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PETITIONER:

THE SUPREME COURT REPORTSK.C. GAJAPATI NARAYAN DEO AND OTHER

Vs.

RESPONDENT:

THE STATE OF ORISSA.

DATE OF JUDGMENT:

29/05/1953

BENCH:

MUKHERJEA, B.K.

BENCH:

MUKHERJEA, B.K.

BHAGWATI, NATWARLAL H.

SASTRI, M. PATANJALI (CJ)

DAS, SUDHI RANJAN

HASAN, GHULAM

CITATION:

1953 AIR 375 1954 SCR 1

CITATOR INFO :

F 1954 SC 139 (6A)

RF 1954 SC 257 (7)

C 1954 SC 259 (7)

F 1956 SC 503 (21)

RF 1959 SC 308 (7)

F 1959 SC 648 (14)

APL 1960 SC 796 (3,6)

RF 1961 SC 459 (50)

R 1962 SC 137 (9)

R 1962 SC 458 (27)

R 1962 SC 594 (14)

R 1962 SC 723 (4)

R 1962 SC 821 (16)

R 1962 SC1912 (2,5)

R 1964 SC 381 (75)

R 1964 SC 925 (73)

R 1965 SC1017 (16)

RF 1966 SC 416 (16)

R 1966 SC 619 (6)

R 1966 SC1571 (7,13)

R 1967 SC 691 (15)

RF 1968 SC1138 (51)

R 1970 SC 508 (16)

RF 1973 SC2734 (35)

RF 1976 SC2118 (6)

RF 1978 SC1296 (68)

RF 1979 SC1550 (14)

RF 1980 SC1682 (27)

RF 1982 SC1107 (39)

R 1987 SC 579 (7)

RF 1991 SC1792 (6)

ACT:

Orissa Estates Abolition Act, 1952, ss. 23, 26, 27, 37-

Orissa Agricultural Income-tax (Amendment) Act, 1950-

Validity "Colourable legislation"-Tests of validity-Effect

of ulterior motives-Provisions for vesting buildings and

private lands in Government-Provision for paying

compensation in 30 Years Validity -Provisions introduced in

Bill after coming into force of new Constitution-Whether

protected by art. 31(4)-Constitution of India, 1950, arts.

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31(2), 31(4); Sch.VII, List II entry 46, List III entry 42.

HEADNOTE:

The Bill relating to the Orissa Estates Abolition Act,

1952, was published in the Gazette on the 3rd January, 1950.

It contained a provision that any sum payable for

agricultural incomes-Tax for the previous year should be

deducted from the gross asset of an estate for the purpose

of arriving at its not income on the basis on which

compensation was payable to the estate owners. On the 8th

January, 1950, a Bill to amend the Orissa Agricultural

Income-tax Act of 1947 so as to enhance the highest rate of

tax from 3 annas in the rupee to 4 annas and reduce the

highest slab from Rs. 30,000 to Rs. 20,000 was published in

the Gazette. This Bill was dropped by the next Chief

Minister who introduced a revised Bill on the 22nd July,

1950, enhancing the highest rate to 12 annas 6 pies in the

rupee and reducing the highest slab to Rs. 15,000 and this

was passed into law in August, 1950. It was contended that

the Orissa Agricultural Income-tax (Amendment) Act of 1950

was a fraud on the Constitution and as such invalid as it

was a colourable legislation to effect a drastic reduction

in the compensation payable under the Estates Abolition Act:

Held" (i) that the question whether a law was a

colourable legislation and as such void did not depend on

the. motive or bona fides of the legislature in passing the

law but upon the competency of the legislature to pass that

particular law, and what the courts have to determine in

such cases is whether though the legislature has purported

to act within the limits of its powers, it has in substance

and reality transgressed those powers, the transgression

being veiled by what appears, on proper,examination, to be a

mere pretence or disguise. The whole doctrine of colourable

legislation is based upon the maxim that you cannot do

indirectly what you cannot do directly.

2

(ii) The impugned Act was in substance and form a law in

respect to the "taxing of agricultural income", as described

in entry 46 of List 11 of the Seventh Schedule to the

Constitution and, as the State Legislature was competent to

legislate on this subject, the Act was not void, and the

fact that the object of the legislature was to accomplish

another purpose, viz., to reduce the compensation payable

under the Estates Abolition Act, cannot render this law a

colourable legislation and void as such, as the ulterior

object itself was not beyond the competence of the

legislature.

(iii) Assuming that in India there is no absolute rule

of law that whatever is affixed to or built on the soil

becomes a part of it and is subject to the same rights of

property as the soil itself, there is nothing in law which

prevents the State Legislature from providing as part of an

estate abolition scheme that buildings lying within the

ambit of an estate and used primarily for the management or

administration of the estate should vest in the Government

as appurtenances to the estate itself. Such acquisition

would come within article 31(2) of the Constitution and if

the conditions laid down in clause (4) of that article are

complied with, it would be protected by that clause even if

the compensation provided for is not just and proper.

(iv) The provisions in the Orissa Estates Abolition Act,

1950, relating to private lands in the possession of

temporary tenants are not unconstitutional. Merely because

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compensation was based on the produce rent payable by the

tenants it cannot be said that the landholder was given

compensation only for the landholder's rights and not for

the kudivaram (tenant's) rights also.

(v) The expression "passed by such legislature" in article

31(4) of the Constitution means passed with or without

amendments and the fact that the provisions relating to

vesting of private lands did not form a part of the Estates

Abolition Bill as originally introduced but were added to

the Bill after the new Constitution had come into force

would not deprive those provisions of the protection of

article 31(4) of the Constitution.

(vi) The provision contained in section 37 of the Orissa

Estates Abolition Act, 1950, for payment of compensation by

30 annual instalments is not a piece of colourable

legislation. It comes clearly within entry 42 of List III

of Schedule VII of the Constitution.

[The question whether the provisions of the Madras Estates

Land (Orissa Amendment) Act, 1947, which empowered the

Collector to settle and reduce rents were void because they

involved an improper delegation of legislative powers to the

executive and contravened article 14 of the Constitution was

raised, but with the consent of the counsel, their Lordships

decided to leave the question open as it did not relate to

the validity of the Orissa

3

Estates Abolition Act, which was the subject-matter in

dispute in the present case].

State of Bihar v. Maharajah Kameshwar Singh and Others

([1952] S.C.R. 889) distinguished. Surya Pal Singh v. The

State of Uttar Pradesh ([1952] S.C.R. 1056) followed.

Attorney-General for Ontario v. Reciprocal Insurers and

Others ([1924] A.C. 328), Attorney-General for Alberta v.

