made by its successive owners.  The               price of the property acquired might have shot               up  because of various contributions  made  by               the  society such as improvements effected  by               the  State in the locality in question or  the               conversion of a rural area into an urban area.               It  is  undoubtedly  open  to  the  State   to               appropriate to itself that part of the  market               value of a property which is not the result of               any  contribution made by its  owners.   There               may  be  several other  relevant  grounds  for               fixing  a particular ’amount’ in a given  case               or  for adopting one or more of  the  relevant               principles for the determination of the  price               to   be  paid.   In  all  these  matters   the               legislative  judgment  is  entitled  to  great               weight.  It will be for the aggrieved party to               clearly  satisfy  the  Court  that  the  basis               adopted by the legislature has no               687               reasonable  relationship to the value  of  the               property  acquired or that the ’amount’ to  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 45 of 50  

             paid  has been arbitrarily fixed or  that  the               same  is an illusory return for  the  property               taken.   So  long  as the  basis  adopted  for               computing   the  value  of  the  property   is               relevant to the acquisition in question or the               amount  fixed  can be justified  on  any  such               basis,  it  is no more open to  the  court  to               consider  whether  the amount fixed or  to  be               determined is adequate.  But it is still  open               to  the court to consider whether ’amount’  in               question  has been arbitrarily  determined  or               whether the same is an illusory return for the               property taken.  It is also open to the  court               to  consider whether the principles laid  down               for  the  determination  of  the  amount   are               irrelevant for the acquisition or  requisition               in  question.   To  put  it  differently,  the               judicial  review  under  the  amended  Article               31(2)  lies within narrow limits.   The  court               cannot  go into the question whether  what  is               paid  or is payable is compensation.   It  can               only go into the question whether the ’amount’               in question was arbitrarily fixed as  illusory               or  whether the principles laid down  for  the               purpose  of determining the  ’amount’  payable               have reasonable relationship with the value of               the property acquired or requisitioned."  (pp.               341342).               Even here we may excerpt Hegde J’s  highlight               of Part IV               "Part  IV of the Constitution is  designed  to               bring about the social and economic revolution               that   remained   to   be   fulfilled    after               independence.  The aim of the Constitution  is               not  to guarantee certain liberties to only  a               few   of  the  citizens  but  for  all.    The               Constitution visualizes our society as a whole               and  contemplates  that every  member  of  the               society  should  participate in  the  freedoms               guaranteed.   To ignore Part IV is  to  ignore               the    substance   provided   for    in    the               Constitution, the hopes held out to the Nation               and the very ideals on which our  Constitution               is built.  Without faithfully implementing the               Directive  Principles, it is not  possible  to               achieve the Welfare State contemplated by  the               Constitution.  A society like ours stepped  in               poverty  and ignorance satisfying the  minimum               economic  needs  of  every  citizen  of   this               country.  Any Government which fails to fulfil               the pledge taken under the Constitution cannot               be   said  to  have  been  faithful   to   the               Constitution  and to its  commitments."  (343-               344).               Reddy  J. in short paragraph disposed  of  the               question               "Once   the  Court  is  satisfied   that   the               challenge,  on the ground that the  amount  or               the manner of its payment is neither arbitrary               or illusory or where the principles upon which               it  is  fixed  are found  to  bear  reasonable               relationship  to  the value  of  the  property               acquired,   the  Court  cannot  go  into   the               question  of  the-adequacy of  the  amount  so               fixed  or  determined  on the  basis  of  such

