PETITIONER:
STATE OF WEST BENGAL
Vs.
RESPONDENT:
UNION OF INDIA
DATE OF JUDGMENT:
21/12/1962
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
IMAM, SYED JAFFER
SUBBARAO, K.
SHAH, J.C.
AYYANGAR, N. RAJAGOPALA
MUDHOLKAR, J.R.
CITATION:
1963 AIR 1241 1964 SCR (1) 371
CITATOR INFO :
E 1963 SC1811 (104)
RF 1964 SC 669 (14,18)
RF 1964 SC1486 (12)
MV 1967 SC 997 (34)
RF 1967 SC1643 (264,271)
RF 1969 SC 530 (2A)
RF 1973 SC1461 (1619,1674,2180)
RF 1976 SC1654 (5,20TO23,30,36)
R 1978 SC 68 (221,223,254)
E 1980 SC1955 (18,19,22)
RF 1982 SC 149 (266)
E&D 1985 SC1367 (33,35)
R 1987 SC2310 (11A)
RF 1988 SC 782 (40)
R 1988 SC1353 (12)
RF 1989 SC1530 (17)
RF 1991 SC 101 (32)
RF 1991 SC1676 (44,46)
R 1992 SC 81 (12)
ACT:
Land Acqusition-State property-Coal bearing areasAcquisition
by Union of India-Parliament, power to enact law-Indian
Constitution, if not federal-Sovereignty, if lies in States
also-Fundamental rights, whether can be claimed by States-
“Person” and “Property”, Connotation of-Coal Bearing Areas
(Acquisition and Development) Act, 1957 (XX of 1957)-
Constitution of India, Arts. 13, 31, 73, 162, 245, 246, 248,
249, 254, 294, 298, Seventh schedule, List I Entries 52, 54,
97, List II Entries 23, 24, List III Entry 42.
HEADNOTE:
Under the Coal Bearing Areas (Acquisition and Develop. ment)
Act, 1957, enacted by Parliament, the Union of India
proposed to acquire certain coal bearing areas in the State
of West Bengal. The State filed a suit contending that the
Act did not apply to lands vested in or owned by the State
and that if it applied to such lands the Act was beyond the
legislative competence of Parliament.
Held, (per Sinha C. J., Imam, Shah, Ayyangar and
Mudholkar,JJ.), that upon a proper interpretation of the
relevant
372
provisions of the Act it was clear that the Act applied also
to coal bearing areas vested in or owned by the State. The
preamble of the Act did not support the argument that the
Act was intended to acquire only the rights of individuals
and not those of the States in coal bearing areas. Though
the statement of Objects and Reasons supported the
contention of the State it could not be used to determine
the true meaning and effect of the substantive provisions of
the Act.
Held, further, (per Sinha C. J., Iman, Shah, Ayyangar and
Mudholkar JJ. Subba Rao J., contral, that the Coal Bearing
Areas (Acquisition and Development) Act, 1957, is not ultra
vires the powers of Parliament and is valid. Under Entry 42
of List III of the Seventh Schedule to the Constitution,
Parliament is competent to make a law for the acquisition
for the property of a State.
The Constitution of India is not truly Federal in character.
The basis of distribution of powers between the Union and
States is that only those powers which are concerned with
the regulation of local problems are vested in the States
and the residue specially those which tend to maintain the
economic industrial and commercial unity of the country are
left to the Union. It is not correct to say that fall
sovereignty is vested in the States. Parliament which is
competent to destory a State cannot be held, on the theory
of absolute sovereignty of the States, to be incompetent to
acquire by legislation the property owned by the States.
Even if the Constitution were held to be a Federation and
the States regarded qua the Union as sovereign, the power of
the Union to legislate in respect of the property situate in
the States would remain unrestricted. The power of
Parliament conferred by Entry 42, List III, as accessory to
the effectuation of the power under Entries 52 and 54, List
I, is not restricted by any provi. sion of the Constitution
and is capable of being exercised in respect of the property
of the States also.
From the fact that Art. 294 vests the property in the States
and that Art. 298 empowers the States to transfer the
property it does not follow that the property of the States
cannot be acquired without a constitutional amendment,
Article 294 does not contain any prohibition against the
transfer of property of the States and if the property is
capable of being transferred by the State it is capable of
being acquired.
Under s. 127 of the Government of India Act, 1933, the
Central Government could require the Province to acquire
land
373
on behalf of the Federation if it was private land and to
transfer it to the Federation if it was land belonging to
the Province, and the Provincial Government had no option
but to comply with the direction. It was not considered an
infraction of Provincial autonomy to vest such a power in
the Central Government. Absence of a similar provision in
the present Constitution made no difference. Under the
Government of India Act the power to compulsorily acquire
property was exclusively vested in the Provinces but under
the Constitution the Union also has that power.
If the other provisions of the Constitution in terms of
sufficient amplitude confer power for making laws for
acquiring State property, the power cannot be defeated
because the express power to acquire property generally does
not specifically and in terms refer to State property.
Power to acquire and requisition property can be exercised,
concurrently by the Union and the States but on that account
there can be no conflict in the exercise of the power as
such a conflict is prevented by Arts. 31 (3) and 254.
Under the Constitution fundamental rights can be claimed not
only by individuals and corporations but in some cases by
the State also. Property vested in the States may not be
acquired under a law made under Entry 42, List III, unless
the law complies with the requirements of Art. 31.
The rule that the State is not bound, unless it is expressly
named or by necessary implication in a statute is one of
interpretation. In interpreting a constitutional document
provisions conferring legislative power must normally be
interpreted liberally and in their widest amplitude. There
is no indication in the Constitution that the word
“property” in Entry 42 of List III is to be understood in
any restricted sense; it must accordingly be held to include
property belonging to the States also.
Per Subba Rao, J.-The impugned Act in so far as it confers a
power on the Union to acquire lands owned by the States,
including coal mines and coal bearing lands is ultra vires.
Under the Constitution of India the political sovereignty is
divided between the constitutional entities, that is, the
Union and the States, who are juristic personalities
possessing properties and functioning through the
instrumentalities created by the Constitution. The Indian
Constitution accepts the federal concept and distributes the
sovereign powers between the coordinate constitutional
entities, namely, the Union and the
374
states. This concept implies that one cannot encroach upon
the governmental functions or instrumentalities of the other
unless the Constitution provides for such interference. The
legislative fields allotted to the units cover subjects for
legislation and they do not deal with the relationship
between the coordinate units functioning in their allotted
fields. This is regulated by other provisions of the
Constitution and their is no provision Which enables one
unit to take away the property of another except by
agreement.
The power to acquire the property of a citizen for a public
Purpose is one of the implied powers of the sovereign.
Under the Indian Constitution that Sovereign power is
divided between the Union and the States. It is -implicit
in the power of acquisition by a sovercign that it must
relate only to property of the governed. for a sovereign
cannot acquire its own property.
It is also implicit in the concept of acquisition and
requisition that they shall be for public purpose on payment
of compensation. Tile word “person” in Art. 31 does not
include “State”; if Entry 42 were to empower Parliament to
acquire the property of a State, the State would not have
the protection of Art. 3-1 which is available to all other
persons. Therefore, Entry 42 List III does not authorise
either Parliament or a State Legislature to make. a law for
the acquisition of the property of the other.
Nor do the residuary Art. 248 and Entry 97 List I confer any
power on Parliament to acquire the property of a State. The
residuary legislative field cannot possibly cover inter-
State relation, for that matter is not distributed between
the Union and the States by way of legislative Lists. When
a specific provision is made for acquisition of property, it
would be incongruous to confine that Entry to properties
other than those of the States and to resort to the
residuary power for acquiring the property of the States.
Further the anomaly of the Union acquiring the property of
the States without compensation would still remain.
Neither Entry 24 of List II nor Entry 52 of List I empo.
wers a State Legislature before Parliament made a law decla-
ring that the control of a particular industry by the Union
is expedient in the public interest or the Parliament, after
such declaration, to make such a law for acquisition of
State lands, for they deal only with the regulation of an
existing industry or an industry that may be started
subsequently, but not with acquisition of lands.
375
Act 12 of 1952 and Act 67 of 1957 deal only with the
regulation of mines an3 further the declarations contained
in the said Acts are expressly confined to the extent of the
regulation provided thereunder and, therefore, the
declarations therein could not be relied upon to sustain the
validity of the Act.
No inspiration can be drawn from foreign constitutions or
decisions made thereunder in construing the express
provisions of our Constitution in the context of its
different set up. The property of the states can be
acquired by the Union only by agreement.
JUDGMENT:
ORIGINAL JURISDICTION : Suit No. 1 of 1961.
S. M. Bose,, Advocate-General for the State of West
Bengal, B. Sen, S. C.Bose, Milon K. Bunerjee, P. K.
Chatterjee, and P. K. Bose, for the plaintiff.
M. C. Setalvad, Attorney-General for india, H. N. Sanyal,
Additional Solicitor General of India, Bishan Narain, N. S.
Bindra and R. H. Dhebar, for the defendant.
B. N. Seib and I. N. Shroff, for the Intervener No. 1.
S. M. Sikri, Advocate-General for the State of Punjab, R.
Ganapathy Iyer and P. D. Menon, for Intervener No. 2.
B. C. Barua, Advocate-General for the State of Assam and
Naunit Lal, for the Intervener No. 3.
Dinabandhu Sahu, Advocate-General for the State of Orissa,
B. K. P. Sinha and P. D. Ale on, for the Intervener No. 4.
A. Ranganadhan Chetty and A. V. Rangam, for Intervener No.
5.
Lal. Narayan Sinha, and D. Goburdhan, for Intervener No. 6.
376
K. S. Hajela and C. P. Lal, for Intervener No. 7.
P. D. Xenon, for Intervener No. 8.
S. M. Sikri, Advocate-General for State of Punjab, and P.
D. Xenon, for Intervener No. 9.
G. S. Pathak, N. S. Bindra and R. H. Dhebar, for Intervener
No. 10.
1962. December 21. The Judgment of Sinha, C. J., Imam,
Shah, Ayyangar and Mudholkar, JJ., was delivered by Sinha,
C. J., Subba Rao, J., delivered a separate judgment.
SINHA, C. J.-This is a suit by the State of West Bengal
against the Union of India for a declaration that Parliament
is not competent to make a law authorising the Union
Government to acquire land and rights in or over land, which
are vested in a State, and that the Coal Bearing Areas
(Acquisition and Development) Act (XX of 1957)-which
hereinafter will be referred to as the Act-enacted by the
Parliament, and particularly ss. 4 and 7 thereof, were ultra
vires the legislative competance of Parliament, as also for
an injunction restraining the defendant from proceeding
under the provisions of these sections of the Act in respect
of the coal bearing lands vested in the plaintiff. As will
presently appear, the suit raises questions of great public
importance, bearing on the interpretation of quite a large
number of the Articles of the Constitution. In view of the
importance of the questions raised in this litigation,
notices were issued by this Court to all the Advocates-
General of the States of India. In pursuance of that
notice, the States of Assam, Bihar, Gujarat, Madras, Orissa,
Punjab, Rajasthan and Uttar Pradesh have appeared, either
through their respective AdvocatesGeneral or through other
Counsel. The National Coal Development Corporation Ltd.,
with its head
377
office at Ranchi in Bihar, has also intervened in view of a
pending litigation between it as one of the defendants and
the State of West Bengal as the plaintiff. We have heard
counsel for the parties at great length.
The Plaint is founded on the following allegations. The
plaintiff is a State, specified in the First Schedule of the
Constitution,, as forming part of India’ which is a Union of
States. By virtue of Art. 294 of the Constitution, all
property and assets in West Bengal, which were vested in His
Majesty for the purposes of the Government of the Province
of Bengal became vested in the State of West Bengal for the
purpose of the State. The State of West Bengal, in exercise
of its exclusive legislative powers, enacted the West Bengal
Estates Acquisition Act, 1954 (W. B. 1 of 1954). By
notification issued under the Act, as amended, all estates
and rights of intermediaries and Ryots vested in the State
for the purposes of Government, free from encumbrances,
together with rights in the sub-soil, including mines and
minerals. The Parliament enacted the impugned Act
authorising the Union of India to acquire any land or any
right in or over land, in any part of India. In exercise of
its powers under the Act, the Union of India, by two
notifications dated September 21, 1959 and January 8, 1960,
has expressed its intention to prospect for coal lying
within the lands which are vested in the plaintiff, as
aforesaid. Disputes and differences have arisen between the
plaintiff and the defendant as to the competence of
Parliament to enact the Act and its power to acquire the
property of the plaintiff, which is a sovereign authority.
In paragraph 9 of the Plaint, a controversy had been raised
as to whether or not the proposed acquisition was for a
public purpose, but at the actual hearing of the case, the
learned AdvocateGeneral of Bengal withdrew that contention,
and, therefore, that issue is no more a live one. Notice
378
under s. 80 of the Code of Civil Procedure is said to have
been duly served.
The Written Statement of the defendant does not deny the
allegations of fact made in the Plaint, but denies the
correctness of each and all the submissions or legal
contentions as to the legislative competence of Parliament
to enact the Act and as to the power of the defendant to
acquire any property of a State. It is also denied that the
State of West Bengal is a sovereign authority. The
following statement in paragraph 12 of the Written Statement
brings out the policy underlying the enactment in question :
“The defendant states that it is in the public
interest that there should be a planned and
rapid industrialization of the country. For
such rapid and planned industrialization, it
is essential that the production of coal
should be greatly increased as coal is the
basic essential for industries. Regulation of
mines and mineral development under the
control of the Union has been declared by
Parliament by law to be expedient in the
public interest. It is submitted that in the
circumstances, the acquisition of coal bearing
areas by the Union is necessary for the
regulation of mines and mineral development
and for increased production of coal in the
public interest. The defendant will rely on
documents a list whereof is hereto annexed.”
On those pleadings, the following issues were
raised :
1. Whether Parliament has legislative compe
tence to enact a law for compulsory acqui-
sition by the Union of land and other
properties vested in or owned by the State as
alleged in para 8 of the plaint ?
379
2. Whether the State of West Bengal is a
sovereign authority as alleged in para 8 of
the plaint ?
3. Whether assuming that the State of West
Bengal is a sovereign authority, Parliament is
entitled to enact a law for compulsory
acquisition of its lands and properties ?
4. Whether the Act or any of its provisions
are ultra vires the legislative competence of
Parliament ?
5. Whether the plaintiff is entitled to any
relief and if so, what relief ?
After the arguments on behalf of the
plaintiff, and of the States in support of the
plaintiff, had been finished, application was
made for amendment of the plaint praying that
the following paragraph may be added as
paragraph 9A, which is as follows :-
“Alternatively the plaintiff submits that the
Coal Bearing Areas (Acquisition and Develop-
ment) Act (Act XX of -1957) on its true cons-
truction does not apply to the lands vested in
or owned by the Plaintiff the State of West
Bengal. Further the notifications purported
to have been issued under the said Act are
void and of no effect.”
At the request of the learned Attorney-General
a short adjournment was granted to consider
the position as to whether or not the
amendment sought should be opposed on behalf
of the defendant. As the amendment sought was
not opposed, it was granted and an additional
issue was raised in these terms :
“Whether Act XX of 1957 on its true construc-
tion applies to lands vested in or owned by
the Plaintiff State?
380
It will thus appear that the parties are not at issue on any
question of fact, and the determination of the controversy
depends entirely upon the interpretation of the relevant
provisions of the Constitution, and the scope and effect of
the Act.
The issues joined between the parties are mainly two, (1)
whether on a true construction of the provisions of the Act,
they apply to lands vested in or owned by the plaintiff; and
(2) If this is answered in the affirmative whether there was
legislative competence in Parliament to enact the impunged
statute. The scope and effect of the Act is the most
important question for determination, in the first instance,
because the determination of that question will affect the
ambit of the discussion on the second question. As already
indicated, when the case was opened for the first time by
the learned Advocate-General of Bengal, he proceeded on the
basis that the Act purported to acquire the interests of the
State, and made his further submission to the effect that
Parliament had no competence to pass an Act which had the
effect of affecting or acquiring the interest of the State.
But later he also took up the alternative position that the
Act, on its true construction, did not affect the interests
or property of the State. The other States which have
entered appearance, through their respective counsel, have
supported this stand of the plaintiff and have laid
particular emphasis on those provisions of the Act which,
they contend, support their contention that the Act did not
intend to acquire or in any way affect the interests of the
States. In this connection, the arguments began by making
pointed reference to the following paragraphs in the
Statement of Objects and Reasons, set out at pages 16-17 of
the Paper Book :
“According to the Industrial Policy Resolution
of 1956 the future development of coal is the
responsibility of the State. All new units in
381
the coal industry will be set up only by the
State save in exceptional circumstances as
laid down in the Resolution.
The production of coal in India in 1953 was 38 million tons
and the target for production for the Second Five-Year Plan
has been fixed at 60 million tons per annum. It has been
decided that out of the additional production of 22 million
tons per annum envisaged. the public sector should produce
an additional 12 million tons per annum, the balance being
allocated to the private industry for production from
existing collieries and immediately contiguous areas.
Out of the additional 12 million tons in the public sector,
the bulk (10 million tons per annum) will have to be raised
by the development of new coal fields, such as Korba,
Karanpura, Kathara and Jhilimili and Bisrampur. Very nearly
all the coal bearing areas however are covered by mining
leases held by private persons or prospecting licencees
which carry a right to mining lease. Hence it is proposed
to take power to acquire unworked coal bearing areas covered
by private leases or prospecting licencees which are found
surplus to the production required in the private sector and
to work these areas as lessees of the State Government.
With the acquisition of zamindari rights by the the State
Governments, the rights in minerals are now vested in all
areas in the State Governments, and it is not appropriate to
use the Land Acquisition Act, 1891, for the acquisition of
mineral rights’, particularly because the Central Government
does not intend to acquire the proprietary rights vested in
the States. There is no other existing Central or State
Legislation under which the Government has powers to acquire
immediately the lessee’s rights over the coal bearing areas
acquired by Government for the
382
additional coal production. It is accordingly considered
necessary to take powers by fresh legislation to acquire the
lessees” rights over unworked coal-bearing areas on payment
of reasonable compensation to the lessees, and without
affecting the State Government rights as owner of the
minerals or the royalty payable to the State Government on
minerals.
The Bill provides for payment of reasonable compensation for
the acquisition of the rights of prospecting licencees and
mining lessees.”
Besides setting out the policy of the State in the matter of
coal mining industry and the actual state of affairs in
relation thereto, the Statement of objects and Reasons
contains the crucial words on which particular reliance was
placed on behalf of the States, “because the Central
Government does not intend to acquire the proprietary rights
vested in the States…….. and, “without affecting the
State Government rights as owners.” It is however well-
settled that the Statement of Objects and Reasons
accompanying a bill, when introduced in Parliament, cannot
be used to determine the true meaning and effect of the
substantive provisions of the statute. They cannot be used
except for the limited purpose of understanding the
background and the antecedent state of affairs leading up to
the legislation. But we cannot use this statement as an aid
to the construction of the enactment or to. show that the
legislature did not intend to acquire the proprietary rights
vested in the State or in any way to affect the State
Governments’ rights as owners of minerals. A statute, as
passed by Parliament, is the expression of the collective
intention of the legislature as a whole, and any statement
made by an individual, albeit a Minister, of the intention
and objects of the Act cannot be used to cut down the
generality of the words used in the statute.
