Summarize the following court judgment. Appeal No. 1222 of 1966. Appeal from the judgment and order dated March 14 1966 Appeal of the Punjab High Court (Circuit Bench)	 at Delhi in Civil Writ No. 832 D of 1965. section V. Gupte	 Solicitor General	 N. section Bindra	 R. H. Dhebar and B. R. G. K. Achar	 for the appellant. M. C. Setalvad	 B. C. Dutt	 Santosh Chatterjee	 B. Partha sarathy	 0. C. Mathur	 and Ravinder Narain	 for respondent No. 1. B. C. Dutt	 Santosh Chatterjee	 Anand Prakash	 0. C. Mathur and Ravinder Narain	 for respondent No. 2. The Judgment of the Court was delivered by Subba Rao	 C. J. This appeal by certificate raises the question of the constitutional validity of the Metal Corporation of India 	(Acquisition of Undertaking) Act (No. XLIV of 1965)	 hereinafter called the Act. The relevant facts lie in a small compass. The 1st respondent	 The Metal Corporation of India Limited	 hereinafter called the 	Corporation	 was a limited company constituted under the Indian Companies Act	 having for its objects	 inter alia	 the development of zinc and lead mines at Zawar in the State of Rajasthan and the construction of a zinc smelter and other connected works for producing electrolytic zinc and by products. The Government was 	satisfied that it was necessary to acquire the said Corporation in public interest and on October 22	 1965	 the President of India 257 promulgated an Ordinance (No. 6 of 1965) providing for the acquisition of the Corporation by the Central Government. Pursuant to the said Ordinance	 on or about October 23	 1965	 the Central Government took over the possession	 control and administration of the said Corporation. The Corporation	 the 1st respondent and its Managing Director	 the 2nd respondent filed a Writ Petition under article 226 of the Constitution in the High Court of Judicature for the State of Punjab	 Circuit Bench at New Delhi	 being Petition No. 631 D of 1965	 challenging the validity of the said Ordinance. In the meantime	 the Parliament passed the Act on the same terms as contained in Ordinance No. 6 of 1965: it received the assent of the President of India on December 12	 1965. The respondent filed another writ petition in the said High Court	 being Writ Petition No. 832 D of 1965	 for a declaration that the Act was ultra vires the Constitution. The said High Court held that the Ordinance and the Act contravened the relevant provisions of article 31 of the Constitution and	 therefore	 were constitutionally void. The present appeal is preferred against the said judgment of the High Court. It will be convenient at this stage to read the relevant provisions of the Act. The preamble and the relevant provisions of the Act read: "Preamble. An Act to provide for the acquisition of the undertaking of the Metal Corporation of India Limited for the purpose of enabling the Central Government in the public interest to exploit	 to the fullest extent possible	 zinc and lead deposits in and around the Zawar area in the State of Rajasthan and to utilise those minerals in such manner as to subserve the common good Section 3. On the commencement of this Act	 the undertaking of the company shall	 by virtue of this Act	 be transferred to	 and vest in	 the Central Government. Section 10. (1) The Central Government shall pay compensation to the company for the acquisition of the undertaking of the company and such compensation shall be determined in accordance with the principles specified in the Schedule and in the manner hereinafter set out	 that is to say	 (2) Notwithstanding that separate valuations are calculated under the principles specified in the Schedule in respect of the several matters referred to therein	 the 258 amount of compensation to be given shall be deemed to be a single compensation to be given for the undertaking as a whole. (3) THE SCHEDULE Principles for determining compensation for acquisition of the undertaking. Paragraph I. The compensation to be paid by the Central Government to the company in respect of the acquisition of the undertaking thereof shall be an amount equal to the sum total of the value of the properties and assets of the company on the date of commencement of this Act calculated in accordance with the provisions of paragraph II less the sum total of the liabilities and obligations of the company as on the said date calculated in accordance with the provisions of paragraph 111. Paragraph II. (a) The market value of any land or buildings; (b) the actual cost incurred by the company in acquiring any plant	 machinery or other equipment which has not been worked or used and is in good condition and the written down value (determined in accordance with the provisions of the Income tax Act	 1961 (XLIII of 1961)	 of any other plant	 machinery or equipment; (c) the market value of any shares	 securities or other investments held by the company; (d) the total amount of the premium paid by the company in respect of all leasehold properties reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease; (e) the amount of debts due to the company	 whether secured or unsecured	 to the extent to which they are reasonably considered to be recoverable. (f) the amount of cash held by the company	 whether in deposit with a bank or otherwise; (g) the value of all tangible assets and properties other than those failing within any of the preceding clauses. Paragraph III. The total amount of liabilities and obligations incurred by the company in connection with 259 the formation	 management and administration of the undertaking and subsisting immediately before the commencement of this Act. " The gist of the said