ition Civil Nos
35172 and 798 of 1992
Under Articte 32 of the Constitution of India
G Ramaswamy Attorney General Soli J Sorabjee HN Salve GL Sanghi Dr V Gaurishankar DD Thakur AK Ganguli JB Dadachandji Mrs AK Verma Sunil Gupta section Sukumaran Manmohan Mrs section Pathak section Rajappa Ms A Subhashini P Parmeshwaran CVS Rao RF Nariman MP Vinod R Nagendra Naidu NN Bhatt CN Sreekumar Pichai D Goburdhan Santokh Singh Ms M Karanjawala Antip Sachthey and G Prakash for the appearing Parties
The Judgments of the Court were delivered by
section RATNAVEL PANDIAN J
These two Writ Petitions call in question the constitutional validity of the Constitution Twenty sixth Amendment Act of 1971 inter alia on the ground that it violates the basic structure and essential features of the Constitution of India and is therefore outside the scope and ambit of constituent powers of the Parliament to amend the Constitution as provided under Article 368 of the Constitution
In addition certain directions or suitable orders are sought for declaring that the petitioner continue to be the Rulers or the Successor Rulers  as the case may be and directing the respondent Union of India to continue to recognise their personal rights amenities and privileges as Rulers of their erstwhile States and also continue to pay privy purse to them in addition to their arrears of amounts
For facilitating a proper understanding of the controversy that has led to the filing of these two Writ Petitions and the interlocutor Applications 1 to 3 of 1992 in Writ 490 Petition No 351 of 1972 a synoptical resume of the case as adumbrated in Writ Petition No 35172 with the historical background may be stated  The petitioner Shri Raghunathrao Raja was the Co Ruler of Indian State of Kurundwad Jr which was prior to 15th August 1947 a sovereign State in treaty relationship with and under the suzerainty of the British Crown
On the commencement of the Indian Independence Act 1947 British Paramountcy lapsed and the Indian States became completely sovereign and independent
They were free to accede to either of the two Dominions of India or Pakistan or to remain independent
The petitioner s co Ruler on behalf of both executed an instrument of accession under Section 5 of the Government of India Act 1935 as adopted under the Indian Independence Act 1947
This instrument was accepted by the Governor General of India and the State thus became a part of the Dominion of India
Likewise Rulers of most of the other Indian States also executed similar instruments which were accepted by the Governor General
By the said instrument the petitioner accepted the matters specified in the schedule thereto as matters with respect to which the Dominion Legislature may make laws for the State and declared his intent that the Governor General of India the dominion Legislature the Federal Court and any other Dominion authority established for the purposes of the Dominion shall subject to the terms of the instrument exercise in relation to the Kurundwad State such functions as may be vested in them by the Government of India Act 1935 as in force in the Dominion of India on the 15th August 1947
According to the petitioner clause 7 of the Instrument provided that nothing therein shall be deemed to commit the Ruler in anyway to acceptance of any future Constitution of India or to fetter his discretion to enter into agreements with the Government of India under any such future Constitution
Subsequently a number of Rulers executed Agreements of Merger and transferred the administration of their States to the Dominion Government
The Merger Agreement was in the form given in the White Paper on Indian States  and it was executed on the 19th February 1948
Then the administration of the State of the petitioner was handed over on the 8th March 1948
The case of the petitioner is that under the Merger Agreement he was entitled to receive annually from the revenues of the State his privy 491 purse as specified in the Merger Agreement as amended by an order of Government of India in 1956 free of taxes besides reserving his personal rights privileges and dignities
Certain groups of States entered into covenants for the establishment of United States comprising the territories of the covenanting States and Talukas with a common executive legislature and judiciary
The covenants inter alia provided for the administration of United States by a Rajpramukh aided and advised by a Council of Ministers
They also envisaged the establishment of a Constituent Assembly charged with the duty to frame Constitution for the United States within the framework of covenants and of the Constitution of India
Each of the covenants was concurred in by the Government of India which guaranteed all its provisions including provisions relating to the privy purse personal privileges etc
However it was later desired that the Constitution of the United States should also be framed by the Constituent Assembly of India and form part of the Constitution of India
It was decided in consultation with the Government of the United States that the Constitution of India as framed by the Constituent Assembly of India should itself contain all the necessary provisions governing the constitutional structure of the United States as well as the provisions for the guarantee contained in the covenants and the Merger Agreements
In pursuance of this decision the necessary provisions including part VII providing for the Government legislature judiciary etc
of the United States as well as certain separate articles governing other matters for example the privy purse and privileges of Rulers bringing them within the framework of the covenants were included in the Constitution of India
Accordingly on 13th October 1949 the Constituent Assembly of India adopted inter alia two Articles namely Article 291 relating to payment of privy purse and Article 362 relating to personal rights and privileges of the Rulers
Amendment relating to the United States and other States which had not merged were also adopted and these States were called Part B  States
The Rulers and Rajpramukhs of the States agreed to adopt the Constitution as drafted by the Constituent Assembly of India and issued proclamations directing that the Constitution to be adopted by the Constituent Assembly of India shall be the Constitution for the United States
Supplementary covenants were also executed by the covenanting States which covenants were concurred in and guaranteed by Government of India
Thereafter the Constituent Assembly passed and adopted the Constitution
According to the petitioner it was only on the 493 was to terminate the privy purses and privileges of the former Indian Rulers and to terminate expressly the recognition already granted to them under those two deleted Articles
According to the learned counsel appearing for the writ petitioners the withdrawal of the guarantees and assurances given under those articles and the abolition of the privy purse personal rights privileges and dignities is in violent breach of the power of Parliament acting as a constituent body under Article 368 of the Constitution inasmuch as it not only sought to amend the Constitution but also destroy the basic philosophy personality structure and feature of the Constitution
Though it is not necessary to narrate in detail the historical events leading to the transfer of power and the integration of Indian States consequent upon the political and constitutional changes yet a prefatory note of the past historical background may be stated so as to have a better understanding of the policy step taken for the integration of the States in terms of the consolidation of the country
Though India is geographically one entity yet throughout its long and past chequered history it never achieved political homogeneity
There were about 554 States subject to a marginal variation as found in various Reports out of which the States of Hyderabad and Mysore were left territorially untouched
Two hundred and sixteen states were merged in the adjoining provinces in which they were situated or to which they were contiguous
Five were taken over individually as Chief Commissioners  provinces under the direct control of the Government of India besides twenty one Punjab Hill States which comprised Himachal Pradesh
Three hundred and ten were consolidated into six Unions of which Vindhya Pradesh was subsequently converted into a Chief Commissioner s province
Thus as a result of integration in the place of 554 states fourteen ad ministrative units had emerged
This was a physical or geographical consolidation
The next step was to fit all these units into a common administrative mould
Administration in the erstwhile States was in varying stages of development and with a few exceptions it was both personal and primitive
Such states being Mysore Baroda Travancore and Cochin could stand comparison with their neighboring provinces and in some respects were ahead of them
But there were smaller States where owing mainly to the 449 slenderness of their resources the rulers were not in a position to discharge even the elementary functions of government
Between these two extremes there were several States with administrative systems of varying degrees of efficiency
In the past the comparative Indian area covered by the States was 48 per cent of the total area of the Dominion of India the relative population ratio of the States was 28 per cent of the total population of the Dominion of India
All the above Indian states formed a separate part of India before their merger with the rest of India
It is common knowledge that the aim of Government of India Act 1935 was to associate the Indian states with the British India as equal partners in loose federation
When India became independent by the Indian Independence Act of 1947 British paramountcy in respect of the Indian states lapsed
Therefore theoretically though the Rulers became independent in actual fact almost all the Rulers signed Instruments of Accession in August 1947 surrendering Defence External Affairs and Communications
The Rulers immediately after independence became divided into four classes
All the agreements of merger and covenants provided for the fixation of the Rulers  privy purse which was intended to cover all the expenses of the Rulers and their families including the expenses of their residences marriages and other expenses etc
Under the terms of the agreements and covenants entered into by the Rulers privy purses were paid to the Rulers out of the revenues of the States concerned and payments had so far been made accordingly
During the course of the discussion with the Indian States Finances Enquiry Committee it was urged by most of the States that the liability for paying privy purses of Rulers should be taken over by the Centre
Having regard to the various factors it was decided that the payments should constitute a charge on the Central revenues
The privy purses settlements were therefore in the nature of consideration for the surrender by the Rulers of all the ruling powers and also for the dissolution of the States as separate units
it is stated that the total amount of the privy purse came to about Rs 58 crores per annum and the quantum of privy purse each year was liable to reduction with every generation
According to VP Menon who was the Constitutional Advisor to the Governor General till 1947 and then the Secretary to the Ministry of States and closely connected with the 495 annexation of the princely states the price paid as Privy Purses was not too high for integration and indeed it was insignificant when compared with what the Rulers had lost
 He pointed out that the cash balances were to the tune of Rs 77 crores and that palaces in Delhi alone were worth several lakhs of rupees
 It is appropriate to refer to the speech of Sardar Vallabhbhai Patel made on 12th October 1949 in the Constituent Assembly on the Draft constitution on which reliance was placed by the writ petitioners
The speech reads thus  There was nothing to compel or induce the Rulers to merge the identity of their States
Any use of force would have not only been against our professed principles but would have also caused serious repercussions
If the Rulers had elected to stay out they would have continued to draw the heavy civil lists which they were drawing before and in large number of cases they could have continued to enjoy unrestricted use of the State revenues
The minimum which we could offer to them as quid pro quo for parting with their ruling powers was to guarantee to them privy purses and certain privileges on a reasonable and defined basis
The privy purse settlements are therefore in the nature of consideration for the surrender by the Rulers of all their ruling powers and also for the dissolution of the States as separate units
We would do well to remember that the British Government spent enormous amounts in respect of the Mahratta settlements alone
We are ourselves honouring the commitments of the British Government in respect of the persons of those Rulers who helped them in consolidating their empire
Need we cavil then at the small purposely use the world small price we have paid for the bloodless revolution which has affected the destinies of millions of our people
justice to them let us place ourselves in their position and then assess the value of their sacrifice
The Rulers have now discharged their part of the obligations by transferring all ruling powers and by agreeing to the 496 integration of their States
The main part of our obligation under these agreements is to ensure that the guarantees given by us in respect of privy purse are fully implemented
Our failure to do so would be a breach of faith and seriously prejudice the stabilization of the new order
 The constitutional provisions of Articles 291 a id 362 which are now deleted by Section 2 of the impugned Constitution Twenty sixth Amendment Act as they stood read as follows 291 Privy purse sums of Rulers 1 Where under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of this Constitution the payment of any sums free of tax has been guaranteed or assured by the Government of India to any Ruler of such State as privy purse a such sums shall be charged on and paid out of the consolidated Fund of India and b the sums so paid to any Ruler shall be exempt from all taxes on income
2 Where the territories of any such Indian State as aforesaid are comprised within a State specified in Part A or Part B of the First Schedule there shall be charged on and paid out of the Consolidated Fund of that State such contribution if any in respect of the payments made by the Government of India under clause 1 and for such period as may subject to any agreement entered into in that behalf under clause 1 of Article 278 be determined by order of the President
362 Rights and privileges of Rulers of India States In the exercise of the power of Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in clause 497 1 of Article 291 with respect to the personal rights privileges and dignities of the Ruler of an Indian State  Clause 22 of Article 366 was amended by Section 4 of the impugned Act of 1971
We shall reproduce that clause as it stood then and the substituted clause present consequent upon the amendment
Unmended Clause Ruler in relation to an Indian State means the Prince Chief or other person by whom any such covenant or agreement as is referred to in clause 1 of Article 291 was entered into and who for the time being is recognized by the President as the Ruler of the State and includes any person who for the time being is recognized by the President as the successor of such Ruler
 Substituted or amended clause Ruler means the Prince Chief or other person who at any time before the commencement of the Constitution Twenty sixth Amendment Act 1971 was recognized by the President as the Ruler of an Indian State or any person who at any time before such commencement was recognized by the President as the successor of such Ruler  In this connection the new Article 363 A which has been inserted by section 3 of the impugned Amendment Act which is also relevant for our purpose may be reproduced  363 A Recognition granted to Rulers of Indian States to cease and privy purses to be abolished Notwithstanding anything in this Constitution or in any law for the time being in force a the Prince Chief or other person who at any time before the commencement or the Constitution Twentysixth Amendment Act 1971 was recognized by the President as the Ruler of any Indian State or any persons who at any time before such commencement was recognized by the President as the successor of such ruler shall on 498 and from such commencement cease to be recognized as such Ruler or the Successor of such Ruler
b on and from the commencement of the Constitution Twenty sixth Amendment Act 1971 privy purse is abolished and all rights liabilities and obligations in respect of privy purse are extinguished and accordingly the Rulers or as the case may be the successor of such Ruler referred to in clause a or any other person shall not be paid any sum as privy purse
The submissions advanced by Mr Soli J Sorabjee the learned senior counsel appearing on behalf of the writ petitioner in Writ Petition No 351 of 1972 are thus
Articles 291 362 and 36622 of the Constitution were integral part of the constitutional scheme and formed the important basic structure since the underlying purpose of these Articles was to facilitate stabilization of the new order and ensure organic unity of India
These Articles guaranteed pledges to the Rulers based on elementary principles of justice and in order to preserve the sanctity of solemn agreements
It was only by the incorporation of these Articles that the unity of India was achieved by getting all the Rulers within the fold of the Constitution and that the deletion of these Articles has damaged and demolished the very basic structure of the Constitution
The covenants entered into were in the nature of contracts which had been guaranteed constitutionally and affirmed by making the privy purse an expenditure charged under the Consolidated Fund of India and the use of the expressions guaranteed or assured by the Government of the Dominion of India to any Ruler as embodied in Article 291 and the expression guaranteed and assurance given under such covenants or agreements as is referred to in clause 1 of Article 291   as comprised in Article 362 were a permanent feature of the Constitution reflecting the intention of the founding fathers of the Constitution and as such these two Articles should have been kept intact
According to the learned counsel the deletion of these Articles amounted to a gross breach of the principle of political justice enshrined in the preamble by  depriving or taking away from the princes the privy purses which were given to them as consideration for surrendering all their sovereign rights and contributing to the unity and integrity of the country 499 and that the deletion of these Articles by the impugned Amendment Act is arbitrary unreasoable and violative of Article 14 of the Constitution
Further it has been urged that the Rulers acceded to the Dominion of India and executed Instruments of Accession and Covenants in consideration of the pledges and promises enshrined in Articles 291 and 362 and that the impugned Amendment Act is beyond and outside the scope and ambit of the constitutional power of the Parliament to amend the Constitution as provided under Article 368 of the Constitution
Mr Soli J Sorabjee the learned senior counsel in his additional written submissions has further urged that without the co operation of the Rulers not only the territory of India its population the composition of the State Legislatures the Lok Sabha and Rajya Sabha but also the Constitution that was adopted on 26th November 1949 would have been basically different and that India ie Bharat would have been fundamentally different from the Bharat that came into being
In Writ Petition No 351 of 1972 in Ground Nos 38 39 and 40 it is contended that the Constitution Twenty sixth Amendment Act is unconstitution null void and violative of Articles 14 191g 21 31 1 and 2 of the Constitution
Mr Harish Salve the learned senior counsel contended that 291 and 362 when incorporated were intended to grant recognition to the solemn promises on the strength of which the former Rulers ageed to merge with the Indian Dominion and the guarantee of privy purses and certain privileges was as a just quid pro quo for surrendering their sovereignty and dissolving their States
It has been stated that the constitutional guarantees and assurances promising continuance of privy purse as enshrined in the Agreements and Covenants were an integral part of the Constitutional Schemes  and an important part of the Constitutional structure  and they were to be fully honoured and not cast away on a false morass of public opinion or buried under acts of States but the impugned Act ex facie has abolished and destroyed those constitutional provisions of Articles 291 and 362 affirming the guarantees and assurances given to agreements
To highlight the signature of those agreenents whereby the Rulers were persuaded to sign the instruments the statement of Shri VP Menon who was Closely connected with the annexation of the princely states and the speech of Sardar Vallabhbhai 500 Patel made in the Constituent Assembly were cited
It is further emphasized that Sardar Patel also made it clear that according to the vision and views of the Constitution makers the guarantees of Privy Purse privileges etc were perfectly in keeping with the democratic ethos and principle of the Indian people
Then the learned counsel stated that the views expressed in the Constituent Assembly were unanimously accepted and there was no dissent and that in fact the closing remarks in the debate of Dr B Pattabhai Sitaramayya were not only remarkably confirmatory of the permanence and indefeasibility of the aforesaid guarantees and assurances but also went a long way in determining that the said guarantees and assurances have come to stay as an integral and untouchable part of the basic structure of the Constitution
Finally it was said that there can be no basic structure of a Constitution divorced from the historical evolution of the precepts and principles on which the Constitution is founded
