ivil Appeal No 1357 of 1973
From the Judgment and Order dated 10101972 of the Gujarat High Court in Second Appeal No 93 of 1968
689 GA Shah and MN Shroff for the Appellants
Krishan Kumar and Vimal Dave NP for the Respondents
 The Judgment of the Court was delivered by VENKATARAMIAH J
The question for consideration in this case is whether the hereditary right of the respondents to recover a sum of Rs3500 per annum under an agreement dated 1081914 entered into between the predecessor in interest of the respondents and the former princely State of Junagadh came to an end by virtue of provisions contained in the Gujarat Surviving Alienations Abolition Act 1963 hereinaf ter referred to as the Act 
There was one Darbar Harsurvala of Mandavad in the former princely State of Junagadh
He had a hereditary right to collect certain quantities of grass fire wood and timber from the Gir Forest in the State of Junagadh and that right was recognised by a declaratory decree made by the Rajastha nik Court of Kathiawar in the year 1884
On the death of Harsurvala the said right was being enjoyed by his son Jiva Vala till the year 1914
On 10th August 1914 an agreement was entered into between Jiva Vala and the State of Junagadh under which the State of Junagadh agreed to pay every year commencing with 1st September of the preceding year and ending with the 31st August of the succeeding year in the month of January a sum of Rs3500 to Jiva Vala and after him to the heirs claiming under him in lieu of the right to collect grass fire wood and timber which was being exer cised by Jiva Vala
Accordingly Jiva Vala was receiving the sum of Rs3500 every year and on his death his son Kalubhai was receiving the said sum every year from the State of Junagadh and on the State of Junagadh becoming part of the Union of India from the Saurashtra State then from the State of Bombay in which Saurashtra State was merged and thereafter from the State of Gujarat which came to be estab lished under the Bombay Reorganisation Act 1960 till his death
After his death Respondent No1 Kamlaben the wife of Kalubhai and the other respondents who were children of Kalubhai were receiving the amount due to them till the year 1964
However in January 1965 the Mamlatdar of Visavadar issued notice under the orders of the Collector Junagadh to the respondents stating that the right to receive the said amount had come to an end on the coming into force of the Act ie the Gujarat Surviving Alienations Abolition Act 1963 which had come into force on 1st October 1963 and threatening the respondents that measures such as attachment etc
would be taken if the amount 690 paid for the year 191963 to 3181964 was not refunded by them to the State Government
Thereupon the respondents instituted the suit before the Court of the Civil Judge Junagadh out of which this appeal arises for a declaration that they continued to enjoy the right to receive the sum of Rs3500 per annum hereditarily and for an injunction re straining the appellants the State of Gujarat and the Collector of Junagadh from taking any action to recover the amount which had already been paid to them
The Trial Court dismissed the suit
Aggrieved by the judgment and decree of the Trial Court the respondents filed an appeal before the District Judge Junagadh in Civil Regular Appeal No 135 of 1966
The District Judge allowed the appeal holding that the right to receive the amount had not come to an end on the coming into force of the Act
The decree passed by the learned District Judge was confirmed by the High Court of Gujarat in Second Appeal No 93 of 1968 vide its Judgment dated 10101972
The appellants have filed this appeal by special leave against the judgment of the High Court
There is no dispute about the facts involved in this case
The right of Harsurvala to take grass fire wood and timber from the Gir Forest belonging to the State of Juna gadh had been declared in a decree Exhibit 21 passed by the Rajasthanik Court on April 14 1884
By a further agree ment dated 10th August 1914 Exhibit 24 which had been arrived at between Jiva Vala descendant of Harsurvala and the State of Junagadh the State of Junagadh had agreed to pay every year a sum of Rs3500 to Jiva Vala and his heirs in lieu of the right to collect grass fire wood timber from the Gir Forest as stated above
That the State of Junagadh and then the State of Saurashtra the State of Bombay and the State of Gujarat were paying the said amount annually to Jiva Vala and his successors till the year 1964
The only question which arises for consideration is whether the said right to receive Rs3500 per annum came to an end on the coming into force of the Act
The Act was passed with the object of abolishing certain alienations which were not affected by the earlier enact ments which had been enacted for the abolition of various kinds of alienations in the State of Gujarat and to provide for matters consequential and incidental thereto
