S.P. MITTAL ETC. ETC. v. UNION. OF INDIA AND OTHERS . November 8, 1982

The contention of Mr. Venugopal is that the audit report had once been considered and the Government did not choose to take c any further steps on assurance given on the behalf of the Society that the irregulatities pointed out by the audit report will be rectified and· proper management would be carried out in future. There was absolutely no reason for Government to have come forward with the proposal of the impugned Ordinance or the impugned Act taking over the management of_,the. Aurovil1e from the Society. 0 The circumstances obtaining on the date of the _impugned Ordinance or the impugned Act were the .relevant consitlerations for the enactment. ·And the earlier report of the audit which bad already been considered by the Government and the irregularities having beeri condoned, tliey cannot be made ihe basis' for the impugned Ordinance or the Act. · · E For the respondents, however, it is contended that despite the assurance given by the office bearers Of the Society nothing tangible. had been done and the condition of the institution was go.ing froai bad to worse.

---.... .The Government was involved in this case inasmuch as it was at the instance of the Government that the UNESCO and other members of UNESCO had generously donated for the construction of Auroville, the cultural township to tbe tune of crores of rupees. It was, therefore, a matter of vital concern for the Government of India to see tha\ the donations so generously received from Governmen_t of India and from other States as also from abroad were properly utilised to carry out the mission ·of Shri Autobindo . and the Mother.

In view of the prevailing situation in the Auroville and the ff Society the only way to put the management on the wheels was to take over the management of the institution.

814 SUPREME COURT RBPoRTS [1983) 1 s.C.il.

It was further contended by Mr. Venugopal that if the management of the institution had been taken over by the· Govern- ment on the .ground of mis-management, there could be other institutions where similar situation might be prevailing. There should ·have been a general legislation rather than singling out Shri Aurobindo Society for hostile treatment. B The argument cannot ·he accepted for two reasons. Firstly, because it has not been pointed out which were the other institutions where similar situations were prevailing. Besides, there is a unique- ness with this institµtion inasmuch as the Government is also "· · involved. Even a single institution may be taken as a class. The c situation prevailing in the Auroville had converted the dream of the Mother into a nightmare. There had arisen acute law and order situation in the Auroville, numerous cases were. pending against various foreigners, the funds meant for the Auroville had been diverted towards ·other purposes and the atmosphere was getting out of hand. In the circumstances the Government intervened and D promulgated the Ordinance and later onsubstituted it by the impugned enactment. It cannot be said that it is violative of Article 14 on that account. · We get support for our view from the following decisions.

In Budhan Chow.dhury v. The State of Bihat( 1) a Constitution E Bench of seven Judges of this Court explained the true meaning and scope of Article 14 as follows :

"It is now well established that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must· be fulfilled, namely (i) that the classification must be founded on an intelligible differentia' which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that the differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases, namely, geographical, or according to objects or occupation or the like, What is necessary is that there must be a nexus between the basis of classifica- tion and the object of the Act u'nder consideration. It is also well established by the decisions of this Court that.

(I) [1955] I S.C.R. 1045.

s.P. MITIAL v. UNION (Misra, J.) 81~

article 14 condemns discrimination not only by a substan- A tive law but also by a law of procedure."

These observations were quoted with approval by this Court in Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors.(') B In this case the Court further laid down : • "(a) that a law may be constitutional even though it relates to a single individual if, on account' of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be c treated as a class by himself;

(b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression onhe constitutional principles ; D (c) that it must be presumed that the legislature under- stands and correctly appreciates the need of its own people, that its laws are directed to problems. made manifest by ·experience and that its discriminations ·are based on adequate grounds ; E (d) that the legislature is free to'recognise degrees of harm and l°ay confine its restrictions to. those cases where the need is deemed to be the clearest ;

(e) that in order to sustain the presumption of consti- tutionality the court may take into consideration matters of common knowledge, m~tters of common 0

report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation ; and

(f) that while good faith and . knowledge of the existing conditions on the part of a legislature are to be G presumed, if there is nothing on the face of the law or the .surrounding circumstances brought to the . notice of the court on which .the classification Jllay reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of H

(I) [19S9) S.C.R. 279.

816 SUPREME COURT REPORTS , (1983) 1 S.C.R.

A always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation."