It was then contended that the preamble of the
883
Act was the key to the understanding of the scope and
provisions of the statute. The preamble is in these words :
“An act to establish in the economic interest
of India greater public control over the coal
mining industry and its development by provid-
ing for the acquisition by the state of
unworked land containing or likely to contain
coal deposits or of rights in or over such
land, for the extinguishment or modification
of such rights accruing by virtue of any
agreement, lease, licence or otherwise, and
for matters connected therewith.”
Particular stress was laid on the last two lines of the
preamble, showing that only rights “accruing by virtue of
any agreement, lease, licence or otherwise” were being
sought to be extinguished or modified by the provisions of
the Act. But this argument omits to take note of the words
of the previous clause in the preamble which has reference
to the fact that the Act also was meant for “acquisition by
the state of unworked lands containing or likely to contain
coal deposits.” Before proceeding to deal with the main
arguments it is necessary to advert to a submission of the
learned Advocate-General of Bengal that the reference to the
“State” in the words “acquisition by the State” occurring in
the preamble was a reference to the “States” as
distinguished from the union. This contention has only to
-be mentioned to be rejected as the entire object and
purpose of the impugned Act was to vest powers in the Union
Government to work coal mines and in that context the word
“State” could obviously refer only to the Union Government.
The preamble, therefore, does not support the argument that
the Act was intended to acquire only the rights of
individuals, derived from prospecting licences or based on
leases, and to exclude from the
384
purview of the Act the rights of States in coal-bearing
lands. Section 4, relating to the issue of a preliminary
notification of the intention to prospect for coal in any
given area, makes reference to “lands”, without any
qualifications, and s. 6, which is consequential’ upon s. 4
lays down the effect of such notification on prospecting
licences and mining leases. Section 7 also speaks of giving
notice of the Government’s intention to acquire the whole or
any part of the land, notified as aforesaid. or any rights
in or over such land. Section 9, which provides for a
declaration of acquisition has also used the same
expression, “any land or any rights in or over such land.”
The proviso to s. 9, which is in these terms
“Provided that, where the declaration relates
to any land or to any rights in or over land
belonging to a State Government which has or
have not been leased out, no such declaration
shall be made except after previous
consultation with the State Government”
is very important in this connection. This proviso for the
first time makes specific reference to any land or to any
rights in or over land “belonging to a State Government.”
Section 9A authorises the Central Government to dispense
with the necessity of complying. with the provisions of s.
8, which provides for hearing any objections raised to the
proposal to acquire any land which is notified under s. 7 as
the subject-matter of acquisition. Ordinarily, if a
notification is made by the Central Government of its
intention to acquire of the whole or any part of the land or
of any right in or over land, notified under s. 4, it is
open to any person interested in the land to object to the
acquisition of the whole or any, part of the land or of any
rights in or over such land. If any such objection is
raised, an opportunity has to be given for hearing such an
objection or
385
objections, by the “competent authority.” But under s. 9-A,
the Central Government, if it is satisfied that it is
necessary to acquire immediately the whole or any part of
the land, or any rights in or over such land, may direct
that s. 8 shall not come into operation, and, therefore, no
proceedings thereunder would be entertainable. Section 10
lays down the consequences of the notification of
declaration of acquisition under s. 9. On such a declaration
the land, or the rights in or over the land, shall vest in
the Central Government, free from all encum brances, and
under sub-section (2) where the rights acquired happen to
have been granted under a mining lease by a State
Government, the Central Government shall be deemed to have
become the lessee of the State Government. A good deal of
argument was addressed to us as to the significance of the
provision, contained in s. 10 (2) of the Act. They will be
dealt with later in the course of this judgment. But it is
open to Government to direct by an order in writing that the
land or the rights in or over the land, instead of vesting
in the Central Government under s. 10 shall vest in a
Government Company, which has expressed its willingness to
comply with the terms and conditions imposed by the Central
Government. A ‘Government Company means a company as
defined in s. 617 of the Companies Act, 1956. In the case
where the land or the rights in or over the land become
vested in a Government Company, under s. 11 (1), that
company shall be deemed to have become a lessee of the State
Government, as if the Company had been granted the mining
lease by the State Government. under the Mineral Concession
Rules. Compensation under the Act on account of prospecting
licences ceasing to have effect, or the rights under a
mining lease having been. acquired, or for any land acquired
under s. 9, has been provided for and the rules lay down the
procedure for determining such compensation, in s. 13. It
is clear on a reading of the provisions for
386
compensation in that section that no compensation has been
provided for in respect of minerals lying unworked
underground. Section 14 to 17 lay down the method of
determining compensation and other cognate matters relating
to payment of compensation. The rest of the provisions of
the Act do not bear on the present controversy and,
therefore, need not be adverted to.
On a bare reading of the provisions of the Act, the
expression “any land” or “any rights in or over such land”
would appear to cover every interest regardless of the
person or authority who owns them, including those of a
State Government. But it has been argued that on a close
examination of the provisions aforesaid of the Act and
keeping certain general principles of interpretation of
Statutes in view, the conclusion follows that the Act does
not cover any property or interest in or over land belonging
to a State Government. We have already indicated that
neither the statement of objects and reasons nor the
preamble are of any help to the plaintiff or to States which
have intervened and have claimed that any property belonging
to a State Government is outside the scope and effect of the
Act.
Bearing in mind that the words used in s. 4 are
comprehensive and unrestricted and apt to include in their
sweep lands “belonging to a State” and that the reference in
s. 7 is to lands which are notified under s. 4 (1), we shall
now turn to the arguments bearing upon the interpretation of
certain specific provisions which are however claimed to
suggest an opposite conclusion. Firstly, it is urged that
“any person” used in s. 8 could not be interpreted as
including a State. This argument is bound up with the other
argument relating to the competence of Parliament to
legislate in respect of property belong, ing to a State. It
will, therefore, be convenient to deal
387
with this argument along with that topic, It is enough to
point out here that the explanation to s. 8 (1), and
particularly the words “undertaken by the Central Government
or by any other person’ Would lend support to the argument
of the learned AttorneyGeneral that the word “Person” has
been used in the generic sense of including both a natural
person and a juristic person. Secondly, it “as argued with
reference to the words of the proviso to s. 9 (1) that where
the Act intended to make any mention of a State Government,
it had done so specifically as in ss. 9, 10, 11 and 18 of
the Act, and that, therefore, the substantive provisions of
the Act were. not intended to apply to any rights or
interest vested in a State Government. The argument is
plausible but not sound. Section 9 is the effective section
of the Act, which provides that after the Central Government
has investigated the prospect of obtaining coal, after the
issue of a notification under s. 4, and after notifying its
intention to acquire the land covered by the notification
under, s. 7, and after disposing of objections, if any,
under s. 8, the Central Government has to make the necessary
declaration that that land should be acquired. The proviso
to s. 9 (1) only requires consultation with the concerned
State Government where it is the owner of the land, or has
any interest in or over such land. It has rightly been
pointed out on behalf of the Central Government that if the
right or interest of a State Government were not involved in
the acquisition, it would be wholly unnecessary to make any
reference to the State Government concerned. It was urged
that unless “lands belonging to a State Government” or in
which a State Government has an interest in or over such
land, were within the operative words of the main provisions
in s. 9 (1), it would be meaningless to Make a provision for
the consultation referred to in the proviso. We see force
in this submission. The consultation with the State
Government is made a condition precedent to the declaration
388
to be made by the Central Government in respect of the
proposed acquisition. But consultation does not necessarily
mean consent, though ordinarily consultation between two
governments or two public authorities would signify the co-
operation and willingness to accede to the proposals
situation which is not contemplated with reference to the
interests of private persons.
On the question of the proper interpretation of the proviso
to s. 9 (1), a Dumber of readings were suggested, which went
to the length of not only rewriting the section but of
adding words which were not there so as to make the proviso
mean what on its plain reading it cannot. We are not,
therefore, inclined seriously to examine those several
alternative readings of this part of the section. Similarly
the provisions of s. 10 (2) were pressed in aid of the
construction suggested on behalf of the plaintiff and the
other intervening States, that the interests of a State
Government were not within the purview of the Act. This
argument is based on the consideration that if rights or
interests of a State Government were also within the purview
of the Act, it would be meaningless to provide that the
Central Government or a Government Company, as contemplated
by s. II, should be deemed to be the lessee of the State
Government in respect of the rights acquired. We are unable
to acceeds to this construction. Sections 10 (2) and 11
have particular reference to those cases where the property
acquired consists of rights under any mining leases granted
by a State Government. Apart from the kind of property
contemplated by ss. 10 (2) and 11 (2), as aforesaid, there
may be other kinds of property acquired, e. g. coal-bearing
land, in which the entirety of the interest is vested in a
State Government. In such cases, there would be no question
of the Central Government or a Government Company becoming
or being deemed to become a lessee of a State Government.
Reference was made
389
to s. IS but the mention of a “State Government” in the
section is consequential upon the provisions of ss. 10 and
11, that is to say, where the Central Government or a
Government Company has, by operation of those provisions of
the Act, become the lessee of a State Government. In the
case of any differences between the Central Government and a
State Government on the question of how prospecting is to be
done or of how far the mineral Concession Rules shall be
observed, is, by virtue of this section, to be resolved by
arbitration or in such other manner as the Governments
concerned may decide.
It will thus appear that on a proper interpretation of the
relevant provisions of the Act, it cannot be said that
either in express terms or by necessary implication the
provisions of the Act are implacable to rights or interests
of a State Government or that such lands are excluded. It
is plain that the Act is intended to cover land or rights in
or over land belonging either to an individual or to a
juristic person. Such land may comprise not only surface
rights but also mineral rights. The land to be acquired by
the Central Govt. might be virgin soil unencumbered by any
prospecting licences or mining leases granted bv the State
or by an intermediary, using the expression to mean all
interests below the State. Such an interest as aforesaid
may be vested in a State or different interests may be
vested in different persons by virtue of leases or licences
granted by proprietors in permanently settled States or by
tenure-holders who have expressly obtained mining rights.
The Act, therefore, had to use the compendious language
“‘land or any interest in or over land” to cover all those
diverse rights and interests which the Central Govt. would
be interested to acquire in order to have a free hand in
developing the I and for coal mining in the public sector,
as it is called. The Act may have been more artistically
drafted but construing it as it is, we have no doubt that
390
Parliament intended to acquire all rights and interests in
coal bearing land with a view to prospecting for coal and
for exploiting coal-bearing mines. It must, therefore, be
held that the supplementary issue as regards the
interpretation of the Act joined between the parties as a
result of the amendment of the plaint must be decided
against the plaintiff.
Starting with the position that on a true construction of
the relevant provisions of the Act, the rights and interests
of a State Government in coal bearing land had not been
excluded from the operation of the Act, either in express
terms or by necessary implication, the next question that
arises for consideration is the first issue which covers
issues 3 and 4 also. The competence of Parliament to enact
the Act has to be determined with reference to specific
provisions of the Constitution, with particular reference to
the entries in the Seventh ScheduleList I and List III.
By Entry 42 in List III of the Seventh Schedule to the
Constitution read with Art. 246 (3) power to legislate in
respect of acquisition and requisition of property is
conferrcd upon the Parliament as well as the State
Legislatures, Prima facie, this power may be exercised by
the Parliament in respect of all property, privately owened
or State owned. But on behalf of the State of West Bengal
and some of the intervening States it was submitted that the
very nature of the right in property vested in the State for
governmental purposes imposed a limitation upon the exercise
of the Pocwer of the Union Parliament, affecting State
owned property. On behalf of the State of Punjab-one of
the intervening States-it was urged that if acquisition
of property was necessarily incidedtal to the effective
exercise of power by Parliament in respect of any of the
entries in Lists I and 111, the Parliament may legislate so
as to affect title of the State to property vested in it
391
provided it does not interfere with the legislative power of
the State.
Diverse reasons were suggested at the Bar in support of the
plea that the State property was not subject to the exercise
of legislative powers of the Parliament. They may be
grouped under the following heads
(1) The Constitution having adopted the federal principle
of government the States share the sovereignty of the nation
with the Union, and therefore power of the Parliament does
not extend to enacting legislation for depriving the States
of property vested in them as sovereign authorities.
Entrustment of power to legislate must therefore be so read
as to imply a restriction upon the parliamentary under Entry
42 of List III when it is sought to be exercised in respect
of the property owned by a State.
(2) Property vested in the States by virtue of Art. 294 (I)
cannot be diverted to Union purposes by Compulsion of
Parliamentary legislation.
(3) The Government of India Act, 1935 provided special
machinery for acquisition of property of the State by
negotiations, and not by compulsion in exercise of
legislative power that provision recognised
that the Central Legislature of the Government
of India had no power to acquire property of
the State by exercise of legislative power,
and even though no provision similar to s. 127
of the Government of India Act, 1935 has been
enacted in the Constitution, the recognition
implicit in that provision of the immunity of
the property of the units must also be deemed
to be superimposed upon the exercise
392
of legislative power vested in the Parliament under the
Constitution.
(4) Absence of power expressly conferred such as is to be
found in the Australian Constitution, to legislate for
acquisition of the property of the State indicates that it
was not the intention of the Constitution makers to confer
that power upon the Union Parliament, under the general
legislative heads.
(5) If power be exercised by the Union to acquire State
property under Entry 42 of the Concurrent List, similar
power may also be exercised by the States in respect of
Union property and even to re-acquire the property from the
Union by exercise of the State’s legislative power. The
power under Entry 42 can therefore never be effectively
exercised by the Parliament.
(6) It could not have been the intention of the
Constitution makers to confer authority upon the Parliament
to legislate for acquiring property of the States and
thereby to make the right of the State to property owned by
it even more precarious than the right which individuals or
Corporations have under Constitution to their property.
Individuals and Corporations have the guarantee under Art.
31 (2) of the Constitution that acquisition of their
property will be for public purposes and compensation will
be awarded for acquiring property. Entry 42
must be read subject to Art. 31, and inasmuch
as Fundamental rights are conferred upon
individuals and Corporations against executive
or legislative actions, and States are not
invested with any fundamental rights
exerciseable against the Union or other
States, the right to legislate for -compulsory
acquisition of State property cannot be
exercised,
393
(7) Unless a law expressly or by necessary implication so
provides, a State is not bound thereby. This well
recognised rule applies to the interpretation of the
Constitution. Therefore in the absence of any provision
express or necessarly implying that the property of the
State could be acquired by the Union, the rights claimed by
the Union to legislate for acquisition of State property
must be negatived.
All these arguments, except the purely inter- pretational,
are ultimately founded upon the plea that the States have
within their allotted field full attributes of sovereignty
and exercise of authority by the Union agencies, legislative
or executive, which trenches upon that sovereignty is void.
Rc: (1)
Ever since the assumption of authority by the British Crown
under Statute 21- & 22, Vict .(1656) Ch. 106, the
administration of British India was unitary and highly
centralized. The GovernorGeneral was invested with
autocratic powers to administer the entire territory. Even
though the territory was divided into administrative units,
the authority of the respective Governors of the Provinces
was derived from the Governor-General and the Governor-
General was responsible to the British Parliament. There
was, therefore, a chain of responsibility-the Provincial
Governments were subject to the control of the Central
Government and the Central Government to the Secretary of
State. Some process of Revolution took place under the
Government of India Act, 1919, but that was only for the
purpose of decentralization of the Governmental power but on
that account the Government did not cease to be unitary.
The aim of the Government of India Act, 1935 was to unite
the Provinces and Indian States -into a federation, but that
could be
394
achieved only if a substantial number of the Indian States
agreed to join the Provinces in the federation. For diverse
reasons the Indian States never joined the proposed
federation and the part dealing with federation never became
effective. The Central Government as it was originally
constituted under the Government of India Act, 1919, with
some modification continued to function. But in the
Provinces certain alterations were made. Certain
departments were administered with the aid of Ministers, who
were popularly elected, and who were in a sense responsible
to the electorate. The Governor was still authorised to act
in his discretion without consulting his Ministers in
respect of certain matters. He derived his authority from
the British Crown, and was subject to the directions which
the Central Government gave to carry into execution Acts of’
the Central Legislature in the Concurrent List and for the
maintenance of means of communication, and in respect of all
matters for preventing grave menace to the peace or
tranquility of India or part thereof. The administration
continued to function as an agent of the British Parliament.
By the Indian Independence Act, 1947 a separate Dominion of
India was carved out and by s. 6 thereof the Legislature
was for the first time authorised to make laws for the
Dominion. Such laws were not to be void or inoperative on
the ground that they were repugnant to the law of England or
to the provisions of any existing or future Act of
Parliament of the United Kingdom, or to any order, rule or
regulation made under any such Act, and the powers of the
Legislature of the Dominion included the power to repeal or
amend any such Act, order, rule or regulation. The British
Parliament ceased to have responsibility as respects
governance of the territories which were immediately before
that date included in British India, and suzerainty of the
Crown over the Indian States lapsed
395
and ‘With it all treaties and agreements in force on the
(late of the passing of the Act between the Crown and the
rulers of Indian States. The bond of agency which bound the
administration in India to function as agent of the Birtish
Parliament was dissolved and the Indian Dominion to that
extent became sovereign. Then came the Constitution. The
territory was evidently too large for a democratic set-up
with wholly centralized form of Government. Imposition of a
centralized form might also have meant a reversal of
political trends which had led to decentralization of the
administration and some distribution of power. The
Constitution had, therefore, to be in a form in which
authority was decentralized. In the era immediately prior
to the enactment of the Indian Independence Act, there were
partially autonomous units such as the Provinces. There were
Indian States which were in a sensesovereign but their
sovereignty was extinguished bythe various merger agreements
which the rulers ofthose States entered into with the
Government of India before the Constitution. By virtue of
the process of integration of the various States there
emerged a Centralised form of administration in which the
Governor General was the fountain head of executive
authority. The Constitution of India was erected on the
foundations of the Government of India Act, 1935 ; the basic
structure was not altered in many important matters, and a
large number of provisions were incorporated verbatim from
the earlier Constitution.
