K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR.

A The Judgment of the Court was delivered by ASHOK BHUSHAN, J.

1Copy pinpoint1. Leave granted. These two appeals have been filed against the common judgment B of Madras High Court dated 22.03.2018 by which the writ petitions filed by the appellants questioning the nominations made by the Central Government in exercise of power under Section 3(3) of the Government of Union Territories Act, 1963 (hereinafter referred to as “Act, 1963”), to the Legislative Assembly of Union Territory of Puducherry has been dismissed. C

2Copy pinpoint2. The background facts leading to filing of the writ petitions giving rise to these appeals are as follows:- 2.1 Part VIII of the Constitution of India dealing with the Union Territories was amended by Constitution (Fourteenth D Amendment) Act, 1962 by inserting Article 239A, which provides for “creation of local Legislatures or Council of Ministers or both for certain Union Territories.” Article 239A provided that Parliament, may by law, create for the Union Territory of Pondicherry, a body, whether elected or partly nominated and partly elected, to function as a E Legislature for the Union Territory, or a Council of Ministers, or both with such constitution, powers and functions, in each case, as may be specified in the law. After the above Constitutional amendment inserting Article 239A, the Parliament enacted Government of Union Territories Act, F 1963 to provide for Legislative Assembly and Council of Ministers for certain Union Territories and for certain other matters. 2.2 At the time of commencement of Act, 1963, there were large number of Union Territories, which were to be governed by the Act, 1963. Gradually, several Union G Territories were upgraded to the status of a State and as on date, the definition of Union Territories under Section 2(h) defines “Union Territory” as the Union Territory of Puducherry. Section 3 of the Act, 1963 provides for Legislative Assemblies for Union territories and their composition. According to Section 3(2), the total number

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of seats in the Legislative Assembly of the Union territory to be filled by persons chosen by direct election shall be thirty and as per Section 3(3), the Central Government may nominate not more than three persons, not being persons in the service of Government, to be members of the Legislative Assembly of the Union territory. B 2.3 Election for filling thirty seats in the Legislative Assembly of Puducherry was held in the year 2016. Indian National Congress, who bagged fifteen out of thirty seats with support of DMK and one independent candidate has formed the Government in Puducherry. Writ Petition (C) No. 16275 of 2017 as K. Lakshminarayanan Vs. Union of India & C Anr. was filed in the Madras High Court praying for a writ of mandamus forbearing the respondents from in any manner nominating or filling up the nominated seats of Members for the Puducherry Legislative Assembly except with the consultation and choice of the elected Council of D Ministers. The writ petition was filed on 27.06.2017. The Government of India, Ministry of Home Affairs had issued a notification on 23.06.2017 nominating Shri V. Saminathan, Shri K.G. Shankar and Shri S. Selvaganabathy as members of the Legislative Assembly of the Union Territory of Puducherry. An application for amendment was filed in the writ petition praying for quashing the notification dated 23.06.2017. Another Writ Petition (C) No. 18788 of 2017 – S. Dhanalakshmi Vs. Union of India & Ors. was filed in the Madras High Court praying for following reliefs:- “Writ of Certiorarified Mandamus calling for the records on the file of the third respondent relating to the impugned Notification bearing Ref. No. F.No.U-11012/1/2014- UTL dated 23-06-2017 and quash the same and consequently direct the respondents 1 to 3 to nominate the members to the Puducherry Legislative Assembly G only with the consultation and choice of the elected Council of Ministers and pass such further or other orders and thus render justice”. 2.4 On 13.11.2017, the Secretary of Puducherry Legislative Assembly communicated the decision of the Speaker of H

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A the Legislative Assembly that the nominated members could not be recognised as members of the Assembly, having been appointed in contravention of the Constitution and the Act,

1963. The communication dated 13.11.2017 was challenged by three nominated members by filing three separate writ petitions being Writ Petition Nos. 29591, 29592 and 29593 B of 2017. All the writ petitions, i.e. Writ Petition No. 16275 of 2017, Writ Petition No. 18788 of 2017 and Writ Petitions No. 29591, 29592 and 29593 of 2017 were heard and decided by Division Bench of Madras High Court vide its judgment dated 22.03.2018. The Writ Petition Nos. 16275 C of 2017 and 18788 of 2017 challenging the notification dated 23.06.2017 has been dismissed, whereas the Writ Petition Nos. 29591, 29592 and 29593 have been allowed. Two separate but concurring judgments have been delivered by Division Bench of Madras High Court. Operative portion of the judgment delivered by Justice M. Sundar, with which D judgment, Chief Justice expressed absolute agreement, was to the following effect:- “W.P. No. 16275 of 2017 filed by the Whip and W.P. No. 18788 of 2017 filed by PIL petitioner are dismissed. Writ petitions, being W.P. Nos. 29591 to 29593 of 2017 E filed by nominated MLAs are allowed. Considering the nature of the matter and in the light of the trajectory this litigation has taken, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.” F 2.5 Against the aforesaid Division Bench judgment of Madras High Court dated 22.03.2018, only two appeals have been filed, one by K. Lakshminarayanan and other by S. Dhanalakshmi challenging the judgment of Division Bench by which Writ Petition No. 16275 of 2017 has been G dismissed and another appeal has been filed against the judgment of Division Bench in Writ Petition No. 18788 of 2017 by which writ petition was dismissed. In so far as judgment of Division Bench in Writ Petitions Nos. 29591, 29592 and 29593 of 2017 filed by three nominated MLAs, by which their writ petitions were allowed quashing the H

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decision of the Speaker dated 23.11.2017, no appeals have been filed.

3Copy pinpoint3. We have heard Shri Kapil Sibal and Shri Salman Khurshid, learned senior counsel appearing for the appellants. We have heard Shri K.K. Venugopal, learned Attorney General for the Union of India. Shri Ranjit Kumar, learned senior counsel has been heard for the respondents.

4Copy pinpoint4. Shri Kapil Sibal challenging the nominations made by the Central Government has raised various submissions. Shri Sibal submits that the Government of Puducherry has vital interest in the constitution of the Assembly, since it enjoys the confidence of Legislative Assembly and accountable to the people. The Government of Puducherry cannot be a stranger in the nominations made to the Assembly. He submits that nominations of the members of the Assembly must emanate from the Government of Puducherry and should have concurrence of the Government. It was open for the Central Government to adopt any fair procedure for nominating the members. The nominees could have been originated from Government of Puducherry. The President could have asked the names from the Government of Puducherry. He submits that let this Court decide on a valid procedure, which is to be adopted while making nominations by Central Government in the Legislative Assembly of Puducherry. He further submits that there has been at least six occasions when elected Government of Puducherry was consulted before nominating the members in the Legislative Assembly by the Central Government. In the year 2001, when Lieutenant Governor without consulting the Government of Puducherry forwarded the names for nomination to the Assembly, objection was raised by the Government of Puducherry and the proposed list of nominated members was referred back to the Lieutenant Governor for lack of consultation with the elected Government. He submits that earlier incidents when the Government of Puducherry was consulted before nomination has taken shape of a constitutional convention, which is nothing but a constitutional law to be followed by all concerned. He submits that while making nominations vide notification dated 23.06.2017, the above constitutional convention has not been followed, which renders the nomination illegal and unsustainable. He further submits that in the counter affidavit filed by the Union of India before the High Court, it was stated that Lieutenant Governor has not sent any nominations to the Central Government and H