provisions may be given thus. The Act was made to acquire in public interest the undertaking of the Corporation	 On the commencement of the Act	 the undertaking was transferred and vested in the Central Government. Under section 10 of the Act	 the Government shall pay compensation to the undertaking as a whole: but	 in the absence of an agreement between the Government and the Corporation	 the compensation payable to the Corporation has to be ascertained under the principles specified in the Schedule in respect of the several matters referred to therein. Paragraph 1 of the Schedule lays down the manner in which the compensation to be paid to the Corporation for the acquisition of the undertaking is to be ascertained. The said compensation shall be an amount equal to the sum total of the value of the properties and assets of the Corporation on the date of the commencement of the Act calculated in accordance with the provisions of paragraph It less the liabilities on the said date calculated in accordance with the provisions of paragraph III of the Schedule. Broadly	 the said paragraph lays down the principles for ascertaining the value of lands	 buildings	 machinery and equipment	 amounts due to the undertaking and other tangible assets and properties. The different clauses of the paragraph adopt different principles for valuation. But what is important for the present purpose is the principle embodied in cl. (b) of para II. It is in two parts: the first provides for the valuation of plant	 machinery or other equipment which has not been worked or used and is in good condition	 and the second provides for the valuation of any other plant	 machinery or equipment. The former has to be valued at the actual cost incurred by the Corporation in acquiring the same and the latter at the writtendown value determined in accordance with the provisions of the Indian Income tax Act	 1961. The High Court held	 on a construction of the said provisions	 that the principle contained in cl. (b) of paragraph 11 of the Schedule to the Act in respect of machinery etc. "cannot be called relevant to the determination of 'just equivalent '	 as it takes no notice of the notorious fact that prices have been steadily rising during the past several years	 particularly of imported machinery and plant". It also held	 "that depreciation rule does not even pretend to determine the actual depreciation in a particular case and it is obvious that such depreciation has no real relationship with the actual value of any machinery at any particular point of time". On that reasoning	 it came to the conclusion	 having regard to the decision of this Court in Vajravelu vs Special Deputy Collector(1) that the said provision in respect of machinery did. (1) ; 260 not lay down a principle for fixing compensation i. e.	 a just equivalent to the machinery acquired. The reasoning of the High Court was attacked by the learned Additional Solicitor General on the ground that it did not appreciate the true scope of the said decision of this Court and that	 in any view	 it went wrong in applying the principle of the said decision to the provisions of the Act. He contended that the Act laid down the broad principle that compensation shall be paid for the entire undertaking as a unit	 but provided different modes for the ascertainment of the value of different parts thereof in such a way that the deficiency in the valuation of one part was offset by the liberal valuation of the other part. In that view	 he contended	 the Act embodied a principle relevant to the ascertainment of compensation for the undertaking acquired and	 therefore	 the product worked out under the said principle pertained only to the realm 	of adequacy which was beyond the ken of judicial review. He added that compensation in article 31 of the Constitution meant that cornpensation which was regarded as just in the context of public acquisitions and that test was satisfied in the present case. Mr. M. C. Setalvad	 learned counsel for the respondents	 contended that though under the Act compensation was to be given to the undertaking as one unit	 the Act laid down principles for arriving at the valuation of the parts to arrive at the valuation of the whole and that	 therefore	 every such principle should stand the test laid down by this Court. So judged	 the argument proceeded	 both the principles laid down in cl. (b) of para 11 of the Schedule had no nexus to the ascertainment of compensation for the machinery acquired	 for in the case of unused machinery	 its cost price was the guide and in the case of used machinery its written down value was the criterion and that both the methods were arbitrary. We find it difficult to appreciate the arguments of the learned Solicitor General. It is true that under section 10 of the Act the Central 	Government shall pay compensation for the acquisition of the undertaking to the Corporation and the said compensation arrived at in the manner prescribed in the Schedule to the Act shall be 	deemed to be a single compensation to be given to the undertaking as a whole. But it will be noticed that though a single compensation for the undertaking is given	 the said compensation shall be deter mined in accordance with the principles specified in the Schedule. Under the Schedule	 the compensation for the entire undertaking shall be the amount equal to the sum total of the value of the properties and assets of the Corporation calculated in accordance with the provisions of para II of the Schedule. Under the said para 11	 different principles are laid down for ascertaining the value of different parts of the undertaking. If