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PETITIONER:

STATE OF WEST BENGAL

Vs.

RESPONDENT:

UNION OF INDIA

DATE OF JUDGMENT:

21/12/1962

BENCH:

SINHA, BHUVNESHWAR P.(CJ)

BENCH:

SINHA, BHUVNESHWAR P.(CJ)

IMAM, SYED JAFFER

SUBBARAO, K.

SHAH, J.C.

AYYANGAR, N. RAJAGOPALA

MUDHOLKAR, J.R.

CITATION:

1963 AIR 1241 1964 SCR (1) 371

CITATOR INFO :

E 1963 SC1811 (104)

RF 1964 SC 669 (14,18)

RF 1964 SC1486 (12)

MV 1967 SC 997 (34)

RF 1967 SC1643 (264,271)

RF 1969 SC 530 (2A)

RF 1973 SC1461 (1619,1674,2180)

RF 1976 SC1654 (5,20TO23,30,36)

R 1978 SC 68 (221,223,254)

E 1980 SC1955 (18,19,22)

RF 1982 SC 149 (266)

E&D 1985 SC1367 (33,35)

R 1987 SC2310 (11A)

RF 1988 SC 782 (40)

R 1988 SC1353 (12)

RF 1989 SC1530 (17)

RF 1991 SC 101 (32)

RF 1991 SC1676 (44,46)

R 1992 SC 81 (12)

ACT:

Land Acqusition-State property-Coal bearing areasAcquisition

by Union of India-Parliament, power to enact law-Indian

Constitution, if not federal-Sovereignty, if lies in States

also-Fundamental rights, whether can be claimed by States-

"Person" and "Property", Connotation of-Coal Bearing Areas

(Acquisition and Development) Act, 1957 (XX of 1957)-

Constitution of India, Arts. 13, 31, 73, 162, 245, 246, 248,

249, 254, 294, 298, Seventh schedule, List I Entries 52, 54,

97, List II Entries 23, 24, List III Entry 42.

HEADNOTE:

Under the Coal Bearing Areas (Acquisition and Develop. ment)

Act, 1957, enacted by Parliament, the Union of India

proposed to acquire certain coal bearing areas in the State

of West Bengal. The State filed a suit contending that the

Act did not apply to lands vested in or owned by the State

and that if it applied to such lands the Act was beyond the

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legislative competence of Parliament.

Held, (per Sinha C. J., Imam, Shah, Ayyangar and

Mudholkar,JJ.), that upon a proper interpretation of the

relevant

372

provisions of the Act it was clear that the Act applied also

to coal bearing areas vested in or owned by the State. The

preamble of the Act did not support the argument that the

Act was intended to acquire only the rights of individuals

and not those of the States in coal bearing areas. Though

the statement of Objects and Reasons supported the

contention of the State it could not be used to determine

the true meaning and effect of the substantive provisions of

the Act.

Held, further, (per Sinha C. J., Iman, Shah, Ayyangar and

Mudholkar JJ. Subba Rao J., contral, that the Coal Bearing

Areas (Acquisition and Development) Act, 1957, is not ultra

vires the powers of Parliament and is valid. Under Entry 42

of List III of the Seventh Schedule to the Constitution,

Parliament is competent to make a law for the acquisition

for the property of a State.

The Constitution of India is not truly Federal in character.

The basis of distribution of powers between the Union and

States is that only those powers which are concerned with

the regulation of local problems are vested in the States

and the residue specially those which tend to maintain the

economic industrial and commercial unity of the country are

left to the Union. It is not correct to say that fall

sovereignty is vested in the States. Parliament which is

competent to destory a State cannot be held, on the theory

of absolute sovereignty of the States, to be incompetent to

acquire by legislation the property owned by the States.

Even if the Constitution were held to be a Federation and

the States regarded qua the Union as sovereign, the power of

the Union to legislate in respect of the property situate in

the States would remain unrestricted. The power of

Parliament conferred by Entry 42, List III, as accessory to

the effectuation of the power under Entries 52 and 54, List

I, is not restricted by any provi. sion of the Constitution

and is capable of being exercised in respect of the property

of the States also.

From the fact that Art. 294 vests the property in the States

and that Art. 298 empowers the States to transfer the

property it does not follow that the property of the States

cannot be acquired without a constitutional amendment,

Article 294 does not contain any prohibition against the

transfer of property of the States and if the property is

capable of being transferred by the State it is capable of

being acquired.

Under s. 127 of the Government of India Act, 1933, the

Central Government could require the Province to acquire

land

373

on behalf of the Federation if it was private land and to

transfer it to the Federation if it was land belonging to

the Province, and the Provincial Government had no option

but to comply with the direction. It was not considered an

infraction of Provincial autonomy to vest such a power in

the Central Government. Absence of a similar provision in

the present Constitution made no difference. Under the

Government of India Act the power to compulsorily acquire

property was exclusively vested in the Provinces but under

the Constitution the Union also has that power.

If the other provisions of the Constitution in terms of

sufficient amplitude confer power for making laws for

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acquiring State property, the power cannot be defeated

because the express power to acquire property generally does

not specifically and in terms refer to State property.

Power to acquire and requisition property can be exercised,

concurrently by the Union and the States but on that account

there can be no conflict in the exercise of the power as

such a conflict is prevented by Arts. 31 (3) and 254.

Under the Constitution fundamental rights can be claimed not

only by individuals and corporations but in some cases by

the State also. Property vested in the States may not be

acquired under a law made under Entry 42, List III, unless

the law complies with the requirements of Art. 31.

The rule that the State is not bound, unless it is expressly

named or by necessary implication in a statute is one of

interpretation. In interpreting a constitutional document

provisions conferring legislative power must normally be

interpreted liberally and in their widest amplitude. There

is no indication in the Constitution that the word

"property" in Entry 42 of List III is to be understood in

any restricted sense; it must accordingly be held to include

property belonging to the States also.

Per Subba Rao, J.-The impugned Act in so far as it confers a

power on the Union to acquire lands owned by the States,

including coal mines and coal bearing lands is ultra vires.

Under the Constitution of India the political sovereignty is

divided between the constitutional entities, that is, the

Union and the States, who are juristic personalities

possessing properties and functioning through the

instrumentalities created by the Constitution. The Indian

Constitution accepts the federal concept and distributes the

sovereign powers between the coordinate constitutional

entities, namely, the Union and the

374

states. This concept implies that one cannot encroach upon

the governmental functions or instrumentalities of the other

unless the Constitution provides for such interference. The

legislative fields allotted to the units cover subjects for

legislation and they do not deal with the relationship

between the coordinate units functioning in their allotted

fields. This is regulated by other provisions of the

Constitution and their is no provision Which enables one

unit to take away the property of another except by

agreement.

The power to acquire the property of a citizen for a public

Purpose is one of the implied powers of the sovereign.

Under the Indian Constitution that Sovereign power is

divided between the Union and the States. It is -implicit

in the power of acquisition by a sovercign that it must

relate only to property of the governed. for a sovereign

cannot acquire its own property.

It is also implicit in the concept of acquisition and

requisition that they shall be for public purpose on payment

of compensation. Tile word "person" in Art. 31 does not

include "State"; if Entry 42 were to empower Parliament to

acquire the property of a State, the State would not have

the protection of Art. 3-1 which is available to all other

persons. Therefore, Entry 42 List III does not authorise

either Parliament or a State Legislature to make. a law for

the acquisition of the property of the other.

Nor do the residuary Art. 248 and Entry 97 List I confer any

power on Parliament to acquire the property of a State. The

residuary legislative field cannot possibly cover inter-

State relation, for that matter is not distributed between

the Union and the States by way of legislative Lists. When

a specific provision is made for acquisition of property, it

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would be incongruous to confine that Entry to properties

other than those of the States and to resort to the

residuary power for acquiring the property of the States.

Further the anomaly of the Union acquiring the property of

the States without compensation would still remain.

Neither Entry 24 of List II nor Entry 52 of List I empo.

wers a State Legislature before Parliament made a law decla-

ring that the control of a particular industry by the Union

is expedient in the public interest or the Parliament, after

such declaration, to make such a law for acquisition of

State lands, for they deal only with the regulation of an

existing industry or an industry that may be started

subsequently, but not with acquisition of lands.

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Act 12 of 1952 and Act 67 of 1957 deal only with the

regulation of mines an3 further the declarations contained

in the said Acts are expressly confined to the extent of the

regulation provided thereunder and, therefore, the

declarations therein could not be relied upon to sustain the

validity of the Act.

No inspiration can be drawn from foreign constitutions or

decisions made thereunder in construing the express

provisions of our Constitution in the context of its

different set up. The property of the states can be

acquired by the Union only by agreement.

JUDGMENT:

ORIGINAL JURISDICTION : Suit No. 1 of 1961.

S. M. Bose,, Advocate-General for the State of West

Bengal, B. Sen, S. C.Bose, Milon K. Bunerjee, P. K.

Chatterjee, and P. K. Bose, for the plaintiff.

M. C. Setalvad, Attorney-General for india, H. N. Sanyal,

Additional Solicitor General of India, Bishan Narain, N. S.

Bindra and R. H. Dhebar, for the defendant.

B. N. Seib and I. N. Shroff, for the Intervener No. 1.

S. M. Sikri, Advocate-General for the State of Punjab, R.

Ganapathy Iyer and P. D. Menon, for Intervener No. 2.

B. C. Barua, Advocate-General for the State of Assam and

Naunit Lal, for the Intervener No. 3.

Dinabandhu Sahu, Advocate-General for the State of Orissa,

B. K. P. Sinha and P. D. Ale on, for the Intervener No. 4.

A. Ranganadhan Chetty and A. V. Rangam, for Intervener No.

5.

Lal. Narayan Sinha, and D. Goburdhan, for Intervener No. 6.

376

K. S. Hajela and C. P. Lal, for Intervener No. 7.

P. D. Xenon, for Intervener No. 8.

S. M. Sikri, Advocate-General for State of Punjab, and P.

D. Xenon, for Intervener No. 9.

G. S. Pathak, N. S. Bindra and R. H. Dhebar, for Intervener

No. 10.

1962. December 21. The Judgment of Sinha, C. J., Imam,

Shah, Ayyangar and Mudholkar, JJ., was delivered by Sinha,

C. J., Subba Rao, J., delivered a separate judgment.

SINHA, C. J.-This is a suit by the State of West Bengal

against the Union of India for a declaration that Parliament

is not competent to make a law authorising the Union

Government to acquire land and rights in or over land, which

are vested in a State, and that the Coal Bearing Areas

(Acquisition and Development) Act (XX of 1957)-which

hereinafter will be referred to as the Act-enacted by the

Parliament, and particularly ss. 4 and 7 thereof, were ultra

vires the legislative competance of Parliament, as also for

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an injunction restraining the defendant from proceeding

under the provisions of these sections of the Act in respect

of the coal bearing lands vested in the plaintiff. As will

presently appear, the suit raises questions of great public

importance, bearing on the interpretation of quite a large

number of the Articles of the Constitution. In view of the

importance of the questions raised in this litigation,

notices were issued by this Court to all the Advocates-

General of the States of India. In pursuance of that

notice, the States of Assam, Bihar, Gujarat, Madras, Orissa,

Punjab, Rajasthan and Uttar Pradesh have appeared, either

through their respective AdvocatesGeneral or through other

Counsel. The National Coal Development Corporation Ltd.,

with its head

377

office at Ranchi in Bihar, has also intervened in view of a

pending litigation between it as one of the defendants and

the State of West Bengal as the plaintiff. We have heard

counsel for the parties at great length.

The Plaint is founded on the following allegations. The

plaintiff is a State, specified in the First Schedule of the

Constitution,, as forming part of India' which is a Union of

States. By virtue of Art. 294 of the Constitution, all

property and assets in West Bengal, which were vested in His

Majesty for the purposes of the Government of the Province

of Bengal became vested in the State of West Bengal for the

purpose of the State. The State of West Bengal, in exercise

of its exclusive legislative powers, enacted the West Bengal

Estates Acquisition Act, 1954 (W. B. 1 of 1954). By

notification issued under the Act, as amended, all estates

and rights of intermediaries and Ryots vested in the State

for the purposes of Government, free from encumbrances,

together with rights in the sub-soil, including mines and

minerals. The Parliament enacted the impugned Act

authorising the Union of India to acquire any land or any

right in or over land, in any part of India. In exercise of

its powers under the Act, the Union of India, by two

notifications dated September 21, 1959 and January 8, 1960,

has expressed its intention to prospect for coal lying

within the lands which are vested in the plaintiff, as

aforesaid. Disputes and differences have arisen between the

plaintiff and the defendant as to the competence of

Parliament to enact the Act and its power to acquire the

property of the plaintiff, which is a sovereign authority.

In paragraph 9 of the Plaint, a controversy had been raised

as to whether or not the proposed acquisition was for a

public purpose, but at the actual hearing of the case, the

learned AdvocateGeneral of Bengal withdrew that contention,

and, therefore, that issue is no more a live one. Notice

378

under s. 80 of the Code of Civil Procedure is said to have

been duly served.

The Written Statement of the defendant does not deny the

allegations of fact made in the Plaint, but denies the

correctness of each and all the submissions or legal

contentions as to the legislative competence of Parliament

to enact the Act and as to the power of the defendant to

acquire any property of a State. It is also denied that the

State of West Bengal is a sovereign authority. The

following statement in paragraph 12 of the Written Statement

brings out the policy underlying the enactment in question :

"The defendant states that it is in the public

interest that there should be a planned and

rapid industrialization of the country. For

such rapid and planned industrialization, it

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is essential that the production of coal

should be greatly increased as coal is the

basic essential for industries. Regulation of

mines and mineral development under the

control of the Union has been declared by

Parliament by law to be expedient in the

public interest. It is submitted that in the

circumstances, the acquisition of coal bearing

areas by the Union is necessary for the

regulation of mines and mineral development

and for increased production of coal in the

public interest. The defendant will rely on

documents a list whereof is hereto annexed."

On those pleadings, the following issues were

raised :

1. Whether Parliament has legislative compe

tence to enact a law for compulsory acqui-

sition by the Union of land and other

properties vested in or owned by the State as

alleged in para 8 of the plaint ?

379

2. Whether the State of West Bengal is a

sovereign authority as alleged in para 8 of

the plaint ?

3. Whether assuming that the State of West

Bengal is a sovereign authority, Parliament is

entitled to enact a law for compulsory

acquisition of its lands and properties ?

4. Whether the Act or any of its provisions

are ultra vires the legislative competence of

Parliament ?

5. Whether the plaintiff is entitled to any

relief and if so, what relief ?

After the arguments on behalf of the

plaintiff, and of the States in support of the

plaintiff, had been finished, application was

made for amendment of the plaint praying that

the following paragraph may be added as

paragraph 9A, which is as follows :-

"Alternatively the plaintiff submits that the

Coal Bearing Areas (Acquisition and Develop-

ment) Act (Act XX of -1957) on its true cons-

truction does not apply to the lands vested in

or owned by the Plaintiff the State of West

Bengal. Further the notifications purported

to have been issued under the said Act are

void and of no effect."

At the request of the learned Attorney-General

a short adjournment was granted to consider

the position as to whether or not the

amendment sought should be opposed on behalf

of the defendant. As the amendment sought was

not opposed, it was granted and an additional

issue was raised in these terms :

"Whether Act XX of 1957 on its true construc-

tion applies to lands vested in or owned by

the Plaintiff State?

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It will thus appear that the parties are not at issue on any

question of fact, and the determination of the controversy

depends entirely upon the interpretation of the relevant

provisions of the Constitution, and the scope and effect of

the Act.

The issues joined between the parties are mainly two, (1)

whether on a true construction of the provisions of the Act,

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they apply to lands vested in or owned by the plaintiff; and

(2) If this is answered in the affirmative whether there was

legislative competence in Parliament to enact the impunged

statute. The scope and effect of the Act is the most

important question for determination, in the first instance,

because the determination of that question will affect the

ambit of the discussion on the second question. As already

indicated, when the case was opened for the first time by

the learned Advocate-General of Bengal, he proceeded on the

basis that the Act purported to acquire the interests of the

State, and made his further submission to the effect that

Parliament had no competence to pass an Act which had the

effect of affecting or acquiring the interest of the State.

But later he also took up the alternative position that the

Act, on its true construction, did not affect the interests

or property of the State. The other States which have

entered appearance, through their respective counsel, have

supported this stand of the plaintiff and have laid

particular emphasis on those provisions of the Act which,

they contend, support their contention that the Act did not

intend to acquire or in any way affect the interests of the

States. In this connection, the arguments began by making

pointed reference to the following paragraphs in the

Statement of Objects and Reasons, set out at pages 16-17 of

the Paper Book :

"According to the Industrial Policy Resolution

of 1956 the future development of coal is the

responsibility of the State. All new units in

381

the coal industry will be set up only by the

State save in exceptional circumstances as

laid down in the Resolution.

The production of coal in India in 1953 was 38 million tons

and the target for production for the Second Five-Year Plan

has been fixed at 60 million tons per annum. It has been

decided that out of the additional production of 22 million

tons per annum envisaged. the public sector should produce

an additional 12 million tons per annum, the balance being

allocated to the private industry for production from

existing collieries and immediately contiguous areas.

Out of the additional 12 million tons in the public sector,

the bulk (10 million tons per annum) will have to be raised

by the development of new coal fields, such as Korba,

Karanpura, Kathara and Jhilimili and Bisrampur. Very nearly

all the coal bearing areas however are covered by mining

leases held by private persons or prospecting licencees

which carry a right to mining lease. Hence it is proposed

to take power to acquire unworked coal bearing areas covered

by private leases or prospecting licencees which are found

surplus to the production required in the private sector and

to work these areas as lessees of the State Government.

With the acquisition of zamindari rights by the the State

Governments, the rights in minerals are now vested in all

areas in the State Governments, and it is not appropriate to

use the Land Acquisition Act, 1891, for the acquisition of

mineral rights', particularly because the Central Government

does not intend to acquire the proprietary rights vested in

the States. There is no other existing Central or State

Legislation under which the Government has powers to acquire

immediately the lessee's rights over the coal bearing areas

acquired by Government for the

382

additional coal production. It is accordingly considered

necessary to take powers by fresh legislation to acquire the

lessees" rights over unworked coal-bearing areas on payment

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of reasonable compensation to the lessees, and without

affecting the State Government rights as owner of the

minerals or the royalty payable to the State Government on

minerals.

The Bill provides for payment of reasonable compensation for

the acquisition of the rights of prospecting licencees and

mining lessees."