Attorney General for Canada ([1939] A.C. 117), Union

Colliery Co. of Br. Columbia Ltd. v. Bryden ([1899] A.C.

580), Cunningham v. Tomeyhomma ([1903] A.C. 151), Be

Insurance Act of Canada ([1932] A.C. 41), Moran v. Deputy

Commissioner for Taxation, New South Wales ([1940] A.C. 838)

referred to.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 71 to 76 of

1953.

Appeals under article 132(1) of the Constitution of India

from the Judgment and Order dated 30th January, 1953, of the

Orissa High Court in Original Jurisdiction Cases Nos. 13,

14, 15, 16, 25 and 26 of 1952. The facts of the case appear

in the judgment.

B. Somayya (K. B. Krishnamurthi, with him) for the

appellant in Civil Appeal No. 71 of 1953.

B. Somayya (D. Narasaraju and N. Y. Ramdas, with him) for

the appellant in Civil Appeal No. 72 of 1953.

D. Narasaraju and A. Krishnaswami (N. V. Ramdas, with

them) for the appellant in Civil Appeal No. 73 of 1953.

D. Narasaraju (N. V. Ramdas, wit him) :for the appellant

in Civil Appeal No. 76 of 1953.

D. V. Narasinga Rao for the appellant in Civil Appeal No.

75 of 1953.

R. Patnaik for the appellant in Civil Appeal No. 74 of

1953.

M. C. Setalvad, Attorney-General for India, and Pitambar

Misra, Advocate-General of Orissa (P. A. Mehta, with them)

for the respondent.

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1953. May 29. The Judgment of the Court was delivered by

MUKHERJEA J.

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MUKHERJEA J.-These six appeals arise out of as many

applications, presented to the High Court of Orissa, under

article 226 of the Constitution, by the proprietors of

certain permanently settled estates within the State of

Orissa, challenging the constitutional validity of the

legislation known as the Orissa Estates Abolition Act of

1952 (hereinafter called "the Act") and praying for

mandatory writs against the State Government restraining

them from enforcing the provisions of the Act so far as the

estates owned by the petitioners are concerned.

The impugned Act was introduced in the Orissa State

Legislature on the 17th of January, 1950, and was passed by

it on the 28th September, 1951. It was reserved by the

State Governor for consideration of the President and the

President gave his assent on 23rd January, 1952. The Act

thus receives the protection of articles 31(4) and 31A of

the Constitution though it was not and could not be included

in the list of statutes enumerated in the ninth schedule to

the Constitution, as referred to in article 31B.

The Act, so far as its main features are concerned, follows

the pattern of similar statutes passed by the Bihar, Uttar

Pradesh and Madhya Pradesh Legislative Assemblies. The

primary purpose of the Act is to abolish all zemindary and

other proprietary estates and interests in the State of

Orissa and after eliminating all the intermediaries, to

bring the ryots or the actual occupants of the lands in

direct contact with the State Government. It may be

convenient here to refer briefly to some of the provisions

of the Act which are material for our present purpose. The

object of the legislation is fully set out in the preamble

to the Act which discloses the public purpose underlying it.

Section 2(g) defines an "estate" as meaning any land held by

an intermediary and included under one entry in any of the

general registers of revenue-paying lands and revenue-free

lands prepared and maintained under the law for the time

being in force by the Collector of a district. The

expression "intermediary" with reference to any estate is

then defined and it

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means a proprietor, sub-proprietor, landlord, landholder ...

thikadar, tenure-holder, under-tenure-holder and includes

the holder of inam estate, jagir and maufi tenures and all

other interests of similar nature between the ryot and the

State. Section 3 of the Act empowers the State Government

to declare, by notification, that the estate described in

the notification has vested in the State free from all

encumbrances. Under section 4 it is open to the State

Government, at any time before issuing such notification, to

invite proposals from "intermediaries" for surrender of

their estates and if such proposals are accepted, the

surrendered estate shall vest in the Government as soon as

the agreement embodying the terms of surrender is executed.

The consequences of vesting either by issue of notification

or as a result of surrender are described in detail in

section 5 of the Act . It would be sufficient for our

present purpose to state that the primary consequence is

that all lands comprised in the estate including communal

lands, non-ryoti lands, waste lands, trees, orchards,

pasture lands, forests, mines and minerals, quarries, rivers

and streams, tanks, water channels, fisheries, ferries, hats

and bazars, and buildings or structures together with the

land on which they stand shall, subject to the other

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provisions of the Act, vest absolutely in the State

Government free from all encumbrances and the intermediary

shall cease to have any interest in them. Under section 6,

the intermediary is allowed to keep for himself his

homestead and buildings and structures used for residential

or trading purposes such as golas, factories, mills, etc.,

but buildings used for office or estate purposes would vest

in the Government. Section 7 provides that an intermediary

will be entitled to retain all lands used for agricultural

or horticultural purposes which are in his kha's possession

at the date of vesting. Private lands of the intermediary,

which were held by temporary tenants under him, would

however vest in the Government and the temporary tenants

would be deemed to be tenants under the Government, except

where the intermediary himself holds less than 33 acres of

land in any capacity. As

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regards the compensation to be paid for the compulsory

acquisition of the estates, the principle adopted is that

the amount of compensation would be calculated at a certain

number of years' purchase of the net annual income of the

estate during the previous agricultural year, that is to

say, the year immediately preceding that in which the date

of vesting falls. First of all, the gross asset is to be

ascertained and by gross asset is meant the aggregate of the

rents including all cesses payable in respect of the estate.

From the gross asset certain deductions are made in order to

arrive at the net income. These deductions include land

revenue or rent including cesses payable to the State

Government, the agricultural 'income-tax payable in the

previous year, any sum payable as chowkidary or municipal

tax in respect of the buildings taken over as office or

estate buildings and also costs of management fixed in

accordance with a sliding percentage scale with reference to

the gross income. Any other sum payable as income-tax in

respect of any other kind of income derived from the estate

would also be included in the deductions. The amount of

compensation thus determined is payable in 30 annual equated

instalments commencing from the date of vesting and an

option is given to the State Government to make full payment

at any time. These in brief are the main features of the

Act.

There was a fairly large number of grounds put forward on

behalf of the appellants before the High Court in assailing

the validity of the Act. It is to be remembered that the

question of the constitutional validity of three other

similar legislative measures passed, respectively, by the

Bihar, Uttar Pradesh and Madhya Pradesh Legislative

Assemblies had already come for consideration before this

court and this court had pronounced all of them to be valid

with the exception of two very minor provisions in the Bihar

Act. In spite of all the previous pronouncements there

appears to have been no lack of legal ingenuity to support

the present attack upon the Orissa legislation, and as a

matter of fact, much of the arguments put forward on behalf

of the appellants purported to have been based

7

on the majority judgment of this court in the Bihar appeals,

where two small provisions of the Bihar Act were held to be

unconstitutional.