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A Central Government on its own has made nominations under Section 3(3) of the Act, 1963. Shri Kapil Sibal submits that the expression “Central Government” as occurring in Section 3(3) of the Act, 1963 has not been correctly understood by the High Court. He submits that according to the definition given under Section 3(8) of the General Clauses Act, 1897, the Central Government means the President and include in relation to the administration of a Union Territory, the administrator thereof. It is submitted that the President has framed Rules of Business of the Government of Puducherry, 1963, Rule 4 of which Rules is relevant for the present case. It is submitted that as per the Business Rules, it is the administrator, who was required to make nominations that too after consultation of Council of Ministers. Shri Sibal refers to Rule 4(2) and Rule 48 of the Business Rules to buttress his submission. It is submitted that the nomination to Legislative Assembly is fully covered by expression “remaining business of the Government” as occurring in Rule 4(2). Therefore, Rule 4(2) read with Chapter IV of the Rules of Business, cover the entire gamut of executive power exercisable by the President D under Article 239 of the Constitution. Since Section 3(3) of the Act, 1963 refers to “Central Government”, thereby indicating exercise of power in terms of Article 239 of the Constitution, Rule 4(2) read with Chapter IV of the Rules of Business of the Government of Puducherry would apply. Therefore, the power to nominate members under Section E 3(3) of the Act, 1963 has to necessarily involve the administrator acting in accordance with Chapter IV.

5Copy pinpoint5. Shri Sibal further submits that in event interpretation is accepted that the Government of Puducherry has no role to play in the nominations of members to Legislative Assembly, it is de-establishing cooperative F federalism. It is submitted that federalism has been recognised as a basic feature of the Constitution and it is Government, which is democratically formed and reflect the will of the people and responsible to the Legislature, who has to initiate and concur in the members to be nominated in the Legislative Assembly. In the representative democracy, the Government is not a stranger to the process of nomination. One G more submission which has been pressed by Shri Sibal is that even though nominated members may have right to vote in the proceedings of Assembly there are two exceptions to such right of vote, i.e., (i) voting on budget, and (ii) voting on no-confidence motion against the Government. He submits that nominated members shall have no right to H vote in above two subjects. Shri Kapil Sibal has further very candidly in

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his submission, stated that he is not pursuing the challenge to Section A 3(3) of the Act, 1963 nor he is carrying further the submission made before the High Court on the ground of eligibility of members, who have been nominated in the Legislative Assembly. Shri Sibal has placed reliance on various judgments of this Court, which shall be referred to while considering the submissions in detail. B

6Copy pinpoint6. Shri K. K. Venugopal, learned Attorney General replying the submissions of Shri Sibal submits that the Union Territory is a Territory of a Union in which Central Government can nominate unless the Constitution or law provides for any consultation of Government of Puducherry. According to Article 239, it is the President, who has to administer Union Territory. Lieutenant Governor, who is an administrator C appointed by the President to administer the Union Territory of Puducherry, govern the Union Territory as per instructions and directions of the President. Neither Lieutenant Governor nor Legislative Assembly can assert themselves in governing the Union Territory. The Act, 1963 is a law framed by Parliament in exercise of power under Article 239A D of the constitution. The powers and functions of the Legislative Assembly are such as specified in the Act, 1963. The provision empowering nominations in the Legislative Assembly by the Central Government in no manner affect the principle of federalism or cooperative federalism. The Act, 1963 or any Constitutional provision does not provide for any consultation of Government of Puducherry for making nomination in the E Legislative Assembly by the Central Government. There are large number of Constitutional provisions, which provide for consultation, whereas no Constitutional provision provide for consultation of Government of Puducherry in making nomination by Central Government nor any such right of consultation, is decipherable from the Act, 1963. F Reading consultation in nomination shall upset the Constitutional balance. Appellants want to read the word “consultation” in Section 3(3) of Act, 1963, which has been consciously withheld. When the provisions of Act, 1963 indicate a primacy of Central Government, the submission that nomination should be made with the concurrence of Government of Puducherry is wholly unfounded. The Union Territory of Puducherry is G wholly subservient to the President.

7Copy pinpoint7. Shri K.K. Venugopal further submits that Council of Ministers of Government of Puducherry is a Agency devised by President of India.

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A Section 50 of Act, 1963 gives absolute power to the President to issue any direction to the Administrator and his Council of Ministers. It is submitted that there is no kind of any limit in the extent of power as envisaged under Section 50. Shri Venugopal referred to various other statutes where provisions envisaged for issuing directions by Central Government or other authorities. He submits that in various statutory provisions, directions are hedged by several conditions and in some of the statutes consultation is also envisaged.

8Copy pinpoint8. Shri Ranjit Kumar, learned senior counsel appearing for nominated MLAs submits that the Constitution itself provides that Legislative Assembly of Union Territory of Puducherry shall be partly elected and partly nominated and Parliament enacted Act, 1963, for both the elected and non-elected members. He further submits that Section 14 of the Act, 1963 which deals with disqualification of members, does not contemplate that if nomination is made without consultation of Legislative Assembly, the members will be disqualified. Hence, non- D consultation with Council of Ministers of Legislative Assembly cannot be treated to be as any disqualification.

9Copy pinpoint9. Shri Ranjit Kumar further submits that Section 33 provides that the Legislative Assembly of the Union territory may make rules for regulating and conducting its business. Similarly, Section 46 provides E that the President shall make the rules for allocation of business to the Ministers and for the more convenient transaction of business. He submits that both in the rules framed under Act, 1963 as well as Section 36, there is no rule providing consultation of the Council of Ministers or Chief Minister before making any nomination in the Legislative Assembly by the Central Government. F

10Copy pinpoint10. He further submits that Legislative Assembly has no power to make any law to regulate nomination to be made in the Assembly. It is only the Parliament who is empowered to make law under Article 239A regulating constitution of the Legislative Assembly. When the legislative power is not there with the Union Territory of Puducherry, no executive G power can be exercised by the Legislative Assembly of the Puducherry. He further submits that power of nomination which shall flow from law making power unless Article 239A and legislative power will be co- extensive with the executive power.

11Copy pinpoint11. Shri Kapil Sibal in his rejoinder submission replying the H

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submissions of learned Attorney General as well as Shri Ranjit Kumar, A submits that the appellants are questioning the procedure adopted by Central Government for nomination. He further reiterates that Central Government under Section 3(3) of Act, 1963 is to mean the President who in turn delegated his power to its Administrator, thus, nomination has to emanate from Administrator who is to Act on the advise of the B Council of Ministers. He submits that the Rules of Business framed by the President are Rules of Business both under Article 239 as well as under Section 44 and under Section 46 of the Act, 1963, hence, the Rules of Business relate to entire executive functions of the Government of Puducherry.

