# • ,. SH. JILUBHAI NANBHAI KHACHAR ETC ETC v. STATE OF GUJARAT AND ANR. ETC. ETC

- **Citation:** [1994] Supp. 1 S.C.R. 807
- **Court:** Supreme Court of India
- **Decided:** 1994-07-20
- **Case number:** Civil Appeals No. 2211A 15/84 and 3013 of 1990
- **Bench:** K. Ramaswamy, N. Venkatachala
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sh-jilubhai-nanbhai-khachar-etc-etc-v-state-of-gujarat-and-anr-etc-etc-12383
- **Pages:** 49

## Headnote

B
Land Tenure Abolition Laws (Gujarat Amendment) Ac~ 1982:
Amendments introduced in Bombay La11d Revenue Code-Legislative
compete11ce of-Held covered by Entries 18 a11d 23 of List JI (State List) read C
with Entry 42 of List Ill (Co11cwre11t Listf-Amendment Act held part of the
scheme of agrarian refonn-Held protected by Article 31-A and 31-~ Held
Not ultra vires the power of State LegislaturHurpose of the Act discussed.
i
Bombay Land Revmue Code, 1879 :'
Section 69-A (As Introduced by Gujarat Amendment) Act, 1982Validicy-Girasdars and Barkhalidars-Holding. Mines and quarries--
Provision for vesting in State-Held not violative of Article 300-A-Limited
retrospective operation given to the provision--He/d not ultra vires.
D
Sectio11 69-A( 4 )--Compensation-Principle for quantificationE
Average of three years net annual income preceding the date of vesting-Held
not violative of Article 14.
Constitution of India, 1950: Articles 31-A, 31-B, 31-C and 39(b) and
(c).
Law providing for acquisition of estates-Saving oj-{.,and Tenure
Abolition Laws (Gujarat Amendment) Act, 1982- inclusion in Nint1'
Schedule-Held protected by Articles 31-A and 31-B.
F
Article 39(b) and (cf-'Material Resources ofCommunity'-Scope and G
meaning of-Held the concept is broad and must be interpreted broadly-Held Mines Minerals and Quarries embedded in land are material resources of community-Held Amendment Act (8 of 1982) falls under Article
39(b) and is saved by Article 31 ( C).
Article 300-A-Right to property-Held not a basic feature of the Con- H
807
808
SUPREME COURT REPORTS (1994] SUPP.1 S.C.R.
A stitution--Position before and after Constitution 44th Amendment Ac~is
cussed.
'Property'-Legal connotation of-Held it must be construed in the
context in which sovereign power of eminent domain is exercised-Deprivation of property-Compensation for-Principles of-State can acquire properB ty in exercise of power of Eminent Domain--Payment of market value in lieu
of acquired property is not sine qua non for acquisition.
Property-Acquisition of-Compensatiort-Adequacy of-Held not subject to judicial review-Principle of depletion of rupee value held not relevant
C for determination of compensation.
Compensation for property acquired-Prescription of different mode9Held not Violative of Article 14.
Seventh Schedule-Lists I, II, and III-Entries-Interpretation ofD Held should be given widest scope of their meaning-Duty of Court to
ascertain pith and substance of AcHleld entries in Schedule do not confer
legislative powers.
Scheduled II-List II-Entry lS-'Land'-lnterpretation of-Held includes Mines Minerals and Quarries embedded in Land-'Right in or over
E land'-lnc/Udes not only surface but everything under it.
F
Constitution--Principles of interpretatiort-Should not be considered in
na"ow and pedantic mannei--Construction must be beneficial to the
amplitude of Legislative powers.
Legislature-Power to make laws-Held in the absence of express
Constitutional prohibition power can be exercised prospectively and retrospectively.
Doctrine of Eminent Domai1t"""74.pplicability of Doctrine of Pith and
G Substance-Applicability of
Words and Phrases : 'Land'-Meaning of-Entry 18--List- II-Seventh
Schedule to the Constitution.
'Distribution'-Meaning and construction of-cArtic/e 39(b) of the ConH stitution.
-
'"T1
J.N.KHACHARv.STATEOFGUJARAT
809
'Property'-Meaning of-Article 300-A of the Constitution.
A
In these appeals the Constitutional validity of the land Tenure
Abolition Laws (Gujarat Amendment) Act, 1982 and sections 69, 69·A and
69-A (4) of the Bombay Land Revenue Code, 1879 is in question. By a
notification published in the Government Gazette the State of Gujarat B
abolished the Girasdars' and Barkbalidars right in the estates. Conse·
quently the rights of Girasdars and Barkbalidars to occupy and enjoy the
land as land-holders in terms of the grant made by the erstwhile Rules
stood extinguished and vested in the State. However, by judicial interpreta·
tion it was held that only

## Text

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•
,.
SH. JILUBHAI NANBHAI KHACHAR ETC ETC.
A
v.
STATE OF GUJARAT AND ANR. ETC. ETC.
JULY 20, 1994
[K. RAMASWAMY AND N. VENKATACHALA, JJ.)
