THE STATE OF WEST BENGAL versus MRS. BELA BANERJEE AND OTHERS

The Union of India v. Madan Gopal Kabra. Palaf!fali Sastri C.J.

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disappeared except, of course, in regard to matters m which such distinction has been preserved by the Constitution itself, e.g., by article 238 and article 371. It follows that the amendment of section 2 clause (14-A) of the Indian Act, by the Finance Act, 1950, so as to authorise the levy of tax on income accruing in the territory of Rajasthan in the year 1949-50 is within the competence of Parliament and therefore valid.

We accordingly allow the appeal, and set aside the judgment of the High Court. We make no order as to costs.

Appeal allowed.

Agent for the appellant : G. H. Rajadhyaksha. Agent for the. respondent : Rajinder Narain.

THE ST TE OF 'WEST BENGAL

MRS. BELA BANERJEE AND OTHERS.

rPATANJALI sAsTRI c.J., MEHR CHAND MAHAJAN, S. R. DAs, GHULAM HASAN and JAGANNADHAD.\S JJ.J

?'he rv est Ren gal Land Dcvelopn1ent and Planning Act, 194!! (West Bengal Act XX/ of 1948)-Provisions of s. 8-(i) Decla-ration under s. 6-Conclusive evidence-I~and-Subject 1natter of decla1·ation needed for public purposc-(ii) Con1pensation of land acquired under the Act not to exceed nzarket value of land as on Dece1nber 31, 1946-ultra Yires the Constitution and void-Contti· tution of India, ai·t. 31(2).

T'he \\Test Bengal Land l)evelop1nent and Planning Act, 1948, passc<l prin1arily for the scttlen1ent of immigrants \Vho had 1nigrated into \Vest Bengal due to communal disturbances in East Bengal provi<les for the acquisition and develop1nent of land ior public purposes including the purpose aforesaid :

field, that the provisions of s. 8 of the West Bengal ,Act XXI of 1948 n1aking the declaration of the CJ-overnment con· elusive as to the public nature of the purpose of the acquisition and the lin1itation of the ainount of compensation so as not to exceed the rnarket \'alue of the land on December 31, 1946, are ultra vires the Constitution :;i,nd void :

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(i) inasmuch as art. 31(2) o[ the Constitution made the existence of puhlic purpose necessary condition of acqu1s1tion, the existence of such purpose as fact must be established objectively ; (ii) that in vie\v of the {act that the icnpugned Act is perma~ ncnt cnact1nent an<l lands may be acquired under it many years after it catne into force, the fixing of the 1narkct value on Dcce1n-ber 31, 1946, as the ceiling on compensation without reference to the value of the land at the time of acquisition, is arbitrary and cannot be regarded as due co1npliance in "letter and spirit \Vith the requirements of art. 31(2) :

(iii) the Act is not saved by art. 31(5) from the operation of r,rt. 31 (2) as it was not certified by the President as proYi<led for by rirt. 31(6).

Ile/d, further, that while entry No. 42 • of List J[J of the SeYcnth Schedule confers on .the legislature the discretionary po\ver of laying do\vn the principles \vhich should goYern the det~nnination of the a1nount to be giYen to the owner of the pro.-perty appropriated, art. 31(2) requires that such principles n1ust ensure that what is detern1ined as payable n1ust be "con1pen-sation", that is, just equivalent of \vhat the owner has been deprived of. \\Thcther such principles .take into account all the ele1nents \Vhich make up the true value of the property appro-priated and exclude matters which are to be neglected is oi. justici-ahle issue to be a<lju<licatcd by the Court.

C1v1L APPELLATE J umsmcnoN : Civil Appeal No. 123 of 1952.

Appeal against the Judgment and Order, dated the 22nd March, 1951, of the High Court of Judicature at Calcutta (Harries C.J. and Banerjee J.) m Reference No. 2 of 1951 in Civil Rules Nos. 20 and 21 of 1950. 1953. December 11. The Judgment of the Court was delivered by PATANJ ALI SASTRI C.J.-This is an appeal from judgment of the High Court of Judicature at Calcutta declaring certain provisions of the West Bengal Land Development and Planning Act, 1948, (hereinafter referred to as the "impugned Act") unconstitutional and void. The impugned Act was passed on October 1, 1948, primarily for the settlement of immigrants ·who had migrated into the Province of West Bengal due to communal di,turbances m East Bengal, and it

The State of We£t Bengal v. Bela Banerjee and Others. Patanjali Sastri C.J.