In some respects a greater degree of economic unity was
sought to be secured by transferring subjects having impact
on matters of common interest into the Union list. A
comparison of the Lists in Schedule 7 to the Constitution
with the Schedule 7 to the Government of India Act, 1935
discloses that the powers of the Union have been enlarged
particularly in the field of economic unity and this was
done as it was felt that there should be,
396
centralized control and administration in certain fields if
rapid economic and industrial progress had to be achieved by
the nation. To illustrate this it is sufficient to refer to
National Highways (Entry 24), inter-State Trade and Commerce
(Entry 42)-to mention only a few being transferred from List
II of the Government of India Act to List I in the Consti-
tution, to the new entry regarding inter-State rivers (Entry
56), to the new Entry 33 in the Concurrent List to which it
is transferred from List 11, and to the comprehensive
provisions of Part XIII-which seek to make India a single
economic unit for Purposes of trade and commerce under the
overall control of the Union Parliament and the Union
Executive. The result was a Constitution which was not true
to, any traditional pattern of federation. There is no
warrant for the assumption that the Provinces were
sovereign, autunomous units which had parted with such power
as they considered reasonable or proper for enabling the
Central Government to function for the common good. The
legal theory on which the Constitution was based was the
withdrawal or restimption of all the powers of sovereignty
into the people of this country and the distribution of
these powers save those withheld from both the Union and the
States by reason of the provisions of Part III between the
Union and the States.
(a) A truly federal form of Government envisages a compact
or agreement between independent and sovereign units to
surrender partially their authority in their common interest
and vesting it in a Union and retaining the residue of the
authority in the constituent units. Ordinarily each
constituent unit has its separate Constitution by which it
is governed in all matters except those surrendered to the
Union, and the Constitution of the Union primarily operates
upon the administration of the units. Our Constitution was
not the result of any such
397
compact or agreement : Units constituting a unitary State
which were non-sovereign were transformed by abdication of
power into a Union.
(b) Supremacy of the Constitution which cannot be altered
except by the component units. Our
Constitution is undoubtedly supreme but it is
liable to be altered by the Union Parliament
alone and the units have no power to alter it.
(c) Distribution of powers between the Union and the
regional units each in its sphere coordinate and independent
of the other. The basis of such distribution of power is
that in matters of national importance in which a uniform
policy is desirable in the interest of the units, authority
is entrusted to the Union, and matters of local concern
remain with the State.
(d) Supreme authority of the Courts to interpret the
Constitution and to invalidate action
violative of the Constitution. A federal
Constitution, by its very nature, consists of
checks and balances and must contain provi-
sions for resolving conflicts between the
executive and legislative authority of the
Union and the regional units.
In our Constitution characteristic (d) is to be found in
full force, (a) and (b) are absent. There is undoubtedly
distribution of powers between the Union and the States in
matters legislative and executive; but distribution of
powers is not always an index of political sovereignty. The
exercise of powers legislative and executive in the allotted
fields is hedged in by numerous restrictions, so that the
powers of the States are not coordinate with the Union and
are not in many respects independent.
398
Legal sovereignty of the Indian nation is vested the people
of India who as stated by the -preamble have solemnly
resolved to constitute India into a Sovereign Democratic
Republic for the objects specified therein. The Political
sovereignty is distributed between, as we will presently
demonstrate, the Union of India and the States with greater
weightage in favour of the Union. Article 300 invests the
Government of India and the States with the character of
quasi-corporations entitled to sue and liable to be sued in
relation to their respective affairs. By Art. 299 contracts
may be entered into by the Union and the States in exercise
of their respective executive powers’ and Art. 298
authorises in exercise of their respective executive powers
the Union and the States to carry on trade or business and
to acquire, hold and dispose of property and to make
contracts. These provisions and the entrustment of powers
to legislate on certain matters exclusive, and concurrently
in certain other matters, and entrustment of executive
authority coextensive with the legislative power form the
foundation of the division of authority.
In India judicial power is exercised by a single set of
courts, Civil, Criminal and Revenue whether they deal with
disputes in respect of legislation which is either State
legislation or Union legislation. The exercise of executive
authority by the Union or by the State and rights and
obligations arising out of the executive authority are
subject to the jurisdiction of the Courts which have
territorial jurisdiction in respect of the cause of action.
The High Courts have been invested with certain powers under
Art. 226 to issue writs addressed to any person or
authority, including in appropriate cases any Government,
for the enforcement of any of the rights conferrcd by Part
III and for anv other purpose and under Art. 227 the High
Court has superintendence over all courts in relation to
which it exercises jurisdiction. The Supreme Court is at
the apex of the
399
hierarchy of courts, civil, criminal,revenue and of quasi-
judicial tribunals. There are in India not two sets of
courts, Federal and State as are found functioning under the
Constitution of the United States of America. By Art. 247
Dower is reserved to the Parliament by law to provide for
establishment of courts for better administration of laws
made by the Parliament or of any existing laws with regard
to the matters enumerated in the Union List, but no such
courts have been constituted.
Sovereignty in executive matters of the Union is declared by
Art. 73 which enacts that subject to the provisions of the
Constitution, the executive power of the Union extends to
the matters with respect to which Parliament may make laws,
and to the exercise of such rights, authority and
jurisdiction as are cxercisable by the Government of India
by virtue of any treaty or agreement. But this executive
power may not save as expressly provided in the Constitution
or in any law made by Parliament, extend in any State to
matters with respect to which the Legislature of the State
has also power to make laws. By Art. 77 all executive
actions of the Government of India have to be expressed to
be taken in the name of the President. Executive power of
the State is vested by Art. 154 in the Governor and is
exercisable by him directly or through officers subordinate
to him in accordance with the Constitution. The appointment
of the Governor is made by the President and it is open to
(lie Pregideat to make such provision as lie thinks fit for
the discharge of the function of a Governor of the State in
any contingency not providded for in Ch. II of Part VI. By
Art. 162 subject to the provisions of the Constitution,
executive power of the State extends to matters with respect
to which the Legislature of the State has power to make
laws, subject to the restriction that in matters in the Con-
current List of the Seventh Schedule, exercise of executive
power of the State is also subject to and
400
limited by the executive power expressly conferred by the
Constitution or by any law made by Parliament upon the Union
or authorities thereof. Exercise of executive authority of
the States is largely restricted by diverse Constitutional
provisions. The executive power of every State has to be so
exercised as to ensure compliance with the laws made by
Parliament and any existing laws which apply in that State,
and not to impede or prejudice the executive power of the
Union. The executive power of the Union extends to the
giving of such directions to a State as may appear to the
Government of India to be necessary for those purposes and
as to the construction and maintenance of means of
communication declared to be of national ‘or military
importance and for protection of railways. The Parliament
has power to declare highways or waterways to be of national
importance, and the Union may execute those powers, and also
construct and maintain means of communication as part of its
function with respect to naval, military and air force
works. The President may also, with the consent of the
Government of a State, entrust to that Government or to its
officers functions in relation to any matter to which the
executive power of the Union extends : Art. 258 (1). Again
the Union Parliament may by law made in exercise of
authority in respect of matters exclusively within its
competence confer powers and duties or authorise the
conferment of powers and imposition of duties upon the
State, or officers or authorities thereof : Art 258 (2).
Art. 365 authorises the President to hold that a situation
has arisen in which the Government of a State cannot be
carried on in accordance with the provisions of the
Constitution, if the State fails to comply with or give
effect to any directions given in exercise of the executive
power of the Union.
These are the restrictions on the exercise of the executive
power by the States, in normal times; in
401
times of emergency power to override the exercise of
executive power of the State is entrusted to the Union.
Again the field of exercise of’ legislative power being co-
extensive with the exercise of the legislative power of the
States, the restrictions imposed upon the legislative power
also apply to the exercise of executive power.
Distribution of legislative powers is effected by Art. 246.
In respect of matters set out in List I of the Seventh
Schedule Parliament has exclusive power to make laws: in
respect of matters set out in List 11 the State has
exclusive power to Legislate and in respect of matters set
out in List III Parliament and the State Legislature have
concurrent power to legislate. The residuary power,
including the power to tax, by Art. 248 and item 97 of List
I is vested in the Parliament. The basis of distribution of
powers between the Union and States is that only those
powers and authorities which are concerted with the
regulation of local problems are vested in the States, and
the residue specially those, which tend to maintain the
economic, industrial and commercial unity of the nation are
left with the Union. By Art. 123 the President is invested
with the power to promulgate Ordinances on matters on which
the Parliament is competent to legislate, during recess of
Parliament. Similarly under Art. 213 power is conferred
upon the, Governor of a State to promulgate Ordinances on
matters on which the State Legislature is competent to
legislate during recess of the Legislature. But upon the
distribution of legislative powers thus made and entrustment
of power to the State Legislature, restrictions are imposed
even in normal times. Article 249 authorises the Parliament
to legislate with respect to any matter in the State List if
the Council of States has declared by resolution supported
by not less than two-third of the members present and voting
that it is necessary or expedient in the national interest
that it Parliament
402
should make laws with respect to any matter enumerated in
the State List specified in the resolution. By Art. 252
power is conferred upon Parliament to legislate for two or
more States by consent even though the Parliament may have
no power under Art. 246 to make laws for the State except as
provided in Art. 249 and 250. Such a law may be adopted by
a Legislature of any other State. By Art. 253 Parliament
has the power notwithstanding anything contained in Art. 246
to make any law for the whole or any part of the territory
of India for implementing any treaty, agreement or
convention with any other country or countries or any
decision made at any international conference, association
or other body. In case of inconsistency. between the laws
made by Parliament and laws made by the Legislatures of the
States, the laws made by the Parliament whether passed
before or after the State law in matters enumerated in the
Concurrent List to the extent of repugnancy prevail over the
State laws. It is only a law made by the Legislature of a
State which had been reserved for the consideration of the
President and has received his assent, on a matter relating
to a Concurrent List containing any provision repugnant to
the provisions-of an earlier law made by Parliament or an
existing law with respect to that matter, prevails in the
State.
Power of taxation (which is exercisable by the States in
comparatively minor fields, the more important such as
Income-tax, wealth-tax, exciseduties other than those on
certain specified articles, and customs, being reserved to
the Union) conferred by various entries under List II on the
States is also severely restricted. Property of the Union,
save in so far as the Parliament may by law otherwise
provide, is exempt from all taxes imposed by the State or by
any authority within the State. By Art. 286 imposition of a
tax on sale or purchase of
403
goods’ where such sale or purchase takes place outside the
State or in the course of import of the goods into, or
export of the goods out of, the territory of India can only
be imposed by Parliamentary legislation. A State is also
prohibited unless the Parliament by law otherwise provides,
from imposing a tax on the consumption or sale of
electricity which is consumed by the Government of India or
in the construction, maintenance and operation of any
railway. Nor can levy of a tax be authorised in respect of
water consumed or distributed or sold by any authority
established by any existing law or any law made by
Parliament for regulating or developing any inter-State
river or river valley, except in so far as the Parliament
may by law so provide.
The States depend largely upon financial assistance from the
Union. A share in certain taxes levied and collected by the
Union such as tax on non-agricultural income, duties in
respect of succession to property other than agricultural
land, estate duty in respect of property other than agri-
cultural land, terminal taxes on goods or passengers carried
by railway, sea or air, taxes on railway fares and freights,
taxes on the sale or purchase of newspapers and on
advertisements published therein, taxes on the sale or
purchase of goods other than newspapers where such sale or
purchase takes place in the course of inter-State trade or
commerce, is given to the States. Certain grants-in-aid of
the revenues of the States of Assam, Bihar, Orissa and West
Bengal in lieu of assignment of any share of the net
proceeds in each year of export duty on jute and jute
products to those States may also be made. Union duties of
excise except duties on medicinal and toilet preparations
are collected by the Union but may be distributed in whole
or in part among the States in accordance with such
principles of distribution as may be formulated. By Art.
275 grants-in-aid of the revenue of such States as
404
Parliament may determine to be in need of assistance may
also be made.
It is manifest that the States depend for financial
assistance upon the Union, their own resources, because of
their restricted fields of taxation, being inadequate. The
power of borrowing is exercisable by the States under Art.
293, but the same cannot be exercised without the consent of
the Government of India, if there is still outstanding any
part of a loan which has been made to the State by the
Government of India or by its predecessor Government, or in
respect of which a guarantee has been given by the Union, or
by its predecessor.
In times of national political or financial emergency, the
States may exercise only such powers legislative and
executive as the Union permits. When a State of emergency
is declared the Parliament has power to make laws for the
whole or any part of the territory of India with respect to
any matter in the State List, and the laws made by
Parliament prevail over the State Laws in the event of
repugnancy. If as a result of war, external aggression or
internal disturbances the security of India or any territory
is threatened, the President may declare a state of
emergency, and the executive power of the Union will
thereupon extend to giving directions to the States, as to
manner in which the executive power of the States is to be
exercised, and the power of the Parliament to make laws will
extend to making laws conferring or authorising conferment
of powers and imposition of duties, upon the Union or its
officers and authorities as respect any matter, even if such
matter be not enumerated in the Union List. The President
may also during the emergency suspend the operation of Art.
268, to 279 and require that all money Bills shall be
submitted to the President for his consideration, after they
are passed by the Legislature of the State.
405
The normal corporate existence of States entitles them to
enter into contracts and invests them with power to carry on
trade or business and the States have the right to hold
property. But having regard to certain basic features of
the Constitution, the restrictions on the exercise of their
powers executive and legislative and on the powers of taxa-
tion, and dependence for finances upon the Union Government
it would not be correct to maintain that absolute
sovereignty remains vested in the States. This is
illustrated by certain striking features of our
constitutional set up. There is no dual citizenship in
India: all citizens are citizens of India and not of the
various States in which they are domiciled. There are no
independent Constitutions of the States, apart from the
national Constitution of the Union of India: Ch. II, Part VI
from Arts. 152 to 237, deals with the States, the powers of
the Legislatures of the States, the powers of the executive
and judiciary. What appears to militate against the theory
regarding the sovereignty of the State is the wide power
with which the Parliament is invested to alter the
boundaries of States, and even to extinguish the existence
of a State. There is no constitutional guarantee against
alteration of the boundaries of the States. By Art. 2 of
the Constitution the Parliament may admit into the Union or
establish new States on such terms and conditions as it
thinks fit, and by Art. 3 the Parliament is by law
authorised to form a new State by redistribution of the
territory of a State or by uniting two or more States or
parts of States or by uniting any territory to a part of any
State, increase the area of any State, diminish the area of
any State, alter the boundaries of any State and alter the
name of any State. Legislation which so vitally affects the
very existence of the States may be moved on the
recommendation of the President which in practice means the
recommendation of the Union Ministry, and if the proposal in
the Bill affects the area, boundaries or name of any of the
States, the
406
President has to refer the Bill to the Legislature of that
State for merely expressing its views thereon. Parliament
is therefore by law invested with authority to alter the
boundaries of any State and to diminish its area so as even
to destroy a State with all its powers and authority. That
being the extent of the power of the Parliament it would be
difficult to hold that the Parliament which is competent to
destroy a State is on account of some assumption as to
absolute sovereignty of the State incompetent effectively to
acquire by legislation designed for that purpose the
property owned by the State for governmental purpose.
The parliamentary power of legislation to acquire property
is, subject to the express provisions of the Constitution,
unrestricted. To imply limitations on that power on the
assumption of that degree of political sovereignty which
makes the States coordinate with and independent of the
Union, is to envisage a Constitutional scheme which does not
exist in law or in practice. On a review of the diverse
provisions of the Constitution the inference is inevitable
that the distribution of powers-both legislative and
executive-does not support the theory of full sovereignty in
the States so as to render it immune from the exercise of
legislative power of the Union Parliament-particularly in
relation to acquisition of property of the States. That the
Parliament may in the ordinary course not seek to obstruct
the normal exercise of the powers which the States have,
both legislative and executive, in the field allotted to
them will not be a ground for holding that the Parliament
has no such power if it desires, in exercise of the powers
which we have summarisedted do so. It was urged that to
hold that property yes to in the State could be acquired by
the Union, would mean, as was picturesquely expressed by the
learned Advocate-General of Bengal, that the Union could
acquire and take possession of Writer’s buildings
407
where the Secretariat of the State Government is functioning
and thus stop all State Governmental activity. There could
be no doubt that if the Union did so, it would not be using
but abusing its power of acquisition, but the fact that a
power is capable of being abused has never been in law a
reason for denying its existence, for its existence has to
be determined on very different considerations.
We might add that this submission is, as it were, a
resuscitation of the now exploded doctrine of the immunity
of instrumentalities which originating from the observations
of Marshall, C. J., in Mc Culloch v. Maryland (1), has been
decisively rejected by the Privy Council as inapplicable
to the inter predation of the respective powers of the
States and the Centre under the Canadian and Australian
Constitutions (vide Bank of Toronto v. Lambe (2), and Webb
v. Outrim (3), and has practically been given tip even in
the United State’s. The following passage in the judgment
of Lord Hobhouse in Lambe’s case, though it dealt with the
converse case of not reading limitations into provincial
power might usefully be set out
“The appellant invokes that principle to
support the conclusion that the Federation Act
must be so construed as to allow no power to
the provincial legislatures under sect. 92,
which may by possibility, and if exercised in
some extravagant way, interfere with the
object of the Dominion in exercising their
powers under sect. 91. It is quite impossible
to argue from the one case to the other.
Their Lordships have to construe the express
words of an Act of Parliament which makes an
elaborate distribution of the whole field of
legislative authority between two legislative
bodies, and at the same time provides for the
federated provinces a carefully balanced
constitution, under which
(1) (1819) 4 Wheat. 316.
(2) ( 1887) 12 App. Cas. 575.
(3) [1907] A.C. 81,
408
no one of the parts can pass laws for itself
except under the control of the whole acting
through the Governor-General. And the ques-
tion they have to answer is whether the one
body or the other has power to make a given
law. If they find that on the due
construction of the Act a legislative power
falls within sect. 92, it would be quite wrong
of them to deny its existence because by some
possibility it may be abused, or may limit the
range which otherwise would be open to the
Dominion Parliament.”
It is pertinent also to note that under several entries of
List I it is open to the Union Parliament to legislate
directly upon properties which are situate in the State
including properties which are vested in the States, for
instance, Railways (Entry No. 22), Highways declared by or
under law made by Parliament to be national highways (Entry
23), Shipping and Navigation on inland waterways declared by
Parliament by law to be national waterways,(Entry
24),Lighthouses including lightships etc.(Entry 26), Ports
declared by or under law made by Parliament or existing law
to be major ports (Entry 27), Airways, aircraft and air
navigation,provision of aerodynamic etc. (Entry 29),
Carriage of passengers and goods by railways, sea or air, or
by national waterways in mechanically propelled vessels
(Entry 30), Property of the Union and the Revenue therefrom,
but as regards property situated in a State subject to
legislation by the State, save in so far as Parliament by
law otherwise provides (Entry 32), Industries, the control
of which by the Union is declared by Parliament by law to be
expedient in the public interest (Entry 52), Regulation and
development of oilfields and mineral oil resources,
petroleum and petroleum products, other liquids and
substances declared by Parliament by law to be dangerously
inflammable (Entry 53), Regulation of
409
mines and mineral development (Entry 54), Regulation and
development of inter-State rivers and rivervalleys (Entry
56), Ancient and historical monuments and records and
archaeological sites and remains declared to be of national
importance (Entry 67). These are some of the matters in
legislating upon which the Parliament may directly legislate
in respect of property in the states. To deny to the
Parliament while granting these extensive powers of
legislation authority to legislate in respect of property
situate in the State, and even of the State, would be to
render the Constitutional machinery practically unworkable.
