Case: State Of Karnataka And Anr Etc Vs. Shri Ranganatha Reddy & Anr. Etc


Decision reasoning: 1[ds]6. It is indisputable and beyond the pale of any controversy now as held by this Court in several decisions including the decision in the case of Kesavananda Bharati v. State of Kerala [1973 Supp SCR 1 : 1973 4 SCC 225.]  popularly known as Fundamental Rights casethat any law providing for acquisition of property must be for a public purpose. Whether the law of acquisition is for public purpose or not is a justiciable issue. But the decision in that regard is not to be given by any detailed enquiry or investigation of facts. The intention of the legislature has to be gathered mainly from the Statement of Objects and Reasons of the Act and its Preamble. The matter has to be examined with reference to the various provisions of the Act, its context and set up, the purpose of acquisition has to be culled out therefrom and then it has to be judged whether the acquisition is for a public purpose within the meaning of Article 31(2) and the law providing for such acquisition. The acquisition of the vehicles namely the contract carriages, their permits and other assets for running them for the purposes of the Corporation could not be challenged as being not for a public purpose merely because it was for the purpose of transferring them to the CorporationWe may only add that the propesition so broadly put is not quite correct. There may be many circumstances and facts to justify the acquisition of even a movable property for a public purpose. It may not be universally so but the converse is also not correct. In the instant cases what has been acquired under the Act is not only movables and chattels namely the vehicles but also the permits, the workshops, land and buildings etc. Although the whole transport undertaking of any carriage operator was not acquired, the acquisition in no sense was of mere movable properties available easily for purchase in the market. Several hundred vehicles were acquired by the various notifications. In substance it was a nationalisation of the contract transport service in the State of Karnataka. Undoubtedly it was for a public purpose. We may just quote a few lines from the judgment of Mahajan, J. in the case of State of Bihar v. Kameshwar Singh (supra) occurring at page 941In other words, shortly put, the purpose behind the Act is to bring about a reform in the land distribution system of Bihar for the general benefit of the community as advised. The Legislature is the best judge of what is good for the community, by whose suffrage it comes into existence and it is not possible for this Court to say that there was no public purpose behind the acquisition contemplated by the impugned statute13. In our judgment, therefore, the decision of the High court on the question of public purpose is erroneous. We hold that the impugned law of acquisition and the acquisitions are for public purposeShelat and Grover, JJ. in addition to what they have said earlier categorically say at page 285 (SCC p. 457, para 591)and further that the "amount" is neither illusory nor it has been fixed arbitrarily, nor at such a figure that it means virtual deprivation of the right under Article 31(2)22. Now by the harmonious and reasonable rules of construction as also to save the Act from being violative of Article 31(2) of the Constitution, we proceed to discuss and accept in large measure the interpretation put and canvassed by Mr. Sinha. If the amount is fixed by agreement, well and good. In absence of an agreement, the State Government shall appoint an arbitrator who will be an officer of a high rank. Two assessors having expert knowledge as to the nature of the acquired propertyone by the Government and one by the person interested, can be appointed to assist the arbitrator. Both sides will state before the arbitrator as to what should be the amount payable according to each. The arbitrator shall hear the dispute and make an award determining the amount which appears to him just and reasonable. He shall also specify the person or persons to whom the amount shall be paid. In making the award, he shall have regard to the circumstances of each case the provisions of the schedule so far they are applicable. Some difficulty at the outset arose in reconciling the expression "as specified in the schedule" occurring in27. On the interpretations aforesaid which we have put to the relevant provisions of the Act, it was difficultrather impossibleto argue that the amount so fixed will be arbitrary or illusory. In some respects it may be inadequate but that cannot be a ground for challenge of the constitutionality of the law under Article 31(2). The respondents felt quite satisfied by the interpretations aforesaid and could not pursue their attack on the vires of the Act on that groundLEGISLATIVE COMPETENCE RE : CONTRACT CARRIAGES PLYING ON28. The number