The arguments advanced on behalf of the appellants before

the High Court have been classified by the learned Chief

Justice in his judgment under three separate heads. In the

first place, there were contentions raised, attacking the

validity of the Act as a whole. In the second place, the

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validity of the Act was challenged as far as it related to

certain specified items of property included in an estate,

e.g., private lands, buildings, waste lands, etc. Thirdly,

the challenge was as to the validity of certain provisions

in the Act relating to determination of compensation payable

to the intermediary, with reference either to the

calculation of the gross assets or the deductions to be made

therefrom for the purpose of arriving at the net income.

The learned Chief Justice in a most elaborate judgment

discussed all the points raised by the appellants and

negatived them all except that the objections with regard to

some of the matters were kept open. Mr. Justice Narasimham,

the other learned Judge in the Bench, while agreeing with

the Chief Justice as to other points, expressed,, in a

separate judgment of his own, his suspicion about the bona

fides of the Orissa Agricultural Income-tax (Second

Amendment) Act, 1950, and he was inclined to hold that

though ostensibly it was a taxation measure, it was in

substance-nothing else but a colorable device to cut down

drastically the income of the intermediaries so as to

facilitate further reduction of their net income as provided

in clause (b) of section 27(1) of the Act. He, however, did

not dissent from the final decision arrived at by the Chief

Justice, the ground assigned being that whenever there is

any doubt regarding the constitutionality of an enactment,

the doubt should always go in favour of the legislature.

The result was that with the exception of the few matters

that were kept open, all the petitions were dismissed. The

proprietors have now come before us on appeal on the

strength of certificates granted by the High Court under

articles 132 and 133

8

of the Constitution as well as under section 110 of the

Code of Civil Procedure.

No contention has been pressed before us on behalf of the

appellants attacking the constitutional validity of the Act

as a whole. The arguments that have been advanced by the

learned counsel for the appellants can be conveniently

divided under three heads: In the first place, there has

been an attack on the validity of the provisions of two

other statutes, namely, the Orissa Agricultural Income-tax

(Amendment) Act, 1950, and the Madras Estates Land

(Amendment) Act, 1947, in so far as they affect the

calculation of the net income of an estate for the purpose

of determining the compensation payable under the Act. In

the second place, the provisions of the Act have been

challenged as unconstitutional to the extent that they are

applicable to private lands and buildings of the

proprietors, both of which vest as parts of the estate,

under section 5 of the Act. Lastly, the manner of payment

of compensation money, as laid down in section 37 of the

Act, has been challenged as invalid and unconstitutional.

Under the first head the appellants' main contention relates

to the validity of the Orissa Agricultural Income-tax

(Amendment) Act of 1950. This Act, it is said, is not a

bona fide taxation statute at all, but is a colorable piece

of legislation, the real object of which is to reduce, by

artificial means, the net income of the intermediaries, so

that the compensation payable to them under the Act might be

kept down to as low a figure as possible. To appreciate

this contention of the appellants, it would be necessary to

narrate a few relevant facts. Under section 27 (1)(b) of

the Act, any sum payable in respect of an estate as

agricultural income-tax, for the previous agricultural year,

constitutes an item of deduction which has to be deducted

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from the gross asset of an estate for the purpose of

arriving at its net income, on the basis of which the amount

of compensation is to be determined. The Estates Abolition

Bill was published in the local gazette on 3rd January 1950,

As has been said

9

already, it was introduced in the Orissa Legislative

Assembly on the 17th of January following and it was passed

on the 28th September, 1951. There was an Agricultural

Income-tax Act in force in the State of Orissa from the year

1947 which provided a progressive scale of taxation on

agricultural income, the highest rate of tax being 3 annas

in the rupee on a slab of over Rs. 30,000 received as

agricultural income. On 8th January, 1950, that is to say,

five days after the publication of the Abolition Bill, an

amended agricultural income-tax bill was published in the

official gazette. At that time Mr. H. K. Mahtab was the

Chief Minister of Orissa and this bill was sponsored by him.

The changes proposed by this Amendment Act were not very

material. The highest rate was enhanced from 3 annas to 4

annas in the rupee and the highest slab was reduced from Rs.

30,000 to Rs. 20,000. For some reason or other, however,

this bill was dropped and a revised bill was_ published in

the local gazette on 22nd July, 1950, and it passed into law

on 10th of August following. This new Act admittedly made

changes of a very drastic character regarding agricultural

income-tax. The rate of taxation was greatly enhanced for

slabs of agricultural income above Rs. 15,000 and for the

highest slab the rate prescribed was as much as 12 annas 6

pies in the rupee. It was stated in the statement of

objects and reasons that the enhanced agricultural income

was necessary for financing various development schemes in

the State. This, it is said, was wholly untrue for it could

not be disputed that almost all the persons who came within

the higher income group and were primarily affected by the

enhanced rates were intermediaries under the Estates

Abolition Bill which was at that time before the Select

Committee and was expected to become law very soon, and as

the legislature had already definitely decided to extinguish

this class of intermediaries, it was absurd to say that an

increased taxation upon them was necessary for the

development schemes. The object of this amended

legislation, according to the appellants, was totally

different from what it ostensibly purported

2

10

to be and the object was nothing else but to use it as a

means of effecting a drastic reduction in the income of the

intermediaries, so that the compensation payable to them may

be reduced almost to nothing. This change in the provisions

of the Agricultural Income-tax Bill, it is further pointed

out, synchronized with a change in the Ministry of the

Orissa State. The original amended bill was introduced by

the then Chief Minister, Mr. H. K. Mahtab, who was in favour

of allowing suitable compensation to expropriated zemin.

dars; but his successor, who introduced the revised bill,

was said to be a champion of the abolition of zemindary

rights with little or no compensation to the proprietors.

In these circumstances, the argument of the learned counsel

is that the agricultural income-tax legislation being really

not a taxation statute but a mere device for serving another

collateral purpose constitutes a fraud on the Constitution

and as such is invalid, either in its entirety, or at any

rate to the extent that it affects the estate abolition

scheme. We have been referred to a number of decisions on

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this point where the doctrine of colourable legislation came

up for discussion before courts of law; and stress is laid

primarily upon the pronouncement of the majority of this

court in the case of The State of Bihar v. Maharaja

Kameshwar Singh and Others (1) which held two provisions of

the Bihar Land Reforms Act, namely, sections 4(b) and 23 (f)

to be unconstitutional on the ground, among others, that

these provisions constituted a fraud on the Constitution.