Besides setting out the policy of the State in the matter of

coal mining industry and the actual state of affairs in

relation thereto, the Statement of objects and Reasons

contains the crucial words on which particular reliance was

placed on behalf of the States, "because the Central

Government does not intend to acquire the proprietary rights

vested in the States........ and, "without affecting the

State Government rights as owners." It is however well-

settled that the Statement of Objects and Reasons

accompanying a bill, when introduced in Parliament, cannot

be used to determine the true meaning and effect of the

substantive provisions of the statute. They cannot be used

except for the limited purpose of understanding the

background and the antecedent state of affairs leading up to

the legislation. But we cannot use this statement as an aid

to the construction of the enactment or to. show that the

legislature did not intend to acquire the proprietary rights

vested in the State or in any way to affect the State

Governments' rights as owners of minerals. A statute, as

passed by Parliament, is the expression of the collective

intention of the legislature as a whole, and any statement

made by an individual, albeit a Minister, of the intention

and objects of the Act cannot be used to cut down the

generality of the words used in the statute.

It was then contended that the preamble of the

883

Act was the key to the understanding of the scope and

provisions of the statute. The preamble is in these words :

"An act to establish in the economic interest

of India greater public control over the coal

mining industry and its development by provid-

ing for the acquisition by the state of

unworked land containing or likely to contain

coal deposits or of rights in or over such

land, for the extinguishment or modification

of such rights accruing by virtue of any

agreement, lease, licence or otherwise, and

for matters connected therewith."

Particular stress was laid on the last two lines of the

preamble, showing that only rights "accruing by virtue of

any agreement, lease, licence or otherwise" were being

sought to be extinguished or modified by the provisions of

the Act. But this argument omits to take note of the words

of the previous clause in the preamble which has reference

to the fact that the Act also was meant for "acquisition by

the state of unworked lands containing or likely to contain

coal deposits." Before proceeding to deal with the main

arguments it is necessary to advert to a submission of the

learned Advocate-General of Bengal that the reference to the

"State" in the words "acquisition by the State" occurring in

the preamble was a reference to the "States" as

distinguished from the union. This contention has only to

-be mentioned to be rejected as the entire object and

purpose of the impugned Act was to vest powers in the Union

Government to work coal mines and in that context the word

"State" could obviously refer only to the Union Government.

The preamble, therefore, does not support the argument that

the Act was intended to acquire only the rights of

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individuals, derived from prospecting licences or based on

leases, and to exclude from the

384

purview of the Act the rights of States in coal-bearing

lands. Section 4, relating to the issue of a preliminary

notification of the intention to prospect for coal in any

given area, makes reference to "lands", without any

qualifications, and s. 6, which is consequential' upon s. 4

lays down the effect of such notification on prospecting

licences and mining leases. Section 7 also speaks of giving

notice of the Government's intention to acquire the whole or

any part of the land, notified as aforesaid. or any rights

in or over such land. Section 9, which provides for a

declaration of acquisition has also used the same

expression, "any land or any rights in or over such land."

The proviso to s. 9, which is in these terms

"Provided that, where the declaration relates

to any land or to any rights in or over land

belonging to a State Government which has or

have not been leased out, no such declaration

shall be made except after previous

consultation with the State Government"

is very important in this connection. This proviso for the

first time makes specific reference to any land or to any

rights in or over land "belonging to a State Government."

Section 9A authorises the Central Government to dispense

with the necessity of complying. with the provisions of s.

8, which provides for hearing any objections raised to the

proposal to acquire any land which is notified under s. 7 as

the subject-matter of acquisition. Ordinarily, if a

notification is made by the Central Government of its

intention to acquire of the whole or any part of the land or

of any right in or over land, notified under s. 4, it is

open to any person interested in the land to object to the

acquisition of the whole or any, part of the land or of any

rights in or over such land. If any such objection is

raised, an opportunity has to be given for hearing such an

objection or

385

objections, by the "competent authority." But under s. 9-A,

the Central Government, if it is satisfied that it is

necessary to acquire immediately the whole or any part of

the land, or any rights in or over such land, may direct

that s. 8 shall not come into operation, and, therefore, no

proceedings thereunder would be entertainable. Section 10

lays down the consequences of the notification of

declaration of acquisition under s. 9. On such a declaration

the land, or the rights in or over the land, shall vest in

the Central Government, free from all encum brances, and

under sub-section (2) where the rights acquired happen to

have been granted under a mining lease by a State

Government, the Central Government shall be deemed to have

become the lessee of the State Government. A good deal of

argument was addressed to us as to the significance of the

provision, contained in s. 10 (2) of the Act. They will be

dealt with later in the course of this judgment. But it is

open to Government to direct by an order in writing that the

land or the rights in or over the land, instead of vesting

in the Central Government under s. 10 shall vest in a

Government Company, which has expressed its willingness to

comply with the terms and conditions imposed by the Central

Government. A 'Government Company means a company as

defined in s. 617 of the Companies Act, 1956. In the case

where the land or the rights in or over the land become

vested in a Government Company, under s. 11 (1), that

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company shall be deemed to have become a lessee of the State

Government, as if the Company had been granted the mining

lease by the State Government. under the Mineral Concession

Rules. Compensation under the Act on account of prospecting

licences ceasing to have effect, or the rights under a

mining lease having been. acquired, or for any land acquired

under s. 9, has been provided for and the rules lay down the

procedure for determining such compensation, in s. 13. It

is clear on a reading of the provisions for

386

compensation in that section that no compensation has been

provided for in respect of minerals lying unworked

underground. Section 14 to 17 lay down the method of

determining compensation and other cognate matters relating

to payment of compensation. The rest of the provisions of

the Act do not bear on the present controversy and,

therefore, need not be adverted to.

On a bare reading of the provisions of the Act, the

expression "any land" or "any rights in or over such land"

would appear to cover every interest regardless of the

person or authority who owns them, including those of a

State Government. But it has been argued that on a close

examination of the provisions aforesaid of the Act and

keeping certain general principles of interpretation of

Statutes in view, the conclusion follows that the Act does

not cover any property or interest in or over land belonging

to a State Government. We have already indicated that

neither the statement of objects and reasons nor the

preamble are of any help to the plaintiff or to States which

have intervened and have claimed that any property belonging

to a State Government is outside the scope and effect of the

Act.

Bearing in mind that the words used in s. 4 are

comprehensive and unrestricted and apt to include in their

sweep lands "belonging to a State" and that the reference in

s. 7 is to lands which are notified under s. 4 (1), we shall

now turn to the arguments bearing upon the interpretation of

certain specific provisions which are however claimed to

suggest an opposite conclusion. Firstly, it is urged that

"any person" used in s. 8 could not be interpreted as

including a State. This argument is bound up with the other

argument relating to the competence of Parliament to

legislate in respect of property belong, ing to a State. It

will, therefore, be convenient to deal

387

with this argument along with that topic, It is enough to

point out here that the explanation to s. 8 (1), and

particularly the words "undertaken by the Central Government

or by any other person' Would lend support to the argument

of the learned AttorneyGeneral that the word "Person" has

been used in the generic sense of including both a natural

person and a juristic person. Secondly, it "as argued with

reference to the words of the proviso to s. 9 (1) that where

the Act intended to make any mention of a State Government,

it had done so specifically as in ss. 9, 10, 11 and 18 of

the Act, and that, therefore, the substantive provisions of

the Act were. not intended to apply to any rights or

interest vested in a State Government. The argument is

plausible but not sound. Section 9 is the effective section

of the Act, which provides that after the Central Government

has investigated the prospect of obtaining coal, after the

issue of a notification under s. 4, and after notifying its

intention to acquire the land covered by the notification

under, s. 7, and after disposing of objections, if any,

under s. 8, the Central Government has to make the necessary

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declaration that that land should be acquired. The proviso

to s. 9 (1) only requires consultation with the concerned

State Government where it is the owner of the land, or has

any interest in or over such land. It has rightly been

pointed out on behalf of the Central Government that if the

right or interest of a State Government were not involved in

the acquisition, it would be wholly unnecessary to make any

reference to the State Government concerned. It was urged

that unless "lands belonging to a State Government" or in

which a State Government has an interest in or over such

land, were within the operative words of the main provisions

in s. 9 (1), it would be meaningless to Make a provision for

the consultation referred to in the proviso. We see force

in this submission. The consultation with the State

Government is made a condition precedent to the declaration

388

to be made by the Central Government in respect of the

proposed acquisition. But consultation does not necessarily

mean consent, though ordinarily consultation between two

governments or two public authorities would signify the co-

operation and willingness to accede to the proposals

situation which is not contemplated with reference to the

interests of private persons.

On the question of the proper interpretation of the proviso

to s. 9 (1), a Dumber of readings were suggested, which went

to the length of not only rewriting the section but of

adding words which were not there so as to make the proviso

mean what on its plain reading it cannot. We are not,

therefore, inclined seriously to examine those several

alternative readings of this part of the section. Similarly

the provisions of s. 10 (2) were pressed in aid of the

construction suggested on behalf of the plaintiff and the

other intervening States, that the interests of a State

Government were not within the purview of the Act. This

argument is based on the consideration that if rights or

interests of a State Government were also within the purview

of the Act, it would be meaningless to provide that the

Central Government or a Government Company, as contemplated

by s. II, should be deemed to be the lessee of the State

Government in respect of the rights acquired. We are unable

to acceeds to this construction. Sections 10 (2) and 11

have particular reference to those cases where the property

acquired consists of rights under any mining leases granted

by a State Government. Apart from the kind of property

contemplated by ss. 10 (2) and 11 (2), as aforesaid, there

may be other kinds of property acquired, e. g. coal-bearing

land, in which the entirety of the interest is vested in a

State Government. In such cases, there would be no question

of the Central Government or a Government Company becoming

or being deemed to become a lessee of a State Government.

Reference was made

389

to s. IS but the mention of a "State Government" in the

section is consequential upon the provisions of ss. 10 and

11, that is to say, where the Central Government or a

Government Company has, by operation of those provisions of

the Act, become the lessee of a State Government. In the

case of any differences between the Central Government and a

State Government on the question of how prospecting is to be

done or of how far the mineral Concession Rules shall be

observed, is, by virtue of this section, to be resolved by

arbitration or in such other manner as the Governments

concerned may decide.

It will thus appear that on a proper interpretation of the

relevant provisions of the Act, it cannot be said that

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either in express terms or by necessary implication the

provisions of the Act are implacable to rights or interests

of a State Government or that such lands are excluded. It

is plain that the Act is intended to cover land or rights in

or over land belonging either to an individual or to a

juristic person. Such land may comprise not only surface

rights but also mineral rights. The land to be acquired by

the Central Govt. might be virgin soil unencumbered by any

prospecting licences or mining leases granted bv the State

or by an intermediary, using the expression to mean all

interests below the State. Such an interest as aforesaid

may be vested in a State or different interests may be

vested in different persons by virtue of leases or licences

granted by proprietors in permanently settled States or by

tenure-holders who have expressly obtained mining rights.

The Act, therefore, had to use the compendious language

"'land or any interest in or over land" to cover all those

diverse rights and interests which the Central Govt. would

be interested to acquire in order to have a free hand in

developing the I and for coal mining in the public sector,

as it is called. The Act may have been more artistically

drafted but construing it as it is, we have no doubt that

390

Parliament intended to acquire all rights and interests in

coal bearing land with a view to prospecting for coal and

for exploiting coal-bearing mines. It must, therefore, be

held that the supplementary issue as regards the

interpretation of the Act joined between the parties as a

result of the amendment of the plaint must be decided

against the plaintiff.

Starting with the position that on a true construction of

the relevant provisions of the Act, the rights and interests

of a State Government in coal bearing land had not been

excluded from the operation of the Act, either in express

terms or by necessary implication, the next question that

arises for consideration is the first issue which covers

issues 3 and 4 also. The competence of Parliament to enact

the Act has to be determined with reference to specific

provisions of the Constitution, with particular reference to

the entries in the Seventh ScheduleList I and List III.

By Entry 42 in List III of the Seventh Schedule to the

Constitution read with Art. 246 (3) power to legislate in

respect of acquisition and requisition of property is

conferrcd upon the Parliament as well as the State

Legislatures, Prima facie, this power may be exercised by

the Parliament in respect of all property, privately owened

or State owned. But on behalf of the State of West Bengal

and some of the intervening States it was submitted that the

very nature of the right in property vested in the State for

governmental purposes imposed a limitation upon the exercise

of the Pocwer of the Union Parliament, affecting State

owned property. On behalf of the State of Punjab-one of

the intervening States-it was urged that if acquisition

of property was necessarily incidedtal to the effective

exercise of power by Parliament in respect of any of the

entries in Lists I and 111, the Parliament may legislate so

as to affect title of the State to property vested in it

391

provided it does not interfere with the legislative power of

the State.

Diverse reasons were suggested at the Bar in support of the

plea that the State property was not subject to the exercise

of legislative powers of the Parliament. They may be

grouped under the following heads

(1) The Constitution having adopted the federal principle

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of government the States share the sovereignty of the nation

with the Union, and therefore power of the Parliament does

not extend to enacting legislation for depriving the States

of property vested in them as sovereign authorities.

Entrustment of power to legislate must therefore be so read

as to imply a restriction upon the parliamentary under Entry

42 of List III when it is sought to be exercised in respect

of the property owned by a State.

(2) Property vested in the States by virtue of Art. 294 (I)

cannot be diverted to Union purposes by Compulsion of

Parliamentary legislation.

(3) The Government of India Act, 1935 provided special

machinery for acquisition of property of the State by

negotiations, and not by compulsion in exercise of

legislative power that provision recognised

that the Central Legislature of the Government

of India had no power to acquire property of

the State by exercise of legislative power,

and even though no provision similar to s. 127

of the Government of India Act, 1935 has been

enacted in the Constitution, the recognition

implicit in that provision of the immunity of

the property of the units must also be deemed

to be superimposed upon the exercise

392

of legislative power vested in the Parliament under the

Constitution.

(4) Absence of power expressly conferred such as is to be

found in the Australian Constitution, to legislate for

acquisition of the property of the State indicates that it

was not the intention of the Constitution makers to confer

that power upon the Union Parliament, under the general

legislative heads.

(5) If power be exercised by the Union to acquire State

property under Entry 42 of the Concurrent List, similar

power may also be exercised by the States in respect of

Union property and even to re-acquire the property from the

Union by exercise of the State's legislative power. The

power under Entry 42 can therefore never be effectively

exercised by the Parliament.

(6) It could not have been the intention of the

Constitution makers to confer authority upon the Parliament

to legislate for acquiring property of the States and

thereby to make the right of the State to property owned by

it even more precarious than the right which individuals or

Corporations have under Constitution to their property.

Individuals and Corporations have the guarantee under Art.

31 (2) of the Constitution that acquisition of their

property will be for public purposes and compensation will

be awarded for acquiring property. Entry 42

must be read subject to Art. 31, and inasmuch

as Fundamental rights are conferred upon

individuals and Corporations against executive

or legislative actions, and States are not

invested with any fundamental rights

exerciseable against the Union or other

States, the right to legislate for -compulsory

acquisition of State property cannot be

exercised,

393

(7) Unless a law expressly or by necessary implication so

provides, a State is not bound thereby. This well

recognised rule applies to the interpretation of the

Constitution. Therefore in the absence of any provision

express or necessarly implying that the property of the

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State could be acquired by the Union, the rights claimed by

the Union to legislate for acquisition of State property

must be negatived.

All these arguments, except the purely inter- pretational,

are ultimately founded upon the plea that the States have

within their allotted field full attributes of sovereignty

and exercise of authority by the Union agencies, legislative

or executive, which trenches upon that sovereignty is void.

Rc: (1)

Ever since the assumption of authority by the British Crown

under Statute 21- & 22, Vict .(1656) Ch. 106, the

administration of British India was unitary and highly

centralized. The GovernorGeneral was invested with

autocratic powers to administer the entire territory. Even

though the territory was divided into administrative units,

the authority of the respective Governors of the Provinces

was derived from the Governor-General and the Governor-

General was responsible to the British Parliament. There

was, therefore, a chain of responsibility-the Provincial

Governments were subject to the control of the Central

Government and the Central Government to the Secretary of

State. Some process of Revolution took place under the

Government of India Act, 1919, but that was only for the

purpose of decentralization of the Governmental power but on

that account the Government did not cease to be unitary.

The aim of the Government of India Act, 1935 was to unite

the Provinces and Indian States -into a federation, but that

could be

394

achieved only if a substantial number of the Indian States

agreed to join the Provinces in the federation. For diverse

reasons the Indian States never joined the proposed

federation and the part dealing with federation never became

effective. The Central Government as it was originally

constituted under the Government of India Act, 1919, with

some modification continued to function. But in the

Provinces certain alterations were made. Certain

departments were administered with the aid of Ministers, who

were popularly elected, and who were in a sense responsible

to the electorate. The Governor was still authorised to act

in his discretion without consulting his Ministers in

respect of certain matters. He derived his authority from

the British Crown, and was subject to the directions which

the Central Government gave to carry into execution Acts of'

the Central Legislature in the Concurrent List and for the

maintenance of means of communication, and in respect of all

matters for preventing grave menace to the peace or

tranquility of India or part thereof. The administration

continued to function as an agent of the British Parliament.

By the Indian Independence Act, 1947 a separate Dominion of

India was carved out and by s. 6 thereof the Legislature

was for the first time authorised to make laws for the

Dominion. Such laws were not to be void or inoperative on

the ground that they were repugnant to the law of England or

to the provisions of any existing or future Act of

Parliament of the United Kingdom, or to any order, rule or

regulation made under any such Act, and the powers of the

Legislature of the Dominion included the power to repeal or

amend any such Act, order, rule or regulation. The British

Parliament ceased to have responsibility as respects

governance of the territories which were immediately before

that date included in British India, and suzerainty of the

Crown over the Indian States lapsed

395

and 'With it all treaties and agreements in force on the

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(late of the passing of the Act between the Crown and the

rulers of Indian States. The bond of agency which bound the

administration in India to function as agent of the Birtish

Parliament was dissolved and the Indian Dominion to that

extent became sovereign. Then came the Constitution. The

territory was evidently too large for a democratic set-up

with wholly centralized form of Government. Imposition of a

centralized form might also have meant a reversal of

political trends which had led to decentralization of the

administration and some distribution of power. The

Constitution had, therefore, to be in a form in which

authority was decentralized. In the era immediately prior

to the enactment of the Indian Independence Act, there were

partially autonomous units such as the Provinces. There were

Indian States which were in a sensesovereign but their

sovereignty was extinguished bythe various merger agreements

which the rulers ofthose States entered into with the

Government of India before the Constitution. By virtue of

the process of integration of the various States there

emerged a Centralised form of administration in which the

Governor General was the fountain head of executive

authority. The Constitution of India was erected on the

foundations of the Government of India Act, 1935 ; the basic

structure was not altered in many important matters, and a

large number of provisions were incorporated verbatim from

the earlier Constitution.