B
Land Tenure Abolition Laws (Gujarat Amendment) Ac~ 1982:
Amendments introduced in Bombay La11d Revenue Code-Legislative
compete11ce of-Held covered by Entries 18 a11d 23 of List JI (State List) read C
with Entry 42 of List Ill (Co11cwre11t Listf-Amendment Act held part of the
scheme of agrarian refonn-Held protected by Article 31-A and 31-~ Held
Not ultra vires the power of State LegislaturHurpose of the Act discussed.
i
Bombay Land Revmue Code, 1879 :'
Section 69-A (As Introduced by Gujarat Amendment) Act, 1982Validicy-Girasdars and Barkhalidars-Holding. Mines and quarries--
Provision for vesting in State-Held not violative of Article 300-A-Limited
retrospective operation given to the provision--He/d not ultra vires.
D
Sectio11 69-A( 4 )--Compensation-Principle for quantificationE
Average of three years net annual income preceding the date of vesting-Held
not violative of Article 14.
Constitution of India, 1950: Articles 31-A, 31-B, 31-C and 39(b) and
(c).
Law providing for acquisition of estates-Saving oj-{.,and Tenure
Abolition Laws (Gujarat Amendment) Act, 1982- inclusion in Nint1'
Schedule-Held protected by Articles 31-A and 31-B.
F
Article 39(b) and (cf-'Material Resources ofCommunity'-Scope and G
meaning of-Held the concept is broad and must be interpreted broadly-Held Mines Minerals and Quarries embedded in land are material resources of community-Held Amendment Act (8 of 1982) falls under Article
39(b) and is saved by Article 31 ( C).
Article 300-A-Right to property-Held not a basic feature of the Con- H
807
808
SUPREME COURT REPORTS (1994] SUPP.1 S.C.R.
A stitution--Position before and after Constitution 44th Amendment Ac~is
cussed.
'Property'-Legal connotation of-Held it must be construed in the
context in which sovereign power of eminent domain is exercised-Deprivation of property-Compensation for-Principles of-State can acquire properB ty in exercise of power of Eminent Domain--Payment of market value in lieu
of acquired property is not sine qua non for acquisition.
Property-Acquisition of-Compensatiort-Adequacy of-Held not subject to judicial review-Principle of depletion of rupee value held not relevant
C for determination of compensation.
Compensation for property acquired-Prescription of different mode9Held not Violative of Article 14.
Seventh Schedule-Lists I, II, and III-Entries-Interpretation ofD Held should be given widest scope of their meaning-Duty of Court to
ascertain pith and substance of AcHleld entries in Schedule do not confer
legislative powers.
Scheduled II-List II-Entry lS-'Land'-lnterpretation of-Held includes Mines Minerals and Quarries embedded in Land-'Right in or over
E land'-lnc/Udes not only surface but everything under it.
F
Constitution--Principles of interpretatiort-Should not be considered in
na"ow and pedantic mannei--Construction must be beneficial to the
amplitude of Legislative powers.
Legislature-Power to make laws-Held in the absence of express
Constitutional prohibition power can be exercised prospectively and retrospectively.
Doctrine of Eminent Domai1t"""74.pplicability of Doctrine of Pith and
G Substance-Applicability of
Words and Phrases : 'Land'-Meaning of-Entry 18--List- II-Seventh
Schedule to the Constitution.
'Distribution'-Meaning and construction of-cArtic/e 39(b) of the ConH stitution.
-
'"T1
J.N.KHACHARv.STATEOFGUJARAT
809
'Property'-Meaning of-Article 300-A of the Constitution.
A
In these appeals the Constitutional validity of the land Tenure
Abolition Laws (Gujarat Amendment) Act, 1982 and sections 69, 69·A and
69-A (4) of the Bombay Land Revenue Code, 1879 is in question. By a
notification published in the Government Gazette the State of Gujarat B
abolished the Girasdars' and Barkbalidars right in the estates. Conse·
quently the rights of Girasdars and Barkbalidars to occupy and enjoy the
land as land-holders in terms of the grant made by the erstwhile Rules
stood extinguished and vested in the State. However, by judicial interpreta·
tion it was held that only uncultivable waste lands stoods vested in the
State and the lands with mines and minerals could not be held to be C
uncuitivable waste lands and did not vest in the State. To obviate this
Interpretation the Amendment Act, 1982 introduced Section 69-A in the
Bombay Land Revenue Code, 1879 which extinguished the right to mines
or minerals and quarries in the lands held by any person including
Girasdars or Barkbalidars and reserved them for the Government under D
Section 69 of the Code. The appellants unsuccessfully challenged the
validity of these provisions before the Gujarat High Court.
In appeals to this Court, it was contended that: (1) The Amendment
Act is void and is ultra vires the power of the State Legislature; (2) Without
amendment to the other Act. viz. (a) The Saurashtra Gharkhed Tenancy E
Settlement and Agricultural Land Ordinance, 1949: (b) The Saurashtra
Land Reorms Acts, 1951; (C) The Saurashtra Barkbali Abolition Act, 1951,
the Amendment Act becomes inoperative; (3) The limited retrospective
operation given to Section 69 and 69-A with effect from 1st May, 1960 is
illegal and ultra vires; (4) Section 69-A of the Code though included in the F
Ninth Scheduled to the Constitution is not a law relating to agrarian
reforms and therefore, it is not protected by Article 31-A of the Constitu·
lion; (5) Right to property which was abolished by Cm,stitution's 44th
Amendment Act was resurrected under Article 300-A as a Constitutional
right. Therefore, the law must meet the test of Articles 14 and 21; (6) The
Compensation provided under sub-section (4) of section 69-A of the Code G
is void as compensation was not just equivalent to the property acquired;
(7) In view of the erosion in the money value the ftxation of compensation
on the principle of net annual income of three years preceding the date of
vesting, namely 1st May, 1960 is arbitrary; (8) The Act and the related
provisions provided different modes of compensaHon Limn the one H
810
SUPREME COURT REPORTS (1994] SUPP. l S.C.R.