The fact that the provisions in the amended Agricultural

Income-tax Act were embodied in a separate statute and not

expressly made a part of the Abolition Act itself should

not, it is argued, make any difference in principle. As the

question is of some importance and is likely to be debated

in similar cases in future, it would be necessary to examine

the precise scope and meaning of what is known ordinarily as

the doctrine of "colourable legislation".

It may be made clear at the outset that the doctrine of

colourable legislation does not involve any question

(1) [1952] S.C.R. 889.

of bona fides or mala fides on the part of the legislature.

The whole doctrine resolves itself into the, question of

competency of a particular legislature to enact a particular

law. If the legislature is competent to pass a particular

law, the motives which impelled it to act are really

irrelevant. On the other hand, if the legislature lacks

competency, the question of motive does not arise at all.

Whether a statute is constitutional or not is thus always a

question of power( ' (1). A distinction, however, exists

between a legislature which is legally omnipotent like the

British Parliament and the laws promulgated by which could

not be challenged on the ground of incompetency, and a

legislature which enjoys only a limited or a qualified

jurisdiction. If the Constitution of a State distributes

the legislative powers amongst different bodies, which have

to act within their respective spheres marked out by

specific legislative entries, or if there are limitations on

the legislative authority in the shape of fundamental

rights, questions do arise as to whether the legislature in

a particular case has or has not, in respect to the subject-

matter of the statute or in the method of enacting it,

transgressed the limits of its constitutional powers. Such

transgression may be patent, manifest or direct, but it may

also be disguised, covert and indirect and it is to this

latter class of cases that the expression "colorable

legislation" has been applied in certain Judicial

pronouncements. The idea conveyed by the expression is that

although apparently a legislature in passing a statute

purported to act within the limits of its powers, yet in

substance and in reality it transgressed these powers, the

transgression being veiled by what appears, on proper

examination, to be a mere presence or disguise. As was said

by Duff J. in Attorney-General for Ontario

v. Reciprocal Insurers and Others(2),

"Where the law making authority is of a limited or qualified

character it may be necessary to examine with some

strictness the substance of the legislation

(1) Vide Cooley's Constitutional Limitations Vol. I. p.

379.

(2) [1924] A.C. 328 at 337.

12

for the purpose of determining what is that the legislature

is really doing."

In other words, it is the substance of the Act that is

material and not merely the form or outward appearance, and

if the subject-matter in substance is something which is

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beyond the powers of that legislature to legislate upon, the

form in which the law is clothed would not save it from

condemnation. The legislature cannot violate the

constitutional prohibitions by employing an indirect method.

In cases like these, the enquiry must always be as to the

true nature and character of the challenged legislation and

it is the result of such investigation and not the form

alone that will determine as to whether or not it relates to

a subject which is within the power of the legislative

authority(1). For the purpose of this investigation the

court could certainly examine the effect of the legislation

and take into consideration its object, purpose or

design(1). But these are only relevant for the purpose of

ascertaining the true character and substance of the

enactment and the class of subjects of legislation to which

it really belongs and not for finding out the motives which

induced the legislature to exercise its powers. It is said

by Lefroy in his well known work on Canadian Constitution

that even if the legislature avow on the face of an Act that

it intends thereby to legislate in reference to a subject

over which it has no jurisdiction, yet if the enacting

clauses of the Act bring the legislation within its powers,

the Act cannot be considered ultra vires(3).

In support of his contention that the Orissa Agricultural

Income-tax (Amendment) Act of 1950 is a colorable piece of

legislation and hence ultra vires the Constitution, the

learned counsel for the appellants, as said above, placed

considerable reliance upon the majority decision of this-

court in the case of The State of Bihar v. Sir Kameshwar

Singh(4), where two clauses

(1) Vide Attorney-General for Ontario v. Reciprocal

Insurers and Others, [1924] A.C. 328 at 337.

(2) Vide Attorney-General for Alberta v. Attorney-General

for Canada,

[19391 A.C. I 17 at 130.

(3) See Lefroy on Canadian Constitution, page 75.

(4) [1952] S.C.R. 889.

13

of the Bihar Land Reform Act were held to be un-

constitutional as being colourable exercise of legislative

power under entry 42 of List III of Schedule VII of the

Constitution. The learned counsel has also referred us, in

this connection, to a number of cases, mostly of the

Judicial Committee of the Privy Council, where the doctrine

of colourable legislation came up for consideration in

relation to certain enactments of the Canadian and

Australian legislatures. The principles laid down in these

decisions do appear to us to be fairly well settled, but we

do not think that the appellants in these appeals could

derive much assistance from them.

In the cases from Canada, the question invariably has been

whether the Dominion Parliament has, under colour of general

legislation, attempted to deal with what are merely

provincial matters, or conversely whether the Provincial

legislatures under the pretence of legislating on any of the

matters enumerated in section 92 of the British North

America Act really legislated on a matter assigned to the

Dominion Parliament. In the case of Union Colliery Company

of British, Columbia Ltd. v. Bryden( ), the question raised

was whether section 4 of the British Columbian Coal Mines

Regulation Act, 1890, which prohibited China men of full age

from employment in under-ground coal working, was, in that

respect, ultra vires of the Provincial legislature. The

question was answered in the affirmative. It was held that

if it was regarded merely as a coal working regulation, it

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could certainly come within section 92, sub-section (10) or

(13), of the British North America Act; but its exclusive

application to Chinamen, who were aliens or naturalised

subjects, would be a statutory prohibition which was within

the exclusive authority of the Dominion Parliament, con-

ferred by section 91, sub-section (25), of the Act. As the

Judicial Committee themselves explained in a later case(2),

the regulations in the British Columbian Act "were not

really aimed at the regulation of coal mines at all, but

were in truth a device to deprive the Chinese,

(1) [1899] A.C. 580.

(2) Vide Cunningham v. Tomeyhomma [1903] A.C. 151 at 157.

14

naturalised or not, of the ordinary rights of the inhabit-

ants of British Columbia and in effect to prohibit their

continued residence in that province since it prohibited

their earning their living in that province."

On the other hand, in ReInsurance Act of Canada(1), the

Privy Council had to deal with the constitutionality of

sections 11 and 12 of the Insurance Act of Canada passed by

the Dominion Parliament under which it was declared to be

unlawful for any Canadian company or an alien, whether a

natural person or a foreign company, to carry on insurance

business except under a licence from the Minister, granted

pursuant to the provisions of the Act. The question was

whether a foreign or British insurer licensed under the

Quebec Insurance Act was entitled to carry on business

within that Province without taking out a licence under the

Dominion Act? It was held that sections 1 1 and 12 of the

Canadian Insurance Act, which required the foreign insurers

to be licensed, were ultra vires, since in the guise of

legislation as to aliens and immigration -matters admittedly

within the Dominion authority the Dominion legislature was

seeking to intermeddle with the conduct of insurance

business which was a subject exclusively within the

provincial authority. The whole law on this point was thus

summed up by Lord Maugham in Attorney-General for Alberta v.