The ex pression alienation  as defined in clause 3 of section 2 of the Act reads thus 3 alienation  means 691 a any right in respect of an aghat land enjoyed by an aghat holder immediately before the appointed day b any right in respect of a Taluqdari watan enjoyed by the holder thereof immediate ly before the appointed day c any right with or without any condition of service in respect of any other land village or portion of a village and consisting of i any proprietary interest in the soil coupled or not coupled with exemption from the payment of the whole or part of the land revenue or ii a right only to the land revenue or a share of land revenue of the land vil lage or portion of a village enjoyed by the holder thereof for the time being and subsisting immediately before the appointed day in limitation of the right of the State Government to assess the land or village or portion of a village to land reve nue in accordance with the Code whether by virtue of an express grant or recognition as a grant by the ruling authority for the time being or otherwise or d any right to any cash allowance or allowance in kind by whatever name called payable by the State Government and enjoyed by any person immediately before the appointed day Section 6 of the Act reads thus 6
Abolition of alienations together with their incidents and alienated lands liable to payment of land revenue
Notwithstanding any usage or custom settlement grant agree ments sanad or order or anything contained in any decree or order of a court or any law for the time being applicable to any alienation with effect on and from the appointed day a all alienations shall be and are hereby abolished b save as expressly provided by or under this Act 692 all rights legally subsisting on the said day under such alienations and all other incidents of such alienations including any right to hold office or any liability to render serv ice appertaining to an alienation shall be and are hereby extinguished c subject to the other provisions of this Act all alienated lands shall be and are hereby made liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder and accordingly the provisions therein relating to unalienated land shall apply to all alienated lands
 On such abolition the alienee is entitled to compensation as provided in section 13 of the Act if the alienation is one covered by section 23d of the Act
The right to receive a sum of Rs3500 per annum which the respondents were enjoying admittedly did not fall under sub clauses a b and c of clause 3 of section 2 of the Act
The question is whether the said right falls under sub clause d of clause 3 of section 2 of the Act and if it falls under that clause whether the payment of the said sum can be abolished constitutionally under the Act
Sub clause d of clause 3 of section 2 of the Act is very widely worded and refers to any right to any cash allowance or allowance in kind by whatever name called payable by the State Government and enjoyed by any person immediately before the appointed day
The Act is included in the Ninth Schedule to the Constitution of India as Item No 33 which reads thus 33
The Gujarat Surviving Alienations Aboli tion Act 1963 Gujarat Act XXXIII of 1963 except in so far as this Act relates to an alienation referred to in sub clause d of clause 3 of section 2 thereof Sub clause d of clause 3 of section 2 of the Act having been specifically excluded the said clause does not receive the protection of Article 31B of the Constitution of India
The question which remains to be considered is wheth er the said sub clause can be deemed to be protected by Article 31A of the Constitution of India
Article 3 IA of the Constitution of Indian refers to matters described in sub clauses a to e of Article 31A1 of the Constitution of India
It is not claimed 693 on behalf of the State Government that the present case falls under sub clauses b to e of Article 31A1 of the Constitution of India
It is however urged that the present case falls under sub clause a of clause 1 of Article 31A of the Constitution of India which reads thus a
the acquisition by the State of any estate or of any rights therein or the extin guishment or modification of any such rights or In other words it is urged that the provision in question should be treated as a part of a legislation intended for bringing about agrarian reform to which Article 31A1a of the Constitution of India is attracted
In the instant case the right which the family of the respondents possessed was the right to collect grass fire wood and timber etc
from the Git Forest and that right had already been surrendered under the agreement dated 1081914 by the said family in lieu of the annual payment of Rs3500
In an earlier deci sion in Civil Application No 1399 of 1968 decided on 181931971 a Division Bench JM Mehta and AD Desai JJ of the Gujarat High Court had held that sub clause d of clause 3 of section 2 of the Act was not ultra vires so far as the alienation in question was by way of an agrarian reform
The judgment in that case had been delivered by JM Mehta J The Judgment out of which the present Second Appeal arises was also rendered by JM Mehta J himself
Distinguishing his earlier decision from the present case JM Mehta J has observed thus In the present case the right of plaintiff has originated in the right to take forest produce of the Gir Forest belonging to the former Junagadh State and which had been enjoyed by the ancestor Shri Harsurvala
The right was recognised by the Rajasthanic Court of the then Kathiawad Agency
It was under the agreement exhibit 24 dated August 10 1914 that this right was commuted into a lump sum amount of Rs3500 and this was enjoyed hereditarily by the plaintiffs  ancestor
Therefore this alienation has nothing to do with any agrarian reform and this alienation would not fall within the section 23d so that it can have any immunity from the challenge