It may be noticed that in the United States of America the
authority of Congress to legislate on a majority of these
matters was derived from the “ Commerce Clause.” The
commerce clause is not regarded as so exclusive as to
preclude the exercise of State legislative authority in
matters which are local, in their nature or operation, or
are mere aids to commerce. As observed in Cooley’s
Constitutional Limitations-8th Edition p. 1004 ”Mr.
justice Hughes, in deliverig the opinion of the Supreme
Court of the United States,in Simpson v. Shepard (1), said :
“The grant in the Constitution conferred upon
Congress an authority at all times adequate to
secure the freedom of inter-state commercial
intercourse from State control, and to provide
effective regulation of that intercourse as
the national interest may demand. The words
‘among the several States’ distinguish between
commerce which concerns more States than one,
and that commerce which is confined within one
State and does not affect other States. ’The
genius and character of the whole government,
said Chief Justice Marshall, ‘seems to be,
that its action is to be applied to all the
external concerns of the nation, and to those
internal concerns which affect the States
(1) (1913) 230 U.S. 352 : 517 L. ed. 1511.
410
generally; but not to those which are comple-
tely within a particular State, which do not
affect other States and with which it is not
necessary to interfere, for the purpose of
executing some of the general powers of the
Government. The completely internal commerce
of a State, then, may be considered as
reserved for the State itself. ‘This
reservation to the States manifestly is only
of that authority which is consistent with,
and not opposed to, the grant to Congress.
There is no room in our scheme of government
for the assertion of State power in hostility
to the authorized exercise of Federal power.
The authority of Congress extends to every
part of inter-state commerce, and to every
instrumentality or agency by which it is
carried on; and the full control by Congress
of the subjects committed to its regulation is
net to be denied or thwarted by the
commingling of interstate and intrastate
operations. This is not to say that the
nation may deal with the internal concerns of
the State, as such, but that the execution by
Congress of its constitutional power to
regulate inter-state commerce is not limited
by the fact that intrastate transactions may
have become so interwoven therewith that the
effective government of the former
incidentally controls the latter. This
conclusion necessarily results from the
supremacy of the national power with its appo-
inted sphere.”
Our Constitution recognises no such distinction between the
operation of a State law in matters which are local, and
which are interstate. if an enactment falls within the Union
List, whether its operation is local or otherwise State
legislation inconsistent therewith, will subject to Art. 254
(2) be struck down.
411
The question may be approached from another angle. Even
under Constitutions which are truly federal and full
sovereignty of the States is recognised in the residuary
field both executive and legislative, power to utilise or as
it is said “Condemn” property of the State for Union
purposes is not denied.
The power to acquire land sought to be exercised by the
Union, which is challenged by the State of West Bengal, is
power to acquire in exercise of authority conferred by ss.
6, 7 and 9 of the Coal Bearing Areas (Acquisition and
Development) Act, 1957. The Act was enacted for
establishing in the economic interest of India greater
public control over the coal mining industry and its
development by providing for the acquisition by the State of
land containing or likely to contain coal deposits or of
rights in or over such land for the extinguishment or
modification of such rights accruing by virtue of any
agreement, lease, licence or otherwise, and for matters
connected therewith. By Entries 52 and 54 of List I the
Parliament is given power to legislate in respect of :
(52) “Industries, the control of which by the
Union is declared by parliament by law to be
expedient in the public interest.”
(54) “Regulation of mines and mineral
development to the extent to which such
regulation and development under the control
of the Union is declared by Parliament by law
to the expedient in the public interest.”
In exercise of powers under Entry 36 of the Government of
India Act, 1935 which corresponds with Entry 52 of the
Constitution the Central Legislature enacted the Minerals &
Mining (Regulation &. Development) Act, 1948, (LIII of
1948). By s. 2 of the Act it was declared that it was
expedient in the
412
public interest that the Central Government should take
under its control the regulation of mines and oilfields and
development of minerals to the extent specified in the Act.
‘Mine’ was defined under the Act as meaning any excavation
for the purpose of searching for or obtaining minerals and
includes an oil well. No mining lease could be given after
the commencement of the Act, otherwise than in accordance
with the rules made under the Act. By s. 13 the provisions
of the Act were to be binding on the Government, whether in
the right of the Dominion or of a State. By the declaration
by s. 2 the minerals became immobilized. The Act is on the
Statute Book, and the declaration, in the future application
of the Act since the Constitution must also remain in force,
as if it were made under Art. 52 of the Constitution.
After the Constitution, the Industries (Development &
Regulation) Act, 1951 (65 of 1951) was enacted by the
Parliament. By s. 2 it was declared that it is expedient in
the public interest that the Union should take under its
control the industries specified in the First Schedule. In
the Schedule item (3) “‘Coal, including Coke and other
derivatives” was included as one of such industries. The
Legislature then enacted the Mines & Minerals (Regulation &
Development) Act, 1957 (LXVII of 1957). By s. 2 a
declaration in terms similar to the declaration in Act LIII
of 1948 was made. The Act deals with all minerals except
oil, and enacts certain amendments in Act LIII of 1948.
There being a declaration in terms of item 52 the Parliament
acquired exclusive authority to legislate in respect of Coal
industry set out in the Schedule to Act 65 of 1951 and the
State Government had no authority in that behalf.
In the American Constitution there is no express power
conferred upon the Congress to make a law for
413
acquisition of any property for a public purpose. But it
has been held by a long course of decisions that it is open
to the Congress to legislate in respect of matters within
its competence even if such legislation may have a direct
impact upon the States’ rights, to property. In the States
of Oklahoma Ex Rel. Leon Co. Phillips v. Guy F. Atkinson
Company (1), it was held that in enacting flood control
legislation which authorised construction of a reservoir,
the Congress had the power to condemn lands owned by a
constituent State. It was observed “‘The Tenth Amendment
does not deprive ‘the national government of authority to
resort to all means for the exercise of a granted power
which are appropriate and plainly adapted to the permitted
end’ United States v. Darby (312 U. S. p. 124) x x x Since
the construction of this dam and reservoir is a valid
exercise by Congress of its commerce power, there is no
interference with the sovereignty or the State. United
States v. Appalachian Electric Power Co. (311 U. S. 428).
The fact that land is owned by a state is no barrier to its
condemnation by the United States. Wayne Country v. United
States, 53 Ct. cl. (F) 417, affirmed in 252 U. S. 574.”
Similarly it was held in The Cherokee Nation v. The Southern
Kansas Railway Co. (2), that Congress has the power to
authorise a Corporation to construct a railway through the
territory of the Cherokee Nation, for the United States may
exercise the right of eminent domain even within the limits
of the several States for purposes necessary to the
execution of powers granted to the general government by the
Constitution.
Power to effectuate its legislative authority which is
entrusted in absolute terms being essential for carrying out
of the powers, does not depend upon the consent of the
States, and cannot be thwarted by any opposition on the part
of the States. The extent of this power was aptly de-
scribed by Strong, J., in
(1) (1940) 313 U.S. 508: 85 L. ed. 1487.
(2) (1889) 135 U,S, 641 : 34 L, ed. 295.
414
Kohl v. United States (1).
“It has not been seriously contended during
the argument that the United States Government
is without power to appropriate. lands or
other property within the States for its own
uses and to enable it to perform its proper
functions. Such an authority is essential to
its independent existence and perpetuity.
These cannot be preserved if the obstinacy of
a private person, or if any other authority,
can prevent the acquisition of the means or
instruments by which alone governmental
functions can be performed. The powers vested
by the Constitution in the General Government
demand for their exercise the acquisition of
lands in all the States. These are needed for
forts, armories and arsenals, for navy yards
and light houses, for custom-houses, post
offices and Court-houses, and for other public
uses. If the right to acquire property for
such uses may be made a barren right by the
unwillingness of property holders to sell, or
by the action of a State prohibiting a sale to
the Federal Government, the constitutional
grants of power may be rendered nugatory, and
the Government is dependent for its practical
existence upon the will of a State, or even
upon that of a private citizen. This cannot
be. No one doubts the existence in the state
governments of the right of eminent domain-a
right distinct from and paramount to the right
of ultimate ownership. It grows out of the
necessities of their being, not out of the
tenure by which lands are held. It may be
exercised, though the lands are not held by
grant from the Government either mediately or
immediately, and independent of the consi-
deration whether they would escheat to the
Government in case of a failure of heirs. The
right is the offspring of political necessity;
and
(1) (1876) 91 U.S. 449.
415
it is inseparable from sovereignty, unless
denied to it by its fundamental law.”
In the United States of America power to take, private
property for public use is called by American lawyers
eminent domain. It is the power of the State to take
property upon payment of just compensation for public use:
it is an inherent attribute of sovereignty-not arising even
out of the Constitution, but independently of it, and may be
exercised in respect of all property in the States for
effective enforcement of the authority of the Union against
private property or property of the State.
In Attorney-General for British Columbia v. Canadian
Pacific Railway (1),one of the questions which fell to be
determined before the judicial Committee was whether
power under s. 91 read with s. 92 of the British North
America Act 1867 which secures to the Dominion Parliament
exclusive legislative authority in respect of lines of steam
or other ships, railways, canals, telegraphs, and other
works and undertakings connecting any province with any
other, or others could be exercised so as to authorise use
of crown. lands in the province for a railway. The judicial
Committee observed at p. 210 :
“It was argued for the appellant that these
enactments ought not to be so construed as to
enable the Dominion Parliament to dispose of
Provincial Crown lands for the purposes
mentioned. But their Lordships cannot concur
in that argument. In Canadian Pacific Ry.
Co. v. Corporation of the Parish of Notre Dame
de Bonsecours (1899 A. C. 367) (a case
relating to the same company as the present)
the right to legislate for the railway in all
the provinces through which it passes Was
fully recognised. In Toronto Corporation v.
Bell Telephone Co. of Canada
(1) [1906] A.C. 204.
416
(1905 A. C. 52) which related to a telephone
company whose operations were not limited to
one province, and which depended on the same
sections, this Board gave full effect to
legislation of the Dominion Parliament over
the streets of Toronto which are vested in the
city corporation. To construe the section now
in such a manner as to exclude the power of
Parliament over Provincial Crown lands would
in their Lordships’ opinion, be inconsistent
with the terms of the sections which they have
to construe, with the whole scope and purposes
of the legislation, and with the principle
acted upon in the previous decisions of this
Board. Their Lordships think, therefore, that
the Dominion Parliament had full power if it
thought fit, to authorize the use of
provincial Crown lands by the company for the
purposes of this railway.”
It is not considered as inconsistent with a true federation
like Australia to have a provision like s. 51 (31) of the
Commonwealth of Australia Act, 1900 which specifically
empowers the Commonwealth to acquire “‘State” property, if
needed for a Commonwealth purpose on terms of payment of
compensation. In this connection it is to be noticed that
there is under the Commonwealth of Australia Act a provision
as regards vesting of property in States and in the
Commonwealth on lines somewhat similar to Art. 294. In
Canada, the decision of the Privy Council have held that the
acquisition of property by the Dominion for implementing or
carrying out Dominion legislation under powers vested in
Parliament in that behalf by s. 91 was not inconsistent with
what might be termed the legislative sovereignty of the
Provinces in the fields marked out for them by s. 92. And
lastly, even in America which is a true federation, since
the Constitution of the U. S. makes no provision for the
State Constitutions, these being
417
determined by their own laws, it has been held that the
power of eminent domain of the Congress for the purposes of
effectuating Congressional purpose comprehends the right to
expropriate State property. In these circumstances we are
unable to appreciate the argument that if the Constitution
were to be held to be a Federation, the States being
considered as the federative units, such a status
necessarily involved a prohibition or negation of the right
of the Union to acquire the property of the State for the
purpose of giving effect to its legislative powers.
Therefore the power of the Union to legislate in respect of
property situate in the States even if the States are
regarded qua the Union as Sovereign, remains unrestricted,
and the State property is not immune from its operation.
Exercising powers under the diverse entries which have been
referred to earlier, the Union Parliament could legislate so
as to trench upon the rights of the State in the property
vested in them. If exclusion of State property from the
purview of Union legislation is regarded as implicit in
those entries in List 1, it would be difficult if not
impossible for the Union Government to carry out its
obligations in respect of matters of national importance.
If the entries which we have referred to earlier are ’not
subject to any such restriction as suggested, there would be
no reason to suppose that Entry 42 of List III is subject to
the limitation that the property which is referred to in
that item is of individuals or corporations and not of the
State. In its ultimate analysis the question is one of
legislative competence. Is the power conferred by Entry 42
List III as accessory to the effectuation of the power under
Entries 52 & 54 incapable of being exercised in respect of
property of the States? No positive interdict against its
exercise is perceptible in the Constitution : and the
implication of such an interdict assumes a degree of
sovereignty in the States of such plenitude as transcending
the express legislative
418
power of the Union. The Constitution which makes a division
of legislative and executive powers between the Union and
the States is not founded on such a postulate : and the
concept of superiority of the Union over the States in the
manifold aspects already examined negatives it.
Re. (2).
By Art. 294 (a) all property and assets which immediately
before the commencement of the Constitution were vested in
the British Crown for the Dominion of India, became vested
in the Union, and property vested for the purposes of the
Government of the Provinces, became vested in the
corresponding States. Under the Government of India Act all
property for governmental purposes was vested in the British
Crown, and by virtue of the Constitution that property
became vested in the Union and the States. By virtue of cl.
(b) the rights, liabilities and obligations of the
Government of India and the Provinces, devolved upon the
Union and the corresponding States.
A considerable point was made of the fact that Art. 294 had
vested certain property in the State and it was submitted
that subject to the right of the State by agreement to
convey that property under Art. 298, the Constitution
intended that the State should continue to be the owner of
that property and that this vesting must be held to negative
the Union”s right to acquire any property vested in the
State without its consent. It was pointed out by the
learned Attorney-General that so far as the plaintiff-the
State of West Bengal-was concerned it did not own the coal-
bearing lands on the date of the Constitution, and that it
got title thereto only after the vested in the State by
virtue of the provisions of the Bengal Acquisition of
Estates Act of 1954 (W. B. I of 1954) and that the property
thus acquired subsequently was not within the scope of Art.
294. We
419
have no doubt that this would be an answer to the claim of
the plaintiff in this suit and particularly in the context
of the challenge to the validity of the notification now
‘impugned , but we do not desire to rest our decision on any
such narrow ground.-
Article 298 runs :
“298. The executive power of the Union and of
each State shall extend to the carrying on of
any trade or business and to the acquisition,
holding and disposal of property and the mak-
ing of contracts for any purpose
Provided that-
(a) the said executive power of the Union
shall, in so far as such trade or business or
such purpose is not one with respect to which
Parliament may make laws, be subject in each
State to legislation by the States; and
(b) the said executive power of each State
shall, in so far as such trade or business or
such purpose is not one with respect to which
the State Legislature may make laws, be
subject to legislation by Parliament.”
The argument was that the Constitution intended and enacted
that property allotted to or vested in a State under the
provisions of Art. 294 or 296 shall continue to belong to
that State unless and until by virtue of the power conferred
on the State by Art. 298 it chose to part with it, and that
without a Constitutional amendment of these Articles such
property cannot be divested from the State. We consider
that this submission proceeds on a misconception of the
function of Arts. 294 and 298 in the ‘scheme of the
Constitution. To start with it has to
420
be pointed out that when Art. 298 Confers on States the
power to acquire or dispose of property, the reference is to
the executive power of the State to acquire or dispose of
property which would apply without distinction to property
vested under Art.294 or under 296 by escheat or lapse or as
bona vacantia, on- property acquired otherwise. Besides,
Art. 298 is merely an enabling Article-conferring on the
State as owner of the property, the power of disposal. That
cannot on any reasonable interpretation be constructed a,,
negativing the possibility of the State’s title to property
being lost by the operation of other provisions of the
Constitution. Art. 298 has therefore no relevance on the
proper construction of Art. 294.
Article 294 wits modelled on s. 172 of the Government of
India Act, 1935. As pointed out by the Federal Court in In
re the Allocation of Lands and Buildings in a Chief
Commissioner’s Province(1).
“Up to April 1st, 1937, when the greater part
of the Act came into force, the Government of
India was a unitary Government to which all
the Provincial Governments were subordinate
and hence all lands and buildings belonging to
Government or used for governmental purposes
of were vested in His Majesty for the purpose
of the Government of India.’ This had been the
legal position ever since the Government of
India Act, 1858 (see s. 31) of that Act, and
s. 28(1) and (3) of the Government of India
Act. which immediately preceded the Art of
1935). Bitt the setting up of a number of
autonomous Provinces, independent of the
Central Government and dividing with the
latter the totality if executive and
legislative powers in British India, and the
separation of the powers connected with the
exercise of the functions of the Crown in its
relations with the Indian State (which were to
be thenceforward exercised
(1) 1943 F.C.R.. 20, 23
421
exclusively by His Majesty’s Representative
appointed for that purpose) made an allocation
necessary among these three authorities of the
lands and buildings which had hitherto been
vested in His Majesty for the purposes of the
Government of India alone. It is this alloca-
tion which was effected, or attempted to be
effected, by the provisions of s. 172, sub-s.
(1), paras, (a), (b) and (c).”
Section 172 which effected this distribution
rat)
“172. (1) All lands and buildings which imme-
diately before the commencement of Part III of
this Act were vested in His Majesty for the
purpose of the Government of India shall as
from that date–
(a) in the case of lands and buildings which
are situate in a Province, vest in His Majesty
for the purposes of the government of that
Province unless they were then used, otherwise
than under a tenancy agreement between the
Governor-General in Council and the Government
of that Province, for purposes which
thereafter will be purposes of the Federal
Government or of His Majesty Representative
for the exercise of the functions of the Crown
in its relations with Indian States, or unless
they are lands and buildings formerly used for
such purposes is fore, said, or intended or
formerly intended to, be so used and are
certified by the Governor-General in Council
or, as the case may be, His Majesty’s
Representative, to have been retained for
future use for such purposes, or to have been
retained temporarily for the purpose of more
422
advantageous disposal by sale or otherwise;
just like s. 172 being the forerunner of Art. 294, as. 174
and 175 are phrased in terms similar and correspond to Arts.
296 and 298.
The right of the States to property, which devolved upon
them by Art. 294 (a) was therefore no different from the
right they had in the after acquired property: the
Constitution does not warrant a distinction between the
property acquired at the inception of the Constitution, and
in exercise of executive authority. Article 294 does not
contain any prohibition against transfer of property of the
State and if the property is capable of being transferred by
the State it is capable of being compulsorily acquired.
Attorney-General for Quebec v. Nipissing Central Railway Co.
and Attorney-General for Canada (1), is in this context
instructive.