12Copy pinpoint12. Learned counsel for the parties in support of their respective C submissions have relied on various judgments of this Court which shall be referred to while considering the submission in detail.

13Copy pinpoint13. From the submissions raised by the learned counsel for the parties and the materials on record following are the main issues which arise for consideration in these appeals: D

(1) Whether the expression “Central Government” as occurring in Section 3(3) of the 1963 Act means the Administrator, hence, it is the Administrator who has to exercise the power of nomination that too on the aid and advise of the Council of Ministers of the Union Territory of Puducherry? E

(2) Whether the nomination in the Legislative Assembly of the Puducherry is the business of the Government which has to be transacted in accordance with Rule 4 sub-Rule (2) read with Rule 48 of the Rules of Business of the Government of Puducherry,

1963. As per which Rule the Administrator was required to consult F either Council of Ministers or Chief Minister before discharging his functions under Rule 4(2)? (3) Whether nomination by Central Government in the Legislative Assembly without concurrence of Government of Union Territory of Puducherry violates principles of Federalism and co-operative G Federalism? (4) Whether there is a constitutional convention to consult the Government of Puducherry before making any nomination by the Central Government on the strength of the fact that on six earlier occasions when the nominations were made, the Central H

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A Government has consulted the Government of Puducherry before making nominations? (5) Whether the Central Government while exercising its power of nomination under Section 3(3) of 1963 Act is obliged to consult the Council of Ministers/Chief Minister of Government of Union B Territory of Puducherry and the nomination by Central Government can only be made with the concurrence of the Government of Puducherry? (6) Whether recommendations made by the Madras High Court in so far as recommendations made in paragraph 5(iv) of the C impugned judgment is concerned, are unsustainable and not in accordance with law? (7) Whether the nominated members in the Legislative Assembly shall have no voting right in two matters, i.e., (i) budget and (ii) no- confidence motion against the Government? D Issue No.1

14Copy pinpoint14. The submission made by Shri Sibal is that the expression “Central Government” used under Section 3(3) of the Act, 1963 means the administrator. In consequence, he contends that the power of nomination in the Legislative Assembly of Puducherry is to be exercised E by the administrator on the aid and advise of the Council of Ministers of Union Territory of Puducherry. The Act, 1963 does not define the expression “Central Government”. The provision of General Clauses Act, 1897 had to be looked into to find out the definition of the expression “Central Government”. Section 3(8) of the General Clauses Act, 1897 F defines the expression “Central Government”. The relevant portion of Section 3(8) is as follows:- “3(8) “Central Government” shall,— (a) ………… (b) in relation to anything done or to be done after the G commencement of the Constitution, mean the President; and shall include,— (i) …………… (ii) …………… H (iii) in relation to the administration of a Union territory, the

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administrator thereof acting within scope of the authority given to him under article 239 of the Constitution;

15Copy pinpoint15. In Section 3(8)(b) Central Government has been defined as to “mean the President”. The next phrase used after the semi-colon is “and shall include”. The definition of Central Government given in Section 3(8) is a restrictive and exhaustive definition. When the definition uses the word “mean the President”, the clear intention is that Central Government is the President, the next phrase “and shall include in relation to the administration of a Union territory, the administrator thereof acting within the scope of the authority given to him under article 239 of the Constitution” has been added with a purpose and object. Article 239 of the Constitution provide that save as otherwise provided by Parliament C by law, every Union territory shall be administered by the President acting, to such extent as he thinks fit, through an administrator to be appointed by him with such designation as he may specify. As per definition of Section 3(8)(b)(iii) administrator shall include in the definition of Central Government when in relation to the administration of a Union D territory, the administrator thereof acting within the scope of the authority given to him under article 239 of the Constitution. Thus, the administrator will be Central Government when he acts within the scope of the authority given to him under article 239. Under Article 239, Rules of Business have been framed as noticed above, which has been brought on record as Annexure P1 to Civil Appeal of K. Lakshminarayanan. Executive E functions of the administrator as contemplated by Rule 4(2) read with Rule 48 shall include a variety of the executive functions, which he is authorised to discharge. The executive functions may include: (i) the business of executive functions in relation to the subjects on which Legislative Assembly of the Union Territory of Puducherry is entitled to F make law; (ii) the executive functions entrusted to the Government of Puducherry, to be exercised in the name of the administrator, entrusted/ delegated under any Parliamentary law; (iii) functions to be discharged by administrator under any special or general order issued by the President of India; (iv) functions to be discharged by administrator under the instructions issued by the Central Government from time to time. A G perusal of the Rules of Business, which have been framed under Article 239 as well as Section 46 of the Act, 1963 does not expressly indicate that in so far as power of nomination to be exercised by the Central government under Section 3(3), the administrator or Government of Puducherry has been authorised or delegated any function in the above H

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A regard. No order of the President or Central Government has been brought on the record on the basis of which it can be concluded that with regard to right of a nomination to be exercised by the Central Government under Section 3(3) of Act, 1963, any function has been delegated, authorised or instructed to the administrator. The definition of Central Government given under Section 3(8)(b)(iii), which means the President B cannot be given a go bye to rely on the next expression “shall include” the administrator. The context of subject has to be looked into while finding out as to whether in context of Section 3(3), the Central government shall mean the President or the administrator.

16Copy pinpoint16. This Court had occasion to interpret the definition clause in C Jagir Singh and Others Vs. State of Bihar and Others, (1976) 2 SCC 942. In the above case, the Court was considering the definition of expression “owner” as defined in Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961. In para 11 of the judgment, the definition has been extracted, which is to the D following effect:- “11. The expression “owner” is defined in the Bihar Act in Section 2(d) thereof as follows: “ ‘Owner’ means the owner of a public service motor vehicle in respect of which a permit has been granted by a Regional or E State Transport Authority under the provisions of the Motor Vehicles Act, 1939 and includes the holder of a permit under the said Act in respect of a public service motor vehicle or any person for the time being in charge of such vehicle or responsible for the management of the place of business of such owner.”

17Copy pinpoint17. The definition of owner in the Bihar Act also used two expression, first ‘Owner’ means the owner of a public service motor vehicle and second it includes the holder of a permit under the said Act in respect of a public service motor vehicle or any person for the time being in charge of such vehicle or responsible for the management of G the place of business of such owner. The provisions of Maharashtra Tax on Goods (Carried by Road) Act, 1962 and other Acts were also under consideration. In Maharashtra Act, the “operator” means any person whose name is entered in the permit as the permit holder or any person having the possession or control of such vehicle. It was contended before the Court that words “or any person for the time being in charge H

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of such vehicle” in the definition of “owner” indicate that the transport A or booking agencies which would take the public service motor vehicle on hire would be owners within the definition of the word without being permit holders in respect of these public service motor vehicles. The contention to read definition in particular manner was rejected by this Court. In paragraph Nos. 19 and 21, following has been held:- B “19. The definition of “owner” repels the interpretation submitted by the petitioners that the definition means not only the owner who is the permit holder but also a booking agency which may be in charge of the vehicle without being a permit holder. The entire accent in the definition of owner is on the holder of a permit in respect of the public service motor vehicle. It is the permit which entitles the holder to ply the vehicle. It is because the vehicle is being plied that the passengers and consignors of goods carried by that vehicle become liable to pay not only fare and freight to the owner but also tax thereon to the owner. The words “or any person for the time being in charge of such vehicle or responsible for the management of the place of business of such owner” indicate that the permit holder will include any person who is in charge of such vehicle of the permit holder or any person who is responsible for the management of the place of business of such owner. The owner cannot escape the liability by stating that any person is for the time being in charge of such vehicles, and, therefore, such person is the owner and not the permit holder.

