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PETITIONER: STATE OF TAMIL NADU, ETC, ETC.

       Vs.

RESPONDENT: L. ABU KAVUR BAI AND ORS. ETC.

DATE OF JUDGMENT31/10/1983

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA CHANDRACHUD, Y.V. ((CJ) TULZAPURKAR, V.D. REDDY, O. CHINNAPPA (J) VARADARAJAN, A. (J)

CITATION:  1984 AIR  326            1984 SCR  (1) 725  1984 SCC  (1) 516        1983 SCALE  (2)541  CITATOR INFO :  RF         1984 SC 374  (16,17,19)  R          1990 SC 123  (37)  RF         1992 SC 938  (22,32)

ACT:      Constitution of  India 1950  Article 14,19,31,39(b) and (c).      Tamilnadu  Stage   Carriages  and   Contract  Carriages (Acquisition) Act  1973-Nationalisation of  stage  carriages and contract carriages-Vesting of vehicles, workshop etc. in the  government   on  nationalisation-Whether   confiscatory legislation-Constitutionally valid  and permissible-Scope of Articles 39(b) and (c)-What is interpretation of Statutes.      Policy of Nationalisation evolved by government-Duty of Courts to give effect.      Words and Phrases: "distribution" -"Material resources" -Meaning of-Constitution of India 1950 Article 39(b).

HEADNOTE:      The transport  industry  can  be  nationalised  by  two methods: (i)  where the  Government acts under Chapter IV-A, (section 68  (b) and  (c) of  the Motor  Vehicles Act 1939), after formulating  the scheme  for taking  over a  route  or routes, and (ii) the more effective method, to take over the running of  the entire  transport services  by nationalising them, along  with their  units, (Vehicles,  workshops  etc.) either by one stroke or by stages spread over a short time.      The Karnataka  State adopted  the second method and the legislation   viz.,   the   Karnataka   Contract   Carriages (Acquisition) Act, 1976 was upheld by this Court in State of Karnataka and  Anr. v.  Ranganatha Reddy  and Anr., [1978] 1 S.C.R. 641.      The  Tamilnadu  State  passed,  the  Tamil  Nadu  Stage Carriages and  Contract Carriages  (Acquisition)  Ordinance, 1973 which  later took  the shape  of the  Tamil Nadu  Stage Carriages and Contract Carriage (Acquisition) Act, 1973.      The  intention   of  the   Act   was   to   start   the nationalisation scheme  in one  district of  the State first and then extend it to other districts. Section 1 provided

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726 that the  policy of nationalisation shall come into force on the 14th  January, 1973. Clause (iii) of sub-section (4) (b) of section  I laid down that with respect to stage carriages in any  other district  in the State, the Act will come into force on  such dates  as the  Government may by notification appoint. Section  2 codified  one  of  the  clauses  of  the preamble by  enacting a  declaration that  the Act was meant for giving  effect  to  the  policy  of  the  State  towards securing the  principles specified in clauses (b) and (c) of Article 39  of  the  Constitution  and  the  acquisition  in respect of  the stage  carriages and  contract carriages and other properties referred to in section 4.      Section 4,  the pivotal  section provided  that on  and from the  date as  may be  specified by  the  Government  in respect of any stage carriage or contract carriage operator, the  permit  issued  to  the  operator  shall  vest  in  the Government absolutely  free from  all encumbrances and stage carriages  or   contract  carriages   which  vest   in   the Government, shall  by force  of such  vesting be  freed  and discharged from  any trust, obligation and encumbrances etc. It was  further provided  that any  person interested  shall have no  claim in  relation to  such carriages  or  contract carriages taken  over by  the  State  in  pursuance  of  the nationalisation policy  and the  claim,  if  any,  would  be limited to the amount payable under the Act. Sub-section (3) of section 4 contained a declaration that the vesting of the stage carriages and other properties shall be deemed to have been acquired for a public purpose and in public interest.      Section  6   provided  for   a  reasonable   amount  of compensation to be paid to the operators on their properties vesting in  the Government. Where the amount can be fixed by agreement, the  same shall  be determined in accordance with the agreement  and in other cases by an arbitrator appointed by the  Government. Section 12 provided for an appeal to the High Court against the award of the arbitrator.      The schedule to the Act fixed the scale of compensation enunciated the  principles on which it was to be awarded and contained the guidelines for its payment.      The operators  whose stage carriages were taken over by the State Government assailed the constitutional validity of the Act in their writ petitions in the High Court.      The High  Court held  that  the  Act  was  ultra  vires Articles 14  and 19  of the  Constitution as it did not fall within the scope of Articles 31 C, and that by virtue of the Act the  financiers who  were the  owners of  the  stage  or contract carriages  would be  completely wiped  out of their business and that therefore Article 19 was clearly violated. It further  held that  the objects  of Article  30 (b) & (c) have not been subserved and since the vehicles taken over by the State  under the Act were moveable properties Article 39 was not applicable.      In appeals  to this Court it was contended on behalf of the State  that the  Act squarely fell within the protective umbrella of Article 31 inasmuch as 727 in pith and substance, the Act sought to subserve and secure the objects  contained in  clauses (b) and (c) of Article 39 and was,  therefore, fully  protected from  the onslaught of Articles 14,19  and 31. The provisions of the Act are almost in  pari  materia  with  the  Karnataka  Contract  Carriages (Acquisition) Act, 196, which has been upheld by this Court. On the  other hand,  it  was  contended  on  behalf  of  the operators (Respondents in the appeals and petitioners in the writ petition)  that  the  manner  in  which  the  transport

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services had  been nationalised  under the  Act did not fall within the  ambit of  Article 39 (b) and (c) as the buses or the vehicles  were not  an integral  part of  the policy  of nationalisation. If  the Act  had nationalised the transport services without  taking over  the units  and the workshops, etc, then  the operators  could have  had something  to fall back upon  to earn their livelihood. Complete deprivation of livelihood by  the Act  amounted to  a confiscatory piece of legislation and therefore void.      Allowing the appeals and dismissing the writ petitions: ^      HELD:  The  Tamilnadu  Stages  Carriages  and  Contract Carriages (Acquisition)  Act 1973 is constitutionally valid. [766 A]      1. By and large the provisions of the two Acts viz. the Karnataka Contract  carriage (Acquisition) Act, 1976 and the Tamil  Nadu   Stages  Carriages   and   Contract   Carriages (Acquisition) Act,  1973 appear  to  be  identical  in  many respects and  the  general  structure  and  the  fundamental features of  the two  Acts are  almost same.  In view of the clear decision  of this  Court regarding  the constitutional validity of  the Karnataka  Act, very little survives so far as the  arguments in  this case,  advanced on  behalf of the respondents  are  concerned.  Further  the  three  important decision in  Minerva  Mills,  Waman  Rao  and  Sanjeev  Coke Manufacturing cases, reinforce and reiterate the conclusions reached in the Karnataka case. [751 F, 752 D-E]      2. (i)  There  appears  to  be  complete  unanimity  of judicial opinion  on the  point that  although the directive principles are  not enforceable  yet the court should make a real attempt  at harmonising  and reconciling  the directive principles and  the fundamental  rights  and  any  collision between the  two should  be avoided as far as possible. [736 B]      (ii) Whereas  in the  25th  Amendment,  the  protective umbrella given by Constitution was restricted to laws passed only to  promote objects  in Cls.  (b) &  (c) or Art. 39, by virtue of  the 42nd  Amendment the  limitations  which  were confined to  Cls. (b) and (c) of-Art. 39 were taken away and the  Article   was  given   a  much   wider  connotation  by legislating that Acts or laws giving effect to all or any of the principles  laid down  in part  IV of  the  Constitution would be protected by the umbrella contained in Art. 31C and would be  immune from challenge on the ground that they were violative of Art. 14 or 19. [738 C-D]      (iii)From a  combined reading  of Bharati’s and Minerva Mills’ cases  as  also  of  the  subsequent  decisions,  the undisputed position  is that  Art. 31C, as introduced by the 25th Amendment,  is constitutionally  valid in all respects. [738 G-H] 728      3. An  important facet of Act 31C, is that there should be  a   close  nexus  between  the  statute  passed  by  the legislature and  the twin  objects mentioned  in clauses (b) and (c) of Art. 39. The doctrine of nexus cannot be extended to such  an extreme  limit that  the very purpose of Art. 39 (b) and  (c) is  defeated. By requiring that there should be nexus between  the law and Art. 39 (b) what is meant is that there must be a reasonable connection between the Act passed and the  objects mentioned in Art. 39 (b) and (c) before the said Article  can apply.  If the nexus is present in the law then  protection   of  Art.   31C   becomes   complete   and irrevocable. [739 F-740 A]      State of  Kerala & Anr. v. N.M. Thomas & Ors., [1976] 1 S.C.R. 906  at 993  to 996; His Holiness Kesavananda Bharati

