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1989 (5) TMI 317

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..... t;![endif]--> PATHAK, R.S. (CJ) AND MISRA RANGNATH, JJ. Dr. Y.S. Chitale, Soli J. Sorabiee, A.B. Diwan, B.V. Desai, Ms. Madavi Gupta, Bharat Sangal, Harish N. Salve, T.V.S.N. Chari, Ms. Sunita Modigunda, Ms. Vrinda Grover and S.K. Bhattacharya for the Petitioner G. Ramaswamy, Additional Solicitor General Anil Dev Singh, P.S. Shroff, S.S. Shroff, R. Karanjawala, Mrs. M. Karanjawala, Ejaz Maqbool, Mrs. Shobha Dikshit, E.C. Aggarwal, B.V. Desai, Ms. Madhavi Gupta, C.S. Vaidyanathan and S.V. Deshpande for th .....

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..... terest. It was further contended that State largesse had been conferred on the petitioners at the cost of the State exchequer. The petitioners therein also pleaded that a monopoly had been created in favour of the private grantees and was not protected under Art. 19(1)(g) of the Constitution. According to Kasturilal, the petitioner before this Court then, the benefits should have been thrown open and opportunity should have been provided to all interested persons to compete for the obtaining of the contract. A three-Judge Bench consisting one of us (the learned Chief Justice) dealt with the matter at length and ulti mately dismissed the petition holding that there was no substance in any of the contentions advanced on behalf of Kasturilal. (Kasturi Lal Lakshmi Reddy v. State of Jammu Kashmir Anr., [1980] 3 SCR 1336). The order made in favour of the petitioner-company in writ petition No. 794/86 and incorporated in the agreement dated 6.11. 1978 had also been challenged in a separate writ petition before this Court and the reasoned order for rejection of the writ petition is found in Brij Bhushan Ors. v. State of Jammu Kashmir Ors., [1986] 2 SCC 354. While the petiti .....

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..... er, instrument, agreement or contract or in any judgment, decree or order of any Court or Authority, no person, other than the Government shall as from the commencement of this Act ,- (a) extract resin by tapping or otherwise from Chit/ Chil or Kail trees in the State whether such trees belong to the State or not; (b) transport resin from one place to other in the State except under and in accordance with the permit granted under this Act; (c) acquire, possess, store, dispose of or otherwise deal with any resin extracted and manufactured in the State. 4. Disposal of resin (1) All resin extracted under section 3 shall be stored at resin depots and thereafter shall be sold by the Government to the Jammu Kashmir Industries Limited for processing. (2) After processing it by the Jammu Kashmir Industries Limited, the resin products, if any surplus, shall be sold by it to the small scale units and medium scale units in the State in such manner as may be provided for, and at such price as may be fixed by the Jammu Kashmir Industries Limited in consultation with the Government. 5. Fixation of price- (1) The Government shall, having due regard to the following fact .....

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..... on right to property as a fundamental one. The petitioners maintained that the Government orders and contracts under which they have got the right to exploit or utilise the particular forest product does amount to 'property' and the petitioners were entitled to protection thereof against expropriation and in case no compensation was provided the relevant provisions of the Act became exposed to challenge. They have similarly contended that the impugned provisions of s. 3 are hit for contravening the fundamental right guaranteed by Art. 19(1)(g) which confers upon them the right to carry on any occupation, trade or business. The Government orders made in 1979 did confer the right to exploit the forest and appropriate a part of the collection of the gums for purposes of business. The concept of 'property' known to jurisprudence has expanded through several pronouncements of this Court. Ramana Dayaram Shetty v. The International Airport Authority of India Ors., [1979] 3 SCR 1014, to which one of us (the learned Chief Justice) was party held: Today the Government in a welfare State is the regulator and dispenser of special services and provider of a large num .....