1953 The State of West Bengal v. Bela Baneryti and others. Patanj2li Sastri C.J.

provides for the acquisition and development of land for public purposes including the purpose aforesaid. registered Society called the West Bengal Settlement Kanungoe Co-operative Credit Society Ltd., respond-ent No. 4 herein, was authorised to undertake develop-ment scheme, and the Government of the .state of West Bengal, the appellant herein, acquired and made over certain lands to the society for purposes of the development scheme on payment of the estimated cost of the acquisition. On July 28, 1950, the respondents 1 to 3, the owners of the lands thus acquired, institut-ed suit in the Court of the Subordinate Judge, II Court at Alipore, District 24-Parganas, against the society for declaration tb;it the impugned Act was void as contravening the Constitu~ion and that all the proceedings taken thereunder for the acquisition afore-said were also void and of no effect and for other consequential reliefs. The State of West Bengal was subsequently impleaded as defendant. As the suit involved questions of interpretation of the Constitution respondents 1 to 3 also moved the High Court under article 228 of the Constitution to withdraw the suit and determine the constitutional question. The suit was accordingly transferred to the High Court and the matter was heard by Division Bench (Trevor Harries C.J. and Banerjee J.) who, by their final judg--ment, held that the impugned Act as whole was not unconstitutional or void save as reg-ards two of the provisions contained in section 8 which, so far as it is material here, runs as follows :-"A declaration under section 6 shall be conclusive evidence that the land in respect of which the declara-tion is made is needed for public purpose and, after making such declaration. the Provincial Government may acquire the land and thereupon the ·provisions of the Land Acquisition Act, 1894, (hereinafter in thi.s section referred to as the said Act), shall, so far as may be, apply : Provided that-

(b) in determining the amount of compensation to be awarded for land acquired in pursuance of this

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Act the market value referred to in clause first of sub-section ( 1) of section 23 of the said Act shall be deem-ed to be the market value of the land on the date of publication of the notification under sub-section ( 1) of section 4 for the notified area in which the land is included subject to the following condition, that is to . say-

if such market value exceeds by any amount the market value of the land on the 31st day of December, 1946, on the assumption that the land had been at that ·date in the state in which it in fact was on the date of publication of the said notification, the amount of such excess shall not be taken into consideration."

The provision making the declaration of the Govern-ment conclusive as to the public nature of the purpose of the acquisition and the limitation of the amount of compensation so as not to exceed the market value of the land on December 31, 1946, were declared ultra vires the Constitution and void.

The Attorney-Genera\, appearing for the appellant, rightly conceded that inasmuch as article 31 (2) made the existence of public purpose necessary condition ·of acquisition the existence of such purpose as fact must be established objectively and the provision in section 8 relating .to the conclusiveness of the declara-tion of Government as to the nature of the purpose ·of the acquisition must be held unconstitutional but he ·.contended tbat the provision was saved by article 31(5) of the Constitution which provides: "Nothing .in dause (2) shall affect-( a) the provisions of any exist-ing law other than law to which the provisions of dause (6) apply, or .............. " Clause (6) reads thus:

"Any law of the State enacted not more than eighteen months hefore the commencement of this Constitution may within three months from such commencement be submitted io the President for his certification ; and, thereupon, if the President by public notification so certifies, it shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of this article or has

The State of J11est Bengal v. Bela Banerjee and Others. Patanjali Sastri C.J .

The State of West Brngal v. Bela Banerjee and Ot1iers. Patanjali Sajtri C.J.

contravened the prov1s10ns of sub-section (2) of section 299 of the Government of India Act, 1935." It was argued that the impugned Act having been passed within 18 months before the commencement of the Constitution and not having been submitted t<> the President for his certification, it was law to which the provisions of clause ( 6) did not apply and, therefore, as ·an existing law, the impugned Act was not affected by clause (2) of that article. The argu-ment is manifestly unsound. Article 31(6) is intended to save State law enacted within 18 months before the commencement of the Constitution provided the same was certified by tht President while, article 31 (5) saves all existing laws passed more than 18 months before the commencement of the Cof)stitntion. Reading the two clanses together, the intention is clear that an existing law passed within 18 months before January 26, 1950, is not to be saved unless it was submitted to the President within three months from such date for his certification and was certified by him. The argument, if accepted, would reduce article 31(6) to ameaningless redundancy.

The only serious controversy in the appeal centred round the constitutionality of the "condition" in proviso (b) to section 8 limiting the compensation payable so as not to exceed the market value of the lorn! on December 31, 1946. The Attorney-General, while conceding that the word "compensation'' taken by itself must mean full and fair money equivalent, urged that, in the context of article 31 (2) read with entry No. 42 of List III of the Seventh Schedule, the term was not used in any rigid sense importing equiva-lence in value but had reference to what the legisla-ture might think was proper indemnity for the loss sustained by the owner. Article 31(2) provides : No property, movable or immovable, including any interest in, or in any company owmg, any-commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for

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compensation for the property taken possession of or acquired and either fixes the amount of the compen-sation, or specifies the principles on which, and the manner in which, the compensation is to be deter-mined and given.

and entry 42 of List III reads thus :

Principles on which compensation for property ac-quired or requisitioned for the purposes of the Union or of 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. It is argued that the term "compensation" m mtry 42 could not mean full cash equivalent, for then, the power conferred on the legislature to lay down the principles on which compensation is to be determined and the form and the manner in which such compen-sation is to be given would be rendered nugatory. On the other hand, the entry showed that the compensa-tion to be "given" was only "such co111pensation" as was determined on the principles laid down by the law enacted in exercise of the power, and, as the conclud-ing words used in article 31(2) are substantially the same as in the entry, the Constitution, it was claimed, left scope for legislative discretion m determining the measure of the indemnity.