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Sripadagalaveru v.  State of  Kerala,[1973] Supp.  S.C.R. 1; Minerva Mills Ltd. & Ors. v. Union of India & Ors., [1981] 1 S.C.R. 206  at 261;  Waman Rao  & Ors. etc. etc. v. Union of India &  Ors. [1981]2  S.C.R. 1  at  41;  and  Sanjeev  Coke Manufacturing Co.  v. M/s.  Bharat Coking  Coal Ltd.  & Anr. [1983] 1 S.C.C. 147/160, referred to.      4.  In   a  case   where  Art.   31C  applies,  whether compensation is  necessarily to  be given, has the following facts:-      (a)   if Art.  31C is taken, to exclude Art. 31 (2) the           question of  compensation becomes  irrelevant  and           otiose, ,[741 D]      (b)   nationalisation of transport service by the State           is unobjectionable  and unexceptionable and can be           accomplished in three different methods:-           (i)   nationalisation of  services and  not  units                thereof, [741 E]           (ii) nationalisation of the services alongwith the                entire assets of the units, and [741 F]            (iii) nationalisation of the services and part of                the assets  of the  units of  the  operators.                [741 G]      In the  instant case, the State of Tamil Nadu has taken recourse to method (iii) above, i.e. it has nationalised the entire transport service as also a part of the entire assets of  the  units  thereof.  As  nationalisation  is  a  policy decision, an  enquiry into  the policy of the legislature or the considerations governing the same, cannot be made by the courts unless  the policy  is so  absurd as  to violate  the provisions of  the Constitution.  In view  of Art.  31C, the court  cannot   strike  down  the  Act  merely  because  the compensation for  taking over  the transport services or its units is  not provided for. The reason for this is that Art. 31C was  not merely  a pragmatic  approach to  socialism but imbibed  a   theoretical  aspect   by  which  all  means  of production,  key   industries,   mines,   minerals,   public supplies, utilities  and services  may  be  taken  gradually under public  ownership, management  and control. [741 H-742 B]      Akadasi Padhan  v. State  of Orissa  [1963]  Supp.  (2) S.C.R. 691, referred 729      5. From  a perusal of Bharati’s as also Karnataka cases the following  principles for  assessing compensation  after the amendment  of Art.  31 (2)  by substitution  of the word ’amount’, emerge:      (1)   that compensation  should  not  be  arbitrary  or           illusory,      (2)   that the  amount fixed as compensation should not           be unprincipled,      (3)  that the compensation sought to be paid should not           be   so   arbitrary   or   illusory   as   to   be           unconscionably shocking, and      (4)    it  is  not  necessary  that  compensation  must           represent the  actual market  value or be adequate           for even  if compensation  is inadequate  but  not           illusory, the  requirement of Art. 31 (2) is fully           complied with. [755 E-H]      In the  instant case,  on the  question of compensation the  relevant   sections  of   the  Act  are  completely  in accordance with  the principles  enunciated above  and hence the argument  of the  counsel for  the respondents  that the compensation  is  wholly  inadequate  or  illusory  must  be overruled. [756 A]      6. (i)  The  compensation  awarded  or  the  principles

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contained in  the  various  sections  of  the  Act  are  not illusory but amount to a just and sufficient compensation to the operators  whose properties  are taken away. In fact, it was to  meet such situations that Art. 31C was introduced so that any  obstacle resulting  in  evil  consequence  to  the operators or  persons whose  properties are  taken  over  is completely removed. [757 B]      In the  instant case,  the State  has nationalised  the stage and  contract carriages for the purpose of providing a general and expeditious transport at reasonable rates to the members of  the public  and such  a policy is undoubtedly in public interest  and involves  an important  public purpose. [758 F]      (ii) Art.  39 (b)  does not  mention either moveable or immovable property.  The actual expression used is ’material resources of  the community’  "Material resources"  are wide enough to cover not only natural physical resources but also moveable or immovable properties. [759 E]      7. (i)  If the  State chooses  to monopolise  trades in certain essential  commodities or  properties, the  purposes mentioned in  Art. 39  (b) &  (c),  Art.  31  (2)  would  be completely excluded;  otherwise no  State monopoly  is  ever possible. It  was for this reason that Parliament thought it advisable to protect the objects contained in Article 39 (b) JUDGMENT:      (ii) Article  31(2) by  virtue of  the  25th  Amendment omitted the word ’compensation’ and had substituted the word ’amount’ which  gives ample discretion to the State to fix a reasonable amount  if the property of an individual is taken over for a public purpose. The court in such matters cannot 730 interfere with the amount so fixed unless it is shown to the court’s satisfaction  that the  amount fixed is so monstrous as to shock its conscience. [761 G-762 A]      8. The  persons whose  properties are taken over cannot be heard  to complain  that the compensation awarded to them should be  according to the market value which, if conceded, would defeat  the very  purpose and  objective of Article 39 (b) & (c). The principles that emerge are.      (1)  that in view of the express provisions of Art. 31C           which excludes  Art. 31 (2) also, where a property           is acquired  in public  interest  for  the  avowed           purpose  of   giving  effect   to  the  principles           enshrined in Art. 39 (b) & (c), no compensation is           necessary and Art. 31 (2) is out of the harms way,           and      (2)   That even  if the  law provides for compensation,           the courts  cannot go into the details or adequacy           of the  compensation and  it is sufficient for the           State  to   prove  that   the   compensation   was           reasonable and  not monstrous or illusory so as to           shock the conscience of the court. [762 E; C-D]      In the  instant case,  both  the  conditions  mentioned above are  fully satisfied having regard to the provision of the Act. [762 F]      9.  It  will  not  be  correct  to  construe  the  word ’distribution’ in  a purely literal sense so as to mean only division of  a particular kind or to particular persons. The words, apportionment,  allotment allocation, classification, clearly  fall   within  the   broad  sweep   of   the   word ’distribution’. So  construed, the  word  ’distribution’  as used in  the  Art.  39  (b)  will  include  various  facets, aspects, methods and terminology of a broad-based concept of distribution. The  word ’distribution’  does not merely mean that property of one should be taken over and distributed to

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others like  land reforms  where  the  lands  from  the  big landlords are  taken away and given to landless labourers or for that  matter the  various urban  and rural ceiling Acts. That is  only one  of the  modes of distribution but not the only mode. [763 G-764 A]      In the  instant case, distribution is undoubtedly there though in  a different  shape. So  far as the operators were concerned they  were motivated  by making  huge profits  and were most  reluctant to  go to  villages or places where the passenger traffic  is low  or the  track is  difficult. This naturally caused  serious in convenience to the poor members of the  community who  were denied  the facility of visiting the towns  or other  areas in  a transport. By nationalising the transport  as also  the units the vehicles would be able to go  to the  farthest corner of the State and penetrate as deep as  possible and  provide better  and quicker  and more efficacious  facilities.   This  would   undoubtedly  be   a distribution for  the common good of the people and would be clearly covered by cl. (b) of Art. 39. [764 B-C] 731      10. Once  a policy  of  nationalisation  is  in  public interest and  for public  good, some  losses, some  damages, some prejudices  and some  harsh consequences  are bound  to follow  but   this  does   not  mean   that  the   aforesaid considerations should result in a stalemate of the policy of State monopoly or nationalisation. [756 H]

&      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos.  957- 966(N) of 1973 and 435-442 of 1976.      From the  Judgment and order dated the 24th April, 1973 and 19th  April, 1973  of the  High Court  of Madras in Writ Petition Nos.  1647, 1900,  1466, 1557,  1559,  1527,  1256, 1488, 1584  and 1585/73  and 741,  157, 132, 123, 288, 1486, 1528 and 876/1973 respectively.                             AND      Writ Petition Nos. 8818 of 1982 and 312-313 of 1979.            (Under article 32 of the Constitution)      S.S.  Ray,   R.K.  Garg   and  A.  V.  Rangam  for  the Appellants.      Vineet Kumar  for the respondent No. 1 in CA. Nos. 965, 966, 437 & 439.      G.L. Sanghi and Miss Lily Thomas for the respondent No. 1 in CAs. 957 & 962 & W.P. No. 8818/82.      K  K.   Venugopal,  A.K   Sen,  A.T.M.   Sampath,  M.N. Rangachari,  S.   Srinivasan  and   Mahabir  Singh  for  the respondent No.  1 in  CAs. 959,960-961,963,964 & Respd No. 1 in CAs. 435-42/76.      J. Ramamurthi for the respondent No. 1 in C.A. No. 438.      A.T.M. Sampath  for  the  petitioners  in  WPs.  312  & 313/79.      K  G.  Bhagat  Additional  Solicitor  General  Miss  A. Subhashini, T.  V.S. Narasihma Chari and C. V. Subba for the interveners. (For. Art. Genl).      A.V. Rangam for Eherran Transport. 732      A.T.M. Sampath,  M.N.  Rangachari,  S.  Srinivasan  and Mahabir Singh for K.A. Kanappa Chetty & T.R. Subhraj.      B. Parthasarthy  for  Adv.  Genl.  Orissa  and  Cherran Transport Employees Union.      Ashak Grover for Adv. Genl. J & K.      A.K. Sen,  A.T.M Sampath and K. Ram Kumar for D. Kannia Pillai, M/s.  Sundaram Finance  P.T. Krishnan and S.K. Nandy

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for State of Assam.      The Judgment of the Court was delivered by      FAZAL  ALI,  J.  One  of  the  planks  of  building  an egalitarian  society  in  order  to  achieve  socio-economic emancipation is the policy of nationalisation of industries. Easy, cheap  and dependable  transport  is  a  prime  social necessity. Unfortunately,  no State has been able to achieve this goal so far by a full-fledged nationalisation. Reliance is largely  placed on  schemes framed  under Chapter IV-A of the Motor Vehicles Act.      Perhaps Karanataka  was the  only  State  which  having become ’sadder  and wiser’  took the lead in enunciating the bold  step   of  complete   nationalisation  of  the  entire transport industry  but, unfortunately,  it has not yet been able to implement it fully.      There are  two methods  by which the transport industry can be nationalised:-      (1) where  the Government acts under Chapter IV A (s.68 (b)  &  (c)  of  the  Motor  Vehicles  Act)  and  after  due publication formulates  a scheme  for taking  over route  or routes and  invites objections thereto. After the objections have  been   received  they   are  decided   and  ultimately processed. This  method however  is dilatory  and involves a time consuming  process  which  leads  to  delaying  tactics adopted by the operators. Even so, after the objections have been decided  the operators or the persons concerned are not satisfied but  go up  in appeals  to the  law courts.  These delaying  tactics   have  resulted   in  most  cases  in  an indefinite postponement  of the  scheme of  nationalisation. Moreover, normally this process is 733 applied to  a route or routes selected by the Government and is accomplished by stages which also takes a long time.      (2) Another  method which  is the more effective one is to take over the running of the entire transport services by nationalising  them,   alongwith  their   units   (vehicles, workshops, etc.)  either by  one stroke  or by stages spread over a  short time. This course is clearly permissible under cls. (b)  & (c)  of Art.  39 of the Constitution as would be discussed in a later part of the judgment.      The  Karnataka   State  tried  the  second  method  and succeeded, to some extent, but ran into difficulties for one reason or  the other.  The Tamil  Nadu State  following  the Karnataka pattern passed the impugned ordinance, which later took the  shape  of  the  Tamil  Nadu  Stage  Carriages  and Contract  Carriages  (Acquisition)  Act,  1973  (hereinafter referred to as the ’Act’) to nationalise the State transport industry  by  stages.  The  Madras  High  Court  stayed  the operation of the ordinance as also the Act and declared void all  its   provisions.  As   a  result,  nationalisation  of transport became  a  stillborn  child  and  its  progressive policy was stifled the day it was put into action.      It is  this judgment  of the  High Court  which is  the subject matter  of appeals and writ petitions before us. The Madras High  Court declared  the Act  ultra vires  as  being violative of  Arts. 14  and 19 of the Constitution as it did not fall  within the  protective umbrella  contained in Art. 31C and on a number of other grounds which would be examined hereafter.      It is  manifest that  the attempt  of  the  Tamil  Nadu legislature to  give effect  to the  principles enshrined in Art.39(b)&(c) would  have secured  the  socialist  objective aimed  by   the  Constitution   in  order  to  build  up  an egalitarian society.  By virtue  of complete nationalisation the numbers  of the  public or  the community would have got