of such carriages and such permits compared to the total number of vehicles acquired was very few. It was about 20 or 25 only. It is no doubt true that under the Ordinance contract carriages withe permits were not sought to be acquired. The Act, however, has done so and with a retrospective effect. Question is whether the State Legislature of Karnataka has gone beyond its powers and competence in making such a provision. In that regard it was also canvassed before us whether it was possible to read down certain provisions of the Act to save it from constitutional invalidity. If so, to what extent and in what respect ?JUDICIAL PERSPECTIVES CONSTITUTIONALITY OF ECONOMIC LEGISLATION43. When confronted by serious constitutional problems, judicial statesmanship drops the craft of a legal tinker or lexicographic borrower but transforms itself into that of a social engineer who beholds the future in the present and his thoughts are the germs of the flower and fruit of latest time. He gives conscious expression, in justice tongue, to the Constitutions implicit purpose grounded on the permanent interests of man as a progressive beenhere, the little yet large man of India breaking out of an iniquitous system, yet reaching out to a humane society, shot with distributive justice. The presence of thisd perspective, in the court, as the interpreter of the Constitution and its imperatives and the laws designed to inaugurate a Human Tomorrow, compels us in all humility and aware of inadequacy, to lend our pen to the reversal of the decision under appeal which de facto proceeds on fastidious societal values of vanishing validity in the changed setting, and is partly founded on exotic juridical doctrines (eminent domain) incongruous with the legitimate realities of the emerging Indian Order as are writ into Article 31(2) and more unmistakably in Article 31C read (in the manner of Kesavananda Bharati [1973 Supp SCR 1 : 1973 4 SCC 225  ]) alongside of Article 39(b) and (c)WHAT IS THE BATTLE ABOUT ?50. Back to the challenging problems thrown up by the High Courts decision. The facts are there in the leading judgment and the formulation of the controverted propositions also needs no reiteration. Broadly speaking, we strike no note of dissensus but seek to bring out some social nuances even in consensus. Let us project the pegs on which our discussion may hang. Incidentally, conceptual differences about the dimensions of the change visualised by Article 31C read with Article 39(b) and (c) are bound to exist among judges who, after all, professionally objectify the social philosophy of the Constitution through the subjective prism of their own mentalism51. These and cousin issues are thec points canvassed before us and are sure to occupy the centre of the stage when management and control of growth in effective measure for common weal expand the frontiers of public law with a view to implement the distributive justice embodied in Articles 38 and 39 and, by Article 37 made fundamental in the governance of the country. Dr. Ambedkar, inwards significant, saidIn enacting this part (Part IV) of the Constitution the Assembly is giving certain directions to the future legislature an the future executive to show in what manner they are to exercise the legislative and executive power they will have. Surely it is not the intention to introduce in this part these principles as mere pious declarations. It is the intention of this Assembly that in future both the legislature and the executive should not merely paye to those principles but that they should be made the basis of all legislative and executive action that they may be taking hereafter in the matter of the governance of the countryThe Directive Principles, being the spiritual essence of the Constitution, must receive sweeping signification, being our socioeconomic Magna Carta, quiddities apartTHEE THOUGHT OF THE CONSTITUTION AND THE INTERPRETATIVE RESPONSEThe market value of a property is the result of ann of various forces. It may not have, any reasonable relationship with the investment made by its successive owners. The price of the property acquired might have shot up because of various contributions made by the society such as improvements effected by the State in the locality in question or the conversion of a rural area into an urban area. It is undoubtedly open to the State to appropriate to itself that part of the market value of a property which is not the result of any contribution made by its owners. There may be several other relevant grounds for fixing a particular amount in a given case or for adopting one or more of the relevant principles for the determination of the price to be paid. In all these matters the legislative judgment is entitled to great weight. It will be for the aggrieved party to clearly satisfy the Court that the basis adopted by the Legislature has no reasonable relationship to the