Case: Godavari Sugar Mills Ltd. And Ors Vs. S. B. Kamble And Ors

3. At this stage we may advert to the facts giving rise to the present appeal. The appellant company owns two factories for the manufacture of sugar and allied products. The company held large areas of land in Ahmednagar district for the cultivation of sugarcane for its factories. On March 1, 1963 Special Deputy Collector respondent No. 2 declared an area of 8468 acres 26 1/2 gunthas in village Sakarwadi held by the appellant company to be in excess of the ceiling area. On March 7, 1963 Special Deputy Collector respondent No. 1 passed an order declaring 3677 acres 16 gunthas of appellant companys land situated in Lakshmiwadi to be in excess of the ceiling area. Thus a total area of 12146 acres 1/2 guntha was declared to be surplus. Appeals against the aforesaid orders were filed by the appellant company to the Maharashtra Revenue Tribunal. The appellants and some others also filed petitions challenging the constitutional validity of the principal Act. A Division Bench of the Bombay High Court as per judgment dated October, 25, 1963 delivered in a petition filed by another party upheld the constitutional validity of all the provisions of the principal Act, except Section 28 which was struck down. It was held that the provisions of the Act other than Section 28 were a measure of agrarian reform and as such protected by article 31A of the Constitution. Section 28 was held to be violative of article 14 of the Constitution.4. On June 20, 1964 the Constitution (Seventeenth Amendment) Act was passed. As a result of the Seventeenth Amendment of the Constitution the principal Act including Section 28 was included in the Ninth Schedule. The petition filed by the appellants challenging the validity of the principal Act was in view of the Seventeenth Amendment dismissed by a Division Bench of the Bombay High Court on March 10, 1965. The appellants came up in appeal to this Court against the judgment of the Bombay High Court but that appeal was dismissed by this Court on April 10, 1968. The judgment of this Court is reported in (1968) 3 SCR 712   = (AIR 1968 SC 1395  ). It may be stated that a stay order was made during the pendency of the appeal filed by the appellants. After the dismissal of the appeal on application filed by the respondents, the counsel for the appellants gave an undertaking on April 26, 1968 to deliver possession of 10315 acres of land on or before May 2, 1968. Possession of 10315 acres of land in pursuance of the above undertaking was handed over by the appellant company in May 1968. As the joint farming societies referred to in Section 28 had not yet been formed, till such formation the said land along with some other land taken over from others in similar circumstances was given for cultivation to the Maharashtra State Farming Corporation Limited respondent No. 5. The said Corporation was incorporated on March 6, 1963 under the Companies Act and is owned and controlled by the State of Maharashtra respondent No. 3.5. On May 17, 1968 amending Act 16 of 1968 was published. As a result of the amending Act Sec. 28-lA was inserted in the principal Act This Section extended the period for the setting up of joint farming societies contemplated by Sec. 28 of the principal Act by one year. It also empowered the State Government to make a scheme for the interim period. On June 26, 1968 the appellants filed petition under Articles 226 and 227 of the Constitution for a declaration that the principal Act as amended by Act 16 of 1968 was unconstitutional. Interim injunction was issued restraining the respondents from taking any steps under the amended Act on June 27, 1968. The injunction was thereafter vacated in respect of 10315 acres of land. The appellants also gave an undertaking that they would not press their appeals before the Tribunal in respect of 10315 acres of land. Accordingly, on July 22, 1968 the Maharashtra Revenue Tribunal dismissed the appeals of the appellants in respect of 10317 acres 37 gunthas of land. The appeals regarding the rest of the land measuring 1829 acres were kept pending in view of the injunction issued by the High Court.6. On December 28, 1968 amending Act, 33 of 1968 was published.Section 2 of the amending Act added an explanation in Section 28 as under:"Explanation. - For the avoidance of doubt, it is hereby declared that a producer of raw material (being a person, a joint farming society, or corporation (including a company) ) referred to in sub-section (2) shall be liable to supply raw material to the undertaking concerned only on that undertaking agreeing to accept such supply at the fair price."The amending Act also introduced Section 28-lB, the material part of which was as under:"28-lB. The supply of raw material by any producer (being a person, a joint farming society or corporation including a company) ) to the undertaking during any season shall be regulated, and the fair prices at which such