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much better  and greater facilities than afforded to them by the  private   operators  running  vehicles  under  permits. Secondly, the  efficiency and efficacy of the services would undoubtedly make  a marked  improvement in  the  manner  and method of  running the  vehicles as compared to the services run by  private operators.  Thirdly, prior to the passing of the Act,  the entire  services were  actually run behind the screen  through  various  financiers  in  the  name  of  the operators with  whom they  had  entered  into  hire-purchase agreements. This obviously led to concentration of wealth in the hands of a few. With the coming into force of the total 734 nationalisation scheme,  this  device  of  concentration  of wealth would be completely nipped in the bud resulting in an equal distribution  of wealth  and services among the people of the  country. Fourthly,  the private  services run by the operators mainly  inspired by  profit making  motive neither had the  will nor  the capacity  to  penetrate  as  deep  as possible into  areas so  far inaccessible  to the travelling public and  would confine their running of the services only to serve  important points.  When the  State takes  over the entire transport  services, it would undoubtedly be its duty to see  that the  vehicles reach  the most  distant part  or corner of  the State  and serve as many travelling public as possible so  that nobody  is caused any inconvenience. These are  some   of   the   initial   advantages   of   a   total nationalisation scheme,  which would  be brought to the fore and  provide  an  ideal  service  for  the  members  of  the community at  large. It  may be  that in  this process  some financiers would  suffer loss and some operators may also be wiped out  of the  business but this cannot be helped as the scheme of  our Constitution  is that  individual  rights  or benefits must  yield to  the larger benefits and good of the entire community. Some of these points were very elaborately dealt with  in the case of State of Karnataka & Anr. etc. v. Ranganatha Reddy  & Anr.  etc.  (for  facility,  hereinafter referred to as ’Karnataka case’).      The Act  was  for  the  purpose  of  carrying  out  and implementing the objects specified in Art.39(b)&(c) and was, therefore, immune  from challenge on the ground that the Act or its  provisions were violative of Art. 14, 19 or 31. This was accomplished  by virtue  of Art.31C,  introduced by  the 25th  Constitution   Amendment,  which   gave  a  protective umbrella to  such acts  so  as  to  exclude  them  from  the operation of  Arts.14, 19  or 31.  Before dealing  with  the provisions of  the  Act  we  might  give  a  resume  of  the importance and  significance  of  the  directive  principles contained in Art.39(b)&(c) which may be extracted thus:           "39. The  State shall,  in particular,  direct its      policy towards securing-      (b)   that the  ownership and  control of  the material           resources of  the community  are so distributed as           best to subserve the common good; 735      (c)  that the operation of the economic system does not           result in the concentration of wealth and means of           production to the common detriment."      We would  not  like  to  tread  on  the  difficult  and delicate ground as to whether or not the directive principle or the  fundamental rights  have primacy  over  one  or  the other. Nevertheless,  it would  appear that  right from 1959 uptodate  this   Court  has   stressed  and  emphasised  the importance of  directive principles  in a  number of  cases, some of which may be listed below:      (a)  Mohd. Hanif  Quareshi &  Ors. v.  State  of  Bihar

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         (1959 SCR 629 at 648)      (b)  In Re  the Kerala  Education Bill,  1957 (1959 SCR           995 at 1020,1022)      (c)  I.C. Golak  Nath &  Ors. v. State of Punjab & Ors.           (1967 (2) SCR 762 at 789-790)      (d)  Chandra Bhavan  Boarding &  Lodging, Bangalore  v.           The State  of Mysore  & Anr.  (1970 (2) SCR 600 at           612)      (e)  His Holiness  Kesavananda Bharati  Sripadagalaveru           v. State of Kerala (1973 Supp. SCR 1)      In State  of Kerala & Anr. v. N.M. Thomas & Ors. one of us (Fazal  Ali,  J)  reviewed  the  earlier  cases  and  has collected the  ratio of  all the  decisions on this point at one place.      In recent  decisions on  the subject  the view that has crystallised is  that the  courts should  attempt to  give a harmonious  interpretation   to  the   directive  principles contained in  part IV  of the  Constitution even  though not enforceable.  Attempt   should  ,   therefore,  be  made  to reconcile the two important provisions rather than to arrive at  conclusions   which  bring   into  collision  these  two provisions-one contained  in part  III and the other in part IV. We  must appreciate  that the  reason why  the  founding fathers of  our Constitution  did not  advisedly make  these principles  enforceable   was  perhaps   due  to  the  vital consideration of giving the Government sufficient latitude 736 to implement these principles from time to time according to capacity, situations and circumstances that may arise.      On a  careful consideration of the legal and historical aspects of  the directive  principles  and  the  fundamental rights, there  appears to  be complete unanimity of judicial opinion of  the various decisions of this Court on the point that although  the directive  principles are not enforceable yet the  court should make a real attempt at harmonising and reconciling the  directive principles  and  the  fundamental rights and  any collision  between the two should be avoided as far as possible.      In the  instant case,  we are really concerned with the second limb  of the  Constitution, viz.,  the importance and significance of  the directive  principles contained in part IV. We  now propose  to discuss  the purport,  significance, scope,  ambit   and  rationale  of  Art.31C,  which  may  be extracted thus:           "31C. Saving  of laws  giving  effect  to  certain      directive principles           Notwithstanding anything  contained in article 13,      no law giving effect to the policy of the State towards      securing all or any of the principles laid down in part      IV shall  be deemed to be void on the ground that it is      inconsistent with, or takes away or abridges any of the      rights conferred  by article  14 or  article 19; and no      law containing  a declaration  that it  is  for  giving      effect to  such policy  shall be  called in question in      any court on the ground that it does not give effect to      such policy:           Provided that  where  such  law  is  made  by  the      legislature of  a State, the provisions of this article      shall not  apply thereto  unless such  law, having been      reserved for  the consideration  of the  President, has      received his assent."      A brief setting and origin of this Article is contained in  the  objects  and  Reasons  of  the  Constitution  (25th Amendment) Act,  1971, which  show that  the  amendment  was introduced with  the main  objective  of  getting  over  the

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difficulties placed  in the  way of  giving  effect  to  the directive principles of State policy. 737      It is  manifest from  a bare reading of the newly added Art.31C that any law effectuating the policy of the State in order to  secure or  comply with  the  directive  principles specified in  clauses (b)  and (c)  of Art.39  would not  be deemed to  be void  even  if  it  is  inconsistent  with  or violates Arts.  14, 19  or 31.  It was further provided that any law  which contains a declaration that it was put on the statute book  for giving  effect to  such a policy, the same could not be called into question in any court on the ground that the  new law  does not  give effect  to the  policy. In other words,  the position  was that once Art.31C was put on the statute book, the question of any law being in violation or infraction  of the  fundamental rights  contained in part III (Arts.14,  19 and  31) ceased to be justiciable. Art.31C further provided that where a law is made by the legislature of a  State, the provisions of this Article would apply only if the  law had  received the  assent of  the  President  of India. We  might mention  here that  it is undisputed in the instant case  that the  impugned law had received the assent of the President and is, therefore, fully enforceable in the State of  Tamil Nadu  if it  fulfils the  conditions of Art. 31C, which  it doubtless  does. A  substantial part  of this amendment appears  to have  been  held  to  be  valid  by  a majority  of   7:6  in   His  Holiness   Kesavananda  Bharti Sripadagalaveru v.  State of Kerala (hereinafter referred to as ’Bharti’s  case’), but  a portion of Art. 31C was held to be invalid.      While considering  the scope,  ambit and constitutional validity of  Art. 31C,  the majority  judgment in Bhararti’s case (supra)  held that  the first part of Art 31C was valid but  the  second  part,  viz.,  "and  no  law  containing  a declaration that  it is  for giving  effect to  such  policy shall be  called in question in any court on the ground that it does  not give  effect to  such policy"  was held  to  be invalid. In other words, so far as the present aspect of the case before  us is  concerned, the majority judgment clearly held that  while Art.  31C permitted  Parliament to make any law giving  effect  to  the  policy  of  the  State  towards securing the  principles contained  in cls.  (b) and  (c) of Art. 39,  such law could not be declared void even if such a course of  action violates  or abridge  any  of  the  rights conferred by Art. 14, 19 or 31.      Another crucial  stage in the history of Art. 31C arose when the  famous 42nd  amendment  of  the  Constitution  was passed by the 738 Parliament.  By   virtue  of   this  amendment  a  complete, irrevocable and  impregnable constitutional  protection  was given to  laws passed  not only  to implement the principles specified in  cls. (b)  &  (c)  of  Art.  39  but  also  the principles contained in all the clauses of Art. 39. However, to put  the record  straight and  to complete the history of Art. 31C we may briefly indicate the distinction between the 25th and 42nd amendments thus:      Whereas in  the 25th amendment, the protective umbrella given by the Constitution was restricted to laws passed only to promote objects in cls. (b) & (c) of Art.39, by virtue of the 42nd  amendment the  limitations which  were confined to cls. (b)  and (c)  of Art.39 were taken away and the Article was given  a much wider connotation by legislating that Acts or laws  given effect  to all  or any of the principles laid down in  part IV  of the  Constitution would be protected by

