MAHARAO SAHIB SRI BHIM SINGHJI ETC. ETC v. UNION OF INDIA AND ORS. ETC. ETC.

of section 10, such State Government shall pay to the person or persons having any interest therein,-

(a) in a case where there is any income from such vacant land, an amount equal to eight and one-third times the net average annual income actually derived from such land during the period of five consecutive years immedia- tely preceding the date of publication of the notification issued under sub-section (1) of section 10; or

(b) in a case where no income is derived from such vacant land, an amount calculated at a rate not c exceeding-

(i) ten rupees per square metre in the case of vacant land situated in an urban agglomeration falling within • D category, or category specified in 3chedulc I; and

(ii) five rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category or category specified in that schedule." E In order that the burden of compensation, that is, the amount • payable under Art.31(2) for taking over vacant land in excess of the ceiling limit in sub-s. (3) of s.10 by the government may not be high, the Act incorporates a specific provision in sub-s, (6) of s.11 to fix F a ceiling on the maximum amount payable in any single case. The sub-section reads :

"11(6) Notwithstanding anything contained in sub- section (I) or sub-section (5), the amount payable under either of the said sub-sections shall, in no case, exceed ( two lakhs of rupees."

It is not suggested that sub·s.(I) of s. 11 does not lay down any principles for determination of the amount payable for the taking of excess vacant lands in an urban agglomeration or that the principles laid down in sub·s. (I) are not relevant for the determination of the amount payable. It is also not suggested that payment of the amount at the rate of Rs. 10 per sq. metre and Rs. 5 per sq. metre,

M!S BHIM SINGH v. UNION (Sen, J.) 941

for the vacant land in categories and B, and categories and respectively, makes the amount illusory or the Act confiscatory. The submission is that the fixation of the maximum amount payable at A Rs. 2 lacs in a single case by sub·s.(6) makes the amount payble under sub-s (I) wholly illusory and, therefore, the Act is confiscatory. That cannot be so, because the fixation of ceiling on the maximum at Rs. 2 lacs under s.11(6) implies that it would affect only persons owning 20,000 sq. metres of vacant land in metrepolitan cities like B Delhi, Calcutta, Bombay and Madras or large cities like Hyderabad, Bangalore, Poona, Kanpur and Ahmedabad falling in categories A and B, or persons owning 40,000 sq. meters in big cities like Lucknow, Allahabad, Nagpur, Jaipur etc. falling in categories and and D. One is left to wonder how many own such vast tracts of c vacant land in such cities. If any, very few indeed. Even if there are, the amount cannot be related to the value of the property taken. It is pure arithmetics. Twenty thousend sq. metres would make 23,920 sq. yards and forty thousand sq. metres 47,840 sq. yards. In a city like Delhi, Calcutta, Bombay and Madras the value of a square yard of vacant land would depend upon the situation of the land. If that be the criteria, then there can be no ceiling on vacant land in urban agglomerations, much less gei!ing on immovable property in such cities, when it comes to be imposed. The State has not the capacity to bear the burden. If the contention were to prevail, then no law for the implementation of the Directive Princi· pies of State Policy under Art.39(b) or (c) can ever be implemented. E

We may recall the words of Pandit Jawaharlal Nehru, who while introducing the Constitution (Fourth Amendment) Act, \955, said in Parliament :

"If we are aiming, as I hope we arc aiming and vere· ' peatedly say we are aiming, at changes in the social j structure, then inevitably we cannot think in terms of giving what is called full compensation. Why ? Well, firstly because you cannot do it, secondly because it would be improper to do it, unjust to do it, and it should not be done even if you can do it for the simple reason that in all those social matters, laws etc., they are aiming to bring about a certain structure of society different from what it is . at present.. In that different structure among other thmgs tha will change is this, the big, difference between the have's and the hav~qofs, Now, if w~ are !livin$ full

942 llUPREMB COURT REPORTS (1985] SUPPL, S.C.R.