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 46 of 50  

             principles." (p. 555).               688               our  learned brother Chandrachud J.  explained               his stand effectively thus :               "The  specific obligation to pay  an  ’amount’               and  in  the alternative the use of  the  word               ’principles’ for determination of that  amount               must mean that the amount fixed or  determined               to  be paid cannot be illusory.  If the  right               to  property  still  finds  a  place  in   the               Constitution,  you cannot mock at the man  and               ridicule  his  right.  You cannot tell  him  :               I  will take your fortune for a  farthing  :."               (p. 992-993).               "As  at present advised, I am inclined to  the               view  which as I have said is  unnecessary  to               discuss  fully, that though it is not open  to               the  court  to question a  law  under  Article               31(2)  on the ground that the amount fixed  or               determined is not adequate, Courts would  have               the power to question such a law if the amount               fixed   thereunder   is   illusory;   if   the               principles, it any are stated, for determining               the amount are wholly irrelevant for  fixation               of  the  amount, if the  power  of  compulsory               acquisition or requisition is exercised for  a               collateral   purpose;  if  the   law   offends               constitutional  safeguards other than the  one               contained in Article 19(1)(f); or, if the  law               is   in   the  nature  of  a  fraud   on   the               Constitution.   I would only like to  add,  by               way of explanation, that if the fixation of an               amount  is  shown to  depend  upon  principles               bearing on social good it may not be  possible               to  say that the principles  are  irrelevant."               (p. 993) (emphasis added) It  is  regrettable  that two  significant  points  made  by brother  Chandrachud J. have slipped out of the scrutiny  of the   High   Court   and  we  have   emphasized   them   for identification.   Are the principles wholly irrelevant ?  Do the  principles bear on social good ? In the  present  case, few will agree that the principles are wholly irrelevant  or not geared to social good. The  majority view in Bharati was set  out by the Court  and there  it  was  stated  :  Section  2(a)  and  (b)  of   the Constitution  (25th Amendment) Act, 1971 is valid.   Glosses apart,   the  provision  excluding  the  court’s  power   to investigate  either  the  adequacy  of  the  amount  or  the propriety  of  the principles to determine  the  amount  was upheld.     It   follows   that    individual    annotations notwithstanding  the Court has set its seal of  validity  on Article  31(2).  Nothing covered by it can now be  available for  examination using passages in separate  opinions.   The result is the quantum of the amount or the reasonableness of the principles are out of bounds for the Court.  Article 31C has also been upheld subject to the rider that there  should be nexus between Article 39(b) and (c) and the object of the acquisition.   Our  learned  brother,  Chandrachud  J.,  has struck  a middle note and pointed out that where the  inputs of valuation prescribed by the statute are wholly irrelevant or  unconnected with Social good, thin, Article 3 1 (2)  may not  retrieve  the  statute.   It is a  far  cry  from  this observation  to  the  position that  the  25th  Constitution Amendment  leaves  untouched the ratio in  Cooper.  We  have pointed out how the said constitutional amendment was ex-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 47 of 50  

689 pressly undertaken, inter alia, to undo the effect of Cooper and  to  forbid forensic diagnostics into  the  question  of compensation.   In this light it is difficult to uphold  the view of the High Court that Cooper survives after death  and keeps virtually alive the obligation for payment of  market value  inclusive of the usurious rates of interest at  which the owner borrowed to buy the property seized by the state. This takes us to the non-negotiable minimum of nexus between the  purpose of the acquisition and Article 39(b).   Article 39(c) was feebly mentioned but Article 39(b) was  forcefully pressed by the appellant.  Better read Article 39(b)  before discussing its full import :               "  39(b)  Certain principles of policy  to  be               followed  by the State.--The State  shall,  in               particular, direct its policy towards securing               that the ownership and control of the material               resources of the community are so  distributed               as best to subserve the common good." The key word is ’distribute’ and the genius of the  article, if  we,  may say so, cannot but be given fully  play  as  it fulfils  the  basic purpose of  restructuring  the  economic order.   Each word in the article has a strategic  role  and the  whole  article is a social mission.  ’It  embraces  the entire material resources of the community.  Its task is  to distribute  such  resources.  Its goal is  so  to  undertake distribution  as best to subserve the common good.   It  re- organizes by such distribution the ownership and control. ’Resources’  is  a sweeping expression and covers  not  only cash   resources   but  even  ability  to   borrow   (credit resources).   Its meaning given in Black’s Legal  Dictionary is:               "Money  or any property that can be  converted               into  supplied:  means  of  raising  money  or               supplies; capabilities of raising wealth or to               supply  necessary  wants; available  means  or               capability of any kind." And  material resources of the community in the  context  of reordering  the national economy embraces all  the  national wealth,  not merely natural resources, all the  private  and public sources of meeting material needs, not merely  public possessions.   Every thing of value or use in  the  material world is material resource and the individual being a member of the community his resources are part of those of the com- munity.  To exclude ownership of private resources from  the coils of Article 39(b) is to cipherise its very I purpose of redistribution the socialist way.  ’A directive to the State with a deliberate design to dismantle feudal and  capitalist citadels of property must be interpreted in that spirit  and hostility  to such a purpose alone can be hospitable to  the meaning which excludes private means of production or  goods produced from the instruments of production.  Sri A. K.  Sen agrees  that  private means of production  are  included  in ’material  resources of the community’ but by some  baffling logic  excludes  things  produced.  If a car  factory  is  a material  resource, why not cars manufactured ?   ’Material’ may  cover everything worldly and ’resources’, according  to Random House Dictionary, takes in ’the collective wealth  of a country 690 or  its  means of producing wealth : money or  any  property that  can  be  converted into  money;  assets.’  No  further argument  is needed to conclude that Article 39(b) is  ample enough to rope in buses. the motor vehicles are part of  the material resources of the operators.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 48 of 50  