The State could only succeed if the term alienation  in section 23d is interpreted in such wide context which would make it ultra vires as per the settled legal position in the aforesaid Divi 694 sion Bench decision
That is why narrow inter pretation was given by me confining to only those alienations which were incidental to the agrarian reform
The present alienation which consisted of cash allowance as per exhibit 24 is not incidental to any agrarian reform and therefore the Act would not abolish this alienation
The plaintiffs  rights are to take forest produce and on commutation of their rights by exhibit 24 they are property rights
When such allowance is being paid the right to this cash allowance could never be acquired by the State as per the aforesaid settled legal position   In view of the foregoing the High Court held that sec tion 23d of the Act should be read down and construed as not including payment of cash allowance of the type in question
It held that otherwise the said clause would be violative of Articles 14 19 and 31 of the Constitution of India
It is not disputed by the learned counsel for the State Government that unless the present case receives the protec tion of Article 3 IA of the Constitution of India the action taken by the State Government to treat the right of the respondents as having come to an end would be unconstitu tional since it would be violative of Articles 14 19 and 31 of the Constitution of India
It is therefore necessary to examine the nature of the transaction under which the amount of Rs3500 was payable every year to the respondents on the hereditary basis in order to find out whether the abolition of the said right can be considered as a part of agrarian reform which re ceives the protection of Article 31A of the Constitution of India
An extract of the Records of Rights giving particu lars of the agreement dated 10th August 19 14 entered into between Vala Jiva Harsur and the State of Junagadh is pro duced before the Court
It shows that Vala Jiva Harsur the predecessor in interest of the respondents had the right to remove from the Gir Forest every year i 75 cart loads of teak wood ii 100 cart loads of atcot wood iii 600 cart loads of sarpan and iv 250 cart loads of grass in addi tion to the right of grazing of cattle and removing two lakhs bundles of grass during the time of famine
It is clear from the above statement that certain rights which the family of respondents possessed in the land comprised in the Gir Forest were agreed to be surrendered against payment of Rs3500 annually
It is no doubt true that long before the date on which the Act came into force the agreement had come into existence but it was a 695 right which was originally annexed to land
It may be that the said land formed part of the said forest but still it falls within the definition of the expression estate  in clause a of Article 31A2 of the Constitution of India
Article 31A2aiii states that any land held or let for purposes
of agriculture or for purposes ancillary thereto including waste land forest land for pasture or sites of buildings and other structures occupied by cultivators of land agricultural labourers and village artisans is includ ed in the expression estate  for purposes of Article 3 IA of the Constitution of India
Article 3 IA as it stood on the date of the passing of the Act provided that notwith standing anything contained in Article 13 no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights shall be deemed to be void on the ground that it was inconsistent with or took away or abridged any of the rights conferred by Article 14 or Article 19 or Article 31 of the Constitution of India
The expression rights  is again defined in Article 31A2 of the Constitution of India as in relation to an estate including any rights vesting in a proprietor sub proprietor underproprietor tenure hold er raiyat under raiyat or other intermediary and any rights or privileges in respect of land revenue
It is an inclusive definition
The Fight which was being enjoyed by the predecessor ininterest of the respondents was a right in a waste land or a forest land or a land for pasture
In order to treat a particular law as a part of an agrarian reform it is not necessary that on the land which is the subject matter of the said law actual cultivation should be carried on
In the State of Kerala and Anr
vs The Gwalior Rayon silk Manufacturing Wvg Co Ltd etc
  the
constitutionality of the Kerala Private Forests Vesting and Assignment Act 1971 came up for consideration before this Court
In that case one of the questions which arose for consideration was whether the said Act which related to private forests envisaged a scheme of agrarian reform
In that case this Court held that even though the said legislation had the effect of extinguishing or modifying rights annexed to or arising out of the forest land it could be considered as part of agrarian reform because such forest lands also if prudently and profitably exploited could bring about relief to people engaged in agriculture
This Court further observed in that case that agrarian reform was more humanist than mere land reform and scientifically viewed covered not merely abolition of inter mediary tenures zamindaris and the like but restructuring of village life itself taking in its broad embrace the socia economic regeneration of the rural population