value of the property acquired or that the amount to be paid has been arbitrarily fixed or that the same is an illusory return for the property taken. So long as the basis adopted for computing the value of the property is relevant to the acquisition in question or the amount fixed can be justified on any such basis, it is no more open to the Court to consider whether the amount fixed or to be determined is adequate. But it is still open to the Court to consider whether amount in question has been arbitrarily determined or whether the same is an illusory return for the property taken. It is also open to the Court to consider whether the principles laid down for the determination of the amount are irrelevant for the acquisition or requisition in question. To put it differently, the judicial review under the amended Article 31(2) lies within narrow limits. The Court cannot go into the question whether what is paid or is payable is compensation. It can only go into the question whether the amount in question was arbitrarily fixed as illusory or whether the principles laid down for the purpose of determining the amount payable have reasonable relationship with the value of the property acquired or requisitioned. [Ibid. pp.2 : SCC pp.1 (paran here we may excerpt Hegde, J.s highlight of Part IVPart IV of the Constitution is designed to bring about the social and economic revolution that remained to be fulfilled after independence. The aim of the constitution is not to guarantee certain liberties to only a few of the citizens but for all. The Constitution visualizes our society as a whole and contemplates that every member of the society should participate in the freedoms guaranteed. To ignore Part IV is to ignore the substance provided for in the Constitution, the hopes held out to the Nation and the very ideals on which our Constitution is built. Without faithfully implementing the Directive Principles, it is not possible to achieve the Welfare State contemplated by the Constitution. A society like ours steeped in poverty and ignorance satisfying the minimum economic needs of every citizen of this country. Any Government which fails to fulfil the pledge taken under the Constitution cannot be said to have been faithful to the Constitution and to its commitments. [Ibid. pp. 343344 : SCC pp.3 (para 713)]Doubtless, the latter, for reasons so apparent and eloquent. To distribute, even in its simple dictionary meaning, is to allot, to divide into classes or into groups and distribution embraces arrangement, classification, placement disposition, apportionment, the way in which items, a quantity, or the like is divided or apportioned; the system of dispersing goods throughout a community. (See Random House Dictionary). To classify and allocate certain industries or services or utilities or articles between the private and public sectors of the national economy is to distribute those resources. Socially conscious economists will find little difficulty in treating nationalisation of transport as a distributive process for the good of the community. You cannot condemn the concept of nationalisation in our Plan on the score that Article 39(b) does not envelop it. It is a matter of public policy left to legislative wisdom whether a particular scheme ofr should be undertakenTwo conclusions strike us as quintessential. Part IV, especially Article 39(b) and (c), is a futuristic mandate to the State with a message of transformation of the economic and social order. Firstly, such change calls for collaborative effort from all the legal institutions of the system : the legislature, the judiciary and the administrative machinery. Secondly and consequentially, loyalty to the high purpose of the Constitution, viz., social and economic justice in the context of material want and utter inequalities on a massive scale, compels the Court to ascribe expansive meaning to the pregnant words used with hopeful foresight, not to circumscribe their connotation into contradiction of the objectives inspiring the provision. To be Pharisaic towards the Constitution through ritualistic construction is to weaken thel thrust of the founding fathers dynamic faithWe have been guided by the thought that ane gap between the law and public needs, arising out of narrow notions, must be bridged by broadening the constitutional concepts to suit the changing social consciousness of the emerging Welfare State. Institutional crises and confrontations can be and should be avoided by evolving a progressive interpretation, discardingy ton when private property is taken for public good. A legal system that works to serve the community says Bernard Schwartz, is better than the academic conceptions of a bevy of Platonic guardians unresponsive to public needs. The law, in the words of Justice Holmes, is a magic mirror in which we see reflected not only our own lives but also the lives of those who