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the umbrella  contained in Art. 31C and would be immune from challenge on  the ground  that they were violative of Art.14 or 19.      Even so, in Minerva Mills Ltd. & Ors. v. Union of India Ors., one  of us  (Chandrachud, CJ)  while referring  to the ratio of Bharati’s case on the unamended Art.31C observed as follows:           "Indeed, if there is one topic on which all the 13      Judges in  Kesavananda Bharati were agreed, it is this:      that the  only question  open to  judicial review under      the unamended Art.31C was whether there is a direct and      reasonable nexus  between  the  impugned  law  and  the      provisions of  Art 39(b)  and  (c).  Reasonableness  is      regarding the nexus and not regarding the law."                                              (Emphasis ours)      Thus, it  would  appear  from  a  combined  reading  of Bharati’s and  Minerva Mills cases as also of the subsequent decisions that  the undisputed  position is that Art.31C, as introduced by  the 25th amendment, is constitutionally valid in all  respects and  has survived  the stormy  decision  of Bharati’s case. 739      Similar observations were made in Waman Rao & Ors. etc. v. Union  of India & Ors., where one of us (Chandrachud, CJ) observed thus:           "Article 31 is now out of harm’s way. In fact, far      from damaging  the basic structure of the Constitution,      laws passed  truly and  bona fide  for giving effect to      directive principles  contained in  clauses (b) and (c)      of Article 39 will fortify that structure."                                          (Emphasis supplied)      In the latest Constitution Bench decision of this Court in Sanjeev Coke Manufacturing Co. v. M/s. Bharat Coking Coal Ltd. &  Anr., it has been emphasised that the constitutional validity of  Art.31C is  now beyond  challenge and  in  this connection one of us (Reddy, J.) speaking for the Court made the following observations:           "In  the   second  place,   the  question  of  the      constitutional validity  of Art.31C appears to us to be      concluded by  the decision  of the Court in Kesavananda      Bharati case."      In view of the aforesaid decisions, it is not necessary for  us   to  dilate   further  on   the  question   of  the constitutional validity of Art.31C.      Another important  facet  of  Art.31C  which  has  been emphasised by  this Court  is that  there should  be a close nexus between  the statute passed by the legislature and the twin objects  mentioned in clauses (b) and (c) of Art.39. In approaching this  problem and  considering the  question  of nexus a  narrow approach  ought not to be made because it is well  settled   that   the   courts   should   interpret   a constitutional provision  in order  to suppress the mischief and advance  the object  of the  Act. The  doctrine of nexus cannot be  extended to  such an  extreme limit that the very purpose of  Art.39 (b)&(c)  is defeated.  By requiring  that there should be nexus between the law and Art.39(b)&(c) what is meant  is that  there must  be  a  reasonable  connection between the Act passed and the objects 740 mentioned in  Art.39(b)&(c)  before  the  said  Article  can apply.  If  the  nexus  is  present  in  the  law  then  the protection of Art.31C becomes complete and irrevocable.      Furthermore, the  fact that  there is  a declaration in the Act  regarding the  purpose mention in Art.39(b)&(c) may generally be  evidence of  the nexus between the law and the

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objects of  Art.39(b)&(c). In  this connection, Iyer, J., in the Karnataka case observed thus:           "The requisite declaration contemplated in Article      31C is  thus made in the preamble as well as in section      2 of  the Act....  The  nexus  between  the  taking  of      property and  the public  purpose  springs  necessarily      into existence  if the  former is  capable of answering      the latter."      There is  no particular  magical tinsel  or ritualistic formula in the term ’nexus’ which may be closed in a strait- jacket. Even  a nationalisation scheme meant for the purpose of distribution or preventing concentration of wealth, as in this  case,   would  be  sufficient  nexus  to  attract  the operation of  Art.39(b)&(c). On  this aspect  of the matter, Iyer,J. in the Karnataka case further observed thus:           "The next  question is whether nationalisation can      have nexus with distribution.. 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."      In a  later decision in Sanjay Coke Manufacturing Co.’s case (supra),  adverting to  this  very  point,  one  of  us (Reddy, J.) made the following observations:           "We are  firmly of  the opinion that where Article      31C comes in Article.14 goes out. There is no scope for      bringing in  Article 14 by a side wind as it were, that      is, by  equating the rule of equality before the law of      Article 14  with the broad egalitarianism of Article 39      (b) or  by treating  the principle  of  Article  14  as      included in the principle of Article 39 (b)." 741      We might  now mention  in passing some important facets of Art.  31C which  we shall  discuss in detail when we deal with the  various provisions  of the Act in the light of the reasons given by the High Court and the contentions advanced before us. At this stage, suffice it to say that on a proper and true  construction of  Art. 31C  in  the  light  of  the decisions  of  this  Court,  the  question  of  compensation becomes  totally   irrelevant.  If,   once  the   conditions mentioned in  Art. 31C are fulfilled by the law, no question of compensation  arises because  the said  Article expressly excludes not  only Arts.  14 and  19 but  also 31  which, by virtue of the 25th amendment, had replaced the word ’amount’ for the  word ’compensation’  in Art.  31  (2).  As  already extracted, Chandrachud,  CJ in Waman Rao’s case has observed that once Art. 31C is attracted, Arts. 14, 19 and 31 are out of harm’s way.      The question  whether in a case where Art. 31C applies, compensation is  necessary to  be given,  has the  following facets:-      (a)  if Art.  31C is  taken, as  it must be, to exclude           Art. 31  (2), the question of compensation becomes           irrelevant and otiose,      (b)  nationalisation of transport services by the State           is unobjectionable  and unexceptionable and can be           accomplished in three different methods-           (i)  nationalisation of  the services  and not the                units thereof,           (ii) nationalisation of the services alongwith the                entire assets of the units, and            (iii) nationalisation of the services and part of                the assets of the units of the operators.

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    In the  instant case, the State of Tamil Nadu has taken recourse to  method (iii)  above., i.e., it has nationalised the entire  transport service  as also  a part of the entire assets  of   the  units  thereof.  It  is  obvious  that  as nationalisation is  a policy  decision, an  enquiry into the policy of  the legislature  or the  considerations governing the same  cannot be  made by the courts unless the policy is so absurd  as to violate the provisions of the Constitution. In view of Art. 31C, 742 which gives  protective umbrella  against Art.  31 (2) also, the court  cannot strike  down the  Act merely  because  the compensation for  taking over  the transport services or its units is  not provided for. The reason for this is that Art. 31C was  not merely  a pragmatic  approach to  socialism but imbibed  a   theoretical  aspect   by  which  all  means  of production,  key   industries,   mines,   minerals,   public supplies, utilities  and services  may  be  taken  gradually under public ownership, management and control.      Even as  far back as 1963 in Akadasi Padhan v. State of Orissa, Gajendragadkar,  J., speaking  for the  Constitution Bench, observed thus:           "To  the  rationalist,  nationalisation  or  State      ownership  is  a  matter  of  expediency  dominated  by      considerations of  economic  efficiency  and  increased      output of production......           The amendment  made by  the Legislature in Art. 19      (6) shows  that according  to the  Legislature,  a  law      relating to  the creation  of State  monopoly should be      presumed to  be in the interests of the general public.      Art. 19  (6) (ii)  clearly shows that there is no limit      placed on  the power  of the  State in  respect of  the      creation of  State monopoly....  In  our  opinion,  the      amendment clearly  indicates  that  State  monopoly  in      respect of any trade or business must be presumed to be      reasonable and  in the  interests of general public, so      far as Art. 19 (1) (g) is concerned."      Thus, even  in 1963  the change  in the approach by the Supreme  Court  towards  social  problems  had  come  to  be seriously felt so much so that any policy of nationalisation of assets  or State  monopoly was held to be so necessary to acquire the  goal of  building an  egalitarian society as to make  the   restrictions  contained   in  Art.  19  (1)  (g) reasonable. In  other words, even if Art. 31C was not there, the policy of nationalisation of transport services could be held to be valid on the basis of this decision and would not violate Art.  19, being  a reasonable restriction. The major part of  the spirit of Art. 31C, which was introduced almost a decade after the above decision, 743 was clearly  anticipated and  accepted in  Akadasi  Padhan’s case (supra)  and this Court in a way paved the way for more socialistic reform  which may destroy any obstacle coming in the way  of achieving  the important directive principles of the Constitution.  More than  this we  would not like to say anything regarding this decision because Arts. 14, 19 and 31 are completely  excluded by  Art.  31C.  The  provisions  to validate laws made to secure the objects in Art. 39 (b) &(c) seem to be the conclusive chapter of a humble beginning with an appeal  to the courts to make a doctrinaire and pragmatic approach in such cases.      Mr. Ray  rightly argued  that in view of the provisions of Art.  31C, the  Act squarely  falls within the protective umbrella of  the  said  Article  inasmuch  as  in  pith  and substance, the  Act seeks to subserve and secure the objects

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contained in clauses (b) & (c) of Art. 39 and is, therefore, fully protected  from the  onslaught of Arts. 14, 19 and 31. To counter  the argument  of Mr.  Ray,  S/Shri  Ashoke  Sen, Venugopal and Sanghi made two fold submissions. In the first place it  was argued  that the manner in which the transport services had  been nationalised  under the Act does not fall within the  ambit of  Art. 39  (b) & (c) as the buses or the vehicles  were  not  an  integral  part  of  the  policy  of nationalisation. Secondly,  Mr. Venugopal  submitted that if the Act  would  have  nationalised  the  transport  services without taking  over the units and the workshops, etc., then the operators  could have had something to fall back upon to earn their livelihood. Complete deprivation of livelihood by the Act  amounts to  a confiscatory piece of legislation and therefore void.  Although the  arguments are  attractive, on closer scrutiny  they seem  to be without substance. Once it is held  that the  policy of  nationalisation  of  transport services is  valid, which  is no  doubt an essential service and a  type of  a State  monopoly, any  consequence that may follow cannot  be taken  into  consideration;  otherwise  no social reform  can ever  be brought  about. All  schemes  of monopoly or  nationalisation are  meant to  serve the public good and  individual interests  in such  cases must yield to the good  of  the  general  public.  Moreover,  on  a  close examination of the argument it seems to us that it is wholly untenable. The various provisions of the Act clearly provide for a  just and  reasonable compensation  which may  not  be equal to  market value of the units taken over but cannot be said to  be illusory  or shocking  to the  conscience of the court. 744      Although  we  have  found  that  Art.  31  having  been excluded no  question of  compensation arises,  even  so  it seems to us that the courts while interpreting the policy of total nationalisation  and being imbued with a keen sense of the doctrine  of justice  and fair  play have  projected the question of  compensation in  a very  limited  sense  and  a restricted extent  by holding  that the word ’amount’ merely means some  sort of a reasonable amount which may or may not be adequate  in the  circumstances. We  feel that in view of the explicit and express provisions of Art. 31C the question of compensation  does not  arise at all and even if it does, the matter  is concluded by a 7-Judge Bench decision of this Court in the Karnataka case.      Having dealt  with the  various aspects of Art. 31C, we now proceed  to examine  the provisions  of the  Act in  the light of  the law laid down by this Court  and the aforesaid conclusions reached  by us.  To being  with, the Act gives a detailed preamble  describing the  ends and  objects of  the Act. We  might mention  that in  the first  paragraph of the preamble, cl.  (c) of  Art. 39  was  not  mentioned  in  the Ordinance but  when the  Ordinance was  replaced by the Act, cl. (c)  of Art.  39 was  inserted. A perusal of the various clauses of  the preamble  reveals that the legislation was a purely progressive  measure  meant  not  to  confiscate  the property or  destroy the  business  of  the  stage  carriage operators  but   to  take  absolute  control  of  the  State transport services by stages in various revenue districts.      As already  indicated,  the  Act  was  preceded  by  an Ordinance, containing identical provisions, which was issued on 12.1.1973.  The constitutional  validity of the Ordinance was challenged  in the  Madras  High  Court  and  while  the judgment of  the High  Court was  pending, the Ordinance was replaced by the Act on March 14, 1973. The High Court struck down the  Ordinance as being unconstitutional and an interim