In the present case the extinguishment of the right to receive a certain amount in lieu of the right to remove timber grass etc
from a forest area therefore formed part 696 of the process of agrarian reform as there was clear nexus between the agreement to pay the amount and the rights arising out of the forest area
It is significant that under the agreement of the year 1914 the State of Junagadh under took to pay Rs3500 every year hereditarily in lieu of the rights which the predecessor in interest of the respondents had in the forest area thereby meaning that if the amount was not paid the original right to carry timber grass etc
from the forest area would revive
It cannot therefore be said that the extinguishment of the right to receive money alone unconnected with land was contemplated in the instant case
When once the above conclusion is reached then the legislation in question should be construed as having the effect of bringing about the extinguishment of the right in an estate for the purpose of better management of the forest area keeping in view the interests of the people of the State in general and of the people living in or around the Gir Forest in particular
Sub clause d of clause 3 of section 2 of the Act should be deemed to include the cash allowance of the type involved in this case and the Act must be held to be valid even though it affects the rights of the respondents which undoubtedly originated from the land covered by the forest area
We therefore hold that the view taken by the High Court that it the transaction in question is construed as covered by sub clause d of clause 3 of section 2 of the Act the Act would become void to that extent is not correct
We are of the view that the legislation has the effect of validly extinguishing the right of the respondents to receive annually a sum of Rs3500 on a hereditary basis
The respondents are entitled to the payment of whatever compensation is payable under the Act notwithstanding the provisions of Articles 14 and 19 and Article 31 of the Constitution of India as it existed prior to its deletion
We therefore set aside the judgment of the High Court and dismiss the suit instituted by the respondents
We however make it clear that the dismissal of the suit does not come in the way of the respondents being paid whatever compensation they are entitled to under the Act
If such compensation has not been paid yet the authority concerned shall proceed to compute the amount of compensation payable to the respondents and to disburse it within three months from today
The appeal is accordingly allowed
No costs
RNJ Appeal allowed


Summary:
The petitioners Public Limited Companies were grant ed licences under the provisions of the for supply of electricity within the respective licensed areas of Tinsukhia and Dibrugarh Municipal Boards
The Dihrugarh Company was granted licence in 1928 on certain terms and conditions with an option to the State to purchase the under
taking on the expiry of 50 years and thereafter on the expiry of every subsequent period of twenty years
So also the Tinsukhia company was granted licence in 1954 on certain terms and conditions with an option to the State Government to purchase the undertaking on the expiry of 20 years and thereafter on the expiry of every 20 years
The State Government negotiated with the companies for pur 545 chasing them
The negotiations were going on for several years
On 2791972 the Governor promulgated two ordinances for the compulsory acquisition of the undertakings of the two companies
Subsequentiy the ordinances were replaced by the Indian Electricity Assam Amendment Act 1973 and the Tinsukhia  Dibrugarh Electric Supply Undertakings Acquisi tion Act 1973
The two legislations one amending the provisions of Section 52 67 and 7 A of the and the other providing for the acquisition of the two undertakings viz the Tlnsukhia and Dibrugarh Electric Supply Undertaking Acquisition Act 1973 were Challenged in this Court by the writ petitioners on several grounds
It was contended that in view of the private negotiations and the exercise of the option to purchase the legislations were not bona fide but constituted a mere colourable exer cise of legislative power and that the real objects of the two legislations have no direct and reasonable nexus to the objects envisaged in Article 39b of the Constitution
It was also contended that what was sought to be acquired was not the undertakings of the two companies but the differ ence between the market value of the undertakings agreed to by the State Government and the Book value of the undertak ings which the law has substituted by virtue of the amend ments made in the 
The Article 31 C protection given to the legislations and some of the specific provisions of the acquisition law which excluded certain items from the computation of compensation and authorised certain deductions in the amount of compensation have also been challenged
On behalf of the Respondents it was contended that electrical energy has been a material source of the communi ty and any legislative measure to nationalise the undertak ing fell squarely within the ambit of Article 39b and was entitled to Article 31 C protection