Any effort to determine the basic structure of the Constitution without keeping a finger on the historical pulse of the Constitution may well lead to substantial injustice
According to him if the historical approach to the test of basic structure is kept in view the guarantees and assurances of the privy purses privileges etc
granted by the Constitution makers by incorporating Articles 291 362 and 366 22 in the Constitution framed by them would without any doubt or dispute emerge in their own rights as basic features  of the Constitution which cannot be abrogated or annihilated by any Constitutional amendment
What he fmally concluded is that the guarantees and assurances of the privy purses privileges etc
contained in the above three Articles were in fact the reflections of the aforesaid virtues of the Constitution makers which are the very virtues which characterized the personality of the Indian Constitution and that the Objects and Reasons of the impugned Amendment clearly establish the mala fides of the Amendment
Mr AK Ganguly the learned senior counsel appearing in IA
No 3 of 1992 in WP No 351 of 1972 pointed out that after the Articles 291 362 and 366 22 were adopted by the Constituent Assembly of India on 12th 13th 14th and 16th October of 1949 Maharaja of Mysore then issued a proclamation on 25th November 1949 to the effect that the Constituent Assembly of Mysore and Maharaja adopted the Constitution of India which would be as passed and adopted by the Constituent Assembly of India
On 501 the following day namely 26th November 1949 the Constituent Assembly adopted the Constitution of India
Thereafter on 23rd January 1950 Maharaja of Mysore executed the Merger Agreement with the Government of India
The learned counsel after giving a brief history of the Merger of the princely States stated that the fact that the framers of the Constitution adroitly chose the words guarantee or assured unequivocally conveys the intention of the framers of the Constitution to continue the guarantee as per the covenants in their plain meaning
Learned counsel submitted that the fact that the expression guaranteed occurring both in Article 32 and Article 291 besides in Article 362  guarantee  clearly demonstrates the mind of the Constitution makers that they intended the said provisions of Articles 291 and 362 to be the basic and essential structure of the Constitution
According to him to preserve the sanctity of these rights the framers of the Constitution chose to avoid voting in Parliament on the amount to be paid as privy purses and keeping that object in their view they framed Articles 2911 reading Such sums shall be charged on and paid out of the Consolidated Fund of India and that the said payments would be exempted from all taxes on income
When such was the sanctity attached to this guarantee the impugned Amendment completely throwing away those guarantees and assurances to the wind is palpably arbitrary and destructive of the equality clause which is admittedly a basic feature of the Constitution
1992 in Writ Petition No 351 of 1972 adopted the arguments of the other counsel and contended that the erstwhile Rulers of the princely states formed a class apart in that there is a real and substantial distinction between them and the citizenry of India
In this context he referred to Section 87B of the Civil Procedure Code 1908 which was introduced by way of Amendment after the Constitution came into force in the year 1951 and in order to protect the erstwhile Rulers from frivolous suits filed against them in free India after the Constitution came into force
This according to learned counsel was legislative recognition in addition to the constitutional guarantee contained in Articles 291 and 362 of the fact that the erstwhile Princes formed a class apart
When such was the position according to the learned counsel the impugned Amendment which violates the basic structure of the Constitution is unconstitutional
He cited certain decisions in support of his arguments that the Amendment Act is violative of the essential features contained in Articles 14 and 191f
502 Mr DD Thakur the learned senior counsel appearing for the petitioner in Writ Petition No 79892 besides adopting the argument advanced in Writ Petition No 35172 added that these two Articles Were not at all amendable on the principle of prohibition against impairment of the contract obligations a principle recopised in Section 10 Article 1 of the Constitution of the United States of America
The same principle is incorporated in the Indian Constitution in the shape of Articles 362 and 291
According to the learned counsel the impugned Amendment Act is an ugly epitome of immorality perpetrated by the Indian Parliament that too in the exercise of its constituent powers and the said Amendment Act constitutes an unholy assault on the spirit which is impermissible and that the principle of justice fairness and reasonableness are beyond the amending powers of the Parliament
He further stated that the equality clause as interpreted by this Court in various decisions is the most important and indispensable feature of the Constitution and destruction thereof will amount to changing the basic structure of the Constitution and that the authority of the Parliament to amend the Constitution under Article 368 could be exercised only if the Amendment in the Constitution is justifiable and necessitated because of the socioeconomic reasons broadly referred to in the directive principles of the State Policy and that any Amendment unrelated to any genuine compulsion amounts to an abuse of the power and is therefore a fraud on the exercise of power itself
The learned Attorney General of India with regard to the above pre Constitutional agreements stated that the history of the developments leading to the merger agreements and the framing of the Constitution clearly show that it is really the union of the people of the native States with the people of the erstwhile
British India and the Instruments of Accession were only the basic documents but not the individual agreements with the Rulers and therefore to attribute the agreements entered into by Rulers as a sacrifice by the Rulers is unfounded
Secondly the nature of the covenants is not that of a contract because a contract is enforceable at law while these covenants were made non justiciable by the Constitution vide Article 363
According to him the covenants were political in nature and that no legal ingredients as the basis can be read into these agreements and that the guarantees and assurances embodied in Articles 291 and 362 were guarantees for the payment of privy purses
He has urged that such a guarantee can always be revoked in public interest pursuant to fulfilling a policy objective or the directive principles of the Constitution
That being 503 so the theory of sanctity of contract or unamendability of Articles 291 or 362 did not have any foundation
He continues to state that the theory of political justice is also not tenable because political justice means the principle of political equality such as adult suffrage democratic form of Government etc
In this context he drew the attention of this Court to a decision in Nawab Usmanali Khan vs Sagarmal  wherein Bachawat J speaking for the Bench has held    the periodical payment of money by the Government to a Ruler of a former Indian State as privy purse on political considerations and under political sanctions and not under a right legally enforceable in any municipal court is strictly to a political pension within the meaning of section 601g of the Code of Civil Procedure
The use of the expression privy purse instead of the expression pension is due to historical reasons
The privy purse satisfies all the essential characteristics of a political pension
 Furhter it has been observed in the above case purse are not liable to attachment or sale in execution of the respondent s decree
 Before embarking upon a detailed discussion on the various facets of the contentions both factual and legal we shall deal with the precursive point with regard to the pre constitutional Instrument of Accession the Merger Agreement and the covenants which guaranteed the payment of privy purse and the recognition of personal privileges etc
and which ageements ultimately facilitated the integration of these States with the Dominion of India
In 1947 India obtained independence and became a Dominion by reason of the Indian Independence Act of 1947
The suzerainty of the British Crown over the Indian States lapsed at the same time because of Section 7 of that Act
Immediately after all but few of the Indian States acceded to the new Dominion by executing Instruments of Accession
The Instrument of Accession executed by the Rulers provided for the accession of the States to the Dominion of India on three subjects namely 1 504 Defence 2 External Affairs and 3 Communications their contents being defined in List I of Schedule VII of the Government of India Act 1935
This accession did not imply any financial liability on the part of the acceding States
This accession of the Indian States to the Dominion of India established a new organic relationship between the States and the Government the significance of which was the foregoing of a constitutional link or relationship between the States and the Dominion of India
The accession of the Indian States to the Dominion of India was the first phase of the process
of fitting them into the constitutional structure of India
The second phase involved a process of two fold integration the consolidation of States into sizable administrative units and their democratization
Though high walls of political isolation had been raised and buttressed to prevent the infiltration of the urge for freedom and democracy into the Indian States with the advent of independence the popular urge in the States for attaining the same measure of freedom as was enjoyed by the people in the Provinces gained momentum and unleashed strong movements for the transfer of power from the Rulers to the people
On account of various factors working against the machinery for self sufficient and progressive democratic set up in the smaller states and the serious threat to law and order in those States there was an integration of States though not in an uniform pattern in all cases
Firstly it followed the merger of States in the Provinces geographically contiguous to them
Secondly there was a conversion of States into Centrally administered areas and thirdly the integration of their territories to create new viable units known as Union of States
Sardar Vallabhbhai Patel had a long discussion with the Rulers and took a very active role in the integration of the States
As a result of the application of various merger and integration schemes 1 216 States had been merged into Provinces 2 61 States had been taken over as Centrally administered areas and 3 275 States had been integrated in the Union of States
Thus totally 552 States were affected by the integration schemes
Reference may be made to 1 the Report of the Joint Select Committee on Indian Constitutional Reforms 1933 34 2 the Report of the Expert Committee headed by Nalini Ranjan Sarkar published in December 1947 3 The Indian States  Finances Enquiry Committee chaired by 505 Sir VT Krishnamachari appointed on 22nd October 1948 the recommendations of which on further discussions with the representatives of the States and Union of States led to the conclusion that the responsibility for payment of the privy purses fixed under various covenants and agreements should be taken over by the Government and 4 the Report of the Rau Committee appointed in November 1948 under the chairmanship of Sir BN Rau
Reverting to the cases on hand Shri Raghunathrao Ganpatrao the petitioner in Writ Petition No 351 of 1972 executed a merger agreement as per the form of merger on 19th February 1948 and handed over the administration of the State on 8th March 1948
The petitioner was entitled to receive annually from the revenues of the States his privy purse of Rs 49720 as specified in the Merger Agreement as amended by an Order of Government of India in 1956 free of taxes besides his personal privileges rights and the Dominion Government guaranteed the succession according to law and custom of the Gadi of the State and the Raja s personal rights privileges and dignities
Shri Jaya Chamaraja Wadiyar father of the petitioner Sri Srikanta Datta Narasimharaja Wadiyar in Writ Petition No 798 of 1992 executed an Instrument of Accession and entered into an Merger AgreementTreaty on 23rd January 1950
Under the merger Agreement the Maharaja of Mysore was entitled to receive annually for his privy purse the sum of Rs 2600000 Rupees twenty six lakhs free of all taxes wef
1st April 1950
Article 1 of the said Agreement contained a proviso that the sum of Rs 2600000 was payable only to the then Maharaja of Mysore for his life time and not to his successor for whom a provision would be made subsequently by the Government of India
Besides the then Maharaja was entitled to the full ownership use and enjoyment of all his private properties as distinct from State properties belonging to him on the date of the agree ment as specified under clause 1 of Article 2 of the Agreement
We are not concerned about the particulars of the agreements executed by other Rulers of various States
While it was so in 1950 when the Constitution was enforced it conferred upon the Rulers the aforesaid guarantees and assurances to privy purse privileges etc
under Articles 291 362 and 36622 of the Constitution
Accordingly Rulers continued to enjoy the said benefits upto 1970
506 On 14th May 1970 the Constitution Twenty fourth Amendment Bill 1970 for abolition of the above said privy purse privileges etc
conferred under Articles 291 362 and 366 22 was introduced in the Lok Sabha by the then Finance Minister Shri YB Chavan
The Bill contained three caluses and a short statement of Objects and Reasons
The statements reads thus  The concept of rulership with Privy Purses and Special Privileges unrelated to any current functions and social purposes is incompatible with an egalitarian social order
Government have therefore decided to terminate the Privy Purses and Privileges of the Rulers of former Indian States
Hence this Bill
 On 2nd September 1979 the Bill was voted upon in the Lok Sabha
But on 5th September 1970 the Rajya Sabha rejected the same since the Bill failed in the Rajya Sabha to reach the requisite majority of not less than two third members present as required by Article 368 and voting
Close on the heels of the said rejection the President of India purporting to exercise his powers under clause 22 of Article 366 of the Constitution signed an Order withdrawing recognition of all the Rulers in the country en masse
A communication to this effect was sent to all the Rulers in India who have been previously recognised as Rulers
This Presidential Order de recognising the Rulers was questioned in HH Maharajdhiraja Madhav Rao Jiwaji Rao Scindia Bahadur  Ors
vs Union of India  by filing Writ Petitions under Articles 32 of the Constitution challenging it as unconstitutional ultra vires and void
An eleven Judges Bench of this Court by its Judgment dated 15th December 1970 struck down the Presidential Order being illegal ultra vires and inoperative on the ground that it had been made in violation of the powers of the President of India under Article 36622 of the Constitution and declared that the writ petitioners would be entitled to all their pre existing rights and privileges including right to privy purses as if the impugned orders therein had not been passed
Here it may be noted that Mitter and Ray JJ gave their dissenting judgment
Thereupon the payment of privy purses to the Rulers was restored
Subsequently Parliament enacted a new Act entitled the Constitution Twenty Fourth Amendment Act 1971 on receiving the ratification by the 507 Legislature of 11 States
It received the assent of the President on 5th November 1971
By this amendment Act clause 4 reading Nothing in this article shall apply to any amendment of this Constitution made under Article 368 was inserted in Article 13 and Article 368 was renumbered as clause 2
The marginal heading to that article was substituted namely Power of Parliament to amend the Constitution and procedure therefor in the place of Procedure for amendment of the Constitution
Before re numbered clause 2 clause 1 was inserted
In the re numbered clause 2 for the words it shall be presented to the President for his assent upon such assent being to the Bill the words it shall be presented to the President who shall give his assent to the Bill and thereupon was sub stituted
After the re numbered clause 2 clause 3 was inserted namely Nothing in article 13 shall apply to any amendment under this article
 It may be recalled that Article 368 was firstly amended by Section 29 of the Constitution Seventh Amendment Act 1956 by omitting the words and letters specified in Part A and B of the First Schedule  and thereafter by Section 3 of the Constitution Twenty Fourth Amendment Act 1971
Again by Section 55 of the Constitution Forty second Amendment Act 1956 clauses 4 and 5 were inserted
But this amendment has been held unconstitutional in Minerva Mills vs Union of India   holding that Sections 55 of the Forty second Amendment Act inserting clauses 4 and 5 to Article 368 had transgressed the limits of the amending power of the Parliament which power in Kesavananda Bharati was held not to include the power of damaging the basic features of the Constitution or destroying its basic structure
The Constitution Twenty fifth Amendment Act 1971 by substituting a new clause to clause 2 of Article 31 and inserting clause 2B after clause 2A came into force
By the same Amendment Act Article 31C was inserted after Article 31B entitled Saving of laws giving effect to certain directive principles
It is significant to note that Article 31 was omitted by the Constitution Fourty fourth Amendment Act 1978 wef
20th June 1979
The impugned Constitution Twenty sixth Amendment 1971 was passed by the Parliament and it received the assent of the President on 28th December 1971
By this Act Articles 291 362 were omitted and Article 363 A was inserted under the title Recognition granted to Rulers 508 of India States to cease and privy purses to be abolished
By the same Amendment Act an amended new clause was substituted to the then existing clause 22
We have already reproduced Articles 291 362 and the past and present clause 22 of Article 366
After the impugned Twenty sixth Amendment was brought into force we
L 28th December 1971 the present writ Petition No 351 of 1972 was filed on 24th August 1972 for declarations that the Twenty fourth Twenty fifth and Twenty sixth Amendment Acts of 1971 are unconstitutional invalid ultra vires null and void and that the petitioner continues to be entitled to the privy purse and to personal rights privileges as a Ruler and for a Writ or order directing the respondent to continue to pay privy purse to the petitioner
Another Writ Petition No 352 of 1972 was filed by HH Nawab Mohanuned If tikhar Ali Khan of Malekotla seeking same relief as in Writ Petition No 351 of 1972
It may be noted when Writ Petition Nos 351 and 352 challenging the Twenty fourth Twenty fifth and Twenty sixth Amendment Acts were filed in this Court Writ Petition No 135 of 1970 entitled His Holiness Kesavananda Bharati Sripadagalvaru vs State of Kerala and Another was pending before this Court
When both these Writ Petitions ie WP No 351 and 352 of 1972 were listed together on 28th August 1972 this Court passed the following order  Upon hearing for the parties the Court directed issue of Rule Nisi and directed these petitions to be heard along with Writ petition No 135 of 1970
Respondents granted time till end of September 1972 to file counter affidavit to the writ petitions
Notice of the writ petitions shall issue to the Advocates General of all States
All the Writ Petitions to be heard on the 23rd October1972
Written arguments dispensed with
 A thirteen Judges bench of this court in Kesavananda Bharati vs State of Kerala 1973 4 SCC 225 heard some writ petitions along with these two writ petitions and gave its conclusions thus The view by the majority in these writ petitions is as 509 follows 1
Golak Nath s case is over ruled 2 article 368 does not enable Parliament alter the basic structure of framework of the Constitution 3
The Constitution Twenty fourth Amendment Act 1971 is valid 4
Section 2a and b of the Constitution Twenty fifth Amendment Act 1971 is valid 5
The first part of Section 3 of the Constitution Twenty fifth Amendment Act 1971 is valid
The second part namely and no law containing a declaration that it is for giving effect to such policy shall be called in question in any Court on the ground that it does not give effect to such policy  is invalid
The Constitution Twenty ninth Amendment Act 1971 is valid
The Constitution Bench will determine the validity of the Constitution Twenty sixth Amendment Act 1971 in accordance with law
The cases are remitted to the Constitution Bench for disposal in accordance with law
There will be no order as to costs incurred up to this stage  In pursuance of the said Order Writ Petition No 351 of 1972 is now before this Constitution Bench for determination of the constitutional validity of the Twenty sixth Amendment Act in accordance with the law laid down in Kesavananda Bharati
Since the constitutional validity of the same Twenty sixth Amendment Act is involved in Writ Petition No 798 of 1992 it is also before this Bench along with Writ Petition No 351 of 1972
As regards the inbuilt separate mechanism for amending the Constitution Dr Amedkar said One can therefore safely say that the Indian 510 federation will not suffer from the faults of rigidity or legalism
Its distinpishing feature is that it is a flexible consideration Dr Wheare in his modern Constitution has commended that it strikes a good balance by protecting the rights of the State while leaving remainder of the Constitution easy to amend  Our constitution is amendable one