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order was passed by which all the provisions of the Act were stayed, pending appeal to this Court. One time in June 1973, an interim  order was  passed by  this Court  by  which  the transport vehicles  not taken  over by the State were stayed from being taken over.      Coming to  the provisions  of the Act, it would be seen that so  far as  s. 1  is concerned,  it  is  more  or  less descriptive with  the only  difference that  as far  as  the Nilgiri District  is concerned,  the provision says that the policy of  nationalisation shall come into force on the 14th of January 1973. In other words, the intention of the 745 Act is  to start the nationalisation scheme with the Nilgiri district first  and then extend it to other districts as and when it  becomes necessary.  Clause (iii) of sub-cl. (4) (b) of s.  1 lays  down that  with respect to stage carriages in any other  district in  the State,  the Act  will come  into force on  such date  as the  Government may  by notification appoint. Section  2 codifies  one  of  the  clauses  of  the preamble by enacting a declaration that the Act is meant for giving effect  to the  policy of  the State towards securing the principles  specified in  cls. (b) and (c) of Art. 39 of the Constitution and the acquisition in respect of the stage carriages  and   contract  carriages  and  other  properties referred to  in section  4. After  the Act  was  passed,  by virtue of  the decision  in the  Bharati’s case whatever may have been  the   legal status  or position  of the directive principles so  far as  clauses (b)  & (c)  of  Art.  39  are concerned, they  were held  to be constitutional and any Act passed to  enforce these  principles clearly fell within the protective umbrella  of Art.  31C and  was therefore  immune from challenge.  We have  already adverted to this aspect of the matter heretofore.      Sub-s. 2  (a) of  s. 2 provides that the acquisition of the  stage  carriages  shall  commence  with  the  districts wherein comparatively  fewer number  of stage carriages were operating. This  provision appears to have been incorporated in order  to cause  the least  possible inconvenience to the bus operators  so that  the operators of the other districts were the nationalisation of the scheme has not been enforced may make  due preparations  and alternative  arrangements in case the  concerned  districts  are  also  included  in  the nationalisation scheme by virtue of the notifications issued from time to time under the Act.      Section 3  only gives  the definitions  of the  various expressions used  in the Act and, for the time being, it may not be  necessary for  us to  give a detailed description of cls. (a) to (s) of this section.      Section 4,  which is the pivotal section, provides that on and  from the  date as may be specified by the Government in respect  of  any  stage  carriage  or  contract  carriage operator, the  permit issued  to the  operator shall vest in the Government  absolutely free  from all  encumbrances  and such carriages  or contract  carriages, which  vest  in  the Government, shall  by force  of such  vesting be  freed  and discharged from any trust, obligation and encumbrances, etc. In other  words, the  intention of  the Act  was that  while nationalising the  State transport services the State should not encumber  itself with the liabilities that may have been incurred by the bus operators prior to 746 the  enforcement   of  the   Act  so   that  the  policy  of nationalisation may run smoothly and without any obstruction or obstacle.  At the  same time, s. 4 also provides that any person interested  shall have  no claim  in relation to such

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carriages or  contract carriages  taken over by the State in pursuance of  the aforesaid  nationalisation policy  and the claim, if  any, would  be limited  to the  amount payable in respect of  such stage  carriages or  contract carriages  as provided under  the Act.  Sub-s. (2)  of s.  4 lays  down an important safeguard  that all rights, title and interests of the stage carriage operators or contract carriage operators, including lands,  buildings,  workshops  and  other  places, stores, instruments,  machinery,  tools,  plants  and  other equipments used  in connection  with the  service  of  these carriages would also vest in the State.      There  was   a  serious   controversy  regarding   this provision and  it was vehemently attacked by the counsel for the respondents  on the ground that this is a very harsh and strident provision  of the Act which completely destroys not only the  fundamental right  of the  operators but  also the right to  equality under  Art. 14.  Even if  Art. 14  or  19 apply, the vesting of machinery, tools, etc., which were the personal property  of the  operators meant to carry on their business,  would   amount  to   a  confiscatory   piece   of legislation. We shall deal with this aspect of the case when we consider  the various  contentions advanced  before us by counsel  for   both  the  parties.  At  this  stage,  it  is sufficient  to  remark  that  even  the  books  of  account, registers, etc.,  would vest  in the Government on the issue of the  notification and  all hire-purchase  agreements  and transaction, etc,  would be  deemed to  have been withdrawn. The main  object in enacting this provision is that when the Government decides  to nationalise the transport services or its units,  all the  means of  business should  vest in  the Government so that after the vesting the Government does not feel itself bound by any commitment or contracts made by the operators which  might make  the policy abortive as a result of which  the scheme  of nationalisation itself may run into rough weather.      Sub-s. (3)  of s.  4 contains  a declaration  that  the vesting of the stage carriages and other properties shall be deemed to  have been  acquired for a public purpose, that is to say,  acquisition of  not only the stage carriages or the contract carriages  used by  the operators  but  also  their tools, implements  and workshops would be in public interest in order  to prevent  any legal  or constitutional objection being taken against the various moveables which by virtue of the provisions of the Act vest in the Government. 747      Section 5  contains  provisions  of  a  routine  nature regarding the submission of accounts, agreements, inspection by Government  officers, furnishing  of data and details and the like.  Another important provision of the Act is section 6 which  provides for a reasonable amount of compensation to be paid  to the operators on their properties vesting in the Government. Sub-s.  (1) of  s.  6  says  that  every  person interested shall  be entitled  to receive such amount as may be determined  in the second schedule to the Act, that is to say, where  the amount  can be  fixed by agreement, the same shall  be  determined  in  accordance  with  the  agreement. Secondly, where  no agreement can be reached, the Government shall appoint  as arbitrator  a person who is or has been or is qualified  for appointment  as a  District  Judge.  While appointing an  arbitrator, the Government may, if necessary, nominate a  person having  expert knowledge as to the nature of the acquired property to assist the arbitrator. These two provisions clearly  show the  attitude of  fairness that the Act displayed  towards the operators on the vesting of their properties in  the Government. Cl. (e) of sub-s. (1) of s. 6

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provides that  the arbitrator  after hearing the dispute and the parties  concerned, would  determine  the  amount  which appears to  him to  be just  and reasonable and also specify the person or persons who would be entitled to the aforesaid compensation. Clause 1 (f) of s. 6 provides that where there is a  dispute of  title with  respect to the distribution of the amount the same would be apportioned amongst the persons concerned by  the Arbitrator.  At the  same time, to exclude any further  disputes during the process of arbitration, cl. (g) of  sub-s. (1)  of s.  6 provides that the provisions of the Arbitration  Act, 1940 (Central Act X of 1940) shall not apply to the arbitrations made under s. 6.      Sections 7 and 8 contain the usual procedure for filing of claims  and the  conditions thereon. What is important to be noticed  is that  the award of the arbitrator is not made final but is subject to an appeal to the High Court.      Section 12  clearly provides  that any person aggrieved by an  award, may within 30 days from the date of such award prefer an  appeal to  the High  Court. The  proviso  however empowers the  High Court  to condone  the delay  in suitable cases where  sufficient cause  preventing  a  claimant  from filing the appeal within the time prescribed is made out. 748      Before going  to other provisions we would like to make a reference  to  the  schedule  which  fixes  the  scale  of compensation and  enunciates the  principles on the basis of which it  is to  be awarded  to the  operators  whose  stage carriages or  contract  carriages  are  taken  over  by  the Government. The  table containing the guidelines for payment of compensation may be extracted below:                          THE TABLE              Period                            Percentage 1. Not more than six months prior to the              85    notified date 2. More than six months prior to the notified         75    date but not exceeding one year 3. More than one year but not exceeding two years     70 4. More than two years but not exceeding three years  68 5. More than three years but not exceeding four years 67 6. More than four years but not exceeding five years  66-2/3 7. More than five years but not exceeding six years   59 8. More than six years but not exceeding seven years  41 9. More than seven years but not exceeding eight      29    years 10. More than eight years but not exceeding nine      21     years 11. More than nine years but not exceeding ten years  14 12. More than ten years but not exceeding eleven      10     years 13. More than eleven years but not exceeding twelve    7     years 14. More than twelve years but not exceeding thirteen  5     years 15. More than thirteen years                           4 749      It would  be seen  from a  perusal of  these guidelines that heavy compensation has not been provided for, obviously because if compensation at the market rate is given it would amount to a huge drain on the State treasury which may cause a complete  financial breakdown  and thus frustrate the very policy of  nationalisation. We  might mention  here that the respondents argued  that  the  rates  of  compensation  were wholly  inadequate   and  absolutely  illusory  because  the arbitrator or the High Court cannot travel beyond the second schedule  in  assessing  the  compensation.  Mr.  S.S.  Ray,