The Dominion legislation-the Railway Act, 1919 of Canada-
made provision for the expropriation of lands for the
purpose of railways and for the payment of compensation for
the lands so taken and under s. 189 of the enactment the
railway company was empowered with the consent of the
Governor General-in-Council to take “Crown lands” for the
use of the railway.
Section 109 of the British North America Act which
corresponds to Art. 294 ran :
“109. All lands, mines, minerals, and
royalties belonging to the several Provinces
of Canada, Nova Scotia and New Brunswick at
the Union, and all sums then due or payable
for such lands, mines, minerals, or royalties,
shall belong
(1) (1926) A. C. 715.
423
to the several Provinces of Ontario, Quebec,
Nova Scotia and New Brunswick in which the
same are situate or arise, subject to any
trusts existing in respect thereof, and to any
interest other than that of the Province in
the same.”
The right of the Provinces to continue to retain and enjoy
their property so vested was further emphasized by s. 11 7
which read :
“117. The several Provinces shall retain all
their respective public property not otherwise
disposed of in this Act, subject to the right
of Canada to assume any lands or public
property required for fortifications or for
the defence of the country.”
The Governor-General of Canada referred to the Supreme Court
questions as to the effect of these provisions and its
competence in relation to Provincial Crown Lands.
It would be seen that the lands were not required either for
fortifications for the defence of the country within s. 117.
The Supreme Court of Canada held that the provision applied
to the Provincial lands and was competently enacted by the
Dominion Parliament, Sir John Simon appearing for the
appellant-Province made two submissions : (1) That on a
proper construction of the Railway Act, it could be held
applicable only to Crown Lands vested in the Dominion and
not to Provincial Crown Lands, relying for this purpose
largely on the provision in s. 189 of the impugned Act
for taking the consent of the Governor-General-in-Council.,
(2) By reason of Provincial Crown Lands being vested in
the appellant by s. 109 of the Imperial Act, read with s. II
7, the Provinces were entitled to retain their respective
property not otherwise disposed of by the Act, and that the
purpose for which the Railways
424
Act made provision did not fall within the last limb of s.
117 vesting in the Dominion Government a right to take
property for certain limited purposes. For this reason, if
the Act on its proper construction involved interference
with Provincial Lands the same was unconstitutional. The
agreement for the respondent–the Dominion-was that when s.
117 of the, British North America Act vested in the Dominion
the power to take Dominion land for defence etc. it was a
reference to executive and not legislative action. They
submitted that the section was not intended to ensure that
the Provinces retain their public property for all time but
was meant merely as a distribution of public property on the
date of the Confederation. Viscount Cave, after disposing
of the question relating to the construction of s. 189 in
the following terms :
“The section applies in terms to all lands of
the Crown lying on the route of the railway,
no distinction being made between Dominion and
Provincial Crown lands.”
dismissed as not very material the contention raised that as
reference had been made to the Governor Gcneral-in-Council
it indicated that it was only Dominion property that was
intended to be covered by that provision.
Dealing with the main constitutional objection to the
validity of the taking of Provincial property, Viscount Cave
pointed out that it was not the first occasion when the
impact of Dominion legislative power under s. 91 of the
British North America Act upon the property vested in the
Provinces arose before the Privy Council, for in Attorney-
General for British Columbia v. Canadian Pacific Railway Co.
(1906 A. C. 204) the argument had been advanced that the
legislative power of the Dominion ought not to be construed
so as to deprive the Provinces of their
425
proprietary interest in what had been vested in them by the
British North America Act.
Viscount Cave quoted the passage in the judgment we have
already extracted and continued :
“It was argued that the effect of ss. 109 and
1.17 of the British North America Act was to
vest in each of the Provinces the beneficial
Interest in the Crown land situate in the
Province, subject only to the right of Canada
under the reservation contained in s. 117 to
assume lands required for purposes of defence.
But the reservation in question appears to
refer
to executive, and not to’ legislative, action;
and while the proprietary right of each
Province in its own Crown lands is beyond
dispute, that right is subject to be affected
by legislation passed by the Parliament of
Canada within the limits of the authority
conferred on that Parliament………………
where the legislative power cannot be
effectually exercised without affecting the
proprietary rights both of individuals in a
Province and of the Provincial Government, the
power so to affect those rights is necessarily
involved in the legislative power.”
Re. (3).
Power to acquire land was vested under the Government of
India Act, 1935, by Entry 9 in List II of the Seventh
Schedule, exclusive. by in the Provinces. For any purpose
connected with a matter in respect of which the Central
Legislature was competent to enact laws the Central
Executive could require the Province to acquire land on
behalf of and at the expense of the Union. This however did
not mean that incidental to the exercise of the right to
legislate in respect of Railways, Ports, Lighthouses, power
to affect the right of the citizens and
426
corporations and of Provinces in land was not exercisable.
As already observed even under Constitutions where a larger
slice of sovereignty remains effectively vested in the
(component unity) such as the United States of America power
to legislate vested in the Central or national subjects
includes the power to legislate so as to extinguish rights
in State property.
Under the Government of India Act, 1935 the Central
Government could require the Province to acquire lands on
behalf of the Union if it was private land, and to transfer
it to the Union if it was the State land. The Provincial
Government had manifestly no option to refuse to comply with
the direction. Provision for fixation of compensation did
not affect the nature of the right which the Central Govern-
ment could exercise.
In broad outline the governmental structure under the
Constitution vis-a-vis the Union and the States is based on
the relationship which existed between the Central
Government and the Provinces under the Government of India
Act, 1935, and that in this respect the Constitution has
borrowed largely from the earlier constitutional document.
But even with the Provinces being autonomous within the
spheres allotted to them and there being a distribution of
property and assets between the Central Government and the
Provinces under part III of Ch. VII in almost the same terms
as is found in the corresponding Arts. 294 and 298, it was
not considered an infraction of the autonomy of the
Provinces to vest such a power in the Central Government,
for s. 127 of the Government of India Act enacted
“127. The Federation I may, if it deems it
necessary to acquire any land situate in a
Province for any purpose connected with a
matter
with respect to which the Federal Legislature
427
has power to make laws, require the province
to acquire the land on behalf, and at the
expense, of the Federation or, if the land
belongs to the Province, to transfer it to the
Federation on such terms as may be agreed, or,
in default of agreement, as may be determined
by an arbitrator appointed by the Chief
justice of India.”
and thus property vested in a Province under s. 172 could be
required to be transferred to the Central Government if it
was needed for a central purpose.
It would therefore be manifest that the right of the Centre
to require the Province to part with property for the
effective performance of central functions was not
considered as detracting from provincial autonomy.
What however is of relevance is the presence of s. 127 in
that enactment which empowered the Central Government to
require the Provinces to part with property owned by them if
the same was needed for the purposes of the Government of
India. It was however suggested that the compulsory
acquisition of provincial property by the Central Government
was there specifically provided for and that the absence of
such a provision made all the difference. But this, in our
opinion, proceeds on merely a superficial view of the
matter. A closer examination of the scheme of distribution
of legislative power in regard to compulsory acquisition of
property under the Government, of India Act discloses that
though the power to compulsorily acquire property was
exclusively vested in the Provinces, the Central Government
could satisfy its requirements of property for Central
purpose by utilising provincial machinery, and that it was
in that context that a specific provision referring to the
Provinces having at the direction of the Central Government
to transfer provincial property was needed. It is therefore
difficult to appreciate the ground
428
on which the existence of a provision in the Government of
India Act for assessment of compensation for land which the
Provinces were bound to transfer on being so required by the
Central Government and the deletion of that provision in
enacting the Constitution may affect the exercise of the
power vested in the Union Parliament.
Re. (4):
The Australian Constitution contains an express power
authorising legislation by the Parliament of Australia for
acquisition of State property But the Constitutions of the
United States of America and Canada contain no such express
provision. The power of the Union Parliament to enact
legislation affecting title of the constituent States to
property vested in them, is on that account not excluded.
If the other provisions of our Constitution in terms of
sufficient amplitude confer power for enacting legislation
for acquiring State property, authority to exercise that
power cannot be defeated because the express power to
acquire property generally does not specifically and in
terms refer to State property.
Re. (5):
In the Constitution of India as originally, enacted there
was an elaborate division of powers by providing three
entries relating to acquisition and requisition of property.
List I entry 33 “Acquisition or requisitioning property for
purposes of the Union”. List II Entry 36 “Acquisition or
requisitioning of property, except for the purpose of the
Union, subject to the provisions of Entry 42 of List 111″;
List III Entry 42 “principles on which compensation for
property acquired or requisitioned for the purpose of the
Union or of a State or for any other public purpose is to be
determined, and the form and the manner in which such
compensation is to be given”. Bythe Constitution (Seventh
Amendment) Act, 1956 the
429
three Entries were repealed, and a single Entry 42 in the
Concurrent List “Acquisition and Requisition of property”
was substituted. Power to acquire or requisition property
may since the amendment, be exercised concurrently by the
Union and the States. But on that account conflicting
exercise of the power cannot be envisaged. Article 31 (2)
Which deals with acquisition of all property requires two
conditions to be fulfilled (1) acquisition or requisitioning
must be for a public purpose (2) the law under which the
property is acquired or requisitioned must provide for
payment of compensation either fixed thereby or on
principles specified thereby. By cl. (3) of Art. 31 no such
law as is referred to in cl. (2) made by the legislature of
a State shall have efficacy unless such law has been
reserved for the consideration of the President and has
received his assent. As the President exercises his
authority with the advice of the non Ministry, Conflict by
the effective exercise of power of acquisition in respect of
the same subjectmatter simultaneously by the Union, and the
State or by the State following upon legislation by the
Union cannot in practice be envisaged even as a possibility.
Article 254 also negatives the possibility of such
conflicting legislation. By cl. (1) of that Article if a
law made by the legislature of a State is repugnant to any
provision of a law competently made by Parliament, the State
lady is, subject to cl. (2), Vold, Clause (2) recognises
limited validity of a State law on matters in the Concurrent
List if that law is repugnant to an existing or earlier law
made by Parliament, only it such law has’ been reserved for
the consideration of’ the president, and has received his
assent. By the proviso authority is reserved to the
Parliament to repeal a law having even this lining
validity. Assent of the President to State legislation
intended to nulls a law enacted by Parliament for
acquisition of State property for the purposes of’ the Union
lies outside the realm of practical possibility.
430
Re. (6):
The submission that Art. 31 has no application to the
acquisition or requisition of property of a State is based
on no solid foundation. This argument was based on three
grounds:-
(a) Fundamental rights are declared in
favour or citizens and others against
legislative or executive action of the
Government and the Parliament of India and the
Government and the legislatures of the States
and all local or other authorities within the
territory of India, or under the control of
the Government of India and not in favour” of
the States against Union action.
(b) Article 31 gives protection to the
rights of persons, and a State is not a person
within the meaning of that Article.’
(c) Entry 42 in the Concurrent List is by
virtue of Art. 13 and 245 subject to Art. 31.
Therefore private property may be acquired
consistently with the prohibitions in the
Constitution, but State property may be
acquired without a public purpose and without
payment of compensation.
It is difficult to agree with the view that under the scheme
of the Constitution fundamental rights may be claimed by
individuals or corporations only and never by the State.
By Art. 13 (1) all laws in force before the Constitution to
the extent of inconsistency with Ch. III are declared void :
and by cl. (2) the State is prohibited from making any law
which takes away or abridges fundamental rights, and the
laws made in contravention of the prohibition are void.
431
The fundamental rights are primarily for the protection of
rights of individuals and corporations enforceable against
executive or legislative action of a Governmental agency,
but it has to be remembered that all laws preexisting which
are inconsistent with and post constitutional laws which
contravene the prohibitions are to the extent of the
inconsistency or contravention void. Some of these rights
are declared in form positive but subject to the restric-
tions authorising the State to make laws derogating from the
fullness of the protection e. g. 15 (4), 16 (3), 16 (4), 16
(5)……. 19 (2), (3), (4), (5), (6), 22 (3), 22 (6), 23
(2), 25 (2), 28 (2) & (3) : there arc certain articles which
merely declared rights c. g. 17, 25 (1), 26, 29 (1) and 30,
(1) : and there are others merely prohibitory without
reference to the right of any person, body or agency to
enforce them e.g. 18 (1), 23 (1), 24 and 28 (1).
Prima facie, these declarations involve an obligation
imposed not merely upon the “State”, but upon all persons to
respect the rights so declared, and the rights are
enforceable unless the context indicates otherwise against
every person or agency seeking to infringe them. The rights
declared in the form of prohibition must have a concomitant
positive content ; without such positive content they could
be worthless. Relief may be claimed from the High Court or
from this Court, against infringement of the prohibition, by
any agency, unless the protection is expressly restricted to
State action.
There are still other Articles in the form not of rights but
fundamental disabilities e. g. 18 (2), 18 (3), 18 (4).
Again there are certain Articles e.g. 19(g), Part 11, 24 (2)
which appear to recognise affirmative rights of the States.
Article 31 is couched in negative form, but recognises the
existence of at least one important power vested in every
sovereign State, not by virtue of its Constitution, but
432
springing from its very existence as a State viz, the power
to acquire property for public purposes on payment of
compensation which the American jurists call ‘eminent
domain’. Article 31 (2) enunciates the restriction subject
to which this power of eminent domain is to be exercised.
For the purposes of the present case it is unnecessary to
consider whether Art. 31 (1) recognises the existence of the
police power. Before Art. 31 was amended by the
Constitution (Fourth Amendment Act, 1955), there was
conflict of opinion in this Court as to the interrelation of
cl. (1) and (2). Some judges held that cl. (1) & (2) dealt
with subject of eminent domain : other judges were of the
opinion that Art. 31 (1) dealt with the police power and
Art. 31 (2) with eminent domain ; some judges did not
express any definite view. After the amendment by the
Constitution (Fourth Amendment) Act, 1955, cl. (1), (2) and
(2A) of Art. 31 read as follows :-
(1) No person shall be deprived of his
property save by authority of law.
(2) No property shall be compulsorily
acquired or requisitioned save for a public
purpose and save by authority of a law which
provides for compensation for the property so
acquired or requisitioned and either fixes the
amount of’ the compensation or specifies the
principles on which, and the manner in which
the compensation is to be determined and given
; and no such law shall be called in question
in any Court on the ground that the compen-
sation provided by that law is not adequate.
(2A) Where a law does not provide for the
transfer of the ownership or right to
possession of any property to the State
433
or to a corporation owned or controlled by the
State, it shall not be deemed to provide for
the compulsory acquisition or requisitioning
of property, notwithstanding that it deprived
any person of his property”.
In Kavalappara Kottarathil Kochuni v. State of Madras (1),
it was held that cls. (1) and (2) of Art. 31 as amended
grant a limited protection against the exercise of different
powers. By cl. (2) of Art. 31 property is protected against
compulsory acquisition or requisition. The clause grants
protection in terms of widest amplitude against compulsory
acquisition or requisition of property, and there is nothing
in the Article which indicates that the property protected
is to be of individuals or corporations. Even the
expression ‘person’ which is used in cl. (1) is not used in
cls. (2) and (2A), and the context does not warrant the
interpretation that the protection is not to be available
against acquisition of State property. Any other
construction would mean that properties of municipalities or
other local authorities–which would admittedly fall within
the definition of State in Part III either cannot be
acquired at all or if acquired may be taken without payment
of compensation. Entry 42 in List III and cl. (2) of Art.
31, operate in the same field of legislation : the former
enunciates the content of legislative power, and the latter
restraints upon the exercise of that power. For
ascertaining whether an impugned piece of legislation in
relation to acquisition or requisition of property is within
legislative competence, the two provisions must be read
together. The two provisions being parts of a single
legislative pattern relating to the exercise of the right
which may for the sake of convenience be called of eminent
domain the expression ‘property’ in the two provisions must
have the same import in defining the extent of the power and
delineating restraints thereon. In other words Art. 31(2)
imposes restrictions on the exercise of
(1) [1960] 3 S.C.R. 887.
434
legislative power under Entry 42 of List Ill. Property
vested in the State may not therefore be acquired under a
statute enacted in exercise of legislative power under Entry
42 unless the’ Statute complies with the requirement of the
relevant clauses of Art. 31.
Re. (7) :
In Director of Rationing and Distribution v. The Corporation
of Calcutta (1), it was held by this Court by a majority
“The law applicable to India before the
Constitution was as authoritatively laid down
by the Privy Council in L. R. 73 I. A. 271.
The Constitution has not made any change in
the legel position. On the other ban& it has
clearly indicated that the laws in
force before January 26, 1950, shall continue
to have validity even in the new set-up except
in so far as they were in conflict with the
express provisions of the Constitution. The
rule of interpretation of statutes that the
State is not bound by a statute unless it is
so provided in express terms or by necessary
implication, is still good law”.
It was observed at p. 172 :
“The immunity of Government from the operation
of certain statutes, and particularly statutes
creating offences, is based upon the funda-
mental concept that the Government or its
officers cannot be a party to committing a
crime-analogous to the “prerogative of perfec-
tion’ that the King can do no wrong. Whatever
may have been the historical reason of the
rule, it has been adopted in our country on
grounds of public policy as a rule of inter-
pretation of statutes. That this rule is not
(1) [1961] 1 S.C.R. 158.
435
peculiar or confined to a monarchical form of Government. ”
The Court thereby approved the principle of exemption of the
sovereign from the general words of a Statute enunciated by
the Judicial Committee in Province of Bombay v. Municipal
Corporation of Bombay in the following terms
“The general principle to be applied in con-
sidering whether or not the Crown is bound by
general words in a statute is not in doubt.
The maxim of the law in early times was that
no statute bound the Crown Unless the crown
was expressly named therein, “Roy nest lie par
ascun statute si il ne soit expressement
nosme.” But the rule so laid down is subject
to at least one exception. The Crown may be
bound, as has often been said, “‘by necessary
implication”. If, that is to say
, it is
manifest from the very terms of the statute,
that it was the intention of the Legislature
that the Crown should be bound, then the
result is the same as if the Crown had been
expressly named. It must then be inferred
that the Crown, by assenting to the law,
agreed to be bound by its provisions.”
But the rule that the State is not bound, unless it is
expressly named or by necessary implication in the statute
is one of interpretation. In considering the true meaning
of words or expression used by the Legislature the Court
must have regard to the aim, object and scope of the statute
to be read in its entirety. The Court must ascertain the
intention of the Legislature by directing its attention not
merely to the clauses to be construed but to the entire
Statute; it must compare the clause with the other parts of
the law, and the setting in which the clause to be
interpreted occurs. Again in interpreting a Constitutional
document provisions conferring legislative power must
normally be interpreted liberally
(1) (1946) L.R, 73 I.A. 271, 274.