supply is to be made to the undertaking shall be fixed, in accordance with the provisions of the Third Schedule."Clause 3 of the Third Schedule provided for the formation of a committee for fixation of the fair price.7. On July 26, 1969 amending Act 37 of 1969 was published. The amending Act made changes in the Third Schedule and provided for the setting up of a Board for fixation of the fair price of the raw material supplied to an undertaking under the principal Act.8. Amending Act 27 of 1970 was published on May 19, 1970. The long preamble of the Act reads as under:"Whereas, Section 28 ofthe Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 inter alia provides that the State Government shall take particular care to ensure that the acquisition of land held by an industrial undertaking (being land which was being used for the purpose of producing or providing raw material for the manufacture or production of any goods, articles or commodities by the undertaking) does not affect adversely the production and supply of, raw material from such land to the undertaking; and that for the purpose of so ensuring the continuance of supply of such raw material to the undertaking and generally, for the full and efficient use of the land for agriculture and its efficient management, the State Government may maintain the integrity of the area so acquired in one or more compact blocks, and may grant the land, or any part thereof, to a joint farming society (or a member thereof) consisting of persons referred to in clause (b) of sub-section (2) of that Section;And Whereas, that Section inter alia further provides that for such period as is necessary for the setting up of joint farming societies as provided in sub-section (2) of that Section (being not mare than five years in the aggregate from the date of taking possession of the land), the land acquired or any part thereof should be cultivated by one or more farms run or managed by the State, or by one or more corporations (including a company) owned or controlled by the State; And Whereas, the State Government have accordingly constituted the Maharashtra State Farming Corporation Limited (a company formed and registered under the provisions ofthe Companies Act, 1956), for managing the farms till the setting up of the joint farm so societies aforesaid;And Whereas, efforts so far made in the setting up of such societies including the efforts made for the setting up of such societies under the Maharashtra Aricultural Land (Ceiling on Holding) Setting up of Joint Farming Societies Scheme, 1968, made under Section 28-1A of the said Act have not borne fruit, and the periods for the setting up of such societies are due to expire between the months of May and October 1970;And Whereas, in the light of experience mentioned aforesaid, it is not possible to say that any such joint farming societies can be set up at all;And Whereas short extensions of time for the setting up of such joint farming societies is hampering the full and efficient use of the land for agriculture and its efficient management for the reason that the Maharashtra State Farming Corporation is thereby prevented from undertaking any plans or schemes for the improvement of the land and it is finding it difficult to carry out the objects of clause (b) of sub-section (2) of Section 28;And Whereas, most of the undertakings have also represented to the State Government that cultivation of the land may be continued with the Maharashtra State Farming Corporation on a permanent basis for the reason that implementation of the Joint Farming Societies Scheme aforesaid will lead to fragmentation of land and that since the economic development of land is part of agrarian reform, the continuation of the management of the lands by the said Corporation will subserve the purpose of agrarian reform in consonance with the objects of the said Act;And Whereas, the State Government after carefully considering the question, in particular, in the light of what has been set out hereinabove, is also of opinion that the cultivation of the land should be continued with the Maharashtra State Farming Corporation on a permanent basis;And Whereas, it is necessary to amend the said Act for the purposes aforesaid, and also for certain other purposes hereinafter appearing; It is hereby enacted in the Twenty-first Year of the Republic of India as follows:"Sections 2 and 3 of the amending Act inserted additional words in the long title and preamble of the principal Act so as to include the words:"also to provide that the lands taken over from undertakings and the integrity of which is maintained in compact blocks for ensuring the full and efficient use of the land for agriculture and its efficient management through corporations (including a company) owned or controlled by the State, be granted to such corporations or company;"Section 4 of the amending Act amended Section 21 of the principal Act by providing in a newly inserted subsection (5) that where possession of any land delimited as surplus is handed over by the holder in pursuance of an undertaking given by him in any Court, and the appeal filed by the holder against the declaration of that land as surplus has been subsequently withdrawn or dismissed, the land, notwithstanding anything contained in sub-section (4), shall with effect from the date on which the possession thereof is taken by the Collector, be deemed to be duly acquired by the State Government for the purposes of the Act. Section 7 of the amending Act deleted Section 28-lA of the principal Act. Section 28-lAA was inserted by Section 8 of the amending Act Sub-sections (1) and (2) of Sec. 28-lAA read as under:"28-lAA. (1) The State Government may, by notification in the Official Gazette, not later than ninety days from the commencement of the Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) ,Act, 1970, grant the surplus land taken over from the industrial undertakings and referred to in Section 28 and which is being cultivated by one or more corporations (including a company) owned and controlled by the State to such corporation, or corporations, as the case may be, subject to such terms and conditions, including in particular, the condition of maintaining the integrity of the surplus land, in one or more compact blocks, and conditions which are calculated to ensure the fun and continued supply of raw material to the undertaking at a fair price. On the grant of such surplus land to one or more corporations as aforesaid, the provisions of Section 28 so far as they provide for setting up of joint farming societies shall not apply in relation to such surplus land.(2) The State Government may provide that,-(a) for the breach of any term or condition referred to in sub-section (1), or(b) if it considers after such inquiry as it thinks fit, that the production and supply of raw material to the undertaking is not maintained at the level or in the manner which, with proper and efficient management it ought to be maintained, or(c) for any other reason it is undesirable in the interest of the full and efficient cultivation of the land, that the corporation (including a company) should continue to cultivate the land, the grant shall, after giving three months notice of termination thereof, and after giving the corporation reasonable opportunity of showing cause be terminated, and the land resumed. Thereafter, the State Government may itself take steps by running or managing one or more farms for the proper cultivation of the land and maintenance of the production and supply of raw material to the undertaking at a fair price.Explanation.- For the avoidance of doubt, it is hereby declared that a producer of raw material being the corporation (including a company) or the State Government referred to in this Section shall be liable to supply raw material to the undertaking concerned only on that undertaking agreeing to accept such supply at the fair price."9. It may be mentioned that the principal Act has also been amended by Maharashtra Act 50 of 1973 which was published on December 22, 1973. Petitions challenging the validity of the principal Act as amended by Act 50 of 1973 are stated to be pending in the High Court. The High Court in the case which is the subject matter of the present appeal allowed amendment of the petition so as to include challenge to the principal Act as amended by Act 27 of 1970. It may also be stated that before the amendment made by Act 27 of 1970, the principal Act was amended by various amending Acts, besides those to which reference has already been made, but we are not concerned with those other amending Acts.10. To complete the narration we may also refer to the Maharashtra Agricultural Lands (Ceiling on Holdings) Grant of Surplus Lands Taken Over from Industrial Undertakings Order. 1970 which was issued by the Maharashtra Government on August 13, 1970 in exercise of the powers conferred by Section 28-1AA of the Act. Clause 2 (c) of the Order defines "Corporation" to mean the Maharashtra State Farming Corporation Ltd. Clause 3 of the Order reads as under:"Grant of lands to Corporation. The lands specified in column 3 of the schedule hereto (being surplus lands taken over from the undertakings referred to in Section 28 and specified in column 2 of that schedule) and which are being cultivated by the Corporation are hereby granted to the Corporation on payment of occupancy price and on the terms and conditions specified in this Order." Clause 4 of the Order specifies the conditions for maintaining the integrity of surplus land, while clause 5 deals with conditions so as to ensure full and continued supply of raw material to industrial undertakings. Clause 6 provides for conditions as to termination of grants11. By the judgment under appeal the High Court, as already mentioned, has upheld the validity of the impugned Act on the ground that it is protected by Articles. 31A and 31B of the Constitution.