In fact tin now Seventy two amendments have been brought about the first of which being in 1951 ie within 15 months of the working of the Constitution
The first amendment was challenged in Shankari Prasad vs Union of Indua  but the Supreme Court unanimously upheld the validity of the Amendment
A brief note as regards the circumstances which necessitated the Twenty fourth Amendment being brought may be recapitulated
The Constitution Bench of this Court in Sajjan Singh vs State of Rajasthan  wherein the constitutional validity of the Constitution Seventeenth Amendment Act 1964 was challenged reiterated the views expressed in Shankari Prasad by a mojority of three Judges although two Judges gave their separate dissenting judgments
one of the dissenting Judges Hidayatullah J stated that the Constitution gives so many assurances in Part III that it would be difficult to think that they were the playthings of a special majority  The other dissenting Judge Mudholker J took the view that the word law  in Article 13 included a constitutional amendment under Article 368 and that therefore the Fundamental Rights part was unalterable
In his view Article 13 qualified the amending power found in Article 368 making the Fundamental Rights part of India s Constitution unamendable
The concerns of the two dissenting learned Judges came before an eleven Judges Bench of this Court in Golak Nath vs State of Punjab  involving another round of attack on three Amendment Acts namely the first fourth and seventeenth Amendment Acts
This Court by a ratio of six to five held that the Parliament had no power to amend any of the provisions of Part III  so as to take away or abridge the fundamental rights enshrined in that Part
The decision in Golak Nath was rendered in 1967 but one of the amendments it would invalidate dated am 1951 another from 1955 and another from 1964
Therefore this Court order to avoid any catastrophe that would have ensued in the social and economic relations had the Court ruled that the amendments were void 511 ab initio relied on American cases and adopted the doctrine of prospective overuling which was construed to enable the Court to reverse its prior decisions to continue the validity of the three amendments in issue and to declare that after judgment the Indian Parliament would have no power to amend or abridge any of the Fundamental Rights
Therefore intending to override the ruling in Golak Nath s case the Twenty fourth Amendment Act 1971 was brought as reflected from the Objects and Reasons of the Twenty fourth Amendment which read thus Objects and Reasons In the Golak Nath case   the Supreme Court reversed by a narrow majority its own earlier decisions upholding the power of Parliament to amend all parts of the Constitution including Part III relating to fundamental rights
The result of the judgment was that Parliament was considered to have no power to take away or curtain any of the fundamental rights even if became necessary to do so for the attainment of the objectives set out in the Preamble to the Constitution
The Act therefore amends the Constitution to provide expressly the Parliament power to amend any part of the Constitution
 Thereafter the Twenty fifth Amendment Act was brought in 1971 which amended the Constitution to surmount the difficulties placed in the way of giving effect to the Directive Principles of State Policy by the interpretation of Article 31 of the Constitution in Rustom Cawasjee Cooper vs Union of India  The said Act substituted clause 2 and inserted clause 2B to Article 31 and added Article 31C
These amendment acts namely twenty fourth and twenty fifth besides twentyninth Amendment Act and the continuing validity of the dictum laid down in Golak Nath s case were the subjects for decision in Kesavananda Bharati
Though Writ Petition No 351 of 1972 challenging the twentyfourth twenty fifth and twenty sixth Amendment Act was also listed along with other writ petitions in Kesavananda Bharati the constitutional validity of the twenty sixth amendment was left over for determination by a Constitution Bench
We shall now proceed to examine the constitutional validity of the ampuped Amendment Act
512 The question whether Article 291 is a provision related to the Covenants and Agreements entered into between the Rulers of the States and Indian Domination and is that in reality and substance a provision on the subject matter of covenants and agreements were considered by Hidayatullah CJ in his separate concurring judgment in Madhav Rao and they are answered in the following terms The Article when carefully analysed leads to these conclusions The main and only purpose of the provision is to charge Privy Purses on the Consolidated Fund of India and make obligatory their payment free of taxes on in come
It narrows the guarantee of the Dominion Government from freedom from all taxes to freedom only from taxes on income
Earlier I had occasion to show that the Princes had guaranteed to themselves their Privy Purses free of all taxes
The Dominion Government had guaranteed or assured the same freedom
The Constitution limits the freedom to taxes on income and creates a charge on the Consolidated Fund
There were other guarantees as in the Merger Agreements of Bilaspur and Bhopal quoted earlier which are ignored by the Article
The guarantee of the Dominion Government is thus continued in a modified form
The reference to Covenants and Agreements is casual and subsidiary
The immediate and dominant purpose of the provision is to ensure payment of Privy Purses to charge them on the consolidated Fund and to make them free of taxes on income emphasis supplied Shah J speaking for the majority with reference to the covenants and eements made the following observation  After the Constitution the obligation to pay the privy purse rested upon the Union of India not because it was inherited from the Dominion of India but because of the constitutional mandate under article 291
The source of the obligation was in article 291 and not in the covenants and the agreements emphasis supplied 513 So far as Article 362 is concerned it has been held by majority of the Judges that the said Article is plainly a provision relating to covenants within the meaning of Article 363 and a claim to enforce the rights privileges and dignities under the covenants therefore are barred by the first limb of Article 363 and a claim to enforce the recognition of rights and privileges under Article 362 are barred under the second limb of Article 363 and that the jurisdiction of the Courts however is not excluded where the relief claimed is founded on a statutory provision enacted to give effect to personal rights under Article 362
The important question now that arises for our consideration is whether the twenty sixth amendment Act which completely omitted Articles 291 362 and inserted a new Article 363A and also substituted a new clause 22 in place of its original clause or Article 366 has destroyed damaged and altered the basic structure of the Constitution
The Constitution remains at the apex because it is the supreme Law
The question is what is the power of the Parliament to amend the Constitution either by abridging or omitting any existing Article or adding any new Article or clause or substituting any new clause for its original clause
To answer this most important question some supplementary questions have to be examined those being as to what is the parameter or the mode by which an amendment can be brought and what are limitations either express or implied on the amending power which inters in the Constitution itself including its Preamble
Before we proceed further let us understand what is meant by an amendment 
The word has latin origin emendere  to amend means to correct
Walter F Murply in Constitutions Constitutionalism and Democracy  while explaining what amendment  means has stated Thus an amendment corrects errors of commission or omission modifies the system without fundamentally changing its nature that is an amendment operates within the theoretical parameters of the existing Constitution
 In our Constitution the expression amendment of the Constitution  is not defined
However Part XX which contains one Article viz Article 368 provide a special procedure for amending certain provisions of the Constitution under the heading Amending of the Constitution
514 It is not necessary for us to deal with the different provisions of the Constitution and the procedures for amendment as laid down by the Constitution because the authority of the Parliament in bringing about the impugned amendment Act is not under challenge
After the judgment of Madhav Rao Scindia the twenty sixth amendment was brought to overcome the effect of the judgment The objects and reasons of the twenty sixth amendment makes the position clear which read thus  The concept of rulership with privy purses and special privileges unrelated to any current functions and social purposes was incompatible with an egalitarian social order
Government therefore decided to terminate the privy purses and privileges of the Ruler of former Indian States
It was necessary for this purpose apart from amending the relevant provisions of the Constitution to insert a new article therein so as to terminate expressly the recognition already granted to such Rulers and to abolish privy purses and extinguish all rights liabilities and obligations in respect of privy purses
Hence this Act
 We shall now deal with the dictum laid down in Kesavananda Bharati as regards the power vested in the Parliament and the limitations either express or implied or inherent therefor to amend the Constitution
In Kesavananda Bharati the Supreme Court upheld the validity of the twenty fourth Amendment
Of the 13 Judges Shelat Hedge Grover Jagmohan Reddy and Mukherjea observed that the Twenty fourth Amendment did not more than clarify in express language that which was implicit in the unamended Article 368 and it did not and could not add to the power originally conferred thereunder
Ray J said that the Twenty fourth Amendment made explicit what the judgment in Shankari Prasad and the majority judgment in Sajjan Singh and the dissenting judgment in Golak Nath said namely that Parliament has the constituent power to amend the Constitution
Sikri CJ and Ray Palekar Khanna Beg Dwivedi JJ who also held the twenty fourth Amendment valid said that under Article 368 Parliament can now amend every article of the Constitution
According to Khanna J the non obstante clause 1 has been in 515 serted in the article to emphasise the fact that the power exercised under that Article is constituent power not subject to the other provisions of the Constitution and embraces within itself addition variation and repeal of any provision of the Constitution
Mathew J put it succinctly stating that the twenty fourth Amendment Act did not add anything to the content of Article 368 as it stood before the amendment that it is declaratory in character except as regards the compulsory nature of the assent of the President to a Bill for amendment
Dwivedi J has explicitly stated that except as regard the assent of the President to the Bill everything else in the twenty fourth Amendment was already there in the unamended Article 368 and that this amendment is really declaratory in nature and removes doubts cast on the amending power by the majority judgment in Golak Nath
Sikri CJ
elaborating the above theme has observed that the Twenty fourth Amendment insofar as it transfers power to amend the Constitution from the residuary entry Entry 97 List I or from Article 248 of the Constitution to Article 368 is valid in other words Article 368 of the Constitution as now amended by the twenty fourth Amendment Act deals not only with the procedure for amendment but also confers express power on Parliament to amend the Constitution
He has also further held that under Article 368 Parliament can now amend every article of the Constitu tion as long as the result is within the limits laid down
Thus the Constitutional questions that arose in Kesavananda Bharati s case were scrupulously and conscientiously examined in detail on varied and varying topics from different angles such as the basic elements of the Constitutional structure  the basic structure of the Constitution  the essential and non essential features of the Constitution  the plenary power of amendment  etc
etc and finally by majority it is laid down that the power of amendment is plenary and it includes within itself the power to add alter or repeal the various Articles of the Constitution including those relating to fundamental rights but the power to amend does not include the power to alter the basic structure or framework of the Constitution so as to change its identity
In fact there are inherent or implied limitations on the power of amendment under Article 368
We shall now examine the various arguments made on behalf of the petitioners and the interveners grouping all those submissions under separate and distinct topics
516 One of the points urged in common before us is that the framers of the Constitution in their wisdom had thought it fit to incorporate the words guaranteed  or assured  in Article 291 which by their very plain meaning convey the intention of the framers of the Constitution guaranteeing or promising that the erstwhile Rulers of the States would be entitled to receive their privy purses from the revenues of the Union and that it would be free from all taxes
As we have indicated above there were multiple sequence of events in the historical evolution which necessitated the Indian Rulers to enter into various agreements and ultimately to agree for integration of their States with the Dominion of India by dissolving the separate indentity of their States and surrendering their sovereignty but reserving only their rights for privy purses and privileges
Though India was geographically regarded as one entity it was divided in as many as about 554 segments big and small
On 15th August 1947 the British paramountacy lapsed and India attained its independence
The fact that a heavy price was paid to attain independence and freedom which are sanctified by the blood of many martyrs is unquestionable
During the independence struggle there was popular urge in the Indian States for attaining the freedom which unleashed strong movements for merger and integration of the States with the Dominion of India
The agreements entered into by the Rulers of the States with the Government of India were simple documents relating to the accession and the integration and the assurances and guarantees given under those documents were only for the fixation of the privy purses and the recognition of the privileges
The guarantees and the assurances given under the Constitution were independent of those documents
After the advent of the Constitution the Rulers enjoyed their right to privy purses private properties and privileges only by the force of the Constitution and in other respects they were only ordinary citizens of India like any other citizen of course this is an accident of history and with the concurrence of the Indian people in their Constituent Assembly
Therefore there cannot be any justification in saying that the guarantees and assurances given to the Rulers were sacrosanct and that Articles 291 and 362 reflected only the terms of the agreements and covenants
In fact as soon as the Constitution came into force the Memoranda of 517 Agreements executed and ratified by the States and Union of States were embodied in formal agreements under the relevant Articles of the Constitution and no obligation flowed from those agreements and covenants but only from the Constitutional provisions
To say differently after the introduction of Articles 291 and 362 in the Constitution the agreements and covenants have no existence at all
The reference to Covenants and Agreements was casual and subsidiary and the source of obligation flowed only from the Constitution
Therefore the contention urged on the use of the words guaranteed  or assured  is without any force and absolutely untenable
The next vital issue is whether the impugned Amendment Act has damaged any basic structure or essential feature of the Constitution
According to Mr Soli J Sorabjee by the repeal of Articles 291 and 362 which were integral part of the constitutional scheme the identity of the Constitution has been changed and its character has been fundamentally altered
The total repeal of these Articles coupled with an express repudiation of the guarantees embodied therein has resulted in nullification of a just quid pro quo which were the essence of these guarantees
He has urged that the underlying purpose of doing justice to the Rulers has been subverted and breach of faith has been sanctioned
He based the above arguments on three decisions of this Court namely 1 Waman Rao and Others vs Union of India and Others  at 588 80 2 Maharao Sahib Shri Bhim Singhji vs Union of India and Others at 212 and 3 Madhav Rao vs Union at 74 and 83
There has been a common recurrent argument that the impugned Amendment Act is beyond the constituent power of the Parliament since it has damaged the basic structure and essential features of the Constitution
Mr DD Thakur in addition to the above has stated that one of the tests to determine whether the provision of the Constitution was intended to be permanent or could be deleted or amended is to see whether the Constitution makers had intended that to be permanent
In support of his submission he placed much reliance on the observation of Mudholkar J in Sajjan Singh vs State of Rajasthan  at page 966 reading thus  518 Above all it formulated a solemn and dignified preamble which appears to be an epitome of the basic features of the Constitution
Can it not be said that these are indicate of the intention of the Constituent Assembly to give a permanency to the basic feature of the Constitution
 This observation has been reiterated in a separate judgment of Hedge and Mukherjea JJ in Kesavananda Bharati stating that it was Mudholkar J who did foresee the importance of the question whether there is any implied limitation on the amending power under Article 368 of the Constitution
On the basis of the above he has urged that if the intention of the founding fathers regarding the permanence or imper manence of a provision of the Constitution is conclusive for determining whether a provision is basic or not there is no difficulty in gathering the intention of the founding fathers from Article 362 itself He continues to state that the fact that assurances and guarantees  had been insulated against every future constituent inroad or legislative incursion of Parliamentary control is further substantiated from the provisions of Article 291 of the Constitution
Mr AK Ganguly has adopted the above arguments and supple mented the same stating that the privileges of the Rulers of the State were made an integral part of the constitutional scheme and that thereby a class of citizens are for historical reasons accorded special privileges and that the recognition of the status rights and privileges conferred on the Rulers were not on temporary basis and as such they are not liable to be varied or repudiated
Mr Nariman also emphasises the same
Before adverting to the above contentions we state in brief about the basic principle to be kept in view while amending a Constitution
In our democratic system the Constitution is the supreme law of the land and all organs of the Government executive legislative and judiciary derive their powers and authority from the Constitution
A distinctive feature of our Constitution is its amendability
The Courts are entrusted with important constitutional responsibilities of upholding the supremacy of the Constitution
An amendment 519 of a Constitution become ultra vires if the same contravenes or transgresses the limitations put on the amending power because there is no touchstone outside the Constitution by which the validity of the exercise of the said powers conferred by it can be tested
In our Constitution there are specific provisions for amending the Constitution
The amendments had to be made only under and by the authority of the Constitution strictly following the modes prescribed of course subject to the limitations either inherent or implied
The said power cannot be limited by any vague doctrine of repugnancy
There are many outstanding interpretative decisions delineating the limitations so that the Constitutional fabric may not be impaired or damaged
The amendment which is a change or alteration is only for the purpose of making the Constitution more perfect effective and meaningful
But at the same time one should keep guard over the process of amending any provision of the Constitution so that it does not result in abrogation or destruction of its basic structure or loss of its original identity and character and render the Constitution unworkable
The Court is not concerned with the wisdom behind or proprietary of the Constitutional amendment because these are the matters for those to consider who are vested with the authority to make the Constitutional amendment 
All that the Court is concerned with are 1 whether the procedure prescribed by Article 368 is strictly complied with  and 2 whether the amendment has destroyed or damaged the basic structure or the essential features of the Constitution
If an amendment transgresses its limits and impairs or alters the basic structure or essential features of the Constitution then the Court has power to undo that amendment
The doctrine of basic structure was originated in Sajjan Singh and has been thereafter developed by this Court in a line of cases namely 1 Kesavananda Bharati supra 2 Indira Gandhi Nehru 3 Minerva Mills 4 Waman Rao and 5 Sanjeev Coke Manufacturing Company vs Bharat Coaking Coal Ltd  Mr Soli J Sorabjee in support of his contention that Articles 291 and 362 and clause 22 of Article 366 were integral part of the constitutional scheme which otherwise would mean the essential part of the constitutional scheme  referred to Webster New International Dictionary 3rd Edition and Collins Concise English Dictionary and has pointed out the lexical meaning say that integral  means essential  and therefore 520 according to him the total abolition of the provisions of the Constitution which are its integral parts otherwise essential parts has damaged the essential and basic features of the Constitution