A
provided in sub-section ( 4) or Section 69-A or the Code and that, therefore,
it is discriminatory, violating Article 14 and unfair procedure offending
Article 21.
B
c
Dismissing the appeals, this Court
HELD : l. Jn pith and substance, the predominent purpose or the
Amendment Act is to extinguish the pre-existing rights, title and interest
in the land which includes the mines, minerals and quarries held by
Girasdars or Barkhalidars and to reserve and vest them in the State or
Gujarat for public use. It would thereby fall within Entry 18 and 23 of List
lI (State List) read with Entry 42 of List III (Concurrent List). [827-H]
2. The Amendment Act in pith and substance is predominently for
abolition and extinguishment or the right in lands comprising of mines,
minerals and qnarries held by Girasdar, Barkbalidar or any person under
a grant or agreement or by operation of a decree, order or judgment of a
D court and vest. them in the State by their acquisition. So the ~endment
Act g•ts the protection of Article 31-A. Thus itis not ultra vires of the power
of the State Legislature. [828-E)
E
F
G
India Cement Ltd. & Ors. v. State of Tamil Nadu, [1990) 1 SCC 12;
Orissa Cement Ltd. & Ors. v. State of Orissa & Ors. etc., [1991) 2 SCC 103
and Federation of Mining Association of Rajasthan v. State of Rajasthan &
Anr., [1992] Supp. 2 SCC 239, held inapplicable.
3. The Amendment Act received its protective canopy of Ninth
Schedule in Entry 219 thereortbrougb the Constitution's 66th-Amendment
Act, 1990. It is part of the scheme of agrarian reforms envisaged under the
Act falling within Entries 18 and 23 of List II (State List) and Entry 42 of
Concurrent List of the Seventh Schedure to the Constitution. So it is saved
by Article 31 ·A of the Constitution. Even otherwise it would fall under
Article 39(b) and (c) of the Constitution. It is saved by Article 3l(c).
[831-G-H)
4. Land in Entry 18 is not restricted to agricultural land alone but
includes non-agricultural land etc. The words 'rights in' or 'over land'
confer very wide power which are not limited by rights between the land
holder inter se or the land holder and the State or the land holder and the
tenant. Restriction or extinction or existing interest in the land includes
H provision for abolition and exitinguishment of the rights in or over the
..
J.N. KHACHAR v. STATE OF GUJARAT
811
land Resumption or the estate is one or the objectives or the government A
and the Act seeks to serve that object. Resumption includes all ancillary
provisions, cancellation or extinguishment or any existing grant by the exRulers or lease by grant with restrospective effect. [825-H, 826-A-B)
Land in its widest signification would therefore include not only the
B
surCace or the ground, cultivable, uncultivable or waste lands but also
everything on or under it. [826-G)
Thakur Raghubir Singh & Ors. v. The State of Ajmer (now Rajasthan)
and Ors., [1959) SCR Supp. 1, 478; Jagannath Singh v. State of U.P., AIR
(1960) SC 1563; State of UP. v. Sarju Devi, [1978) 1 SCR 18; State of Gujarat c
v. Kam/a Ben liven Bha~ [1979) Supp. 2 SCC 440; Sri Ram Ram Narain
Medhi v. State of Bombay, [1959) Supp. 1 SCR 489 and Digvijaya Singh
Hamirsinhji v. Manji Savda, [1969) SCR 1 405, rererred to.
Black's Law Dictionary (Sixth edn.) page 877; Ramanatha Iyer, The
Law Lexicon (Reprint edn. 1987), p. 187, rererred to.
D
5. Entries In the Seventh Schedule to the Constitution are not powers
but fields or legislation. The legislature drives its powers by Article 246
and other related Articles of the Constitution. Therefore, the power to
make the Amendment Act is derived not Crom the respective entries but E
under Article 246 or the Constitution. The language or the respective
entries should be given the widest scope or their meaning, Calrly capable
to meet the machinery or the Government settled by the Constitution. Each
"
general word should extend to all ancillary or subsidiary mattars which
can Cairly and reasonably be comprehended In it. When the vires or an
enactment is Impugned, there is an initial presumption or Its conF
stitutionallty and IC there is any difficulty in ascertaining the limits or the
legislative power, the difficulty must be resolved, as Car as possible in
Cavour or the legislature putting the most liberal construction upon the
legislative entry so that it may have the widest amplitude. [824-D-F)
India Cement Ltd. and ors. v. State of Tamil Nadu and Ors., [1990] 1 G
~
sec 12, referred to.
6. When the court is called upon to interpret the Constitution, it
must not be construed In any narrow or pedantic sense and adopt such
construction which must be beneficial to the amplitude of legislative H
812
SUPREME COURT REPORTS [1994) SUPP.1 S.C.R.