In some respects a greater degree of economic unity was

sought to be secured by transferring subjects having impact

on matters of common interest into the Union list. A

comparison of the Lists in Schedule 7 to the Constitution

with the Schedule 7 to the Government of India Act, 1935

discloses that the powers of the Union have been enlarged

particularly in the field of economic unity and this was

done as it was felt that there should be,

396

centralized control and administration in certain fields if

rapid economic and industrial progress had to be achieved by

the nation. To illustrate this it is sufficient to refer to

National Highways (Entry 24), inter-State Trade and Commerce

(Entry 42)-to mention only a few being transferred from List

II of the Government of India Act to List I in the Consti-

tution, to the new entry regarding inter-State rivers (Entry

56), to the new Entry 33 in the Concurrent List to which it

is transferred from List 11, and to the comprehensive

provisions of Part XIII-which seek to make India a single

economic unit for Purposes of trade and commerce under the

overall control of the Union Parliament and the Union

Executive. The result was a Constitution which was not true

to, any traditional pattern of federation. There is no

warrant for the assumption that the Provinces were

sovereign, autunomous units which had parted with such power

as they considered reasonable or proper for enabling the

Central Government to function for the common good. The

legal theory on which the Constitution was based was the

withdrawal or restimption of all the powers of sovereignty

into the people of this country and the distribution of

these powers save those withheld from both the Union and the

States by reason of the provisions of Part III between the

Union and the States.

(a) A truly federal form of Government envisages a compact

or agreement between independent and sovereign units to

surrender partially their authority in their common interest

and vesting it in a Union and retaining the residue of the

authority in the constituent units. Ordinarily each

constituent unit has its separate Constitution by which it

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is governed in all matters except those surrendered to the

Union, and the Constitution of the Union primarily operates

upon the administration of the units. Our Constitution was

not the result of any such

397

compact or agreement : Units constituting a unitary State

which were non-sovereign were transformed by abdication of

power into a Union.

(b) Supremacy of the Constitution which cannot be altered

except by the component units. Our

Constitution is undoubtedly supreme but it is

liable to be altered by the Union Parliament

alone and the units have no power to alter it.

(c) Distribution of powers between the Union and the

regional units each in its sphere coordinate and independent

of the other. The basis of such distribution of power is

that in matters of national importance in which a uniform

policy is desirable in the interest of the units, authority

is entrusted to the Union, and matters of local concern

remain with the State.

(d) Supreme authority of the Courts to interpret the

Constitution and to invalidate action

violative of the Constitution. A federal

Constitution, by its very nature, consists of

checks and balances and must contain provi-

sions for resolving conflicts between the

executive and legislative authority of the

Union and the regional units.

In our Constitution characteristic (d) is to be found in

full force, (a) and (b) are absent. There is undoubtedly

distribution of powers between the Union and the States in

matters legislative and executive; but distribution of

powers is not always an index of political sovereignty. The

exercise of powers legislative and executive in the allotted

fields is hedged in by numerous restrictions, so that the

powers of the States are not coordinate with the Union and

are not in many respects independent.

398

Legal sovereignty of the Indian nation is vested the people

of India who as stated by the -preamble have solemnly

resolved to constitute India into a Sovereign Democratic

Republic for the objects specified therein. The Political

sovereignty is distributed between, as we will presently

demonstrate, the Union of India and the States with greater

weightage in favour of the Union. Article 300 invests the

Government of India and the States with the character of

quasi-corporations entitled to sue and liable to be sued in

relation to their respective affairs. By Art. 299 contracts

may be entered into by the Union and the States in exercise

of their respective executive powers' and Art. 298

authorises in exercise of their respective executive powers

the Union and the States to carry on trade or business and

to acquire, hold and dispose of property and to make

contracts. These provisions and the entrustment of powers

to legislate on certain matters exclusive, and concurrently

in certain other matters, and entrustment of executive

authority coextensive with the legislative power form the

foundation of the division of authority.

In India judicial power is exercised by a single set of

courts, Civil, Criminal and Revenue whether they deal with

disputes in respect of legislation which is either State

legislation or Union legislation. The exercise of executive

authority by the Union or by the State and rights and

obligations arising out of the executive authority are

subject to the jurisdiction of the Courts which have

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territorial jurisdiction in respect of the cause of action.

The High Courts have been invested with certain powers under

Art. 226 to issue writs addressed to any person or

authority, including in appropriate cases any Government,

for the enforcement of any of the rights conferrcd by Part

III and for anv other purpose and under Art. 227 the High

Court has superintendence over all courts in relation to

which it exercises jurisdiction. The Supreme Court is at

the apex of the

399

hierarchy of courts, civil, criminal,revenue and of quasi-

judicial tribunals. There are in India not two sets of

courts, Federal and State as are found functioning under the

Constitution of the United States of America. By Art. 247

Dower is reserved to the Parliament by law to provide for

establishment of courts for better administration of laws

made by the Parliament or of any existing laws with regard

to the matters enumerated in the Union List, but no such

courts have been constituted.

Sovereignty in executive matters of the Union is declared by

Art. 73 which enacts that subject to the provisions of the

Constitution, the executive power of the Union extends to

the matters with respect to which Parliament may make laws,

and to the exercise of such rights, authority and

jurisdiction as are cxercisable by the Government of India

by virtue of any treaty or agreement. But this executive

power may not save as expressly provided in the Constitution

or in any law made by Parliament, extend in any State to

matters with respect to which the Legislature of the State

has also power to make laws. By Art. 77 all executive

actions of the Government of India have to be expressed to

be taken in the name of the President. Executive power of

the State is vested by Art. 154 in the Governor and is

exercisable by him directly or through officers subordinate

to him in accordance with the Constitution. The appointment

of the Governor is made by the President and it is open to

(lie Pregideat to make such provision as lie thinks fit for

the discharge of the function of a Governor of the State in

any contingency not providded for in Ch. II of Part VI. By

Art. 162 subject to the provisions of the Constitution,

executive power of the State extends to matters with respect

to which the Legislature of the State has power to make

laws, subject to the restriction that in matters in the Con-

current List of the Seventh Schedule, exercise of executive

power of the State is also subject to and

400

limited by the executive power expressly conferred by the

Constitution or by any law made by Parliament upon the Union

or authorities thereof. Exercise of executive authority of

the States is largely restricted by diverse Constitutional

provisions. The executive power of every State has to be so

exercised as to ensure compliance with the laws made by

Parliament and any existing laws which apply in that State,

and not to impede or prejudice the executive power of the

Union. The executive power of the Union extends to the

giving of such directions to a State as may appear to the

Government of India to be necessary for those purposes and

as to the construction and maintenance of means of

communication declared to be of national 'or military

importance and for protection of railways. The Parliament

has power to declare highways or waterways to be of national

importance, and the Union may execute those powers, and also

construct and maintain means of communication as part of its

function with respect to naval, military and air force

works. The President may also, with the consent of the

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Government of a State, entrust to that Government or to its

officers functions in relation to any matter to which the

executive power of the Union extends : Art. 258 (1). Again

the Union Parliament may by law made in exercise of

authority in respect of matters exclusively within its

competence confer powers and duties or authorise the

conferment of powers and imposition of duties upon the

State, or officers or authorities thereof : Art 258 (2).

Art. 365 authorises the President to hold that a situation

has arisen in which the Government of a State cannot be

carried on in accordance with the provisions of the

Constitution, if the State fails to comply with or give

effect to any directions given in exercise of the executive

power of the Union.

These are the restrictions on the exercise of the executive

power by the States, in normal times; in

401

times of emergency power to override the exercise of

executive power of the State is entrusted to the Union.

Again the field of exercise of' legislative power being co-

extensive with the exercise of the legislative power of the

States, the restrictions imposed upon the legislative power

also apply to the exercise of executive power.

Distribution of legislative powers is effected by Art. 246.

In respect of matters set out in List I of the Seventh

Schedule Parliament has exclusive power to make laws: in

respect of matters set out in List 11 the State has

exclusive power to Legislate and in respect of matters set

out in List III Parliament and the State Legislature have

concurrent power to legislate. The residuary power,

including the power to tax, by Art. 248 and item 97 of List

I is vested in the Parliament. The basis of distribution of

powers between the Union and States is that only those

powers and authorities which are concerted with the

regulation of local problems are vested in the States, and

the residue specially those, which tend to maintain the

economic, industrial and commercial unity of the nation are

left with the Union. By Art. 123 the President is invested

with the power to promulgate Ordinances on matters on which

the Parliament is competent to legislate, during recess of

Parliament. Similarly under Art. 213 power is conferred

upon the, Governor of a State to promulgate Ordinances on

matters on which the State Legislature is competent to

legislate during recess of the Legislature. But upon the

distribution of legislative powers thus made and entrustment

of power to the State Legislature, restrictions are imposed

even in normal times. Article 249 authorises the Parliament

to legislate with respect to any matter in the State List if

the Council of States has declared by resolution supported

by not less than two-third of the members present and voting

that it is necessary or expedient in the national interest

that it Parliament

402

should make laws with respect to any matter enumerated in

the State List specified in the resolution. By Art. 252

power is conferred upon Parliament to legislate for two or

more States by consent even though the Parliament may have

no power under Art. 246 to make laws for the State except as

provided in Art. 249 and 250. Such a law may be adopted by

a Legislature of any other State. By Art. 253 Parliament

has the power notwithstanding anything contained in Art. 246

to make any law for the whole or any part of the territory

of India for implementing any treaty, agreement or

convention with any other country or countries or any

decision made at any international conference, association

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or other body. In case of inconsistency. between the laws

made by Parliament and laws made by the Legislatures of the

States, the laws made by the Parliament whether passed

before or after the State law in matters enumerated in the

Concurrent List to the extent of repugnancy prevail over the

State laws. It is only a law made by the Legislature of a

State which had been reserved for the consideration of the

President and has received his assent, on a matter relating

to a Concurrent List containing any provision repugnant to

the provisions-of an earlier law made by Parliament or an

existing law with respect to that matter, prevails in the

State.

Power of taxation (which is exercisable by the States in

comparatively minor fields, the more important such as

Income-tax, wealth-tax, exciseduties other than those on

certain specified articles, and customs, being reserved to

the Union) conferred by various entries under List II on the

States is also severely restricted. Property of the Union,

save in so far as the Parliament may by law otherwise

provide, is exempt from all taxes imposed by the State or by

any authority within the State. By Art. 286 imposition of a

tax on sale or purchase of

403

goods' where such sale or purchase takes place outside the

State or in the course of import of the goods into, or

export of the goods out of, the territory of India can only

be imposed by Parliamentary legislation. A State is also

prohibited unless the Parliament by law otherwise provides,

from imposing a tax on the consumption or sale of

electricity which is consumed by the Government of India or

in the construction, maintenance and operation of any

railway. Nor can levy of a tax be authorised in respect of

water consumed or distributed or sold by any authority

established by any existing law or any law made by

Parliament for regulating or developing any inter-State

river or river valley, except in so far as the Parliament

may by law so provide.

The States depend largely upon financial assistance from the

Union. A share in certain taxes levied and collected by the

Union such as tax on non-agricultural income, duties in

respect of succession to property other than agricultural

land, estate duty in respect of property other than agri-

cultural land, terminal taxes on goods or passengers carried

by railway, sea or air, taxes on railway fares and freights,

taxes on the sale or purchase of newspapers and on

advertisements published therein, taxes on the sale or

purchase of goods other than newspapers where such sale or

purchase takes place in the course of inter-State trade or

commerce, is given to the States. Certain grants-in-aid of

the revenues of the States of Assam, Bihar, Orissa and West

Bengal in lieu of assignment of any share of the net

proceeds in each year of export duty on jute and jute

products to those States may also be made. Union duties of

excise except duties on medicinal and toilet preparations

are collected by the Union but may be distributed in whole

or in part among the States in accordance with such

principles of distribution as may be formulated. By Art.

275 grants-in-aid of the revenue of such States as

404

Parliament may determine to be in need of assistance may

also be made.

It is manifest that the States depend for financial

assistance upon the Union, their own resources, because of

their restricted fields of taxation, being inadequate. The

power of borrowing is exercisable by the States under Art.

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293, but the same cannot be exercised without the consent of

the Government of India, if there is still outstanding any

part of a loan which has been made to the State by the

Government of India or by its predecessor Government, or in

respect of which a guarantee has been given by the Union, or

by its predecessor.

In times of national political or financial emergency, the

States may exercise only such powers legislative and

executive as the Union permits. When a State of emergency

is declared the Parliament has power to make laws for the

whole or any part of the territory of India with respect to

any matter in the State List, and the laws made by

Parliament prevail over the State Laws in the event of

repugnancy. If as a result of war, external aggression or

internal disturbances the security of India or any territory

is threatened, the President may declare a state of

emergency, and the executive power of the Union will

thereupon extend to giving directions to the States, as to

manner in which the executive power of the States is to be

exercised, and the power of the Parliament to make laws will

extend to making laws conferring or authorising conferment

of powers and imposition of duties, upon the Union or its

officers and authorities as respect any matter, even if such

matter be not enumerated in the Union List. The President

may also during the emergency suspend the operation of Art.

268, to 279 and require that all money Bills shall be

submitted to the President for his consideration, after they

are passed by the Legislature of the State.

405

The normal corporate existence of States entitles them to

enter into contracts and invests them with power to carry on

trade or business and the States have the right to hold

property. But having regard to certain basic features of

the Constitution, the restrictions on the exercise of their

powers executive and legislative and on the powers of taxa-

tion, and dependence for finances upon the Union Government

it would not be correct to maintain that absolute

sovereignty remains vested in the States. This is

illustrated by certain striking features of our

constitutional set up. There is no dual citizenship in

India: all citizens are citizens of India and not of the

various States in which they are domiciled. There are no

independent Constitutions of the States, apart from the

national Constitution of the Union of India: Ch. II, Part VI

from Arts. 152 to 237, deals with the States, the powers of

the Legislatures of the States, the powers of the executive

and judiciary. What appears to militate against the theory

regarding the sovereignty of the State is the wide power

with which the Parliament is invested to alter the

boundaries of States, and even to extinguish the existence

of a State. There is no constitutional guarantee against

alteration of the boundaries of the States. By Art. 2 of

the Constitution the Parliament may admit into the Union or

establish new States on such terms and conditions as it

thinks fit, and by Art. 3 the Parliament is by law

authorised to form a new State by redistribution of the

territory of a State or by uniting two or more States or

parts of States or by uniting any territory to a part of any

State, increase the area of any State, diminish the area of

any State, alter the boundaries of any State and alter the

name of any State. Legislation which so vitally affects the

very existence of the States may be moved on the

recommendation of the President which in practice means the

recommendation of the Union Ministry, and if the proposal in

the Bill affects the area, boundaries or name of any of the

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States, the

406

President has to refer the Bill to the Legislature of that

State for merely expressing its views thereon. Parliament

is therefore by law invested with authority to alter the

boundaries of any State and to diminish its area so as even

to destroy a State with all its powers and authority. That

being the extent of the power of the Parliament it would be

difficult to hold that the Parliament which is competent to

destroy a State is on account of some assumption as to

absolute sovereignty of the State incompetent effectively to

acquire by legislation designed for that purpose the

property owned by the State for governmental purpose.

The parliamentary power of legislation to acquire property

is, subject to the express provisions of the Constitution,

unrestricted. To imply limitations on that power on the

assumption of that degree of political sovereignty which

makes the States coordinate with and independent of the

Union, is to envisage a Constitutional scheme which does not

exist in law or in practice. On a review of the diverse

provisions of the Constitution the inference is inevitable

that the distribution of powers-both legislative and

executive-does not support the theory of full sovereignty in

the States so as to render it immune from the exercise of

legislative power of the Union Parliament-particularly in

relation to acquisition of property of the States. That the

Parliament may in the ordinary course not seek to obstruct

the normal exercise of the powers which the States have,

both legislative and executive, in the field allotted to

them will not be a ground for holding that the Parliament

has no such power if it desires, in exercise of the powers

which we have summarisedted do so. It was urged that to

hold that property yes to in the State could be acquired by

the Union, would mean, as was picturesquely expressed by the

learned Advocate-General of Bengal, that the Union could

acquire and take possession of Writer's buildings

407

where the Secretariat of the State Government is functioning

and thus stop all State Governmental activity. There could

be no doubt that if the Union did so, it would not be using

but abusing its power of acquisition, but the fact that a

power is capable of being abused has never been in law a

reason for denying its existence, for its existence has to

be determined on very different considerations.

We might add that this submission is, as it were, a

resuscitation of the now exploded doctrine of the immunity

of instrumentalities which originating from the observations

of Marshall, C. J., in Mc Culloch v. Maryland (1), has been

decisively rejected by the Privy Council as inapplicable

to the inter predation of the respective powers of the

States and the Centre under the Canadian and Australian

Constitutions (vide Bank of Toronto v. Lambe (2), and Webb

v. Outrim (3), and has practically been given tip even in

the United State's. The following passage in the judgment

of Lord Hobhouse in Lambe's case, though it dealt with the

converse case of not reading limitations into provincial

power might usefully be set out

"The appellant invokes that principle to

support the conclusion that the Federation Act

must be so construed as to allow no power to

the provincial legislatures under sect. 92,

which may by possibility, and if exercised in

some extravagant way, interfere with the

object of the Dominion in exercising their

powers under sect. 91. It is quite impossible

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to argue from the one case to the other.

Their Lordships have to construe the express

words of an Act of Parliament which makes an

elaborate distribution of the whole field of

legislative authority between two legislative

bodies, and at the same time provides for the

federated provinces a carefully balanced

constitution, under which

(1) (1819) 4 Wheat. 316.

(2) ( 1887) 12 App. Cas. 575.

(3) [1907] A.C. 81,

408

no one of the parts can pass laws for itself

except under the control of the whole acting

through the Governor-General. And the ques-

tion they have to answer is whether the one

body or the other has power to make a given

law. If they find that on the due

construction of the Act a legislative power

falls within sect. 92, it would be quite wrong

of them to deny its existence because by some

possibility it may be abused, or may limit the

range which otherwise would be open to the

Dominion Parliament."

It is pertinent also to note that under several entries of

List I it is open to the Union Parliament to legislate

directly upon properties which are situate in the State

including properties which are vested in the States, for

instance, Railways (Entry No. 22), Highways declared by or

under law made by Parliament to be national highways (Entry

23), Shipping and Navigation on inland waterways declared by

Parliament by law to be national waterways,(Entry

24),Lighthouses including lightships etc.(Entry 26), Ports

declared by or under law made by Parliament or existing law

to be major ports (Entry 27), Airways, aircraft and air

navigation,provision of aerodynamic etc. (Entry 29),

Carriage of passengers and goods by railways, sea or air, or

by national waterways in mechanically propelled vessels

(Entry 30), Property of the Union and the Revenue therefrom,

but as regards property situated in a State subject to

legislation by the State, save in so far as Parliament by

law otherwise provides (Entry 32), Industries, the control

of which by the Union is declared by Parliament by law to be

expedient in the public interest (Entry 52), Regulation and

development of oilfields and mineral oil resources,

petroleum and petroleum products, other liquids and

substances declared by Parliament by law to be dangerously

inflammable (Entry 53), Regulation of

409

mines and mineral development (Entry 54), Regulation and

development of inter-State rivers and rivervalleys (Entry

56), Ancient and historical monuments and records and

archaeological sites and remains declared to be of national

importance (Entry 67). These are some of the matters in

legislating upon which the Parliament may directly legislate

in respect of property in the states. To deny to the

Parliament while granting these extensive powers of

legislation authority to legislate in respect of property

situate in the State, and even of the State, would be to

render the Constitutional machinery practically unworkable.