all the said principles laid 	down in para 11 of the Schedule do not provide for the just equivalent 261 of all the parts of the undertaking mentioned therein	 the sum total also cannot obviously be a just equivalent of the undertaking. So too	 if some of them do not provide for a just equivalent and others do so	 the sum total cannot equally be a just equivalent to the undertaking. In the case of the undertaking in question	 the machinery is the most valuable part of the undertaking. Apropos the unused machinery in good condition	 how can the price for which the said machinery was purchased years ago possibly represent its price at the time of its acquisition? A simple illustration will disclose the irrelevance of the principle. Suppose in 1950 a machinery was purchased for Rs. 100 and	 for some reasons	 the same has not been used in the working of the undertaking but has been maintained in good condition. That machinery has not become obsolescent and still can be used effectively. If purchased in open market it will cost the owner Rs. 1	000. A compensation of Rs. 100 for that machinery cannot be said to be a just equivalent of it. It is common knowledge that there has been an upward spiral in prices of the machinery in recent years. The cost price of a machinery purchased about ten years ago is a consideration not relevant for fixing compensation for its acquisition in 1965. The principle must be such as to enable the ascertainment of its price at or about the time of its acquisition. Nor the doctrine of written down value accepted in the Income tax law can afford any guide for ascertaining the compensation for the used machinery acquired under the Act. Under the general scheme of the Income tax Act	 the income is to be charged regardless of the diminution in the value of the capital. But the rigor of this hard principle is mitigated by the Act granting allowances in respect of depreciation in the value of certain assets such as machinery	 buildings	 plant	 furniture etc. These allowances are worked out on a notional basis for giving relief to the income tax assessee. This artificial rule of depreciation evolved for income tax purposes has no relation to the value of the said assets. To illustrate: a machinery was purchased in the year 1950 for Rs. 1	000. The aggregate of all the depreciation allowances made year after year for ten years may exhaust the sum of Rs. 1	000 with the result	 after the tenth year	 the assessee will not be entitled to any depreciation. From this it cannot be said that after the tenth year the machinery has no value. Indeed	 a machinery purchased for Rs	 1	000 in 1950	 because of subsequent rise in. prices may be sold in 1965 for Rs. 10	000. But the application of the principle laid down in cl. (b) of para 11 of the Schedule to the Act in regard to used machinery gives the owner no compensation at all. Yet	 the Government takes the machinery worth Rs. 10	000 gratis. This illustration exposes the extreme arbitrariness of the principle. It is	 therefore	 manifest that the two principles of valuation embodied in cl. (b) of para II of the Schedule to the Act are not relevant to the fixing of compensation for the machinery at. the time of its acquisition under the Act. The argument	 of the 262 learned Additional Solicitor General that the working out of all the principles in respect of different parts of the undertaking would result in a product which would fairly represent	 in the context of public acquisitions	 the "just equivalent" to the undertaking acquired is purely based on a surmise for	 it is not shown that the working out of any one or more of the principles would give a higher compensation to some parts of the undertaking so that the excess paid under one head would offset the deficiency under another head. Nor can the doctrine of inherent worth of a machinery has any relevance in the matter of giving compensation for its acquisition at a particular point of time	 for the simple reason that the worth of an article depends upon the market conditions obtaining at the time of its acquisition. It is impossible to predicate	 irrespective of such conditions	 that a particular machinery has a fixed value. for all times. Four decisions of this Court laid down the principles applicable to the present case. Indeed	 but for the said decisions	 we would have posted this case before a Constitution Bench of five Judges. But	 as this appeal involves only the application of the construction put upon article 31 of the Constitution by this Court in the said decisions	 we did not resort to that course. The first of them is The State of West Bengal vs Mrs. Bela Banerjee (1). There	 the validity of the West Bengal Land Development and Planning Act	 1948 was under scrutiny. Section 8 thereof provided that compensation to be awarded for compulsory acquisition to owners of land was not to exceed the market value as on December 31	 1946. This Court held that the said Act was ultra vires the Constitution and void under article 32(2) thereof. In that context	 Patanjali Sastri	 C.J.	 observed: "Turning now to the provisions relating to compensation under the impugned Act	 it will be seen that the latter part of the proviso to section 8 limits the amount of compensation so as not to exceed the market value of the land on December 31	 1946	 no matter when the land is acquired. Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force	 the fixing of the market value on December 31	 1946	 as the ceiling on compensation	 without reference. to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compliance in letter and spirit with the requirement of article 31(2). " The above decision was followed by this Court in State of Madras vs D. Namasivaya Mudaliar(2). There the respondents were owners of certain lands which were to be compulsorily acquired under (1) ; 	 564. (2) ; 	 945 2 63 Madras Lignite (Acquisition of Land) Act	 1953. The Act came into force on August 20	 1953	 before article 31 of the Constitution was amended by the Constitution (Fourth Amendment) Act	 1955. By the said Act compensation for the acquisition of lignite bearing bands under the Land Acquisition Act was to be assessed on the market value of the land prevailing on August 28	 1947	 and not on he date on which the notification was issued under section 4(1) of the and Acquisition Act. It also provided that in awarding compensation	 the value of non agricultural improvements commenced since April 28	 1.947 would not be taken into consideration. This Court held that the said Act was bad	 because it contravened article 31(2) of the Constitution	 as it stood before the Constitution (Fourth Amendment) Act	 1955. This Court	 speaking through Shah	 J.	 observed: "Assuming that in appropriate cases	 fixation of a date anterior to the publication of the notification under section 4(1) for ascertainment of market value of the land to be acquired	 may not always be regarded as a violation of the constitutional guarantee	 in the absence of evidence that compensation assessed on the basis of market value on such anterior date	 awards to the expropriated owner a just monetary value of his property at the date on which his interest is extinguished	 the provisions of the Act arbitrarily fixing compensation based on the market value at a date many years before the notification under section 4(1) was issued	 cannot be regarded as valid." Then the learned Judge proceeded to state: "To deny to the owner of the land compensation at rates which justly indemnify him for his loss by awarding him compensation at rates prevailing ten years before the date on which the notification under section 4(1) was issued amounts in the circumstances to a flagrant infringement of the fundamental right of the owner of the land under article 31(2) as it stood when the Act was enacted. " These two decisions turned upon the construction of article 31(2) of the Constitution before the Constitution (Fourth Amendment) Act	 1955. These cases laid down two propositions: (1) "Compensation" under article 31(2) of the Constitution means a "just equivalent" of what the owner has been deprived of ; and (2) the value of land at an anterior date is presumed to be no compensation within the meaning of the said Article. After the Constitution (Fourth Amendment) Act	 1955	 this Court had to construe in two decisions he amended provision of article 31(2) vis a vis the expression "compensation" found therein. The first decision is that in Vajravelu 264 vs Special Deputy Collector(1). There	 this Court observed at p. 625 626: "A scrutiny of the amended Article discloses that it accepted the meaning of the expressions "compensation" and "principles" as defined by this Court in Mrs. Bela Banerjee 's case(2)." .lm0 And it held that	 if the compensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition	 it can be said that the Legislature committed a fraud on power and	 therefore	 the law is bad. One of the illustrations given at p. 627 is relevant to the present enquiry and that is as follows : if a law lays down principles which are not relevant ' to the property acquired or to the value of the property at or about the time it is acquired	 it may be said that they are not principles contemplated by article 31(2) of the Constitution. If a law says. . that though it (house) is acquired in 1960 its value in 1930 should be given. . the principles do not pertain to the domain of adequacy but are principles unconnected to the value of the property acquired. " Applying these principles	 this Court in Jeejeebhoy vs Assistant Collector(3)	 held that the fixation of an anterior date for the ascertainment of the value of the property acquired without reference to any relevant considerations which necessitated the fixing of an earlier date for the purpose of ascertaining the real value is arbitrary. On that ground this Court held that the Land Acquisition (Bombay Amendment) Act	 1948	 did not provide for payment of just equivalent of what the owner was deprived of	 as it provided for the ascertainment of compensation on the basis of the value of lands acquired as on January 1	 1948 and not as on the date on which the section 4 notification under the 1894 Act was issued. The relevant aspect of the legal position evolved by the said decisions may be stated thus: Under article 31(2) of the Constitution	 no property shall be compulsorily acquired except under a law which provides for compensation for the property acquired and either fixes the amount of compensation or specifies the principles on which and the manner in which compensation is to be determined and given. The second limb of the provision says that no such law shall be called in question in any court on the ground that the compensation provided by the law is not adequate. If the two concepts	 namely	 "compensation" and the jurisdiction of the court are kept apart	 the meaning of the provisions is clear. The law to (1)[1965] 1 S.C.R. 614. (2) ; (3) 6. 