21. The definition of the term “owner” is exhaustive and intended to extend the meaning of the term by including within its sweep bailee of a public carrier vehicle or any manager acting on behalf of the owner. The intention of the legislature to extend the meaning of the term by the definition given by it will be frustrated if what is intended to be inclusive is interpreted to exclude the actual owner.”

18Copy pinpoint18. It is further relevant to notice that definition clause in Section 3 of the General Clauses Act, 1897 begins with the expression “In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context”. Thus, all definitions given under Section 3 are subject “unless there is anything repugnant in the subject or context”. Thus, the subject or context has to be looked into to apply the definition given in Section 3(8)(b). This Court in Jagir Singh (supra) has also held that H

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A while interpreting the definition clause, the context, the collocation and the object of words relating to such matter has to be kept in mind while interpreting the meaning intended to be conveyed by the use of the word under a circumstance. In paragraph No. 20 following has been laid down:- B “20. The general rule of construction is not only to look at the words but to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning according to what would appear to be the meaning intended to be conveyed by the use of the words under the circumstances. Sometimes definition clauses create qualification by expressions like “unless the context otherwise requires”; or “unless the contrary intention appears”; or “if not inconsistent with the context or subject-matter”. “Parliament would legislate to little purpose,” said Lord Macnaghten in Netherseal Co. v. Bourne (1889) 14 AC 228, “if the objects of its care might supplement or undo the work of legislation by making a definition clause of their own. People cannot escape from the obligation of a statute by putting a private interpretation on its language.” The courts will always examine the real nature of the transaction by which it is sought to evade the tax.”

19Copy pinpoint19. Another judgment of this Court in Black Diamond Beverages and Another Vs. Commercial Tax Officer, Central Section, Assessment Wing, Calcutta and Others, (1998) 1 SCC 458 is also relevant in the present context. In the above case, this Court had occasion to consider the definition of “Sale price” as occurring in Section 2(d) of West Bengal Sales Tax Act, 1954. The definition has been quoted in F paragraph No.5 of the judgment, which is to the following effect:- “5. The 1954 Act generally provides for levy of a single-point tax at the first stage on commodities notified under Section 25 of that Act. On the other hand, the 1941 Act is a general statute providing for multipoint levy of sales tax on commodities not covered by the G 1954 Act. Sub-clause (d) of Section 2 of the 1954 Act reads as follows: “2. (d) ‘sale-price’ used in relation to a dealer means the amount of the money consideration for the sale of notified commodities manufactured, made or processed by him in West Bengal, or H

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brought by him into West Bengal from any place outside West A Bengal, for the purpose of sale in West Bengal, less any sum allowed as cash discount according to trade practice, but includes any sum charged for containers or other materials for the packaging of notified commodities;”

20Copy pinpoint20. The above definition also contain two expression means and B includes. The first part of the definition defines the meaning of the word ‘sale-price’ as the amount of the money consideration for the sale. This Court held that interpretation of the first part of the definition in no way control or affect the other part of the definition and include other part. In paragraph Nos. 7 and 8, following has been laid down:- C “7. It is clear that the definition of “sale price” in Section 2(d) uses the words “means” and “includes”. The first part of the definition defines the meaning of the word “sale price” and must, in our view, be given its ordinary, popular or natural meaning. The interpretation thereof is in no way controlled or affected by the second part which “includes” certain other things in the definition. D This is a well-settled principle of construction. Craies on Statute Law (7th Edn., 1.214) says: “An interpretation clause which extends the meaning of a word does not take away its ordinary meaning…. Lord Selborne said in Robinson v. Barton-Eccles Local Board AC at p. E 801: ‘An interpretation clause of this kind is not meant to prevent the word receiving its ordinary, popular, and natural sense whenever that would be properly applicable, but to enable the word as used in the Act … to be applied to something F to which it would not ordinarily be applicable.’ ” (emphasis supplied) Therefore, the inclusive part of the definition cannot prevent the main provision from receiving its natural meaning. G

8. In view of the above principle of construction, the first part of the definition of sale price in Section 2(d) of the 1954 Act must be given its own meaning and the respondent’s counsel is therefore right in urging that the first part of Section 2(d) which is similar to the first part of Section 2(p) in the Rajasthan Sales Tax Act, 1954, H

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A must be given the same meaning given to similar words in Hindustan Sugar Mills v. State of Rajasthan, (1978) 4 SCC

271. What the said meaning is we shall consider separately. If, therefore, by virtue of Hindustan Sugar Mills case the first part is to be interpreted as bringing within its natural meaning the “freight charges” then the contention for the appellants that like “packaging charges” these “freight charges” must have also been specifically included in Section 2(d) cannot be accepted.”

21Copy pinpoint21. Thus, it is clear that the definition of Central Government, which means the President is not controlled by the second expression “and shall include the administrator”. The ordinary or popular meaning of the word “the President” occurring in Section 3(8)(b) has to be given and the second part of the definition shall not in any way control or affect the first part of the definition as observed above. In the definition of Central Government, an administrator shall be read when he has been authorised or delegated a particular function under the circumstances as indicated above. No statutory rules or any delegation has been referred to or brought on record under which the administrator is entitled or authorised to make nomination in the Legislative Assembly of the Union Territory of Puducherry. Thus, in the present case, the definition of Central Government, as occurring in Section 3(3) of the Act, 1963 has to be read as to mean the President and not the administrator. The issue is answered accordingly. Issue No.2

22Copy pinpoint22. Relying on Rule 4(2) of the Rules of Business of the Government of Puducherry, 1963 (hereinafter referred to as “Rules of F Business”) read with Rule 48 it is contended that business of Government in the nominations in the Legislative Assembly is covered by Rule 4(2), hence, Administrator is required to consult Council of Ministers or the Chief Minister before taking any decision. The Rules of Business have been framed by the President in exercise of the powers conferred by Article 239 and the proviso to Article 309 of the Constitution, Section 46 G of the Act, 1963 and all other powers enabling the President in this regard. In the Rules of Business, Rule 2(f) means: “the Government of Puducherry”. Rule 3 provides that the business of the Government shall be transacted in accordance with these Rules. Rule 4 on which reliance has been placed by Kapil Sibal is to the following effect: H