It may be noticed that in the United States of America the

authority of Congress to legislate on a majority of these

matters was derived from the " Commerce Clause." The

commerce clause is not regarded as so exclusive as to

preclude the exercise of State legislative authority in

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matters which are local, in their nature or operation, or

are mere aids to commerce. As observed in Cooley's

Constitutional Limitations-8th Edition p. 1004 "Mr.

justice Hughes, in deliverig the opinion of the Supreme

Court of the United States,in Simpson v. Shepard (1), said :

"The grant in the Constitution conferred upon

Congress an authority at all times adequate to

secure the freedom of inter-state commercial

intercourse from State control, and to provide

effective regulation of that intercourse as

the national interest may demand. The words

'among the several States' distinguish between

commerce which concerns more States than one,

and that commerce which is confined within one

State and does not affect other States. 'The

genius and character of the whole government,

said Chief Justice Marshall, 'seems to be,

that its action is to be applied to all the

external concerns of the nation, and to those

internal concerns which affect the States

(1) (1913) 230 U.S. 352 : 517 L. ed. 1511.

410

generally; but not to those which are comple-

tely within a particular State, which do not

affect other States and with which it is not

necessary to interfere, for the purpose of

executing some of the general powers of the

Government. The completely internal commerce

of a State, then, may be considered as

reserved for the State itself. 'This

reservation to the States manifestly is only

of that authority which is consistent with,

and not opposed to, the grant to Congress.

There is no room in our scheme of government

for the assertion of State power in hostility

to the authorized exercise of Federal power.

The authority of Congress extends to every

part of inter-state commerce, and to every

instrumentality or agency by which it is

carried on; and the full control by Congress

of the subjects committed to its regulation is

net to be denied or thwarted by the

commingling of interstate and intrastate

operations. This is not to say that the

nation may deal with the internal concerns of

the State, as such, but that the execution by

Congress of its constitutional power to

regulate inter-state commerce is not limited

by the fact that intrastate transactions may

have become so interwoven therewith that the

effective government of the former

incidentally controls the latter. This

conclusion necessarily results from the

supremacy of the national power with its appo-

inted sphere."

Our Constitution recognises no such distinction between the

operation of a State law in matters which are local, and

which are interstate. if an enactment falls within the Union

List, whether its operation is local or otherwise State

legislation inconsistent therewith, will subject to Art. 254

(2) be struck down.

411

The question may be approached from another angle. Even

under Constitutions which are truly federal and full

sovereignty of the States is recognised in the residuary

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field both executive and legislative, power to utilise or as

it is said "Condemn" property of the State for Union

purposes is not denied.

The power to acquire land sought to be exercised by the

Union, which is challenged by the State of West Bengal, is

power to acquire in exercise of authority conferred by ss.

6, 7 and 9 of the Coal Bearing Areas (Acquisition and

Development) Act, 1957. The Act was enacted for

establishing in the economic interest of India greater

public control over the coal mining industry and its

development by providing for the acquisition by the State of

land containing or likely to contain coal deposits or of

rights in or over such land for the extinguishment or

modification of such rights accruing by virtue of any

agreement, lease, licence or otherwise, and for matters

connected therewith. By Entries 52 and 54 of List I the

Parliament is given power to legislate in respect of :

(52) "Industries, the control of which by the

Union is declared by parliament by law to be

expedient in the public interest."

(54) "Regulation of mines and mineral

development to the extent to which such

regulation and development under the control

of the Union is declared by Parliament by law

to the expedient in the public interest."

In exercise of powers under Entry 36 of the Government of

India Act, 1935 which corresponds with Entry 52 of the

Constitution the Central Legislature enacted the Minerals &

Mining (Regulation &. Development) Act, 1948, (LIII of

1948). By s. 2 of the Act it was declared that it was

expedient in the

412

public interest that the Central Government should take

under its control the regulation of mines and oilfields and

development of minerals to the extent specified in the Act.

'Mine' was defined under the Act as meaning any excavation

for the purpose of searching for or obtaining minerals and

includes an oil well. No mining lease could be given after

the commencement of the Act, otherwise than in accordance

with the rules made under the Act. By s. 13 the provisions

of the Act were to be binding on the Government, whether in

the right of the Dominion or of a State. By the declaration

by s. 2 the minerals became immobilized. The Act is on the

Statute Book, and the declaration, in the future application

of the Act since the Constitution must also remain in force,

as if it were made under Art. 52 of the Constitution.

After the Constitution, the Industries (Development &

Regulation) Act, 1951 (65 of 1951) was enacted by the

Parliament. By s. 2 it was declared that it is expedient in

the public interest that the Union should take under its

control the industries specified in the First Schedule. In

the Schedule item (3) "'Coal, including Coke and other

derivatives" was included as one of such industries. The

Legislature then enacted the Mines & Minerals (Regulation &

Development) Act, 1957 (LXVII of 1957). By s. 2 a

declaration in terms similar to the declaration in Act LIII

of 1948 was made. The Act deals with all minerals except

oil, and enacts certain amendments in Act LIII of 1948.

There being a declaration in terms of item 52 the Parliament

acquired exclusive authority to legislate in respect of Coal

industry set out in the Schedule to Act 65 of 1951 and the

State Government had no authority in that behalf.

In the American Constitution there is no express power

conferred upon the Congress to make a law for

413

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acquisition of any property for a public purpose. But it

has been held by a long course of decisions that it is open

to the Congress to legislate in respect of matters within

its competence even if such legislation may have a direct

impact upon the States' rights, to property. In the States

of Oklahoma Ex Rel. Leon Co. Phillips v. Guy F. Atkinson

Company (1), it was held that in enacting flood control

legislation which authorised construction of a reservoir,

the Congress had the power to condemn lands owned by a

constituent State. It was observed "'The Tenth Amendment

does not deprive 'the national government of authority to

resort to all means for the exercise of a granted power

which are appropriate and plainly adapted to the permitted

end' United States v. Darby (312 U. S. p. 124) x x x Since

the construction of this dam and reservoir is a valid

exercise by Congress of its commerce power, there is no

interference with the sovereignty or the State. United

States v. Appalachian Electric Power Co. (311 U. S. 428).

The fact that land is owned by a state is no barrier to its

condemnation by the United States. Wayne Country v. United

States, 53 Ct. cl. (F) 417, affirmed in 252 U. S. 574."

Similarly it was held in The Cherokee Nation v. The Southern

Kansas Railway Co. (2), that Congress has the power to

authorise a Corporation to construct a railway through the

territory of the Cherokee Nation, for the United States may

exercise the right of eminent domain even within the limits

of the several States for purposes necessary to the

execution of powers granted to the general government by the

Constitution.

Power to effectuate its legislative authority which is

entrusted in absolute terms being essential for carrying out

of the powers, does not depend upon the consent of the

States, and cannot be thwarted by any opposition on the part

of the States. The extent of this power was aptly de-

scribed by Strong, J., in

(1) (1940) 313 U.S. 508: 85 L. ed. 1487.

(2) (1889) 135 U,S, 641 : 34 L, ed. 295.

414

Kohl v. United States (1).

"It has not been seriously contended during

the argument that the United States Government

is without power to appropriate. lands or

other property within the States for its own

uses and to enable it to perform its proper

functions. Such an authority is essential to

its independent existence and perpetuity.

These cannot be preserved if the obstinacy of

a private person, or if any other authority,

can prevent the acquisition of the means or

instruments by which alone governmental

functions can be performed. The powers vested

by the Constitution in the General Government

demand for their exercise the acquisition of

lands in all the States. These are needed for

forts, armories and arsenals, for navy yards

and light houses, for custom-houses, post

offices and Court-houses, and for other public

uses. If the right to acquire property for

such uses may be made a barren right by the

unwillingness of property holders to sell, or

by the action of a State prohibiting a sale to

the Federal Government, the constitutional

grants of power may be rendered nugatory, and

the Government is dependent for its practical

existence upon the will of a State, or even

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upon that of a private citizen. This cannot

be. No one doubts the existence in the state

governments of the right of eminent domain-a

right distinct from and paramount to the right

of ultimate ownership. It grows out of the

necessities of their being, not out of the

tenure by which lands are held. It may be

exercised, though the lands are not held by

grant from the Government either mediately or

immediately, and independent of the consi-

deration whether they would escheat to the

Government in case of a failure of heirs. The

right is the offspring of political necessity;

and

(1) (1876) 91 U.S. 449.

415

it is inseparable from sovereignty, unless

denied to it by its fundamental law."

In the United States of America power to take, private

property for public use is called by American lawyers

eminent domain. It is the power of the State to take

property upon payment of just compensation for public use:

it is an inherent attribute of sovereignty-not arising even

out of the Constitution, but independently of it, and may be

exercised in respect of all property in the States for

effective enforcement of the authority of the Union against

private property or property of the State.

In Attorney-General for British Columbia v. Canadian

Pacific Railway (1),one of the questions which fell to be

determined before the judicial Committee was whether

power under s. 91 read with s. 92 of the British North

America Act 1867 which secures to the Dominion Parliament

exclusive legislative authority in respect of lines of steam

or other ships, railways, canals, telegraphs, and other

works and undertakings connecting any province with any

other, or others could be exercised so as to authorise use

of crown. lands in the province for a railway. The judicial

Committee observed at p. 210 :

"It was argued for the appellant that these

enactments ought not to be so construed as to

enable the Dominion Parliament to dispose of

Provincial Crown lands for the purposes

mentioned. But their Lordships cannot concur

in that argument. In Canadian Pacific Ry.

Co. v. Corporation of the Parish of Notre Dame

de Bonsecours (1899 A. C. 367) (a case

relating to the same company as the present)

the right to legislate for the railway in all

the provinces through which it passes Was

fully recognised. In Toronto Corporation v.

Bell Telephone Co. of Canada

(1) [1906] A.C. 204.

416

(1905 A. C. 52) which related to a telephone

company whose operations were not limited to

one province, and which depended on the same

sections, this Board gave full effect to

legislation of the Dominion Parliament over

the streets of Toronto which are vested in the

city corporation. To construe the section now

in such a manner as to exclude the power of

Parliament over Provincial Crown lands would

in their Lordships' opinion, be inconsistent

with the terms of the sections which they have

to construe, with the whole scope and purposes

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of the legislation, and with the principle

acted upon in the previous decisions of this

Board. Their Lordships think, therefore, that

the Dominion Parliament had full power if it

thought fit, to authorize the use of

provincial Crown lands by the company for the

purposes of this railway."

It is not considered as inconsistent with a true federation

like Australia to have a provision like s. 51 (31) of the

Commonwealth of Australia Act, 1900 which specifically

empowers the Commonwealth to acquire "'State" property, if

needed for a Commonwealth purpose on terms of payment of

compensation. In this connection it is to be noticed that

there is under the Commonwealth of Australia Act a provision

as regards vesting of property in States and in the

Commonwealth on lines somewhat similar to Art. 294. In

Canada, the decision of the Privy Council have held that the

acquisition of property by the Dominion for implementing or

carrying out Dominion legislation under powers vested in

Parliament in that behalf by s. 91 was not inconsistent with

what might be termed the legislative sovereignty of the

Provinces in the fields marked out for them by s. 92. And

lastly, even in America which is a true federation, since

the Constitution of the U. S. makes no provision for the

State Constitutions, these being

417

determined by their own laws, it has been held that the

power of eminent domain of the Congress for the purposes of

effectuating Congressional purpose comprehends the right to

expropriate State property. In these circumstances we are

unable to appreciate the argument that if the Constitution

were to be held to be a Federation, the States being

considered as the federative units, such a status

necessarily involved a prohibition or negation of the right

of the Union to acquire the property of the State for the

purpose of giving effect to its legislative powers.

Therefore the power of the Union to legislate in respect of

property situate in the States even if the States are

regarded qua the Union as Sovereign, remains unrestricted,

and the State property is not immune from its operation.

Exercising powers under the diverse entries which have been

referred to earlier, the Union Parliament could legislate so

as to trench upon the rights of the State in the property

vested in them. If exclusion of State property from the

purview of Union legislation is regarded as implicit in

those entries in List 1, it would be difficult if not

impossible for the Union Government to carry out its

obligations in respect of matters of national importance.

If the entries which we have referred to earlier are 'not

subject to any such restriction as suggested, there would be

no reason to suppose that Entry 42 of List III is subject to

the limitation that the property which is referred to in

that item is of individuals or corporations and not of the

State. In its ultimate analysis the question is one of

legislative competence. Is the power conferred by Entry 42

List III as accessory to the effectuation of the power under

Entries 52 & 54 incapable of being exercised in respect of

property of the States? No positive interdict against its

exercise is perceptible in the Constitution : and the

implication of such an interdict assumes a degree of

sovereignty in the States of such plenitude as transcending

the express legislative

418

power of the Union. The Constitution which makes a division

of legislative and executive powers between the Union and

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the States is not founded on such a postulate : and the

concept of superiority of the Union over the States in the

manifold aspects already examined negatives it.

Re. (2).

By Art. 294 (a) all property and assets which immediately

before the commencement of the Constitution were vested in

the British Crown for the Dominion of India, became vested

in the Union, and property vested for the purposes of the

Government of the Provinces, became vested in the

corresponding States. Under the Government of India Act all

property for governmental purposes was vested in the British

Crown, and by virtue of the Constitution that property

became vested in the Union and the States. By virtue of cl.

(b) the rights, liabilities and obligations of the

Government of India and the Provinces, devolved upon the

Union and the corresponding States.

A considerable point was made of the fact that Art. 294 had

vested certain property in the State and it was submitted

that subject to the right of the State by agreement to

convey that property under Art. 298, the Constitution

intended that the State should continue to be the owner of

that property and that this vesting must be held to negative

the Union"s right to acquire any property vested in the

State without its consent. It was pointed out by the

learned Attorney-General that so far as the plaintiff-the

State of West Bengal-was concerned it did not own the coal-

bearing lands on the date of the Constitution, and that it

got title thereto only after the vested in the State by

virtue of the provisions of the Bengal Acquisition of

Estates Act of 1954 (W. B. I of 1954) and that the property

thus acquired subsequently was not within the scope of Art.

294. We

419

have no doubt that this would be an answer to the claim of

the plaintiff in this suit and particularly in the context

of the challenge to the validity of the notification now

'impugned , but we do not desire to rest our decision on any

such narrow ground.-

Article 298 runs :

"298. The executive power of the Union and of

each State shall extend to the carrying on of

any trade or business and to the acquisition,

holding and disposal of property and the mak-

ing of contracts for any purpose

Provided that-

(a) the said executive power of the Union

shall, in so far as such trade or business or

such purpose is not one with respect to which

Parliament may make laws, be subject in each

State to legislation by the States; and

(b) the said executive power of each State

shall, in so far as such trade or business or

such purpose is not one with respect to which

the State Legislature may make laws, be

subject to legislation by Parliament."

The argument was that the Constitution intended and enacted

that property allotted to or vested in a State under the

provisions of Art. 294 or 296 shall continue to belong to

that State unless and until by virtue of the power conferred

on the State by Art. 298 it chose to part with it, and that

without a Constitutional amendment of these Articles such

property cannot be divested from the State. We consider

that this submission proceeds on a misconception of the

function of Arts. 294 and 298 in the 'scheme of the

Constitution. To start with it has to

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420

be pointed out that when Art. 298 Confers on States the

power to acquire or dispose of property, the reference is to

the executive power of the State to acquire or dispose of

property which would apply without distinction to property

vested under Art.294 or under 296 by escheat or lapse or as

bona vacantia, on- property acquired otherwise. Besides,

Art. 298 is merely an enabling Article-conferring on the

State as owner of the property, the power of disposal. That

cannot on any reasonable interpretation be constructed a,,

negativing the possibility of the State's title to property

being lost by the operation of other provisions of the

Constitution. Art. 298 has therefore no relevance on the

proper construction of Art. 294.

Article 294 wits modelled on s. 172 of the Government of

India Act, 1935. As pointed out by the Federal Court in In

re the Allocation of Lands and Buildings in a Chief

Commissioner's Province(1).

"Up to April 1st, 1937, when the greater part

of the Act came into force, the Government of

India was a unitary Government to which all

the Provincial Governments were subordinate

and hence all lands and buildings belonging to

Government or used for governmental purposes

of were vested in His Majesty for the purpose

of the Government of India.' This had been the

legal position ever since the Government of

India Act, 1858 (see s. 31) of that Act, and

s. 28(1) and (3) of the Government of India

Act. which immediately preceded the Art of

1935). Bitt the setting up of a number of

autonomous Provinces, independent of the

Central Government and dividing with the

latter the totality if executive and

legislative powers in British India, and the

separation of the powers connected with the

exercise of the functions of the Crown in its

relations with the Indian State (which were to

be thenceforward exercised

(1) 1943 F.C.R.. 20, 23

421

exclusively by His Majesty's Representative

appointed for that purpose) made an allocation

necessary among these three authorities of the

lands and buildings which had hitherto been

vested in His Majesty for the purposes of the

Government of India alone. It is this alloca-

tion which was effected, or attempted to be

effected, by the provisions of s. 172, sub-s.

(1), paras, (a), (b) and (c)."

Section 172 which effected this distribution

rat)

"172. (1) All lands and buildings which imme-

diately before the commencement of Part III of

this Act were vested in His Majesty for the

purpose of the Government of India shall as

from that date--

(a) in the case of lands and buildings which

are situate in a Province, vest in His Majesty

for the purposes of the government of that

Province unless they were then used, otherwise

than under a tenancy agreement between the

Governor-General in Council and the Government

of that Province, for purposes which

thereafter will be purposes of the Federal

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Government or of His Majesty Representative

for the exercise of the functions of the Crown

in its relations with Indian States, or unless

they are lands and buildings formerly used for

such purposes is fore, said, or intended or

formerly intended to, be so used and are

certified by the Governor-General in Council

or, as the case may be, His Majesty's

Representative, to have been retained for

future use for such purposes, or to have been

retained temporarily for the purpose of more

422

advantageous disposal by sale or otherwise;

just like s. 172 being the forerunner of Art. 294, as. 174

and 175 are phrased in terms similar and correspond to Arts.

296 and 298.

The right of the States to property, which devolved upon

them by Art. 294 (a) was therefore no different from the

right they had in the after acquired property: the

Constitution does not warrant a distinction between the

property acquired at the inception of the Constitution, and

in exercise of executive authority. Article 294 does not

contain any prohibition against transfer of property of the

State and if the property is capable of being transferred by

the State it is capable of being compulsorily acquired.

Attorney-General for Quebec v. Nipissing Central Railway Co.

and Attorney-General for Canada (1), is in this context

instructive.