To draw strength for his submission he relied upon certain observations made by Shah J in his judgment in Madhav Rao observing By the provisions enacted in Articles 36622 291 and 362 of the Constitution the previliges of Rulers are made an integral part of the constitutional scheme and An order merely de recognising a Ruler without providing for continuation of the institution of Rulership which is an integral part of the constitutional scheme is therefore plainly illegal emphasis supplied The learned Attorney General has vehemently opposed the above submission stating that the expression integral part of the scheme of the Constitution used in Madhav Rao are not the same as the basic structure and that expression has to be read in the context of a challenge to the Ordinance which sought to render nuptory certain rights guaranteed in the Constitution then existing
It is further stated that the attack on the Twenty sixth Amendment based on the principles laid down
in Madhav Rao is totally misconceived because only in order to overcome the effect of that judgment the Twenty sixth Amendment was passed by the Parliament in exercise of its constituent powers
According to the Attorney General the observations in the said case were nullified by the Amendment and that judgment is no longer good law after the Amendment
To test the Amendment on the basis of that judgment is impermissible and all the arguments based upon this case are therefore misconceived
In this content it becomes necessary to recall certain events which ultimately gave rise to Madhav Rao s case
After the commencement of the Constitution in pursuance of Article 36622 the Rulers were recognised and they had been enjoying the Privy purses privileges dignities etc
on the basis of the relevant constitutional provisions
Pursuant to the resolution passed by the AD India Congress committee in 1967 the Union of India introduced the Twenty fourth Amendment Bill in 1970 to implement the decision of the AR India Congress Committee favouring removal of privy purses privileges etc
But the Bill though passed in the Lok Sabha failed to secure the requisite majority in the Rajya Sabha and thereby it lapsed
It was only thereafter the President of India issued an Order in exercise of the powers vested in him under Article 36622 derecognising the Rulers and stopping the privy 521 purses privileges etc
enjoyed by the rulers
This Order passed by the President was the subject matter of challenge in Madhav Rao
The Supreme Court struck down the Order of the President as invalid as in the view of the Court derecognition of the Rulers would not take away right to privy purses when Articles 291 and 362 were in the Constitution
It was only in that context the observations which have been relied upon by Mr Soi J Sorabjee were made
The Twenty sixth Amendment itself was passed by Parliament to overcome the effect of this judgment
Now by this Amendment Articles 291 and 362 are omitted Article 363A is inserted and clause 22 of Article 366 is amended
Therefore one cannot be allowed to say that the above said omitted Articles and unamended clause were the essential part of the constitutional scheme
So they have to be read only in the context of a challenge made to the Presidential Order which sought to render nugatory certain rights guaranteed in the Constitution which were then existing
In any event the constitutional bar of Article 362 denudes the jurisdiction of any Court in disputes arising from covenants and treaties executed by the Rulers
The statement of Objects and Reasons of Twenty sixth Amendment clearly points out that the retention of the above Articles and continuation of the privileges and privy purses would be incompatible with the egalitarian society assured in the Constitution and therefore in order to remove the concept of rulership and terminate the recognition granted to Rulers and abolish the privy purses this Amendment was brought on being felt necessary
We are of the opinion that the observations of Shah J in Madhav Rao that the privileges of Rulers are made an integral part of the constitutional scheme and that institution of Rulership is an integral part of the constitutional scheme  must be read in their proper context
That was a case where by a Presidential order the Rulers were deprived of their privy purses and other privileges while keeping Articles 291 and 362 intact in the Constitution
Indeed the said Presidential order was issued after the Government failed in its attempt to effect an amendment on those lines
It is in that connection that the learned Judge made the above observations
It is clear that the learned Judge used the words integral part  in their ordinary connotation not in any lexicographical sense
Ordinarily speaking integral  means of a whole or necessary to the completeness of a whole  and as forming a whole  Concise Oxford Dictionary
Our Constitution is not a disjointed document
It incorporates a particular socio economic and political philosophy
It is an integral whole
Every provision 522 of it is an integral part of it even the provisions contained in Part XXI Temporary Transitional and Special Provisions
One may ask which provision which concept or which institution  in the Constitution is not an integral part of the Constitution He will not find an answer
To say that a particular provision or a particular institution  or concept is an integral part of the Constitution is not to say that it is an essential feature of the Constitution
Both are totally distinct and qualitatively different concepts
The said argument is really born of an attempt to read a judgment as a statute
One may tend to miss the true meaning of a decision by doing so
We may say the aforesaid observations of Shah J constituted the sheet anchor of the petitioners  argument relating to basic structure
In the above premise it is not permissible to test the Twenty sixth Amendment with reference to the observations made in Madhav Rao
We shall now dispose of the contention raised in the grounds of the Writ Petition No 351 of 1972 that the impugned Amendment is violative of Articles 14 191f and g 21 31 1 and 2 of the Constitution
Evidently this contention has been raised in the year in 1972 that is long before the Constitution Fortv fourth Amendment Act of 1978 was passed wef
26th June 1979
Writ Petition No 798 of 1992 has been filed on October 15 1992 in which the ground with reference to Articles 191f and 31 are left out
It is to be stated that Articles 19 1 f and 31 are completely omitted by the Forty fourth Amendment
By the deletion of these Articles by Forty fourth Amendment the status of right to property  from that of a fundamental right is reduced to a legal right under Article 300A which reads No person shall be deprived of his property save by authority of law
However in order to allay the fears of the minorities in respect of that right guaranteed in the then Article 31 Article 30 1A has been inserted by the Forty fourth Amendment
The right to property even as a fundamental right was not a part of the basic structure and even assuming that the right to privy purse is a property it is a right capable of being extinguished by authority of law vide article 300A Needless to emphasise according to the rules laid down in Keshavananda Bharati that even the fundamental right can be amended or altered provided the basic structure of the Constitution in any way is not damaged
Permanent retention of the privy purse and the privileges of rights 523 would be incompatible with the sovereign and republican form of Government
Such a retention will also be incompatible with the egalitarian form of our Constitution
That is the opinion of the Parliament which acted to repeal the aforesaid provisions in exercise of its constituent power
The repudiation of the right to privy purse privileges dignities etc
by the deletion of Articles 291 and 362 insertion of Article 363A and amendment of clause 22 of Article 366 by which the recognition of the Rulers and payment of privy purse are withdrawn cannot be said to have offended Article 14 or 19 g and we do not Find any logic in such a submission
No principle of justice either economic political or social is violated by the Twenty sixth Amendment
Political justice relates to the principle of rights of the people ie right to universal suffrage right to democratic form of Government and right to participation in political affairs
Economic justice is enshrined in Article 39 of the Constitution
Social justice is enshrined in Article 38
Both are in the Directive Principles of the Constitution
None of these rights are abridged or modified
by this Amendment
We feel that this contention need not detain us any more and therefore we shall pass on to the next point in debate
A serious argument has been advanced that the privy purse was a just quid pro quo to the Rulers of the Indian States for surrendering their sovereignty and rights over their territories and that move for integration began on a positive promising note but it soon de generated into a game of manoeuvre presumably as a deceptive plan or action
This argument based on the ground of breaking of solemn pledges and breach of promise cannot stand much scrutiny
To say that without voluntary accession India ie Bharat would be fundamentally different from that Bharat that came into being prior to the accession is untenable muchness inconceivable
We have already dealt with the necessity of the Rulers to accede for the integration of States with the Dominion of India in the earlier part of this judgment and therefore it is quite unnecessary to reiterate in this context except saying that the integration could have been achieved even otherwise
One should not lose sight of the fact that neither because of their antipathy towards the Rulers nor due to any xenophobia did the Indian Government entertain the idea of the integration but because of the will of the people
It was the people of the States who were basically instrumental in the integration of India
It would be apposite to refer to the observation of Bose J in Varinder singh  Ors vs State of UP  at 435
The said observation reads as follows 124 Every vestige of sovereignty was abandoned by the dominion of India and by the States and surrendered to the peoples of the land who through their representatives in the Constituent Assembly hammered out for themselves a new Constitution in which all were citizens in a new order having but one tie and owning but one allegiance  devotion loyality fidelity to the Sovereign Democratic Republic that is India
 It is also worthwhile to take note of the historical process of states integration which is well set out in Chapter 18 under the heading Indian states in The Framing of Constitution A Study by B Shiva Rao
A persual of that chapter indicates that the attitude of the princes towards joining a united India was one of resistance reluctance and high bargain and it was the peoples of the States who forced them to accede to the new United India
To say in other words the States were free but not stable because of the stress and strain they underwent both from inside and outside
Though the process of integration and democratisation called as unionization in the words of Sardar Patel was undertaken step by step at various stages multiple forces such as political economic and geographic more so the democratic movement within the States accelerated the process of integration
Therefore it is a misnomer to say that the Rulers made their
sacrifices for which they were given just compensation and assured permanent payment of privy purses
What was given to the Rulers was a political pension as rightly pointed out in Usman A1is case on consideration of their past position
Hence there is no question of breaking of solemn pledges or breach of promises etc
given to the Rulers
Therefore the repudiation of the same cannot be said to have amounted to any breach of those guarantees and promises resulting in alteration of the basic structure of the Constitution
Mr DD Thakur has submitted that the Twenty sixth Amendment is an ugly epitome of immorality perpetrated by the Indian Parliament that too in the exercise of its constituent powers and that the justice fairness and reasonableness is the soul spirit and the conscience of the Constitution of India as framed originally and that the impugned Amendment Act constitutes an unholy assault on that spirit which is impermissible and beyond the amending powers of the Parliament under Article 368 of the constitution
According to him the equality clause as interpreted by this 525 Court in 1 Maneka Gandhi vs Union of India 1978 2 SCR 621 2 RD Shetty vs Intemational Airport Authority of India   3 Kasturi Lal Lakshmi Reddy vs State of Uttar Pradesh   4 EP Royappa vs State of Tamil Nadu   5 Indira Gandhi s case and 6 Minerva Mill s case supra is the most important indispensable feature of the Constitution and destruction thereof will amout to changing the basic structure of the Constitution
Mr Harish Salve in addition to the above urged that the basic structure test is to be applied on the touchstone of the Constitution as it stood while being delivered at the hands of the Constitution makers and that it would be contrary to the very principle of the basic structure to apply any personal notion or ideological predilections while determining the  personality test  of the original Constitution
Further he states that the identity of the Constitution has been lost on account of the impugned Amendment
As regards the submission that the amendment is an ugly epitome of immorality perpetrated by the Indian Parliament it has been seriously opposed by the learned Attorney General that this argument based on immorality has only to be stated to be rejected and that it is an elementary principle of jurisprudence that a law cannot be interpreted on the basis of moral principles
In this connection reference may be made to the following passage in Dias s Jurisprudence Fifth Edition at Page 355 and 356 It reads thus  As a positivist Prof Hart excludes morality from the concept of law for he says that positivists are concerned to promote clarity and honesty in the formulation of the theoretical and moral issues raised by the existence of particular laws which were morally iniquitous but were enacted in proper form clear in meaning and satisfied all the acknowledged criteria of validity of a system
Their view was that in thinking about such laws both the theorist and the unfortunate official or private citizen who was called on to apply or obey them could only be confused by an invitation to refuse the title of law  or valid  to them
They thought that to confront these problems simpler more candid resources were available which would bring into focus far 526 better every relevant intellectual and moral consideration we should say This is law  but it is too inquitous to be applied or obeyed  it was pointed out at the beginning of this chapter that the principal
call for a positivist concept of law is to identify laws precisely for the practical purposes of the present and that for the limited purpose it is desirable to separate the is  from the ought 
To accomplish this no more would appear to be needed than simply those uses of the word law  by courts which is akin to Salmond s definition alluded to above
Professor Hart s concept however is of legal system  which is a continuing phenomenon
        When Professor Hart thinks in a continuum as he does with society he has to bring in morality  but in order to defend positivism he shifts ground and takes refuge in the present time frame for only in this way can he justify the exclusion of morality for the purpose of identifying laws here and now
There would thus appear to be a greater separation between his concept of law and his positivism than ever he alleges between law and morality
For the limited purpose of identifying law his concept seeks to accomplish more than is necessary for the purpose of portraying law in a continuum it does not go far enough
Bentham in his Theory of Legislation Chapter XII at page 60 said thus Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good
Legislation ought to have precisely the same object
But although these two arts or rather sciences have the same end they differ greatly in extent
All actions whether public or private fall under the jurisdiction of morals
It is a guide which leads the individual as it were by the hand through all the details 527 of his life all his relations with his fellows
Legislation cannot do this and if it could it ought not to exercise a continual interference and dictation over the conduct of men
Morality commands each individual to do all that is advantageous to the community his own personal advantage included
But there are many acts useful to the community which legislation ought not to command
There are also manyinjurious actions which it ought not to forbid although morality does so
In a word legislation has the same centre with morals but it has not the same circumference
 Reference may also be made to Krishna Kumar vs Union of India  The above passages remind us of the distinction between law and morality and the line of demarcation which separates morals from legislation
The sum and substance of it is that a moral obligation cannot be converted into a legal obligation
In the light of the above principle the Attorney General is right in saying that Courts are seldom concerned with the morality which is the concern of the law makers
According to him there is no unreasonableness unfairness and dishonesty in bringing this amendment or in any way injuring the basic feature of the Constitution and this amendment has not caused any damage to the concept of reasonableness and non arbitrariness pervading the entire Constitution scheme
On a deep consideration of the entire scheme and content of the Constitution we do not see any force in the above submissions
the present case there is no question of change of identity on account of the Twenty sixth Amendment
The removal of Articles 291 and 362 has not made any change in the personality of the Constitution either in its scheme nor in its basic features nor in its basic form nor in its character
The question of identity wilt arise only when there is a change in the form character and content of the Constitution
In fact in the present case the identity of the Constitution even on the tests proposed by the counsel of 528 the writ petitioners and interverners remains the same and unchanged
Mr RF Nariman has contended that by removing the real and substantial  distinction between the erstwhile Princes forming a class and the rest of the citizenary of India the Constitutional amendment has at one stroke violated the basic structure of the Constitution as reflected both in Articles 14 and 51 c and treated unequals as equals thereby giving a go by to a solemn treaty obligation which was sanctified as independent Constitutional guarantee
He has drawn strength in support of his above argument from the decisions in Md Usman  Ors
vs State of Andhra Pradesh  Ors 1971 Supp
SCR 549 and Ramesh Prasad Singh vs State of Bihar  Others  After carefully going through the above decisions which relate to service matters we are afraid that such an argument
as one made by Mr Nariman could be substantiated on the principles laid down in these two decisions that Article 14 will be violated if unequals are treated as equals
In our considered opinion this argument is misconceived and has no relevance to the facts of the present case
One of the objectives of the Preamble of our Constitution is fraternity assuring the dignity of the individual and the unity and integrity of the nation  It will be relevant to cite the explanation given by Dr Ambedkar for the word fraternity  explaining that fraternity means a sense of common brotherhood of all Indians  In a country like ours with so many disruptive forces of regionalism communalism and linguism it is necessary to emphasise and reemphasise that the unity and integrity of India can be preserved only by a spirit of brotherhood
India has one common citizenship and every citizen should feel that he is Indian first irrespective of other basis
In this view any measure at bringing about equality should be welcome
There is no legitimacy in the argument in favour of continuance of princely privileges
Since we have held that abolition of privy purses is not violative of Article 14 it is unnecessary for us to deal with the cases cited by Mr Nariman which according to him go to say that any law violating Article 14 is equally violative of the basic structure of the Constitution inasmuch as Article 14 is held to be a basic postulate of the Constitution
One of the arguments advanced by Mr D D Thakur is that the Constitution should be read in the context of the pluralistic society of India where there are several distinct and differing interests brought together 529 and harmonised by the Constitution makers by assuring each Section class and society preservsation of certain political cultural and social features specific to that class or section
By way of example reference to Article 370 which confers a special status for Jammu and Kashmir is made
He continues to state that likewise in the North Eastern States the tribals were given autonomus powers for their District Councils coequal to what is conferred on the states and that for minorities special provisions are made under Article 30
Besides Articles 25 and 26 are meant to safeguard the minorities and religious denominations
The persons to determine the injury will be those for whom these provisions were made and whose interests are prejudiced
According to him in such a circumstance the assurances and guarantees given under Articles 291 and 3462 which are the magna karta assuring the rulers of their pre existing rights cannot in any way be destroyed
We do not think that the aforesaid special provisions have any relevance herein
As repeatedly pointed out supra the only question is whether there is any change in the basic structure of the Constitution by deletion of Articles 291 362 and by insertion of Article 363A and amendment of clause 22 of Article 366