A 1>owers. The broad and liberal spirit should inspire those whose duty Is to
Interpret the Constitution to Ond whether the impugned Act is relatable
to any entry In the relevant Ust. (824-GJ
7. The amended Sections 69 and 69-A(l) of the Code determined the
existing rights and reserved them in favour of the State of the rights in
B mines, minerals and quarries In the lands whether alienated or un·
alienated whether held by Girasdar or Barkhalidar or any others. Section
69-A(l) brought the lands covered under a grant or an agreement or a
judgment, decree or order of any court interpreted in that behalf within
Section 69 of the Act. Thereby all mines, minerals or quarries situated in
C any land, be it alienated or Unalienated, lield by any person including
Girasdar or Barkhalidar are now governed by Section 69 and 69A of the
Code. The contention, therefore, that without amendment to the aforemen·
tloned four Acts the amendment becomes inoperative is devoid of sub·
stance. The analogy of special law prevails over Amendment Act and the
Code, a general law, renders little assistance to the appellants. (829-F-H)
D
E
F
8. The power to make the law pros1>ectlvely include the power to make
the law retrospectively. It Is true that generally law intended that vested
rights or Imposition of new burden cannot be deemed to have been inade
with retrospective effect. Equally is tbe settled law that the provision which
touched the right in existence at the passing of the statute are not to be
appiied retrospectively in the absence of an express enactment or any
necessaryintendment. It is equally settled law that every statute whkh takes
away or impairs vested rights acquired under existing laws or creates a new
obligation or imposes a new duty or burden or tonches a new right in respect
of transaction already passed must normally be presumed, unless ex·
pressed otherwise, to be intended not to have retrospective effect. (830-C-E)
Tata Iron and Steel Co. v. State of Bihar, (1958) SCR 335 and Rama
Krishna v. State of Bihar, (1964) 1 SCR 897, referred to.
G
9. In the light of the language in section 2 of the Amendment Act, the
express retrospective operation given to the Amendment Act with effect
•
-·
from May 1, 1960 retrospectively affected vested rights of the Girasdar or
j_
Barkhalidars created by a grant or agreement etc. or Down from a judg-
,,.. .
ment, order or a decree of any court and stood extinguished with effect from
May 1,1960. It is true that a limited retrospective effect was given to the
r~
H Amendment Act as the State was formed and became operative from May
Y
)
)
I
J.N. KHACHARv. STATE OF GUJARAT
813
1,1960, the date on which the State was formed. So, any grant or agreement A
etc. though otherwise was valid with effect from any anterior date, would
cease and lose their validity from May 1, 1960. Any other earlier date would
have rendered the Amendment Act ultra vires. Only to obviate such an
interpretation, consistrnt with the date of existence of the State Legislature
i.e. the date on which the State legislature became competent to enact the
Code, the Amendment Act was given retrospective operation. Accordingly,
the retrospective operation cannot be faulted nor would it be declared ultra
vires. [830-F-H]
10. Right to property under Article 300-A is not a basic feature or
B
structure of the Constitution. It is only a constitutional right. [838-G]
C
11. Property in a comprehensive term is an essential guarantee to
lead full life with human dignity, for, in order that a man may be able to
develop himself in a human fashion with full blossom, he needs a certain
freedom and a certain security. The economic and social justice, equality of
status and dignity of person are assured to him only through property.
D
[843-H, 844-A)
12. Property in legal sense means. an aggregate of rights which are
guaranteed and protected by law. It extends to every species of valuable
right and interest, more particularly, owernship and exclusive right to a
thing, the right to dispose of the thing in every legal way, to possess it, to E
use it, and to exclude every one else from interfering with it. The dominion
or indefinite right of use or disposition which one may la\Vfully exercise over
particular thing or subjects is called property. The exclusive right of possessing, enjoing and disposing of a thing is property in legal parameters.
Therefore, the word 'property' connotes everything which is subject of
ownership, corporeal or incorporeal, tangible or intangible, visible or invisible, real or personal; everything that has an exchangeable value or
which goes to make up wealth or estate or status. [844-D-E)
F
Kesavananda Bharti v. State of Kera/a, [1973) Suppl. SCR l; Waman
Rao v. Union of India, [1981) 2 SCR 36; State of West Bengal v. Mrs. Bela G
Banerjee & Ors., [1954) SCR 558; State of West Bengal v. Subodh Gopal Buse
& Ors., [1954) SCR 587; P. Vajravelu Mudaliar v. Special Deputy Collector,
Madras & Ors., [1965) 1 SCR 614; Union of I11dia v. The Metal Corporation
of India Ltd. &Anr., [1967) 1 SCR255; State of Gujarat v. Shanti Lal Mangat
Das, [1969] 3 SCR 341; R.C. Cooper v. Union of llldia, [1970) 3 SCR 530;
Golak Nath v.State of Punjan, [1967] SCR 177; Minerva Mills Ltd. v. U11iun H
814
SUPREME COURT REPORTS [1994] SUPP. l S.C.R.
A of India, (1981) 1 SCR 36 and State of Maharashtra v. Madhavrao Damodar
Pati/chand & Ors., (1968) 3 SCR 712.
B
c
Sanjeev Coke Mfg. Co. v. Bharat Cooking Coal Ltd., (1983) 1 SCR
1000; State of Kamataka v. Ranganatha Reddy, [1978) 1 SCR 641; State of
Maharashtra v. Basantibai Mohan/al Khetan, (1986) 2 SCC 516; Minerva
Mills v. Union of India, (1986) 4 SCC 222; Tinsukhia Electric Supply Co.