compensation, the have's remain the have's and the have- A not's, have-not's. It does not change in shape or form if compensation takes place. Therefore, in any scheme of social engineering, if I may say so, you cannot give fall compensation-apart from the patent fact that you are not in a position-nobody has the resources-to give 8 it." There can be no scheme for nationalisation of any industry, there can be no socio-economic measures enacted if the concept of 'just equivalent' were to be introduced even after the 25th Amend· ment. To emphasise the point that the amount of Rs. 2 lacs fixed c under sub-s.(6) of s.11 makes the Act confiscatory, our attention was drawn to the fact that the Jetitioner in writ Petition No. 350 of 1977, Maharao Saheb hri Bhim Singhji, the former Maharana of Kotah owns 971. 50 acres of vacant land appurtenant to and covered under his Urned Bhawan Palace in the city of Kotah, which is an < urban agglomeration falling under category 'D', and which stands requisitioned under s.23(1) of the Defence and Internal Security of India Act, 197 I. There is no dispute that the property of the Maharana is valued for the purposes of the Rajasthan Lands and Buildings Tax Act, 1964, at Rs. 4,12,27,726.84. Does it mean that the amount should be geared to the value of the vacant land taken under sub-s. (3) of s IO? When the Court has no power to question the adequacy of the amount under Art.31(2), can it be said that the amount fixed determined according to the principles laid • down in sub-s.( 1) of s. l l, subject to the maximum fi<ed under sub-s.(6) thereof is illusory merely because of inadequacy?

F Who are we to say that it should be 10 per cent or less, or 50 per cent or more. The leeislature in its wisdom has laid down the principles and fixed a ceiling on the maximum amount payable. That is a legislative judgment and the Court has no power to question it. Seervai in his book on Constitution, 2nd Ed., vol.I, p.656, while dealing with the Fourth Amendment states that in permitting 'inade· G quate compensation' the 4th Amendment removed a fixed yard-stick and made all discussion about 'relevant' and 'irrelevant' principles meaningless. The learned author says : "If the questions were asked, why ha1 the law fixed compensation amounting to 60 per cent and not to 70 or H 50 per cent of the market value, the answer would be that in the legislative judgment the amount fixed by the law Wa$

MSS BBIM SJNClH Y. UNION (Sen, /.) 943

a fair and just compensation for the acquisition of pro- perty under the at law, and if a law fixing compensation at amounts ranging from 90 to 50 per cent or less, of the market value of the property acquired, cannot be struck down by a Court, equally, principles of compensation cannot be struck down when they produce the same result. The consequences of the transformation brought about by the 4th Amendment is that 'principles of compensation' do not mean the samething before and after the 4th Amendment."

As the learned author explains, 'considerations of social justice are imponderable and, therefore no fixed money value can be put on them by any principle', and goes on to say 'The question whether the Court can go into the question whether the amount is illusory is difficult to answer'. The legislature considers a maximum amount of Rs.2 lacs to be a fair and just recompense for the acquisition or excess vacant land in an urban agglomeration. By no standard can an amount of Rs.2 lacs be considered to illusory.

The 25th Amendment has placed the matter of adequacy of compensation beyond the pate of controversy by substituting the word 'amount' for the word 'compensation' in Art 31(2) and made the adequacy of the amount payable for acqisition or requisition of ,. property nonjusticiable.

In Kesavananda Bharti's case, the Court upheld the constitu,. tio1at validity of the 25th Amendment. The impact of the new Article 31 (21 was also considered as well as the content and meaning of the word 'amount'. According to the majority, the amount fixed F or determined to be paid cannot be illusory. But one thing is clear- the meaning which the Court placed on the word 'compensation' in R. C, Cooper's case( 1) of adequacy of compensation and on relevant principles has been held to have been nulified by the 25th Amedment. G The two decisions directly in point are the State of Kera/a & Anr. v. The Gwalior Rayon Silk Mfg. Co.( 2 ) and State of Karnataka v. Ranganatha Rtddy.(3 ) In Gwalior Rayon's case the Court upheld

(I) [1970] 3 S.C.R 530. H (2) [1974) I S.C.R. 671. (3) [1978) I S.C.R. 641.

944 SUPREME COURT REPORTS [1985] SUPPL1 S.C.R.

the validity of the Kerala Private Forests (Vesting and Assignment) A Act, 1971, which provided for the vesting of private forest lands held in Janman rights, even though there was no provisio.n for payment of compensation. The Court held that since the Act envisaged a scheme of agrarian reform, it was protected under Art. 3.l A and could not be challenged on the ground that it takes aways, a bridges B or abrogates the fundamental rights guaranteed by Arts.14, 19 and

31. In Ranganatha Reddy's case the Court upheld a scheme for nationalisation of contract carriages in the State, since it laid down the principles for the determination of the amount payable under Art.31(2) and they were not irrelevant for the determination of the amount. Untwalia J. speaking for the majority ob;erved : c "On the interpretations aforesaid which we have put to the relevant provisions of the Act, it was diflicult- rather impossible-to argue that the amount so fixed will ( be arbitrary or illusory. In some respects it may be D inadequate but that cannot be a ground for challenge of the constitutionality of the law under Article 31(2)."