The Dominion legislation-the Railway Act, 1919 of Canada-

made provision for the expropriation of lands for the

purpose of railways and for the payment of compensation for

the lands so taken and under s. 189 of the enactment the

railway company was empowered with the consent of the

Governor General-in-Council to take "Crown lands" for the

use of the railway.

Section 109 of the British North America Act which

corresponds to Art. 294 ran :

"109. All lands, mines, minerals, and

royalties belonging to the several Provinces

of Canada, Nova Scotia and New Brunswick at

the Union, and all sums then due or payable

for such lands, mines, minerals, or royalties,

shall belong

(1) (1926) A. C. 715.

423

to the several Provinces of Ontario, Quebec,

Nova Scotia and New Brunswick in which the

same are situate or arise, subject to any

trusts existing in respect thereof, and to any

interest other than that of the Province in

the same."

The right of the Provinces to continue to retain and enjoy

their property so vested was further emphasized by s. 11 7

which read :

"117. The several Provinces shall retain all

their respective public property not otherwise

disposed of in this Act, subject to the right

of Canada to assume any lands or public

property required for fortifications or for

the defence of the country."

The Governor-General of Canada referred to the Supreme Court

questions as to the effect of these provisions and its

competence in relation to Provincial Crown Lands.

It would be seen that the lands were not required either for

fortifications for the defence of the country within s. 117.

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The Supreme Court of Canada held that the provision applied

to the Provincial lands and was competently enacted by the

Dominion Parliament, Sir John Simon appearing for the

appellant-Province made two submissions : (1) That on a

proper construction of the Railway Act, it could be held

applicable only to Crown Lands vested in the Dominion and

not to Provincial Crown Lands, relying for this purpose

largely on the provision in s. 189 of the impugned Act

for taking the consent of the Governor-General-in-Council.,

(2) By reason of Provincial Crown Lands being vested in

the appellant by s. 109 of the Imperial Act, read with s. II

7, the Provinces were entitled to retain their respective

property not otherwise disposed of by the Act, and that the

purpose for which the Railways

424

Act made provision did not fall within the last limb of s.

117 vesting in the Dominion Government a right to take

property for certain limited purposes. For this reason, if

the Act on its proper construction involved interference

with Provincial Lands the same was unconstitutional. The

agreement for the respondent--the Dominion-was that when s.

117 of the, British North America Act vested in the Dominion

the power to take Dominion land for defence etc. it was a

reference to executive and not legislative action. They

submitted that the section was not intended to ensure that

the Provinces retain their public property for all time but

was meant merely as a distribution of public property on the

date of the Confederation. Viscount Cave, after disposing

of the question relating to the construction of s. 189 in

the following terms :

"The section applies in terms to all lands of

the Crown lying on the route of the railway,

no distinction being made between Dominion and

Provincial Crown lands."

dismissed as not very material the contention raised that as

reference had been made to the Governor Gcneral-in-Council

it indicated that it was only Dominion property that was

intended to be covered by that provision.

Dealing with the main constitutional objection to the

validity of the taking of Provincial property, Viscount Cave

pointed out that it was not the first occasion when the

impact of Dominion legislative power under s. 91 of the

British North America Act upon the property vested in the

Provinces arose before the Privy Council, for in Attorney-

General for British Columbia v. Canadian Pacific Railway Co.

(1906 A. C. 204) the argument had been advanced that the

legislative power of the Dominion ought not to be construed

so as to deprive the Provinces of their

425

proprietary interest in what had been vested in them by the

British North America Act.

Viscount Cave quoted the passage in the judgment we have

already extracted and continued :

"It was argued that the effect of ss. 109 and

1.17 of the British North America Act was to

vest in each of the Provinces the beneficial

Interest in the Crown land situate in the

Province, subject only to the right of Canada

under the reservation contained in s. 117 to

assume lands required for purposes of defence.

But the reservation in question appears to

refer

to executive, and not to' legislative, action;

and while the proprietary right of each

Province in its own Crown lands is beyond

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dispute, that right is subject to be affected

by legislation passed by the Parliament of

Canada within the limits of the authority

conferred on that Parliament..................

where the legislative power cannot be

effectually exercised without affecting the

proprietary rights both of individuals in a

Province and of the Provincial Government, the

power so to affect those rights is necessarily

involved in the legislative power."

Re. (3).

Power to acquire land was vested under the Government of

India Act, 1935, by Entry 9 in List II of the Seventh

Schedule, exclusive. by in the Provinces. For any purpose

connected with a matter in respect of which the Central

Legislature was competent to enact laws the Central

Executive could require the Province to acquire land on

behalf of and at the expense of the Union. This however did

not mean that incidental to the exercise of the right to

legislate in respect of Railways, Ports, Lighthouses, power

to affect the right of the citizens and

426

corporations and of Provinces in land was not exercisable.

As already observed even under Constitutions where a larger

slice of sovereignty remains effectively vested in the

(component unity) such as the United States of America power

to legislate vested in the Central or national subjects

includes the power to legislate so as to extinguish rights

in State property.

Under the Government of India Act, 1935 the Central

Government could require the Province to acquire lands on

behalf of the Union if it was private land, and to transfer

it to the Union if it was the State land. The Provincial

Government had manifestly no option to refuse to comply with

the direction. Provision for fixation of compensation did

not affect the nature of the right which the Central Govern-

ment could exercise.

In broad outline the governmental structure under the

Constitution vis-a-vis the Union and the States is based on

the relationship which existed between the Central

Government and the Provinces under the Government of India

Act, 1935, and that in this respect the Constitution has

borrowed largely from the earlier constitutional document.

But even with the Provinces being autonomous within the

spheres allotted to them and there being a distribution of

property and assets between the Central Government and the

Provinces under part III of Ch. VII in almost the same terms

as is found in the corresponding Arts. 294 and 298, it was

not considered an infraction of the autonomy of the

Provinces to vest such a power in the Central Government,

for s. 127 of the Government of India Act enacted

"127. The Federation I may, if it deems it

necessary to acquire any land situate in a

Province for any purpose connected with a

matter

with respect to which the Federal Legislature

427

has power to make laws, require the province

to acquire the land on behalf, and at the

expense, of the Federation or, if the land

belongs to the Province, to transfer it to the

Federation on such terms as may be agreed, or,

in default of agreement, as may be determined

by an arbitrator appointed by the Chief

justice of India."

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and thus property vested in a Province under s. 172 could be

required to be transferred to the Central Government if it

was needed for a central purpose.

It would therefore be manifest that the right of the Centre

to require the Province to part with property for the

effective performance of central functions was not

considered as detracting from provincial autonomy.

What however is of relevance is the presence of s. 127 in

that enactment which empowered the Central Government to

require the Provinces to part with property owned by them if

the same was needed for the purposes of the Government of

India. It was however suggested that the compulsory

acquisition of provincial property by the Central Government

was there specifically provided for and that the absence of

such a provision made all the difference. But this, in our

opinion, proceeds on merely a superficial view of the

matter. A closer examination of the scheme of distribution

of legislative power in regard to compulsory acquisition of

property under the Government, of India Act discloses that

though the power to compulsorily acquire property was

exclusively vested in the Provinces, the Central Government

could satisfy its requirements of property for Central

purpose by utilising provincial machinery, and that it was

in that context that a specific provision referring to the

Provinces having at the direction of the Central Government

to transfer provincial property was needed. It is therefore

difficult to appreciate the ground

428

on which the existence of a provision in the Government of

India Act for assessment of compensation for land which the

Provinces were bound to transfer on being so required by the

Central Government and the deletion of that provision in

enacting the Constitution may affect the exercise of the

power vested in the Union Parliament.

Re. (4):

The Australian Constitution contains an express power

authorising legislation by the Parliament of Australia for

acquisition of State property But the Constitutions of the

United States of America and Canada contain no such express

provision. The power of the Union Parliament to enact

legislation affecting title of the constituent States to

property vested in them, is on that account not excluded.

If the other provisions of our Constitution in terms of

sufficient amplitude confer power for enacting legislation

for acquiring State property, authority to exercise that

power cannot be defeated because the express power to

acquire property generally does not specifically and in

terms refer to State property.

Re. (5):

In the Constitution of India as originally, enacted there

was an elaborate division of powers by providing three

entries relating to acquisition and requisition of property.

List I entry 33 "Acquisition or requisitioning property for

purposes of the Union". List II Entry 36 "Acquisition or

requisitioning of property, except for the purpose of the

Union, subject to the provisions of Entry 42 of List 111";

List III Entry 42 "principles on which compensation for

property acquired or requisitioned for the purpose of the

Union or of a State or for any other public purpose is to be

determined, and the form and the manner in which such

compensation is to be given". Bythe Constitution (Seventh

Amendment) Act, 1956 the

429

three Entries were repealed, and a single Entry 42 in the

Concurrent List "Acquisition and Requisition of property"

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was substituted. Power to acquire or requisition property

may since the amendment, be exercised concurrently by the

Union and the States. But on that account conflicting

exercise of the power cannot be envisaged. Article 31 (2)

Which deals with acquisition of all property requires two

conditions to be fulfilled (1) acquisition or requisitioning

must be for a public purpose (2) the law under which the

property is acquired or requisitioned must provide for

payment of compensation either fixed thereby or on

principles specified thereby. By cl. (3) of Art. 31 no such

law as is referred to in cl. (2) made by the legislature of

a State shall have efficacy unless such law has been

reserved for the consideration of the President and has

received his assent. As the President exercises his

authority with the advice of the non Ministry, Conflict by

the effective exercise of power of acquisition in respect of

the same subjectmatter simultaneously by the Union, and the

State or by the State following upon legislation by the

Union cannot in practice be envisaged even as a possibility.

Article 254 also negatives the possibility of such

conflicting legislation. By cl. (1) of that Article if a

law made by the legislature of a State is repugnant to any

provision of a law competently made by Parliament, the State

lady is, subject to cl. (2), Vold, Clause (2) recognises

limited validity of a State law on matters in the Concurrent

List if that law is repugnant to an existing or earlier law

made by Parliament, only it such law has' been reserved for

the consideration of' the president, and has received his

assent. By the proviso authority is reserved to the

Parliament to repeal a law having even this lining

validity. Assent of the President to State legislation

intended to nulls a law enacted by Parliament for

acquisition of State property for the purposes of' the Union

lies outside the realm of practical possibility.

430

Re. (6):

The submission that Art. 31 has no application to the

acquisition or requisition of property of a State is based

on no solid foundation. This argument was based on three

grounds:-

(a) Fundamental rights are declared in

favour or citizens and others against

legislative or executive action of the

Government and the Parliament of India and the

Government and the legislatures of the States

and all local or other authorities within the

territory of India, or under the control of

the Government of India and not in favour" of

the States against Union action.

(b) Article 31 gives protection to the

rights of persons, and a State is not a person

within the meaning of that Article.'

(c) Entry 42 in the Concurrent List is by

virtue of Art. 13 and 245 subject to Art. 31.

Therefore private property may be acquired

consistently with the prohibitions in the

Constitution, but State property may be

acquired without a public purpose and without

payment of compensation.

It is difficult to agree with the view that under the scheme

of the Constitution fundamental rights may be claimed by

individuals or corporations only and never by the State.

By Art. 13 (1) all laws in force before the Constitution to

the extent of inconsistency with Ch. III are declared void :

and by cl. (2) the State is prohibited from making any law

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which takes away or abridges fundamental rights, and the

laws made in contravention of the prohibition are void.

431

The fundamental rights are primarily for the protection of

rights of individuals and corporations enforceable against

executive or legislative action of a Governmental agency,

but it has to be remembered that all laws preexisting which

are inconsistent with and post constitutional laws which

contravene the prohibitions are to the extent of the

inconsistency or contravention void. Some of these rights

are declared in form positive but subject to the restric-

tions authorising the State to make laws derogating from the

fullness of the protection e. g. 15 (4), 16 (3), 16 (4), 16

(5)....... 19 (2), (3), (4), (5), (6), 22 (3), 22 (6), 23

(2), 25 (2), 28 (2) & (3) : there arc certain articles which

merely declared rights c. g. 17, 25 (1), 26, 29 (1) and 30,

(1) : and there are others merely prohibitory without

reference to the right of any person, body or agency to

enforce them e.g. 18 (1), 23 (1), 24 and 28 (1).

Prima facie, these declarations involve an obligation

imposed not merely upon the "State", but upon all persons to

respect the rights so declared, and the rights are

enforceable unless the context indicates otherwise against

every person or agency seeking to infringe them. The rights

declared in the form of prohibition must have a concomitant

positive content ; without such positive content they could

be worthless. Relief may be claimed from the High Court or

from this Court, against infringement of the prohibition, by

any agency, unless the protection is expressly restricted to

State action.

There are still other Articles in the form not of rights but

fundamental disabilities e. g. 18 (2), 18 (3), 18 (4).

Again there are certain Articles e.g. 19(g), Part 11, 24 (2)

which appear to recognise affirmative rights of the States.

Article 31 is couched in negative form, but recognises the

existence of at least one important power vested in every

sovereign State, not by virtue of its Constitution, but

432

springing from its very existence as a State viz, the power

to acquire property for public purposes on payment of

compensation which the American jurists call 'eminent

domain'. Article 31 (2) enunciates the restriction subject

to which this power of eminent domain is to be exercised.

For the purposes of the present case it is unnecessary to

consider whether Art. 31 (1) recognises the existence of the

police power. Before Art. 31 was amended by the

Constitution (Fourth Amendment Act, 1955), there was

conflict of opinion in this Court as to the interrelation of

cl. (1) and (2). Some judges held that cl. (1) & (2) dealt

with subject of eminent domain : other judges were of the

opinion that Art. 31 (1) dealt with the police power and

Art. 31 (2) with eminent domain ; some judges did not

express any definite view. After the amendment by the

Constitution (Fourth Amendment) Act, 1955, cl. (1), (2) and

(2A) of Art. 31 read as follows :-

(1) No person shall be deprived of his

property save by authority of law.

(2) No property shall be compulsorily

acquired or requisitioned save for a public

purpose and save by authority of a law which

provides for compensation for the property so

acquired or requisitioned and either fixes the

amount of' the compensation or specifies the

principles on which, and the manner in which

the compensation is to be determined and given

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; and no such law shall be called in question

in any Court on the ground that the compen-

sation provided by that law is not adequate.

(2A) Where a law does not provide for the

transfer of the ownership or right to

possession of any property to the State

433

or to a corporation owned or controlled by the

State, it shall not be deemed to provide for

the compulsory acquisition or requisitioning

of property, notwithstanding that it deprived

any person of his property".

In Kavalappara Kottarathil Kochuni v. State of Madras (1),

it was held that cls. (1) and (2) of Art. 31 as amended

grant a limited protection against the exercise of different

powers. By cl. (2) of Art. 31 property is protected against

compulsory acquisition or requisition. The clause grants

protection in terms of widest amplitude against compulsory

acquisition or requisition of property, and there is nothing

in the Article which indicates that the property protected

is to be of individuals or corporations. Even the

expression 'person' which is used in cl. (1) is not used in

cls. (2) and (2A), and the context does not warrant the

interpretation that the protection is not to be available

against acquisition of State property. Any other

construction would mean that properties of municipalities or

other local authorities--which would admittedly fall within

the definition of State in Part III either cannot be

acquired at all or if acquired may be taken without payment

of compensation. Entry 42 in List III and cl. (2) of Art.

31, operate in the same field of legislation : the former

enunciates the content of legislative power, and the latter

restraints upon the exercise of that power. For

ascertaining whether an impugned piece of legislation in

relation to acquisition or requisition of property is within

legislative competence, the two provisions must be read

together. The two provisions being parts of a single

legislative pattern relating to the exercise of the right

which may for the sake of convenience be called of eminent

domain the expression 'property' in the two provisions must

have the same import in defining the extent of the power and

delineating restraints thereon. In other words Art. 31(2)

imposes restrictions on the exercise of

(1) [1960] 3 S.C.R. 887.

434

legislative power under Entry 42 of List Ill. Property

vested in the State may not therefore be acquired under a

statute enacted in exercise of legislative power under Entry

42 unless the' Statute complies with the requirement of the

relevant clauses of Art. 31.

Re. (7) :

In Director of Rationing and Distribution v. The Corporation

of Calcutta (1), it was held by this Court by a majority

"The law applicable to India before the

Constitution was as authoritatively laid down

by the Privy Council in L. R. 73 I. A. 271.

The Constitution has not made any change in

the legel position. On the other ban& it has

clearly indicated that the laws in

force before January 26, 1950, shall continue

to have validity even in the new set-up except

in so far as they were in conflict with the

express provisions of the Constitution. The

rule of interpretation of statutes that the

State is not bound by a statute unless it is

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so provided in express terms or by necessary

implication, is still good law".

It was observed at p. 172 :

"The immunity of Government from the operation

of certain statutes, and particularly statutes

creating offences, is based upon the funda-

mental concept that the Government or its

officers cannot be a party to committing a

crime-analogous to the "prerogative of perfec-

tion' that the King can do no wrong. Whatever

may have been the historical reason of the

rule, it has been adopted in our country on

grounds of public policy as a rule of inter-

pretation of statutes. That this rule is not

(1) [1961] 1 S.C.R. 158.

435

peculiar or confined to a monarchical form of Government. "

The Court thereby approved the principle of exemption of the

sovereign from the general words of a Statute enunciated by

the Judicial Committee in Province of Bombay v. Municipal

Corporation of Bombay in the following terms

"The general principle to be applied in con-

sidering whether or not the Crown is bound by

general words in a statute is not in doubt.

The maxim of the law in early times was that

no statute bound the Crown Unless the crown

was expressly named therein, "Roy nest lie par

ascun statute si il ne soit expressement

nosme." But the rule so laid down is subject

to at least one exception. The Crown may be

bound, as has often been said, "'by necessary

implication". If, that is to say

, it is

manifest from the very terms of the statute,

that it was the intention of the Legislature

that the Crown should be bound, then the

result is the same as if the Crown had been

expressly named. It must then be inferred

that the Crown, by assenting to the law,

agreed to be bound by its provisions."

But the rule that the State is not bound, unless it is

expressly named or by necessary implication in the statute

is one of interpretation. In considering the true meaning

of words or expression used by the Legislature the Court

must have regard to the aim, object and scope of the statute

to be read in its entirety. The Court must ascertain the

intention of the Legislature by directing its attention not

merely to the clauses to be construed but to the entire

Statute; it must compare the clause with the other parts of

the law, and the setting in which the clause to be

interpreted occurs. Again in interpreting a Constitutional

document provisions conferring legislative power must

normally be interpreted liberally

(1) (1946) L.R, 73 I.A. 271, 274.