Ltd. v. State of Assam, (1989) 3 SCC 709; Assam Sillianite Ltd. v. Union of
India, [1992) Suppl. 1 SCC 692; Union of India v. Hari Krishan Khosla
(dead) by Lrs., [1993) Suppl. 2 SCC 149 and Smt. Indira Gandhi v. Raj
Narain (1976) 2 SCR 347, referred to.
K.K. Mathew, "Right to Property" 10, Journal of Constitution and
Parliamentary Studies I (1976); M.R. Cohen, "Property and Sovereignty" 13
Cornell Law Quarterly 8; Hidayatullah, "Right to Property and The Indian
Constitution" (Tagore Law Lectures); Karl Renner, "The Institution of
Private Law and their Functions" 1949 Edn. by Kahn-Feund; Henry Maine,
D ':Ancient Law'~ 1931-Edn.; Friedman, "Legal Theory"; Ramanatha Aiyar and
"The Law Lexicon" Reprint Ed. 1987, p. 103, referred to.
E
F
13. The term 'property' in Article 300-A receives its true colour and
reOection from the context in which State's power of eminent domain or
police power is invoked and effectuated. The word 'Property' used in
Article 300-A must be understood in the context in which the sovereign
power of eminent domain is exercised by the State and property ex-
. propriated. No abstract principles could be laid. Each case must be
considered in the light of its own facts and setting. The phrase 'deprivation
of the property of a person' must equally be considered in the fact situation
of a case. Deprivation connotes different concepts. (848-A)
Article 300A gets attracted to an acquisition of taking possession of
private property, by necessary implication for public purpose, in accordance with the law made by the Parliament or a State Legislature, a rule or
G a statutory order having force of law. It is inherent in every soveriegn State
by exercising its power of eminent domain to expropriate private property
without owner's consent. Prima facie, State would be the judge to decide
whether a purpose is a public purpose. [848-C]
But it is not the sole judge. This will be subject to judicial review and
H It is the duty of the court to determine whether a particular purpose is a
'
J.N. KHACHARv. STATE OF GUJARAT
815
public purpose or not. Public interest has always been considered to be an A
essential ingredient of public purpose. But every public purpose does not
fall under Article 300A nor every exercise of eminent domain an acquisition
or taking possession under Article 300A. Generally speaking preservation
of public health or prevention of damage to life and property are considered
to be public purposes. Yet deprivation of property for any such purpose B
would not amount to acquisition or possession taken under Article 300A. It
would be by exercise of the Police power of the State. [848•D]
14. The right of eminent domain is the right of the sovereign State,
through its regular agencies, to reassert, either temporarily or permanent·
ly, its dominion over any portion of the soil of the State including private C
property without its owner's consent on account of public exigency and for
the public good. Eminent domain is the highest and most exact Idea of
property remaining in the government, or in the aggregate lmdy of the
people in their sovereign capacity. It gives the right to resume possession
of the property in the manner directed by the Consititution and the laws D
of the State, whenever the public interest requires it. The term
'expropriation' is practically synonymous with.the term
11eminent domain".
(841-C·D]
Dwarka Das Srinivas of Bombay v. Sholapur Spinning and Weaving Co.
Ltd., (1954] SCR 674; Chiranjit Lal Chowdhury v. Union of India, (1950]
E
SCR 869; State of Biharv. Kameshwar Singh, (1952] SCR 869 and Bisambhar
Dayal Chandra Mohan v. State of U.P., [1982] 1 SCC 39, referred to.
Ramanatha Iyer's "The Law Lexicon" Reprint 1987 p. 385; Black's Law
Dictionary 6th Edn. p. 523; referred to.
F
15. Legislat.,re has power to acquire the property of private persons
exercising the power of eminent domain by a law for public purpose. The law
may fix an amount or which may be determined in accordance with such
principles as may be laid therein and given in such manner as may be
specified in such law. However, such law shall not be questioned on the G
grounds that the amount so fixed or amount determined is not adequate.
The amount fixed must not be illusory. The principles laid to determine the
amount must be relevant to the determination of the amount. [850-G·H]
16. When the State exercises its power of eminent domain and
acquires the property of private person or deprives him of his property for H
816
SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.
A public purpose, concomitantly fixation of the amount or its determination
must be in accordanee with such principles as laid therein and the amount
given In such manner as may be specified in such a law. However, judicial
Interpretation should not be a tool to reinduct the doctrine of compensation as concomitance to acquisition or deprivation of property under
Article 300A. This would be manifest from two related relevant provisions
B of the Consitution itself. Article 30(1A) and 2nd proviso to Article 31A as
exceptions to the other type of acquisition or deprivation of the property
under Article 300A. By necessary implication the obligation of the state, to
pay compensation for property acquired or indemnification of property
deprived under Article 300A or other public purpose is obviated.
C
(851-C-D-G)
Roscoe Pound, ''.A Survey of Social Interests" 57th, Harvard Law
Review 1 (1943); Roscoe Pound, "Justice According to Law" and Rescoe
Pound, ''Theory of Justice" 1951 Edu. referred to.
D .
17. Acquisition of the property by law laid in furtherance of the
directive principles of State policy was to distribute the material resources
or the community including acquisition and taking possession or private
property for public purpose. It does not require p111yment of just compensation or Indemnification to the owner orthe property expropriate. It is the
very negation of effectuating the public purpose. Payment of market value
E in lien or acquired property is not sine qua non for acquisition. Acquisition
and payment or amount are part of the scheme and they cannot be dissected.