Attorney-General for Canada(2):

"It is not competent either for the Dominion or a Province

under the guise, or the pretence, or in the form of an

exercise of its own powers to carry out an object which is

beyond its powers and a trespass on the exclusive power of

the other."

The same principle has been applied where the question was

not of one legislature encroaching upon the exclusive field

of another but of itself violating any constitutional

guarantee or prohibition. As an illustration of this type

of cases we may refer to the Australian case of Moran v. The

Deputy Commissioner of Taxation for New South Wales(3).

What happened

(1)[1932] A.C. 41. (3) [1940]A.C.838.

(2)[1939] A.C. 117 at 130.

15

in that case was that in pursuance of a joint Commonwealth

and States scheme to ensure to wheat growers in all the

Australian States "a payable price for their produce " a

number of Acts were passed by the Commonwealth Parliament

imposing taxes on flour sold in Australia for home

consumption, so as to provide a fund available for payment

of moneys to wheat growers. Besides a number of taxing

statutes, which imposed tax on flour, the Wheat Industry

Assistance Act No. 53 of 1938 provided for a fund into which

the taxes were to be paid and of which certain payments were

to be made to the wheat growers in accordance with State

legislation. In the case of Tasmania where the quantity of

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wheat grown was relatively small but the taxes were imposed

as in the other States, it was agreed as a part of the

scheme and was provided by section 14 of the Wheat Industry

Assistance Act that a special grant should be made to

Tasmania, not subject to any federal statutory conditions

but intended to be applied by the Government of Tasmania, in

paying back to Tasmanian millers, nearly the whole of the

flour tax paid by them and provision to give effect to that

purpose was made by the Flour Tax Relief Act No. 40 of 1938

of the State of Tasmania. The contention raised was that

these Acts were a part of a scheme of taxation operating and

intended to operate by way of discriminating between States

or parts of States and as such were contrary to the

provisions of section 51(ii) of the Commonwealth Australian

Constitution Act. The matter came up for consideration

before a full court of the High Court of Australia and the

majority of the Judges came to the conclusion that such

legislation was protected by Section 96 of the Constitution,

which empowered the Parliament of the Commonwealth to grant

financial assistance to any State on such terms and

conditions as the Parliament thought fit. Evatt J. in a

separate judgment dissented from the view and held that

under the guise of executing the powers under section 96 of

the Constitution, the legislature had really violated the

constitutional prohibition laid down in section 51(ii) of

the Constitution. There was an appeal taken to the Privy

Council. The Privy Council

16

affirmed the judgment of the majority but pointed out that "

cases may be imagined in which a purported exercise of the

power to grant financial assistance under section 96 would

be merely colourable. Under the guise and pretence of

assisting a State with money, the real substance and purpose

of the Act might simply be to effect discrimination in

regard to taxation. Such an Act might well be ultra vires

the Commonwealth Parliament."

We will now come to the decision of the majority of this

court regarding two clauses in the Bihar Land Reforms Act

which seems to be the sheet anchor of the appellants'

case(1). In that case the provisions of sections 23(f) and

4(b) of the Bihar Land Reforms Act were held to be invalid

by the majority of this court not on the ground that, in

legislating on these topics, the State legislature had

encroached upon the exclusive field of the Central

legislature, but that the subjectmatter of legislation did

not at all come within the ambit of item No. 42 of List III,

Schedule VII of the Constitution under which it purported to

have been enacted. As these sections did not come within

entry 42, the consequence was that half of the arrears of

rent as well as 12'% of the gross assets of an estate were

taken away, otherwise than by authority of law and therefore

there was a violation of fundamental rights guaranteed by

article 31 (1) of the Constitution. This was a form of

colourable legislation which made these provisions ultra

vires the Constitution.

It may be stated here that section 23 of the Bihar Land

Reforms Act lays down the method of computing the net income

of an estate or a tenure which is the subject-matter of

acquisition under the Act. In arriving at the net income

certain deductions are to be made from the gross asset and

the deductions include, among others, revenue, cess and

agricultural income tax payable in respect of the properties

and also the costs of management. Section 23 (f) provided

another item of deduction under which a sum representing 4

to 121 % of the gross asset of an estate was to be

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(1) Vide The State of Bihar v. Sir Kameshwar Singh, [1952]

S.C.R. 889.

17

deducted as "costs of works for benefit to the raiyat". The

other provision contained in section 4 (b) provides that all

arrears of rent which had already accrued due to the

landlord prior to the date of vesting shall vest in the

State and the latter would pay only 50% of these arrears to

the landlord. Both these provisions purported to have been

enacted under entry 42 of List III Schedule VII of the

Constitution and that entry speaks of" principles on which

compensation for property acquired is to be -determined and

the form and manner in which that compensation is to be

given." It was held in the Bihar case(1) by the majority of

this court that the item of deduction provided for in

section 23(f) was a fictitious item wholly unrelated to

facts. There was no definable pre-existing liability on the

part of the landlord to execute works of any kind for the

benefit of the raiyat. What was attempted to be done,

therefore, was to bring within. the scope of the legislation

something which not being existent at all could not have

conceivable relation to any principle of compensation. This

was, therefore, held to be a colourable piece of legislation

which though purporting to have been made under entry 42

could not factually come within its scope.

The same principle was held applicable in regard to

acquisition of arrears of rent which had become due to the

landlord prior to the date of vesting. The net result of

this provision was that the State Government was given the

power to appropriate to itself half of the arrears of rent

due to the landlord without giving him any compensation

whatsoever. Taking the whole and returning the half meant

nothing more or less than taking the half without any return

and this, it was held, could not be regarded as a principle

of compensation in any sense of the word. It was held

definitely by one of the learned Judges, who constituted the

majority, that item 42 of List III was nothing but the

description of a legislative head and in deciding the com-

petency of the legislation under this entry, the court is

not concerned with the justice or propriety of the

(1) [1952] S.C.R. 889.

3

18

principles upon which the assessment of compensation is

directed to be made; but it must be a principle of

compensation, no matter whether it was just or unjust and

there could be no principle of compensation based upon

something which was unrelated to facts. It may be mentioned

here that two of the three learned Judges who formed the

majority did base their decision regarding the invalidity of

the provision, relating to arrears of rent, mainly on the

ground that there was no public purpose behind such

acquisition. It was held by these Judges that the scope of

article 31(4) is limited to the express provisions of

article 31(2) and although the court could not examine the

adequacy of the provision for compensation contained in any

law which came within the purview of article 31(4), yet that

clause did not in any way debar the court from considering

whether the acquisition was for any public purpose. This

view was not taken by the majority of the court and Mr.