436
and in their widest amplitude. Vide-Navinchandra Mafatlal
v. The Commissioner of Income-tax, Bombay City(1),Entry 42
in List III does not, prima facie, contain any indication
that the expression “Property” therein is to be understood
in any restricted sense : nor do the other provisions of the
Constitution for reasons already stated suggest a restricted
meaning. The ground of absolute sovereignty of the States
which may not be interfered with by taking property vested
in the States by Parliamentary legislation has no legal
basis. Again denial of power to the Union Parliament to
legislate on allotted topics of legislation, in a manner
affecting the property vested in a State, may render
Parliamentary legislation virtually ineffective. No
provision in the Constitution suggesting a restricted
meaning of the word ‘property’ in the context of legislative
power has been brought to our notice. Regard being had to
the extensive powers which the Union Parliament and
Executive have for using State property, in the larger
public interest, the restrict on suggested that the power
does not extend to the acquisition of property of the States
does not seem to be contemplated. By making the requisite
declarations under Entries 54 of List 1, the Union
Parliament assumed power to regulate mines and minerals and
thereby to deny to all agencies not under the control of the
Union, authority to work the mines. It could scarcely be
imagined that the Constitution makers while intending to
confer an exclusive power to work mines and minerals under
the control of the Union, still prevented effective exercise
of that power by making it impossible compulsorily to
acquire the land vested in the States containing minerals.
The effective exercise of the power would depend-if such an
argument is accepted-not upon the exercise of the power to
undertake regulation and control by issuing a notification
under Entry 54, but upon the will of the State in the
territory of which mineral bearing land is situate. Power to
legislate for regulation and development of mines and
minerals
(1) [1955] 1 S.C.R. 829.
437
under the control of the Union, would by necessary
implication include the power to acquire mines and minerals.
Power to legislate for acquisition of property vested
in the States cannot therefore be denied to the Parliament
if it be exercised consistently with the protection afforded
by Art. 31.
The following findings will accordingly be recorded on the
issues:
Issue 1…in the affirmative.
2…..not such as to disentitle the Union
Parliament to exercise its legislative power
under Entry 42 List III.
3….answer covered by answer on
issue 2.
4….in the negative.
5….in the negative.
Finding on additional
issue..in the affirmative.
The suit will therefore stand dismissed with costs.
SUBBA RAO, J.-I regret my inability to agree. The summary
of the pleadings and the issues raised thereon are set out
in the judgment of the learned Chief justice and I need not
restate them.
Learned Advocate-General of West Bengal contended that the
State of West Bengal and the Union of India are sovereign
authorities in their respective spheres allotted to them by
the Constitution, and therefore it would be inconceivable
that one sovereign authority could acquire the property of
the other : they could do so only by mutual agreement.
438
That apart, the argument proceeded, on a true construction
of the relevant entry, i. e., entry 42 of List III, in the
context of the scheme of the Constitution and particularly
of Art. 31 thereof, it would be clear that the said entry
could not be invoked by the Union to acquire the land of the
State. Learned counsel appearing for the States of Madhya
Pradesh, Orissa., Assam and Madras supported the Advocate-
General of West Bengal. The Advocate-General of Punjab,
while supporting the argument of the Advocate-General of
West Bengal, also raised an alternative contention, namely,
that if the acquisition of State property was necessarily
incidental to the effective exercise of any of the powers
conferred on Parliament under Lists I and III of the Seventh
Schedule to the Constitution, it could make a law for
acquiring such property, provided it did not interfere with
the exercise of the governmental functions of the State; and
that the power to acquire land of the State was not
necessarily incidental to the regulation of mines. Learned
Government pleader for the State of Bihar supported the
Union of India in its contention that Parliament can make a
law providing for the acquisition of State property by
virtue of entry 42 of List III.
Learned Attorncy-General, appearing for the Union of India,
argued that entry 42 of List III, on its natural and
grammatical construction, sustains the impugned law;- he
would also seek to support it on the basis of entries 52 and
54 of List I and entry 33 of List 111. In any event, he
contended, the impugned law could be made by Parliament by
virtue of Art. 148 of the Constitution and entry 97 of List
I. He also questioned the correctness of the proposition
that the Union and the States are sovereign authorities in
their respective fields and advanced the theory that under
our Constitution the States are subordinate to the Union.
439
Before I attempt to construe the relevant provisions of the
Constitution, it would be convenient to have a conspectus of
the Constitution as far as it is material to the present
enquiry, as the arguments, to some extent, are linked With
the scope and nature of the powers of the Union and the
States thereunder. The Constitution purports to have been
enacted by the people of India who have solemnly resolved to
constitute India into a sovereign democratic republic.
India is described as a Union of States. The preamble to
the Constitution indicates that the political sovereignty of
the country rests in the people of India and the legal
sovereignty is divided between the constitutional entities
of the Republic of India, namely, the Union and the
different States. Part V of the Constitution deals with the
Union and the instrumentalities through which it is
authorized to function, namely, the legislature, the
executive and the judiciary. Part VI provides for the
States and the organs through which they can function,
namely, the legislature, the executive and the judiciary.
Part XI lays down the relation between the Union and the
States : it distributes the legislative powers and regulates
the administrative relationship between them; it devises
various methods to resolve conflicts that may arise in the
exercise of their powers. Article 246 demarcates the
legislative fields’ with precision and emphasizes the
exclusive power of the Union and the States to make laws in
respect of the matters enumerated in the Lists in the
Seventh Schedule and allotted to the Union or the States, as
the case may be. Even in regard to the executive power,
Arts. 73 and 162 mark out the respective fields of the Union
and the States. Chapter 11 of Part XI provides for the
control of the Union over the States in certain specified
cases. Part XII deals with finance, property, contracts,
rights, liabilities, obligations and suits; it distributes
the revenues between the Union and the States, provides for
the allocation between them of certain taxes collected by
the Union, creates
440
separate consolidated funds described as the consolidated
fund of India and the consolidated fund of the State, and
enacts certain exemptions, among others, of State properties
from Union taxation and Union properties from State taxation
and authorizes the Union as well as the States to borrow
money on the security of their respective properties subject
to certain limitations. Chapter III of part XII deals with
acquisition of property, assets, rights, liabilities and
obligations in certain cases; under Art. 294,
“As from the commencement of this Consti-
tution-
(a) all property and assets which
immediately before such commencement were
vested in His Majesty for the purposes of the
Government of the Dominion of India and all
property and assets which immediately before
such commencement were vested in His Majesty
for the purposes of the Government of each
Governor’s Province shall vest respectively in
the Union and the corresponding State, and
(b) all rights, liabilities and obligations
of the Government of the Dominion of India and
of the Government of each Governor’s Province,
whether arising out of any contract or
otherwise, shall be rights, liabilities and
obligations respectively of the Government of
India and the Government of each corresponding
State………………………. “.
Under Art. 296, any property accruing by way of eschewal or
lapse, or as bona vacantia, if it is property situate in a
State, shall vest in the State and in any other case it
shall vest in the Union. Article 297 vests all lands,
minerals and other things of value underlying the ocean
within the territorial matters of
441
India in the Union. Article 298, which was substituted by
the Constitution (Seventh Amendment) Act, 1956, extends the
executive power of the Union and of each State to the
carrying on of any trade or business and to the acquisition,
holding and disposal of property and the making of contracts
for any purpose subject to the legislative powers of the
Union, or of the State, as the case may be. Article 300
says that the Government of India and the Government of a
State may sue or be sued by the name of the Union of India
or by the name of the State, as the case may be, i.e., they
may be sued as jurists personalities. Chapter 1 of Part XIV
provides for the mode of recruitment and regulation of
conditions of service of different services in the Union and
the States. Part XV provides for an independent machinery
for elections to the Parliament and the State Legislatures.
Part XVIII deals with emergency provisions hereunder the
President, when the security of India or any part of the
territory thereof is threatened by war, external aggression
or internal disturbances or when the constitutional
machinery of the States fails or when the financial
stability or credit of India or any part thereof is
threatened, may, by proclamation, declare an emergency to
that effect; in those events, subject to certain safeguards,
the Centre is authorized to take over the administration of
the State in whole or in part for a specified period.
Article 368 provides for the amendment of the Constitution;
and in regard to certain provisions thereof, such as the
Lists in the Seventh Schedule, the representation of the
States in Parliament, the amendment shall also require to be
ratified by the Legislatures of not less than one-half of
the States by a resolution to that effect passed by those
Legislatures.
Under the scheme of our Constitution, sovereign powers are
distributed between the Union and the States within the’
spheres allotted to them. The Union exercises the sovereign
powers within its sphere
442
throughout the territories of India, and the States exercise
their sovereign powers within their respective territories
in respect of their allotted fields. The Legislatures of
the States as well as the Parliament are elected on adult
franchise. The legislative field of the Union is much wider
than that of the States; and in case of conflict in the
common field allotted to them, the Union law generally
prevails over the State law. In regard to Bills passed by a
Legislature of a State, the Governor may, and in the case of
bills derogating from the powers of the High Court shall,
reserve them for the consideration of the President: though
this is in theory a limitation on the legislative power of
the State, in practice the Governor only acts on the advice
of the ministry which has the confidence of the Legislature.
Except in the case of a bill derogating from the powers of
the High Court when the Governor is bound to refer it to the
President, in other cases it is not likely that the Governor
would refer a bill to the President contrary to the advice
of the ministry. In a few cases of legislation where inter-
State element or conflict of laws are involved, sanction of
the President is made a condition precedent for their
validity: see Arts. 200, 254, 304 etc.
Coming to the executive field, both the Union and the State
are manned by ministers responsible to their respective
Legislatures elected on adult franchise. The executive
powers of the Union as well as of the States extend to
matters in respect of which they have power to make laws,
though the executive of the Union can give directions to a
State to ensure compliance with the laws made by Parliament
and any. existing law which applies in that State. The
State is also enjoined to exercise its powers in such a way
as not to impede or restrict the exercise of the power of
the Union executive; and the executive of the Union is
empowered to give directions to the State as may be
necessary for that purpose. So too, the Union executive can
give
443
directions to a State as to the construction and maintenance
of means of communications declared to be of national
importance. It is also authorised to confer powers on
States in respect of matters to which the executive power of
the Union extends. By and large, with minor exceptions, the
Union as well as the State executive functions in its
exclusive field, and the Union executive’s directives are
intended to facilitate the carrying out of the Union
purposes.
Every State has its judiciary and the highest court in a
State is the High Court of judicature. The expenditure of
the State judiciary is charged on the consolidated fund of
the State concerned but the judges of the High Court are
appointed by the President; and appeals lie to the Supreme
Court of India in certain matters and it has also
extraordinary powers to entertain appeals in other matters
or to issue writs to enforce fundamental rights. But both
the High Courts and the Supreme Court interpret the State
and the Union laws and resolve conflicts, if any. An
integrated system of judiciary has been accepted by the
Constitution and the judicial control operates both ways,
though the final word is with the Supreme Court. That
cannot by itself affect the federal principle, as even in
Australia an appeallies to the Privy Council, under certain
circumstances, from the decisions of the High Court of the
Common. wealth of Australia.
In financial matters,, though the States and the Union have
consolidated funds of their own, the sources allotted to the
States are comparatively meagre and those allotted to the
Union appear to be perennial; the States also depend upon
the Union for allocation of funds from and out of the taxes
collected by it and also for grants; though there is no
direct control by the Union over the field of finance of the
States, there will always be indirect pressure on the States
in that field, The Union, being in charge
444
of the purse strings, can always, to use an euphemistic
term, pursuade the States to take its advice. In case of
emergencies, such as, war, external aggression, internal
disturbances, failure of the constitutional machinery and
financial instability, extraordinary powers are conferred on
the Union, subject to certain limitations, to interfere with
the States’ administration; but the provisions relating to
emergency situations are really in the nature of safety
valves to protect the country’s future. Parliament has also
the power to change the boundaries of the territories or
form new territories, but that is also an extraordinary
provision to meet certain emergencies.
There is also another side of the picture. Parliament shall
consist of the President and two Houses respectively known
as the Council of States and the House of’ the people; the
Council of States shall consist, apart from the 12 nominated
members, not more than 238 representatives of the States and
the Union territories. A part of the Parliament is,
therefore, comprised of the representatives of the State
Legislatures. Though the powers of the Council of States
are not co-equal with those of the House of the People,. to
the extent it exercises its legislative powers the States
also have control over the Union. The States are also
entitled to be consulted in the matter of the amendment of
certain provisions of the Constitution : vide Art. 368.
The foregoing resume of the provisions of the Constitution
reveals the following picture : The political sovereign is
the people of India and the legal sovereignty is divided
between the constitutional entities i.e., the Union and the
States, who are juristic personalties possessing properties
and functioning through the instrumentalities created by the
Constitution. Though the jurisdiction of the Union is
confined to some subjects, it extends throughout India,
whereas that of the States is confined to their
445
territorial limits. Within their respective spheres both in
the legislative and executive fields they are supreme; their
inter se relationship is regulated by specific provisions.
The relation between the Union and the States cannot be
found in the legislative fields demarcated by the Lists, but
can only be discovered in the specific constitutional
provisions forging links between them, The emergency powers
of the Union to meet extraordinary situations do not affect
its exclusive fields of operation in normal times.
On the basis of a comparison of the Indian Constitution with
that of America, it is argued that none of the important
criteria of a federation is present in the Indian
Constitution. “Federalism in the United States embraces the
following elements : (1) as in all federations, the union of
several autonomous political entities, or “States”, for
common purposes ; (2) the division of legislative powers
between a “National Government”, on the one hand and
constituent “States”, on the other, which division is
governed by the rule that the former is “a government of
enumerated powers” while the latter arc governments of
“residual powers”; (3) the direct operation, for the most
part, of each of these centers of Government, within its
assigned sphere, upon all persons and property within its
territorial limits; (4) the provision of each center with
the complete apparatus of law enforcement, both executive
and judicial; (5) the supremacy of the “National Government”
within its assigned sphere over any conflicting assertion of
“state” power; (6) dual citizenship.” The aforesaid elements
are no doubt present in the American Constitution, but it is
not possible to contend that unless all the said criteria
exist a constitution cannot be described as a federal one.
Though on paper the American Constitution is a typical
federation, in practice the Supreme Court of the United
States of America by evolving and developing many legal
doctrines and implied powers has
446
invested the Federal Government with large powers to enable
it to interfere indirectly in the States field. Even in
regard to judicial power, though the American Supreme Court
was originally conceived to be a Federal Court concerning
itself with federal laws, in fact it authoritatively
interprets the State laws when they come into conflict with
federal laws. The point is that even in America there is no
federation in the orthodox sense of the term.
So too, the Constitution of Australia clearly demarcates the
exclusive fields of the Commonwealth and the States and
jealously guards the State rights, but in practice the
States have been reduced to the position of agencies of the
Commonwealth Government. This was brought about because of
the financial grip the Centre has over the State : ’see
Wheare on “‘Federal Government.”
But in Canada the position is the reverse. Though the
Centre and the Provinces have their distinctive Lists of
powers, the Central Government has certain limited powers of
control over the governments of the ten Provinces of Canada;
the residuary powers are given to the Centre and not to the
States. Though undoubtedly some elements of unitary form of
government are present, the constitutional custom evolved
practically a federal State and, as one author puts it, “no
dominion government which attempts to stress the unitary
elements in the Constitution at the expense of the federal
elements would survive.” It is, therefore, clear that in
every federal Constitution there are either textually or
customarily some unitary elements. The real test to
ascertain whether a particular Constitution has accepted the
federal principle or not is whether the said Constitution
provides for the division of powers in such a way that the
general and regional governments are each within its sphere
substantially independent of the other. The reservation
447
of the residue of power or the power to interfere with
States’ affairs in emergencies in the Union may affect the
balance of power in a federation, but does not destroy its
character. Some Constitutions show a marked bias towards
the Federation and the others towards the States, but
notwithstanding the varying emphasis they accept the federal
principle as their basis. Though some authors, accepting
the American Constitution as the yardstick for a federation,
prefer to describe Constitutions with a bias towards Union
as quasi-federations, I do not think it is inappropriate to
describe all Constitutions which substantially accept the
federal principle as Federations. Applying this test, I
have no doubt that the Indian Constitution is a federation,
as the units in normal times exercise exclusive sovereign
powers within the fields allotted to them.
A further distinction is sought to be made between the
American Constitution and the Indian Constitution on the
basis of the historical evolution of the two countries.
While in America, the argument proceeds, the pre-existing
sovereign States were brought together under a federation,
in India the Constitution conferred certain powers on the
existing administrative units or such units newly
constituted. The status of a political entity Under a
particular constitution does not depend upon its history but
upon the provisions of the constitution. The pre-existing
independent States may not be given any appreciable power
under a constitution, while newly formed States may enjoy
larger power under another constitution. A federal
structure is mainly conceived to harmonize existing
conflicting interests and to provide against future
conflicts. India is a vast country: indeed, it is described
as a sub-continent. Historically, before the advent of the
Constitution, there were different Provinces enjoying in
practice a fair amount of autonomy and there were
innumerable States with varying forms of government ranging
from pure autocracy
448
to guided democracy. There were also differences in
language, race, religion etc. There were also foreign
pockets expected sooner or later to be incorporated, with
the main country. In those circumstances our Constitution
adopted a federal structure with a strong bias towards the
Centre. Under such a structure, while the Centre remains
strong to prevent the development of fissiparous tendencies,
the States are made practically autonomous in ordinary times
within the spheres allotted to them.
With this background I shall now proceed to consider the
arguments advanced by learned counsel. I shall first take
up the argument based upon entry 42 of List 111, i.e.,
acquisition and requisitioning of property. The provisions
relevant to the said question are as follows.,
Article 245: (1) Subject to the provisions of
this Constitution, Parliament may make laws
for the whole or any part of the territory of
India, and the Legislature of a State may make
laws for, tile whole or any part of the State.
(2)…No law made by Parliament shall be
deemed to be invalid on the ground that it
would have extra-territorial operation.
Article 246: (1) Notwithstanding anything in
clauses (2) and (3), Parliament has exclusive
power to make laws with respect to any of the
matters enumerated in List I in the Seventh
Schedule (in this Constitution referred to as
the “Union List”).
(2)…Notwithstanding anything in clause (3),
Parliament and, subject to clause (1), the
Legislature of any State also, have power to
make laws with respect to any of the matters
enumerated in List III in the Seventh Schedule
(in
449
this Constitution referred to as the
“Concurrent List”).
(3)…Subject to clauses (1) and (2), the
Legislature of a State has exclusive power to
make laws for such State or any part thereof
with respect to any of the matters enumerated
in List 11 in the Seventh Schedule (in this
Constitution referred to as the State List”).
The entries relevant to acquisition, as they stood before
the Constitution (Seventh Amendment) Act, 1956. read as
follows:
Entry 33 of. List I. Acquisition or
requisitioning of property for the purpose of
the Union.
Entry 36 of List II. Acquisition or
requisitioning of property, except for the
purposes of the Union, subject to the
provisions of entry 42 of List Ill.
-Entry 12 of List III. Principles on which
compensation for property acquired or
requisitioned for the purposes of the Union or
of a State or for any other public purpose is
to be determined, and the form and the manner
in which such compensation is to be given.
After the said amendment, entry 33 of List I and entry 36 of
List II were omitted; and entry 42 of List 111, as
substituted by the Seventh Amendment reads:
Acquisition and requisitioning of property”.