However fixation of the am~unt or specification of the principles and ·the
manner in which the amount is to be determined must be relevant to the
fixation or amount. The amount determined need not bear reasonable
F
relationship. In other words, it Is not illusory. The adequacy of the resultant
amount cannot be question in a court or law. However, the validity of
irrelevant principles are amenable to judicial scrutiny. (852-H, 853-A-B)
Bhim Singhji v. Union of India, (1981) 1 SCC 166; Achutananda
Purohit v. State of Orissa, (1976) 3 SCR 919; State of Maharashtra v.
G Basantibai Mohan/al Khcian, [1986) 2 SCC 516 and Tinsukhia Electric
SupplyCo. Ltd. v. State of Assam, (1989) 3 SCC 709, referred to.
18. The
appellants are not entitled to compensation or just
equivalent of property they are deprived of or Indemnification of the
H property expropriated (,e.111lnes, whetiier Wo.rked or not, minerals whether
. . .
.
- . ·._,. .. _,.·;;<.<".·"-·'.t~_..,...,..,.,,.1 .. ~'~P·•f:~\" ~,'£ ~-
•
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J.N. KHACHAR 1•. STATE OF GUJARAT
817
discovered or not or quarries deprived by law made under Article 300A of A
the Constitution. The principles under Section 69A (4) of the Code are
relevant. The resultant amount is not illusory. Thereby they are not void.
Further after the Constitution Forty fourth Amendment Act has come into
force, the right to property in Articles 19(1)(1) and 31 had its obliteration
from Chapter III. Fundamental Rights, its abridgement and curtailment B
does not retrieve its lost position, nor gets restituted with renewed vigour
claiming compensation under the garb 'deprivation of property' in Article
300A. The Amendment Act neither receives wrath of Article 13(2), nor does
section 69A become ultra vires of Article 300A. [853-C-E]
19. It is more or less the world phenomenon that the erosion in value C
of unit of currency bas been taking place. But this inevitable devaluation
due to inflationary trends does not affect the quantum of compensation
prescribed by the statute for the purpose of allowing compensation in
rupee long ago is the same as the rupee of today, although for the purpose
of market and cost of living, the housewives' answer may be different. Law D
is sometimes blind. Therefore, the loss of rupee value is not relevant
consideration to adjudge the principle laid by the statute. In normal
acquisition, the principle of depletion or rupee value has repeatedly been
held to be not relevant to determine market value. [853-H, 854-A-C]
E
Achutananda Purohit v. State of Orissa, (1976] 3 SCR 919, referred
to.
20. Section 69A(4) of the Code is valid. So it is unassailable under
Article 14. It is true that different Acts provide different principles to F
determine the amount payable to the deprived owner. The principle of
average of three years net annual income received from production of the
mines and min.rats preceding the date of the vesting is a relevant and
germane principle to ·fix the amount payable to the owner. Comparative
evaluation of different principles evolved by each statute may appear to be
different and prima facie to be discriminatory from each other, but comG
parative analogy would not furnish satisfactory test to declare a notional
principle determined by the stiituleto be discriminatory. The principle
bears just relation to the object of determining the amount or compensation payable to the owner and the principle of average of three years net
income is a reasonable classification having relation to the object of H
SJS
SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.
A modilication of the existing rights and extinguishment thereof. [854-E-F]
B
c
21. In a welfare State envisioned in the directive principles of State
policy, the basic perquisites are that everyone is entitled to minimum
material well being, such as food, clothing, and decent housing. Expanding
living standards are possible with the existing or expanding physical
resources and scientific knowledge etc. and the State has right and duty
to act when private initiative fails. In a democratic society, every individual
needs legal protection for the beneficial enjoyment of what he has discovered and appropriated; has createri by his own labour (in wider sense);
and what he has acquired under the existing social and economic order
subject to law and order. Equally welfare consists in adjusting individual
interests with social interest by the aid of law as social engineering, which
would mean public restraints on property designed to mitigate the
privileges which property offers in enjoyment of the things that life has to
offer. Restraints on the power to use the property as a dele1:at1:d power of
· D command, is a means of quasi-governmental private contro! over the
major assets of a nation. Property, thereby, is subject to re:~ulation.
E
[847-E-F]
22. TI1e expression 'material resources Or coinniuiiity' is ·.a·. \\.1,de
concept and must be broadly interpreted' to bring within its . .Weep. all ..
resources, natural or physical moveable or immove~_ble, corporear or
incorporeal, tangible or intangible properties etc. Privat" nosources or
property are part of material resources of the community. All things that
produce wealth for the community are material resour.:es. The word
"distribution" equally must be construed broadly to include not only allotF
ment ofresources to public use but also dispensation oflargess to the poor
to provide access to equal opportunity. (838-D-E]
G
Mines Minerals and quarries embedded in the laml are material
resources of ~e community amenable to public use or for distribution.
(838-F]
Kesavananda Bharti v. State of Kera/a, (1973] Suppl. SCR 1; State of
Tamil Nadu v. L. Abu Kavu Bai, (1984] 1 SCC 515; Sanjeev Coke Mfg. v.
Bharat Coking Coal Ltd., (1983] 1SCR1000; State of Kera/av. The Gwalior
Rayon Silk Mfg. Co. Ltd., (1974) 1 SCR 671 and Gujarat Pottery Works Pvt.