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“4. (1) The business of the Government in relation to matters with respect to which the Council is required under section 44 of the Act to aid and advise the Administrator in the exercise of his functions shall be transacted and disposed in accordance with the provisions of Chapter III. (2) The remaining business of the Government shall be transacted and disposed of in accordance with the provisions of Chapter IV. (3) Notwithstanding anything contained in sub-rule (1) and sub- rule (2), prior reference in respect of the matters specified in chapter V shall be made to the Central Government in accordance with the provisions of that Chapter.” C

23Copy pinpoint23. Rule 4(1) refers to the business of the Government in relation to matters with respect to which the Council is required under Section 44 of the Act to aid and advise the Administrator in exercise of his functions. Section 44(1) of the Act, 1963 is as follows: “44. Council of Ministers. (1) There shall be a Council of D Ministers in each Union territory with the Chief Minister at the head to aid and advise the Administrator in the exercise of his functions in relation to matters with respect to which the Legislative Assembly of the Union territory has power to make laws except in so far as he is required by or under this Act to act in his discretion or by or under any law to exercise any judicial or quasi-judicial functions: Provided that, in case of difference of opinion between the Administrator and his Ministers on any matter, the Administrator shall refer it to the President for decision and act according to the decision given thereon by the President, and pending such decision it shall be competent for the Administrator in any case where the matter is in his opinion so urgent that it is necessary for him to take immediate action, to take such action or to give such direction in the matter as he deems necessary. G a[ x x x x] b[ x x x x]”

24Copy pinpoint24. Section 44(1) relates to functions “in relation to matters with respect to which the Legislative Assembly of the Union Territory has power to make laws. There may be other functions of the Government H

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A of Puducherry which do not pertain to functions in relation to matters with respect to which Legislative Assembly of Puducherry has power to make laws. For example, under any Parliamentary law with respect to which Legislative Assembly of Union Territory has no power to make laws, any power delegated to the State Government is authorised or delegated under the Parliamentary laws to exercise any function. B

25Copy pinpoint25. Rule 4(2) obviously refers to “the remaining business of the Government”, which is not covered by Rule 4(1). Rule 48 of the Rules of Business refers to sub-(2) of Rule 4. Rule 48 is as follows: “48. In regard to any matter referred to in sub-rule (2) of rule 4 C and in respect of which no specific provisions has been made in the foregoing rules in this Chapter, the Administrator may, if he deems fit either consult his Council or the Chief Minister, before exercising his powers or discharging his functions in respect of that matter.”

26Copy pinpoint26. As per Rule 48 with regard to matters referred to in sub-rule (2) of Rule 4, the Administrator may, if he deems fit, either consult his Council or the Chief Minister, before exercising of his powers or discharging his functions in respect of that matter. But the question which needs to be answered for the present case is as to whether the nomination of a member in the Legislative Assembly of Puducherry is covered by E expression “remaining business of the Government”. The Government has been defined in Rule 2(f) as “the Government of Puducherry”. The Government occurring in Rule 4(2) cannot be stretched to be Central Government. When Section 3(3) of Act, 1963 empowers the Central Government to nominate not more than three persons to the Legislative F Assembly of the Union Territory, it is the business of the Central Government to make nominations as per Parliamentary law.

27Copy pinpoint27. The business of the Government as occurring in Rule 4 has to be business which under any law is to be performed by the Government of Puducherry. Article 239A of the Constitution provides that Parliament G may by law create a body, whether elected or partly nominated and partly elected, to function as a Legislature for the Union Territory or Council of Ministers or both with such Constitution, powers and functions, in each case, as may be specified in the law.

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 719 [ASHOK BHUSHAN, J.]

28Copy pinpoint28. The expression ‘law’ used in Article 239A(1) is a Parliamentary A law. When the Constitution expressly provides that it is the Parliament which may provide by law, constitution of Legislature for the Union Territory, it is the Parliament alone which can provide for constitution of Legislative Assembly for Union Territory under the Act, 1963. Section 3 does provide for constitution of Legislative Assembly for Union Territory B with thirty members to be elected members and three members to be nominated by the Central Government. When the Parliamentary law as envisaged by Article 239A provides for the constitution of Legislative Assembly of the Union Territory which also includes nomination, the said constitution which also includes nomination can not be the business of the Government of Puducherry. The nominations of the members to C the Legislative Assembly of Puducherry thus can never be covered by expression ‘remaining business of the Government’ as occurring in Rule 4(2). When Rule 4(2) itself is not attracted in reference to the nomination in the Legislative Assembly, there is no occasion of applicability of Rule 48 that is consultation with the Council of Ministers or the Chief Minister D by the Administrator. We, thus, do not find any substance in the submission of Shri Kapil Sibal that nomination in the Legislative Assembly in the Puducherry is the business of the Government of Puducherry and is to be exercised in accordance with Rule 4(2) read with Rule 48. The nomination in the Legislative Assembly in the Puducherry is to be made by the Central Government by virtue of Article 239A read with Section E 3(3) of the Act, 1963.

29Copy pinpoint29. Article 77 of the Constitution deals with “conduct of business of the Government of India”. Article 77 sub-clause (3) provides that “The President shall make rules for the more convenient transaction of the business of the Government of India, and for the allocation among F Ministers of the said business”. In exercise of the power under Article 77(3) the President has made Government of India (Allocation of Business) Rules, 1961 and the Government of India (Transaction of Business) Rules, 1961. Rule 2 and Rule 3 sub-rule (1) of Allocation of Business Rules which are relevant for this case are to the following effect: G

“2. Allocation of Business – The business of the Government of India shall be transacted in the Ministries, Departments, Secretaries and Officers specified in the First Schedule to these rules (all of which are hereinafter referred to as “departments”). H

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A 3. Distribution of Subjects - (1)The distribution of subjects among the departments shall be as specified in the Second Schedule to these Rules and shall include all attached and subordinate offices or other organisations including Public Sector Undertakings concerned with their subjects and Sub-rules (2), (3) and (4) of this Rule. xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx.”

30Copy pinpoint30. The Second Schedule includes “Ministry of Home Affairs (Grih Mantralaya), which has several departments from A to E. B is “Department of States (Rajya Vibhag). Under heading (III) Union Territories have been mentioned. Under Para 7 sub-clause (b) Union of D Territory of Pondicherry is mentioned. Relevant extract of Second Schedule under the Ministry of Home Affairs, Department of States is as follows: “(III) Union Territories

7. Union of Territories with legislature: E (a) xxx xxx xxx xxx (b) Union Territory of Pondicherry: All matters falling within the purview of the Central Government in terms of provisions contained in Part VIII of the Constitution in so far as these relate to the Union Territory of Pondicherry and the Government of Union Territories Act, 1963 except all such matters as have been under these rules specifically been assigned to any other Ministry or Department of the Government of India.”