Article 31. (1) No person shall be deprived of
his property save by authority of law.
(2)…No property shall be compulsorily acq-
uired or requisitioned save for a public
purpose and save by authority of a law which
provides
450
for compensation for the property so acquired
or requisitioned and either fixes the amount
of the compensation or specifies the
principles on which, and the manner in which,
the compensation is to be determined and
given; and no such law shall be called in
question in any court on the ground that the
compensation provided by that is not adequate.
(2A) Where a law does not provide for the
transfer of the ownership or right to
possession of any property to the State or to
a corporation owned or controlled by the
State, it shall not be deemed to provide for
the compulsory acquisition or requisitioning
of property, notwithstanding that it deprives
any person of his property.
(3) No such law as is referred to in clause
(2) made by the Legislature of a State shall
effect unless such law, having been reserved
or the consideration of the President, has
received his assent.
I have already held that the sovereign powers have been
distributed between the constitutional entities, namely, the
Union and the States; one such sovereign power is the power
to acquire or requisition the property of a citizen for a
public purpose. The doctrine of “Eminent Domain” is defined
by Willis as “the legal capacity of sovereign, or one of its
governmental agents to take private property for a public
use upon the payment of just compensation”. Nicholas in his
book on Eminent Domain, Vol. I, describes it as a power of
the sovereign to take a property for public use without the
owner’s consent: In Chiranjit Lal Chowdhri v. The Union of
India (1), Mukherjea, J., as he then was, accepted this
definition when he said:
“It is a right inherent in every sovereign to
take and appropriate private property
belonging
(1) [1950] S.C.R. a69,901-902.
451
to individual citizens for public use. This
right, which is described as eminent domain in
American law, is like the power of taxation,
an offspring of political necessity, and it is
supposed to be based upon an implied
reservation by Government that private
property acquired by its citizens under its
protection may be taken or its use controlled
for public benefit irrespective of the wishes
of the owner.”
It is, therefore, clear that the power to acquire the
property of a citizen for a public purpose is one of the
implied powers of the sovereign. In our Constitution,,
before the Constitution (Seventh Amendment) Act, 1956, this
power was divided and distributed between the Union and the
States; the Union, by virtue of entry 33 of List I could
acquire a property for Union purposes, and by virtue of
entry 36 of List II a State could acquire a property for
State purposes: the result was that a State could not
acquire a property of a citizen for a Union purpose, and the
Union could not acquire a property of a citizen for a State
purpose. To avoid this difficulty entry 33 of List I and
entry 36 of List II were omitted and the present entry 42 of
List III has been substituted for the earlier entry 42 in
the said List. Now both Parliament and the Legislature of a
State can make a law providing for the acquisition and
requisitioning of property for Union or State purposes. But
the crucial point that is implicit in the power of
acquisition by a sovereign is that it must relate only to
the property of the governed, for a sovereign cannot
obviously acquire its own property. This sovereign power of
Eminent Domain under our Constitution is conferred on, or
divided between, the Union and the States. Prima facie,
therefore, entry 42 of List III can only mean acquisition
and requisitioning of private property by a State. It is
also implicit in the concept of acquisition or requisition-
ing that the acquisition or requisitioning shall be for
452
a public purpose on payment of just compensation. The said
concept has acquired a well defined connotation not only in
the foreign countries from which it is borrowed, but also in
the legislative history of our country. That is why our
Constitution laid down in express terms that any law made
shall not violate the fundamental rights. One of the funda-
mental rights is that enshrined in Art. 31(2) and it says
that no property shall be compulsorily acquired or
requisitioned save for a public purpose and save by
authority of law, which provides for compensation for the
property so acquired or requisitioned. The scope of entry
42 of List III would be apparent if it is read along with
the said article. Unless it is held that Art. 31(2) applies
also to a law of acquisition of a State property by the
Union, the result will be that Parliament can make a law
providing for the acquisition of a property of a State for a
purpose which is not a public purpose and without payment of
compensation, while it cannot do so in the case of
acquisition of a private property. If Art. 31, does not
govern the law of acquisition of a State property, it
indicates that entry 42 of List III does not deal with
acquisition of a State property, for otherwise it would lead
to the anomaly of acquisition of a State property by a law
of Parliament without safeguards inherent in the doctrine of
Eminent Domain. That is why the learned Attorney-General
made an attempt to persuade us to hold that Art. 31(2)
applies also to a law providing for the acquisition of a
State property. He contended that after the Constitution
(Fourth Amendment) Act, 1955, Art. 31(1) is separated from
Art. 31(2) and that the phraseology of Art. 31(2), if
independently construed, is wide enough to take in
acquisition of a State property. And for this position be
relied upon the judgment of this Court in Kavalappara
Kottarathil Kochuni v. The State of Madras (1). There, this
Court held that after the Constitution (Fourth Amendment
Act, 1955, cls. (1), (2) and (2A) of Art. 31 dealt with
(1)..[1960] 3 S.C.R. 887.
453
different subjects-cls. (2) and (2A) dealing with
acquisition and requisitioning, and cl. (1) with deprivation
of property with authority of law. That decision has no
bearing on the construction of cl. (2) of the said Article
vis-a-vis the question of acquisition of a State property.
The fact that this Court held that the two clauses of the
Article deal with two different subjects does riot mean that
cl. (1) has no bearing on the interpretation of cl. (2) of
the same Article. Clause (2) of Art. 31 reads
“No property shall be compulsorily acquired or
requisitioned save for a public purpose and
save by authority of a law which provides for
compensation for the property so acquired or
requisitioned and either fixes the amount of
the compensation or specifies the principles
on which, and the manner in which, the
compensation is to be determined and given;
and no such law shall be called in question in
any court on the ground that the compensation
provided by that law is not adequate.”
Clause (2A) thereof reads
“Where a law does not provide for the transfer
of the ownership or right to possession of any
property to the State or to a corporation
owned or controlled by the State, it shall not
be deemed to provide for the compulsory
acquisition or requisitioning of property,
notwithstanding that it deprives any person of
his property.”
It is true that cl. (1) opens out with the words ”‘no
person” whereas cl. (2) does not repeat that expression; but
in the context, I find it difficult to hold that cl. (1)
deals with property of a person and cl. (2) deals with
property of persons and States. Article 31 deals with a
fundamental right in regard
454
to property-cl. (1) with deprivation of property, and cl.
(2) with acquisition of property. As cl. (1) makes it clear
that property shall be of a person, it is not necessary to,
mention over again that the property acquired should be of a
person. The idea of compulsory acquisition and
requisitioning in cl. (2) indicates that the acquisition or
requisitioning is by a State of a person’s property. That
is made clear by cl. (2A) which says that the law of
acquisition shall provide for the transfer of ownership or
right to possession of any property to the State or to a
corporation owned or controlled by the State. The transfer
of property is to the State and a fortitude the transferor
must be one other than the State. In the context it can
only mean the person mentioned in cl. (1). The use of the
definite article in the expression “the State” is a further
indication that transfer inter se between State and State or
Union and State is not contemplated by that clause. if that
was the intention it would have provided expressly for a
transfer between a State and a State. Even so, the learned
Attorney-General contends that State is also a person.
“Person” has not been defined in the Constitution; but a
perusal of the various provisions of Part III clearly shows
that the expression “Person” is used in contradistinction to
“State.” Indeed, most of the fundamental rights are
conferred on a person or a citizen against infringement of
his rights by a State. The expression “person” in Arts. 14,
18, 20, 21, 22, 25 and 27 does not and cannot include a
“State”. Indeed, there is no other article in this part
wherein the expression “person” is used in the sense of
“State”. Prima facie, therefore, the expression “person” in
Art. 31 will not include “State”. There is nothing in the
said Article which compels me to give a strained meaning
particularly when the Article is consistent with the
recognized concept of Eminent Domain and fits in squarely
with the scheme of fundamental rights. But it is said that
if a State cannot be a “Person”, a corporation or a
455
company will have to be excluded from its scope. There is
no definition of the expression “person” in the
Constitution; but it is defined in the General Clauses Act,
1897, as including any company or association or body of
individuals, whether incorporated or not. Though this
definition is an enlargement of the natural meaning of the
expression “person”, even the extended meaning does not
include the State. Anyhow the question whether the said
expression takes in a corporation or not, does not call for
a decision in this case. ‘In this context two decisions of
this Court may usefully be referred to. In Director of
Rationing and Distribution v. The Corporation of Calcutta
(1), it was held that “‘the rule of interpretation of
statutes that the State is not bound by a statute unless it
is so provided in express terms, or by necessary
implication, is still good law”. Though that rule has been
laid down in the context of a statute, there is no reason
why a different principle should apply in the construction
of the Articles of the Constitution. If that rule of
interpretation is applied to Art. 31 (2) of the
Constitution, it will have to be held that, as the said rule
does not in terms or by necessary implication provide for
the acquisition of State property, a State property cannot
be the subject-matter of the said rule. Reliance is placed
upon another judgment of this Court in The State of Bihar v.
Rani Sonabati Kumari (2), in support of the contention that
the expression “”person” embraces a State. There, the
decision was that when the State disobeyed the order of
injunction issued by the court, the said order could be
enforced against the State in the mariner prescribed by 0.
XXXIX, r. 2 (3), of the Code of Civil Procedure. A
plaintiff may apply to the court for a temporary injunction
to restrain a defendant from committing the injury
complained of. Under 0. XXXIX, r. 2 (3) of the code,
“In case (if disobedience, or of breach of any
(1) [1961] 1 S.C.R. 158.
(2) [1961] 1 S.C.R. 728.
456
such terms, the Court granting an injunction
may order the property Of the person guilty of
such disobedience or breach to be attached,
and may also order such person to be detained
in the civil prison for a term not. exceeding
six months, unless in the meantime the Court
directs his release.”
This Court, on a construction of cls. (1) and (3) of r. 2 of
0. XXXIX of the Code of Civil Procedure held that the
expression ‘person’ in r. 2 (3) has been employed
compendiously to designate everyone in the group “Defendant,
his agents, servants and workmen” and not for excluding any
defendant against whom the order of injunction has primarily
been passed. But at the same time, this Court made it clear
that the provision for detention does not apply to the
State; and this could only be because the State is not a
“Person” who could be detained. The decision is based upon
the phraseology of the two clauses of 0. XXXIX, r. 2 of the
Code of Civil Procedure and does not lay down as a general
proposition that the expression “person” wherever it appears
shall include a “State”.
The historical background of Art. 31 and entry 42 of List
III also does not bear out the construction that acquisition
of a State property is contemplated by the entry 42 of List
III. In the Government of India Act, 1935, acquisition was
a provincial subject, being entry 9 of List 11, Section 299
of the Government of India Act, 1935, read :
(1) No person shall be deprived of his property in British
India save by authority of law.
(2) Neither the Federal nor a Provincial Legislature shall
have power to make any law authorising the compulsory
acquisition for public purposes of any land, or any
457
commercial or industrial undertaking, or any interest in, or
in any company owning, any commercial or industrial
undertaking, unless the law provides for the payment of
compensation for the property acquired and either fixes the
amount of the compensation, or specifies the principles on
which, and the manner in which it is to be determined.”
Broadly, cls. (1) and (2) of s. 299 of the said Act
correspond respectively to cls. (1) and (2) of Art. 31 of
the Constitution, under the said Act, the Federal
Legislature could not make a law acquiring the land of a
Province for the simple reason that the subject of
acquisition of land was exclusively a Provincial subject.
But s. 127 provided for the contingency of the Federation
requiring the land belonging to a Province. The section
read :
“The Federation may, if it deems it necessary
to acquire any land situate in a Province for
any purpose connected with a matter with
respect to which the Federal Legislature has
power to make laws, require the Province to
acquire the land on behalf and at the expense,
of the Federation or, if the land belongs to
the Province, to transfer it to the Federation
on such terms as may be agreed or, in default
of agreement, as may be determined by an
arbitrator appointed by the Chief Justice of
India.”
A combined reading of the said provisions indicates that
though under the Government of India Act the federal
Legislature could not make a law empowering the Federation
to acquire the land belonging to a Province, the Federation
may require the Province to transfer to it the land owned by
the Province on terms agreed upon between them or, in
default of agreement, determined by an arbitrator: that is
to
458
say, under the Government of India Act transfer of lands
owned by a Province to the Federation could be effected only
under an agreement or an award. Under the Constitution,
before it was amended in 1956, Parliament as well as State
Legislatures were empowered to make laws for acquisition of
lands for their respective purposes-Parliament for the Union
purposes and a State Legislature for the purposes of the
State. Prima facie the relevant entries, namely, entry 33
of List I and entry 36 of List II, could have related only
to acquisition of private lands for purposes of the Union or
the State, as the case may be. But if the Union or the
State wanted the land held by the other, it could secure the
same only under Art. 298 (1), as it stood then. The said
article read :
“The executive power of the Union and of each
State shall extend, subject to any law made by
the appropriate Legislature, to the grant,
sale, disposition or mortgage of any property
held for the purposes of the Union or of such
State, as the case may be, and to the purchase
or acquisition of property for those purposes
respectively, and to the making of contracts.”
The phraseology used in this article clearly shows that the
land held by the Union or the State for the Union or the
State purposes respectively, could be transferred to the
other only in the manner indicated in Art. 298 (1). By the
Constitution (Seventh Amendment) Act, 1956, the subject of
acquisition and requisitioning of land was placed in List
III as entry 42, and entry 33 of List I and entry 36 of List
II were deleted and Art. 298 was substituted by a new
Article. The changes made in Art. 298 are not material for
the present purposes. It is, therefore, manifest that under
the Government of India Act, 1935, compulsory acquisition of
land was a provincial subject, that tinder the Constitution,
as it
459
originally stood, Parliament could make a law for acquiring
such a property, for the Union purposes and the State
Legislature for the State purposes by virtue of different
entries and that, after the amendment, both Parliament and
State Legislatures could make a law for the acquisition of
such a property by virtue of entry 42 of List 111. But if
the Federation or a province under the Government of India
Act, or the Union or the State under the Constitution wanted
a property owned by the other, it could secure it only under
an agreement and not otherwise. This scheme clearly
demonstrates that a law whether made by Parliament or by a
State Legislature cannot provide for the acquisition of
property owned by the other. I, therefore, hold that
Parliament cannot make a law by virtue of entry 44 of List
111 for the acquisition by the Union of the property owned
by a State.
Reliance is then placed upon Art. 248 of the Constitution,
read along with entry 97 of List I of the Seventh Schedule
to sustain the wider power of the Parliament. Article 248
reads :
(1) Parliament has exclusive power to make
any law with respect of any matter not
enumerated in the concurrent List or State
List.
(2) Such power shall include the power of
making any law imposing a tax not mentioned in
either of those Lists.
Entry 97 of List I. Any other matter not
enumerated in List II or List III including
any tax not mentioned in either of those
Lists.
It is contended that if acquisition of a State property does
not fall under entry 42 of List III it must fall under entry
97 of List 1. Emphasis is laid upon the
460
words “any matter” in Art. 248 and a contention is advanced
that the expression “any matter” has the widest connotation
and, therefore, it empowers the Parliament to make a law in
regard to any subject, including taking over of the property
of a State. There are two answers to this argument :
firstly, a residuary entry cannot travel beyond the scope of
the division of powers. The sovereign legislative power is
divided between different entitles. The entire legislative
field is divided between the Union and the States. The
method of allocation adopted is by enumeration of subjects.
The residuary article and the entry are the devices adopted
to entrust to the Union any subject omitted by mistake or
otherwise. The residuary legislative field cannot possibly
cover inter-State relation, for that matter is not
distributed between the Union and the States by way of
legislative Lists. That apart, when a specific provision is
made for acquisition of a property, it would be incongruous
to confine that entry to properties other than those of the
States and to resort to the residuary power for acquiring
the properties of States. If the power of acquisition can
be construed to mean only acquisition of properties in the
States and not properties belonging to the States, it must
be held that the power of acquisition is limited to that
extent. Further if Art. 31 (2) applied only to a law of
acquisition of a private property as I have already held,
the anomaly that arises if the said clause does not apply to
entry 42 of List III will equally arise in respect of entry
97 of List II would, therefore. hold that Parliament cannot
make a law for the acquisition of a State property by virtue
of entry 97 of List 1.
There would be many anomalies in the working of the
Constitution if the contention of the Union was accepted.
As the subject of “acquisition and requisitioning” is in the
Concurrent List both Parliament and a State Legislature can
make different
461
laws for acquiring the property of the State or of the
Union, as the case may be. Under the law made by
Parliament, the State property can be acquired and on
acquisition it becomes the Union property; then under the
law made by tile State, the same property can be reacquired
by the state as the Union property. It is said that this
vicious circle cannot arise under the Constitution.
Reliance is first placed upon Art. 31(3) of the
Constitution, which says :
“No such law as is referred to in clause (2)
made by the Legislature of a State shall have
effect unless such law, having been reserved
for the consideration of the President, has
received his assent.”
But I have held that Art. 31 (2) has no application to a law
providing for the acquisition of a State property and if so,
cl. (3) thereof will also not apply to such a law. Even if
Art. 31(3) applies, there is nothing which prevents the
President from giving his consent to a State to acquire the
Union property, though the Union executive may ordinarily be
relied upon not to do so. But we must test the validity of
a contention on the legal possibilities and not on what a
particular executive may or may not do. If so, Art. 31(3)
cannot always prevent the conflict indicated above. It is
-said that Art. 254(1) would invariably resolve such
conflicts in favour of the law made by the Parliament. But
Art. 254(1) can come in aid of the law made by Parliament
only if there is repugnancy between that law and that made
by the. State Legislature. But in the illustration given
there is no such repugnancy, for the law made by Parliament
provides for the acquisition of the property of the State,
whereas the law made by the State provides for the
acquisition of the property owned by the Union. The moment
the State property is acquired by the Union it becomes the
property of the Union. In such a context there is no
462
repugnancy between the two laws though the purpose of the
Union law can be defeated by the exercise of a power under a
State law. Article 254(2) also saves the laws of the States
if the previous consent of the President has been taken;
such a consent is legally possible, though ordinarily the
Central Executive can beexpected to withhold it. The
Constitution couldnot have intended such an unresolved
conflictbetween the Union and the States. Secondly,if
the contention of the Union be correct, Parliament can make
a law making a provision for acquiring the entire property
of a State without compensation. It can indirectly prevent
the State from functioning; it can acquire the buildings
owned by the State and used for its offices; it can take
away the substratum of the State’s jurisdictiony acquiring
not only its offices but also its buildings and works, which
are maintained for the public good. Though Parliament may
not be expected to create such a situation, nothing will
prevent it from doing so. A construction which may prevent
the State from functioning as visualized by the Constitution
cannot easily be accepted unless it is clearly expressed in
the Constitution itself. It is said that Parliament can
destroy the State under Art. 3 of the Constitution and,
therefore, nothing more untoward can happen to a State if
this limited power is conceded, as a larger power has
already vests in the Parliament. Article 3 only enables the
Parliament to make a law for the formation of anew State,
alteration of boundaries of any State, increase or decrease
of the area of any State or alteration of the name of any
State. Such a power is expressly given to the Parliament
and, therefore, it can function under that Article. But
that has nothing to do with a power to acquire the property
of a State. Thirdly, when the Constitution created legal
entities and distributed the sovereign powers between them,
it is unreasonable to construe the ambiguous provisions of
the Constitution in such a way as to create
463
conflicts between them or to make one a creature of the
other. It is said that if such a power is not conceded to
the Union, the States may not cooperate with the Union, in
the implementation of the policies conceived in the interest
of the whole country. This argument may have some relevance
in America or in Australia where the States are powerful
under their respective Constitutions, but absolutely none
under our Constitution whereunder the States are practically
beholden to the Union in many ways. It was necessary in
America to evolve implied powers to implement national
policies; in India the Constitution has conferred on the
Union ample powers in that direction. In such a situation
this Court should be very reluctant to curtail the already
limited powers of the States and should not, by
construction, convert the federal structure into a unitary
form of government which the Constitution has rejected.
