Case: K.T. Plantation Pvt. Ltd.  Vs. State Of Karnataka


Decision reasoning: 0[ds]31. The first appellant being a company was, therefore, prohibited from holding any agricultural land after the commencement of the Act. If the company was holding any land with Linaloe cultivation on the date of the commencement of the Act, the same would have vested in the State Government under Section 79B(3) of the Act and an amount as specified in Section 72 would have been paid. Section 104, however, states that the provisions of Section 38, Section 63 other than sub- section (9), thereof, Sections 64, 79-A, 79-B and 80 shall not apply to plantations and is not made subject to the provisions of Section 110.Law is settled that the Court shall not invalidate a legislation on the ground of delegation of essential legislative functions or on the ground of conferring unguided, uncontrolled and vague powers upon the delegate without taking into account the preamble of the Act as also other provisions of the statute in the event they provide good means of finding out the meaning of the offending statute. The question whether any particular legislation suffered from excessive delegation, has to be determined by the court having regard to the subject-matter, the scheme, the provisions of the statute including its preamble and the facts and circumstances and the background on which the statute is enacted. See Bhatnagars & Co. Ltd. v. Union of India AIR 1957 SC 478 ; Mohmedalli and Ors. v. Union of India and Ors., AIR 1964 SC 980 .36. Further, if the legislative policy is formulated by the legislature, the function of supplying details may be delegated to the executive for giving effect to the policy. Sometimes, the legislature passes an act and makes it applicable, in the first instance, to some areas and classes of persons, but empowers the government to extend the provisions thereof to different territories, persons or commodities, etc. So also there are some statutes which empower the government to exempt from their operation certain persons, commodities, etc. Some statutes authorise the government to suspend or relax the provisions contained therein. So also some statutes confer the power on the executive to adopt and apply statutes existing in other states without modifications to a new area.We may also consider the effect of Section 80 of the Land Reforms Act on Section 79-B. Section 80 prohibits transfer of any land to non- agriculturalist. Section 80(1)(iv), states that it shall not be lawful to sell, gift, exchange or lease of any land, in favour of a person, who is disentitled under Section 79-B, to acquire or hold any land. The expressionhas been defined under Section 2(18) which is all comprehensive and takes in agricultural lands, that is land which is used or capable of being used for agriculture, but for the exemption granted under Section 107(1)(vi) lands used for the cultivation of linaloe would have fallen under Section 2(18). But, so far the company is concerned, the prohibition was total and complete since Section 79-B states that it would not be lawful for a company to hold, with effect and from the date of the commencement of the amending Act. The Company, therefore, could not have held the land used for the cultivation of Linaloe on the date of the commencement of the Act. Further on withdrawal of exemption vide notification dated 08.03.94 the Company was disentitled to hold the land belonging to Roerichs since the same would be governed by the provisions of the Land Reforms Act.52. We also find no force in the contention that opportunity of hearing is a pre-condition for exercising powers under Section 110 of the Act. No such requirement has been provided under Section 107 or Section 110. When the exemption was granted to Roerichs no hearing was afforded so also when the exemption was withdrawn by the delegate. It is trite law that exemption cannot be claimed as a matter of right so also its withdrawal, especially when the same is done through a legislative action. Delegated legislation which is a legislation in character, cannot be questioned on the ground of violation of the principles of natural justice, especially in the absence any such statutory requirement. Legislature or its delegate is also not legally obliged to give any reasons for its action while discharging its legislative function. See - State of Punjab v. Tehal Singh and Ors. (2002) 2 SCC 7 ; West Bengal Electricity Regulatory Commission v. CESC Ltd. etc. etc. (2002) 8 SCC 715 ; Pune Municipal Corporation and Anr. v. Promoters and Builders Association and Anr. (2004) 10 SCC 796 ; Bihar State Electricity Board v. Pulak Enterprises and Ors. (2009) 5 SCC 641. 