265 justify itself has to provide for the payment of a "just equivalent" to the land acquired or lay down principles which will lead to that result. If the principles laid down are relevant to the fixation of compensation and are not arbitrary	 the adequacy of the resultant product cannot be questioned in a court of law. The validity of the principles	 judged by the above tests	 falls within judicial scrutiny	 and if they stand the tests	 the adequacy of the product falls outside its jurisdiction. Judged by the said tests	 it is manifest that the two principles laid down in cl. (b) of Para 11 of the Schedule to the Act	 namely	 (i) compensation equated to the cost price in the case of unused machinery in good condition	 and (ii) written down value as understood in the Income tax law as the value of used machinery	 are irrelevant to the fixation of the value of the said machinery as on the date of acquisition. It follows that the impugned Act has not provided for "compensation" within the meaning of article 31(2) of the Constitution and	 therefore	 it is void. The mere fact that in regard to some parts of the undertakings the principles provide for compensation does not affect the real question	 for	 machinery is the major part of the undertaking and		 as the entire undertaking is acquired as a unit	 the constitutional invalidity of cl. (b) of Para 11 of the Schedule to the Act affects the totality of the compensation payable to the entire undertaking. In the context of compensation for the entire undertaking	 the clauses of Para 11 of the Schedule to the Act are not severable. In the result	 the Act	 not having provided for compensation	 is unconstitutional and the conclusion arrived at by the High Court is	 correct. appeal fails and is dismissed with costs. V.P.S. Appeal dismissed.

The Metal Corporation of India (Acquisition of Undertaking) Act	 1965	 was enacted for acquiring in the public interest	 the undertaking of the Metal Corporation of India. The Act provided that the Corp oration was to vest in the Central Government on the commencement of the Act; and that in the absence of an agreement between the Government and the Corporation	 the compensation payable to the Corporation was to be an amount equal to the sum total of the value of the properties and assets of the Corporation on the date of the commencement of the Act calculated in accordance with the provisions of Paragraph 11 of the Schedule to the Act	 less the liabilities on the said date	 calculated in accordance with the provisions of Paragraph III of the Schedule. One of the clauses laying down principles of compensation	 viz.	 clause (b) of para 11 is in two parts. The first part provides for the valuation of plant	 machinery or other equipment which has not been worked or used and is in good condition	 and the second part provides for the valuation of any other plant	 machinery or equipment. The former have to be valued at the actual curt incurred by the Corporation in acquiring them 'and the latter	 at the writtendown value determined in accordance with the provisions of the Income of the constitutional validity of the Act. HELD : The Act contravened article 31(2) of the Constitution and was therefore void. [265 C] Under article 31(2)	 no property shaft be compulsorily acquired except under a law which provides for compensation and either fixes the amount of compensation or specifies the principles on which and the manner in which the compensation is to be determined and given. If the compensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition	 the law is bad. The law	 to justify itself	 has to provide for the payment of a "just equivalent" to the property acquired	 or lay down principles which are not arbitrary but which are relevant to the fixation of compensation. It is only when the principles stand this test	 that the adequacy of the resultant compensation falls outside judicial scrutiny under the second limb of article 31(2). In the instant case	 the two principles laid down in cl. (b) of Para 11 of the Schedule are irrelevant to the fixation of the value of the machinery as on the date of acquisition. In the case of unused machinery	 if it was Purchased in 1950 for Rs. 100 and	 for some reason	 had not been used in the working of the Undertaking but had been maintained in good condition	 it may cost Rs. 1000 in 1965. A compensation of Rs. 100 for that machinery could not be said to be a "just equivalent" of it. Similarly	 in the case of used machinery	 if it was purchased in 1950 for Rs. 1000	 256 the aggregate of all the depreciation allowances made year after year may exhaust the sum of Rs. 1000 in ten years	 with the result that	 under the Income tax Act	 the assessee will not be entitled to any depreciation after the tenth year. It could not	 however	 be said that after the tenth year	 the machinery had no value and that the owner was not to be given any compensation. Indeed	 such a machinery	 because of subsequent rise in prices	 may be sold in 1965 for Rs. 10	000. Further the constitutional invalidity of cl. (b) of Para II of the Schedule affect& the totality of the compensation payable; for	 machinery is the major part of the undertaking	 the entire Undertaking is acquired as a unit	 and	 in the context of compensation for the entire Undertaking	 the clauses of Para H of the Schedule to the Act are not severable. Therefore	 the mere fact that in regard to some parts of the Undertaking	 the principles laid down in Para H provide for compensation does no affect the question	 especially when it has not been shown that the working out of any one or more of the principles would give a higher compensation to some parts of the Undertaking so that the excess paid under one head would offset the deficiency under another head. [261 F H; 262 B; 264 B C	 F H; 265 A El Vajravelu vs Special Deputy Collector	 ; and Jeejeebhoy vs Assistant Collector	 ; 	 followed.