Reasoning:
14. We have given the matter our consideration and are unable to agree with the above conclusion of the High Court Articleabove article was inserted in the Constitution by the First Amendment. The object of this article is to give a blanket protection to the Acts and Regulations specified in the Ninth Schedule and the provisions of those Acts and Regulations against any cha1lenge to those Acts, Regulations or the provisions thereof on the ground that they are inconsistent with or take away or abridge any of the rights conferred by, Part III of the Constitution. The result is that howsoever violative of the fundamental rights may be the provisions of an Act or Regulation once the Act or Regulation is specified in the Ninth Schedule it would not be liable to be struck down on that score. This immunity against the above challenge would be available notwithstanding any judgment, decree or order of any Court or tribunal to the contrary. The effect of Article 31B, however, is not to prevent challenge to an enactment on the ground that it is beyond the legislative competence of the legislature which enacted it. It is also plain from the language of the article that the specification of an Act or Regulation would not prevent the competent legislature to repeal or amend it.The protection of Art. 31B can also not be extended to a new provision inserted as a result of amendment on the ground that it is ancillary or incidental to the provisions to which protection has already been afforded by including them in the Ninth Schedule. Article 31B carves out a protected zone. It has inserted Ninth Schedule in the Constitution and gives immunity to the Acts, Regulations and provisions specified in the said schedule from being struck down on the ground of infringement of fundamental rights even though they are violative of such rights. Article 3lB thus excludes the operation of fundamental rights in matters dealt with by those Acts, Regulations and provisions. Any provision which has the effect of making an inroad into the guarantee of fundamental rights in the very nature of things should be construed very strictly, and it would not, in our opinion, be permissible to widen the scope of such a provision or to extend the frontiers of the protected zone beyond what is warranted by the language of the provision. No Act, Regulation or provision would enjoy immunity and protection of Article 31B unless it is expressly made a part of the Ninth Schedule. The entitlement to protection being confined only to the Acts, Regulations and provisions mentioned in the Ninth Schedule, it cannot be extended to provisions which were not included in that schedule. This principle would hold good irrespective of the fact whether the provision to which entitlement to protection is sought to be extended deals with new substantive matters or whether it deals with matters which are incidental or ancillary to those already protected.17. We are fortified in the above conclusion by the previous decisions of this Court.It is now well established that before the protection of Art. 31A can be afforded to the acquisition of any land by the State, the acquisition should be for the purpose of agrarian reform.The following principles can be inferred from the decided cases in order to find whetheran impugned enactment for acquisition of land is protected by Article31A:1) Acquisition of land by the State in order to enjoy the protection of Article 31A should be for the purpose of agrarian reform. 2) Acquisition of land by taking it from a senior member of the family and giving it to a junior member is not a measure of agrarian reform.3) Acquisition of land for urban slum clearance or for a housing scheme in neighbourhood of a big city is not a measure of a agrarian reform.4) Acquisition of land by the State without specifying the purpose for which land is to be used is not a measure of agrarian reform.5) Scheme of rural development envisages not only equitable distribution of land but also raising of economic standards and bettering of rural health and social conditions in the villages. Provision for the assignment of land to a Panchayat for the use of the general community or for hospitals, schools, manure pits, tanning grounds enure for the benefit of the rural population and as such constitute a measure of agrarian reform.6) Provision for reservation of land for promotion of agriculture and for the welfare of agricultural population constitutes a measure of agrarian reform. Agrarian reform is wider than land reform.7) If the dominant and general purpose of the scheme is agrarian reform, the scheme may provide for ancillary provisions to give full effect to the scheme.8) A provision fixing ceiling area and providing for the disposal of surplus land in accordance with the rules is a measure of agrarian reform.It would appear from the preamble to amending Act 27 of 1970 and the affidavit of Shri I. G. Karandikar, Under Secretary to Government of Maharashtra that efforts to set up joint farming societies contemplated by Section 28 of the Act did not bear fruit in spite of the fact that the time for the setting up of those societies was extended.Conspectus of the different provisions of the impugned Act, in our opinion, goes to show that the main purpose of the Act was to prevent concentration of agriculture land in the hands of a few. A ceiling was consequently imposed regarding the extent of land which might be held by an individual. Surplus land was distributed in accordance with Section 27 of the Act. It