53. We, therefore, repel the challenge on the validity of Section 110 of the Karnataka Land Reforms Act as well as the notification dt.8.3.1994 and we hold that the land used for linaloe cultivation would be governed by the provisions of the Land Reforms Act which is protected under Article 31B of the Constitution having been included in the IXth140 does not require the State Legislature to give its approval for bringing into effect the notification, but a positive act by the Legislature has been contemplated in Section 140 to make the notification effective, that does not mean that failure to lay the notification has affected the legal validity, its effect or the action taken precedent to that notification. We, therefore, hold that non-laying of the notification dated 08.03.1994 before the State Legislature has not affected its validity or the action taken precedent to that notification. We have now, vide our order dated 24.02.2011, directed the State Government to place the notification before both the Houses of the State Legislature following the judgment in Quarry Owners case (supra). Therefore, the defect, if any, of not placing the notification has beenplea of repugnancy can be urged only if both the legislations fall under the Concurrent List. Under Article 254 of the Constitution, a State law passed in respect of a subject matter comprised in List III would be invalid if its provisions are repugnant to a law passed on the same subject by Parliament and that too only if both the laws cannot exist together. The question of repugnancy under Article 254 of the Constitution arises when the provisions of both laws are fully inconsistent or are absolutely irreconcilable and it is impossible without disturbing the other, or conflicting results are produced, when both the statutes covering the same field are applied to a given set of facts. Repugnancy between the two statutes would arise if there is a direct conflict between the two provisions and the law made by the Parliament and the law made by the State Legislature occupies the samethe repugnancy between the Central and State Legislations is pleaded we have to first examine whether the two legislations cover or relate to the same subject matter. The test for determining the same is to find out the dominant intention of the two legislations and if the dominant intention of the two legislations is different, they cover different subject matter then merely because the two legislations refer to some allied or cognate subjects, they do not cover the same field. A provision in one legislation to give effect to its dominant purpose may incidentally be on the same subject as covered by the provision of the other legislation, but such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intended to be covered by Article 254(2). In other words, both the legislations must be substantially on the same subject to attract Articleare of the considered view that the Acquisition Act, in this case, as rightly contended by the State, primarily falls under Entry 18 List II, since the dominant intention of the legislature was to preserve and protect Roerichs Estate covered by the provisions of the Land Reforms Act, on the State Government withdrawing the exemption in respect of the land used for linaloe cultivation. The Acquisition Act, though primarily falls under Entry 18 List II incidentally also deals with the acquisition of paintings, artefacts and other valuable belongings of Roerichs and, hence, the Act partly falls under Entry 42 List III as well. Since the dominant purpose of the Act was to preserve and protect Roerichs Estate as part of agrarian reforms, the inclusion of ancillary measures would not throw the law out of the protection of Article 31A(1)(a). On the other hand, the Land Acquisition Act, 1894 is an act which fell exclusively under Entry 42 List III and enacted for the purpose of acquisition of land needed for public purposes for companies and for determining the amount of compensation to be made on account of such acquisition, which is substantially and materially different from the impugned Act whose dominant purpose is to preserve and protectgoverned by Art.31A(a) read with Art.31A(2)(a)(iii) of the Constitution.68. We are, therefore, of the considered view that no assent of the President was required under Article 254(2) of the Constitution to sustain the impugned Act, which falls under Article 31A(1)(a) of the Constitution, for which the assent of the President was obtained. The contention of the counsel that the Acquisition Act was invalid due to repugnancy is, therefore, rejected.69. We may also state that the Constitution (17th Amendment) Act, 1964 extended the scope of the expressionin Art.31A(a) as to protect all legislations on agrarian reforms and the expressionwas given a wider meaning so as to bring within its scope lands in respect of which provisions are normally made in land reforms enactments. Art.31A(2)(a)(iii) brings in any land held or let for the purpose of agriculture or for purpose ancillary thereto, including waste or vacant land, forest land, land for pasture or sites of buildings and other structure occupied by the cultivators of landAcquisition Act was enacted in public interest, to preserve and protect the land used for the linaloe cultivation and its tree growth as part of agrarian reforms which is its dominant purpose. Proposal to preserve the paintings, artefacts, carvings and other valuables and to establish an Art-Gallery-cum-Museum are merely ancillary to the main purpose. The dominant purpose of the Act is to protect and preserve the land used for Linaloe cultivation, a part of agrarian reforms. The Act is, therefore, saved by the provisions of Art.31A(1)(a).72. We, therefore, hold that Roerichs estate falls within the expressionunder clause (2) of Article 31A of the Constitution and the Act has obtained the assent of the President, hence, is protected from the challenge under Articles 14 and 19 of the Constitution of India. No arguments have been raised on the applicability or otherwise of Article 31C and hence it is unnecessary to examine whether the Act is protected by Article 31C of the Constitution orvalidity of Articles 19(1)(f) and (g) was also the subject matter of