31Copy pinpoint31. Para 7(b) expressly provides that all matters falling within the purview of the Central Government in terms of provisions contained in Part VIII of the Constitution in so far as these relate to the Union Territory of Puducherry and the Government of Union Territories Act, 1963 are assigned to the Department of States. Thus, under the Act, 1963 all matters falling within the purview of the Central Government including power of nomination given to the Central Government under Section H

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 721 [ASHOK BHUSHAN, J.]

3(3) are assigned under the Allocation of Business Rules by the President A of India to Ministry of Home Affairs, Department of States. Thus, power under Section 3(3) of Act, 1963 has to be transacted in the Ministry of Home Affairs, Department of States. For Transaction of Business, the President has framed Government of India (Transaction of Business) Rules, 1961. Rule 3 of (Transaction of Business) Rules, 1961 which is B relevant is as follows: “3. Disposal of Business by Ministries. - Subject to the provisions of these Rules in regard to consultation with other departments and submission of cases to the Prime Minister, the Cabinet and its Committees and the President, all business allotted to a department under the Government of India (Allocation of Business) Rules, C 1961, shall be disposed of by, or under the general or special directions of, the Minister-in-charge.”

32Copy pinpoint32. Thus, as per Transaction of Business Rules, the matter of nomination in the Legislative Assembly of Puducherry not being a matter in regard to consultation with other departments and submission of the cases to the Prime Minister, the Cabinet and its Committees and the President, the above business is to be disposed of by or under the general or special orders or the directions of the Minister-in-charge that is Home Minister.

33Copy pinpoint33. In view of the foregoing discussion, we are of the clear opinion that nomination in the Legislative Assembly of Puducherry is not the Business of the Government of Puducherry. It is a business of Central Government as per Section 3(3) of Act, 1963 which is to be carried out in accordance with the Government of India (Allocation of Business) Rules, 1961 and Government of India (Transaction of Business) Rules, F

1961. The issue is answered accordingly. Issue No. 3 Whether Principles of Federalism or Cooperative Federalism has been violated in the present case? G

34Copy pinpoint34. The Constitution of India is a written Constitution, which came into being after long deliberations by the men of eminence representing the aspirations and culture of our ancient nation. Before Constitution makers, various Constitutions of the world were there to be looked into, incorporated and relied on. Our Constitution makers have taken best H

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A part of the Constitution of different countries including USA, Australia, Germany, Canada and Others. When the draft Constitution was being debated in the Constituent Assembly, one of the relevant issue to be deliberated, pondered upon and decided was the nature of Indian Constitution. Whether Constitution should be one, which is being followed in Federal countries like USA or it should be a Unitary Constitution, was B deliberated and pondered. Dr. B.R. Ambedkar, Chairman of the Drafting Committee after noticing the characteristics of Unitary Constitution and Federal Constitution categorically stated that draft Constitution is a Federal Constitution. In the deliberation of 04.11.1948, Vol. VII Page 33, following was said by Dr. B.R. Ambedkar;- C “Two principal forms of the Constitution are known to history - one is called Unitary and the other Federal. The two essential characteristics of a Unitary Constitution are:(1) the supremacy of the Central Polity and (2) the absence of subsidiary Sovereign polities. Contrariwise, a Federal Constitution is marked: (1) by the existence of a Central polity and subsidiary polities side by side, and (2) by each being sovereign in the field assigned to it. In other words. Federation means the establishment of a Dual Polity. The Draft Constitution is, Federal Constitution inasmuch as it establishes what may be called a Dual Polity. This Dual Polity under the proposed Constitution will consist of the Union at the Centre and the States at the periphery each endowed with sovereign powers to be exercised in the field assigned to them respectively by the Constitution………..”

35Copy pinpoint35. Dr. Ambedkar further said that there are marked differences with the American Federation. He said that all federal systems including the American are placed in a tight mould of federalism. It cannot change its form and shape no matter what are the circumstances. Our draft Constitution can be both Unitary as well as Federal according to time and circumstances. Dealing with the essential characteristics of the Federal Constitution, Dr. Ambedkar Said:- G “…………………. A Federal Constitution cannot but be a written Constitution and a written Constitution must necessarily be a rigid Constitution. A Federal Constitution means division of Sovereignty by no less a sanction than that of the law of the Constitution between the Federal Government and the States, with two H necessary consequences (1) that any invasion by the Federal

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 723 [ASHOK BHUSHAN, J.]

Government in the field assigned to the States and vice versa is a A breach of the Constitution and (2) such breach is a justiciable matter to be determined by the Judiciary only………………….”

36Copy pinpoint36. It is also relevant to notice that before the Constituent Assembly, complaint was raised by the members that there is too much of centralisation in the Union. Replying the above complaint, Dr. Ambedkar B clarified that legislative and executive authority, is partitioned between the Centre and the States.

37Copy pinpoint37. Dr. Ambedkar in deliberations dated 25.11.1949, Vol. XI Page 976 said:- “There is only one point of constitutional import to which I propose to make a reference. A serious complaint is made on the ground that there is too much of centralization and that the States have been reduced to Municipalities. It is clear that this view is not only an exaggeration, but is also founded on a misunderstanding of what exactly the Constitution contrives to do. As to the relation between the Centre and the States, it is necessary to bear in mind the fundamental principle on which it rests. The basic principle of Federalism is that the Legislative and Executive authority is partitioned between the Centre and the States not by any law to be made by the Centre but by the Constitution itself. This is what Constitution does. The States under our Constitution are in no way dependent upon the Centre for their legislative or executive authority. The Centre and the States are co-equal in this matter. It is difficult to see how such a Constitution can be called centralism. It may be that the Constitution assigns to the Centre too large field for the operation of its legislative and executive authority than is to be found in any other federal Constitution. It may be that the residuary powers are given to the Centre and not to the States. But these features do not form the essence of federalism. The chief mark of federalism as I said lies in the partition of the legislative and executive authority between the Centre and the Units by the Constitution. This is the principle embodied in our constitution. There can be no mistake about it.

38Copy pinpoint38. The nature and character of the Constitution came for consideration before this Court in several Constitution Benches, where this Court noted the fundamental feature of the Constitution of India. A seven-Judge Constitution Bench of this Court in Special Reference H

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A No.1 of 1964, AIR 1965 SC 745 held that essential characteristics of federalism is the distribution of executive, legislative and judicial authorities among bodies, which are independent of each other. In paragraph 39, following has been laid down:- “39. Our legislatures have undoubtedly plenary powers, but these powers are controlled by the basic concepts of the written Constitution itself and can be exercised within the legislative fields allotted to their jurisdiction by the three Lists under the Seventh Schedule; but beyond the Lists, the legislatures cannot travel. They can no doubt exercise their plenary legislative authority and discharge their legislative functions by virtue of the powers conferred on them by the relevant provisions of the Constitution; but the basis of the power is the Constitution itself. Besides, the legislative supremacy of our legislatures including the Parliament is normally controlled by the provisions contained in Part III of the Constitution. If the legislatures step beyond the legislative fields assigned to them, or acting within their respective fields, they trespass on the fundamental rights of the citizens in a manner not justified by the relevant articles dealing with the said fundamental rights, their legislative actions are liable to be struck down by courts in India. Therefore, it is necessary to remember that though our legislatures have plenary powers, they function within the limits prescribed by the material and relevant provisions of the Constitution.”