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appearing for  the appellant  State fairly conceded that the schedule was  merely a  sort of  a guideline  which was  not exhaustive for  determining the  quantum of compensation and it may  be taken as a concession on behalf of the State that the officers  fixing the  compensation were entitled to make marginal but  not vital  departures from  the principles  of compensation laid down by the Act which seems to be the real intention of  the statute  in question  by providing  for  a broad-based compensation and allowing the same to be decided by the highest court of justice in the State, viz., the High Court. In  the circumstances,  it cannot  be said  that  the compensation provided  is absolutely illusory or shocking to the conscience of the court which is the only requirement of Art. 31(2).      Then there  are other  routine provisions  contained in s.11 which  provide the  manner in  which the payment of the amount adjudicated  by the compensation authorities is to be given. Clause  1A even  awards interest at the rate of 6-1/2 per cent  per annum  on the  said amount  and certain  other options are given to the operators.      Section 13  provides the  legal procedure to be adopted in  arbitration   proceedings  and   for  that  purpose  the arbitrator would  have all the powers of a civil court while trying a  suit under  the Code  of  Civil  Procedure,  1908. Section 13  also applies  this procedure  for summoning  and enforcing the  attendance of  witnesses, requiring discovery and  production  of  documents,  reception  of  evidence  on affidavits, requisitioning  any  public  record  or  a  copy thereof from any court or office and issuing commissions for examination of witnesses or documents.      Section 14  however carves  out an  exception regarding the acquisition of the stage carriages or contract carriages from applying  for any new permit or renewal of the existing permit after  the acquisition  of  the  stage  carriages  or contract carriages by the State. It also provides that every application for grant of a new permit or 750 renewal of  an existing  permit or  any appeal  or  revision relating thereto  made or  preferred before the 14th January 1973, the  date of  the enforcement  of the Act, and pending before any  court or  any officer  or authority  or tribunal shall abate.  This appears  to us  to  be  a  very  salutary provision in order to prevent future recurring disputes.      Section 15  provides that  the transfer of the stage or contract carriages on or after 14th January, 1973 and before the notified  date, is  prohibited. It further provides that no person  shall after the aforesaid date transfer by way of sale or  gift any  stage or  contract carriage  liable to be acquired under the Act.      Section 16  provides for  grant of temporary permits to the operators  and the  circumstances under  which  and  the period for  which they  could be extended or transferred and as a  consequence of  the pivotal  Section it  also provides that no stage or contract carriage operator would be able to obtain any  temporary permit in respect of any area or route which has been notified in the Act.      Section 17 prohibits transfers of any stage or contract carriage and enjoins that if any transfer is made, the shall be void  and is  liable to  be acquired  by the  Government. Section  18   makes  a  provision  for  the  appointment  of administrators for arranging the taking over of the acquired property and  for carrying  out the duties assigned to them. Section 19 also makes an identical provision for appointment of authorised  officers. Section  20 is  also  an  important provision which  has been  introduced  for  the  purpose  of

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safeguarding the  existing staff  of the operators for being absorbed  in   the  State   Transport  Department   of   the Government, on  a given scale, or any corporation or company owned by  the Government  and for  this purpose  a number of steps have been detailed in this section.      Section 21  gives the  resultant  consequences  of  the policy of  nationalisation and prescribes the modes in which the newly acquired stage or contract carriages are to be run by the  corporation or  the company  or the  State Transport Department of  the Government to which the acquired property is transferred.      Section 25 is also a sort of a routine provision making provisions for  issue of  orders, notices  and the manner of delivering the  same etc. Section 26 is an important section which exempts 751 particular types  of stage  or contract  carriages from  the operation of  the Act,  such as  stage or contract carriages held by  the Central  Government, any  State Government, any company controlled or owned by the Central Government or any State Government.  Section 27  is the  usual  section  which provides   immunity to  persons discharging  their duties in good  faith  in  pursuance  of  the  Act.  Section  28  bars jurisdiction of  civil courts in certain matters. Section 29 is a  penal provision  which  provides  for  punishment  for offences committed  in violation  of the  provisions of  the Act.   Section    30   invests    certain   officers    like administrators, arbitrators, authorised officers, etc., with the status  of a  public servant within the meaning of s. 21 of the Indian Penal Code. Section 31 is the saving provision which overrides  other laws  on  the  passing  of  the  Act. Section 32 is the rule-making power given to the Act.      Before discussing  the reasons  given by the High Court for striking  down the  Act we might dispose of an important argument advanced  before us for the appellant to the effect that the  provisions of  this Act are almost in pari materia with the  Karnataka Act which formed the subject-matter of a constitution Bench  decision of  this  Court  by  which  the Karnataka Act  was upheld.  On the  basis of  the  aforesaid decision, it  was submitted that the matter stands concluded by a seven-Judge Bench decision of this Court and the appeal should be  allowed on  this ground alone. On the other hand, the  respondents   challenged   the   correctness   of   the appellant’s submission  and contended  that there are marked and sharp points of difference between the two Acts. We are, however, unable  to accept  this contention  for the reasons given hereafter.      By and  the large the provisions of the two Acts appear to be  identical in  many respects and the general structure and the  fundamental features of the two Acts are almost the same. The  broad features  of the two Acts may be summarised as follows:      (a)  both the Acts aim at the policy of nationalisation           of transport  services (Karnataka Act started with           only stage  carriages but  the Act  has also taken           within its fold contract carriages),      (b)  both the  Acts clearly  mention that the object of           nationalisation was  to secure the ends of Art. 39           (b) & (c), 752      (c)  both the Acts seem to convey that being a national           policy evolved  by the Government itself, it would           undoubtedly be in great public interest,      (d)  the process  of distribution of material resources           and the units taken over is more or less the same,

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    (e)  by and  large the  scope and ambit, the manner and           method  of   formulation  of  the  nationalisation           policy are identical, and      (f)  the principles  of compensation  and the machinery           provided for determining the same in both the Acts           are absolutely  similar with  minor and negligible           variations here and there.      Thus,  all   the  arguments   addressed  regarding  the constitutional validity  of the  Karnataka Act  before  this Court apply equally and fully to the present Act and in view of the  clear decision  of this  Court in the Karnataka case very little  survives so  far as the arguments in this case, advanced on behalf of the respondents, are concerned. On the other hand,  three important  decisions of  this Court, viz, Minerva Mills,  Waman Rao and Sanjeev Coke Manufacturing Co. cases, which  were given after the Karnataka case, reinforce and reiterate  the conclusions  reached by this Court in the Karnataka case.      Before examining the reasons given by the High Court we would like  to mention  certain important  facts which  have come into  existence after  the Act  was passed by the Tamil Nadu legislature  as also  after the  judgment of  the  High Court, which fall under three heads:      (1) that by virtue of the Constitution (25th Amendment) Act, 1971  a new  article in  the  shape  of  Art.  31C  was inserted in  the Constitution  with  the  avowed  object  of highlighting  the   importance  of  some  of  the  important directive  principles   contained  in   part   IV   of   the Constitution. Art.  31C provides  that  no  law  made  by  a legislature in  order to  secure the principles specified in Art. 39 (b) & (c) shall deemed to be void on the ground that it abridges  any of  the rights enshrined in Arts. 14, 19 or 31.  The   said  amendment  further  provides  that  no  law containing a  declaration that it has been passed for giving effect to  such a  policy shall  be called  in question  any court on the 753 ground that  is does not give effect to such a policy. There is a  proviso to  Art. 31C  which mandates  that before  the provisions of  the Article  can apply,  the  law  must  have received the assent of the President of India.      The Tamil Nadu legislature seems to have taken abundant precaution of mentioning the objects contained in Art. 31 by providing clearly  is its preamble, as indicated above, that the Act  was passed  with the  intention of giving effect to the principles enunciated in Art. 39 (b) & (c).      (2) that  when the  new Art. 31C created controversies, 13 Judges  of the  Supreme Court  examined not only the said article but  also  a  number  of  other  provisions  of  the Constitution in  order to  decide as  to how far the amended provisions affected the basic structure of the Constitution. It may  be sufficient  to state here for the purpose of this case  that   so  far  as  Art.  31C  is  concerned,  it  was unanimously held  by the entire Court that the first part of Art. 31C, introduced by the Constitution 25th Amendment Act, was valid.           (3) Thus,  it is  manifest that  Art. 31C  gives a complete protective  umbrella to  any law  passed  with  the object of  achieving the aims and goals of Art. 39 (b) & (c) so as  to make  it immune  from challenge on the ground that the said law violates Arts. 14, 19 or 31. The only condition for application of Art. 31C is that there should be a direct and reasonable  nexus between  the law and the provisions of Art. 39 (b) & (c), and the reasonableness would be regarding the nexus rather than the law.

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    In view  of the  aforesaid developments,  most  of  the conclusions arrived  at and  the important  reasons given by the High Court no longer survive and fade into oblivion. The counsel for  the parties  also realising this difficulty did not press  all the  arguments that  were advanced before the High Court  or accepted  it but  confined their arguments to the framework  and applicability  of Art.  39 (b)  & (c). In fairness to  the High  Court, we cannot blame it because the law on  Art. 31C  was crystallised after the delivery of its judgment. We,  therefore,  propose  to  give  a  very  brief summary of  the reasons given by the High Court for striking down the Act laying stress only on the points that survive.      In the  first place,  the  High  Court  seems  to  have accepted the  argument  of  Mr.  Chari,  appearing  for  the operators, that by virtue 754 of the  Act the  financiers who were the owners of the stage or contract-carriages would be completely wiped out of their business and therefore Art. 19 was clearly violated. As Art. 31C gives  complete immunity from challenge in respect in of any law  made to  promote objects  enshrined in  Art. 39 (b) (c), this  argument  no  longer  survives  and  was  wrongly accepted by the High Court.      This now  brings  us  to  the  nature  of  compensation awarded to the operators in the Karnataka case which appears to be  on all  fours with  the facts  of this  case. We must hasten to  add that already discussed above, in view of Art. 31C no  compensation is  necessary as Art. 31 (2) is clearly excluded by  Art. 31C  but proceeding on the assumption that some sort  of  compensatory  relief  may  be  necessary,  we approach this  question only  as a  piece of  an alternative argument. To  begin with, while dealing with the question of compensation, Untwalia,  J., in  the Karnataka  case clearly pointed out  that by  virtue  of  the  25th  amendment,  the question of  compensation may  not  arise,  yet  right  from Bharati’s case  uptodate it  was has  now been held that the amount payable  in respect  of acquired  property should  be fixed by  the legislature  or determined  on  the  basis  of principles contained  in the  law of  acquisition and should not  be   wholly  arbitrary   or  illusory   or  monstrously undervalued, and  in  this  connection,  the  learned  Judge observed thus:           "For the purpose of deciding the point which falls      for consideration  in these appeals, it will suffice to      say that still the overwhelming view of the majority of      Judges in  Kesavanada 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  31C      inserted in  the Constitution  by  the  25th  Amendment      (leaving out  the  invalid  part  as  declared  by  the      majority)."                                          (Emphasis supplied)      The  lines   underlined  by  us  contain  an  important emphasis to  show that  the complexion  of the  necessity of compensation has  completely changed  in view  of  the  25th Amendment by which Art. 31 C was introduced and Untwalia, J. was, therefore, careful enough 755 not to  imply that  even  after  the  passing  of  the  25th Amendment, the  question  of  compensation  would  still  be necessary.      In the  same  strain,  Iyer,  J.,  in  that  very  case