In Ram Prasad Narayan Sahl and Anr. v. The State of Bihar 8 and Ors.(') the Court of Wards had granted to the appellant a large area of land belonging to the Bettiah Raj which was then under • the management of the Court of Wards, on the recommendation of the Board of Revenue, at half the usual rates. The Bihar Legislature passed an Act called the Sathi Lands (Restora- tion) Act, 1950 which declared that, notwithstanding anything c contained in any law for ·the time being in force the settlement granted to the appellants shall be null and void and that no party ..··-4 to the settlement or his successors in interest shall be deemed to · have acquired any right or incurred any liability thereunder, and empowered the Collector to eject the appellants if they refused to restore the lands. The appellants challenged the constitutionality of the Act under Article 226. This Court held :

"The· dispute between the appellants and the State was really a private dispute and a matter to be determined ·by a judicial tribunal in accordance with the law applicable to the case, and, as the Legislature had, in passing the impugned enactment singled out the appellants and deprived them of their right to have this dispute adjudicated upon by a duly constituted Court, the enactment c°ontravened the provisions of article 14 of the Constitution which guarantees to every citizen the equal protection of the laws, and was void. F ,,.._, Legislation which singles .out a particular individual from the fallow subjects and visits him with a disability which is not imposed upon the others and against which even the right of complaint is taken away is highly dis- criminatory." G The facts of this case are· distinguishable from the case in hand. In that case. the legislation. was made only for a particular person. Jn the cases in hand on account of the uniqueness of the institution '-< and on account of the involvement of the Govcrnmeni and the H fl) [1953] SCR 1129.

s.P. MITTAL v. UNION (Misra, J.) 817

stake being a high one about public funds, Parliament could take A a particular institution as. a class by itself.

In Ram Chandra' Deb v. The State of Orissa(1) Sri Jagannath Te_mple Act, 1955 was sought to be challenged being violative of Article 14 of the Constitution inasmuch as the legislature bad made a separate Act for a particular temple alone and· there. were adequate B provisions iii the Orissa Religious Endowments Act, 1951 which ·was the general· Act applicaple to all public temples and religi<)us ~·· institutions and contained adequate provisions to meet all situations. A s.imilar contention ;is raised in the present cases was raised in that case that a particular temple bad been· singled out for hostile discrimination. It was contended that the· Gommissioner of Hindu c Religious Endowments bad ample .powers under tlie Act to frame a scheme for the 'proper management of the temple also and the legislature _by enacting' a separate piece of legislation for the temple alone, ign9ring the other temples· of Orissa such as those at Bhubaneswar where alsci there might be similar administration, bad contravened Article 14. This· argument was, however, repelled by D the Orissa High Court with the following observations : .

"The principles underlying Art. 14 of the Constitution have been reiterated in ·Several decisions of the Supreme Court and it is unnecessary to repeat .them in detail. All ,,, that that article prohibits is class legislation and not reason' E able classification for .the pnrpose of legislation so iong as such classification is not arbitrary and. "bears a rational relation to the object sought t;, be achieved by the statutes · in question" ...... .ln Charanjit Lal v. .Union of India (1950 SCR 869) a separate law enacted for one cpmpany was held not to offend Art. 14 of the Constitution .on ,the ground F that ·there were special reasons for passing legislation for that company." · When that case came up in appeal to this Court at ·the instance .of the son of the petitioner, in Raja Birakishore v. The State of Orissaf) this Court held : G. "There is no violati.on of Art 14 of the Constl·t~tion. ·The Jagannath Temple occupies a un.ique position in the State of O~issa and is a temple of national importance and H (I) AIR 1959 Orissa 5. (2) [1964] 7 SCR 32.

818 SUPREME COURT REPOllTS [1983] 1 s.c.k.

A no other temple in that State can compare with it. It· stands in a class by itself and considering the fact· that it attracts pilgrims from all over India, in large numbers, it could' be the subject of special consideration by the State Government. A law may be constitutional even though it related to a single individual if on account of special circumstances or B reasons applicable to him and not applicable to others, that single individual may be treated as a class by him- self."

It was next contended that there were provisions in the Societies Registration Act itself to meet the situation arising in c Auroville. There was to necessity for the impugned Ordinance or the enactment. Shri Venugopal referred to the various provisions of the Societies Registration Act to show that it was open to the Registrar to call for an explanation from the Society for any illegality or irregularity committed by them or if there· was . a mis-appropria- tion of funds, inasmuch as the Act was a self-contained Code and there was. absolutely no justification for any ordinance or the enactment. The law and order situation also could be controlled by resorting to the provisions of the Code of Criminal Procedure.

Whether the remedies provided under the Societies Registration Act were sufficient to meet the exigencies of the situation is not for the Court to decide but it is for the Governmeni and if the Govern- ment thought that the conditions prevailiog·in the Auroville and the Society can be ameliorated not by- resorting to the provisions of the Societies Registration Act but by a special enactment, that is an area of the Government and not of the Court. F Para 6 of the P!eamble of the Act. gives the reasons for the enactment. It reads : ....