I.C. Golaknath and Others v. State of Punjab, AIR 1967 SC 1643 . In that case, a large portion of the lands of Golak Nath family was declared surplus under the Punjab Security of Land Tenures Act 1953. They challenged the act on the grounds that it denied them their Constitutional Rights to acquire and hold property and practice any profession. Validity of Articles 19(1)(f) and (g), the 17th Amendment, the 1st Amendment and the 4th Amendment were also questioned. Chief Justice Subha Rao speaking for the majority said that the Parliament could not take away or abridge the Fundamental Rights and opined that those rights form `basic structure of the Constitution and any amendment to the Constitution can be made to preserve them, not to annihilate.102. The Parliament enacted the (24th Amendment) Act 1971, by which the Parliament restored to the amending power of the Parliament and also extended the scope of Article 368 which authorised the Parliament to amend any part of the Constitution.103. Parliament then brought in the 25th Amendment Act, 1971 by which Article 31(2) was amended by which private property could be acquired on payment of anA new Article 31(C) was also inserted stating thatlaw giving effect to the policy of the State towards acquiring the principles specified in clause (b) or clause (c) of Article 39 shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14, Article 19 or Article 31; 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.The constitutionality of the above amendments was also the subject matter in His Holiness Kesavananda Bharati Sripadagalvaru v. State of Kerala & Another (1973) 4 SCC 225 , which overruled the principles laid down in Gokalnaths case (supra) and held that a Constitutional amendment could not alter the basic structure of the Constitution, and hence Article 19(1)(f) was not considered to be the basic structure of the Constitution, as later explained in Indira Nehru Gandhi v. Raj Narain (1975) Supp. SCCof eminent domain, as such, is not seen incorporated in Article 300A, as we see, in Article 30(1A), as well as in the 2nd proviso to Article 31A(1) though we can infer those principles in Article 300A. Provision for payment of compensation has been specifically incorporated in Article 30(1A) as well as in the 2nd proviso to Article 31A(1) for achieving specific objectives. Constitutions 44th Amendment Act, 1978 while omitting Article 31 brought in a substantive provision Clause (1A) to Article 30. Resultantly, though no individual or even educational institution belonging to majority community shall have any fundamental right to compensation in case of compulsory acquisition of his property by the State, an educational institution belonging to a minority community shall have such fundamental right to claim compensation in case State enacts a law providing for compulsory acquisition of any property of an educational institution established and administered by a minority community. Further, the second proviso to Article 31A(1) prohibits the Legislature from making a law which does not contain a provision for payment of compensation at a rate not less than the market value which follows that a law which does not contain such provision shall be invalid and the acquisition proceedings would be renderedof property within the meaning of Art.300A, generally speaking, must take place for public purpose or public interest. The concept of eminent domain which applies when a person is deprived of his property postulates that the purpose must be primarily public and not primarily of private interest and merely incidentally beneficial to the public. Any law, which deprives a person of his private property for private interest, will be unlawful and unfair and undermines the rule of law and can be subjected to judicial review. But the question as to whether the purpose is primarily public or private, has to be decided by the legislature, which of course should be made known. The concept of public purpose has been given fairly expansive meaning which has to be justified upon the purpose and object of statute and the policy of the legislation. Public purpose is, therefore, a condition precedent, for invoking Articlehave found that the requirement of public purpose is invariably the rule for depriving a person of his property, violation of which is amenable to judicial review. Let us now examine whether the requirement of payment of compensation is the rule after the deletion of Article 31(2). Payment of compensation amount is a constitutional requirement under Article 30(1A) and under the 2nd proviso to Article 31A(1), unlike Article 300A. After the 44th Amendment Act, 1978, the constitutional obligation to pay compensation to a person who is deprived of his property primarily depends upon the terms of the statute and the legislative policy. Article 300A, however, does not prohibit the payment of just compensation when a person is deprived of his property, but the question is whether a person is entitled to get compensation, as a matter of right, in the absence of any stipulation in the statute, depriving him of hisfind no apparent conflict with the words used in Entry 42 List III so as to infer that the payment of compensation is inbuilt or inherent either in the wordsunder Entry 42 List III. Right to claim compensation is, therefore, cannot be read into the legislative Entry 42 List III. Requirement of public purpose, for deprivation of a person of his property under Article 