Narasaraju, who argued the appeals before us, did not very

properly pursue that line of reasoning. This being the

position, the question now arises whether the majority

decision of this court with regard to the two provisions of

the Bihar Act is really of any assistance to the appellants

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in the cases before us. In our opinion, the question has,

got to be answered in the negative.

In the first place, the line of reasoning underlying the

majority decision in the Bihar case(1) cannot possibly have

any application to the facts of the present case. The

Orissa Agricultural Income-tax (Amendment) Act of 1950 is

certainly a legislation on " taxing of agricultural income "

as described in entry 46 of List II of the Seventh Schedule.

The State legislature had undoubted competency to legislate

on agricultural income tax and the substance of the amended

legislation of 1950 is that it purports to increase the

existing rates of agricultural income-tax, the highest rate

being fixed at 12 annas 6 pies in the rupee. This may be

unjust or inequitable, but that does not affect the

competency of the legislature. It cannot be said, as was

said in the Bihar case(1), that the legislation purported to

be based

(1) (1952) S.C.R. 889.

19

on something which was unrelated to facts and did not exist

at all. Both in form and in substance the Act was an

agricultural income-tax legislation and agricultural income-

tax is certainly a relevant item of deduction in the

computation of the net income of an estate and is not

unrelated to it as item No. 23(f) of the Bihar Act was held

to be. If under the existing law the agricultural income-

tax was payable at a certain-rate and without any amendment

or change in the law, it was provided in the Estates

Abolition Act that agricultural income-tax should be

deducted from the gross asset at a higher rate than what was

payable under law, it might have been possible to argue that

there being no pre-existing liability of this character it

was really a non-existing thing and could not be an

ingredient in the assessment of compensation. But here the

Agricultural Income-tax (Amendment) Act was passed in

August, 1950. It came into force immediately thereafter and

agricultural income-tax was realised on the basis of the

amended Act in the following year. It was, therefore, an

existing liability in 1952, when the Estates Abolition Act

came into force. It may be that many of the people

belonging to the higher income group did disappear as a

result of the Estates Abolition Act, but even then there

were people still existing upon whom the Act could operate.

The contention of Mr. Narasaraju really is that though

apparently it purported to be a taxation statute coming

under entry 46 of List II, really and in substance it was

not so. It was introduced under the guise of a taxation

statute with a view to accomplish an ulterior purpose,

namely, to inflate the deductions for the purpose of valuing

an estate so that the compensation payable in respect of it

might be as small as possible. Assuming that it is so..

still it cannot be regarded as a colourable legislation in

accordance with the principles indicated above, unless the

ulterior purpose which it is intended to serve is something

which lies beyond the powers of the legislature to legislate

upon. The whole doctrine of colourable legislation is based

upon the maxim that you cannot do indirectly what you cannot

do

20

directly. If a legislature is competent to do a thing

directly, then the mere fact that it attempted to do it in

an indirect or disguised manner, cannot make the Act

invalid. Under entry 42 of List III which is a mere head of

legislative power the legislature can adopt any principle of

compensation in respect to properties compulsorily acquired.

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Whether the deductions are large or small, inflated or

deflated they do not affect the constitutionality of a

legislation under this entry' The only restrictions on this

power, as -has been explained by this court in the earlier

cases, are those mentioned in article 31(2) of the

Constitution and if in the circumstances of a particular

case the provision of article 31(4) is attracted to a

legislation, no objection as to the amount or adequacy of

the compensation can at all be raised. The fact that the

deductions are unjust, exorbitant or improper does not make

the legislation invalid, unless it is shown to be based on

something which is unrelated to facts. As we have already

stated, the question of motive does not really arise in such

cases and one of the learned Judges of the High Court in our

opinion pursued a wrong line of enquiry in trying to find

out what actually the motives were which impelled the

legislature to act in this manner. It may appear on

scrutiny that the real purpose of a legislation is different

from what appears on the face of it, but it would be a

colourable legislation only if it is shown that the real

object is not attainable to it by reason of any

constitutional limitation or that it lies within the

exclusive field of another legislature. The result is that

in our opinion the Orissa Agricultural Income-tax

(Amendment) Act of 1950 could not be held to be a piece of

colourable legislation, and as such invalid. The first

point raised on behalf of the appellants must therefore

fail.

The other point raised by the learned counsel for the

appellants under the first head of his arguments relates to

the validity of certain provisions of the Madras Estates

Land (Orissa Amendment) Act of 1947. This argument is

applicable only to those estates which are

21

situated in what is known as ex-Madras area, that is to say,

which formerly belonged to the State of Madras but became a

part of Orissa from 1st April, 1936. The law regulating the

relation of landlord and tenant in these areas is contained

in the Madras Estates Land Act of 1908 and this Act was

amended with reference to the areas situated in the State of

Orissa by the amending Act XIX of 1947. The provisions in

the amended Act, to which objections have been taken by the

learned counsel for the appellants, relate to settlement and

reduction of rents payable by raiyats. Under section 168 of

the Madras Estates Land Act, settlement of rents in any

village or area for which a record of rights has been

published can be made either on the application of the

landholder or the raivats. On such application being made,

the Provincial Government may at any time direct the

Collector to settle fair and equitable rents in respect of

the lands situated therein. Sub-section (2) of section 168

expressly provides that in settling rents under this

section, the Collector shall presume, until the contrary is

proved, that the existing rate of rent is fair and

equitable, and he would further have regard to the

provisions of this Act for determining the rates of rent

payable by raiyats. Section 177 provides that when any rent

is settled under this chapter, it can neither be enhanced

nor reduced for a period of 20 years, except on grounds

specified in sections 30 and 38 of the Act respectively.

The amending Act of 1947 introduced certain changes in this

law. A new section, namely, section 168-A was. introduced

and a further provision was added to section 177 as sub-

section (2) of that section, the original section being

renumbered as sub-section (1). Section 168-A of the amended

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Act runs as follows:--

(1) Notwithstanding anything contained in this Act the

Provincial Government may, on being satisfied that the

exercise of the powers hereinafter mentioned is necessary in

the interests of public order or of the local welfare or

that the rates of rent payable in money or in kind whether

commuted, settled or

22

otherwise fixed are unfair or inequitable invest the

Collector with the following powers:-

(a) Power to settle fair and equitable rents in cash;

(b) Power, when settling rents to reduce rents if in the

opinion of the Collector the continuance of the existing

rents would on any ground, whether specified in this Act or

not, be unfair and inequitable.