We have already answered this question ill the negative observing that the basic structure or the essential features of the Constitution isare in no way changed or altered by the impugned Amendment Act
We cannot make surmises on ifs  and buts  and arrive to any conclusion that Articles 291 and 362 should have been kept intact as special provisions made for minorities in the Constitution
It is but a step in the historical evolution to achieve fraternity and unity of the nation transcending all the regional linguistic religious and other diversities which are the bed rock on which the constitutional fabric has been raised
The distinction between the erstwhile Rulers and the citizenary of India has to be put an end to so as to have a common brotherhood
On a careful consideration of the various aspects of both the writ petitions we hold that the Constitution Twenty sixth Amendment Act of 1971 is valid in its entirety
For all the aforementioned reasons both the Writ Petitions as well as the connected 1
As are dismissed
No costs
It has been brought to our notice that a number of writ petitions are pending before the Karnataka High Court touching the matter in question 530 raising various other questions
Since we have now upheld the validity of the Twenty sixth Amendment Act the High Court may proceed to dispose of all those pending writ petitions with reference to other issues if any arising in accordance with law and in the light of this judgment upholding the Constitutional validity of the impugned Amendment Act
MOHAN
J I had the advantage of perusing the judgment of my learned Brother Ratnavel Pandian J Though I am in respectful agreement with him having regard to the importance of the constitutional issues involved in this case I would like to add the following It was on the 15th day of August 1947 when India attained freedom
Pandit Jawahar Lal Nehru said in memorable words When the world sleeps India will awake to life and freedom
A moment comes which comes but rarely in history when we step out from the old to the new when an age ends and when the soul of nation long suppressed finds utterance
 With the advent of freedom India had to faee problems of highest magnitude
Of the many problmes three were most pressing and urgent
The earlier they were resolved the better it was for the country
The first of them was to restore the communal harmony which had been impaired to great extend
ii Princely States had to be integrated into the Indian Union
iii There was necessity to frame a republican constitution which would vibrate the new ideas
With the dawn of independence it was felt that in an independent India the existence of princely states was an anachronism in the body politic
Neither the past history nor economic and administrative realities could justify the existence of a multitude of autonomous islands
They had to be integrated with the rest of Indian Union to forge the unity of the country
After the withdrawal of British Power the paramountcy lapsed to the princes
They could decide either to join India or Pakistan or even to stay independent
Sardar Vallabhbhai Patel the architect of Indian unity and the master builder of destiny of nationalist India brought the princely states into the Indian Union by means of judicious threats of force appeals to patriotism warnings of anarchy and diplomatic persuasion
An invitation was extended to all the rulers of the State to work through the Councils of 531 Constituent Assembly for the common good of all
This invitation was accepted on 1951949
On this the White Paper says at page 109 As the States came closer to the Centre it became clear that the idea of separate Constitutions being framed for different constituent units of the Indian Union was a legacy from the Rulers  polity which could have no place in democratic set up
The matter was therefore further discussed by the Ministry of States with the Premiers of Unions and States on May 19 1949 and it was decided with their concurrence that the Constitution of the States should also be framed by the Constituent Assembly of India and should form part of the Constitution of India
 It may not be correct to state that those who sat down together in the Constituent Assembly and those who sent their representatives there sat as conqueror and conquered as those who ceded and as those who absorbed as sovereigns or their plenipotentiaries contracting alliances and entering into treaties as high contracting parties to an act of State
They were not there as sovereign and subject or as citizen and alien
On the contrary they were the sovereign peoples of India free democratic equals forgoing the pattern of a new life for the common weal moving with a spirit of all times
When India became a Dominion every vestige of sovereignty was abandoned equally so by the States
They all surrendered to the peoples of the land who through their representatives in the Constituent Assembly hammered out for themselves a new Constitution in which all were citizens in a new order having but one tie and owing but one allegiances devotion loyalty fidelity to the Sovereign Democratic Republic that is India as was eloquently stated by Justice Bose in Virendra Singh and Others vs State of Uttar Pradesh  at P 454  At one Stroke all other territorial allegiances were wiped out and the past was obliterated except where expressly preserved at one moment of time the new order was born with its new allegiance springing from the same source for all grounded on the same basis the sovereign will of the 532 peoples of India with no class no caste no race no creed no distinction  The will of the Union Government was clearly expresssed in its White Paper At page 115 it is said With the inauguration of the new Constitution the merged States have lost all vestiges of existence as separate entities and at page 130 The new Constitution of India gives expression to the changed conception of Indian unity brought about if by  the unionisation of states   and at page31 Unlike the scheme of 1935 the new Constitution is not an aliance between democracies and dynasties but a real union of the Indian people built on the concept of the sovereignty of the people All the citizens of India whether residing in States or Provinces will enjoy the same fundamental rights and the same legal remedies to enforce them
In the matter of their constitutional relationship with the Centre and in their internal set up the States will be on a par with the Provinces
The new Constitution therefore finally eradicates all artificial barriers which separated the States from Provinces and achieves for the first time the objective of a strong United and democratic India built on the true foundations of a cooperative enterprise on the part of the peoples of the Provinces and the States alike
 The princes were first stripped of their three virtal fucntions defence foreign affairs and communications
They were then urged to transfer internal government to popular movements inside the respective states
In recompense they were allowed to retain their titles dignities and immunities and were given generous privy purses
It was in this context 533 Articles 291 and 362 were brought into the Constitution
Likewise Article 366 22 defined the Ruler
On 2nd September 1970 a Bill Twenty fourth Amendment Bill 1970 was introduced omitting these articles
Though it was passed in the Lok Sabha it could not obtain the requisite majority of two thirds of the members present in voting in the Rajya Sabha
Therefore the motion for introduction of the Bill was declared lost
Immediately thereafter the President of India in exercise of his power under clause 22 of Article 366 of the Constitution signed an instrument withdrawing recognision of all the Rulers
Thereupon the order was challenged in this Court under Article 32 of the Constitution of India
In HH Maharajadhiraja Madhav Roa Jiwaji Rao Scindia Bahadur  Ors
vs Union of India  it was held that the order of the President derecognising the Rulers was ultra vires and illegal
In the later part of this judgment the ratio of this ruling will be discussed in detail
In order to render this ruling ineffective the Twenty Sixth Amendment to the Constitution was introduced
The following tabulated statement will bring out the legal postition as is obtainable after Twenty Sixth Amendment
Articles before 26th Amendment Where under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of this Constitution the payment of any sums free of tax has been guaranteed or assured by the Government of the Dominion of India to any Ruler of such State as privy purse a such sums shall be charged on and paid out of the Consolidated 
Fund of India and b the sums so paid to any Ruler shall be exempt from all taxes on income
Articles after 26th Amendment 291
Privy purse sums of Rulers Rep by the Constitution Twenty sixth Amendment Act 1971 Section 2
534 Article 362
In exercise if the power of Indian States
Rep by the Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State due regard shall be had to the guarantee or assurance given under any such covenant or agreeable as is referred in article 291 with respect to the personal rights privileges and dignities of the Ruler of an Indian State
362Rights and privileges of Rulers of Indian StatesRep
by the Constitution Teenty Amendment Act 1971 Section 2
363 A Recognition granted to Rulers of Indian States to cease and privy purses to be abolished Now it that and any anything in this Constitution or in any law for the time being in force a the Prince Chief or other person who at any time before the commencement or the Constitution Twenty sixth Amendment Act 1971 was recognised by the President as the Ruler of an Indian State or any person who at any time before such commencement was recognised by the President as the successor of such Ruler shall on and from such commencement cease to be recognised as such Ruler or the successor of such Ruler b on and from the commencement of the Constitution Twenty sixth Amendment  Act 1971 privy purse is abolished and all rights liabilities and obligations in respect of privy purse are extinguished and accordingly the Ruler or as the case may Article 36222 Ruler In relation to an Indian State means the Prince Chief or other person by whom any such covenant or agreement as is referred to in clause 1 of Article 291 was entered into and who for the time being is recognised by the President as the Ruler of the State and includes any person who for the time being is recognised by the President as the successor of such Ruler
535 be the successor of such Ruler referred to in clause  a or any other person shall not be paid and sum as privy purse
Rulers means the Prince Chief or other person who at any time before the commencement of the Constitution Twenty sixth Amendment Act 1971 was recognised by the President as the Ruler of an Indian State or any person who at any time before such commencement was recognised by the President as the successor of such Rulers
The validity of this amendment was challenged which came up for consideration in His Holiness Keasavananda Bharati Sripadagalavaru vs State of Kerala The Court after holding that the basic structure of the Constitution cannot be amended directed by its judgment dated 24th April 1973 that the Constitution Bench will determine the validity of the Constitution Twenty sixth Amendment Act 1971 in accordance with law and the cases are remitted to the Constitution Bench for disposal in accordance with law
This is how the matter comes before us
Mr Soli J Sorabjee learned counsel for the petitioners relying on Madhav Rao s case supra makes the following submissions
Articles 291 and 362 embodied and guaranteed pledges to the Rulers
They are based on elementary principles of Justice
The underlying purpose of these articles was to facilitate stabilization of the new order and to ensure organic unity of India
This Court in no unmistakable terms said that Articles 36622 291 and 362 are integral part of the constitutional scheme
The institution of rulership is an integral part of the constitutional scheme
This enunciation of law is by a Bench of 9 Judges and is binding
536 Integral means essential
Such a provision therefore could constitute the basic feature of the Constitution
Conseqently the total abolition of these previsions of Constitution would necessarily damage its essential or basic feature
Therefore if the amendment damages the basic or an essential feature of the Constitution it would be beyond the constituent power of the Parliament as laid down in Waman Rao and others vs Union of India and others   588 89 as also in Mahtarao Sahib Shri Bhim Singhji vs Union of India  Ors  212
The correct approach is to examine in each case the place of the particular feature in the scheme of our Constitution its object and purpose as was held in Indira Nehru Gandhi vs Raj Narain s case 1975 Suppl
SC page 1  252
It was by the incorporation of Articles 291 and 362 that the Constitution makers were able to get the willing consent and cooperation of the Rulers to be brought within the fold of the Constitution as laid down by this Court in Madhav s Rao case supra
Without the accession of the Rulers the Constitution would have been basically different
Equally the territory of India its population the composition of the State Legislature and Assemblies and the Lok Sabha and Rajya Sabha would be radically different
The learned counsel seeks to emphasise the nature and the character of guarantees contained in Articles 291 and 362
When they came to he incorporated it was nothing more than the statutory recognition to the solemn promises held out by Government of India
In order to secure a truly democratic form of Government in the united independent India these solemn promises were meant to be honoured
They were intended to incorporate a just quid pro quo for surrender by them of their authority and powers and dissolution of their States
By repeal of these articles it has resulted in nullification of a just quid pro quo
The underlying purpose of doing justice to the Rulers has been subverted
Breach of faith has been sanctioned
Consequently the character and personality of the Constitution have been changed from one of honouring solemn promises and doing justice into one of breaking solemn pledges
537 One of the tests of identifying the basic feature is whether the identity of the Constitution has been changed
As laid down in Kesavananda Bharati s case supra the question to be addressed is can it maintain its identity if something quite different is substituted The personality of the Constitution must remain unchanged
It is not necessary that the constitutional amendment which is violative of a basic or essential feature should have an instant or immediate effect on the basic structure
It is enough if it damages the essential feature as laid down in Indira Nehru Gandhi s case supra
The test to be applied therefore is whether the amendment contravenes or runs counter to an imperative role or postulate which is an integral part of the Constitution
As a matter of fact in Bhim Singhji s case supra it has been laid down that if a statutory provision Section 27 of the Urban Land Ceiling  Regulation Act 1976 confers unfettered discretion and thereby violates Article 14 of the Constitution it can also damage the basic structure of the constitution
For all these reasons it is submitted that the impugned amendment is bad in law
Mr DD Thakur learned counsel for the petitioner supporting Mr Soli J Sorabjee urges that one of the most important features of the Indian Constitution is morality
By the impugned amendment morality is destroyed because Article 361 before the amendment contained a solemn promise to the future generations
By the impugned amendment the solemn promise is breached
The privy purses are charged upon the consolidated fund of India and therefore goes out of control of Parliament
These privy purses are payable during the life time of Maharajas or Princes
If therefore it is temporary in nature and is to last only for a stated period would the Parliament have intended to amend the law If that was the intention of incorporation of these provisions in the Constitution the amendment would run counter to such an intention and therefore cannot be supported
Article 14 guarantees equality which forbids unfair treatment
Where by reason of this amendment the petitioner is subject to unfair treatment there is an impairment of basic structure since equality is a basic structure
In connection with this submission the learned counsel cites case dealing with equality as Ajay Hasia vs Khalid Mujib Sehravardi  and Minerva Mills Ltd vs Union of India  Ors  and 538 In any event privy purse is property
If the petitioner is deprived of the same it is unfair and is violative of basic structure
Even from that point of view the amendment cannot be supported
Mr AK Ganguli learned counsel on behalf of the intervenor in IA No 392 in WP 35172 would submit that under Article 291 of the Constitution payment of any sum has been guaranteed or assured
This guarantee is of great importance
The guarantee would mean continuity of provision
Article 324 also contains the word guarantee 
The same meaning must be ascribed to guarantee under Article 291
It is not without purpose that the privy purse is charged upon the consolidated fund of India as seen from Article 112g
In this connection reference may be made to ON Mohindroo vs District Judge Delhi 1971 III SCC 9
As to what would constitute the basic structure could be gathered from Kesavananda Bharati Sripadagalvaru s case supra par ticulary the passages occurring at parts 582 83 631 632 1159  1473
Mr RF Nariman learned counsel appearing for petitioner No 1 would draw our attention to Section 87b of the Code of Civil Procedure
That provision lists the immunities of foreign rulers
That was challenged as violative of Article 14 of the Constitution
That challenge was repelled in Mohanlal Jain vs His Highness Maharaja Shri Swai Man Singhji 1962 1 SCR 702
On the same line of reasoning it should be held where by the impugned amendment the princes who form a class is sought to be destroyed there is violation of Article 14
Wherever unequals are treated as equals this Court has disapproved of such treatment as seen from Ramesh Prasad Singh vs State of Bihar  Ors  at page 793 and Nagpur Improvement Trust  Another vs Vithal Rao  Ors 1973 III SCR 39
If therefore there is violation of Article 14 that would be offensive of basic structure as seen from Minerva Mills Ltd case supra
It is added that the impugned amendment is violative of Article 51c of the Constitution
The learned Attorney General in countering these submissions advanced on behalf of the petitioners would argue that the agreements with the princes were pre constitutional agreements
Admittedly they were entered into for the purposes of facilitating integration of the nation and 539 creating the constitutional documents for all citizens including those of the native states
The history of the development relating to the merger agreements and the framing of the Constitution clearly shows that it is really the union of the people of the native states with the people of the erstwhile British India
The instruments of accession arc the basic documents and not the individual agreements with the rulers
Therefore to contend that the agreements were entered into by the rulers as a measure of sacrifice by them is untenable
Secondly the nature of the covenant is not that of a contract since a contract is enforceable at law
On the contrary these covenants are made non justiciable as seen from Articles 363
The convenants are political in nature and no legal ingredients as the basis can be read into these agreements as laid down in Usman Ali Khan vs Sagar Mal 119651 3 SCR 201
The guarantees in Articles 291 and 362 are guarantees for the payment of privy purses
Such a guarantee can always be revoked in public interest more so for fulfilling a policy objective or the directive principles of the Constitution
This is precisely what the preamble to the impugned amendment says
That being so the theory of sanctity of contract or the unamendability of Article 291 or 362 does not have any foundation
The theory of political justice is also not tenable since political justice means the principle of political equality such as adult suffrage democratic form of Government etc
The treatiescovenantsetc
entered into between the Union of India and the Rulers were as a result of political action
No justiciable rights were intended to be created
Article 363 as it stood in its original form spells out this proposition
The rights and privileges in the Articles prior to the 26th Amendment were as acts of State of the Government and not in recognition of the scarifies of the rulers
By no means can it be contended that these guarantees given to the rulers were ever intended to be con tinued indefinitely
Turning to basic feature the proper test for determining basic feature is to find out what are not basic features
Rights arising out of covenants which were non justiciable cannot be regarded as basic features
Where therefore Article 363 makes these features non justiciable the 540 question of basic feature does not arise
It is equally incorrect to contend that the amendment is violative of Article 14
There is no such violation
It is not that by the proposed amendment Article 14 is amended
Whether a provision is violative of basic feature of the Constitution has to be decided on the language of the provisions
The observations in Madhav Rao s case have to be read in the context of the Constitution as it then stood
The Court did not intend limiting the amending power
The 26th Amendment does not in any manner amend the Constitution impairing a basic structure
The right to property even as a fundamental right was not a part of the basic structure
Even conceding that pre 26th Amendment right to privy purses to be property it was a right capable of being extinguished by authority of law
A permanent retention of the privy purses and the privileges of the rulers would be incompatible with a sovereign and republican form of Government
Such a retention would also be incompatible with the egalitarian form of the Government envisaged by Article 14