We are unable to agree with this view. While it is true that the legislature is given the discretionary power of laying down the principles which · should govern the determination of the amount to be given to the owner for the property appropriated, such princi-ples must ensure tl\at what is determined as payable must be compensation, that is, just equivalent of what the owner has been deprived of. Within the limits of this basic requirement of full indemnification of the expropriated owner, the Constitution allows free play to the legislative judgment as to what princi-ples should guide the determination of the amount payable. Whether such principles take into account all the elements which make up the true value of the · property appropriated and exclude matters which are

The State O H'est Bengal v. Bela Banerjee· and Others-Patanjali Sastrf-C.J.

The State of ·Wesl Bengal v. Bela BanerJe1 and OtherJ. Palanjali Sastri C.J.

to be neglected, is justiciable issue to be adjudicated by the court. This, indeed, was not disputed.

Reference was made to certain Australian cases where the opinion was expressed that the terms of compulsory acquisition of property were matters of legislative policy and judgment. The decisions largely turned on the absence of any· constitutional prohibi-tion in regard to deprivation of private property with-out compensation as in the Fifth Amendment of the American Constitution and on the use of the words "just terms" instead of "compensation" in section 51 (xxxi) of the Commonwealth Constitution which con-ferred power on the Parliament to make laws with respect to "the acquisition of property on just terms from any State or person ...... " (cf. Grace Brothers Pty. Ltd. v. The Commonwealth(')). Those decisions, therefore, are of no assistance to the appellant here.Turning now to the provisions relating to compensa-tion under the impugned Act, it will be seen that the latter part of the proviso to section 8 limits the amount of compensation so as not to exceed the market value of the land on December 31, 1946, no matter when the land is acquired. Considering that the impugned Act is permanent enactment and lands may be acquired under it many years after it came in-to force, the fixing of the market value on December 31, 1946, as the ceiling on compensation, without refer-ence to the value of the land at the time of the ac-qumt10n is arbitrary and cannot be regarded as due compliance in letter and spirit with the requirement of article 31 (2). The fixing of an anterior date for the ascertainment of value may not, in certain circums-tances, be ·violation of the constitutional requirement as, far instance, when the proposed scheme of acquisi-tion becomes known before it is launched and prices rise sharply in anticipation of the benefits to be derived under it, but the fixing of an anterior date, which might have no relation to the value of the land when it is acquired, may be, many years later, cannot but be regarded as arbitrary. The learned Judges (1) 72 C.L.R. 269.

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below· observe that it is common knowledge that since the end of the war land, particularly around Calcutta, has increased enormously in value and might still further increase very considerably in value ·when the pace of industrialisation increases. Any principle for determining compensation which denies to the owner this increment in value cannot result in the .ascertain-ment of the true equivalent of the land appropriated.

We accordingly hold that the latter part of proviso (b) to section 8 of the impugned Act which fixes the market value on December 31, 1946, as the maximum compensation for lands acquired under it offends against the provisions of article 31 (2) and is unconstitutional and void. The appeal is dismissed with costs.

Appeal dismissed.

Agent for the appellant : P. K. Bose.

Agent for respondents Nos. Banerjee.

1, 2 and 3 : S. C.

Agent for the intervener: C. H. Rajadhyaks?a.

WARYAM SINGH AND ANOTHER

AMARNATH AND ANOTHER.

[MEHR CHAND MAHAJAN C.J., B. K. MuKHERJF.A, S. R. DAs, VIVIAN BosE and GHULAM HASAN JJ. J

Constitution of India, art,·. 227 and 241-High Court-Whe-ther conferred power of judicial superintendence-Rent Controller and District fudge-Whether Tribunals within the meaning of art. 227-East Punjab Urban Rent Restriction Act (III of 1949) as extended to Himachal Pradesh, s. 13(2)(i), Proviso-Non-payment of arrears of rent on first hearing of application for ejectment-Legal effect thereof.

The Court of the Judicial Commissioner of Himachal Pradesh exercises jurisdiction in relation to the \Vhole of the territories of Himachal Pradesh. The Rent Control and the District Judge exercising juris· diction under the East Punjab Rent Restriction Act, 1949, are certainly tribunals if not courts within the meaning of art. 227 of the Constitution and they' function within the territories of

TM State of· West Bengal and Othtrs. Patanjali Sastrf C.J.

Jan. 19·.