went before usand, may we add, of those who come after us. But basically we have brought to bear upon the impugned legislation a value judgment in tune with the welfare wave length of our Constitution and the still, sad music of Indian humanity. The law moves with the main currents of the society it regulates. Each society has its own values which are necessarily reflected in the ends that the legal order seeks to further. The ends of law are attained by recognizing certain interest, defining the limits within which they shall be recognized legally, and endeavouring to secure those interests that are within the limits defined. [Law in America by Bernard Schwartz. p. 34] We have recognised that rights and obligations of long ago do not acquire a static validity in our galloping age and a decent oblivion must put them back into forgotten antiquity if we, as a nation, are to run on the rails of the rule of law and so we have nullified the attempt to drift back from Bharati to Cooper on compensation. A blend of law as a set of responses to the new needs of expanding society and of Daniel Chapmans advice that the known certainty of the law is the safety of all, has played upon our approach. We are aware that in constitutional construction, a limited judicialg is inevitable juristic chemistry, to borrow Roscoe Pounds expressive phrase. The chemist does not make the materials which go into his test tube : He selects them and combines them for some purpose and his purpose gives form to the result. Ours have had due regard to the felt necessities of the time and the philosophical and political theories about what would best serve the countrys progress; and so we have grounded ourselves on these solid prescriptions undeflected by speculative niceties lent by literal study and possible injuries inevitable in reshaping society. The object and end of all Government is to promote the happiness and prosperity of the community by which it is established, wrote U.S. Chief Justice Taney, 140 years ago in Charles River Bridge v. Warren Bridge [11 Pet 420 1937] and we, in a republic with an irrevocable tryst to give social justice in the midst of poverty, cannot diminish the power to accomplish those ends. To be stable is not to stand still; to move forward and reconcile is the road to the goaljuridical engineering geared to desiderated policy objectives, being thekeytomost constitutional problems. Not unoften, the subjective philosophy of the judge underpowers the philosophy of the Constitution while it should be overpowered by it. Cardozo, with apt elegance, struck thise great tides and currents which engulf the rest of men do not turn aside in their course and pass the Judges by. [Cardozo, The Nature of Judicial Process, 1932, p. 170]Taking this warningtohead, we have alsototake the Constituent Assemblys hopeThe Judiciary wastobe the arm of the social revolution, upholding the quality that Indians had longed for in colonial days. . . . The Courts were also idealised because, as guardians of the Constitution, they would be the expression of a new created by Indians for Indians. [Granville Austin, The Indian Constitution]86. TheDiscovery of Law India by interpretingliberallytoembrace the higher values of collective good andtocurb, where necessary, individual property rights, is all that we have endeavouredtodo. We have been cautioned by appellants Counsel that governments may usurp and destroy if judge do not cry halt. Where arbitrary, oppressive and mala fide misuse of power is a real peril, the Court shall not fail. Buttointervene and strike down, because a measure, within the constitutional bounds, may work hardship for some but is conceived for the good of the many in keeping with the planned process of Development, has a Tory. Canonisation of laissez faire cannons by the Court istomove. Lordheld the view that in the field of Constitutional Law, progressive and dynamic interpretation in the light of political developments must dominate (see British Coal Corporation v. The King [1935 AC. LordJowitt, L.C. inl of Ontaria v.. of Canada [1947 AC 503]. affirmed the same approachTo such an organic statute the flexible interpretation must be given that changing circumstances require, and it would be alientothe spirit with which the preambletothe Statute of Westminster is instinct,toconcede anything less than the widest amplitude of powertothe Dominion legislature under Section 101 of the British North America ActLegalism hastoyield when spacious issues arise. Whatever the legal aspect of the thing, there are moments when it is a feeble reedtorely on, said Nehru, in the Constituent Assembly (I Constituent Assembly Debates, p. 61)There is another stark possibilitythe Administration sliding back from the progressive constitutional valuestoprotect private interests; and then the Court may activate the welfare jurisprudence of the Constitution by appropriate commands.