(2) The power given under this section may be made

exercisable within specified areas either generally or with

reference to specified cases or class of cases."

Sub-section (2) which has been added to section 177 stands

thus:--

" 2(a) Notwithstanding anything in sub-section (1) where

rent is settled under the provisions of section 168-A, the

Provincial Government may either retrospectively or

prospectively prescribe the date on which such settlement

shall take effect. In giving retrospective effect the

Provincial Government may, at their discretion, direct that

the rent so settled shall take effect from a date prior to

the commencement of the Madras Estates Land (Orissa

Amendment) Act, 1947."

The appellants' contention is that by these amended

provisions the Provincial Government was authorised to

invest the Collector with power to settle and reduce rents,

in any way he liked, unfettered by any of the rules and

principles laid down in the Act and the Provincial

Government was also at liberty to direct that the reduction

of rents should take effect retrospectively, even with

reference to a period for which rents had already been paid

by the tenant. Under section 26 of the Orissa Estates

Abolition Act, the gross asset of an estate is to be

calculated on the basis of rents payable by raiyats for the

previous agricultural year. According to the appellants,

the State Government made use of the provisions of the

amended Madras Estates Land (Orissa Amendment) Act to reduce

arbitrarily the rents payable by raiyats and further to make

the reduction take effect retrospectively, so that the

diminished rents could be reckoned

23

as rents for the previous year in accordance with the

provision of section 26 of the Estates Abolition Act and

thus deflate the basis upon which the gross asset of an

estate was to be computed.

It is conceded by the learned counsel for the appellants

that the amendments in the Madras Estates Land Act are no

part of the Estates Abolition Act of Orissa and there is no

question of any colourable exercise of legislative powers in

regard to the enactment of these provisions. The

legislation, however, has been challenged, as

unconstitutional, on two grounds. First of all, it is urged

that by the amended sections mentioned above, there has been

an improper delegation of legislative powers by the

legislature to the Provincial Government, the latter being

virtually empowered to repeal existing laws which govern the

relations between landlord and tenant in those areas. The

other ground put forward is that these provisions offend

against the equal protection clause embodied in article 14

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of the Constitution. It is pointed out that the Provincial

Government is -given unfettered discretion to choose the

particular areas where the settlement of rent is to be made.

The Government has also absolute power to direct that the

reduced rents should take effect either prospectively or

retrospectively in particular cases as they deem proper. It

is argued that there being no principle of classification

indicated in these legislative provisions and the discretion

vested in the Government being an uncontrolled and unfetter-

ed discretion guided by no legislative policy, the pro-

visions are void as repugnant to article 14 of the Con-

stitution.

In reply to these arguments it has been contended by the

learned Attorney-General that, apart from the fact as to

whether the contentions are well-founded or not, they are

not relevant for purposes of the present case. The

arguments put forward by the appellants are not grounds of

attack on the validity of the Estates Abolition Act, which,

is the subject-matter of dispute in the present case, and it

is not suggested that the provisions of the Estates

Abolition Act relating to

24

the computation of gross asset on the basis of rents payable

by raiyats is in any way illegal. The grievance of the

appellants in substance is that the machinery of the amended

Act is being utilised by the Government for the purpose of

deflating the gross asset of an estate. We agree with the

learned Attorney-General that if the appellants are right in

their contention, they can raise these objections if and

when the gross assets are sought to be computed on the basis

of the rents settled under the above provisions. If the

provisions are void, the rents settled in pursuance thereof

could not legitimately form the basis of the valuation of

the estate under the Estates Abolition Act and it might be

open to the appellants then to say that for purposes of

section 26 of the Estates Abolition Act, the rents payable

for the previous year would be the rents settled under the

Madras Estates Land Act, as it stood unamended before 1947.

The learned counsel for the appellants eventually agreed

with the views of the Attorney-General on this point and

with the consent of both sides we decided to leave these

questions open. They should not be deemed to have been de-

cided in these cases.

The appellants' second head of arguments relates to two

items of property, namely, buildings and private lands of

the intermediary, which, along with other interests, vest in

the State under section 5 of the Act.

There are different provisions in the Act in regard to

different classes of buildings. Firstly, dwelling houses

used by an intermediary for purposes of residence or for

commercial or trading purposes remain with him on the

footing of his being a tenant under the State in respect to

the sites thereof and paying such fair and equitable rent as

might be determined in accordance with the provisions of the

Act. In the second place, buildings used primarily as

office or kutchery for man agement of the estates or for

collection of rents or as rest houses for estate servants or

as golas for storing of rents in kind vest in the State and

the owner is allowed compensation in respect thereof. In

addition to these, there are certain special provisions in

the Act

25

relating to buildings constructed after 1st January, 1946,

and used for residential or trading purposes, in respect to

which the question of bona fides as to its construction and

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use might be raised and investigated by the Collector.

There are separate provisions also in respect to buildings

constructed before 1st January, 1946, which were not in

possession of the intermediary at the date of coming into

force of the Act. The questions arising in regard to this

class of cases have been left open by the High Court and we

are not concerned with them in the present appeals. No

objection has been taken by the appellants in respect to the

provisions of the Act relating to buildings used for

residential or trade purposes. Their objections relate only

to the building used for estate or office purposes which

vest in the State Government under the provisions of the

Act.

In regard to these provisions, it is urged primarily that

the buildings raised on lands do not necessarily become

parts of the land under Indian law and the legislature,

therefore, was wrong in treating them as parts of the estate

for purposes of acquisition. This contention, we are

afraid, raises an unnecessary issue with which we are not at

all concerned in the present cases. Assuming that in India

there is no absolute rule of law that whatever is affixed to

or built on the soil becomes a part of it and is subject to

the same rights of property as the soil itself, there is

nothing in law which prevents the State legislature from

providing as a part of the estates abolition scheme that

buildings, lying within the ambit of an estate and used

primarily for management or administration of the estate.

would vest in the Government as appurtenances to the estate

itself. This is merely ancillary to the acquisition of an

estate and forms an integral part of the abolition scheme.

Such acquisition would come within article 31(2) of the

Constitution and if the conditions laid down in clause (4)

of that article are complied with, it would certainly

attract the protection afforded by that clause.