It was also asserted that book value has been a well accepted concept of valua tion in accountancy and it cannot be characterised as illu sory even if the legislations did not enjoy the protection of Article 31 C Dismissing the writ petitions HELD RS Pathak
CJ MN Venkatachaliah section Natara jan and section Ranganathan J J per Venkatachaliah J 11
The proposition that the legislative declaration of the nexus between the law and the principles in Article 39 is inconclusive and justiciable is well settled
The sequen tor is that whenever any immunity 546 is claimed for a law under Article 31 C the Court has the power to examine whether the provisions of the law are basically and essentially necessary for the effectuation of the principles envisaged in Article 39b and c
It can hardly be gain said that the electrical energy generated and distributed by the undertakings of the petitioners constitutes material resources of the communi ty
The idea of distribution of the material resources of the community in Article 39b is not necessarily limited to the idea of what is taken over for distribution amongst the intended beneficiaries
That is one of the modes of distri bution
Nationalisation is another mode
The economic cost of social and economic reform is perhaps amongst the most vexed problems of social and economic change and constitute the core element in Nationalisation
The need for constitu tional immunities for such legislative efforts at social and economic change recognise the otherwise unaffordable econom ic burden of reforms
It is not possible to divorce the economic considerations or components from the scheme of nationalisation with which the former are inextricably integrated
The financial cost of a scheme of nationalisa tion lies at its very heart and cannot be isolated
Both the provisions relating to the vestiture of the undertakings in the State and those pertaining to the quantification of the Amount are integral and inseparable parts of the integral scheme of nationalisation and do not ambit of being consid ered as distinct provisions independent of each other
The debate whether nationalisation is by itself to be considered as fulfilling a public purpose or whether the nationalisa tion should be shown to be justified effectuation of the avowed objectives of such nationalisation the choice be tween the pragmatic and the doctrinaire approaches is concluded and no longer available
578C D E 579C D H 580A B E 13
The right title and interest of the licensee in the undertaking does not get transferred to the Board or the State as the case may be immediately upon the mere exer cise of the option to purchase
The exercise of the option would have no such effect on the licensee s right to carry on his business until the undertaking was actually taken over and paid for
The contentions that immediately upon the exercise of the option ipso facto the relationship between the parties get transformed into one as between a Debtor and a Creditor and that the interest of the licensee in the undertaking becomes an actionable right or a chosein action and that no public purpose could be said to be served by the acquisition of a chose in action are all out of place in the instant case
582E 583C 547 14
The acquisition legislation was brought forth for securing the principles contained in Article 39b of the Constitution and is protected under Article 31 C
The Assam amendment made to the provisions of the  amending the basis for quantification of the amount payable in the case of a statutory purchase pursuant to the exercise of the option in terms of the licence would apply to and govern cases of statutory sales and would not assume any immateriality in the instant case
585E F Kesavananda Bharati vs State of Kerala 1973 Suppl
SCR 1 Minerva Mills Ltd vs Union of India   Sanjeev Coke Mfg Co vs Bharat Coking COal Ltd   State of Tamil Nadu vs
L Abu Kavar Bai   Akadasi Padhart vs State of Orissa and Ors   Godra Electricity Co Ltd and Anr
vs The State of Gujarat and Anr  and Madan Mohan Pathak vs Union of India and Ors  relied on
Fergusan vs Skrupa   Fazilka Electric Supply Co Ltd vs The Commissioner of Income Tax Delhi 1962 Suppl
3 SCR 496 and Gujarat Electricity Board vs Shantilal   referred to
Bihar State Electricity Board vs Patna Electricity Supply Co Ltd  distinguished History of the treatment of choses in action by the common law by WS Holdsworth Vol 33 Harvard law Review referred to 2
It may not be just to deprive a recompence that is just and fair in all cases
But that
is not to say that even under a law which has the protection of article 31 A or 31 C the adequacy or justness or fairness of the compensa tion would yet be justiciable
Article 31 C is in effect and substance is to urban property  of what Article 31 A is to agricultural property 
All the same the concept of Book Value is an accepted accountancy concept of value
It cannot be held to be illusory
Even if the impugned law had no protection of Article 31 C and tests appropriate to and available are applied in the circumstances of the present case it cannot be said that the principles envisaged in the acquisition law lead to an amount which can be called unreal or illusory
590C 592B 548 Eswari Khetan Sugar Mills vs State of UP   relied on
Gwalior Rayon vs Union of India  671 referred to
Under the law when a requisition is made by an in tending consumer for electrical energy the licensee has an obligation to lay down service lines
But according to the provisions the entire cost of service line is not required to be borne by the licensee