300A, is a pre-condition, but no compensation or nil compensation or its illusiveness has to be justified by the state on judicially justiciable standards. Measures designed to achieve greater social justice, may call for lesser compensation and such a limitation by itself will not make legislation invalid or unconstitutional or confiscatory. In other words, the right to claim compensation or the obligation to pay, though not expressly included in Article 300A, it can be inferred in that Article and it is for the State to justify its stand on justifiable grounds which may depend upon the legislative policy, object and purpose of the statute and host of other factors.Article 300A would be equally violated if the provisions of law authorizing deprivation of property have not been complied with. While enacting Article 300A Parliament has only borrowed Article 31(1) [thedoctrine] and not Article 31(2) [which had embodied the doctrine of Eminent Domain]. Article 300A enables the State to put restrictions on the right to property by law. That law has to be reasonable. It must comply with other provisions of the Constitution. The limitation or restriction should not be arbitrary or excessive or what is beyond what is required in public interest. The limitation or restriction must not be disproportionate to the situation or excessive. The legislation providing for deprivation of property under Article 300A must beas understood in terms of Articles 14, 19(1)(g), 26(b), 301, etc. Thus in each case, courts will have to examine the scheme of the impugned Act, its object, purpose as also the question whether payment of nil compensation or nominal compensation would make the impugned law unjust, unfair or unreasonable in terms of other provisions of the Constitution as indicated above. At this stage, we may clarify that there is a difference betweencompensation. A law seeking to acquire private property for public purpose cannot say thatcompensation shall beHowever, there could be a law awardingcompensation in cases where the State undertakes to discharge the liabilities charged on the property under acquisition and onus is on the government to establish validity of such law. In the latter case, the court in exercise of judicial review will test such a law keeping in mind the above parameters.Plea of unreasonableness, arbitrariness, proportionality, etc. always raises an element of subjectivity on which a court cannot strike down a statute or a statutory provision, especially when the right to property is no more a fundamental right. Otherwise the court will be substituting its wisdom to that of the legislature, which is impermissible in our constitutional democracy.Statutes are many which though deprives a person of his property, have the protection of Article 30(1A), Article 31A, 31B, 31C and hence immune from challenge under Article 19 or Article 14. On deletion of Article 19(1(f) the available grounds of challenge are Article 14, the basic structure and the rule of law, apart from the ground of legislative competence. In I.R. Coelhos case (supra), basic structure was defined in terms of fundamental rights as reflected under Articles 14, 15, 19, 20, 21 and 32. In that case the court held that statutes mentioned in the IXth Schedule are immune from challenge on the ground of violation of fundamental rights, but if such laws violate the basic structure, they no longer enjoy the immunity offered, by the IXth Schedule.Let the message, therefore, be loud and clear, that rule of law exists in this country even when we interpret a statute, which has the blessings of Article 300A. Deprivation of property may also cause serious concern in the area of foreign investment, especially in the context of International Law and international investment agreements. Whenever, a foreign investor operates within the territory of a host country the investor and its properties are subject to the legislative control of the host country, along with the international treaties or agreements. Even, if the foreign investor has no fundamental right, let them know, that the rule of law prevails in this country.143. We, therefore, answer the reference as follows:(a) Section 110 of the Land Reforms Act and the notification dated 8.3.94 are valid, and there is no excessive delegation of legislative power on the State Government.(b) Non-laying of the notification dt.8.3.94 under Section 140 of the Land Reforms Act before the State Legislature is a curable defect and it will not affect the validity of the notification or action taken thereunder.(c) The Acquisition Act is protected by Article 31A of the Constitution after having obtained the assent of the President and hence immune from challenge under Article 14 or 19 of the Constitution.(d) There is no repugnancy between the provisions of the Land Acquisition Act, 1894 and the Karnataka Land Reforms Act, 1961, and hence no assent of the President is warranted under Article 254(2) of the Constitution.(e) Public purpose is a pre-condition for deprivation of a person from his property under Article 300A and the right to claim compensation is also inbuilt in that Article and when a person is deprived of his property the State has to justify both the grounds which may depend on scheme of the statute, legislative policy, object and purpose of the legislature and other related factors.(f) Statute, depriving a person of his property is, therefore, amenable to judicial review on grounds hereinbefore