436

and in their widest amplitude. Vide-Navinchandra Mafatlal

v. The Commissioner of Income-tax, Bombay City(1),Entry 42

in List III does not, prima facie, contain any indication

that the expression "Property" therein is to be understood

in any restricted sense : nor do the other provisions of the

Constitution for reasons already stated suggest a restricted

meaning. The ground of absolute sovereignty of the States

which may not be interfered with by taking property vested

in the States by Parliamentary legislation has no legal

basis. Again denial of power to the Union Parliament to

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legislate on allotted topics of legislation, in a manner

affecting the property vested in a State, may render

Parliamentary legislation virtually ineffective. No

provision in the Constitution suggesting a restricted

meaning of the word 'property' in the context of legislative

power has been brought to our notice. Regard being had to

the extensive powers which the Union Parliament and

Executive have for using State property, in the larger

public interest, the restrict on suggested that the power

does not extend to the acquisition of property of the States

does not seem to be contemplated. By making the requisite

declarations under Entries 54 of List 1, the Union

Parliament assumed power to regulate mines and minerals and

thereby to deny to all agencies not under the control of the

Union, authority to work the mines. It could scarcely be

imagined that the Constitution makers while intending to

confer an exclusive power to work mines and minerals under

the control of the Union, still prevented effective exercise

of that power by making it impossible compulsorily to

acquire the land vested in the States containing minerals.

The effective exercise of the power would depend-if such an

argument is accepted-not upon the exercise of the power to

undertake regulation and control by issuing a notification

under Entry 54, but upon the will of the State in the

territory of which mineral bearing land is situate. Power to

legislate for regulation and development of mines and

minerals

(1) [1955] 1 S.C.R. 829.

437

under the control of the Union, would by necessary

implication include the power to acquire mines and minerals.

Power to legislate for acquisition of property vested

in the States cannot therefore be denied to the Parliament

if it be exercised consistently with the protection afforded

by Art. 31.

The following findings will accordingly be recorded on the

issues:

Issue 1...in the affirmative.

2.....not such as to disentitle the Union

Parliament to exercise its legislative power

under Entry 42 List III.

3....answer covered by answer on

issue 2.

4....in the negative.

5....in the negative.

Finding on additional

issue..in the affirmative.

The suit will therefore stand dismissed with costs.

SUBBA RAO, J.-I regret my inability to agree. The summary

of the pleadings and the issues raised thereon are set out

in the judgment of the learned Chief justice and I need not

restate them.

Learned Advocate-General of West Bengal contended that the

State of West Bengal and the Union of India are sovereign

authorities in their respective spheres allotted to them by

the Constitution, and therefore it would be inconceivable

that one sovereign authority could acquire the property of

the other : they could do so only by mutual agreement.

438

That apart, the argument proceeded, on a true construction

of the relevant entry, i. e., entry 42 of List III, in the

context of the scheme of the Constitution and particularly

of Art. 31 thereof, it would be clear that the said entry

could not be invoked by the Union to acquire the land of the

State. Learned counsel appearing for the States of Madhya

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Pradesh, Orissa., Assam and Madras supported the Advocate-

General of West Bengal. The Advocate-General of Punjab,

while supporting the argument of the Advocate-General of

West Bengal, also raised an alternative contention, namely,

that if the acquisition of State property was necessarily

incidental to the effective exercise of any of the powers

conferred on Parliament under Lists I and III of the Seventh

Schedule to the Constitution, it could make a law for

acquiring such property, provided it did not interfere with

the exercise of the governmental functions of the State; and

that the power to acquire land of the State was not

necessarily incidental to the regulation of mines. Learned

Government pleader for the State of Bihar supported the

Union of India in its contention that Parliament can make a

law providing for the acquisition of State property by

virtue of entry 42 of List III.

Learned Attorncy-General, appearing for the Union of India,

argued that entry 42 of List III, on its natural and

grammatical construction, sustains the impugned law;- he

would also seek to support it on the basis of entries 52 and

54 of List I and entry 33 of List 111. In any event, he

contended, the impugned law could be made by Parliament by

virtue of Art. 148 of the Constitution and entry 97 of List

I. He also questioned the correctness of the proposition

that the Union and the States are sovereign authorities in

their respective fields and advanced the theory that under

our Constitution the States are subordinate to the Union.

439

Before I attempt to construe the relevant provisions of the

Constitution, it would be convenient to have a conspectus of

the Constitution as far as it is material to the present

enquiry, as the arguments, to some extent, are linked With

the scope and nature of the powers of the Union and the

States thereunder. The Constitution purports to have been

enacted by the people of India who have solemnly resolved to

constitute India into a sovereign democratic republic.

India is described as a Union of States. The preamble to

the Constitution indicates that the political sovereignty of

the country rests in the people of India and the legal

sovereignty is divided between the constitutional entities

of the Republic of India, namely, the Union and the

different States. Part V of the Constitution deals with the

Union and the instrumentalities through which it is

authorized to function, namely, the legislature, the

executive and the judiciary. Part VI provides for the

States and the organs through which they can function,

namely, the legislature, the executive and the judiciary.

Part XI lays down the relation between the Union and the

States : it distributes the legislative powers and regulates

the administrative relationship between them; it devises

various methods to resolve conflicts that may arise in the

exercise of their powers. Article 246 demarcates the

legislative fields' with precision and emphasizes the

exclusive power of the Union and the States to make laws in

respect of the matters enumerated in the Lists in the

Seventh Schedule and allotted to the Union or the States, as

the case may be. Even in regard to the executive power,

Arts. 73 and 162 mark out the respective fields of the Union

and the States. Chapter 11 of Part XI provides for the

control of the Union over the States in certain specified

cases. Part XII deals with finance, property, contracts,

rights, liabilities, obligations and suits; it distributes

the revenues between the Union and the States, provides for

the allocation between them of certain taxes collected by

the Union, creates

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440

separate consolidated funds described as the consolidated

fund of India and the consolidated fund of the State, and

enacts certain exemptions, among others, of State properties

from Union taxation and Union properties from State taxation

and authorizes the Union as well as the States to borrow

money on the security of their respective properties subject

to certain limitations. Chapter III of part XII deals with

acquisition of property, assets, rights, liabilities and

obligations in certain cases; under Art. 294,

"As from the commencement of this Consti-

tution-

(a) all property and assets which

immediately before such commencement were

vested in His Majesty for the purposes of the

Government of the Dominion of India and all

property and assets which immediately before

such commencement were vested in His Majesty

for the purposes of the Government of each

Governor's Province shall vest respectively in

the Union and the corresponding State, and

(b) all rights, liabilities and obligations

of the Government of the Dominion of India and

of the Government of each Governor's Province,

whether arising out of any contract or

otherwise, shall be rights, liabilities and

obligations respectively of the Government of

India and the Government of each corresponding

State............................ ".

Under Art. 296, any property accruing by way of eschewal or

lapse, or as bona vacantia, if it is property situate in a

State, shall vest in the State and in any other case it

shall vest in the Union. Article 297 vests all lands,

minerals and other things of value underlying the ocean

within the territorial matters of

441

India in the Union. Article 298, which was substituted by

the Constitution (Seventh Amendment) Act, 1956, extends the

executive power of the Union and of each State to the

carrying on of any trade or business and to the acquisition,

holding and disposal of property and the making of contracts

for any purpose subject to the legislative powers of the

Union, or of the State, as the case may be. Article 300

says that the Government of India and the Government of a

State may sue or be sued by the name of the Union of India

or by the name of the State, as the case may be, i.e., they

may be sued as jurists personalities. Chapter 1 of Part XIV

provides for the mode of recruitment and regulation of

conditions of service of different services in the Union and

the States. Part XV provides for an independent machinery

for elections to the Parliament and the State Legislatures.

Part XVIII deals with emergency provisions hereunder the

President, when the security of India or any part of the

territory thereof is threatened by war, external aggression

or internal disturbances or when the constitutional

machinery of the States fails or when the financial

stability or credit of India or any part thereof is

threatened, may, by proclamation, declare an emergency to

that effect; in those events, subject to certain safeguards,

the Centre is authorized to take over the administration of

the State in whole or in part for a specified period.

Article 368 provides for the amendment of the Constitution;

and in regard to certain provisions thereof, such as the

Lists in the Seventh Schedule, the representation of the

States in Parliament, the amendment shall also require to be

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ratified by the Legislatures of not less than one-half of

the States by a resolution to that effect passed by those

Legislatures.

Under the scheme of our Constitution, sovereign powers are

distributed between the Union and the States within the'

spheres allotted to them. The Union exercises the sovereign

powers within its sphere

442

throughout the territories of India, and the States exercise

their sovereign powers within their respective territories

in respect of their allotted fields. The Legislatures of

the States as well as the Parliament are elected on adult

franchise. The legislative field of the Union is much wider

than that of the States; and in case of conflict in the

common field allotted to them, the Union law generally

prevails over the State law. In regard to Bills passed by a

Legislature of a State, the Governor may, and in the case of

bills derogating from the powers of the High Court shall,

reserve them for the consideration of the President: though

this is in theory a limitation on the legislative power of

the State, in practice the Governor only acts on the advice

of the ministry which has the confidence of the Legislature.

Except in the case of a bill derogating from the powers of

the High Court when the Governor is bound to refer it to the

President, in other cases it is not likely that the Governor

would refer a bill to the President contrary to the advice

of the ministry. In a few cases of legislation where inter-

State element or conflict of laws are involved, sanction of

the President is made a condition precedent for their

validity: see Arts. 200, 254, 304 etc.

Coming to the executive field, both the Union and the State

are manned by ministers responsible to their respective

Legislatures elected on adult franchise. The executive

powers of the Union as well as of the States extend to

matters in respect of which they have power to make laws,

though the executive of the Union can give directions to a

State to ensure compliance with the laws made by Parliament

and any. existing law which applies in that State. The

State is also enjoined to exercise its powers in such a way

as not to impede or restrict the exercise of the power of

the Union executive; and the executive of the Union is

empowered to give directions to the State as may be

necessary for that purpose. So too, the Union executive can

give

443

directions to a State as to the construction and maintenance

of means of communications declared to be of national

importance. It is also authorised to confer powers on

States in respect of matters to which the executive power of

the Union extends. By and large, with minor exceptions, the

Union as well as the State executive functions in its

exclusive field, and the Union executive's directives are

intended to facilitate the carrying out of the Union

purposes.

Every State has its judiciary and the highest court in a

State is the High Court of judicature. The expenditure of

the State judiciary is charged on the consolidated fund of

the State concerned but the judges of the High Court are

appointed by the President; and appeals lie to the Supreme

Court of India in certain matters and it has also

extraordinary powers to entertain appeals in other matters

or to issue writs to enforce fundamental rights. But both

the High Courts and the Supreme Court interpret the State

and the Union laws and resolve conflicts, if any. An

integrated system of judiciary has been accepted by the

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Constitution and the judicial control operates both ways,

though the final word is with the Supreme Court. That

cannot by itself affect the federal principle, as even in

Australia an appeallies to the Privy Council, under certain

circumstances, from the decisions of the High Court of the

Common. wealth of Australia.

In financial matters,, though the States and the Union have

consolidated funds of their own, the sources allotted to the

States are comparatively meagre and those allotted to the

Union appear to be perennial; the States also depend upon

the Union for allocation of funds from and out of the taxes

collected by it and also for grants; though there is no

direct control by the Union over the field of finance of the

States, there will always be indirect pressure on the States

in that field, The Union, being in charge

444

of the purse strings, can always, to use an euphemistic

term, pursuade the States to take its advice. In case of

emergencies, such as, war, external aggression, internal

disturbances, failure of the constitutional machinery and

financial instability, extraordinary powers are conferred on

the Union, subject to certain limitations, to interfere with

the States' administration; but the provisions relating to

emergency situations are really in the nature of safety

valves to protect the country's future. Parliament has also

the power to change the boundaries of the territories or

form new territories, but that is also an extraordinary

provision to meet certain emergencies.

There is also another side of the picture. Parliament shall

consist of the President and two Houses respectively known

as the Council of States and the House of' the people; the

Council of States shall consist, apart from the 12 nominated

members, not more than 238 representatives of the States and

the Union territories. A part of the Parliament is,

therefore, comprised of the representatives of the State

Legislatures. Though the powers of the Council of States

are not co-equal with those of the House of the People,. to

the extent it exercises its legislative powers the States

also have control over the Union. The States are also

entitled to be consulted in the matter of the amendment of

certain provisions of the Constitution : vide Art. 368.

The foregoing resume of the provisions of the Constitution

reveals the following picture : The political sovereign is

the people of India and the legal sovereignty is divided

between the constitutional entities i.e., the Union and the

States, who are juristic personalties possessing properties

and functioning through the instrumentalities created by the

Constitution. Though the jurisdiction of the Union is

confined to some subjects, it extends throughout India,

whereas that of the States is confined to their

445

territorial limits. Within their respective spheres both in

the legislative and executive fields they are supreme; their

inter se relationship is regulated by specific provisions.

The relation between the Union and the States cannot be

found in the legislative fields demarcated by the Lists, but

can only be discovered in the specific constitutional

provisions forging links between them, The emergency powers

of the Union to meet extraordinary situations do not affect

its exclusive fields of operation in normal times.

On the basis of a comparison of the Indian Constitution with

that of America, it is argued that none of the important

criteria of a federation is present in the Indian

Constitution. "Federalism in the United States embraces the

following elements : (1) as in all federations, the union of

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several autonomous political entities, or "States", for

common purposes ; (2) the division of legislative powers

between a "National Government", on the one hand and

constituent "States", on the other, which division is

governed by the rule that the former is "a government of

enumerated powers" while the latter arc governments of

"residual powers"; (3) the direct operation, for the most

part, of each of these centers of Government, within its

assigned sphere, upon all persons and property within its

territorial limits; (4) the provision of each center with

the complete apparatus of law enforcement, both executive

and judicial; (5) the supremacy of the "National Government"

within its assigned sphere over any conflicting assertion of

"state" power; (6) dual citizenship." The aforesaid elements

are no doubt present in the American Constitution, but it is

not possible to contend that unless all the said criteria

exist a constitution cannot be described as a federal one.

Though on paper the American Constitution is a typical

federation, in practice the Supreme Court of the United

States of America by evolving and developing many legal

doctrines and implied powers has

446

invested the Federal Government with large powers to enable

it to interfere indirectly in the States field. Even in

regard to judicial power, though the American Supreme Court

was originally conceived to be a Federal Court concerning

itself with federal laws, in fact it authoritatively

interprets the State laws when they come into conflict with

federal laws. The point is that even in America there is no

federation in the orthodox sense of the term.

So too, the Constitution of Australia clearly demarcates the

exclusive fields of the Commonwealth and the States and

jealously guards the State rights, but in practice the

States have been reduced to the position of agencies of the

Commonwealth Government. This was brought about because of

the financial grip the Centre has over the State : 'see

Wheare on "'Federal Government."

But in Canada the position is the reverse. Though the

Centre and the Provinces have their distinctive Lists of

powers, the Central Government has certain limited powers of

control over the governments of the ten Provinces of Canada;

the residuary powers are given to the Centre and not to the

States. Though undoubtedly some elements of unitary form of

government are present, the constitutional custom evolved

practically a federal State and, as one author puts it, "no

dominion government which attempts to stress the unitary

elements in the Constitution at the expense of the federal

elements would survive." It is, therefore, clear that in

every federal Constitution there are either textually or

customarily some unitary elements. The real test to

ascertain whether a particular Constitution has accepted the

federal principle or not is whether the said Constitution

provides for the division of powers in such a way that the

general and regional governments are each within its sphere

substantially independent of the other. The reservation

447

of the residue of power or the power to interfere with

States' affairs in emergencies in the Union may affect the

balance of power in a federation, but does not destroy its

character. Some Constitutions show a marked bias towards

the Federation and the others towards the States, but

notwithstanding the varying emphasis they accept the federal

principle as their basis. Though some authors, accepting

the American Constitution as the yardstick for a federation,

prefer to describe Constitutions with a bias towards Union

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as quasi-federations, I do not think it is inappropriate to

describe all Constitutions which substantially accept the

federal principle as Federations. Applying this test, I

have no doubt that the Indian Constitution is a federation,

as the units in normal times exercise exclusive sovereign

powers within the fields allotted to them.

A further distinction is sought to be made between the

American Constitution and the Indian Constitution on the

basis of the historical evolution of the two countries.

While in America, the argument proceeds, the pre-existing

sovereign States were brought together under a federation,

in India the Constitution conferred certain powers on the

existing administrative units or such units newly

constituted. The status of a political entity Under a

particular constitution does not depend upon its history but

upon the provisions of the constitution. The pre-existing

independent States may not be given any appreciable power

under a constitution, while newly formed States may enjoy

larger power under another constitution. A federal

structure is mainly conceived to harmonize existing

conflicting interests and to provide against future

conflicts. India is a vast country: indeed, it is described

as a sub-continent. Historically, before the advent of the

Constitution, there were different Provinces enjoying in

practice a fair amount of autonomy and there were

innumerable States with varying forms of government ranging

from pure autocracy

448

to guided democracy. There were also differences in

language, race, religion etc. There were also foreign

pockets expected sooner or later to be incorporated, with

the main country. In those circumstances our Constitution

adopted a federal structure with a strong bias towards the

Centre. Under such a structure, while the Centre remains

strong to prevent the development of fissiparous tendencies,

the States are made practically autonomous in ordinary times

within the spheres allotted to them.

With this background I shall now proceed to consider the

arguments advanced by learned counsel. I shall first take

up the argument based upon entry 42 of List 111, i.e.,

acquisition and requisitioning of property. The provisions

relevant to the said question are as follows.,

Article 245: (1) Subject to the provisions of

this Constitution, Parliament may make laws

for the whole or any part of the territory of

India, and the Legislature of a State may make

laws for, tile whole or any part of the State.

(2)...No law made by Parliament shall be

deemed to be invalid on the ground that it

would have extra-territorial operation.

Article 246: (1) Notwithstanding anything in

clauses (2) and (3), Parliament has exclusive

power to make laws with respect to any of the

matters enumerated in List I in the Seventh

Schedule (in this Constitution referred to as

the "Union List").

(2)...Notwithstanding anything in clause (3),

Parliament and, subject to clause (1), the

Legislature of any State also, have power to

make laws with respect to any of the matters

enumerated in List III in the Seventh Schedule

(in

449

this Constitution referred to as the

"Concurrent List").

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(3)...Subject to clauses (1) and (2), the

Legislature of a State has exclusive power to

make laws for such State or any part thereof

with respect to any of the matters enumerated

in List 11 in the Seventh Schedule (in this

Constitution referred to as the State List").

The entries relevant to acquisition, as they stood before

the Constitution (Seventh Amendment) Act, 1956. read as

follows:

Entry 33 of. List I. Acquisition or

requisitioning of property for the purpose of

the Union.

Entry 36 of List II. Acquisition or

requisitioning of property, except for the

purposes of the Union, subject to the

provisions of entry 42 of List Ill.

-Entry 12 of List III. Principles on which

compensation for property acquired or

requisitioned for the purposes of the Union or

of a State or for any other public purpose is

to be determined, and the form and the manner

in which such compensation is to be given.

