1983 (10) TMI 269 - SC - Indian Laws

Summary

Issues Involved:
1. Nationalisation of Transport Industry
2. Constitutional Validity of the Tamil Nadu Stage Carriages and Contract Carriages (Acquisition) Act, 1973
3. Application of Article 31C of the Constitution
4. Adequacy and Reasonableness of Compensation

Summary:

1. Nationalisation of Transport Industry:
The Supreme Court discussed the policy of nationalisation of industries as a means to achieve socio-economic emancipation. The judgment highlighted two methods of nationalisation: under Chapter IV-A of the Motor Vehicles Act, and a more effective method involving the complete takeover of transport services by the state. The Karnataka State's attempt at complete nationalisation was noted, followed by Tamil Nadu's enactment of the Tamil Nadu Stage Carriages and Contract Carriages (Acquisition) Act, 1973.

2. Constitutional Validity of the Tamil Nadu Stage Carriages and Contract Carriages (Acquisition) Act, 1973:
The Madras High Court had declared the Act ultra vires, violating Articles 14 and 19 of the Constitution. However, the Supreme Court found that the Act aimed to secure the socialist objectives enshrined in Article 39(b) & (c) of the Constitution. The Act was deemed immune from challenges under Articles 14, 19, or 31, as it fell within the protective umbrella of Article 31C.

3. Application of Article 31C of the Constitution:
Article 31C was introduced by the 25th Constitution Amendment to protect laws effectuating the policy of the State towards securing the principles laid down in Part IV of the Constitution. The Supreme Court noted that any law giving effect to the principles in Article 39(b) & (c) would not be void even if inconsistent with Articles 14, 19, or 31. The Court emphasized that there must be a reasonable nexus between the law and the objectives of Article 39(b) & (c).

4. Adequacy and Reasonableness of Compensation:
The Act provided for compensation to be determined by an arbitrator, with the possibility of appeal to the High Court. The Supreme Court held that compensation need not be equivalent to market value but should not be arbitrary, illusory, or monstrously undervalued. The compensation principles in the Act were found to be in line with these requirements.

Conclusion:
The Supreme Court upheld the constitutional validity of the Tamil Nadu Stage Carriages and Contract Carriages (Acquisition) Act, 1973, and found that it was protected under Article 31C. The Act's provisions for compensation were deemed reasonable and not arbitrary. The appeals were allowed, and the writ petitions were dismissed.