The next question is whether nationalisation can have  nexus with  distribution.  Should we assign a narrow  or  spacious sense  to this concept ? Doubtless, the latter, for  reasons so  apparent  and eloquent.  To ’distribute’,  even  in  its simple  dictionary  meaning, is to ’allot,  to  divide  into classes   or  into  groups;’  and   ’distribution   embraces ’arrangement,   classification,   placement,    disposition, apportionment,  the way in which items, a quantity,  or  the like,  is divided or apportioned; the system  of  dispersing goods throughout a community’ (See Random House Dictionary). To  classify and allocate certain industries or services  or utilities  or  articles between the private and  the  public sectors  of  the  national economy is  to  distribute  those resources.  Socially conscious. economists will find  little difficulty  in  treating nationalisation of transport  as  a distributive  process  for the good of the  community.   You cannot condemn the concept of nationalisation in our Plan on the score that Article 39(b) does not envelope it.  It is  a matter of public policy left to legislative wisdom whether a particular scheme of take-over should be undertaken. Two  conclusions  strike us as  quintessential.   Part,  IV, especially Article 39(b) and (c), is a futuristic mandate to the  state with a message of transformation of the  economic and   social   order.   Firstly,  such  change   calls   for collaborative effort from all the legal institutions. of the system   :   the   legislature,  the   judiciary   and   the administrative  machinery.   Secondly  and  consequentially, loyalty  to  the  high purpose of  the  Constitution,  viz., social and economic justice in the context of material  want and utter inequalities on a massive scale, compels the court to  ascribe  expansive meaning to the, pregnant  words  used with   hopeful   foresight,  not   to   circumscribe   their connotation into con tradiction of the objectives  inspiring the  provision.   To be Pharisaic towards  the  Constitution through  ritualistic construction is to weaken  the  social- spiritual thrust of the founding fathers’ dynamic faith. An  American political scientist, Benjamin Twiss,  commented with jarring exaggeration upon the conservative  perspective of the lawyer in the United States of the slump years in the thirties :’               "It  is not surprising that lawyers’  fame  is               evanescent.... Allied with those who are  pre-               occupied  with production and profits  to  the               exclusion  of  standards  of  consumption  and               general  well-being,  lawyers  have  taken   a               negative   rather   than   a   creative    and               constructive     attitude    toward     social               development.     In   defending   rights    of                             untrammelled  enterprise against rules of  fai r               play and in presuming the  unconstitutionality               of  legislative enactments, they  have  missed               their cue to the role of constructive  leaders               and have been instead dogs in the manger."               (Lawyers  for Social Change : Perspectives  on               Public  Interest  Law  : by  Robert  L.  Rabin               Stanford  Law Review Col. 28, No.  2,  January               1976). 691 This does not apply to the Indian Bar on Bench at all and is referred  to ex abundanti cautela.  Law and  Development  in India  should  repel, as far as possible, such  an  unlovely judgment on Indian jural perspectives and performances.  The Court and counsel have a justice constituency with  economic overtones, the manifesto being the Constitution designed  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 49 of 50  