After the said amendment, entry 33 of List I and entry 36 of

List II were omitted; and entry 42 of List 111, as

substituted by the Seventh Amendment reads:

Acquisition and requisitioning of property".

Article 31. (1) No person shall be deprived of

his property save by authority of law.

(2)...No property shall be compulsorily acq-

uired or requisitioned save for a public

purpose and save by authority of a law which

provides

450

for compensation for the property so acquired

or requisitioned and either fixes the amount

of the compensation or specifies the

principles on which, and the manner in which,

the compensation is to be determined and

given; and no such law shall be called in

question in any court on the ground that the

compensation provided by that is not adequate.

(2A) Where a law does not provide for the

transfer of the ownership or right to

possession of any property to the State or to

a corporation owned or controlled by the

State, it shall not be deemed to provide for

the compulsory acquisition or requisitioning

of property, notwithstanding that it deprives

any person of his property.

(3) No such law as is referred to in clause

(2) made by the Legislature of a State shall

effect unless such law, having been reserved

or the consideration of the President, has

received his assent.

I have already held that the sovereign powers have been

distributed between the constitutional entities, namely, the

Union and the States; one such sovereign power is the power

to acquire or requisition the property of a citizen for a

public purpose. The doctrine of "Eminent Domain" is defined

by Willis as "the legal capacity of sovereign, or one of its

governmental agents to take private property for a public

use upon the payment of just compensation". Nicholas in his

book on Eminent Domain, Vol. I, describes it as a power of

the sovereign to take a property for public use without the

owner's consent: In Chiranjit Lal Chowdhri v. The Union of

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India (1), Mukherjea, J., as he then was, accepted this

definition when he said:

"It is a right inherent in every sovereign to

take and appropriate private property

belonging

(1) [1950] S.C.R. a69,901-902.

451

to individual citizens for public use. This

right, which is described as eminent domain in

American law, is like the power of taxation,

an offspring of political necessity, and it is

supposed to be based upon an implied

reservation by Government that private

property acquired by its citizens under its

protection may be taken or its use controlled

for public benefit irrespective of the wishes

of the owner."

It is, therefore, clear that the power to acquire the

property of a citizen for a public purpose is one of the

implied powers of the sovereign. In our Constitution,,

before the Constitution (Seventh Amendment) Act, 1956, this

power was divided and distributed between the Union and the

States; the Union, by virtue of entry 33 of List I could

acquire a property for Union purposes, and by virtue of

entry 36 of List II a State could acquire a property for

State purposes: the result was that a State could not

acquire a property of a citizen for a Union purpose, and the

Union could not acquire a property of a citizen for a State

purpose. To avoid this difficulty entry 33 of List I and

entry 36 of List II were omitted and the present entry 42 of

List III has been substituted for the earlier entry 42 in

the said List. Now both Parliament and the Legislature of a

State can make a law providing for the acquisition and

requisitioning of property for Union or State purposes. But

the crucial point that is implicit in the power of

acquisition by a sovereign is that it must relate only to

the property of the governed, for a sovereign cannot

obviously acquire its own property. This sovereign power of

Eminent Domain under our Constitution is conferred on, or

divided between, the Union and the States. Prima facie,

therefore, entry 42 of List III can only mean acquisition

and requisitioning of private property by a State. It is

also implicit in the concept of acquisition or requisition-

ing that the acquisition or requisitioning shall be for

452

a public purpose on payment of just compensation. The said

concept has acquired a well defined connotation not only in

the foreign countries from which it is borrowed, but also in

the legislative history of our country. That is why our

Constitution laid down in express terms that any law made

shall not violate the fundamental rights. One of the funda-

mental rights is that enshrined in Art. 31(2) and it says

that no property shall be compulsorily acquired or

requisitioned save for a public purpose and save by

authority of law, which provides for compensation for the

property so acquired or requisitioned. The scope of entry

42 of List III would be apparent if it is read along with

the said article. Unless it is held that Art. 31(2) applies

also to a law of acquisition of a State property by the

Union, the result will be that Parliament can make a law

providing for the acquisition of a property of a State for a

purpose which is not a public purpose and without payment of

compensation, while it cannot do so in the case of

acquisition of a private property. If Art. 31, does not

govern the law of acquisition of a State property, it

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indicates that entry 42 of List III does not deal with

acquisition of a State property, for otherwise it would lead

to the anomaly of acquisition of a State property by a law

of Parliament without safeguards inherent in the doctrine of

Eminent Domain. That is why the learned Attorney-General

made an attempt to persuade us to hold that Art. 31(2)

applies also to a law providing for the acquisition of a

State property. He contended that after the Constitution

(Fourth Amendment) Act, 1955, Art. 31(1) is separated from

Art. 31(2) and that the phraseology of Art. 31(2), if

independently construed, is wide enough to take in

acquisition of a State property. And for this position be

relied upon the judgment of this Court in Kavalappara

Kottarathil Kochuni v. The State of Madras (1). There, this

Court held that after the Constitution (Fourth Amendment

Act, 1955, cls. (1), (2) and (2A) of Art. 31 dealt with

(1)..[1960] 3 S.C.R. 887.

453

different subjects-cls. (2) and (2A) dealing with

acquisition and requisitioning, and cl. (1) with deprivation

of property with authority of law. That decision has no

bearing on the construction of cl. (2) of the said Article

vis-a-vis the question of acquisition of a State property.

The fact that this Court held that the two clauses of the

Article deal with two different subjects does riot mean that

cl. (1) has no bearing on the interpretation of cl. (2) of

the same Article. Clause (2) of Art. 31 reads

"No property shall be compulsorily acquired or

requisitioned save for a public purpose and

save by authority of a law which provides for

compensation for the property so acquired or

requisitioned and either fixes the amount of

the compensation or specifies the principles

on which, and the manner in which, the

compensation is to be determined and given;

and no such law shall be called in question in

any court on the ground that the compensation

provided by that law is not adequate."

Clause (2A) thereof reads

"Where a law does not provide for the transfer

of the ownership or right to possession of any

property to the State or to a corporation

owned or controlled by the State, it shall not

be deemed to provide for the compulsory

acquisition or requisitioning of property,

notwithstanding that it deprives any person of

his property."

It is true that cl. (1) opens out with the words "'no

person" whereas cl. (2) does not repeat that expression; but

in the context, I find it difficult to hold that cl. (1)

deals with property of a person and cl. (2) deals with

property of persons and States. Article 31 deals with a

fundamental right in regard

454

to property-cl. (1) with deprivation of property, and cl.

(2) with acquisition of property. As cl. (1) makes it clear

that property shall be of a person, it is not necessary to,

mention over again that the property acquired should be of a

person. The idea of compulsory acquisition and

requisitioning in cl. (2) indicates that the acquisition or

requisitioning is by a State of a person's property. That

is made clear by cl. (2A) which says that the law of

acquisition shall provide for the transfer of ownership or

right to possession of any property to the State or to a

corporation owned or controlled by the State. The transfer

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of property is to the State and a fortitude the transferor

must be one other than the State. In the context it can

only mean the person mentioned in cl. (1). The use of the

definite article in the expression "the State" is a further

indication that transfer inter se between State and State or

Union and State is not contemplated by that clause. if that

was the intention it would have provided expressly for a

transfer between a State and a State. Even so, the learned

Attorney-General contends that State is also a person.

"Person" has not been defined in the Constitution; but a

perusal of the various provisions of Part III clearly shows

that the expression "Person" is used in contradistinction to

"State." Indeed, most of the fundamental rights are

conferred on a person or a citizen against infringement of

his rights by a State. The expression "person" in Arts. 14,

18, 20, 21, 22, 25 and 27 does not and cannot include a

"State". Indeed, there is no other article in this part

wherein the expression "person" is used in the sense of

"State". Prima facie, therefore, the expression "person" in

Art. 31 will not include "State". There is nothing in the

said Article which compels me to give a strained meaning

particularly when the Article is consistent with the

recognized concept of Eminent Domain and fits in squarely

with the scheme of fundamental rights. But it is said that

if a State cannot be a "Person", a corporation or a

455

company will have to be excluded from its scope. There is

no definition of the expression "person" in the

Constitution; but it is defined in the General Clauses Act,

1897, as including any company or association or body of

individuals, whether incorporated or not. Though this

definition is an enlargement of the natural meaning of the

expression "person", even the extended meaning does not

include the State. Anyhow the question whether the said

expression takes in a corporation or not, does not call for

a decision in this case. 'In this context two decisions of

this Court may usefully be referred to. In Director of

Rationing and Distribution v. The Corporation of Calcutta

(1), it was held that "'the rule of interpretation of

statutes that the State is not bound by a statute unless it

is so provided in express terms, or by necessary

implication, is still good law". Though that rule has been

laid down in the context of a statute, there is no reason

why a different principle should apply in the construction

of the Articles of the Constitution. If that rule of

interpretation is applied to Art. 31 (2) of the

Constitution, it will have to be held that, as the said rule

does not in terms or by necessary implication provide for

the acquisition of State property, a State property cannot

be the subject-matter of the said rule. Reliance is placed

upon another judgment of this Court in The State of Bihar v.

Rani Sonabati Kumari (2), in support of the contention that

the expression ""person" embraces a State. There, the

decision was that when the State disobeyed the order of

injunction issued by the court, the said order could be

enforced against the State in the mariner prescribed by 0.

XXXIX, r. 2 (3), of the Code of Civil Procedure. A

plaintiff may apply to the court for a temporary injunction

to restrain a defendant from committing the injury

complained of. Under 0. XXXIX, r. 2 (3) of the code,

"In case (if disobedience, or of breach of any

(1) [1961] 1 S.C.R. 158.

(2) [1961] 1 S.C.R. 728.

456

such terms, the Court granting an injunction

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may order the property Of the person guilty of

such disobedience or breach to be attached,

and may also order such person to be detained

in the civil prison for a term not. exceeding

six months, unless in the meantime the Court

directs his release."

This Court, on a construction of cls. (1) and (3) of r. 2 of

0. XXXIX of the Code of Civil Procedure held that the

expression 'person' in r. 2 (3) has been employed

compendiously to designate everyone in the group "Defendant,

his agents, servants and workmen" and not for excluding any

defendant against whom the order of injunction has primarily

been passed. But at the same time, this Court made it clear

that the provision for detention does not apply to the

State; and this could only be because the State is not a

"Person" who could be detained. The decision is based upon

the phraseology of the two clauses of 0. XXXIX, r. 2 of the

Code of Civil Procedure and does not lay down as a general

proposition that the expression "person" wherever it appears

shall include a "State".

The historical background of Art. 31 and entry 42 of List

III also does not bear out the construction that acquisition

of a State property is contemplated by the entry 42 of List

III. In the Government of India Act, 1935, acquisition was

a provincial subject, being entry 9 of List 11, Section 299

of the Government of India Act, 1935, read :

(1) No person shall be deprived of his property in British

India save by authority of law.

(2) Neither the Federal nor a Provincial Legislature shall

have power to make any law authorising the compulsory

acquisition for public purposes of any land, or any

457

commercial or industrial undertaking, or any interest in, or

in any company owning, any commercial or industrial

undertaking, unless the law provides for the payment of

compensation for the property acquired and either fixes the

amount of the compensation, or specifies the principles on

which, and the manner in which it is to be determined."

Broadly, cls. (1) and (2) of s. 299 of the said Act

correspond respectively to cls. (1) and (2) of Art. 31 of

the Constitution, under the said Act, the Federal

Legislature could not make a law acquiring the land of a

Province for the simple reason that the subject of

acquisition of land was exclusively a Provincial subject.

But s. 127 provided for the contingency of the Federation

requiring the land belonging to a Province. The section

read :

"The Federation may, if it deems it necessary

to acquire any land situate in a Province for

any purpose connected with a matter with

respect to which the Federal Legislature has

power to make laws, require the Province to

acquire the land on behalf and at the expense,

of the Federation or, if the land belongs to

the Province, to transfer it to the Federation

on such terms as may be agreed or, in default

of agreement, as may be determined by an

arbitrator appointed by the Chief Justice of

India."

A combined reading of the said provisions indicates that

though under the Government of India Act the federal

Legislature could not make a law empowering the Federation

to acquire the land belonging to a Province, the Federation

may require the Province to transfer to it the land owned by

the Province on terms agreed upon between them or, in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 50 of 59

default of agreement, determined by an arbitrator: that is

to

458

say, under the Government of India Act transfer of lands

owned by a Province to the Federation could be effected only

under an agreement or an award. Under the Constitution,

before it was amended in 1956, Parliament as well as State

Legislatures were empowered to make laws for acquisition of

lands for their respective purposes-Parliament for the Union

purposes and a State Legislature for the purposes of the

State. Prima facie the relevant entries, namely, entry 33

of List I and entry 36 of List II, could have related only

to acquisition of private lands for purposes of the Union or

the State, as the case may be. But if the Union or the

State wanted the land held by the other, it could secure the

same only under Art. 298 (1), as it stood then. The said

article read :

"The executive power of the Union and of each

State shall extend, subject to any law made by

the appropriate Legislature, to the grant,

sale, disposition or mortgage of any property

held for the purposes of the Union or of such

State, as the case may be, and to the purchase

or acquisition of property for those purposes

respectively, and to the making of contracts."

The phraseology used in this article clearly shows that the

land held by the Union or the State for the Union or the

State purposes respectively, could be transferred to the

other only in the manner indicated in Art. 298 (1). By the

Constitution (Seventh Amendment) Act, 1956, the subject of

acquisition and requisitioning of land was placed in List

III as entry 42, and entry 33 of List I and entry 36 of List

II were deleted and Art. 298 was substituted by a new

Article. The changes made in Art. 298 are not material for

the present purposes. It is, therefore, manifest that under

the Government of India Act, 1935, compulsory acquisition of

land was a provincial subject, that tinder the Constitution,

as it

459

originally stood, Parliament could make a law for acquiring

such a property, for the Union purposes and the State

Legislature for the State purposes by virtue of different

entries and that, after the amendment, both Parliament and

State Legislatures could make a law for the acquisition of

such a property by virtue of entry 42 of List 111. But if

the Federation or a province under the Government of India

Act, or the Union or the State under the Constitution wanted

a property owned by the other, it could secure it only under

an agreement and not otherwise. This scheme clearly

demonstrates that a law whether made by Parliament or by a

State Legislature cannot provide for the acquisition of

property owned by the other. I, therefore, hold that

Parliament cannot make a law by virtue of entry 44 of List

111 for the acquisition by the Union of the property owned

by a State.

Reliance is then placed upon Art. 248 of the Constitution,

read along with entry 97 of List I of the Seventh Schedule

to sustain the wider power of the Parliament. Article 248

reads :

(1) Parliament has exclusive power to make

any law with respect of any matter not

enumerated in the concurrent List or State

List.

(2) Such power shall include the power of

making any law imposing a tax not mentioned in

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either of those Lists.

Entry 97 of List I. Any other matter not

enumerated in List II or List III including

any tax not mentioned in either of those

Lists.

It is contended that if acquisition of a State property does

not fall under entry 42 of List III it must fall under entry

97 of List 1. Emphasis is laid upon the

460

words "any matter" in Art. 248 and a contention is advanced

that the expression "any matter" has the widest connotation

and, therefore, it empowers the Parliament to make a law in

regard to any subject, including taking over of the property

of a State. There are two answers to this argument :

firstly, a residuary entry cannot travel beyond the scope of

the division of powers. The sovereign legislative power is

divided between different entitles. The entire legislative

field is divided between the Union and the States. The

method of allocation adopted is by enumeration of subjects.

The residuary article and the entry are the devices adopted

to entrust to the Union any subject omitted by mistake or

otherwise. The residuary legislative field cannot possibly

cover inter-State relation, for that matter is not

distributed between the Union and the States by way of

legislative Lists. That apart, when a specific provision is

made for acquisition of a property, it would be incongruous

to confine that entry to properties other than those of the

States and to resort to the residuary power for acquiring

the properties of States. If the power of acquisition can

be construed to mean only acquisition of properties in the

States and not properties belonging to the States, it must

be held that the power of acquisition is limited to that

extent. Further if Art. 31 (2) applied only to a law of

acquisition of a private property as I have already held,

the anomaly that arises if the said clause does not apply to

entry 42 of List III will equally arise in respect of entry

97 of List II would, therefore. hold that Parliament cannot

make a law for the acquisition of a State property by virtue

of entry 97 of List 1.

There would be many anomalies in the working of the

Constitution if the contention of the Union was accepted.

As the subject of "acquisition and requisitioning" is in the

Concurrent List both Parliament and a State Legislature can

make different

461

laws for acquiring the property of the State or of the

Union, as the case may be. Under the law made by

Parliament, the State property can be acquired and on

acquisition it becomes the Union property; then under the

law made by tile State, the same property can be reacquired

by the state as the Union property. It is said that this

vicious circle cannot arise under the Constitution.

Reliance is first placed upon Art. 31(3) of the

Constitution, which says :

"No such law as is referred to in clause (2)

made by the Legislature of a State shall have

effect unless such law, having been reserved

for the consideration of the President, has

received his assent."

But I have held that Art. 31 (2) has no application to a law

providing for the acquisition of a State property and if so,

cl. (3) thereof will also not apply to such a law. Even if

Art. 31(3) applies, there is nothing which prevents the

President from giving his consent to a State to acquire the

Union property, though the Union executive may ordinarily be

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relied upon not to do so. But we must test the validity of

a contention on the legal possibilities and not on what a

particular executive may or may not do. If so, Art. 31(3)

cannot always prevent the conflict indicated above. It is

-said that Art. 254(1) would invariably resolve such

conflicts in favour of the law made by the Parliament. But

Art. 254(1) can come in aid of the law made by Parliament

only if there is repugnancy between that law and that made

by the. State Legislature. But in the illustration given

there is no such repugnancy, for the law made by Parliament

provides for the acquisition of the property of the State,

whereas the law made by the State provides for the

acquisition of the property owned by the Union. The moment

the State property is acquired by the Union it becomes the

property of the Union. In such a context there is no

462

repugnancy between the two laws though the purpose of the

Union law can be defeated by the exercise of a power under a

State law. Article 254(2) also saves the laws of the States

if the previous consent of the President has been taken;

such a consent is legally possible, though ordinarily the

Central Executive can beexpected to withhold it. The

Constitution couldnot have intended such an unresolved

conflictbetween the Union and the States. Secondly,if

the contention of the Union be correct, Parliament can make

a law making a provision for acquiring the entire property

of a State without compensation. It can indirectly prevent

the State from functioning; it can acquire the buildings

owned by the State and used for its offices; it can take

away the substratum of the State's jurisdictiony acquiring

not only its offices but also its buildings and works, which

are maintained for the public good. Though Parliament may

not be expected to create such a situation, nothing will

prevent it from doing so. A construction which may prevent

the State from functioning as visualized by the Constitution

cannot easily be accepted unless it is clearly expressed in

the Constitution itself. It is said that Parliament can

destroy the State under Art. 3 of the Constitution and,

therefore, nothing more untoward can happen to a State if

this limited power is conceded, as a larger power has

already vests in the Parliament. Article 3 only enables the

Parliament to make a law for the formation of anew State,

alteration of boundaries of any State, increase or decrease

of the area of any State or alteration of the name of any

State. Such a power is expressly given to the Parliament

and, therefore, it can function under that Article. But

that has nothing to do with a power to acquire the property

of a State. Thirdly, when the Constitution created legal

entities and distributed the sovereign powers between them,

it is unreasonable to construe the ambiguous provisions of

the Constitution in such a way as to create

463

conflicts between them or to make one a creature of the

other. It is said that if such a power is not conceded to

the Union, the States may not cooperate with the Union, in

the implementation of the policies conceived in the interest

of the whole country. This argument may have some relevance

in America or in Australia where the States are powerful

under their respective Constitutions, but absolutely none

under our Constitution whereunder the States are practically

beholden to the Union in many ways. It was necessary in

America to evolve implied powers to implement national

policies; in India the Constitution has conferred on the

Union ample powers in that direction. In such a situation

this Court should be very reluctant to curtail the already

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limited powers of the States and should not, by

construction, convert the federal structure into a unitary

form of government which the Constitution has rejected.