Krishna Iyer J. in a separate but concurring judgment after deducing the discernible principles from the decision in Kesavananda Bharati's E case, held that the 25th Amendment bars the Court's jurisdiction to investigate the adequacy of the amount. In view of these two decisions, the contention that fixation of maximum amount by sub-s. (6) of s. 11 renders the amount payable under sub-s. (I) illusory or in the alternative makes the !Act confiscatory cannot be accepted. F There still remains the contention regarding the invalidity of sub-s. (1) of s. 27, which reads :

"27. (I) Notwithstanding anything contained in any G other Law for the time being in force, but subject to the provisions of sub-section (3) of section 5 and sub-section (4) of section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building H (whether constructed before or after the commencement of this Act) or a portion only 0f such building for a period of ten years of such commencement or from the date on which the building is constr11cted, wi)ichever

MSS BHIM SINGH v. UNION (Sen, J.)

. is later, except with the previous permission in writing of the competent authority." A It is urged that sub-s. (I) of s. 27 confers arbitrary and uncontrolled powers on the competent authority to grant or refuse permission for transfer and that the conferral of such uncontrolled and uncanalised power without any guidelines renders the provision B illegal and void and unenforceable being an unreasonable restriction on the right to acquire, hold and dispose of property guaranteed under Art. 19(1(f). It is said that the mattet is left to the whim and fancy of tbe competent authority, and the, power so conferred is capable of misuse and thus be an instrument of great oppression. The learned Attorney General tried to meet the cpntention by urging that c there was no reason to think that the competent authority would refuse to grant permission where the trahsaction is bona fide. According to him, the competent authority would be justified in refusing to grant permission where the transaction is calculated to defeat the provisions of the Act. It is said that the whole object of freezing of the transactions was to hold the price line of urban land. He drew our attention to the guidelines issuel:I by the Government of India, Ministry of Works and Housing to the, various State Govern· ments directing that all applications for grant of permission under sub-s. (I) of s. 27 of the Act should be dealt with expeditiously with a view to prevent any inconvenience to the members of the public and further that permission should be granted, as a matter of course, within three days of the receipt of such application.

In my judgment, there is no justification at all for the freezing of transactions by way of sale mortgage, gift or lease of vacant land or building for a period exceeding ten years, or otherwise, for a period of ten years from the date of the commencement of the Act, even though such vacant land with or without building thereon falls within the ceiling limits. In Excel Wear v. Union of India & Ors.i') the Court held that the right to carry on a business guaranteed under Art. 19(1) (g) carries with it the right not to carry on business. It G must logically follow, as a necessary corollary, that the right to acquire, hold and dispose of property guaranteed to a citizen under Art. !9(1)(f) carries with it the right not to hold any property. It is difficult to appreciate how could a citizen be compelled to own }I property against his will.

(I) p979J 1s.c.R.1r09

946 SUPREME COURT REPORTS [1985] SUPPi.. s.c.R.

If vacant land owned by a person falls within the ceiling limits A for an urban agglomeration, he is outside the purview of s. 3 of the • Act. That being so, such a person is not governed by any of the provisions of the Act. When this was pointed out to the learned Attorney General, be was unable to justify the imposition of the restriction imposed by sub·s. (I) of s. 27 in case of land falling with- B in the ceiling limits as a reasonable restriction. It must, accordingly, be held that the provision of sub-s. (I) of s. 27 of the impugned Act is invalid insofar as it seeks to affect a citizen's right to dispose of his urban property in an urban agglomeration within the ceiling limits. c I would, for the reasons stated, declare sub-sections (1) (2) and (3) of section 23 and the opening words "subject to the provisions of sub-sections(!), (2) and (3)" in s~ction 23(4) of the Urban Land (Ceiling and Regulation) Act, 1976 as ultra vires of the Parliament D and that these provisions are not protected under Articles 31·B and Jl·C of the Constitution, and further declare that sub·section (1) of section 27 of the Act is invalid insofar as it imposes a restriction on transfer of urban property for a period of ten years from the com· mencement of the Act, in relation to vacant land or building thereon, within the ceiling limits. E Having struck down sub-sections (I) (2) and (3) of section 23 and the opening words "subject to the provisions of Sub-sections (I), (2) and (3)" in section 23(4) of the Act, I would declare the remaining provisions of the Urban I.and (Ceiling and Regulation) F Act, 1976, including sub·section (4) of section 23 thereof as valid and constitutional.

In the result, the writ petitions, except to the exten I indicated, mull fail and are dismissed. There shall be no order as to costs. G S.R. Petitions dismissed.