Compensation has been pro. vided for these buildings in

section 26(2) (iii) of the

4

26

Act and the annual rent of these buildings determined in the

prescribed manner constitutes one of the elements for

computation of the gross asset of an estate. The contention

of the appellants eventually narrows down to this that the

effect of treating the annual valuation of the buildings as

part of the gross asset of the estate in its entirety, leads

to unjust results, for if these buildings were treated as

separate properties, the intermediaries could have got

compensation on a much higher scale in accordance with the

slab system adopted in the Act. To this objection, two

answers can be given. In the first place, if these

buildings are really appurtenant to the estate, they can

certainly be valued as parts of the estate itself. In the

second place, even if the compensation provided for the

acquisition of the buildings is not just and proper, the

provision of article 31 (4) of the Constitution would be a

complete answer to such acquisition.

As regards the private lands of the proprietor, the

appellants have taken strong exception to the provisions of

the Act so far as they relate to private lands in possession

of temporary tenants. In law these lands are in possession

of the proprietor and the temporary tenants cannot acquire

occupancy rights therein, yet they vest, under the Act, in

the State Government on the acquisition of an estate, the

only exception being made in cases of small land-holders who

do not hold more than 33 acres of land in any capacity.

Section 8(1) of the Act gives the temporary tenants the

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right to hold the lands in their occupation under the State

Government on the same terms as they held them under the

proprietor. Under the Orissa Tenants Protection Act, which

is a temporary Act, the landholder is not entitled to get

contractual or competitive rents from these temporary

tenants in possession of his private lands and the rent is

fixed at two-fifths of the gross produce. It is on the

basis of this produce rent which is included in the

computation of the gross asset of an estate under section 26

of the Act, that the land-holder gets compensation in

respect to the private lands in occupation of temporary

tenants. The appellants' main contention is that although

in these lands

27

both the melvaram and kudivaram rights, that is to say, both

the proprietor's as well as the raiyat's interests are

united in the land-holder, the provisions of the Act

indicated above have given no compensation whatsoever for

the kudivaram or the tenant's right and in substance this

interest has been confiscated without any return. This, in

our opinion, is a wrong way of looking at the provisions for

compensation made in the Act. The Orissa Act, like similar

Acts passed by the legislatures of other States, provides

for payment of compensation on the basis of the net income

of the whole estate. One result of the adoption of this

principle, undoubtedly is, that no compensation is allowed

in respect of potential values of properties; and those

parts of an estate which do not fetch any income have

practically been ignorned. There is no doubt that the Act

does not give anything like a fair or market price of the

properties acquired and the appellants may be right in their

contention that the compensation allowed is inadequate and

improper; but that does not affect the constitutionality of

the provisions. In the first place, no question of

inadequacy of compensation can be raised in view of the

provision of article 31(4) of the Constitution and it cannot

also be suggested that the rule for payment of compensation

on rental basis is outside the ambit of entry 42 of List

Ill. This point is concluded by the earlier decision of

this court in Raja Suriya Pal Singh v. The State of U.P.(1)

and is not open to further discussion. Mr. Narasaraju is

not right in saying that the compensation for the private

lands in possession of temporary tenants has been given only

for the landlord's interest in these properties and nothing

has been given in lieu of the tenant's interest. The entire

interest of the proprietor in these lands has been acquired

and the compensation payable for the whole interest has been

assessed on the basis of the net income of the property as

represented by the share of the produce payable by the

temporary tenants to the landlord. It is true that the

Orissa Tenants Protection Act is a temporary statute, but

whether or not it is renewed in future, the

(1) [1952] S.C.R. 1056.

28

rent fixed by it has been taken only as the measure of tile

income derivable from these properties at the date of

acquisition.

Mr. Narasaraju further argues that his clients are not

precluded from raising any objection on the ground of

inadequacy of compensation in regard to these private lands

by reason of article 31(4) of the Constitution, as the

provision of that article is not attracted to the facts of

the present case. What is said is, that the original

Estates Abolition Bill, which was pending before the Orissa

Legislature at the time when the Constitution came into

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force, did not contain any provision that the private lands

of the proprietor in occupation of temporary tenants would

also vest in the State. This provision was subsequently

introduced by way of amendment during the progress of the

Bill and after the Constitution came into force. It is

argued, therefore, that this provision is not protected by

article 31(4). The contention seems to us to be manifestly

untenable. Article 31(4) is worded as follows:-

"If any Bill pending at the commencement of this

-Constitution in the Legislature of a State has, after it

has been passed by such Legislature, been reserved for the

consideration of the President and has received his assent,

then, notwithstanding anything in this Constitution, the law

so assented to shall not be called in question in any court

on the ground that it contravenes the provisions of clause

(2)."

Thus it is necessary first of all that the Bill, which

ultimately becomes law, should be pending before the State

Legislature at the time of the coming into force of the

Constitution. That Bill must be passed by the Legislature

and then receive the assent of the President. It is the law

to which the assent of the President is given that is

protected from any attack on the ground of non-compliance

with the provisions of clause (2) of article 31. The

fallacy in the reasoning of the learned counsel lies in the

assumption that the Bill has got to be passed in its

original shape without any change whatsoever, before the

provision of clause (4) of article 31 could be attracted.

There is no

29

warrant for such assumption in the language of the clause.

The expression "passed by such Legislature" must mean

"passed with or without amendments" in accordance with the

normal procedure contemplated by article 107 of the

Constitution. There can be no doubt that all the

requirements of article 31(4) have been complied with in the

present case and consequently there is no room for any

objection to the legislation on the ground that the

compensation provided by it is inadequate.

The last contention of the appellants is directed against

the provision of the Act -laying down the manner of payment

of the compensation money. The relevant section is section

37 and it provides for the payment of compensation together

with interest in 30 annual equated instalments leaving it

open to the State to make the payment in full at any time

prior to the expiration of the period. The validity of this

provision has been challenged on the ground that it is a

piece of colourable legislation which comes within the

principle enunciated by the majority of this court in the

Bihar case referred to above. It is difficult to appreciate

this argument of the learned counsel. Section 37 of the Act

contains the legislative provision regarding the form and

the manner in which the compensation for acquired properties

is to be given and as such it comes within the clear

language of entry 42 of List III, Schedule VII of the

Constitution. It is not a legislation on something which is

non-existent or unrelated to facts. It cannot also be

seriously contended that what section 37 provides for, is

not the giving of compensation but of negativing the right

to compensation as the learned counsel seems to suggest.

There is no substance in this contention and we have no

hesitation in overruling it. The result is that all the

points raised by the learned counsel for the appellants fail

and the appeals are dismissed. Having regard to some

important constitutional questions involved in these cases

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which needed clearing up, we direct that each party should

bear his own costs in these appeals.

Appeals dismissed.

30

Agent for the appellant in Civil Appeal Nos. 71, 72, 73, 75

& 76: M. S. K. Sastri.

Agent for the appellant in Civil Appeal No. 74: R.C. Prasad.

Agent for the respondent: G. H. Rajadhyaksha.