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Issues Involved:
1. Public purpose of acquisition. 2. Compensation or amount provided for acquisition. 3. Legislative competence regarding acquisition of contract carriages with Inter-State permits. 4. Applicability of Article 31C in relation to Article 31(2) of the Constitution. Issue-Wise Detailed Analysis: Public Purpose: The Court emphasized that any law providing for the acquisition of property must be for a public purpose, which is a justiciable issue. The intention of the legislature is primarily gathered from the Statement of Objects and Reasons and the Preamble of the Act. The acquisition of vehicles, permits, and other assets for running them for the purposes of the Karnataka State Road Transport Corporation (Corporation) was deemed to be for a public purpose. The Court rejected the argument that acquisition of chattels or movables cannot be for a public purpose, stating that the acquisition in question was not merely for augmenting state revenue but was aimed at preventing misuse of permits and providing better transport facilities, thus serving a public purpose within the meaning of Article 31(2). Compensation or Amount Provided: The High Court had concluded that the scheme for payment under the Act was illusory, violating Article 31(2). However, the Supreme Court clarified that the amount payable for acquired property, whether fixed by the legislature or determined on the basis of principles in the law of acquisition, cannot be arbitrary or illusory. The Court emphasized that the amount need not be the market value but should not be so inadequate as to be a mockery of the right to property. The Court accepted a reasonable and harmonious interpretation of the Act, ensuring that the amount determined by the arbitrator would be just and reasonable, taking into account the circumstances of each case and the provisions of the Schedule. Legislative Competence: The acquisition of contract carriages with Inter-State permits was challenged as ultra vires the legislative power of the State Legislature. The Court held that the pith and substance of the Act were within the legislative competence of the State under Entry 35 of List III (Concurrent List) of the Seventh Schedule to the Constitution. The incidental encroachment on the topic of Inter-State trade and commerce did not invalidate the Act. The Court also clarified that vehicles registered and kept in Karnataka with Inter-State permits granted by Karnataka authorities were validly acquired. However, the countersigned portion of the permit, which authorized plying in other States, could not be acquired as it would involve extra-territorial operation beyond the competence of the Karnataka Legislature. Applicability of Article 31C: The Court addressed whether Article 31C barred the challenge to the Act as being violative of Article 31(2). Article 31C provides that laws giving effect to the principles specified in Article 39(b) and (c) cannot be challenged on the grounds of violating Articles 14, 19, or 31. The Court emphasized that the acquisition aimed at preventing misuse of permits and providing better transport facilities had a reasonable nexus with the principles in Article 39(b) and (c), thus falling within the protective ambit of Article 31C. The Court concluded that the Act was constitutionally valid and did not require further reliance on Article 31C for its defense. Conclusion: The Supreme Court allowed the appeals, setting aside the judgment of the High Court. The Act was upheld as being for a public purpose, providing a reasonable amount for the acquired property, and within the legislative competence of the Karnataka Legislature. The Court also emphasized the harmonious interpretation of the Act to ensure compliance with constitutional provisions. The decision reinforced the principle that legislative judgments on public purposes and compensation should be given due weight, provided they are not arbitrary or illusory.
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