H Ltd. v. B.P. Sood, [1967) 1 SCR 695, referred to.
•
J.N. KHACHAR v. STATE OFGUJARAT[RAMASWAMY,J.]
819
CIVIL APPELLATE JURISDICTION : Civil Appeals No. 2211A
15/84 and 3013 of 1990.
From the Judgment and Order dated 7/8-9-83 & 16-9-88 of the
Gujarat High Court in S.C.A. Nos. 2395, 2400, 2394, 1118, 2396 & 1763 of
1987.
Harish J. Jhaveri for the appellants in C.A. No. 2211 and 2213/84,
2214/84.
B.K. Mehta, Harish J. Jhaveri, D.U. Shah for the Appellants in C.A.
Nos. 2212/84 & 3013/90. ·
A.K. Ganguli, Pramod B. Agarwala and Satish Agarwala for the
Appellant in C.A. No. 2215/84.
D.A. Dave, Anip Sachthey, C.B. Singh,. Vivek Sharma and Ms.
Meenakshi Arora for the Respondents.
The Judgment of the Court was delivered liy
K. RAMASWAMY. J These five appeals raise four-pronged attack
B
c
D
on the Constitutioqality of the Bombay Land Revenue Code and Land
Tenure Abolition Laws (Gujarat Amendment) A,ct.8of1982 (for shmt "the
Amendment Act"f Though unsuccessful in t.he High Court of Gujar~t iii. E
Special Civil Application Nos .. 1118 of·l982 and.bati:h byjudgrilerit of the . ·.
Division Bench dated 7/8 September, 1983 and follqwed ·in Special Civil°
Application No. 763/82 dated Septembe~ 16; .1988the appellants had leave·
of this Court. A short shift of the antecedent history of land tenures in
Saurashtra region. of the State of Gujarat is neeessary to focus the foc;.i
points posed for decision, by common judgment. The appellants are sueF
cessors of Barkhalidars and Girasdars. The erstwhile Saurashtra State
consisted of 220 princely states rules by sovereign Rulers in their own
rights:The lands in these appeals form present parts of Surendra Nagar
and Bhavnagar districts. In the State of Saurashtra, the Rulers entered into
agreements with Taluqadar and estate holders and also created a class of G
interested people known as "Barkhalidars or Girasdars. Various parcels of
lands together with all rights in or interest over those lands were granted
for cultivation on payment of revenue etc. with a right of succession in
favour of their cadets or relations or favourites known as "Girasdars
11 or
"Barkhalidars". "Gharkhed", known in South India estate tenures as
"Homefarm lands", means land reserved by land holder for personal cul- H
820
SUPREME COURT REPORTS (1994] SUPP. l S.C.R.
A
tivation. "Bid Land" means such lands as has been used by the land holders
for grazing his cattle or for cutting grass for the cattle. "Land holder" means
Zamindar, Jagirdar, Girasdar, Taluqadar etc. or any person who is a holder
of land or who is interested in land and whom the Government has
declared, on account of the extent and value of the land or his interests
B
therein, to be a landholdeL
The system in vogue was that the lands that were under control of
the rulers through the agriculturists, the latter had to bring their produce
to a common place "khali" meaning thereby threshing floor. The ruler or
his agent used to take stock of the total produce harvested and set apart
C towards the ruler's share according to the custom or the contract and the
remainder belong to the agriculturists. In the other system the land was
granted to the "Girasdars" or "barkhalidars", and the requirement of bringing the harvest by the agriculturists to the threshing floor was dispensed
with. This anachronistic land tenure system was done away with by progressive different land tenures conferring permanent ryotwari settlements on
D the tiller of the soil through "The Saurashtra Gharkhed Tenancy Settlement
and Agricultural Lands Ordinance, 1949 which later became the Act, the
Saurashtra Land Reforms Act, 1951; the Saurashtra Barkhali Abolition
Act, 1951 and the Saurashtra Estates Acquisition Act, 1952 (for short "the
Act"). Under the respective statutes the rights and liabilities of Girasdars
E or Barkhalidars have been determined. The details whernof arc not
relevant for the purpose of these appeals. Suffice it to state that Section
2(c) of the Act defines "estate" to mean 'all land of whatever description or
an undivided share thereof held by a Girasdar and .includes uncultivable
waste land etc. Section 2(a) defines land as "land of any descriplfon whatever
F
and includes benefits whatsoever arise out of the land and things attached
to the earth or permanently anything attached to the earth. These definitions are of wide amplitude to include mines and mineral wealth beneath
surface land of whatever description. Section 3(1) abolishes Girasdari or
Barkhalidari tenures by a notification published by the government in the
Official Gazette, from time to time declaring with effect from a specified
G date that all rights, title and interest of the Girasdars or Barkhalidars shall,
in respect of any estate or part of an estate comprised in the notification,
ceased and to be vested in the State and all the incidents of the said tenures
attaching to any land comprised in such estate or part thereof shall be
deemed to have been extinguished. Sub-Section (2) thereof empowers the
H State Government to issue notification from time to time in respect of an
•
J.N. KHACHARv. STATEOFGUJARAT[RAMASWAMY,J.]