The licensee is entitled to call upon the consumer to pay part of the cost of service line which may in a given case amount to a substantial part in accordance with the provisions in the Schedule to the Electricity Supply Act
While it is true that the ex pression works  in Section 2h of the Indian Railways Act 1910 includes Service lines  the reason why Service lines  could justifiably be excluded from valuation for purposes of determination of the amount  is that the new licensee is to repair and maintain them
593B C 592F G Dakor Umreth Electricity Co Ltd vs State of Gujarat   approved
On a reasonable construction the expressions amounts remaining  and in so far as such amounts have not been paid over  necessarily exclude any such duplication of the accountability of the licensee for these Reserves 
If any part of the reserves is invested in fixed assets and the reserves in the form of such fixed assets are taken over by the Government pursuant to the acquisition what remains to he accounted for by the licensee is only the amounts remaining  in the pertinent accounts
The liability of the licensee for deduction of the Reserves  from the amount  would arise only if the balance remaining in those accounts are not paid
594F G 5
As regards the liability of the licensee under Sec tion 113 of the Acquisition Act in respect of the amounts payable to employees retrenched by the Government or the Board  as the case may be within one year from the vesting date after the take over even if this question is justicia ble it is not unreasonable or arbitrary as it envisages the continuance of a liability which was otherwise sub stantially that of the licensee
595F G H 596A B 6
Though some of the liabilities arising out of the conduct of the licensees  business prior to vesting are not taken over by Government some of those liabilities are yet authorised to be deducted from the 549 amount
The purpose of this provision is too obvious to require any statutory declaration or the obligations that arise in law and are attandant upon these sums coming to the hands of and retained by the Government
Quite obviously the provision is not intended for an unjust enrichment in the hands of Government
The purpose is obviously to facili tate recovery of certain types of debts owed to public institutions etc and the deduction is for the benefit of those creditor institutions
The Government would plainly be under a legal obligation to pay the sums so deducted to the concerned creditors
The provisions of the Statute must be read along and in consonance with the general princi ples of law which import such obligations on the part of the Government and an implied corresponding discharge to the petitioners to the extent of such deductions in their li abilities
There is a resulting statutory trust in the hands of the Government to pay the sums so deducted to the respec tive creditors even in the absence of express provisions in this behalf in the Statute the general principles of law operate
As a matter of construction it requires to be held that these obligations and consequences follow
596E F G H 597A 7
The Courts strongly lean against any construction which tends to reduce a Statute to a futility
The provision of a Statute must be so construed as to make it effective and operative on the principle but res majis valeat quam periat
It is no doubt true that if a Statute is abso lutely vague and its language wholly intractable and abso lutely meaningless the Statute could be declared void for vagueness
This is not in judicial review by testing the law for arbitrariness or unreasonableness under Article 14 but what a Court of construction dealing with the language of a Statute does in order to ascertain from and accord to the Statute the meaning and purpose which the legislature in tended for it
It is therefore the Court s duty to make what it can of the Statute knowing that the statutes are meant to be operative and not inept and that nothing short of impossibility should allow a Court to declare a Statute unworkable
597F G 598C Manchester Ship Canal Co vs Manchester Race Course Co and Fawcet Properties vs Buckingham County Council 1960 3 AIIER 503 referred to
Section 10 of the Acquisition Act enjoins upon the Government to appoint a person having adequate knowledge anti experience in matters relating to accounts to assess the net amount payable under the Act by the Government to the licensee after making the deductions mentioned in sec tion 9
Proviso to Sections 8 and 9 envisages prior 550 notice to be issued to the licensee by the Government to show cause against any deduction proposed to be made under Section 8 or 9 as the case may be within the period speci fied in the provisos
Even after the Government so makes such determination of the amounts which according to it are deductible from the gross amount such determination would not be final
The assessment of the net amount payable to the licensee will have to be made by the Special Offi cer
It is reasonable to construe that the decision of the Government both under Sections 8 and 9 arrived at even after giving an opportunity to the lincensee of being heard would not be final but the final determination will have to be made by the Special Officer appointed under section 10 of the Act
