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TMI Blog1977 (10) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... convenience hereinafter in this judgment, reference to the High Court judgment wherever necessary will be made from the said report. FACTS The broad and the, common facts of the various cases are in a narrow compass and not in dispute. At the outset, we shall state them mostly from the High Court judgment. We were not concerned to go into the special facts of some cases in these appeals. They may have to be looked into, if necessary, by the, High Court in the light of this judgment. The Karnataka State Road Transport Corporation (hereinafter called the Corporation) was established by the State Government of Karnataka on August 1, 1961 under section 3 of the Road Transport Corporations Act, (Central Act 64 of 1950). The Corporation was a party respondent to the writ petitions aid is an appellant before us alongwith the State of Karnataka. We are stating the facts mostly from Civil Appeal No. 1985 of 1976 arising out of Writ Petition No. 817 of 1976. The Corporation published in the Karnataka Gazette dated May 16, 1974 a draft scheme for nationalisation of Contract Carriages in the State under Chapter IV-A of the Motor Vehicles Act, 1939 (Central Act 4 of 1939). Objections were invi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iages operators, financiers and others including those who, had filed or succeeded in the earlier writ petitions. The High Court has allowed all the writ petitions, struck down the Act as unconstitutional and has declared it null and void. The notifications have been quashed. The respondents in the writ petitions, namely the appellants before us, were directed to restore, the vehicles with the relative, permits and all other assets to the operators from whom they were taken over. Some consequential directives for determination of damages in some later proceedings were also given. We now proceed to state the findings of the High Court on the various points argued before it not in the order as finally recorded in para 98 of its judgment at page 1530 but in the order the points were urged before us by Mr. Lal Narayan Singh, learned counsel for the appellants. They are as follows (1) The acquisition is not for a public purpose. (2) The compensation or the amount provided for or the principles laid down in the Act for payment in lieu of the various vehicles, permits and other assets is wholly illusory and arbitrary. For the two reasons aforesaid, the Act is violative of Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the economic system does not result in the concentration of wealth to the common detriment. In view of the aforesaid it was considered necessary acquire the contract carriages run by private operators. Accordingly the Karnataka Contract Carriages (Acquisition) Ordinance, 1976 was promulgated. The Bill seeks to replace the Ordinance. The title of the Actindicates that it is An Act to provide for the acquisition of contract carriages and for matters incidental, ancillary or subservient thereto. In the Preamble it is stated :- Whereas contract carriages and certain other categories of public service vehicles are being operated in the State in a manner highly detrimental and prejudicial to public interest; And whereas with a view to, prevent such misuse and also to provide better facilities for the transport of passengers by road and to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the, concentration of wealth and means of production to the common detriment; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other places and all stores, instruments, machinery, tools, plants etc. as mentioned in sub-section (2) of Section 4 of the Act. It was not a case where some chattels or movables were merely acquired for augmenting the revenue of the State or for its commercial purposes. Mr. Sen heavily relied upon some passages in the judgment of this Court in The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga and others(1) to strengthen his submission. The, said decision was concerned with the vires of the Bihar Land Reforms Act, 1950 by which the Zamindaries or intermediaries' interest were acquired by the State. One of the provisions in the Act was for acquisition of arrears of rent due to the intermediaries from their respective, tenants. This provision was struck down as being unconstitutional. And in that connection, Mahajan, J, as he, then was, said at page 944 : It has no connection with land reform or with any public purpose. It stands on the same footing as other debts due to zamindars or their other movable properties, which it was not the object of the Act to acquire. As already stated, the only purpose to support this acquisition is to raise revenue to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pale of any attack. Tile use of the word '.'deemed does not invariably and necessarily implies an introduction of a legal fiction but it has to be read and understood in the context of the whole statute. it may well be that the State is not authorised to compulsorily acquire any property merely to augment its revenue although in a larger sense one can say that augmentation of the coffers of the State is also for a public purpose. But it is not always correct to say that a property cannot be acquired merely for a commercial need of the Government. Under the Land Acquisition Act, 1894 land can be acquired for commercial purposes of the Government a Public Corporation or a Company. Why can't movables be acquired for commercial purposes if the exigencies of the situation so require ? A particular commercial activity of the State may itself be for a public purpose. Acquisition of property either movable or immovable may in such a situation be for a public purpose. Mr. Sen referred to section 19 of the Road Transport Corporations Act and specially to