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observed as follows:           "Full compensation with a formal difference:           The  court   will  not   question  the  ’adequacy’      directly, but ’interpret’ the amended articles into the      same desideratum.             ..           ..                ..           The Court  could satisfy  itself  only  about  the      amount not  being a  monstrous or  unprincipled  under-      value......................           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."      Thus, from  a perusal  of Bharati’s  as also  Karnataka cases the  following principles  for assessing  compensation after the  amendment of  Art. 31  (2) by substitution of the word ’amount’, may be summarised:      (1)  that  compensation  should  not  be  arbitrary  or           illusory,      (2)  that the  amount fixed  as compensation should not           be unprincipled,      (3)  that the  compensation sought to be paid should be           so arbitrary  or illusory  as to be unconscionably           shocking, and      (4)  it is  not necessary  that the  compensation  must           represent the  actual market value or be adequate,           for even  if compensation  is inadequate  but  not           illusory, the  requirement of Art. 31 (2) is fully           complied with.      Relevant sections  of  the  Act,  on  the  question  of compensation  are   completely  in   accordance   with   the principles enunciated above 756 and hence  the argument  of the  counsel for  the respondent that the  compensation is wholly inadequate or illusory must be overruled.      Applying  these   principles  to   the  provisions   of compensation, discussed above, it seems to us that the facts of this case are identical with those of the Karnataka case. The principles  on which  compensation was  awarded in  that case have  been bodily lifted and placed in the present Act. The main features of the Act relating to compensation may be summarised thus:      (1)  A  regular   method  and   the  manner   in  which           compensation is  to be  assessed is to be found in           the second schedule to the Act,      (2)  we have  already mentioned  that Mr.  Ray conceded           during the  course  of  arguments  that  the  said           schedule is  not exhaustive  but it is open to the           arbitrator or  the High  Court  to  make  marginal           changes as and when necessary,      (3)  the factors  and circumstances  to be  taken  into           consideration  vide   section  6  and  the  second           schedule clearly spell out that if compensation is           allowed on the basis of those factors it cannot be           said to  be  arbitrary,  illusory  or  monstrously           unconscionable.      It is  true  that  the  compensation  awarded  may  not represent the market value or perhaps may be even inadequate but that  is now  not the test laid down in the amended Art. 31 (2).  On this ground, therefore, the constitutionality of the Act cannot be challenged.      All said  and done, it was contended by the respondents

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that at  least the  taking over  of both  the stage  and the contract carriages alongwith the workshops, etc amounts to a very harsh  provision so to be confiscatory. We have already dealt with  this argument.  In  addition  to  what  we  have stated,  it   may  be   observed  that   once  a  policy  of nationalisation is  in public  interest and for public good, some losses,  some damages,  some prejudices  and some harsh consequences are bound to follow but this does not mean that the aforesaid considerations should result in a stalemate of the policy  of State  monopoly or  nationalisation otherwise the country cannot move forwarded even an inch from where it was when  out Constitution  came into force. Gajendragadkar, J., in Akadasi Pabhan’s case (supra) 757 had pointed  out that  these are  matters of high policy and the courts  cannot go  behind the  policy unless  the policy itself is patently unconstitutional or arbitrary.      We have  found that  the compensation  awarded  or  the principles contained  in the various sections of the Act are not  illusory   but  amount   to  a   just  and   sufficient compensation to  the operators  whose properties  are  taken away. In  fact, it was to meet such situations that Art. 31C was introduced  so  that  any  obstacle  resulting  in  evil consequence to the operators or persons whose properties are taken over  is completely  removed. For  these  reasons,  we reject this  argument of  the respondents’  counsel as being totally ill-founded.      It  was  then  argued  for  the  respondents  that  the nationalisation of  the entire transport services along with the vehicles  and  workshops,  etc.,  cannot  be  in  public interest because  it would not serve any public good. In the same token,  it was  argued that  the manner  and method  in which the nationalisation policy has been enacted in the Act does not per se secure twin objects of Art. 39 (b) & (c) for two reasons-      (1)  that  taking   over  of   the   vehicles,   tools,           implements  and   the  workshops,   etc.,  is  not           contemplated by  Art. 39  (b) as they are moveable           properties and therefore not material resources,      (2)  that the  measure, if translated into action, does           not prevent  the concentration  of wealth  in  the           hands of  a few  and hence  Art.  39  (c)  is  not           attracted at all.      We shall  deal with  these arguments one by one. Coming to the  first argument  that the  nationalisation is  not in public interest,  the said  argument is to be stated only to be rejected  as it  has been  clearly  pointed  out  in  the Karnataka case that a nationalisation policy of this type is undoubtedly in public interest.      In  Black’s   Law  Dictionary   (Special  Deluxe  fifth edition) at  page 1107  the words ’public purpose’ have been defined thus:           "The term  is synonymous with governmental purpose      ..... A  public purpose  or public business has for its      objective the  promotion of  the public health, safety,      morals,  general  welfare,  security,  prosperity,  and      content- 758      ment of all the inhabitants or residents within a given      political division,  as,  for  example,  a  state,  the      sovereign powers of which are exercised to promote such      public purpose or public business."      This matter is concluded by a decision of this Court in the Karnataka  case where  it was held that the purpose of a public body to run a public transport service is undoubtedly

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in public interest and in this connection Iyer, J., observed thus:           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." And Untwalia,  J., speaking for the Court made the following observations:           "Why can’t  moveables 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."      In the  instant case  also, it  would appear  that  the State has  nationalised the stage and contract carriages for the purpose of providing a general and expeditious transport at reasonable rates to the members of the public and in view of the  observations referred  to above,  we can  come to no other conclusion except that such a policy is undoubtedly in public interest and involves an important public purpose.      As a  limb of  this argument,  the High Court held that Art. 39  would not  be applicable  in the  present case.  As extracted  above,   Untwalia,  J.,  in  the  Karnataka  case summarily rejected  this very  argument and  further pointed out that where a legislature thought of preventing misuse in the running  of the  vehicles by  private operators  and  in order  to   provide  better   facilities  to  the  transport passengers or to the general public, acquisition of vehicles or for  that matter the rights and interests in the contract carriage  operators     alongwith   their  land,  buildings, workshops, etc.,  would always  be  permissible.  We  cannot conceive of a greater public interest in respect of a policy 759 than where  the legislature expressly intends to promoter or secure the  objects of  Art. 39 (b) & (c) particularly when, as indicated above, the said two clauses have been conferred a special status and given an impregnable protection by Art. 31C itself.  We, therefore,  fully agree with the view taken by this  Court in  the Karnataka  case  and  hold  that  the nationalisation of  the transport services is undoubtedly in public interest.      As regards  the application  of Art.  39 (b) & (c), the High Court  on the basis of previous decisions of this Court held that-      (1)  the objects  of Art.  39 (b)  & (c)  have not been           subserved, and      (2)  Art. 39  has no application to moveable properties           and since  the vehicles  taken over  by the  State           under the  Act were  moveable properties,  Art. 39           was not applicable in the present case.      With due respect, this view is not correct and proceeds on a  misconception of  the law  and interpretation  of  the words ’material  resources’ as  mentioned in Art. 39 (b). In fact, Art.  39 (b)  does  not  mention  either  moveable  or immovable property.  The actual expression used is ’material resources of the community’. Material resources as enshrined in Art.  39 (b) are wide enough to cover not only natural or physical  resources   but   also   moveable   or   immovable properties. Black’s  Law Dictionary (supra) defined the word ’resources’ thus:           "Money or  any property  that can  be converted to      meet  needs;   means  of  raising  money  or  supplies;      capabilities of  raising wealth  or to supply necessary      wants."

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                   (p.1178)      The mere fact that the resources are material will make to difference  in the  concept of  the word  ’resources’. In Stroud’s Judicial  Dictionary (Vol.3) at page 1634, the word ’material’ is defined thus:           "Materials, tools,  or implements,  to be  used by      such artificer  in his  trade or  occupation,  if  such      artificer be  employed in  mining;....wooden  props  or      "sprags" though  neither  "tools  or  implements"  were      "materials" 760      within these  words.....’Material’ includes a painter’s      bucket of distemper and brush."      In Webster’s Third New International Dictionary at page 1934 the word ’resources’ has been defined thus:           ’available means  (as of  a country  or business):      computable wealth (as in money, property.)"      In words and Phrases (Permanent Edition), Vol. 37A, the word ’Resources’ has been defined at page 16 thus:           "Resources  included  products  of  farm,  forest,      manufacture, art,  education, etc... The "resources" of      a  county   include  its  land,  timber,  coal,  crops,      improvements, railways,  factories and  everything that      goes to make up its wealth or to render it desirable."      In the Karnataka case, Iyer, J., observed thus:           "And material  resources of  the community  in the      context of  re-ordering 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."      The  question   as  to  the  connotation  of  ’material resources, as  mentioned in  Art. 39  (b) &  (c) came up for consideration in  a recent  constitution-Bench  decision  of this Court  in Sanjeev  Coke Manufacturing Co’s case (supra) where one of us (Reddy, J.) made the following observations:           "The next  question for  consideration is  whether      the Coking  Coal Mines  (Nationalisation) Act  is a law      directing 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. Coal is, of course, one of      the  most  important  known  sources  of  energy,  and,      therefore, a vital national resource. 761           Shri Sen  argued that material resources had first      to be  acquired by  the  State  before  they  could  be      distributed. A  law providing for acquisition was not a      law for  distribution. We  are unable to appreciate the      submission of Shri Sen."      The  above  decision  therefore  furnishes  a  complete answer to  the  reason  given  by  the  High  Court  or  the arguments  advanced   before  us  by  the  counsel  for  the respondents on  the question  as to the nature and character of material resources.      Summarising the  arguments relating to compensation and the   prejudice   caused   to   the   operators,   and   the nationalisation policy  contained in  the Act,  the position seems to be as follows:      In the  first place,  as indicated above, once Art. 31C applies, the net of the protective umbrella is so wide as to cut at  the root  of even  Art. 31  (2) which alone survives after Bharati’s  case. We  have already  pointed out that if the State  chooses to monopolise trades in certain essential commodities or  properties, for  the purposes  mentioned  in Art. 39 (b) & (c), Art. 31 (2) would be completely excluded,