39Copy pinpoint39. In the landmark judgment of this Court in Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225 a new dimension was given to the constitutional principles. This Court by majority judgment declared that the basic feature of the Constitution could not be amended by a constitutional amendment. Sikri, C.J. while delivering the majority judgment had held that federal character of the Constitution is one of the basic structures of the Constitution.

40Copy pinpoint40. Shelat and Grover, JJ. while delivering concurring opinion had also stated that our Constitution has all essential elements of federal structure. In para 486 following was stated: (Kesavananda Bharati case, SCC pp. 408-09) “486. The Constitution has all the essential elements of a federal structure as was the case in the Government of India Act, 1935, H the essence of federalism being the distribution of powers between

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 725 [ASHOK BHUSHAN, J.]

the federation or the Union and the States or the provinces. All A the legislatures have plenary powers but these are controlled by the basic concepts of the Constitution itself and they function within the limits laid down in it (Per Gajendragadkar, C.J. in Special Reference No. 1 of 196435). All the functionaries, be they legislators, members of the executive or the judiciary take oath of B allegiance to the Constitution and derive their authority and jurisdiction from its provisions. The Constitution has entrusted to the judicature in this country the task of construing the provisions of the Constitution and of safeguarding the fundamental rights (SCR at p. 446). It is a written and controlled Constitution.”

41Copy pinpoint41. Again a seven-Judge Bench in State of Rajasthan v. Union C of India, (1977) 3 SCC 592 had an occasion to consider the nature of the Indian Constitution. M.H. Beg, C.J., while delivering majority decision, in para 57 states: (SCC p. 622) “57. The two conditions Dicey postulated for the existence of federalism were: firstly, ‘a body of countries such as the Cantons D of Switzerland, the Colonies of America, or the Provinces of Canada, so closely connected by locality, by history, by race, or the like, as to be capable of bearing, in the eyes of their inhabitants, an impress of common nationality’; and, secondly, absolutely essential to the founding of a federal system is the ‘existence of a E very peculiar state of sentiment among the inhabitants of the countries’. He pointed out that, without the desire to unite there could be no basis for federalism. But, if the desire to unite goes to the extent of forming an integrated whole in all substantial matters of Government, it produces a unitary rather than a federal Constitution. Hence, he said, a federal State “is a political F contrivance intended to reconcile national unity with the maintenance of State rights”. The degree to which the State rights are separately preserved and safeguarded gives the extent to which expression is given to one of the two contradictory urges so that there is a union without a unity in matters of Government. In a G sense, therefore, the Indian union is federal. But, the extent of federalism in it is largely watered down by the needs of progress and development of a country which has to be nationally integrated, politically and economically coordinated, and socially, intellectually and spiritually uplifted. In such a system, the States cannot stand H

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A in the way of legitimate and comprehensively planned development of the country in the manner directed by the Central Government.”

42Copy pinpoint42. Further in para 60 referring to Dr Ambedkar following was stated: (State of Rajasthan case, SCC p. 623) “60. Although Dr Ambedkar thought that our Constitution is federal B “inasmuch as it establishes what may be called a Dual Polity”, he also said, in the Constituent Assembly, that our Constitution-makers had avoided the “tight mould of federalism” in which the American Constitution was forged. Dr Ambedkar, one of the principal architects of our Constitution, considered our Constitution to be C ‘both unitary as well as federal according to the requirements of time and circumstances’.”

43Copy pinpoint43. A nine-Judge Bench had occasion to elaborately consider the nature of the Constitution of India in S.R. Bommai v. Union of India, (1994) 3 SCC 1, Ahmadi, J. referring to federal character of the D Constitution in para 14 following was stated: (SCC pp. 68-69) “14. In order to understand whether our Constitution is truly federal, it is essential to know the true concept of federalism. Dicey calls it a political contrivance for a body of States which desire Union but not unity. Federalism is, therefore, a concept E which unites separate States into a Union without sacrificing their own fundamental political integrity. Separate States, therefore, desire to unite so that all the member States may share in formulation of the basic policies applicable to all and participate in the execution of decisions made in pursuance of such basic policies. Thus the essence of a federation is the existence of the Union F and the States and the distribution of powers between them. Federalism, therefore, essentially implies demarcation of powers in a federal compact.” Ahmadi, J. further stated that the Constitution of India is differently described, more appropriately as “quasi-federal” because it is a mixture G of the federal and unitary elements, leaning more towards the latter.

44Copy pinpoint44. B.P. Jeevan Reddy, J. held that the Founding Fathers wished to establish a strong Centre. In the light of the past history of this Sub-Continent, this was probably a natural and necessary decision. In paras 275 and 276 following was stated: (S.R. Bommai case, SCC H pp. 215-17)

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 727 [ASHOK BHUSHAN, J.]

“275. A review of the provisions of the Constitution shows unmistakably that while creating a federation, the Founding Fathers wished to establish a strong Centre. In the light of the past history of this sub-continent, this was probably a natural and necessary decision. In a land as varied as India is, a strong Centre is perhaps a necessity. This bias towards Centre is reflected in the distribution of legislative heads between the Centre and States. All the more important heads of legislation are placed in List I. Even among the legislative heads mentioned in List II, several of them, e.g., Entries 2, 13, 17, 23, 24, 26, 27, 32, 33, 50, 57 and 63 are either limited by or made subject to certain entries in List I to some or the other extent. Even in the Concurrent List (List III), the parliamentary enactment is given the primacy, irrespective of the fact whether such enactment is earlier or later in point of time to a State enactment on the same subject-matter. Residuary powers are with the Centre. By the 42nd Amendment, quite a few of the entries in List II were omitted and/or transferred to other lists. D Above all, Article 3 empowers Parliament to form new States out of existing States either by merger or division as also to increase, diminish or alter the boundaries of the States. …

276. The fact that under the scheme of our Constitution, greater power is conferred upon the Centre vis-à-vis the States does not mean that States are mere appendages of the Centre. Within the sphere allotted to them, States are supreme. The Centre cannot tamper with their powers. More particularly, the courts should not adopt an approach, an interpretation, which has the effect of or tends to have the effect of whittling down the powers reserved to the States. It is a matter of common knowledge that over the last several decades, the trend the world over is towards strengthening of Central Governments — be it the result of advances in technological/scientific fields or otherwise, and that even in USA the Centre has become far more powerful notwithstanding the obvious bias in that Constitution in favour of the States. All this must put the court on guard against any conscious whittling down of the powers of the States. Let it be said that the federalism in the Indian Constitution is not a matter of administrative convenience, but one of principle — the outcome of our own historical process and a recognition of the ground realities. This aspect has been dealt with elaborately by Shri M.C. Setalvad in H

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A his Tagore Law Lectures “Union and State Relations under the Indian Constitution” (Eastern Law House, Calcutta, 1974). The nature of the Indian federation with reference to its historical background, the distribution of legislative powers, financial and administrative relations, powers of taxation, provisions relating to trade, commerce and industry, have all been dealt with analytically. B It is not possible — nor is it necessary — for the present purposes to refer to them. It is enough to note that our Constitution has certainly a bias towards Centre vis-à-vis the States [Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan3, SCR p. 540]. It is equally necessary to emphasise that courts should be careful not to upset the delicately-crafted constitutional scheme by a process of interpretation.”