clause (c) of sub-section (2) to lend support to his argument that without acquiring the whole undertaking only a portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31(2) of the Constitution is interesting and clearly points out the difference in the approach to the question by this Court and the Parliament resulting in the amendments in the provisions from time to time as and when some important and leading judgment were banded down by this Court which according to the Constituent Body did not correctly lay down the law as it intended the Article to mean. The word used in the original Article 31(2) was 'compensation'. In The State of West Bengal v. Mrs. Bela Banerjee and others(1) compensation was held to mean a just equivalent of what the owner has been deprived of. Then came an amendment in the Article by the Constitution (4th Amendment), Act, 1955 stating in clause (2) of Article 31........ no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate. In spite of the amendment, this Court in some decisions-to with P. Yajravelu Mudaliar v. The Special Deputy Collector, Madras ([1965] 1 S.C.R. 614.) and Union of India v. The Metal Corporation of India Ltd. and Another ([1967] 1 S.C.R. 255.) largely, if not fully, stuck to its view in Mrs. Bela Banerjee's case (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ,Constitution by the 25th Amendment (leaving out the invalid part as declared by the majority). Just to support the principle of law culled out above, we may refer to a few lines in some of the judgments in Kesavananda Bharati's case. Sikri C. J., has said at page 197 : Applying this to the fundamental right of property, Parliament cannot empower legislatures to fix an arbitrary amount or illusory amount or an amount that virtually amounts to confiscation, taking all the relevant circumstances of the acquisition into consideration. Shelat and Grover JJ., in addition to what they have said earlier categorically say at page 285 : and further that the amount is neither illusory nor it has been fixed arbitrarily, nor at such a figure that it means virtual deprivation of the right under Article 31(2). The question of adequacy or inadequacy, however, cannot be gone into. Hedge, and Mukherjee JJ., have observed at page 338 : Therefore, stated briefly, what the 25th Amendment makes non-justiciable is an enquiry into the question whether the amount fixed or determined is an equivalent value of or 'compensations for the property acquired or requisitioned It is difficult to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property acquired he suggested such a reasonable, harmonious and just construction' by the rules of interpretation that we found no difficulty in accepting his argument-rather, were glad to do so. The other side on the interpretation so put, which we are going to mention hereinafter, felt satisfied to a large extent. Mr. Sinha also advanced some argument with reference to the valid part of Article 31 C read with clauses (b) and (c) of Article 39 but very wisely did not choose to heavily rely upon it. On the interpretation of the statute as canvassed by him, there hardly remained any necessity of it. Section 3 of the Act defines in clause (a) 'acquired property' to mean the vehicles and other property vesting in the State, Government under section 4. The definition of 'contract carriage is an inclusive one with reference to certain provisions of Motor Vehicles Act. Clause(h) runs thus : Contract carriage operator' means an operator holding one or more contract carriage permit and includes any person in whose name a public service vehicle is registered and is specified as a contract carriage in the certificate of registration of such vehicle. Permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifying the person or persons to whom the amount shall be paid; and in making the award be shall have regard to the circumstances of each case and the provisions of the Schedule so far as they are applicable; (f) where there is any dispute as to the person or persons who are entitled to the amount, the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are entitled to the amount, he shall apportion the amount, amongst such persons; (g) nothing in the Arbitration Act, 1940 (Central Act X of 1940), shall apply to arbitrations under this section. (2) Every award made by the arbitrator under clause(e) of sub-section (1) shall also state the amount of costs incurred in the proceedings before him and by whom and in what proportions such amount is to be paid. A notice under section 7 is to be given to all persons interested in respect of the amount determined under section6. Any person interested and served with a notice under section 7 can file a claim before the authorised officer under sub-section (1) of section 8. The language of subsection (2) created some difficulty in harmonising it with the other provisions of the statute. It ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals with the principle and the manner of determination of the amount for the vehicles. The acquisition cost is to be determined first and then a certain percentage is to be deducted in accordance with the Table appended to sub-para (1). The explanation says : For the purpose, of this paragraph acquisition cost shall be the aggregate cost of the chassis as well as the body of the contract carriage as charged by the manufacturer of chassis and by the body builder. In respect of almost all other properties acquired the amount to be paid is by and large the market value. of the property; vide paras, 2, 3, and 4. Provisions have been also made for payment of the amount in respect of the workshops in para 5 and in respect of stores in para 6. Some compensation has been provided in para 7 of the Schedule for every permit acquired under the Act, although the amount so fixed may not be adequate. Now by the harmonious and reasonable rules