"AND whereas pursuant to the complaints received with regard to mis-use of funds by Shri Aurobindo Society, a G · ComllJitlee was set up under the Chairmanship of the Lt. Governor of Pondicherry with representatives of the Government of Tamil Nadu and of the Ministry of Home Affairs in the Central Government, and the said Committee had after detailed scrutiny of the accounts of Sri Aurobindo H Society found instances of serious irregularities in the management of the said Society, mis-utilisation of its funds and their diversion to other purposes."

s.:I>. MlTTA(; v. UNION (Misra, I.) . S19

On the basis of para 6 of the preamble it is argued that the grounds A given were non-existant at the time of the impugned Ordinance or the enactment and, therefore, the law made on that basis itself is bad.

We are afraid the argument has no substance. Obviously, there were serious irregularities in the management of the said B Society as· has been pointed out in the earlier part of the judgment. There has been misutilisation of funds and their diversion to other purposes. This is evident from the audit report. There was rio material change in the situation on the date of the impugned ordi- nance ·or the Act; rather the situation had grown from bad to worse and the sordid situation p~evailing iu the Auro~ille so pointed out c by the parties fuily justified the promulgation of the Ordinance and· the passing of the enactment. Of course, each party tried to apportion the blame on the other. Whosoever be responsible, the fact remaips that the prevailing situation in the Auroville was far from satisfac· tory. The amount donated for the construction of the cultural t township Auroville and other institutions was to the tune of Rs. 3 D crores. It was the responsibility of the Government to see that the amount was not mis·utilised and the. management was properly carried out. So, the basis of.the argument that the facts as pointed out in the preamble were no~ est is not correct.

Mr. Venugopal tried to explain the various adverse remarks E made by the aud_iiors. On a perusal of the audit report, which. is a voluminous one, all we can say is that on the facts found by the audit committee, the report is rather a mild one. There seems to be serious irregularities in the accounts. A substantial amount received by way of donation.s bad not been pr\iperly spent, there being mis· utilisation and diversion of the funds. · F

The Attorney·General appearing for the Union of India con· tended that even assuming for the sake of argument, but not con· ceding thattbe facts brought to the notice of the legislature were wrong, it will not be open to the Court to hold the Act to be bad on. G that account.

We ·find considerable force in this contention. The Court would' not do so even in case of a litigation which has become final on the ground that the facis or the evidence produced in the case were not correct. The Parliament had to apply its mind on _the facts before it.

~20 : SUPREME rotni.t RB~Ol!.ts (198~] I s.<:.!l.

A The Attorney-General also raised a sort of preliminary objec- tion on behalf of the Union of India, thai-in view of Art. 31A the petitioners could not challenge the Act on the ground of contraven· tion of Art. 14 of the Constitution. In so far as it is material for the purposes of this case, Art. 3 lA reads :

B "3IA. (1) Notwithstanding anything contained in article 13, no Jaw providing for-

(a) ........................................................ ' .. (b) the taking over of the management of any property by the State for a limit~d period either in the public c interest or in order to assure the proper management of the property,

(d) .................................. . D (e) ..................................................................... ..

shall be deemed to be void on the ground that it is inconsis- tent with, ·or takes away or abridges any of the rights conferrea by article 14 or article 19."

We find this argument to be plansible but instead of expressing any concluded opinion on this point we preferred to deal with the various contentions raised by Mr. Venugopal on Art. 14 of the. Constitution in view of the importance of the _question involved in this case. / j. A subsidiary point was further submitted by Mr.. Venugopal that no qualifications have been prescribed and, iherefore any person could be appointed as an Administrator. We can normally assume that the Government would certainly appoint a responsible person G as an administrator especially when there is a heavy stake in which the Government of India is also involved inasmuch as at the instance of the Government the UNESCO gave financial support to the institution.

H It was further submitted that the report of the Commiitee was a tainted one as the Chairman, Kulkarni and the Secretary were parties. There is no foundation ·for this submission.

S.P, MIITAL v. UNION (Misra, J.) 821

We, therefore,. hold that the impqgned Ordinance. or the impugned Act is not violative of Article 14 of the Constitution.

Now we tum to the last but not the least important ground of . ma/a fides. The Act is sought to be challenged on the ground that it is 'rriala fide. This argument is on the basis. that Kirit Joshi, who had his own axe to grind in the matter, was instrumental in getting the imp.ugned Ordinance and the Act passed. Th.is argument bas been advanced only fo be rejected. Allegations about ma/a fides are more easily made than made out. It will be too much to contend · that Kirit Joshi, who was only an Educational Adviser to the Government of India, .Ministry of Education and Culture (Depart· c ment of Educatio'!), was responsible for the impugned enactment. The impugned enactment was passed following the due procedure and merely because he made a complaint about the situatfon pre- vailing in the management of Auroville .and the Society, it cannot be said that the impugned enactment .was passed at his behest. D For the reasons given above all the writ petitions must fail. In view of the final decision on the writ P.etitions themselves, it is. not necessary to pass any specific order in the appeal filed agafost the interim order in one of the writ petitions. The' parties in the . · ·circumstances of the case are left to bear their own costs. E S.R. ' Petitions dismissed.