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..... perty' in 73 Yale Law Journal 733, 'that Government action be based on standards that are not arbitrary or unauthorised. In Kasturi Lal Lakshmi Reddy v. State of Jammu Kashmir Anr., (supra), the interest created in favour of the petitioners in the forest assets of the State (which has now been fatally hit by section 3) was considered to be property. At page 1354 of the Reports this Court stated: It was pointed out by this Court in Ramana Dayaram Shetty v. The International Airport Authority of India Ors., (supra) that with the growth of the welfare state, new forms of property in the shape of Government largess are developing, since the Government is increasingly assuming the role of regulator and dispenser of social services and provider of a large number of benefits including jobs, contracts, licences, quotas, minerals rights etc. In Subodh Gopal Bose's case [1954] SCR 587, this Court had pointed out: The word 'property' in the context of Article 31 (the same should be the meaning under Article 19(1)(f) which is designed to protect private property in all its forms, must be understood both in a corporeal sense as having reference to all t .....

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..... ettlement was 'property' within the meaning of Art. 31(2) and whether stopping payment of bonus amounted to compulsory acquisition of property without payment of compensation. The Court ultimately held that bonus was property and the legislation was bad. At p. 358 of the Reports, this Court said: It is clear from' the scheme of fundamental rights embodied in Part III of the Constitution that the guarantee of the right to property is contained in Article 19(1)(f) and clauses (1) and (2) of Article 31. It stands to reason that 'property' cannot have one meaning in Article 19(1)(f), another in Article 31 clause (1) and still another in Article 31, clause (2). 'Property' must have the same connotation in all the three Articles and since these are constitutional provisions intended to secure a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind. At p. 360 of the Reports, the Court again stated that every form of property, tangible or intangible, including debts and choses in action constituted property, In this group of cases before us the executive grant or the contract created interest i .....

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..... elonging to the State but it shall also apply to such trees belonging to private persons and rights of such private owners to carry on the various operations described in s. 3 are completely taken away without provision of any compensation. It cannot be contended in view of what we have stated above that the right of beneficial enjoyment of the trees by carrying out the processes named in s. 3 do not constitute 'property'. Unless the position is covered by clause (2A) of Art. 31, in view of our conclusion that the interest created under the contract, Government order or the right of beneficial enjoyment vested in the private owner of the trees amount to 'property', the Act would be hit by Art. 31(2). Sub-Art. (2A) provides: 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. Learned Additional Solicitor General's contention has been that under the provisions of s. 3 of the Act the righ .....

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..... f leases and subleases, all other leases and subleases shall stand terminated in so far as they relate to the winning or mining of coal. There is no provision in the Act by which the interest so terminated is vested in the State; Nor does such vesting flow as a necessary consequence of any of the provisions of the Act. Subsection (4) of section 4 of the Act provides that where a mining lease stands terminated under sub-section (3), it shall be lawful for the Central Government or a Government Company or a corporation owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands so terminated. The plain intendment of the Act, which, may it be reiterated, is neither a pretense nor a facade, is that once the outstanding leases and sub-leases are terminated, the Central Government and the other authorities will be free to apply for a mining lease. Any lease-hold interest which the Central Government, for example, may thus obtain does not directly or immediately flow from the termination brought about by section 3(3)(b). Another event has to intervene between the termin .....

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..... petitioners that the circumstances gave rise to a fact situation of estoppel. It is true that there is no estoppel against the legislature and the vires of the Act cannot be tested by invoking the plea but so far as the State Government is concerned the rule of estoppel does apply and the precedents of this Court are clear. It is unnecessary to go into that aspect of the matter as in our considered opinion the impugned Act suffers from the vice of taking away rights to property without providing for compensation at all and is hit by Art. 31(2) of the Constitution. Connected proceedings had been taken for interim arrangement regarding provision of raw material to the petitioners and certain other parties. We do not propose to deal with those aspects in this judgment but liberty is given to parties to apply for such directions as they consider appropriate and such applications, when filed, will be dealt with separately. In the result, each of the writ petitions succeeds. We declare the provisions of ss. 3 and 4 of the Act to be ultra vires the Constitution and since these provisions contain the soul of the Act and without them, the Act cannot operate, the entire Act has to suff .....

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