of construction as also to save the Act from being violative of Article 31(2) of the Constitution, we proceed to discuss and accept in a large measure the interpretation put and canvassed by Mr. Sinha. If the amount is fixed by agreement, well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries Syndicate Ltd. Etc. v. Union of India([1975] 1 S.C.R. 956.). Says the learned Judge at page 959 : The expression having regard to only obliges the Government to consider as relevant date material to which it must have regard. The arbitrator, therefore, reading section 6(1) as a whole is not obliged to fix the amount as specified in the Schedule. But he has to fix the amount which appears to him just and reasonable on the totality of the facts and circumstances keeping primarily in mind the amount mentioned in the Schedule. Another apparent conflict was writ large on the phraseology of subsection (2) of section 6 and the provisions contained in sections 10 and 11. Section 10 provides for the deductions of the various amounts at the outset from the amount determined by the arbitrator payable in respect of the acquired properties, including those due to the secured creditors, which undoubtedly, would include the financiers of the hire-purchase agreements. The amount payable under section 11 and the manner of its payment is, after deducting all the amounts, provided in section 10. To that extent, for the purpose of harmonious construction, sub-section (2) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id and could not pursue their attack on the vires of the Act on that ground. Legislative Competence Re : Contract Carriages Plying on Inter-State Routes The number of such carriages and such permits compared to the total number of vehicles acquired was very few. It was about 20 to 25 ,only. It is no doubt true that under the Ordinance contract carriages with Inter-State permits were not sought to be acquired. The Act, however, has done so and with a r etrospective effect. Question is whether the State Legislature ofKarnataka has gone beyond its powers and competence in making such a provision. In that regard it was also canvassed before us whether it was possible to read down certain provisions of the Act to save it from constitutional invalidity. If so, to what extent and in what respect ? The first attack on the legislative competence was that acquisition ,of such a contract carriage squarely fell under Entry 42 of List I of the Seventh Schedule to the Constitution that is to say, Inter-State trade and commerce. In paragraph 97 of the judgment the High 'Court seems to have rejected the contention that the Act violated the freedom of trade and commerce guaranteed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) 63 Law Ed. 337.). Mr. Sen submitted that the, portion of the Statute providing for acquisition of contract carriages running on Inter-State routes is in reality legislating on the subject of InterState trade and commerce.The State Legislature was not competent to do so. In support of his argument, learned counsel referred to some of the American decisions, viz. United States of America, Plff. in Err., v. Dan Hill(7); Claude R.Wickard, Secretary of Agriculture of the United States etal v. Roscoe C. Filburn(87 Law Ed. 122.); The Steamer Daniel Ball, Byron D. Ball and Jessie Ganoe, Claimants, Appit. v. United States(19 Law Ed. 999.). In Dan Hill's case (supra) it was held that the transportation of intoxicating liquor from one State to, another was in itself Inter-State commerce, and the Congress in the exercise of its plenary authority to regulate the InterState transportation of intoxicating liquors. may prohibit such transportation even into a State which permits it. In the case of Claude R. Wickard (supra) the question arose entirely in a different context. A Federal regulation of the production of wheat not intended in any part for commerce but wholly for consumption on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 23, every owner of a Motor Vehicle has got to cause his vehicle to be registered by a registering authority in the State in which he has the residence or place of business where the vehicle is normally kept. Almost all the Inter-State vehicles (there may be a few exceptions) are registered in the State of Karnataka. They are normally kept there. If a vehicle registered in one State has been kept in another State for a period exceeding 12 months, then the registration has to be changed in accordance with section 29. Under the second proviso to section 45(1) if it is proposed to use a vehicle in two or more regions lying in different States, an application for a permit has to be made to the Regional Transport Authority of the region in which the appellant resides or has his in principal Place of business. Almost all the Inter-State permits were initially granted by the Karnataka authority. Section 63(1) says : Except as may be otherwise prescribed, a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region, unless the permit has been countersigned by the Regional Transport Authority of that other region, and a,permit gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 935: ([1941] 1 S.C.R. 485.) R.M.D. Chamarbaugwalla v. The Union of India([1957] S.C.R. 931.) and Gulabhai Vallabhbhai Desai etc. v. Union of India Ors([1967] 1 S.C.R. 602.) a reading down of some of the provisions is permissible. And that reading down will be only to this effect. Vehicles kept and registered in the State of Karnataka in respect of which initially the Inter State permit has been granted by this State have validly been acquired. The permit acquired in respect of those vehicles will be the permit operative within the territory of the State of Karnataka. The counter-signed portion of the permit, which as pointed out above on the authorities of this Court is in substance and in effect a separate permit authorising the permit holder to ply the bus in another State, cannot be acquired. Such an acquisition will fall within the second connotation, of the extra-territorial operation of the law, as referred to above from the Bangal Immunity case. The State Government on acquisition and the vesting of the acquired property cannot transfer the countersigned portion of the permit to the Corporation. The Corporation in view of the transfer under section 19 will be able to utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of the amounts in respect of the acquired property to the persons interested in accordance with the Act in the light of this judgment. We shall make no order as to costs in any of the appeals. KRISHNA IYER, J.