uphold  the humanist values of life, liberty and  the  equal pursuit of happiness, material and spiritual. An Explanatory Post-script to our juristic Attitude We have been guided by the thought that an all-too-large gap between  the  law and public needs, arising  out  of  narrow notions,  must be bridged by broadening  the  constitutional concepts  to suit the changing social consciousness  of  the emerging   Welfare   State.    Institutional   crises    and confrontations  can be and should be avoided by  evolving  a progressive  interpretation, discarding over-sensitivity  to under-valuation  when private property is taken  for  public good.   ’A legal system that works to serve  the  community’ says   Bernard  Schwartz,  ’is  better  than  the   academic conceptions of a bevy of Platonic guardians unresponsive  to public needs’.  The law, in the words of Justice Holmes,  is a  magic mirror in which we see reflected not only  our  own lives but also the lives of those who went before us-and may we  add, of those who come after us.  But basically we  have brought  to  bear  upon the  impugned  legislation  a  value judgment  in  tune  with the ’welfare" wave  length  of  our Constitution  and the still, and music of  Indian  humanity. ’The  law  moves with the main currents of  the  society  it regulates.   Each  society  has its  own  values  which  are necessarily reflected in the ends that the legal order seeks to  further.   The ends of law are attained  by  recognizing certain  interest,  defining the limits  within  which  they shall  be  recognized legally, and  endeavouring  to  secure those interests that are within the limits defined.’ (Quoted from  the  Law in America Bernard Schwartz-p.  34)  We  have recognised  that rights and obligations of long ago  do  not acquire a static validity in our galloping age and a  decent oblivision  must put them back into forgotten  antiquity  if we, as a nation, are to run on the rails of the rule of  law and  so  we have nullified the attempt to  drift  back  from Bharati  to Cooper on ’compensation’.  A blend of law  as  a set  of responses to the new needs of expanding society  and of Daniel Chapman’s advice that ’the known certainty of  the law is the safety of all’, has played upon our approach.  We are  aware  that in constitutional construction,  a  limited judicial  lawmaking is inevitable ’.juristic chemistry’,  to borrow Roscoe Pound’s expressive phrase.  " The chemist does not  make  the materials which go into his test  tube  :  He selects  them  and combines them for some  purpose  and  his purpose  gives form to the result.’ Our constitution  makers have had due regard to the felt necessities of the time  and the  philosophical and political theories about  what  would best  serve the country’s progress; and so we have  grounded ourselves  on  these  solid  prescriptions  unreflected   by speculative  niceties  lent by literal  study  and  possible injuries  inevitable in reshaping society.  ’The object  and end  of  all  Government is to  promote  the  happiness  and prosperity  of  the community by which it  is  established’, wrote  U.S.  Chief Justice Taney, 140 years ago  in  Charles River Bridge v. Warren Bridge and we, in a republic with  an irrevocable tryst to give social justice in the 692 midst  of poverty, cannot diminish the power  to  accomplish those  ends.   To be stable is not to stand still;  to  move forward  and  reconcile is the road  to  the  goal-juridical engineering  geared to desiderated policy objectives,  being the  key to most constitutional problems.  Not unoften,  the subjective   philosophy   of  the  judge   underpowers   the philosophy   of   the  Constitution  while  it   should   be overpowered by it.  Cardozo, with apt elegance, struck  this note :

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

             "The great tides and currents which engulf the               rest of man do not turn aside in their  course               and  pass the Judges by." Cardozo, The  Nature               of Judicial Process, 1932, P. 170. Taking  this  warning  to head, we have  also  to  take  the Constituent Assembly’s hope to heart :               "The  Judiciary  was  to be the  arm  of  the,               social revolution, upholding the quality  that               Indians had longed for in colonial days......The               courts   were  also  idealised   because,   as               guardians  of the Constitution, they would  be               the expression of a new law created by Indians               for Indians."                 Granville Austin, The Indian Constitution. The  Discovery  of Law India by  interpreting  liberally  to embrace  the higher values of collective good and  to  curb, where necessary, individual property rights, is all that  we have   endeavoured  to  do.   We  have  been  cautioned   by appellant’s  counsel that governments may usurp and  destroy if judges do not cry halt.  Where arbitrary, oppressive  and mala  fide misuse of power is a real peril, the court  shall not  fail.   But  to intervene and strike  down,  because  a measure, within the constitutional bounds, may work hardship for  some  but  is conceived for the good  of  the  many  in keeping  with.  the planned process of  Development,  has  a ’Tory’ touch.  Canonisation of laissez faire cannons by  the Court  is to move cotinter-clockwise.  Lord Sankey held  the view  that in the field of constitutional  Law,  progressive and  dynamic  interpretation  in  the  light  of   political developments  must dominate (see : British Coal  Corporation v.  The King : 1935 AC 500).  Lord Jowitt L.C.  in  Attorney General of Ontario v. Attorney Gen. of Canada (1947 AC  503) affirmed the same approach               "To  such  an  organic  statute  the  flexible               interpretation  must  be given  that  changing               circumstancesrequire and it      would   be               alien to the spirit with which the preamble               to the Statute of Westminster is instinct,  to               concedeanything   less  than  the   widest               amplitude of power to the Dominion legislature               under section 101 of the British North America               Act." Legalism has to yield when spacious issues arise.  "Whatever the legal aspect of the thing, there are moments when it  is a  feeble need to rely on," said Nehru, in  the  Constituent Assembly (I Constituent Assembly Debates, p. 61). There  is  another  stark  possibility  the,  Administration sliding  back from the progressive constitutional values  to protect  private  interests;  and  then  the  Court  may  be activate the ’welfare jurisprudence’ of the Constitution  by appropriate commands. M.R. 693