cannot be disputed that the provisions of the impugned Act in so far as the above objects were concerned effectuated the object of agrarian reform. As regards lands which were held by the industrial undertakings for the purpose producing and providing raw material for the manufacture of goods by those undertaking the legislature made special provision in order to ensure that the acquisition of the aforesaid land did not affect adversely the production and supply of the raw material to the undertaking. The object was further to make full and efficient use of the land for agriculture and also if considered necessary to maintain the integrity of the area so acquired in one or more compact blocks. The legislature for this purpose initially made provision for the grant of the aforesaid lands to joint farming societies but as the proposal to set up these societies did not bear fruit the legislature made provision that the aforesaid lands be given for cultivation to the State Corporation. Section 28-1AA, in our opinion, was an integral part of a general scheme of the Act to bring about agrarian reform and, in our opinion, the impugned provisions of the Act, including Section 28-1AA, are protected by Article 3lA of theare not impressed by this argument. Acquisition of land held by industrial undertakings is not to be taken in isolation but as a part of the general scheme and object of the Act that there should be a ceiling on private holdings. While surplus lands of individuals are to be distributed, the legislature has made special provision in respect of land held by an industrial undertaking which had been cultivated for supplying raw material to the industrial undertaking. It has been provided in the case of such land that it should be cultivated by the Farming Corporation in an efficient manner so that the supply of raw material to the Industrial undertaking might not be affected. It is no doubt, true that distribution of acquired land among landless persons and poor peasants in a vast majority of cases is a part of the scheme of agrarian reform; the fact that in the case of some huge tract of land which is used for a particular purpose the statute in order to prevent its fragmentation and to subserve that purpose provides that it should be cultivated by a State owned farming corporation would not justify the inference that the statutory requirement in this respect is not a part of a general scheme of agrarian reform. Section 28-1AA does not operate in a vacuum. The Section has to be taken in its context and setting with the other provisions of the Act. If the provisions of the Act seek to remove economic imbalance by taking the surplus lands of holders in excess of a ceiling and if the provisions of the Act further contemplate that most of the lands after acquisition be distributed to poor peasants and landless persons, the fact that a few blocks of land because of their size and past use for cultivation of raw material for industrial undertakings are required under the provisions of the Act to be not fragmented, which would inevitably be the result if they were to be distributed like other lands acquired under the Act, but to be retained as compact blocks for being cultivated by, the farming corporation so that the industrial undertakings are not starved of the raw material, the last mentioned provision cannot be detached from the rest of the Act and struck down as being not a measure of agrarian reform. It is no doubt true that acquisition simpliciter of the land by the State to augment its resources and without specifying the purpose for which it is to be used after acquisition would not get the protection of Art. 31A. To decide the question of protection we must look at the general scheme of the statute containing provision for the acquisition, the object of the acquisition and the reasons which weigh for retaining the land with the State or its corporation and not distributing it among the landless persons and the poor peasants. The concept of agrarian reform, it needs to be emphasised, is not static and cannot always be put in a strait-jacket. With the change of times under the impact of fresh ideas and in the context of fresh situations, the concept of agrarian reform is bound to acquire new dimensions. A measure which has the effect of improving the rural economy or promoting rural welfare would be a part of agrarian reform Although in most of the cases, as already mentioned the agrarian reform would require distribution of surplus land among the poor peasants and landless persons living in the villages, situations might well arise where it would be in the interest of rural economy that any compact area of land instead of being fragmented by distribution should be preserved as one compact block and be cultivated by a State owned farming corporation. The fact that part of the acquired land would remain vested in the State Government or State-owned farming corporation would not militate against the object of agrarian reform if the continued vesting of the land in the Government or the Corporation is a part of a general of agrarian reform and there is no oblique deviation from the avowed purpose.We may note that argument has also been advanced by the learned Attorney General regarding the locus standi of the appellants to file the petition giving rise to the presentis, in our opinion, not necessary to express an opinion on the above submissions of the Attorney General in view of our finding thatthe impugned provisions are protected by Article 31A of the