-We go wholly with our learned brother Untwalia J. Then why a separate afterword ? Because, to put it simplistically, a legislation for the nationalisation of contract carriages by the Karnataka State, where provision has been made for fair compensation under present circumstances, has still been struck down by the High Court on the surprising grounds of absence of public purpose, illusoriness of compensation State take-over being beyond the orbit of Article 39(b) and the like, and to express ourselves emphatically in reversal on the obvious, yet basic, issue we itemise below which is necessary to obviate constitutional derailment again. The public sector, in our constitutional system, is so strategic a tool in the national plan for transformation from stark poverty to social justice, transcending administrative and judicial allergies,, that the questions raised and rulings thereon are of larger import for the country than one particular legislation and its vires a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply to diminished compensation as a revised reincarnation of 'adequate compensation' still menacing projects of nationalisation ? How do we conceptulise 'material resources' and 'public purpose' in our current constitutional setting ? When cryptic phrases expressive of constitutional, culture and aspirational future, fundamental to the governance of the nation, call for interpretative insight, do we merely rest content to consult the O.E.D. and alien precedents, or feel the philosophy and share the foresight of the founding fathers and their telescopic faculty ? Is the meaning of meanings an artless art ? Holmes (2) J. in lovely language,, stated 'what oft was thought but never so well expressed' : A word is not crystal, transparent and unchanged; it is the skin of living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used. Jerome Frank adopted a quotation from Holmes which drives home the same point : We must think things not words, or at least, we must constantly translate our words into the facts for which they stand if we are to keep to the real and the true. (3) Be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31C read (in the manner of Keshvananda Bharati) ([1973] Supp S.C.R. 1) along side of Article 39(b) and(c). The social philosophy of the Constitution shapes creative judicial vision and orientation. Our nation has, as its dynamic doctrine,, economic democracy sans which political democracy is chimerical. We say so because our Constitution, in Parts III and IV and else-where, ensouls such a value system and the debate in this case puts precisely this soul in peril. Friedman has said in his 'Legal Theory and Social Evolution'. The lawyer cannot afford to isolate himself from the social process. His independence can never be more than relative, and it is only a clear awareness of the political, social and constitutional foundations of, his function in general as well as of particular legal problems that enables him to find the proper balance between Stability and progress. ( Legal Theory and-Social Evolution, p. 81, 5th Edn.) Our thesis is that the dialectics of social justice should not be missed if the synthesis of Part III and Part IV is to influence State action and court pronouncements. Constitutional problems cannot be studied in a socioeconomic vacuum, since so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rliamentary democracy itself are imperilled if laws are incomprehensible. They did say that it is of fundamental importance in a free society that the law should be readily ascertainable and reasonably clear, and that otherwise it is oppressive and deprives the citizens of one of his basic rights. It is also needlessly expensive and wasteful. Reed Dicerson, the famous American draftsman, said it cost the government and the public many millions of dollars annually. It must be said in fairness to both sides that Shri Lal Narain Sinha whole heatedly agreed with Shri Asoke Sen (they appeared on opposite sides that the legislation was illdrafted and made a big drift on the creative imagination and linguistic tolerance of the judges, to reconcile the verbal deficiencies and semantic difficulties besetting the text. Shri Sinha told the Court that a clarification bill was going before the House shortly as an amending exercise in this behalf. Our draftsmen handle foreign know-how meant for different circumstances, and without full grasp of the economic regulation or the leisure and facilities for such study. In a country where the people are, by and large, illiterate, where a social r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usin issues are the legal-economic points canvassed before us and are sure to occupy the centre of the stage when management and control of growth in effective measure for common weal expand the frontiers of public law with a view to implement the 'distributive justice' embodied in Articles 38 and 39 and, by Article 37, made fundamental in the governance of the country. Dr. Ambedkar, in words significant, said : In enacting this part (Part IV) of the Constitution, the Assembly is giving certain directions to the future legislature and the