At this stage another argument advanced by learned
Advocate-General for West Bengal may be noticed. He
contends that’ under Art. 294 of the Constitution all the
coal-mines vested in His Majesty for the purposes of the
Province vested in the State of West Bengal as from the
commencement of the Constitution; and that, therefore,
unless there is an express constitutional provision for
divesting them, they could not be acquired by a law made by
Parliament. I shall consider the decisions cited at the Bar
in this context at a later stage. If the argument advanced
on behalf of the Union is correct, viz., that there is a
legislative power in the Parliament to acquire the property
of a State, Art. 294 cannot be in the way of the Union law
providing for the acquisition of the State property. That
apart, Art. 294 applies only to the property vested in the
State at the commencement of the Constitution and not to
property that has been subsequently acquired by it. In this
case, the zamindaries where the coal-mines are
464
situate vested in the State of West Bengal subsequent to the
commencement of the Constitution by reason of a State law.
But it is contended that though the surface soil of the
zamindari was with the zamindars, the coal-mines vested in
His Majesty before the Constitution and that at the
commencement of the Constitution continued to vest in the
State. But this argument is contrary to series of decisions
given by the Privy Council : I see Harinarayan Singh Deo v.
Sriram Chakravarti (1); Durga Prasad Singh v. Brajnath Bose
(2); Sashi Bhushan Misra v. Jyoti Prasad Singh Deo (3);
Rajkumar Thakur Girdhari Singh v. Megh Lal Pandey (4); and
Raghunath Roy Marwari v. Durga Prasad Singh (5). Though
these decisions were given in dispute between zamindars and
their tenants, the observations in some of the judgments run
counter to the argument of learned Advocate-General. He has
not placed before us any authority to support his
contention; but he alternatively suggested that though the
estates with the coal-mines may have belonged to the
zamindars, the reversion in the said estates was with His
Majesty and subsequently with the State. This is contrary
to the principles of permanent settlement, for under the
permanent settlement the British Government granted to the
zamindars a permanent hereditary property in their lands for
all times to come and fixed a moderate assessment of public
revenue on such lands, which could not be increased under
any circumstances. The sannads granted under the permanent
settlement regulations did not reserve any reversionary
right to the Government. As I have held that, even if any
interest had vested in the State, it could be divested by an
Act of an appropriate Legislature if the requisite power was
conferred on it by the Constitution,’ I do not propose to
express my final opinion on this question.
The constitutional validity of the impugned
Act is next sought to be sustained on the basis of
(1)(1910) I.L.R. 37 Cal. 723.(3)(1916) I.L.R. 44 Cal. 585
(2)(1912) I.L.R. 39 Col. 696. (4)(1917) I.L.R. 45 Cal.
87,(5) (1919) I.L.R. 47 Cal. 95.
465
entry 52 and entry 54 of List I of the Seventh Schedule to
the Constitution. They read :
Entry 52 of List I : Industries, the control
of which by the Union is declared by
Parliament by law to be expedient in the
public interest.
Entry 54 of List I: Regulation of mines and
mineral development to the extent to which
such regulation and development under the
control of the Union is declared by Parliament
by law to be expedient in the public interest.
Before construing these two provisions.. it
would be convenient to read entries 23 and 24
of List II, the State List :
Entry 23 of List II: Regulation ‘of mines and
mineral development subject to the provisions
of List I with respect to regulation and
development under the control of the Union.
Entry 24 of List II: Industries subject to the
provisions of entries 7 and 52 of List I.
A combined reading of the four entries shows that ordinarily
the industries and the regulation of mines and mineral
development are the State subjects. But if Parliament makes
a law declaring that any particular industry should be under
the control of the Union in public interests or the
regulations of any mines or mineral development should be
under its control, to that extent entries 24 and 23 of List
II shall yield to entries 52 and 54 of List I. Under the
industries (Development and Regulation) Act, 1951 (65 of
1951), Parliament has declared that “”it is expedient in the
public interest that the Union should take under its control
the industries specified in the First Schedule”, which
include coal and, therefore, it is argued, the subject of
coal industry passed on to parliament and the impugned Act
made thereafter
466
for acquisition of coal bearing lands was well within its
power. If I may say so, there is a fallacy in this
argument. A declaration under entry 52 of List I would no
doubt enable Parliament to make a law in respect of an
industry, that is to say Parliament may make a law in
respect of an existing industry or an industry that may be
started subsequently. So too, before the declaration a
State Legislature could have made a law in respect of an
industry by virtue of entry 24 of List II. But neither
entry 24 of List II nor entry 52 of List I empowers the
State Legislature before the said declaration or the
Parliament after such a declaration to make a law for
acquisition of lands. If the State Legislature before the
declaration or the Parliament after the declaration wanted
to acquire the land it can only proceed to make a law by
virtue of entry 42 of List III. As I have held that entry
42 of List III does not enable Parliament to make a law
providing for the acquisition of a property of a State,
entry 52 of list I cannot be relied upon for such a purpose.
Reliance is also placed upon the Coal Mines (Conservation
and Safety) Act, 1952 (Act XII of 1952) in support of the
contention that the declaration contained therein gave
vitality to entry 54 of List I and that the impugned Act
could be sustained under that entry. Section 2 of that Act
says :
“It is hereby declared that it is expedient in
the public interest that the Central
Government should take under its control the
regulation of coal mines to the extent
hereinafter provided.”
The simple answer to this argument is that the declaration
was limited to the control and regulation of coal mines to
the extent provided by that Act, and such a declaration,
with its limited scope, could not be taken advantage of to
sustain the impugned Act. Further, under the entry
“‘regulation of mines” a law cannot be made for the
acquisition of coal bearing
467
lands themselves, particularly when there is a specific
entry for acquisition. Nor can the Mines and Minerals
(Regulation and Development) Act 1957 (Act 67 of 1957) be
successfully invoked in this case, for that Act, which
contains a declaration that it is expedient in the public
interest that the Union should take under its control the
regulation of mines and the development of minerals to the
extent provided therein, was passed on December 28, 1957,
whereas the impugn Act was passed on June 8, 1957. That
declaration was also confined to’ the extent of the
regulation provided thereunder and therefore could not be
relied upon for purposes other than those comprehended by
that Act. It follows that Parliament cannot rely upon the
declaration in either of the three Acts i.e., Act 65 of
1951, Act 12 of 1952, and Act 67 of 1957, to sustain the
impugned law which was solely made for the purpose of
acquiring the coal bearing areas.
Sustenance is sought to be drawn from American.. Australian
and Canadian decision in support of the Union’s contention
that a federal law can provide, for the acquisition of a
property owned by a State. Before adverting to the
decisions of a foreign court, it would be necessary to know
the relevant fundamental differences between the
constitution of the said country and our own. In America
there is no express power conferred on the Congress enabling
it to make a law for the acquisition of any property for
public purposes. There is also no concurrent List giving a
common field of operation for the Federal and the State
units. The power of acquisition was evolved by judicial
decisions by invoking the doctrine of implied powers. The
law of that country, therefore, may not be of much relevance
in construing the provisions conferring express powers on
the different units under our Constitution. Nor the deci-
sions cited on behalf of the Union lend any support
468
to the contention advanced. In State of Oklahoma Ex. Bel.
Leon C. Philips v. Guy F. Atkinson Company (1), the Flood
Control Act of 1938 authorized the construction of the
Denison Reservoir on the Red River as part of a
comprehensive scheme for the control of floods in the
Mississippi River and its tributaries. That law was made by
the Congress in the exercise of its commerce power’ The
effect of the construction of dam and reservoir for the pur-
pose of flood control on a stream running between two States
was to inundate lands in one State. The Supreme Court held
that the fact that the land was owned by a State was not a
barrier to its condemnation by the United States. It also
observed that the State Government could not prevent the
exercise by the Federal Government of its power of eminent
domain for flood control purposes, merely because the State
boundary would be obliterated by the flooding of the land
taken. It was observed therein
“Since the construction of this dam and reser-
voir is a valid exercise by Congress of ’its
commerce power, there is no interference with
the sovereignty of the
State……………………….. The fact
‘that land is owned by a state is no barrier
to its condemnation by the United
States……………….. Nor can a s
tate call
a halt to the exercise of the eminent domain
power of the federal government because the
subsequent flooding of the land taken will
obliterate its boundary.”
It does not appear from the report, though the phraseology
used is wide, that what had submerged or obliterated was
State owned property or the State territory. Assuming that
the State property had submerged because of the operation of
the Federal law, this decision can be understood to have
laid down only the limited proposition that the Congress in
exercise of its commerce power can make a law incidentally
(1)(1940) 85 L. ed. 1487, 1505.
469
encroaching upon the State property. The decision in The
Cherokee Nation v. The Southern Kansas Railway Company (1),
does not carry the matter further. There it was held that
the Congress had power to authorize a corporation to
construct a rail road through the territory of Indian
tribes. It was pointed out that Cherokee Nation was not a
sovereign nation but was under the political control of the
government of the United States and, therefore, it could not
be said that the right of eminent domain within its
territory could only be exercised by it and not by the
United States. It was observed therein:
“The lands in the Cherokee territory, like the
lands held by private owners everywhere within
the geographical limits of the United States,
are held subject to the authority of the
general government to take them for such
objects as are germane to the execution of the
powers granted to it; provided only, that they
are not taken without I just compensation
being made to the owner.’
This case, therefore proceeded on a different basis
altogether, namely.. that the entire territory was directly
under the Federal Government and that the Federal Government
could exercise its power of eminent domain in respect of
that territory. Nor does the decision in Kohl v. United
States (2), support the defendant. There it was held that
the United Sates could acquire lands in Cineinnati for a
post office and other public buildings under the power of
eminent domain. The property sought to be acquired there
was the private property in the State and the decision
therein throws little light on the present question.
The decisions of the Supreme Court of America are clear on
the point viz., that in exercise of the power conferred on
the Congress.. expressly or by implication, a law can be
made to acquire the
(1) (1889) 34 L. ed. 295. 302. (2) (1875) 23 L. ed. 449.
470
private property in a State for carrying out a federal
purpose. But they are not decisions on the question whether
the said law can provide for the condemnation of the
property owned by the States.
In Nichols on Eminent Domain, 3rd edn., Vol. at p. 160. the
following passage appears:
“Despite the phraseology of the Fifth Amend-
ment to the Constitution of the United States
to the effect that “private property” shall
not be taken for public use except upon
payment of just compensation, it has been held
that there is no implied limitation therefrom
which inhibits the taking of public property
by the federal government and the latter may
acquire the property of a state or one of its
agencies or sub-divisions.”
“Although the federal government has the power
to acquire such property, the relative
positions of the federal and state governments
are such that it would seem that the United
States could not for the sake of mere con-
veniencc, take the property of a state which
was devoted to the public use the loss of
which would seriously cripple the state in
carrying on its
functions…………………………… In
case of necessity, as distinguished from mere
convenience, the State would have to yield in
any event.”
The said passage makes a distinction between a State
property and a property devoted by a State for a public
purpose-the former can be acquired and the latter ordinarily
cannot be acquired by the federal government. These
principles arc not based upon any particular power conferred
upon the Congress, but appear to have been envolved on a
pragmatic approach to concrete problems arising in that
country.
471
Such an approach cannot have any relevance to our
Constitution’ where the powers have been described with
particularity. The-passage in ,Willoughby on the
Constitution of the United States”, Vol. 1, at p. 180,
namely, “‘that, in cases of conflict, the power of eminent
domain of the States must yield to the constitutionally
superior power of eminent domain of the United States is
well settled”, does not relate to the acquisition of
property owned by States but to the resolution of a conflict
between the powers of eminent domain of the Union and the
States when both of them seek to acquire property within a
State. That doctrine is based upon the supremacy given by
the constitution to the Government of the United States in
all matters within the scope of its sovereignty.
The said discussion shows that the law in America on the
question raised in the present case is not clear. In view
of the admitted differences in the constitutional
provisions, it would not be safe to rely upon it in
construing the provisions of our Constitution.
The Australian decisions also do not help us, for s. 51 of
the Australian Constitution expressly provides that the
Commonwealth can make a law for the acquisition of property
on just terms from any State or person: see Wynes’
Legislative, Executive and judicial Powers in Australia, p.
441. If at all, the said provision indicates that in a
federal form of government one sovereign unit cannot acquire
the property of another unless the Constitution expressly
provides for it.
In Canada this question was subject of judicial scrutiny.
It may be mentioned that in Canada there is no concurrent
List conferring the power of eminent domain expressly on
both the Union and the constituent States. Reliance is
placed on behalf of the Union on the decision of the Privy
Council in
472
Attorney-General for the Dominion of Canada v. Attorney-
General for the Provinces of Ontario, Quebec and Nova Scotia
(1). Sections 91 and 92 of the British North America Act,
1867, distributed legislative powers between the Dominion
and the Provinces of Canada. Under s. 108 thereof certain
items of property were transferred to the Dominion, one of
them being “rivers and lake improvements, and public
harbours”. The residue of proprietary rights not
transferred to the Dominion by s. 108 and Schedule III
remained vested in the provinces subject to ss. 109 and 117;
and the residuum of legislative jurisdiction not comprised
in ss. 91 and 92 vested in the Dominion. The questions
raised in the appeal were whether under s. 108 the river was
transferred to the Dominion, and whether the Dominion could
make a law under s. 91 affecting fisheries and fishing
rights in the river. The Privy Council held that the
proprietary rights in the river vested in the Province on
the date of the British North America Act, 1867 and that s.
108 by transferring rivers and lake improvements did not
transfer the proprietary rights in the rivers. On the
second question, it held that s. 91 empowered the Dominion
to make a law taxing the right to fish in the rivers. Lord
Herschell recognized a broad distinction between proprietary
rights and legislative jurisdiction and observed that the
fact that such jurisdiction in respect of a particular
subject-matter was conferred on the Dominion Legislature
afforded no evidence that any proprietary rights with
respect to it were transferred to the Dominion. It is
observed at p. 730 :
“If, however, the Legislature purports to
confer upon other proprietary rights where it
possesses none itself,. that ‘in their
Lordships’ opinion is not an exercise of the
legislative jurisdiction conferred by s. 91.,
If the contrary were held, it would follow
that the Dominion might
(1)[1898] A.C. 700.
473
practically transfer to itself property which
has, by the British North America Act, been
left to the provinces and not vested in it.”
This decision, therefore, is an authority for the position
that when the constitution vests particular properties in
one of the governing units, the other cannot by legislation
take over those properties, for if that is allowed one can
destroy the other. This decision supports the broad
contention of the learned Advocate-General of West Bengal
that the properties vested in a State cannot be taken over
by the Union in exercise of a legislative power. The wide
sweep of this decision has been restricted to some extent,
by the judicial Committee in Attorney-General for British
Columbia Canadian Pacific Railway Company (1). There, the
judicial Committee held that ss. 91 and 92, read together,
empowered the Dominion to dispose of provincial Crown lands,
and therefore of a provincial foreshore, for the purposes of
the respondent railway, which was a transcontinental railway
connecting several provinces. In coming to that conclusion
the judicial Committee relied upon its earlier decisions in
Canadian Pacific Railway Co. v. Corporation of the Parish of
Notre Dame De Bonsecours (2), and Toron to Corporation v.
Bell Telephone Co. of Canada (3). Though Crown lands vested
in a province, the Constitution Act conferred an express
power on the Dominion enabling it to make a law for inter-
State purposes affecting the Crown lands. The same view was
reiterated by the Privy Council in Attorney-General for
Quebec v. Nipissing Central Railway Company and Attorney.
General for Canada (4). The Canadian decision do not
support the wide contention of the learned Attorney-General
that properties vested in a State can be acquired by Union
law by virtue of either entry 42 of List III or entry 52 of
List I of our Constitution. Apart from the fact that the
relevant provisions of the other constitutions are not
(1) [1906] A.C. 204. (2) [1899] A.C. 367.
(3) [1905] A.C. 52. (4) [1926] A.C 715.
474
pari materia with those of the Indian Constitution, the
decisions cited do not constitute a clear authority to
support either of the two rival contentions, though they
contain some observations which may be relied upon by either
side. In them circumstances, it would not be proper for
this Court to draw any inspiration from the foreign
constitutions or the decisions made thereunder in construing
the express provisions of our Constitution in the context of
its different set-up. I have referred to the decisions only
out of respect for the argument advanced.
To conclude : The Indian Constitution accepts the federal
concept and distributes the sovereign powers between the co-
ordinate constitutional entitles, namely, the Union and the
States. This concept implies that one cannot encroach upon
the governmental functions or instrumentalities of the
other, unless the Constitution expressly provides for such
interference. The legislative fields allotted to the units
cover subjects for legislation and they do not deal with the
relationship between the two co-ordinate units functioning
in their allotted fields : this is regulated by other
provisions of the Constitution and there is no provision
which enables one unit to take away the property of another
except by agreement. The future stability. of our vast
country with its unity in diversity depends upon the strict
adherence of the federal principle, which the fathers of our
Constitution have so wisely and foresightedly incorporated
therein. This Court has the constitutional power and the
correlative duty-a difficult and delicate one to prevent
encroachment, either overtly or covertly, by the Union of
State field or vice versa, and thus maintain the balance of
federation. The present is a typical case where the Court
should stop the Union from overstepping its boundary and
trespassing into the State field. I would, therefore, hold
that the impugned Act, in so far as it confers a power on
the
475
Union to acquire the lands owned by the State, including
coal mines and coa bearing lands, is ultra vires. I find on
issues 1, 2 and 3 against the defendant; In view of my
findings on the said issue, I do not propose to express my
opinion on the additional issue.
In the result, there will be a decree in favour of the
plaintiff in terms of cls. (a), (c) and (d) of paragraph 11
of the plaint. The plaintiff is entitled to costs.
By COURT: In view of the judgment of the majority, the suit
stands dismissed with costs.
Appeal dismissed.
475