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otherwise no  State monopoly  is  ever  possible  because  a reasonable amount  which may have to be paid as compensation may completely  drain out  the financial  resources  of  the State or  the public  exchequer to  such an  extent that the noble endeavour  to  monopolise  a  particular  trade  would become almost  impossible, as  a logical result of which the purposes sanctified  in Art.  39 (b) & (c) would also become incapable of  implementation. It  was for these reasons that Parliament thought  it  advisable  to  protect  the  objects contained in  Art, 39  (b) & (c) from the purview of Art. 31 (2).      Secondly, Art.  31 (2)  by virtue of the 25th amendment has knocked  out the word ’compensation’ and has substituted the word  ’amount’ which gives ample discretion to the State to fix  a reasonable amount if the property of an individual is taken over for public purpose. In the instant case, as an intense  social   purpose  which   is   indicated   by   the Constitution, is  involved even  an apology  of compensation would be  sufficient to  comply with the conditions required by Art. 31 (2). Even so, in the instant case, as pointed out above, there  is a clear mode of compensation provided which is to  be assessed  by  an  arbitrator  and  is  subject  to judicial scrutiny by the highest court in the State, namely, the High  Court. The  schedule which contains the principles of compensation is wide enough to 762 ensure a  fairly reasonable  compensation to be given to the operators whose  vehicles are  taken over. The court in such matters cannot  interfere with the amount so fixed unless it is shown  to the  court’s satisfaction that the amount fixed is so monstrous as to shock its conscience. Having regard to the provisions  in the  schedule and  the manner and mode of grant of  compensation, we  are  unable  to  hold  that  the compensation provided for is wholly inadequate or absolutely monstrous.      Thus, so far as this aspect of the matter is concerned, two conclusions broadly emerge:-      (1)  that in view of the express provisions of Art. 31C           which excludes  Art. 31  (2) also where a property           is acquired  in public  interest  for  the  avowed           purpose giving  effect to the principles enshrined           in Art. 39 (b) & (c), no compensation is necessary           and Art. 31 (2) is out of the harm’s way, and      (2)  that even  if the  law provides  for compensation,           the courts  cannot go into the details or adequacy           of the  compensation and  it is sufficient for the           State  to   prove  that   the   compensation   was           reasonable and  not monstrous or illusory so as to           shock the conscience of the court.      The persons  whose properties  are taken over cannot be heard to  complain that  the compensation  awarded  to  them should be  according to  market value  which,  if  conceded, would defeat the very purpose and objective of Art. 39 (b) & (c). In  the instant  case, both  the  conditions  mentioned above are fully satisfied having regard to the provisions of the Act.      The last  contention raised by the respondents was that the conditions or objects mentioned in Art. 39 (b) & (c) are not subserved  by the nationalisation policy codified by the Statute because there is no distribution at all in the sense that the  property taken  over  is  distributed  to  various member of  the community  for their  benefit. Moreover,  the members of  the community have been deprived of the services rendered to  them by  the operators  under permits issued by the  transport   authority.  So  far  as  this  argument  is

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concerned,  it  is  based  on  a  serious  misconception  of understanding the  real position.  The  word  ’distribution’ used in Art. 39 (b) must be broadly 763 construed so  that a  court may  give full and comprehensive effect to  statutory intent  contained in  Art.  39  (b).  A narrow construction  of the word ’distribution’ might defeat or frustrate  the very  object which  the Article  seeks  to subserve.  In   Black’s  Law  dictionary  (supra)  the  word ’distribution’ has been defined thus:           "The  giving  out  or  division  among  a  number,      sharing  or   parcelling  out,  allotting,  dispensing,      apportioning."                                                     (p. 426)      Similarly, Webster’s  Third International dictionary at page 660 defines ’distribution’ thus:           "the position,  placement, or arrangement (as of a      mass or  the members  of a  group); the  disposition or      arrangement   in    rational   groups    or    classes:      CLASSIFICATION the  accurate  distribution  of  several      rare zoological  specimens; delivery  or conveyance (as      of newspapers  or goods) to the members of a group (the      distribution of  telephone directories to consumers) in      charge of  company sales  and distribution;  a  device,      mechanism, or  system by which something is distributed      (as from a main source); the marketing or merchandising      of commodities."      In ’Family Word Finder’ published by Readers Digest the word ’distribution’ has been defined at page 237 thus:      "dissemination,  scattering,   spreading,  circulation,      grouping,   organisation,   apportionment,   allotment,      allocation, division."      It is  obvious, therefore,  that in  view of  the  vast range   of    transactions   contemplated    by   the   word ’distribution’ as  mentioned in the dictionaries referred to above,  it   will  not  be  correct  to  construe  the  word ’distribution’ in  a purely literal sense so as to mean only division of  a particular kind or to particular persons. The words, apportionment, allotment, allocation, classification, clearly  fall   within  the   broad  sweep   of   the   word ’distribution’. So  construed, the  word  ’distribution’  as used in  Art.39(b) will  include  various  facets,  aspects, methods  and   terminology  of   a  broad-based  concept  of distribution. In  other words,  the word ’distribution’ does not merely  mean that  property of  one should be taken over and distributed  to others like land reforms where the lands from the big 764 landlords are  taken away and given to landless labourers or for that  matter the  various urban  and rural ceiling Acts. That is  only one  of the  modes of distribution but not the only mode.  In the  instant case, as we have already pointed out, distribution is undoubtedly there though in a different shape. So  far as  the operators  were concerned  they  were mainly motivated  by  making  huge  profits  and  were  most reluctant to  go to  villages or  places where the passenger traffic is  low or  the track  is difficult.  This naturally caused serious  inconvenience to  the poor  members  of  the community who were denied the facility of visiting the towns or  other   areas  in  a  transport.  By  nationalising  the transport as also the units the vehicles would be able to go to the farthest corner of the State and penetrate as deep as possible  and   provided  better   and  quicker   and   more efficacious  facilities.   This  would   undoubtedly  be   a distribution for  the common good of the people and would be

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clearly covered by cl.(b) of Art.39.      In the  Karnataka case, the word ’distribution’ clearly fell for  interpretation and  Iyer, J.  made  the  following observations:           "The key  word is  ’distribute’ and  the genius of      the article, if we may say so, cannot but be given full      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 reorganizes  by      such distribution the ownership and control.......      Furthermore, in  the Sanjeev  Coke Manufacturing  Co.’s case, Reddy,J., observed thus:           "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."      The very  pertinent expression used by Reddy,J. is that those economists  who believe  in bringing  about  a  social revolution would 765 hardly find  any difficulty  in treating  nationalisation of transport as  a distributive  process for  the good  of  the community. This  is exactly what the Act seems to achieve in securing the  objects  contained  in  Art.39(b)&(c)  of  the Constitution.      By nationalising  the transport  services the transport business which  was run  by a  handful of  capitalists would prevent the  concentration of  wealth in  the hands of a few and would therefore benefit the community at large.      This aspect  of the  matter  was  also  argued  in  the Karnataka case  but strongly  repelled,  were  Untwalia,  J. pointed out  that taking  over the  transport  services  was undoubtedly for  the common  good of  the people and was not meant for  augmenting the  revenue of  the State because the profits, if any, made by the services would go to accomplish projects for  the betterment  of the  community and made the following observations:           "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 all  stores, instruments,  machinery,      tools, plants, etc., as mentioned in sub-section (2) of      section 4 of the Act."      Thus, in short, the position seems to be that by virtue of  the   nationalisation  policy   the  twin   objects   of Art.39(b)&(c) are fully secured.      Finally, it  was argued by the respondents that even if the  transport   services  were   nationalised,  there   was absolutely no  rationale  behind  the  taking  over  of  the vehicles of  the operators,  some of  whom were  running  on hire-purchase basis. This argument has no force because once it  is   recognised  that  for  the  purposes  mentioned  in Art.39(b)&(c)  the   entire  service  including  its  units, workshops, etc,  could be  taken over  on  payment  of  some compensation, the fact that the vehicles should be spared is

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only an argument of desperation.      These  are,   therefore,  the   important   contentions advanced before  us by the respondents and the reasons given by the  High Court  in striking  down the Act. We are of the opinion that in fact this 766 case is  clearly covered  by the  decision of  the Karnataka case as  reinforced by  the later  decision of  Sanjeev Coke Manufacturing Co.’s  case and  all  the  contentions  raised before us  by the  respondents (operators) fail. The Act is, therefore,  held   to  be   constitutionally  valid  in  all respects. We  allow the appeals, dismiss the writ petitions, set aside  the judgment  of the High Court and hold that the Act is constitutionally valid.      However, as  some portions  of the  Act, in view of the time-lag, may  have become  out of date, a few consequential amendments may  have to  be made. Mr. Ray, appearing for the appellant, had  also conceded that so far as the question of compensation was concerned, it was open to the arbitrator or the compensation authority not to confine itself strictly to the yardstick  contained in  the second  schedule to the Act but they  can make  marginal changes  as  the  circumstances require.      As a  appellants have  succeeded  in  the  appeals,  we revoke the  interim order  passed by  this Court on June 26, 1973 directing  the appellants  to pay  Rs. 100  (Rupees one hundred)  per  day  to  the  respondents.  In  the  peculiar circumstances of this case we make no order as to costs. N.V.K.                                   Appeals allowed and                                         Petitions dismissed. 767