Section 101 and 2 of the Act must be so construed as to enable the Special Officer to take into account the determination respecting the deduction under Sections 9 and 10 of the ACt made by the Government and take the decision of his own in the matter
The power to assess the net amount by necessary implication takes within its sweep the power to examine the validity of the determination made by the Government in the matter of deduction from the gross amount
This power to determine and assess the net amount  payable by necessary implication cover matters envisaged in Sections 8 and 9
Though only Section 9 is specifically referred to in sub sections 1 and 2 of section 10 the language of sub sections 1 and 2 which enable the Special Officer to assess the net amount pay able would by necessary implication attract the power to decide as to the validity and correctness of the deduction to be made under Section 8 as well
So construed
the provi sions of Section 10 would furnish a reasonably adequate machinery for the assessment of the net amount payable to the licensee
598E H 599A E 9
So far as Arbitration is concerned even after the decision of the Special Officer there is the further arbitral forum to decide disputes in respect of the specific areas in which disputes are rendered arbitrable under Sec tion 20
There is a provision for appointment of a sitting or retired District or High Court Judge as arbitrator under the said section
Hence it cannot be said that there is no proper machinery for resolving the disputes between the Government and the licensee rendering the Acquisition Act unworkable
599F G Per Mukharji J Concurring 1
Article 39b of the Constitution enjoins that the State in particular should direct its policy towards secur ing that the ownership and control of the material resources of the community are so distri 551 buted as to best subserve the common good and that the operation of the economic system does not result in concen tration of wealth and means of production to the common detriment
In order to decide whether a Statute is within Article 31 C the Court if necessary may examine the nature and the character of the legislation and the matter dealt with as to whether there is any nexus between the law and the principles mentioned in Article 39b and c
On such an examination if it appears that there is no such nexus between the legislation and the objectives and the principles mentioned in Article 39b and c the legisla tion will not enjoy the protection of Article 31 C
In order to see the real nature of the Statute if need be the Court may also tear the veil
553E H Kesavananda Bharati vs State of Kerala 1973 Suppl
SCR 1 relied on
Charles Russel vs The Queen 1882 VII AC 829 referred to
Whenever a question is raised that the Parliament or the State Legislature have abused their powers and inserted a declaration in a law for not giving effect to securing the Directive Principles specified in Article 39b and c the Court can and must necessarily go into that question and decide
If the Court comes to the conclusion that the decla ration was merely a pretence and that real purpose of the law is the accomplishment of some object other than to give effect to the policy of the State towards securing the Directive Principles as enjoined by Article 39b and c the declaration would not debar the Court from striking down any provision therein which violates Articles 14 19 or 31
In other words if a law passed ostensibly to give effect to the policy of the State is in truth and substance one for accomplishing an unauthorised object the Court would be entitled to tear the veil created by the declaration and decide according to the nature of the law
The only question open to judicial review under_Article 31 C is whether there is a direct and reasonable nexus between the impugned law and the provisions of Article 39b and c
Reasonableness is evidently regarding the nexus and not regarding the law
554D E F 555B C Kesavananda Bharati vs State of Kerala 1973 Suppl
SCR 1 Minerva Mills Ltd vs Union of India  and Sanjeer Coke Mfg Co vs Bharat Coking Coal Ltd  Anr
   relied on
It is indisputed that the electric energy generated by the petitioner companies constitutes material resources of the community 552 within the scope and meaning of Article 39b and having regard to the true nature and the purpose of the legisla tions reading the legislations entirely the legislations have a direct and reasonable nexus with time objective of distributing the material resources so as to subserve the common good
The determination of value thereof and the substitution of the book value in place of market value are only methods for such acquisition and do not disclose the true nature and character of the legislation but are inci dental provisions thereof
if that is the position then it is incorrect to say that what was acquired was not the material resources but chose in action
The true nature and character of the legislations in question was to acquire the material resources namely the electric energy for better supply and distribution
556D E F State of Tamil Nadu  Ors
vs L Abu Kavur Bai  Ors  relied on
Bihar State Electricity Board  Ors
vs Patna Electrici ty Supply Co Ltd distinguished
Having regard to the true nature and character of the legislations in question the legislations are not colourable legislations in the sense that there was no direct and reasonable nexus with Article 31b and c of the Constitu tion
556H