future executive to show in what manner they are to exercise the legislative and executive power they will have. Surely it is not the intention to introduce in this part these principles as mere pious declarations. It is the intention of this Assembly that in future both the legislature and the executive should not merely pay lip-Service to those principles but that they should be made the basis of all legislative and executive action that they may be making hereafter in the matter of the governance of the country. The Directive Principles, being the spiritual essence of the constitution, must receive sweeping signification, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reality of Indian life. Stark inequalities have been chronic and the 'hidden hunger' (to use Myrdal's phrase) of the people have pushed the Freedom Movement forward in the socialistic direction toward a better life. The fasciculus of clauses in the Constitution we have referred to is calculated to prevent the revolution of rising expectations from becoming a revolution of rising frustrations. These compulsions must inform legal interpretation. For, in the words of Seton Pollock, The law itself, though of crucial social importance, is only one element in the total human task. That task is to meet and master those frustrations that diminish man in this humanity and obstruct the realisation of his freedom and fulfilment within the human society. Those frustrations stem from ignorance, poverty, pain, disease and conflicts of interest both within the person (the field of psychological medicine) and between persons (the territory of the law). These manifold and interacting frustrations cannot be met by any one discipline but only by a coordinated attack upon the problem through enlightened political and administrative initiatives and by educational, medical, psychologica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned statute Coming now to the concrete provisions of the Act, tested on the anvil of Article 31(2) and 39(b) and (c), we have to get a hang of the legislative project. Its purpose is to acquire contract ages from a,]]. private sources. The reason for this measure of nationalisation is set out in the 'whereas' paragraphs. In broad terms, it is.... that private contract carriages are being operated in the State in a manner highly detrimental and prejudical to the public interest. it is further claimed that with. a view to prevent such misuse and also to provide better facilities for the transport of passengers and 'to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment,' acquisition of contract carriages is being resorted to. The requisite declaration contemplated in Article 31C is thus made in the preamble as well as in Section 2 of the Act. Of course, in the light of the Keshavananda Bharati Cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... people, operating it in a responsible manner through exercise of public power which is controlled and controllable by society through its organs like the legislature and, at times, even the court, is manifestly a public purpose. Does the purpose subserve some public use or interest or produce some public good or utility ? If it does, the purpose becomes public. 'Public' qualifies the object. Black's Legal Dictionary elucidates the expression : The term is synonymous with government purpose, (State V. Dizon). As employed to denote the objects for which taxes may be levied, it has no relation to the urgency of the public need or to the extent of the public benefit which is to follow; the essential requisite being that a public service or use shall effect the inhabitants as a community, and not merely as individuals. (Stevenson v.Port of Portland). A public purpose or public business has for its objective the promotion o f the public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants of residents within a given political division, as, for example, state, the sovereign powers of which are exercised to promote such publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n purpose, there is dires; in necessity, there is imperative demand. 'The presumption is that a use is public, if the legislature has declared it to be such, and the decision of the legislature must be treated with the consideration due to a co-ordinate department of the government of the state'. It-, effect is not conclusive but considerable' 'Public purpose' should be liberally construed, not whittled down by logomachy. The concept of 'public purpose' has been considered in some academic writings and judicial rulings and a glance at them may give theoretical nourishment to juridical ideas. We have to remember that neither socialist jurisprudence nor capitalist legal culture can govern the concept of public purpose in India's mixed economy and expanding public sector, in the context of progressive developmental programmes. Even the Privy Council, way back in 1914, in Framjee Patit 42 I.A. 44 approved of the wide definition of 'public purpose.' This court has also taken a liberal view of 'Public purpose'. In a host of cases beginning with Kameshwar AIR (1952 SC 889). Agrarian reform, slum clearance to house the homeless, procuring a h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of workers a,., well as their efficiency and a schedule in which road transport figures (Schedule B) was appended setting out those categories which would be progressively State-owned and in which the State would therefore generally take the initiative in establishing new undertakings. When we ascertain the content of 'public purpose, we have to bear the above factors in mind which mean that acquisition of road transport Indeed, even inEngland, 'public purposes' have been defined to mean such 'purposes'of the administration of the government of the country (p. 228, Words Phrases Legally defined, II Edn.). Theoretically, or even otherwise, there