The words integral part of the scheme of the Constitution  in the majority judgment in Mudhavrao s case supra are not the same as basic structure
They have to be read in the context of a challenge to an ordinance which sought to render nugatory certain rights guaranteed in the Constitution then existing
In any event the constitutional bar of Article 363 denudes the jurisdiction of any court in relation to disputes arising from covenants and treaties executed by rulers
Hence it is idle to contend that the impugned amendment in any manner interferes with the basic structure of the Constitution
Usman Ali s case supra is still good law
What is overruled by Madhav Rao s case supra is the political character
Articles 291 362 36622 could never have intended to form a basic structure
They have no overall applicability permeating throughout the entire Constitution so to say that their absence will change the nature of the Constitution
The 541 intrinsic evidence is the availability of a machinery for enforcement
In the case of the rights guaranteed under Part III of the Constitution a machinery is available for the enforcement
On the contrary such a machinery for enforcement of privy purses is not available under Article 363
Therefore it is submitted that it is a inferior right than the fundamental right
Hence it cannot be called a basic structure at all
As to what is the meaning of basic structure reference must be made to Kesavanand s case supra
The learned Attorney General also draws our attention to an Article of K Subba Rao Ex Chief Justice of India in 1973 2 SCC page 1 journal section entitled as The two judgments Golaknath and Kesavananda Bharati
As to the morality part of the impugned amendment it is urged that there is nothing immoral about it
Where the changed situation and anxiety to establish an egalitarian society require the change of law it is valid
In reply to these submissions Mr Soli J Sorabjee would contend that the submissions of learned Attorney General that the guarantees under Articles 291 and 362 are unenforceable in view of Article 363 are not tenable in view of the judgment of this Court in Madhav Rao s case supra
It is also not correct to argue that it is an act of State and therefore no relief can be granted in respect of matters covered by it
Such a submission has not been accepted by this court as seen from Madhav Rao s case supra at pages 53 90 93
Strong reliance was placed on Usman Ali Khan s case supra that the privy purses are in the nature of compensation
The observations relied upon by the learned Attorney General have been regarded by the majority in Madhav Rao case as not only obiter but also incorrect as seen from Usman Ali khan s case at pages 98 145  193
The submission that the privy purses are mere privileges is contrary to the decision of Madhav Rao s case supra since these have been held to be fundamental rights guaranteed under Articles 191b and 31
Having regard to the above submissions the sole question would be whether the 26th Amendment is beyond the constituent power of the Parliament  To put it in another words does the amendment damage any 542 basic or essential feature of the Constitution  The law prior to and after 26th Amendment has already been set out in the tabulated statement
As could be seen by the impugned amendment Articles 291 and 362 have come to be omitted
A new Article 363A has come to be inserted
The original cause 22 of Article 366 has come to be substituted by a new clause
In pith and substance this amendment seeks to terminate the privy purses and privileges of the Princes of the former Indian States
It also seeks to terminate expressly the recognition already granted to them as guaranteed and assured under Articles 291 and 362 of the Constitution
Therefore the impugned amendment has withdrawn the guarantees and assurances and abolished the privy purses personal rights privileges and dignities
The validity of the amendment is attacked under i Articles 291 362 and 36622 of the Constitution form an important basic structure and demolition of these articles would amount to violation of basic structure
ii The covenants entered into are in the nature of contracts backed by constitutional guarantees
They are further affirmed by making the privy purses an expenditure charged upon the consolidated fund of India
Such being the position a breach of the covenant cannot be made since they were intended to incorporate a just quid pro quo which has come to be nullified by the impugned amendment
iii It is arbitrary and unreasonable and is therefore violative of Article 14 and consequently basic structure
iv It is not moral
In order to appreciate the above points it is necessary to set out the background in which the Articles came to be incorporated in the Constitution
It was on July 5th 1947 Sardar Vallabhbhai Patel exhorted as under This country with its institutions is the proud heritage of the people who inhabit it
It is an accident that some live in the States and some in British India but all alike partake of its culture and character
We are all knit together by bonds of blood and feeling no less than of 543 self interest
None can segregate us into segments no impassable barriers can be set up between us
I suggest that it is therefore better for us to make law sitting together as friends than to make treaties as aliens
I invite my friends the Rulers of States and their people to the councils of the Constituent Assembly in this spirit of friendliness and cooperation in a joint endeavor inspired by common allegiance to our motherland for the common good of us all
We are at a momentous stage in the history of India
By common endeavour we can raise the country to a new greatness while lack of unity will expose us to fresh calamities
I hope the Indian States will bear in mind that the alternative to co operation in the general interest is anarchy and chaos which will overwhelm great and small in a common ruin if we are unable to get together in the minimum of common tasks
Let not the future generation curse us for having had the opportunity but failed to turn it to our mutual advantage
Instead let it be our proud privilege to leave a legacy of mutually beneficial relationship which would raise this sacred land to its proper place amongst the nations of the world and turn it into an abode of peace and prosperity
 While clarifying the position he spoke on 13th November 1947 The State does not belong to any individual
Paramountcy has been eliminated certainly not by the efforts of the Princes but by that of the people
It is therefore the people who have got the right to assert themselves and the Nawab cannot barter away the popular privilege of shaping its destiny
 In this connection it is worthwhile to quote the following from The framing of India s Constitution by B Shiva Rao at page 520 as under The Indian National Congress was in the past wellknown for its sympathy with the Indian States People s Conference a body which sought to establish popular 544 governments in the States
Jawaharlal Nehru himself was closely associated with this movement
The start of the proceedings in the Constituent Assembly was not particularly propitious for cooperation between the Assembly and the Rulers
Moving the Objectives Resolution on December 13 1946 in the Constituent Assembly in which neither the Indian States nor the Muslim League were at that time represented Nehru explained that the resolution did not cern itself with what form of Government the States had or whether the Rajas and Nawabs will continue or not
He also emphasized that if a part of the Indian Republic desired to have its own administration it was welcome to have it
But at the same time he made it clear that the final decision in the matter whether or not there should be a monarchical form of Government in the States was one for decision by the people of the States
 The political background in which the Articles came up to be incorporated in the Constitution has already been set out
At this stage what requires emphasis is that the people brought about the integration of the States with the erstwhile British India which came to be freed from the foreign yoke
This is very clear from the speech of Sardar Vallabhbhai Patel on 13th November 1947 quoted above
It was in recognition of the privileges and powers which existed hitherto the privy purses came to be conferred
The articles assured the payment of privy purses
Nature of What exactly is a nature of privy purse in the realm of Privy Purse law could be gathered from Usman Ali Khan s case supra at page 206 as under  The third contention of Mr Pathak raises the question whether an amount payable to a Ruler of a former Indian State as privy purse is a political pension within the meaning of Section 601g Code of Civil Procedure
The word pension in Section 601g Code of Civil Procedure implies periodical payments of money by the Government to the pensioner
See Nawab Bahadur of 545 Murshidabad vs Kamani Industrial Bank Ltd 4 1931 LR 58 IA
215 219  220 and in Bishamber Nath vs Nawab Imdad Ali Khan 1890 LR 17 IA
181186 Lord Watson observed A pension which the Government of India has given a guarantee that it will pay by a treaty obligation contracted with another sovereign power appears to their Lordships to be in the strictest sense a political pension
The obligation to pay as well as the actual payment of the pension must in such circumstances be ascribed to reasons of State policy
 Now the history of the integration and the ultimate absorption of the Indian States and of the guarantee for payment of periodical sums as privy purse to the Rulers of the former Indian States are well known
Formerly Indian States were semi sovereign vassal States under the suzerainty of the British Crown
With the declaration of Independence the paramountcy of the British Crown lapsed as from August 15 1947 and the Rulers of Indian States became politically independent sovereigns
The Indian States parted with their sovereignty in successive stages firstly on accession to the Dominion of India secondly on integration of the States into sizeable administrative units and on closer accession to the Dominion of Indian and finally on adoption of the Constitution of India and extinction of the separate existence of the States and Unions of States
During the second phase of this political absorption of the States the Rulers of the Madhya Bharat States including the Ruler of Jaora State entered into a Covenant on April 22 1948 for the formation of the United State of Gwalior Indore and Malwa Madhya Bharat
By Article 11 of the Covenant the Covenanting States agreed to unite and integrate their territories into one State
Article VI provided that the Ruler of each Covenanting State shall not later than July 1 1948 make over the administration of the State to the Rajpramuckh and thereupon all rights authority and juris 546 diction belonging to the Ruler and appertaining or incidental to the Government of the State would vest in the United State of Madhya Bharat
Article XI 1 provided that the Ruler of each covenanting State shall be entitled to receive annually from the revenues of the United State for his privy purse the amount of specified against that Covenanting State in Schedule I  In Schedule 1 a sum of Rs 175000 was specified against the State of Jaora
Article XI2 provided that the amount of the privy purse was intended to cover all the expenses of the Ruler and his family including expenses of the residence marriage and other ceremonies and neither be increased nor reduced for any reason whatsoever
Article XI3 provided that the Rajpramukh would cause the amount to be paid to the Ruler in four equal instalments at the beginning of each quarter in advance
Article XI4 provided that the amount would be free of all taxes whether imposed by the Government of the United State or by the Government of India
Article XIII of the Covenant secured to the ruler of each Covenanting State al l personal privileges dignities and titles then enjoyed by them
Article XIV guaranteed the succession according to law and custom to the gaddi of each Covenanting State and to the personal rights privileges dignities and titles of the Ruler
The covenant was signed by all the Rulers of the covenanting state
At the foot of the Covenant it was stated that The Government of India thereby concur in the above Covenant and guarantee all its provisions In confirmation of this consent and guarantee the Covenant was signed by a Secretary to the Government of India
On the coming into force of the Constitution of India the territories of Madhya Bharat became an integral part of India
Article 291 of the Constitution provided  Where under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of this Constitution the payment of any sums free 547 of tax has been guaranteed or assured by the Government of the Dominion of India to any Ruler of such State as privy purse  aSuch sums shall be charged on and paid out of the Consolidated Fund of India and bthe sums so paid to any Ruler shall be exempt from all taxes on income In view of the guarantee by the Government of the Dominion of India to the Ruler of Jaora State in the Covenant for the formation of the United State of Madhya Bharat the payment of the sums specified in the covenant as privy purse to the Ruler became charged on the Con solidated Fund of India and became payable to him free from all taxes on income
Article 362 provides that in the exercise of the legislative and executive powers due regard shall be had to the guarantee given in any such covenant as is referred to in Article 291 with respect to the personal rights privileges and dignities of the Ruler of an Indian State
Article 3631 provides that notwithstanding anything contained in the Constitution the Courts would have no jurisdiction in any dispute arising out of any provision in any covenant entered into by any Ruler of an Indian State to which the Government of the Dominion of India was a party or in any dispute in respect of any right accruing under or any liability or obligation arising out of any of the provisions of the Constitution relating to any such covenant
Article 36622 provides that the expression Ruler  in relation to an Indian State means a person by whom the covenant referred to in Article 2991 was entered into and who for the time being is recopied by the President as the Ruler of the State and includes any person who for the time being is rccognised by the President as the successor of such Ruler
Now the covenant entered into by the Rulers of Madhya Bharat by which they gave up their sovereipity over their respective territories and vested it in the new United 548 State of Madhya Bharat
The Covenant was an act of State and any violation of its terms cannot form the subject of any action in any municipal courts
The guarantee given by the Government of India was in the nature of a treaty obligation contracted with the sovereign Rulers of Indian States and cannot be enforced by action in municipal courts
Is sanction is political and not legal On the coming into force of the Constitution of India the guarantee for the payment of periodical sums as privy purse is continued by Article 291 of the Constitution but its essential political character is preserved by Article 363 of the Constitution and the obligation under this guarantee cannot be en forced in any municipal court
Moreover if the President refuses to recognise the person by whom the covenant was entered into as the Ruler of the State he would not be entitled to the amount payable as privy purse under Ar ticle 291
Now the periodical payment of money by the Government to a Ruler of a former Indian State as privy purse on political considerations and under political sanctions and not under a right legally enforceable in any municipal court is strictly a political pension within the meaning of Section 61g of the Code of Civil Procedure
The use of the expression purse instead of the expression pension is due to historical reasons
The privy purse satisfies all the essential characteristics of a political pension and as such is protected from execution under Section 601g Code of Civil Procedure
Moreover an amount of the privy purse receivable from the Government cannot be said to a debt or other property over which or the proceeds of which he has disposing power within the main part of Section 601 Code of Civil Procedure
It follows that the third contention of Mr Pathak must be accepted and it must be held that the amounts of the privy purse are not liable to attachment or sale in execution of the respondent s decree emphasis supplied This case is an authority for the proposition that it is a political pension
The question is whether this dictum has been overruled by Madhav Rao s case supra
549 At page 145 of the said decision it is held On the coming into force of the Constitution of India the guarantee for payment of periodical sums as privy purse is continued by Article 291 of the Constitution but its essential political character is preserved by Article 363 of the Constitution and the obligation under this guarantee cannot be enforced in any municipal court
With all respect it appears to me that all the above was not strictly necessary for the decision of the case and it would have been enough to say that privy purse was a pension a word which according to the Oxford Dictionary means a periodical payment made specially by a Government company employer etc  which was political in nature because it was based on a political settlement
However it was not the expression of opinion of only one learned Judge but the unanimous view of three learned Judges of this Court
In Kanwar Shri Vir Rajendra Singh vs Union of India  a Bench of another five learned Judges of this Court have pronounced on the non enfor ceability of the provision for payment of privy purse under Article 291 by resort to legal proceedings
In my view on the reasoning already given by me it must be held that the payment of privy purse although placed on a pedestal which defies annihilation or fragmentation as long as the above mentioned constitutional provisions enure is still subject to the constitutional bar of non justiciability and cannot be upheld or secured by adjudication in a court of law including this Court
Further at page 193 of the said decision it is held The learned Judges in that case had no occasion to consider nor did they go into the scope of Article 291 or Article 363
Every observation of this Court is no doubt entitled to weight but an obiter cannot take the place of the ratio
 A careful reading of the above shows what is overruled is the political character and not that the privy purse is not a political pension
Even 550 otherwise if really this dictum has been overruled the very basis of the judgment of Usman Ali Khan s case supra would disappear
Then the reasoning in relation to the attachability under Section 60 of Code of Civil Procedure would be incorrect
Be that so what is argued by Mr Soli J Sorabjee is the guarantee under Article 291 is enforceable notwithstanding Article 363
Therefore this discussion need not detain us
As to the scope of Article 363 it could be culled from Madhav Rao s case supra at page 99  A dispute as to the right to receive the privy purse is therefore not a dispute arising out of the covenant within the first limb of Article 363 nor is it a dispute with regard to a right accruing or obligation arising out of a provision of the Constitution relating to a covenant
But since the right to the privy purse arises under Article 291 the dispute in respect of which does not fall within either clause the jurisdiction of the Court is not excluded in respect of disputes relating to personal rights and privileges which are granted by statutes
 One thing which must be borne in mind while appreciating the scope of Madhav Rao s case supra is what occurs at page 75 as under Scope of Scindia whether the Parliament may by a constitutional amendRuling amendment abolish the fights and privileges accorded to the Rulers is not and cannot be debated in this petition for no such constitutional amendment has been made
The petitioner challenges the authority of the President by an order purporting to be made under Article 36622 to withdraw recognition of Rulers so as to deprive them of the rights and privileges to which they are entitled by virtue of their status as Rulers emphasis supplied This Court had no occasion to go into the scope of constitutional amendment like the present one
Therefore all reasons addressed for striking down the presidential order must be confined only to the authority of the President to issue the order under Article 36622 of the Constitution
551 BASIC STRU This takes us to the power of amendment conferred CTURE under Article 368
That power of amendment is unlimited except that the basic structure of the Constitution cannot be amended
What then is the basic structure  In Kesavananda s case supra Sikri CJ
stated at page 165 as under whether The learned Attorney General said that every Articles 291 provision of the Constitution is essential otherwise it would 362 36622 not has been put in the Constitution
This is true
But this does not place every provision of the Constitution in the same position
The true position is that every provision of the Constitution can be amended provided in the result the basic foundation and structure of the constitution remains the same
The basic structure may be said to consist of the following features  i Supremacy of the Constitution ii Republican and Democratic form of Government iii Secular character of the Constitution iv Separation of powers between the Legislature the executive and the judiciary v Federal character of the Constitution
The above structure is built on the basic foundation ie the dignity and freedom of the individual
This is of supreme importance
This cannot by any form of amend ment be destroyed
The above foundation and the above basic features are easily discernible not only from the preamble but the whole scheme of the Constitution which I have already discussed 552 Shelat  Grover JJ
in the said judgment stated at page 280 as under The basic structure of the Constitution is not a vague concept and the apprehensions expressed on behalf of the respondents that neither the citizen nor the Parliament would be able to understand it are unfounded