At this stage another argument advanced by learned

Advocate-General for West Bengal may be noticed. He

contends that' under Art. 294 of the Constitution all the

coal-mines vested in His Majesty for the purposes of the

Province vested in the State of West Bengal as from the

commencement of the Constitution; and that, therefore,

unless there is an express constitutional provision for

divesting them, they could not be acquired by a law made by

Parliament. I shall consider the decisions cited at the Bar

in this context at a later stage. If the argument advanced

on behalf of the Union is correct, viz., that there is a

legislative power in the Parliament to acquire the property

of a State, Art. 294 cannot be in the way of the Union law

providing for the acquisition of the State property. That

apart, Art. 294 applies only to the property vested in the

State at the commencement of the Constitution and not to

property that has been subsequently acquired by it. In this

case, the zamindaries where the coal-mines are

464

situate vested in the State of West Bengal subsequent to the

commencement of the Constitution by reason of a State law.

But it is contended that though the surface soil of the

zamindari was with the zamindars, the coal-mines vested in

His Majesty before the Constitution and that at the

commencement of the Constitution continued to vest in the

State. But this argument is contrary to series of decisions

given by the Privy Council : I see Harinarayan Singh Deo v.

Sriram Chakravarti (1); Durga Prasad Singh v. Brajnath Bose

(2); Sashi Bhushan Misra v. Jyoti Prasad Singh Deo (3);

Rajkumar Thakur Girdhari Singh v. Megh Lal Pandey (4); and

Raghunath Roy Marwari v. Durga Prasad Singh (5). Though

these decisions were given in dispute between zamindars and

their tenants, the observations in some of the judgments run

counter to the argument of learned Advocate-General. He has

not placed before us any authority to support his

contention; but he alternatively suggested that though the

estates with the coal-mines may have belonged to the

zamindars, the reversion in the said estates was with His

Majesty and subsequently with the State. This is contrary

to the principles of permanent settlement, for under the

permanent settlement the British Government granted to the

zamindars a permanent hereditary property in their lands for

all times to come and fixed a moderate assessment of public

revenue on such lands, which could not be increased under

any circumstances. The sannads granted under the permanent

settlement regulations did not reserve any reversionary

right to the Government. As I have held that, even if any

interest had vested in the State, it could be divested by an

Act of an appropriate Legislature if the requisite power was

conferred on it by the Constitution,' I do not propose to

express my final opinion on this question.

The constitutional validity of the impugned

Act is next sought to be sustained on the basis of

(1)(1910) I.L.R. 37 Cal. 723.(3)(1916) I.L.R. 44 Cal. 585

(2)(1912) I.L.R. 39 Col. 696. (4)(1917) I.L.R. 45 Cal.

87,(5) (1919) I.L.R. 47 Cal. 95.

465

entry 52 and entry 54 of List I of the Seventh Schedule to

the Constitution. They read :

Entry 52 of List I : Industries, the control

of which by the Union is declared by

Parliament by law to be expedient in the

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public interest.

Entry 54 of List I: Regulation of mines and

mineral development to the extent to which

such regulation and development under the

control of the Union is declared by Parliament

by law to be expedient in the public interest.

Before construing these two provisions.. it

would be convenient to read entries 23 and 24

of List II, the State List :

Entry 23 of List II: Regulation 'of mines and

mineral development subject to the provisions

of List I with respect to regulation and

development under the control of the Union.

Entry 24 of List II: Industries subject to the

provisions of entries 7 and 52 of List I.

A combined reading of the four entries shows that ordinarily

the industries and the regulation of mines and mineral

development are the State subjects. But if Parliament makes

a law declaring that any particular industry should be under

the control of the Union in public interests or the

regulations of any mines or mineral development should be

under its control, to that extent entries 24 and 23 of List

II shall yield to entries 52 and 54 of List I. Under the

industries (Development and Regulation) Act, 1951 (65 of

1951), Parliament has declared that ""it is expedient in the

public interest that the Union should take under its control

the industries specified in the First Schedule", which

include coal and, therefore, it is argued, the subject of

coal industry passed on to parliament and the impugned Act

made thereafter

466

for acquisition of coal bearing lands was well within its

power. If I may say so, there is a fallacy in this

argument. A declaration under entry 52 of List I would no

doubt enable Parliament to make a law in respect of an

industry, that is to say Parliament may make a law in

respect of an existing industry or an industry that may be

started subsequently. So too, before the declaration a

State Legislature could have made a law in respect of an

industry by virtue of entry 24 of List II. But neither

entry 24 of List II nor entry 52 of List I empowers the

State Legislature before the said declaration or the

Parliament after such a declaration to make a law for

acquisition of lands. If the State Legislature before the

declaration or the Parliament after the declaration wanted

to acquire the land it can only proceed to make a law by

virtue of entry 42 of List III. As I have held that entry

42 of List III does not enable Parliament to make a law

providing for the acquisition of a property of a State,

entry 52 of list I cannot be relied upon for such a purpose.

Reliance is also placed upon the Coal Mines (Conservation

and Safety) Act, 1952 (Act XII of 1952) in support of the

contention that the declaration contained therein gave

vitality to entry 54 of List I and that the impugned Act

could be sustained under that entry. Section 2 of that Act

says :

"It is hereby declared that it is expedient in

the public interest that the Central

Government should take under its control the

regulation of coal mines to the extent

hereinafter provided."

The simple answer to this argument is that the declaration

was limited to the control and regulation of coal mines to

the extent provided by that Act, and such a declaration,

with its limited scope, could not be taken advantage of to

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sustain the impugned Act. Further, under the entry

"'regulation of mines" a law cannot be made for the

acquisition of coal bearing

467

lands themselves, particularly when there is a specific

entry for acquisition. Nor can the Mines and Minerals

(Regulation and Development) Act 1957 (Act 67 of 1957) be

successfully invoked in this case, for that Act, which

contains a declaration that it is expedient in the public

interest that the Union should take under its control the

regulation of mines and the development of minerals to the

extent provided therein, was passed on December 28, 1957,

whereas the impugn Act was passed on June 8, 1957. That

declaration was also confined to' the extent of the

regulation provided thereunder and therefore could not be

relied upon for purposes other than those comprehended by

that Act. It follows that Parliament cannot rely upon the

declaration in either of the three Acts i.e., Act 65 of

1951, Act 12 of 1952, and Act 67 of 1957, to sustain the

impugned law which was solely made for the purpose of

acquiring the coal bearing areas.

Sustenance is sought to be drawn from American.. Australian

and Canadian decision in support of the Union's contention

that a federal law can provide, for the acquisition of a

property owned by a State. Before adverting to the

decisions of a foreign court, it would be necessary to know

the relevant fundamental differences between the

constitution of the said country and our own. In America

there is no express power conferred on the Congress enabling

it to make a law for the acquisition of any property for

public purposes. There is also no concurrent List giving a

common field of operation for the Federal and the State

units. The power of acquisition was evolved by judicial

decisions by invoking the doctrine of implied powers. The

law of that country, therefore, may not be of much relevance

in construing the provisions conferring express powers on

the different units under our Constitution. Nor the deci-

sions cited on behalf of the Union lend any support

468

to the contention advanced. In State of Oklahoma Ex. Bel.

Leon C. Philips v. Guy F. Atkinson Company (1), the Flood

Control Act of 1938 authorized the construction of the

Denison Reservoir on the Red River as part of a

comprehensive scheme for the control of floods in the

Mississippi River and its tributaries. That law was made by

the Congress in the exercise of its commerce power' The

effect of the construction of dam and reservoir for the pur-

pose of flood control on a stream running between two States

was to inundate lands in one State. The Supreme Court held

that the fact that the land was owned by a State was not a

barrier to its condemnation by the United States. It also

observed that the State Government could not prevent the

exercise by the Federal Government of its power of eminent

domain for flood control purposes, merely because the State

boundary would be obliterated by the flooding of the land

taken. It was observed therein

"Since the construction of this dam and reser-

voir is a valid exercise by Congress of 'its

commerce power, there is no interference with

the sovereignty of the

State............................. The fact

'that land is owned by a state is no barrier

to its condemnation by the United

States.................... Nor can a s

tate call

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a halt to the exercise of the eminent domain

power of the federal government because the

subsequent flooding of the land taken will

obliterate its boundary."

It does not appear from the report, though the phraseology

used is wide, that what had submerged or obliterated was

State owned property or the State territory. Assuming that

the State property had submerged because of the operation of

the Federal law, this decision can be understood to have

laid down only the limited proposition that the Congress in

exercise of its commerce power can make a law incidentally

(1)(1940) 85 L. ed. 1487, 1505.

469

encroaching upon the State property. The decision in The

Cherokee Nation v. The Southern Kansas Railway Company (1),

does not carry the matter further. There it was held that

the Congress had power to authorize a corporation to

construct a rail road through the territory of Indian

tribes. It was pointed out that Cherokee Nation was not a

sovereign nation but was under the political control of the

government of the United States and, therefore, it could not

be said that the right of eminent domain within its

territory could only be exercised by it and not by the

United States. It was observed therein:

"The lands in the Cherokee territory, like the

lands held by private owners everywhere within

the geographical limits of the United States,

are held subject to the authority of the

general government to take them for such

objects as are germane to the execution of the

powers granted to it; provided only, that they

are not taken without I just compensation

being made to the owner.'

This case, therefore proceeded on a different basis

altogether, namely.. that the entire territory was directly

under the Federal Government and that the Federal Government

could exercise its power of eminent domain in respect of

that territory. Nor does the decision in Kohl v. United

States (2), support the defendant. There it was held that

the United Sates could acquire lands in Cineinnati for a

post office and other public buildings under the power of

eminent domain. The property sought to be acquired there

was the private property in the State and the decision

therein throws little light on the present question.

The decisions of the Supreme Court of America are clear on

the point viz., that in exercise of the power conferred on

the Congress.. expressly or by implication, a law can be

made to acquire the

(1) (1889) 34 L. ed. 295. 302. (2) (1875) 23 L. ed. 449.

470

private property in a State for carrying out a federal

purpose. But they are not decisions on the question whether

the said law can provide for the condemnation of the

property owned by the States.

In Nichols on Eminent Domain, 3rd edn., Vol. at p. 160. the

following passage appears:

"Despite the phraseology of the Fifth Amend-

ment to the Constitution of the United States

to the effect that "private property" shall

not be taken for public use except upon

payment of just compensation, it has been held

that there is no implied limitation therefrom

which inhibits the taking of public property

by the federal government and the latter may

acquire the property of a state or one of its

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agencies or sub-divisions."

"Although the federal government has the power

to acquire such property, the relative

positions of the federal and state governments

are such that it would seem that the United

States could not for the sake of mere con-

veniencc, take the property of a state which

was devoted to the public use the loss of

which would seriously cripple the state in

carrying on its

functions................................. In

case of necessity, as distinguished from mere

convenience, the State would have to yield in

any event."

The said passage makes a distinction between a State

property and a property devoted by a State for a public

purpose-the former can be acquired and the latter ordinarily

cannot be acquired by the federal government. These

principles arc not based upon any particular power conferred

upon the Congress, but appear to have been envolved on a

pragmatic approach to concrete problems arising in that

country.

471

Such an approach cannot have any relevance to our

Constitution' where the powers have been described with

particularity. The-passage in ,Willoughby on the

Constitution of the United States", Vol. 1, at p. 180,

namely, "'that, in cases of conflict, the power of eminent

domain of the States must yield to the constitutionally

superior power of eminent domain of the United States is

well settled", does not relate to the acquisition of

property owned by States but to the resolution of a conflict

between the powers of eminent domain of the Union and the

States when both of them seek to acquire property within a

State. That doctrine is based upon the supremacy given by

the constitution to the Government of the United States in

all matters within the scope of its sovereignty.

The said discussion shows that the law in America on the

question raised in the present case is not clear. In view

of the admitted differences in the constitutional

provisions, it would not be safe to rely upon it in

construing the provisions of our Constitution.

The Australian decisions also do not help us, for s. 51 of

the Australian Constitution expressly provides that the

Commonwealth can make a law for the acquisition of property

on just terms from any State or person: see Wynes'

Legislative, Executive and judicial Powers in Australia, p.

441. If at all, the said provision indicates that in a

federal form of government one sovereign unit cannot acquire

the property of another unless the Constitution expressly

provides for it.

In Canada this question was subject of judicial scrutiny.

It may be mentioned that in Canada there is no concurrent

List conferring the power of eminent domain expressly on

both the Union and the constituent States. Reliance is

placed on behalf of the Union on the decision of the Privy

Council in

472

Attorney-General for the Dominion of Canada v. Attorney-

General for the Provinces of Ontario, Quebec and Nova Scotia

(1). Sections 91 and 92 of the British North America Act,

1867, distributed legislative powers between the Dominion

and the Provinces of Canada. Under s. 108 thereof certain

items of property were transferred to the Dominion, one of

them being "rivers and lake improvements, and public

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harbours". The residue of proprietary rights not

transferred to the Dominion by s. 108 and Schedule III

remained vested in the provinces subject to ss. 109 and 117;

and the residuum of legislative jurisdiction not comprised

in ss. 91 and 92 vested in the Dominion. The questions

raised in the appeal were whether under s. 108 the river was

transferred to the Dominion, and whether the Dominion could

make a law under s. 91 affecting fisheries and fishing

rights in the river. The Privy Council held that the

proprietary rights in the river vested in the Province on

the date of the British North America Act, 1867 and that s.

108 by transferring rivers and lake improvements did not

transfer the proprietary rights in the rivers. On the

second question, it held that s. 91 empowered the Dominion

to make a law taxing the right to fish in the rivers. Lord

Herschell recognized a broad distinction between proprietary

rights and legislative jurisdiction and observed that the

fact that such jurisdiction in respect of a particular

subject-matter was conferred on the Dominion Legislature

afforded no evidence that any proprietary rights with

respect to it were transferred to the Dominion. It is

observed at p. 730 :

"If, however, the Legislature purports to

confer upon other proprietary rights where it

possesses none itself,. that 'in their

Lordships' opinion is not an exercise of the

legislative jurisdiction conferred by s. 91.,

If the contrary were held, it would follow

that the Dominion might

(1)[1898] A.C. 700.

473

practically transfer to itself property which

has, by the British North America Act, been

left to the provinces and not vested in it."

This decision, therefore, is an authority for the position

that when the constitution vests particular properties in

one of the governing units, the other cannot by legislation

take over those properties, for if that is allowed one can

destroy the other. This decision supports the broad

contention of the learned Advocate-General of West Bengal

that the properties vested in a State cannot be taken over

by the Union in exercise of a legislative power. The wide

sweep of this decision has been restricted to some extent,

by the judicial Committee in Attorney-General for British

Columbia Canadian Pacific Railway Company (1). There, the

judicial Committee held that ss. 91 and 92, read together,

empowered the Dominion to dispose of provincial Crown lands,

and therefore of a provincial foreshore, for the purposes of

the respondent railway, which was a transcontinental railway

connecting several provinces. In coming to that conclusion

the judicial Committee relied upon its earlier decisions in

Canadian Pacific Railway Co. v. Corporation of the Parish of

Notre Dame De Bonsecours (2), and Toron to Corporation v.

Bell Telephone Co. of Canada (3). Though Crown lands vested

in a province, the Constitution Act conferred an express

power on the Dominion enabling it to make a law for inter-

State purposes affecting the Crown lands. The same view was

reiterated by the Privy Council in Attorney-General for

Quebec v. Nipissing Central Railway Company and Attorney.

General for Canada (4). The Canadian decision do not

support the wide contention of the learned Attorney-General

that properties vested in a State can be acquired by Union

law by virtue of either entry 42 of List III or entry 52 of

List I of our Constitution. Apart from the fact that the

relevant provisions of the other constitutions are not

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(1) [1906] A.C. 204. (2) [1899] A.C. 367.

(3) [1905] A.C. 52. (4) [1926] A.C 715.

474

pari materia with those of the Indian Constitution, the

decisions cited do not constitute a clear authority to

support either of the two rival contentions, though they

contain some observations which may be relied upon by either

side. In them circumstances, it would not be proper for

this Court to draw any inspiration from the foreign

constitutions or the decisions made thereunder in construing

the express provisions of our Constitution in the context of

its different set-up. I have referred to the decisions only

out of respect for the argument advanced.

To conclude : The Indian Constitution accepts the federal

concept and distributes the sovereign powers between the co-

ordinate constitutional entitles, namely, the Union and the

States. This concept implies that one cannot encroach upon

the governmental functions or instrumentalities of the

other, unless the Constitution expressly provides for such

interference. The legislative fields allotted to the units

cover subjects for legislation and they do not deal with the

relationship between the two co-ordinate units functioning

in their allotted fields : this is regulated by other

provisions of the Constitution and there is no provision

which enables one unit to take away the property of another

except by agreement. The future stability. of our vast

country with its unity in diversity depends upon the strict

adherence of the federal principle, which the fathers of our

Constitution have so wisely and foresightedly incorporated

therein. This Court has the constitutional power and the

correlative duty-a difficult and delicate one to prevent

encroachment, either overtly or covertly, by the Union of

State field or vice versa, and thus maintain the balance of

federation. The present is a typical case where the Court

should stop the Union from overstepping its boundary and

trespassing into the State field. I would, therefore, hold

that the impugned Act, in so far as it confers a power on

the

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Union to acquire the lands owned by the State, including

coal mines and coa bearing lands, is ultra vires. I find on

issues 1, 2 and 3 against the defendant; In view of my

findings on the said issue, I do not propose to express my

opinion on the additional issue.

In the result, there will be a decree in favour of the

plaintiff in terms of cls. (a), (c) and (d) of paragraph 11

of the plaint. The plaintiff is entitled to costs.

By COURT: In view of the judgment of the majority, the suit

stands dismissed with costs.

Appeal dismissed.

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