is no warrant for linking up public purpose with State necessity, or in the court throwing off the State's declaration of public purposes to make an economic research on its own. it is indeed significant that in Section 40(b) of the Land Acquisition Act, 1894, the concept of 'public use' took in acquisition for the construction of some work even for the benefit of a company, provided such work as likely to prove useful to the public. Even the American Constitution, in the Vth Amendment, uses the expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... community make it necessary for the government to touch upon and limit individual activities at more points than formerly. In Corpus Juris the meaning of the term is stated to be flexible and varying with time and circumstances. All that can be said is that it embraces public utility, public advantage public interest or object. It is thus quite clear that a fresh outlook which places the general interest of the community above the interest of the individual pervades our Constitution.... The words 'public purpose' used in Article 23(2) indicate that the Constitution used those words in a very large sense. In the never ending race, the law must keep pace with the realities of the social and political evolution of the country as reflected in the Constitution. If, therefore, the Sate has to give effect to this avowed purpose of our Constitution, we must regard as 'public purpose' all that will be calculated to promote the welfare of the people as envisaged in these Directive Principles of State policy whatever else that expression may mean. This new outlook, in the words of Das J. brings in economic justice regarded yesterday as a fantastic formula, but is today ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of public measures aimed at general economic betterment. Today, people cry for intervention of Government when anything goes wrong in any front. They demand interjection of Government in every aspect and sphere of life. Will 'public purpose' run riot ? The consternation that if anything can be acquired compulsorily for a public purpose everything will be so acquired is understandable only if we readily grant that the Legislature and the Cabinet are the veils and vestments worn by a callous body irresponsible to the people and irresponsive to justice. There is a general presumption in favour of honest and reasonable exercise of power (State of West Bengal v. Anwar Ali Sarcar, 1952 SCR, 284, 301, per Patanjali Sastry J.). of course not that gross abuse of power and demoniac departure from legal norms are unknown; even so we should have faith in Parliament which, ultimately, is responsible to the people who cannot be ignored by it for all time without imperilling it own existence. Repelling the argument of likely abuse of power, Das J. observed (1954, SCR 587) : What is abnormal if our Constitution has trusted the legislature, as the people of Great Britain have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind no legal flaw in the measure under attack. We think it is a fallacy to deny the presence of public purpose merely because its 'satisfaction by readily available private purchase is possible in the circumstances. It is for the State to decide whether it should pay market price and buy or resort to Article 31 (2) and pay an amount which may be administratively feasible but less than the market price. It may take on hire and not buy at all, it may requisition without paying full compensation. These are the means which cannot be confounded with the ends and it is egregious error to roll up the two together. The entire object of Article 31(2) is defeated if such a constricted construction or cramped meaning were to be given to the provision. It is a social welfare handicap, a jurisprudential error and a truncation of the State's constitutional power to rule that it shall not 'seize' private property within Article 31 (2) unless it proves beyond reasonable doubt a scarcity situation, a public necessity and unavailability in the open market and the like. Yet this is the ` reasoning' which has had a fascination for the High Court. The specious submission is terse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrink into midget size with large spaces for laissez faire economics. The flaw and fallacy of the law and thefetter on the State in this constitutional interpretation goes far beyond this Act and to mortality. We have no hesitation in visualising a wider horizon of public purpose as outlined by us earlier and consequentially to overrule the view of the High Court. The people in our welfare State await State undertakings in a wealth of ways most of which involve compulsory talking of private property and this futurism argues for a wider connotation of public purpose. The aware court must remember the hint of Francis Bacon that 'it is a hard thing to torture the laws so that they torture men-poor men hopefully looking forward for benignant State action. After all, ordinarily, the legislature will acquire compulsorily only if it considers it a proper measure to promote public good. Compensation vis a vis the 25th Amendment The constitutional salvoes of Shri Sen were fired on the target of illusory compensation granted according to him, by the impugned Act. The amendment and recasting of Article 31(2) would stand stiutified if the High Court were right that payment which is less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If we are to lift these people from the mire then it would be the bounden duty of the National Government of India in order to set its house in order, continually to give preferences to these people and even tree them from the burden under which they are being crushed. And if the landlords, zamindars, monied-men and those who are today enjoying privileges-I do not care whether they are European or Indian-if they find that they are discriminated against, I shall sympathise with them, but I will not be able to help them. It will therefore be a battle between the haves and the have-nots. Speaking as one of the foremost jurists of the country and with a sense of far-sightedness, Alladi Krishnaswami Iyer, in the Constituent Assembly, argued for legislative autonomy, without forensic intervention in the matter of fixation of compensation and the principles in that behalf. He rightly stressed that by their very nature the principles of compensation could not be the same in every species of acquisition : Law, according to me, if it is to fulfil its larger purpose, must serve as an instrument of social progress. It must reflect the progressive social tendencies of the age. Ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be done even if you can do it for the simple reason that in all these social matters, laws etc., they are aiming to bring about a certain structure of society different from what it is at present. In that different structure, among other things that will change is this, the big difference between the have's and the have-not's. Now, if we are giving full compensation, the have's remain the have's and the have-not's, have-not's. It does not change in shape or form if compensation takes place. Therefore, in any scheme of social engineering, if I may say so, you cannot give full compensation, apart from the patient fact that you are not in a position-nobody has the resources--to give it. The divergence of thinking between those who framed the Constitution and amended it and the summit judiciary showed up glaringly in Cooper's case and then came the Constitution 25th Amendment Bill devoted primarily to overcome the effect of Cooper. While moving, the Constitution 25th Amendment Bill which brought in Article 31C, the then Law Minister emphasized : Critics of the present measure seek to invest property rights with an aura of sacrosanctity by regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (b) of clause, 2 of the Bill inserts clause (2B) after clause (2A) in the existing Article, and it lays down that nothing in sub-clause (f) of clause (1) of Article 19 shall effect any such law as is referred to in clause (2). In other words, an additional safeguard has been provided by clause (2B) which is sought to be introduced by the Bill to prevent any attack against the law passed under Article 31 (2) on the ground that any of its provisions contravene the fundamental rights guaranteed by Article 19(1) (F). Specific mention is made of the Bank Nationalisation Case and its poignant pertinence consists in the High Court still clinging to Cooper: On a careful reading of the several opinions of the learned Judges in Keshavananda Bharati's case, I am of the clear opinion that the law laid down in Cooper's case holds good. (ILR 1976 Kar. 1478, 1522) The Commission remarks Every student of Constitutional Law knows that Parliament thought that it was necessary to make these provisions because of the recent decision of the Supreme Court in Rustom Covasjee Cooper Another v. Union of India. Parliament presumably thought, and we think rightly, that the effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate to apply these principles in making laws. 'In the Directive Principles, however, one finds an even clearer statement of the social revolution. They aim at making the Indian masses free in the positive sense, free from the passivity engendered bycenturies of coercion by society and by nature, free from the abject physical conditions that had prevented them from fulfilling their best selves. The High Court has referred to Cooper's case the ratio of which to put it tersely-goes to the extent of saying that if any of the relevant consideration in ascertaining the market value were not included. It ceased to be 'compensation' within the meaning of Article31.Then came the scenario--the 25th Amendment deleting the expression 'compensation' and substituting the neutral word 'amount' and restructuring the Article effectively to exclude judicial examination even of the principles of evaluation, the, challenge. to the constitutionality of that constitutional amendment and the elaborate Bharati ruling upholding, by a majority, the vires of the Amending Act. And yet, the I-High Court has, after selectively culling out passages from the bunch of opinions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the word 'principles' and the question ,of inadequacy can only arise if the amount has some norm. If it has no horm no question of specifying any principles arises nor can there be any occasion for the determination of its adequacy. The very fact that the court is debarred from going into the question of adequacy shows that the amount' can he adequate or inadequate. Even if it is inadequate, the fixation or determination of the amount is immune from any challenge. It postulates the existence of some standard or norm without which any enquiry into adequacy becomes wholly unnecessary and irrelevant. (p.283) (emphasis, added). It is true that the 'amount' to be paid to an owner may not be the market value. The price of the property might have increased owning to various factors to which no contribution has been made by the owner. The element of social Justice may have to be taken into consideration.......... The Court will certainly give due weight to legislative judgment. But the norm or the principles of fixing or determining the 'amount' will have to be disclosed to the Court. It will have to be satisfied that the 'amount' has reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The court cannot go into the question whether what is paid or is payable is compensation. It can only go into the question whether the 'amount' in question was arbitrarily fixed as illusory or whether the principles laid down for the purpose of determining the 'amount' payable