45Copy pinpoint45. A Constitution Bench in Kuldip Nayar v. Union of India, (2006) 7 SCC 1, held that India is not a federal State in the traditional sense of the term and it is not a true federation formed by agreement between various States and it has been described as quasi-federation and similar other concepts.

46Copy pinpoint46. A nine-Judge Constitution Bench in Jindal Stainless Limited and Another Vs. State of Haryana and Others, (2017) 12 SCC 1 had occasion to consider the nature of federalism in the Indian Constitution E while considering the relations between Union and States in reference to part XIII of the Constitution. Dr. T.S. Thakur, Chief Justice of India, as he then was, speaking for the Court noticed the nature of federalism as ingrained in the Constitution. Constitution Bench held that even though our Constitution may not be strictly federal in its character but the significant features of federal Constitution are found in the Indian F Constitution. In Paragraph 32, Constitution Bench laid down as follows:- “32. Whether or not the Constitution provides a federal structure for the governance of the country has been the subject-matter of a long line of decisions of this Court, reference to all of which may be unnecessary but the legal position appears to be fairly well settled that the Constitution provides for a quasi-federal character with a strong bias towards the Centre. The pronouncements recognised the proposition that even when the Constitution may not be strictly federal in its character as the United States of America, where sovereign States came together to constitute a federal Union, where each State enjoins a privilege

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 729 [ASHOK BHUSHAN, J.]

of having a Constitution of its own, the significant features of a A federal Constitution are found in the Indian Constitution which makes it a quasi-federal Constitution, if not truly federal in character and in stricto sensu federal. The two decisions which stand out in the long line of pronouncements of this Court on the subject may, at this stage, be briefly mentioned. The first of these cases is the B celebrated decision of this Court in Kesavananda Bharati case15, wherein a thirteen-Judge Bench of this Court, Sikri, C.J. (as his Lordship then was), being one of them talks about whether the Constitution of India was federal in character and if so whether federal character of the Constitution formed the basic feature of the Constitution. Sikri, C.J. summed up the basic feature of the C Constitution in the following words: (SCC p. 366, paras 292-94) “292. … The true position is that every provision of the Constitution can be amended provided in the result the basic foundation and structure of the Constitution remains the same. The basic structure may be said to consist of the following D features: (1) Supremacy of the Constitution; (2) Republican and Democratic form of Government; (3) Secular character of the Constitution; E (4) Separation of powers between the legislature, the executive and the judiciary; (5) Federal character of the Constitution.

293. The above structure is built on the basic foundation i.e. F the dignity and freedom of the individual. This is of supreme importance. This cannot by any form of amendment be destroyed.

294. The above foundation and the above basic features are easily discernible not only from the Preamble but the whole scheme of the Constitution, which I have already discussed.” G

To the same effect are the views expressed by Shelat and Grover, JJ. who declared that the federal character of the Constitution is a part of its basic structure.”

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47Copy pinpoint47. In Jindal Stainless Ltd. (supra), one of us (Ashok Bhushan,J) has also expressed views on the form of the Indian Constitution, which was the same as expressed by majority opinion. In Paragraph 944, following was held:- “944. The law declared by this Court as noted above clearly B indicates that the Indian Constitution is basically federal in form and has marked traditional characteristics of a federal system, namely, supremacy of the Constitution, division of power between the Union and the States and existence of an independent judiciary. Federalism is one of the basic features of the Indian Constitution. However, the history of Constitution including the debates in the C Constituent Assembly indicate that the distribution of powers was given shape with creating a strong Centre with the object of unity and integrity of India. The States are sovereign in the allotted fields. The Indian Constitution cannot be put in traditional mould of federalism. The traditional concept of federalism has been D adopted with necessary modification in the framework of the Constitution to suit the country’s necessity and requirement. The sum total of above discussion is that federalism in the Constitution is limited and controlled by the Constitution and the exercise of powers of both the States and the Centre are controlled by express provisions of the Constitution.” E

48Copy pinpoint48. A recent Constitution Bench judgment, which needs to be noticed is a judgment of this Court in State (NCT of Delhi) Vs. Union of India & Another, (2018) 8 SCC 501. Chief Justice Dipak Misra, as he then was, speaking for the Constitution Bench elaborately considered the concept of federal Constitution and laid down following in Paragraph Nos. 95, 96 and 108:- “95. In common parlance, federalism is a type of governance in which the political power is divided into various units. These units are the Centre/Union, States and Municipalities. Traditional jurists like Prof. K.C. Wheare lay emphasis on the independent functioning of different governing units and, thus, define “federalism” as a method of dividing powers so that the general/ Central and regional governments are each within a sphere coordinate and independent. As per Prof. Wheare:

K. LAKSHMINARAYANAN v. UNION OF INDIA & ANR. 731 [ASHOK BHUSHAN, J.]

“the systems of Government embody predominantly on division A of powers between Centre and regional authority each of which in its own sphere is coordinating with the other independent as of them, and if so, is that Government federal?”

96. However, modern jurists lay emphasis on the idea of interdependence and define federalism as a form of Government B in which there is division of powers between one general/central and several regional authorities, each within its sphere interdependent and coordinate with each other.

108. From the foregoing discussion, it is clear as day that both the concepts, namely, democracy i.e. rule by the people and federalism are firmly imbibed in our constitutional ethos. Whatever be the nature of federalism present in the Indian Constitution, whether absolutely federal or quasi-federal, the fact of the matter is that federalism is a part of the basic structure of our Constitution as every State is a constituent unit which has an exclusive Legislature and Executive elected and constituted by the same process as in the case of the Union Government. The resultant effect is that one can perceive the distinct aim to preserve and protect the unity and the territorial integrity of India. This is a special feature of our constitutional federalism.”

49Copy pinpoint49. Constitution Bench also noticed the concept of cooperative federalism and referring to an earlier judgment of this Court in State of Rajasthan Vs. Union of India, (1977) 3 SCC 592 laid down following in paragraph No. 121 and 122:- “121. In State of Rajasthan v. Union of India, the Court took cognizance of the concept of cooperative federalism as perceived by G. Austin and A.H. Birch when it observed: (SCC p. 622, para 58) “58. Mr Austin thought that our system, if it could be called federal, could be described as “cooperative federalism”. This term was used by another author, Mr A.H. Birch (see G Federalism, Finance and Social Legislation in Canada, Australia and the United States, p. 305), to describe a system in which: ‘… the practice of administrative cooperation between general and regional Governments, the partial dependence of the regional Governments upon payments from the H