If the historical background the Preamble the relevant provisions thereof including Article 368 are kept in mind there can be no difficulty in discerning that the following can be regarded as the basic elements of the constitutional structure
These cannot be catalogued but can only be illustrated
The supremacy of the Constitution
Republican and Democratic form of Government and sovereignty of the country
Secular and federal character of the Constitution
Demarcation of power between the legislature the executive and the judiciary
The dignity of the individual secured by the various freedoms and basic rights in Part III and the mandate to build a welfare State constrained in Part IV 6
The unity and the integrity of the nation
 Hedge  Mukherjea JJ
in the said judgment stated at page 314 as under  We find it difficult to accept the contention that our Constitution makers after making immense sacrifices for achieving certain ideals made provision in the Constitution itself for the destruction of these ideals
There is no doubt as men of experience and sound political knowledge they must have known that social economic and political chan ges are bound to come with the passage of time and the Constitution must be capable of being so adjusted as to 553 be able to respond to those new demands
Our Constitution is not a mere political document
It is essentially a social document
It is based on a social philosophy and every social philosophy like every religion has two main features namely basic and circumstantial
The former remains constant but the latter is subject to change
The core of a religion always remains constant but the practices associated with it may change
Likewise a Constitution like ours contains certain features which so essential that they cannot be changed or destroyed
In any event it cannot be destroyed from within
In other words one cannot legally use the Constitution to destroy itself
Under Article 368 the amended Constitution must remain the Constitution  which means the original Constitution
When we speak of the abrogation  or repeal  of the Constitution we do not refer to any form but to substance
If one or more of the basic features of the Constitution are taken away to that extent the Constitution is abrogated or repealed
If all the basic features of the Constitution are repealed and some other provisions inconsistent with those features are incorporated it cannot still remain the Constitution referred to in Article 368
The personality of the Constitution must remain unchanged emphasis supplied
Further at page 322 it was stated as under On a careful consideration of the various aspects of the case we are convinced that the Parliament has no power to abrogate or emasculate the basic elements or fundamental features of the Constitution such as the sovereignity of India the democratic character of the individual freedoms secured to the citizens
Nor has the Parliament the power to revoke the mandate to build a welfare State and egalitarian society
 Jaganmohan Reddy J in the said judgment stated at page 517 asunder 554 I will now consider the question which has been strenuously contended namely that there are no essential features that every feature in the Constitution is essential and if this were not so the amending power under the Constitution will apply only to non essential features which it would be difficult to envisage was the only purpose of the framers in inscribing Article 368 and that therefore there is no warrant for such a concept to be read into the Constitution
The argument at first flush is attractive but if we were to ask ourselves the question whether the Constitution has any structure or is structureless or is a jelly fish to use an epithet of the learned Advocate for the petitioner the answer would resolve our doubt
If the Constitution is considered as a mechanism or call it an organism or a piece of constitutional engineering whichever it is it must have a structure or a composition or a base or foundation
What it is can only be ascertained if we examine the provisions which the Hon ble Chief Justice has done in great detail after which he has instanced the features which constitute the basic structure
I do not intend to cover the same field once again
There is nothing vague or unascertainable in the preamble and if what is stated therein is subject to this criticism it would be equally true of what is stated in Article 39b  c as these are also objectives fundamental in the governance of the country which the State is enjoined to achieve for the amelioration and happiness of its people
The elements of the basic structure are indicated in the preamble and translated in the various provisions of the Constitution
The edifice of our Constitution is built upon and stands on several props remove any of them the Constitution collapses
These are 1 Sovereign Democratic Republic 2 Justice social economical and political 3 Liberty of thought expression belief faith and worship 4 Equality of status and of opportunity
Each one of these is important and collectively they assure a way of fife to the people of India 555 which the Constitution guarantees
To withdraw any of the above elements the structure will not survive and it will not be the same Constitution or this Constitution nor can it maintain its identity if something quite different is substituted in its place which the sovereign will of the people alone can do
 Palekar J in the said judgment would say at page 619 Since the essential features and basic principles  referred to Mr Palkhivala are those culled from the provisions of the Constitution it is clear that he wants to divide the constitution into parts one of the provisions containing the essential features and the other containing non essential features
According to him the latter can be amended in any way the Parliament likes but so far as the former provisions are concerned though they may be amended they cannot be amended so as to damage or destroy the core of the essential features
Two difficulties arise who is to decide what are essential provisions and non essential provisions According to Mr Palkhivala it is the court which should do it
If that is correct what stable standard will guide the court in deciding which provision is essential and which is no essential Every provision in one sense is an essential provision because if a law is made by the Parliament or the State Legislatures contravening even the most insignificant provision of the constitution that law will be void
From that point of view the courts acting under the constitution will have to look upon its provisions with an equal eye
Secondly if an essential provision is amended and a new provision is inserted which in the opinion of the constituent body should be presumed to be more essential than the one repealed what is the yardstick the court is expected to employ It will only mean that whatever necessity the constituent body may feel in introducing a change in the constitution whatever change of policy that body may like to introduce in the constitution the same is liable to be struck down if the court is not satisfied either about the 556 necessity or the policy
Clearly this is not a function of the courts
The difficulty assumes greater proportion when an amendment is challenged on the ground that the core of an essential feature is either damaged or destroyed
What is the standard Who will decide where the core lies and when it is reached One can understand the argument that particular provisions in the constitution embodying some essential features are not amendable at all
But the difficulty arises when it is conceded that the provision is liable to be amended but no so as to touch its core 
Apart from the difficulty in determining where the core of an essential features  lies it does not appear to be sufficiently realised what fantastic results may follow in working the Constitution
Suppose an amendment of a provision is made this year
The mere fact that an amendment is made will not give any body the right to come to this Court to have the amendment nullified on the ground that it affects the core of an essential feature
It is only when a law is made under the amended provision and that law affects some individual s right that he may come to this Court
At that time he will first show that the amendment is bad because it affects the core of an essential feature and if he succeeds there he will automatically succeed and the law made by the Legislature in the confidence that it is protected by the amended constitution will be rendered void
 Khanna J in the said judgment at page 720 stated as under So far as the question is concerned as to whether the right to property can be said to pertain to basic structure or framework of the Constitution the answer in my opinion should plainly be in the negative
 Mathew J in the said judgment at page 827 828 observed But the question will still remain even when the core or the essence of a Fundamental Right is found whether the Amending Body has the power to amend it in such a way as to destroy or damage the core
I have already said 557 that considerations of justice of the common good or the general welfare in a democratic society might require abridging or taking away of the Fundamental Rights
I have tried like Jacob of the Old Testament to wrestle all the night with the angel namely the theory of implied limitation upon the power of amendment
I have yet to learn from what source this limitation arises
Is it because the people who were supposed to have framed the Constitution intended it and embodied the intention in an unalterable framework If this is so it would raise the fundamental issue whether that intention should govern the succeeding generations for all time
If you subscribe to the theory of Jefferson to which I have already referred and which was fully adopted by Dr Ambedkar the principal architect of our Constitution and that is the only same theory I think there is no foundation for the theory of implied limitations
Were it otherwise in actual reality it would come to this The representatives of some people the framers of our Constitution could bind the whole people for all time and prevent them from changing the constitutional structure through their representatives
And what is this sacredness about the basic structure of the Constitution Take the republican form of Government the supposed cornerstone of the whole structure
Has mankind after its wandering through history made a final and unalterable verdict that it is the best form of government Does not history show that mankind has changed its opinion from generation to generation as to the best form of Government Have not great philosophers and thinkers throughout the ages expressed different views on the subject Did not Plato prefer the rule by the Guardians And was the sapient Aristotle misled when he showed his proclivity for a mixed form of government If there was no consensus yesterday why expect one tommorow Commenting on this case and Golaknath s decision Subba Rao exhibit CJI in The two judgments  Golaknath and Kesavananda Bharati supra 558 says at page 18 The result is that the Supreme Court by majority declared that the Parliament under the Indian Constitution is not supreme in that it cannot change the basic structure of the Constitution
It also declared by majority that under certain circumstances the amendment of the fundamental rights other than the right to property would affect the basic structure and therefore would be void
The question whether the amendment of the fundamental right to property would under some circumstances affect the basic structure of the Constitution is not free from doubt the answer depends upon the view the Supreme Court takes hereafter of the impact of the opinion of Matthew Beg Dwivedi and Chandrachud JJ
the funda mental rights are the basic features of the Constitution on the opinion of the six judges who held that the core of the fundamental rights is part of the basic structure of the Constitution
One possible view is that together they form a clear majority on the content of the basic structure another possible view is that their opinion should be read along with that the entire Constitution except perhaps the bare machine of Government could be repealed by amendment
 If this be the law the question would be whether Articles 291362 36622 could ever be intended to form a basic structure
The answer should be in the negative
They have no overall applicability permeating through the entire Constitution that the absence of these provisions will change the nature and character of the Constitution
While examining the question whether these Articles constitute the basic structure one must have regard to Article 363 of the Constitution
They are made enforceable in a Court of law
If really they are to form basic structure would not a corresponding right as occurring under Article 324 have been provided In Indira Nehru Gandhi s case supra the following observations are found in para 663  559 The preamble generally uses words of passion and power in order to move the hearts of men and to stir them into action
Its own meaning and implication being in doubtthe preamble cannot affect or throw fight on the meaning of the enacting words of the Constitution
Therefore though our Preamble was voted upon as is a part of the Constitution it is really a preliminary statement of the reasons  which made the passing of the Constitution necessary and desirable
As observed by Gajendragadkar J in In re Berubari Union vs Exchange of Enclaves what Willoughby has said about the preamble to the American Constitution namely that it has never been regarded as the source of any substantive power is equally true about the prohibitions and limitations
The preamble of our Constitution cannot therefore be regarded as a source of any prohibitions or limitations Therefore regard must be had to the scope of the preamble which states  The concept of Rulership with privy purses and special privileges unrelated to any current functions and social purposes is incompatible with an egalitarian social order
Government have therefore decided to terminate the privy purses and privileges of the Rulers of former Indian States
It is necessary for the purpose apart from amending the relevant provisions of the Constitution to insert a new article therein so as to terminate expressly the recognition already granted to such rulers and to abolish privy purses and extinguish all rights liabilities and obligations in respect of privy purses
 If the 26th amendment aims to establish an egalitarian society which is in consonance with the glorious preamble how could this provision be called a basic structure No doubt in Madhav Rao s case supra it was held that these provisions are an integral part of the Constitution of this country
Apart from the fact that all these reasons were addressed against the power of the President under Article 36622 this statement cannot tantamount to basic 560 structure
Nor would it mean the same as the basic structure
To determine whether these provisions constitute basic structure or not they cannot be viewed in the historic background
By repeal of the provisions the personality of the Constitution has not changed
India could still retain its identity and it can hardly be said that the personality has changed
The repudiation of the guarantees might result in the nullification of a just quid pro quo
But if it is the will of the people to establish an egalitarian society that will be in harmony with the changing tunes of times
It cannot be denied that law cannot remain static for all times to come
The extract of Matthew J in Kesavananda s case highlights this aspect as under  But the question will still remain even when the core or the essence of a Fundamental Right is found whether the Amending Body has the power to amend it in such a way as to destroy or damage the core
I have already said that considerations of justice of the common good or the general welfare in a democratic society  might require abridging or taking away of the Fundamental Rights  Weems vs United States 54 Law Edition 801 quoted in Francis Coralie Mullin vs Administrator Union Territory of Delhi  Ors  at page 617 succinctly states the law on this aspect as under  Time works changes brings into existence new conditions and purposes
Therefore a principle to be vital must be capable of wider application than mischief which gave it birth
This is peculiarly true of Constitutions
They are not ephemeral enactments designed to meet passing occasions
They are to use the words of Chief Justice Marshall designed to approach immortality as nearly as human institutions can approach it
The future is their care and provisions for events of good and bad tendencies of which no prophecy can be made
In the application of a Constitution therefore our contemplation cannot be only of what has been but of what may be
Under any other rule a 561 Constitution would indeed be as easy of application as it would be deficient in efficacy and power
Its general principles would have little value and be converted by precedent into impotent and lifeless formulas
Rights declared in the words might be lost in reality
And this has been recognised
The meaning and vitality of the Constitution have developed against narrow and restrictive construction emphasis supplied Robert section Peck in The Bill of Rights  the Politics of Interpretation states at page 316 317 as under  The Constitution then is not a beginning nor an end but part of a timeless process
Any constitution intended to endure for ages to come Mcculloch vs Maryland 17 US   4151819 cannot be a closed system or temporally bound
The Constitution is more properly seen as part of a stream of history
That stream is not always unbroken and has frequently taken radical turn  That it is path has been winding is not surprising since history is not a steady and predictable progression following earlier events
Still constitutional rights must be viewed as traveling down a single historic stream
Today s conclusions to remain principled and persuasive need to relate back to earlier origins
When cases come before the Courts purposes and concerns of timeless character require translation into practical rules that apply to their most modern manifestations
In this role courts perform a mediating function harmonizing different strands into a coherent order
But the courts do not exercise an exclusive authority in giving coherence to constitutional law
Political leaders and political institutions have played this roles well advancing both the law and the mechanisms available to promote constitutional liberty
Great constitutional provisions must be administered with caution  Justice Oliver Wendell Holmes remained us Some play must be allowed for the joints of the machine and it must be remembered that legislatures are ultimate guardians of the liberties and welfare of the people in quite as great a 562 degree as the Courts
Missouri Kansas  Texas Rly Co vs May   270 1904
the Courts are insulated from the political winds that buffer motivate andsometimes disable a legislature
This independence from thelarger political world is critical to discharge of the tasks the successful discharge of the tasks we assign the judiciary Nevertheless the courts operate in a political world of their own
In this variety of politics courts must harmonize past with present conflict with resolution change with continuity
And they must contend with a variety of interest groups that influence the process by their actions and by the appeal of their arguments In the words of the famous poet Jaames Russel Lowell New occasions teach new dutiesTime makes ancient good uncouth They must upward stilt and onward who would keep abreast of Truth
 Nodoubt unity and integrity of India would constitute the basic structureas laid down in Kesavananda s case supra but it is too far fetched aclaim to state that the guarantees and assurances in these Articles have gone into the process of unification and integration of the country
One cannot lose sight of the fact that it was the will of the people and the urge to breathe free air of independent India as equal citizens that brought about the merger of these princely states
Therefore the contention that the Articles 291 and 362 facilitated the organic unity of India is unacceptable
Next as to the violation of Article 14 it is true as laid down in Bhimsinghji s case supra that if a particular provision of a constitution violates Article 14 it would affect the basic structure of the Constitution
This case dealt with the validity of Section 271 of the Urban Land Ceiling and Regulation Act 1976
The relevant portion of the judgment in Bhimsinghji s case supra can now be extracted 563 Further the restriction under Section 271 in the absence of any guidelines governing the exercise of the power on the competent authority in the matter of granting or  refusing to grant the permission is highly arbitrary productive of discriminatory results and
therefore violates the equality clause of Article 14
Which of the three objectives mentioned in the preamble should guide the exercise of power by the competent authority in
any given case is not clear and in any case no standard has been laid down for achieving the objectives of preventing concentration speculation and profiteering in urban land or urban property
Because of these reasons the provisions for appeal and revision under Sections 33 and 34 against the order passed by the competent authority under Section 27 would also not be of much avail to preventing arbitrariness in the matter of granting or refusing to grant the permission
Section 27 is thus ultra vires and unconstitutional
 Per Chandrachud CJ
and Bhagwati J Krishna Iyer J concurring Sub section 1 of Section 27 of the Act is invalid insofar as it imposes a restriction on transfer of any urban or urbanisable land with a building or a portion only of such building which is within the ceiling area
Such property will therefore be transferable without the constrains mentioned in sub section 1 of the Act
 paras 58 10 Per Krishna Iyer J concuming I agree with the learned Chief Justice both regarding the constitutionality of the legislation and regarding partial invalidation of Section 271