have reasonable relationship with the value of the property acquired or requisitioned. (pp. 341342). Even here we may excerpt Hegde J's highlight of Part IV Part IV of the Constitution is designed to bring about the social and economic revolution that remained to be fulfilled after independence. The aim of the Constitution is not to guarantee certain liberties to only a few of the citizens but for all. The Constitution visualizes our society as a whole and contemplates that every member of the society should participate in the freedoms guaranteed. To ignore Part IV is to ignore the substance provided for in the Constitution, the hopes held out to the Nation and the very ideals on which our Constitution is built. Without faithfully implementing the Directive Principles, it is not possible to achieve the Welfare State contemplated by the Constitution. A society like ours stepped in po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bear on social good ? In the present case, few will agree that the principles are wholly irrelevant or not geared to social good. The majority view in Bharati was set out by the Court and there it was stated : Section 2(a) and (b) of the Constitution (25th Amendment) Act, 1971 is valid. Glosses apart, the provision excluding the court's power to investigate either the adequacy of the amount or the propriety of the principles to determine the amount was upheld. It follows that individual annotations notwithstanding the Court has set its seal of validity on Article 31(2). Nothing covered by it can now be available for examination using passages in separate opinions. The result is the quantum of the amount or the reasonableness of the principles are out of bounds for the Court. Article 31C has also been upheld subject to the rider that there should be nexus between Article 39(b) and (c) and the object of the acquisition. Our learned brother, Chandrachud J., has struck a middle note and pointed out that where the inputs of valuation prescribed by the statute are wholly irrelevant or unconnected with Social good, thin, Article 3 1 (2) may not retrieve the statute. It is a far c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e community his resources are part of those of the community. To exclude ownership of private resources from the coils of Article 39(b) is to cipherise its very I purpose of redistribution the socialist way. 'A directive to the State with a deliberate design to dismantle feudal and capitalist citadels of property must be interpreted in that spirit and hostility to such a purpose alone can be hospitable to the meaning which excludes private means of production or goods produced from the instruments of production. Sri A. K. Sen agrees that private means of production are included in 'material resources of the community' but by some baffling logic excludes things produced. If a car factory is a material resource, why not cars manufactured ? 'Material' may cover everything worldly and 'resources', according to Random House Dictionary, takes in 'the collective wealth of a country or its means of producing wealth : money or any property that can be converted into money; assets.' No further argument is needed to conclude that Article 39(b) is ample enough to rope in buses. the motor vehicles are part of the material resources of the operators. The ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the exclusion of standards of consumption and general well-being, lawyers have taken a negative rather than a creative and constructive attitude toward social development. In defending rights of untrammelled enterprise against rules of fai r play and in presuming the unconstitutionality of legislative enactments, they have missed their cue to the role of constructive leaders and have been instead dogs in the manger. (Lawyers for Social Change : Perspectives on Public Interest Law : by Robert L. Rabin Stanford Law Review Col. 28, No. 2, January 1976). This does not apply to the Indian Bar on Bench at all and is referred to ex abundanti cautela. Law and Development in India should repel, as far as possible, such an unlovely judgment on Indian jural perspectives and performances. The Court and counsel have a justice constituency with economic overtones, the manifesto being the Constitution designed to uphold the humanist values of life, liberty and the equal pursuit of happiness, material and spiritual. An Explanatory Post-script to our juristic Attitude We have been guided by the thought that an all-too-large gap between the law and public needs, arising out of narrow notion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about what would best serve the country's progress; and so we have grounded ourselves on these solid prescriptions unreflected by speculative niceties lent by literal study and possible injuries inevitable in reshaping society. 'The object and end of all Government is to promote the happiness and prosperity of the community by which it is established', wrote U.S. Chief Justice Taney, 140 years ago in Charles River Bridge v. Warren Bridge and we, in a republic with an irrevocable tryst to give social justice in the midst of poverty, cannot diminish the power to accomplish those ends. To be stable is not to stand still; to move forward and reconcile is the road to the goal-juridical engineering geared to desiderated policy objectives, being the key to most constitutional problems. Not unoften, the subjective philosophy of the judge underpowers the philosophy of the Constitution while it should be overpowered by it. Cardozo, with apt elegance, struck this note : The great tides and currents which engulf the rest of man do not turn aside in their course and pass the Judges by. Cardozo, The Nature of Judicial Process, 1932, P. 170. Taking this warning to head, we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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