821
estate or part of an estate or in respect of any area specified in the said A
notification. The consequences of the abolition of Girasdars' and
Barkhalidars' rights in the estate have been provided in Section 4 of the
Act. Under clasue (2) of s.4 relevant for the purpose of this case, it has
been provided that consequent upon the notification issued by the government under Section 3, with effect from the specified date, all cultivable and
non-cultivable waste land, excluding land used for building or other nonagricultural purposes ........ which are comprised in the estates so notified
shan except in so far as any rights of any person other than the Girasdar
or the Barkhalidar may be established in and over the same ...... and shall
B
be deemed to be, with all rights in or over the same or appertaining thereto, C
the property of the State and all rights held by a Girasdar or a Barkhalidar
in such property shall be deemed to have been extinguished, (emphasis
supplied) and it shall be lawful for the Collector, subject to the general or
special orders of the Revenue Commissioner, to dispose of them as he
deems fit, subject always to the rights of way and or other rights of the
public or of individuals legally subsisting. Under Section 7, a Girasdar or D
Bar khalidar is entitled to compensation for the extinguishment of their
rights and the details thereof are not necessary for the purpose of this case.
At this juncture, it is relevant to note that Saurashtra Land Reforms Act,
1951 defines 'agriculture' by Section 2(2) which includes horticulture and
the raising of crops, fodder or garden produce and "agricultural land"
means any land, including wells, which is used for the purpose of agriculture and includes sites of farm buildings appurtenant to land used for
agricultural purposes and sites of dwelling houses and wades occupied by
agriculturists, agricultural labourers or artisans and land appurteMnt to
E
F
such dwelling houses. Under Section 2(15) "Girasdar" means any taluqadar,
bhagdar, bhayat, cadet or mulgirasia and includes any person whom the
Government may, by notification in the Official Gazette, declare to be a
Girasdar for the purpose of this Act. In the same Act, under Section 2(13)
"estate" means all land of whatever description or an undivided share
thereof held by a Girasdar and includes uncultivable waste, whether such
land is used for the purposes of agriculture or not and Section 2 (18) defines G
"land" which means any agricultural land, bid land or cultivable waste.
Section 2(7) defines "cadet" which means a brother or a son of a Ruler to
whom a grant of land was made by such Ruler after 14th day of August,
1947, and who is allowed to retain such grant by the Government or any
heir or successors of such person. Under Section 2(8) "Code" means the H
822
SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.
A
Bombay Land Revenue Code, 1879 for short "the Code" as adapted and
applied to the State. Under Section 4, all Girasdari lands are liable to
payment of land revenue. The Saurashtra Barkhali Abolition Ac:t, 1951
defines under Section 2(i) "Bharkhalidar" which means a person who holds
a tenure as Barkhalidar, Jiwaidar, Chakariyat, Kherati, or Dharmada and
B ir.cludes any holder of an estate whomjhe Government may, by notification
in the Official Gazette, declare to be a Barkhalidar for the purpose of this
Act. Section 2(iia) defines "estate" which includes a Jagir, inam or other
grant or interest or aggregate of interests of similar nature in land but shall
not include an occupancy, Section 5 of the Act abolishes Barkhali tenure
existing as on the date and Barkhali estate shall cease and be vested in the
C State free from all encumbrances, subject to the provisions of this Act. The
Act gives right to the Barkhalidar to make an application for P"rsonal
cultivation and the details etc. are not necessary for the purposes of these
appeals.
D
E
F
As seen, consequent upon the abolition of the estate under section
3(1) of the A.ct by issuance of the notification and ensuring consequences
under Section 4, the Girasdar or Barkharidari tenures stood extinguished
and vested in the State. When questioned in Civil Application No. 689/65
in T.K.Gohi/and Ors. v. C.K Dave by a decision dated 14.8.69 J.B. Mehta,
J. held that· the.pro;,;sions ·of Se~tioi:ts 3 ·and 4 of the Act would be
applicable only to uncUitivable waste lands which alone stood vested in tlie
State ~d the lands with Illiries and minerals could not be held .to be
uncuitivable:waste landS and did ·not vest ii:t the State. The said decision,·
was confirmed by the Division Bench ii:t L.P.A. No. 73170 dated March 15,
1971. Section 69 of the Code~ which was admittedly adapted to the
Saurashtra region of the· Gujarat State, states that the right of the Government to mines and mineral products in all unalienated land is and hereby
declared to be expressly reserved provided that nothing in this Section shall
be deemed to affect any subsisting rights of any occupant of such land in
respect of such mines or mineral products. Section 3(20) defines "alienated"
means
11transfer in so far as the rights of the State Government on payment
G of rent or land revenue, wholly or partially to the ownership of any person.
Consequent upon this definition; the operation of Section 69 and the
interpretation made by the High Court, the mines and minerals in the
alienated lands stood excluded from the abolition and extinguishment of
the rights of Girasdars or Barkhalidars under Sections 3 and 4 of the Act.
H To obviate the interpretation and to be in conformity with the object and
•
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J.N. KHACHAR v. STATE OF GUJARAT[RAMASWAMY, J.]
823
purposes of the Ac~ initially the ordinance and later the Amendment Act · A
came to be made which was reserved for the consideration, received the
assent of the President on February 23, 1982 came into force with
retrospective effect from May 01, 1960 - the date on which the Gujarat
State was formed.
By clause (a) of s.2 of the Amendment Act the word "unalienated"
was deleted from section 69 of the Code and clause (b) provides that the
proviso t9 Section 69 shall be and shall be deemed always to have been
deleted w.e.f. 1.5.1960.