 Per Seth J Sub sections 1 2 and 3 of section 23 and the opening words subject to the provisions of sub sections 564 1 2 and 3 in Section 234 are ultra vires the Parliament and are not protected by Articles 31 B and 31 C of the Constitution and further Section 271 is invalid insofar as it imposes a restriction on transfer of urban property for a period of ten years from the commencement of the Act in relation to vacant land or building thereon within the ceiling limits  Krishna lyer J stated in the said judgment at page 186 as under  The question of basic structure being breached cannot arise when we examine the vires of an ordinary legislation as distinguished from a constitutional amendment
Kesavananda Bharati 1973 Supp
SCR cannot be the last refuge of the Propreitariate when benigh legislation takes away their excess  for societal weal
Nor indeed can every breach of equality spell disaster as a lethal violation of the basic structure
Perioheral inequality is inevitable when large scale equalisation processes are put into action
If all the judges of the Supreme Court in solemn session sit and deliberate for half a year to produce a legislation for reducing glaring economic inequality their genius will let them down if the essay is to avoid even peripheral inequalities
Every large cause claims some martyr as sociologists will know
Therefore what is a betrayal of the basic feature is not a mere violation of Article 14 but a shocking unconscionable or unscrupulous travesty of the quintessence of equal justice
If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty
But to permit the Bharati supra ghost to haunt the corridors of the court brandishing fatal writs for every feature of inequality is judicial paralysation of parliamentary function
Nor can the constitutional fascination for the basic structure doctrine be made a Trojan horse to penetrate the entire legislative camp fighting for a new social order and to overpower the battle for abolition of basic poverty by the basic structure  missile
Which is more basic Eradication of die hard deadly and per 565 vasive penury degrading all human rights or upholding of the legal luxury of perfect symmetry and absolute equality attractively presented to preserve the status quo ante  To use the Constitution to defeat the Constitution cannot find favour with the judiciary I have no doubt that the strategy of using the missile of equality  to preserve die hard dreadful societal inequality is a stratagem which must be given short shrift by this Court
The imperatives of equality and development are impatient for implementation and judicial scapegoats must never be offered so that those responsible for stalling economic transformation with a social justice slant may be identified and exposed of Part IV is a basic goal of the nation and now that the Court upholds the urban ceiling law a social audit of the Executive s implementation a year or two later will bring to tight the gaping gap between verbal velour of the statute book and the executive slumber of law in action
The Court is not the anti hero in the tragedy of land reform urban and agrarian
 In this case the amendment does not either treat unequals as equals or in any manner violates Article 14
AD the privy purses holders are treated alike by the withdrawal of all those privileges
The next aspect of the matter is can the Court go into the morality in withdrawing these assurances and guarantees
The following extract from Law and Morality  by Louis Blom Cooper Gavin Drewry at page 2 is very useful  The relationship between law and morals is in effect quadripartite but it is only the fourth part that engages our current interest
The first part is an historical and casual question
Has the law been influenced by moral principles No one doubts the answer is affirmative conversely law has influenced moral principle
The Suicide Act 1961 no doubt accurately reflected the long standing moral view that to take one s own life was not a crime against the law a view which had not always been shared 566 by the judiciary originally for reasons having to do as much with property as with theological morality
The statutory abolition of the crime of suicide in its turn buttressed and affirmed the moral attitude
The second part questions whether law necessarily refers to morality at all do morals and law overlap in practice simply because both share the common vocabulary of rights and duties It is here that the natural lawyers and legal positivists have engaged most fiercely in controversy
The antagonists have found temporary refuge in the sterile argument about whether law is open to moral criticism
Can a rule of law properly  derived in constitutional terms to be held to conflict with some moral principle Those who witnessed Parliament through the vehicle of the War Damage Act 1965 reversing retrospectively the House of Lords  decision in Burmah Oil Co Ltd vs Lord Advocate  and thus depriving a large cor poration of its fruits of litigation would acknowledge readily the dissociation of law and political if not social morality
In any event does it matter that the law is immorally enacted if we are all bound by it Its enforceability if not its actual enforcement is unlikely to be affected by such theoretical objections
Perhaps political morality can be defined only in terms of the franchise and the efficacy of representative government though again the argument rests on a philosophical and psychological rather than on an empirical plane  Then again dealing with constraints on Constitutional interpretationbent Greenwalt in conflicts of fits of Law and Morality  1987 Edition states at page as follows impugned Like ordinary legislation constitutional provisions amendmentprotecting rights reflect the moral judgments of those who whether adopted them in this case complex judgments that certain coral activities should be put beyond the range of control by the 567 Political branches of the government
In constitutions as in statutes language may embody a compromise of competing moral claims though nothing in out federal Constitution resembles the relatively precise accommodation of the criminal law rules governing use of force in selfdefence
The fact that the Constitution itself represents moral evaluations does not of course establish that moral evaluation is also the task of those who must decide if statutes and their applications fall a foul of constitutional restraints
Widespread agreement exists on the appropriateness of some other techniques of interpretation
The point if clearest for actions that the language of the Constitution the intent of the Framers and the decisions of earlier courts place squarely within the area of constitutional protection
For these actions a modern court win rarely need to engage in any debatable moral evaluation
Usually it will apply the plain law perhaps after determining that no overwhelming argument has been made contrary to the indications of these powerful sources
Even for harder cases judicial interpretation is not simple moral evaluation the implications of the textual language the Framers  intent and the precedents count for something if they point in one direction or another
 To the same effect Michael J Perry in Morality Politics and law 1988 Edn states at page 129 as under  According to the view of democracy that underlies originalities it is illegitimate for the judiciary to go beyond the enforcement of policy choices to the making of policy choices at least it is illegitimate unless the judiciary is authorised to do so by the legislative and executive branches
And it is illegitimate in extremis for the undemocratic judiciary to oppose itself in constitutional cases to the democratic branches and agencie s of government on the basis of beliefs never constitutionality by the gratifiers
 568 Therefore this Court cannot concern itself with the moral aspect of the impugned amendment
The impugned amendment is the will of the people expressed through Parliament
In view of the foregoing discussion these petitions Are liable to be dismissed
Accordingly these petition stand dismissed
VPR petition dismissed


Summary:
The Railway Board entered into contracts with 12 manufactur ers for the supply of cast steel bogies to be used for building the wagons every year
Among them HDC Mukand and Bhartiya had capacity to manufacture larger quantities
In 1991 two new firms Simplex and Beekay also entered the field
For the year 1992 93 a tender notice for procurement of 1900 cast steel bogies was issued to the Regular suppliers as well as to Simplex and Beekay the new entrants
The tender notice stated therein that the last date for submission of offers was 271191 by 230 PM and the tenders to be opened at 3 PM on the same day that the price was subject to the price variation clause and the base date for escalation purpose was 1991 that the Railways reserved the right to order additional quantity upto 30  of the quantity ordered during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period
The price quoted by HDC Mukand and Bhartiya firms was identical ie Rs 77
666 per bogie
Other tenderers price varied between Rs 83000 and Rs 84 500 per bogie
The Government s announcement of reduction of custom duty 109 on the import of steel scrap and dispensation of freight equalisation fund for steel came after the opening of the tenders and before the finalisation of the tenders
The Tender Committee recommended that the three manufac turers who quoted an identical lowest rates without any cushion for escalation between 1791 and 191991 formed a cartel that the reasonable rate per bogie was to be Rs 76000 by taking into consideration of the two concessions announced by the Government and that the existing procedure to be followed on the question of distribution of quantities to the tenderers
On 4292 the Committee signed the recommendations
On the same date the Member Mechanical of the Committee received letter from HDC and Mukand wherein the tenderers offered to substantially reduce the prices because of the concessions
The Advisor Finance examined the matter and observed that if it was intended to continue the existing policy of fixing a rate and distributing the order among all the tenderers then negotiations might not be useful that review of the existing policy would take time and that the present tender be decided on the basis of the existing policy
The Member Mechanical the next higher authority recom mended the acceptance if the Tender Committee s recommendation
The Finance Commissioner approving the recommendations of the committee noted that the tenderers who quoted the identical rates had formed a cartel that a counter offer of Rs 76000 be accepted but in the case of HDC a price lower by Rs1 1000 to he offered as per their post tender letter dated 4292 that the present formula regarding the distribution of quantities be applied to all tenderers except the three who formed a cartel that some recoveries from the three tenderers he made on the basis of their letters wherein they quoted prices which were much less than the updated price on 1991 of Rs79305 that the post tender letters be ignored and that for short term gains the Department could not sacrifice long term healthy compensation
110 The Minister for Railways the approving authority agreeing with the recommendations of the Finance Advisor noted that the three tenderers had formed a cartel and they he offered a price lower by Rs 1 1000 with reference to the counter offer recommended by the Tender Committee and the quantities also be suitable adjusted to break the cartel and ordered for redistrib ution of the quantities exercising 30 option
The Chairman Railway Board when received the file for implementation of the orders from the Minister noted that action be taken as decided by the Minister which had resulted in dual pricing namely one to the three tenderers and the higher one to the other tenderers and therefore the Minister to consider whether they could counter offer the lower price to all the tenderers as that would result in saving much more
When the matter was sent to the Finance Commissioner he observed that as some of the units were sick units and owe a lot of money to the nationalised banks it would be in the national interest to accept dual pricing
Therefore the rile was again put up to the approving authority
He agreed with the recommendations of the Commissioner and the Tender Committee and directed for their implementation
As per the final decision taken by the approving authority the three tenderers were issued a counter offer of Rs65000 per bogie by telegram and other tenderers were given a counter offer of Rs76000 per bogie
After the receipt of the telegram dated 18392 HDC and Mukand riled writ petitions in the Delhi High Court challenging the discriminatory counter offer
Bhartiya had riled a writ petition in the Calcutta High Court
It was withdrawn and another writ petition was riled later in the Delhi High Court
In the writ petitions filed by HDCand Mukand the High Court issuing notice to the respondentsstayed the operation of the telegram dated 18392
111 In reply to the telegram HDC and Mukand also wrote to the Minister of Railways offering to supply the bogies at the rate of Rs67000 per bogie which was accepted by the Railway
Pending the writ petitions the High Court passed an interlocutory order directing the Railway to accept the allocation of bogies recommended by the Tender Committee at the rate of Rs67000 per bogie subjected to the final decision in the writ petitions
The Railway s petition for special leave to appeal filed against the interlocutor order of the High Court was dismissed
Thereafter the High Court allowed the writ petitions riled by HDC and Mukand and directed that all the tenderers should make the supplies at the rate of Rs 67000 per bogie and allocation of quantity to be considered afresh on a reasonable basis
The Union of India filed appeal by special leave SLP c Nos 11897 9892 against the judgment of the High Court
The other SLPs
were riled by the affected tenderers who figured as respondents Nos 4 to 12 in the writ petitions before the High Court
The High Court disposed of Bharatiya s writ petition in terms of the judgment in the other two writ petitions WPNos 1152 and 1157 92 wherein they were shown as respondent No 13
As Bharatiya alias Besco did not question the judgment of the High Court they were arrayed as respondent in the SLP riled by the Union of India
The Union of India submitted that the three big manufactures ie Ms HDC Mukand and Bhartiya formed a cartel and the same was evident from the fact that each one of them quoted an identical price which was a cartel price  that the Government in the matters of economic policy for good and sufficient reasons and in the public interest could reject the lowest offer with a view not to allow any monopoly and to encourage competition among the recognised manufacturers that the dual pricing adopted by the Railways under the circumstances was not discriminatory that the Railways had rightly taken into account the two concessions and found that the price at the rate of Rs67000 per bogie was not reasonable and workable and it was only a cartel price and that Rs 76000 was the reasonable price 112 and on that basis made a counter offer to other manufacturers except to these three big manufacturers that the Railways took into consideration all the relevant factors and on rational basis the quantities were allotted and therefore they were not given larger share
The nine smaller manufacturers in general supported the sub missions of the Union of India
The respondent Ms HDC supporting the finding of the High Court submitted that the award of the contract for supply of bogies was vitiated by mala fides and that disproportionate allotment of quota of bogies and
dual pricing were based on malafides and estraneous considerations violating Article 14 of the Constitution that the reasons put forward on behalf of the Railways were disingenuous and bereft of rationale
Ms Mukand respondent submitted that the dual set of counter offers and allocation of disproportionate quantities were highly arbitrary and that the practice and police of the past 10 years of placing orders on all manufacturers in respect of the quantities worked out on the basis of standard quantity formula at a uniform price gave rise to legitimate expectations among all bogie manufacturers and irrational departure from the existing policy was arbitrary and unreasonable that the making of law tender offers could not by Itself be visited with punty consequences like dual pricing and reducing the allotment of legitimate quantities
Ms Bhartiya submitted that the Tender Committee erred In treating ms Bhartiya also as a member of the cartel and that the allotment of quantities was arbitrarily reduced that Ms Bhartiya never made an offer of Rs 67000 and there was nothing in writing to that effect and that merely because of the statement of the counsel during the proceedings before the High Court it should not be understood that they were willing to supply at the rate of Rs 67000 and that they should not be treated differently from the other nine manufacturers
Disposing of the Special Leave Petitions this Court 113 HELD 11
Since the offers of the three tenderers were identical and the price was somewhat lower the Tender Committee entertained a suspicion that a cartel had been formed and the same got further strengthened by the post tender attitude of the said manufacturers which further resulted in entertaining the same suspicion by the other authorities in the hierarchy of decision making body including the Minister of Railways
124 D 12
All the Railway authorities including the Minister acted in a bonafide mannerin taking the stand that the three manufacturers formed a cartel
124F 13
There is no enough of material to conclude that MS HDC Mukand and Bhartiya formed a cartel
Because of mere quoting identical tender offers by the Said three manufacturers for which there is some basis the conclusion that the id manufacturers had formed a cartel does not appear to be correct
124 C 14
The current contract priced based on the updated price is Rs79505
The three manufacturers offered at Rs 77600
Taking into consideration the later concessions the Tender Committee decided that the price of Rs 76000 is reasonable
124 F 15
The fixation of price at Rs 67000 per bogie straightaway without necessary and proper consideration and appraisal regarding the viability and other aspects by some experts is not just and fair from many points of view
A fresh consideration is called for particularly from the point of view of safeguarding the interests of the public exchequer and giving necessary protection to the smaller manufacturers
125 B 16
The Tender committee is directed to reconsider the question of fixation of reasonable price
The Tender Committee shall consider the offer of Rs 67000 made by Ms HDC and Mukand along with the data that would he given by them in support of that and the percentage of profits available to all the manufacturers and other relevant aspects and then fix a resonable price at which the manufacturer would be able to supply
125 C 114 17
At a belated post tender stage the Railway authorities did not deem it fit to reconsider the question of fixation of price in the light of the post tender offers made by Ms HDC and Mukand as by then they were of the opinion that the three big manufacturers have formed a cartel and quoted a cartel price
The stand by the Railways to adopt dual pricing under the circumstances is bona fide and not malafide
However dual pricing on principle may not appear to be rational since the Railways have been following certain formula in fixing the price which is made applicable to all the manufacturers
But under certain circumstances dual pricing may be reasonable 125 E F 18
Ms HDC and Mukand came forward with firm offer of a price at Rs 67000 per bogie
Ms Bhartiya also got committed to supply at the same price
All the three of them did not even challenge the order of the High Court
These three big manufacturers must be deemed to be in a position to supply at the rate of Rs67000 and thus they form a distinct category
The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory
125 F G 19
If the price that is to be fixed by the Tender Committee as directed by the Court happens to be more than Rs 67000 then that would he applicable to the smaller manufacturers only and not to Ms HDC Mukand and Bhartiya who on their own commitment have to supply at the rate of Rs 67000
126 A 110
The price thus fixed by the Tender committee which applies only to the smaller manufacturers shall be deemed to be final and the respective contracts shall be deemed to he concluded so for the price is concerned
126 B 111
The formation of an opinion that a cartel was formed had no firm factual foundation reduction of quota by way of reprisal can not be justified
The Minister of Railways as the final authority after considering various relevant factors may be justified in taking a particular decision in the matter of allotment of quota but such decision must be taken on objective basis
But in this case all the smaller manufacturers deserving a favourable treatment in the mat 115 ter of allotment of quota have not been equally treated in the sense that one or two of them got larger quantities
Though this does not appear to be a serious departure yet in these matters the Govt
is expected to be just and fair to one and all
In future the authorities would make a proper consideration of the relevant factors in respect of each tenderer in an objective manner in allotting the quantities
126 E H 112
The three manufacturers Ms HDC Mukand and Bhartiya should be allocated the quantities as per the recommendations of the Tender Committee
However this Court does not want to disturb at this stage the quantities finally allotted by the competent authority to the small manufacturers as that would cause great hardship to them
127 C The Railway authorities was left to make necessary adjustments next year in the matter of allocation of quantities to them taking into consideration these allotments given to them this year
It will be open to the Railways to exercise 30 option if not already exercised
The time to complete the supply is extended upto 3131993
127 D F