Case: State Of Madhya Pradesh Vs. Ranojirao Shinde &amp; Anr

and is not protected by Art. 31 (2).From the above decisions it follows that choses in action and money could not be acquired under Art. 31 (2). If it is held that, , State by the exercise of its power of eminent domain can acquire choses in action and money belonging to its citizens, by paying a fraction of the money taken as compensation, the fundamentals. right guaranteed under Art. 19(1)(f) would be deprived of all its contents and that Article will cease to have any meaningful purpose. The power conferred under Art. 31 (2) is not a taxing power. That power cannot be utilised for enriching the coffers of the State. It is true that the abolition of the cash grants would argument the resources of the State but that cannot be considered as a public purpose under Art. 31 (2). If it is otherwise it would be permissible for the legislatures to enact laws acquiring the public debts due from the State, the annuity deposits returnable by it and provident fund payable by it by providing for the payment of some nominal compensation, to the persons whose rights are acquired as the acquisitions in question would augment the resources of the State. But nothing so bad can be said to be within contemplation of Art. 31(2). That Article must be construed harmoniously with Art. 19(1)(f). If so construed, it is obviously that the public purpose contemplated by that Article does not include enrichment of the coffers of the State. Further the compensation referred to in Art. 31(2) is, as held by this Court in various decisions, is the just equivalent of the value of the property taken. If for every rupee acquired fifty paisas or less is made payable as compensation the violation of -Art. 31 (2) would be patent and in those circumstances the exercise of the powers by the legislature would be considered as a fraud on its powers and consequently the legislation will be struck down as a colourable piece of legislation.It is true that in State of Bihar v. Kameshwar Singh([1952] S.C.R. 889) and in Bombay Dyeing and Manufacturing Co Limited v. State of Bombay ([1958] S.C.R. 1122), this Court was considering the question of taking of money by the State that was in the hands of others, but in this case we are concerned with the abrogation of the liability of the Government But we fail to see any difference in principle in these two sets of cases. In the former case the Government was compulsorily taking others property and in the latter it seeks to appropriate to itself the property of others which is in its hands.12. It was next urged that the impugned Act, even if it is held not to be protected by Art. 31(2) is still valid under Art. 31(1). The said Article says that no person shall be deprived of his property save by authority of law. A law Which authorises the State to, deprive a person of his property must be a valid law. It must not violate Art. 19(1) (f) which means that it must satisfy the requirements of Art. 19(5). In Kavalaopara Kottarathi Kochuni v. State of Madras([1960] 3 S.C.R. 887) this Court laid down that the word "law" used by Art. 31(1) indicates its limitations and refers back to Art. 19 and any law made under Art. 31 (1) can be sustained only if the restrictions it imposes are reasonable and in the interest of the general public, The Act which empowers the State to, appropriate some one elses property for itself solely with a view to augment the resources of the State, cannot be considered as a reasonable restriction in the interest of the general public. That conclusion of ours receives support from the ratio of the decisions of this Court in State of Bihar v. Kameshwar Singh([1952] S.C.R. 889) and in Bombay Dyeing and Manufacturing Co. Limited v. State of Bombay([1958] S.C.R. 1122) wherein Venkatarama Aiyar, J. speaking for the Court, observed:"Assuming that the correct position is what the respondents contend it is that the case falls within Art. 19(1)(f), the question that has still to be determined is whether the impugned Act could be supported under Art. 19(5). There was some discussion before us as to the scope of this provision, the point of the debate being whether the words imposing reasonable restriction would cover a legislation, which not merely regulated the exercise of the rights guaranteed by Art. 19(1)(f) but totally extinguished them, and whether a law like the present one which deprived the owner of his properties could be held to fall within that provision. It was argued that a law authorising the State to seize and destroy diseased cattle, noxious drugs and the like, could not be brought within Art. 19(5) if the word restriction was to be narrowly construed, and that accordingly the power to restrict must be held to include, in appropriate cases, the power to prohibit the exercise of the right. That view does find support in the observations of Lord Porter in Commonwealth of Australia v. Bank of New South Wales([1950] A.C. 235): but the present legislation cannot be sustained even on the above interpretation of the word "restriction " as s. 3 ( 1 ) of the Act deals with moneys and money cannot be likened to diseased cattle or noxious drugs so as to attract the exercise of police power under Art. 19 (5). It appears to us that whether we apply under Art. 31(2) or Art. 19(5), the impugned Act cannot be upheld and it must be struck down."13. If Article 19(5) is interpreted to mean that State can take by authority of law anyones property for the. purpose of increasing its assets or revenues, the guarantee given by Art. 19(1)(f) would become illusory, a proposition to which this Court cannot subscribe.For the reasons mentioned above we are unable to uphold the validity of Madhya Pradesh Abolition of Cash Grants Act.14.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]n of a cash grant is wide enough to include cash grants sanctioned by ex-Rulers in lieu of Jagirs or other properties resumed or even, en payments agreed to be made in lieu of loans given to the Rulers. Different considerations may arise if the grants abolished are Gratuitous payments, grants in lieu of services to be rendered or other resumable grants. But as mentioned earlier, the definition of cash grants in s. 2(1) does not make, any distinction between the various types of cash grants. Hence, the said definition will have to stand or fall as a whole, there being no basis for severing some out of the several grants included therein. It is impermissible for this Court to rewrite that clause and confine the definition only to such of the cash grants which the legislature might be competent todoctrine of severability is applicable only if it is possible to separate the legal from the unconstitutional portion of the Provision. If it is not possible to do so, the entire provision has to be struck down as unconstitutional. see Kameshivar Prasad v. State of Bihar( A.I.R. 1962 S.C.High Court has come to the conclusion that a "cash grants is property within the meaning of that expression in Articles 19(1)(f) and 31. This conclusion was not challenged before us. It is obvious that a right to a sum of money isArticle 19(5) is interpreted to mean that State can take by authority of law anyones property for the. purpose of increasing its assets or revenues, the guarantee given by Art. 19(1)(f) would become illusory, a proposition to which this Court cannot subscribe.For the reasons mentioned above we are unable to uphold the validity of Madhya Pradesh Abolition of Cash Grants Act.