# The Union of India v. Madan Gopal Kabra. Palaf!fali Sastri

- **Citation:** [1954] 1 S.C.R. 558
- **Court:** Supreme Court of India
- **Decided:** 1951-03-22
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-union-of-india-v-madan-gopal-kabra-palaf-fali-sastri-318
- **Pages:** 8

## Headnote

1953
The Union of
India
v.
Madan Gopal
Kabra.
Palaf!fali Sastri
C.J.
1953
55S
SUPREME COURT REPORTS
[1954}
disappeared except, of course, in regard to matters m
which such distinction has been preserved by the
Constitution itself,
e.g., by article 238
and article 371.
It follows that the amendment of section 2 clause
(14-A)
of the Indian Act, by the Finance Act, 1950,
so as to authorise the levy of tax on income accruing
in the territory of Rajasthan in the year 1949-50 is
within the competence of Parliament and therefore
valid.
We accordingly allow the appeal, and set aside
the judgment of the High Court. We make no order
as to costs.
Appeal allowed.
Agent for the appellant : G. H. Rajadhyaksha.
Agent for the. respondent : Rajinder Narain.
THE ST A TE OF 'WEST BENGAL
v.
MRS. BELA BANERJEE AND OTHERS.
rPATANJALI sAsTRI c.J., MEHR CHAND MAHAJAN,
S. R. DAs, GHULAM HASAN and
JAGANNADHAD.\S JJ.J
?'he rv est Ren gal Land Dcvelopn1ent and Planning Act, 194!!
(West
Bengal
Act XX/ of 1948)-Provisions of s. 8-(i) Declaration
under
s.
6-Conclusive
evidence-I~and-Subject
1natter
of decla1·ation needed for a public purposc-(ii) Con1pensation
of
land acquired under the Act not to exceed nzarket value of land as on
Dece1nber 31, 1946-ultra Yires the Constitution and void-Contti·
tution of India, ai·t. 31(2).
T'he \\Test Bengal Land l)evelop1nent and Planning Act, 1948,
passc<l prin1arily
for
the
scttlen1ent
of immigrants
\Vho
had
1nigrated into
\Vest Bengal due to communal disturbances in East
Bengal provi<les for
the
acquisition and
develop1nent of land ior
public purposes including the purpose aforesaid :
field, that
the
provisions
of
s.
8
of
the
West
Bengal
,Act XXI of 1948
n1aking
the declaration of the CJ-overnment con·
elusive as
to the public nature of the purpose of the acquisition
and
the lin1itation of the ainount of compensation so as not to
exceed the rnarket \'alue of the
land on December 31, 1946,
are
ultra vires the Constitution :;i,nd void :
•
•
•
'
•
S.C.R ..
SUPREME COURT REPORTS
559
(i) inasmuch as
art. 31(2)
o[ the
Constitution made the
existence
of a puhlic purpose a necessary condition of acqu1s1tion,
the existence of such a
purpose as
a fact
must be established
objectively ;
(ii) that in vie\v of the {act that the icnpugned Act is a perma~
ncnt cnact1nent an<l
lands may be acquired under it many years
after it catne into force,
the fixing of the 1narkct value on Dcce1nber 31, 1946,
as
the
ceiling on compensation without reference to
the value of the land at the time of acquisition, is arbitrary and
cannot be regarded as due co1npliance in "letter and spirit \Vith the
requirements of art. 31(2) :
(iii) the Act is not saved by art. 31(5) from the operation
of r,rt. 31 (2) as it was not certified by the President as proYi<led
for by rirt. 31(6).
Ile/d, further,
that while
entry
No. 42 • of List J[J of the
SeYcnth
Schedule
confers
on .the
legislature
the
discretionary
po\ver of laying do\vn
the
principles
\vhich
should goYern the
det~nnination of the a1nount to be giYen to the owner of the pro.-
perty
appropriated,
art. 31(2)
requires
that
such
principles
n1ust ensure that what is detern1ined as payable n1ust be "con1pensation", that is, a just
equivalent of \vhat the owner has been
deprived of. \\Thcther such principles .take
into account all the
ele1nents
\Vhich make up the true
value of the property appropriated and exclude matters which are to be neglected is oi. justiciahle issue to be a<lju<licatcd by the Court.
C1v1L
APPELLATE
J umsmcnoN : Civil Appeal
No.
123 of 1952.
Appeal against the Judgment and Order, dated the
22nd March, 1951, of the High Court of Judicature at
Calcutta
(Harries
C.J.
and
Banerjee
J.)
m
Reference No. 2 of 1951 in Civil Rules Nos. 20 and
21 of 1950.
1953. December 11. The Judgment of the Court
was delivered by
PATANJ ALI SASTRI C.J.-This is an appeal from a
judgment of the High Court of Judicature at Calcutta
declaring certain provisions of the West Bengal Land
Development and
Planning Act, 1

## Text

1953
The Union of
India
v.
Madan Gopal
Kabra.
Palaf!fali Sastri
C.J.
1953
55S
SUPREME COURT REPORTS
[1954}
disappeared except, of course, in regard to matters m
which such distinction has been preserved by the
Constitution itself,
e.g., by article 238
and article 371.
It follows that the amendment of section 2 clause
(14-A)
of the Indian Act, by the Finance Act, 1950,
so as to authorise the levy of tax on income accruing
in the territory of Rajasthan in the year 1949-50 is
within the competence of Parliament and therefore
valid.
We accordingly allow the appeal, and set aside
the judgment of the High Court. We make no order
as to costs.
Appeal allowed.
Agent for the appellant : G. H. Rajadhyaksha.
Agent for the. respondent : Rajinder Narain.
THE ST A TE OF 'WEST BENGAL
v.
MRS. BELA BANERJEE AND OTHERS.
rPATANJALI sAsTRI c.J., MEHR CHAND MAHAJAN,
S. R. DAs, GHULAM HASAN and
JAGANNADHAD.\S JJ.J
?'he rv est Ren gal Land Dcvelopn1ent and Planning Act, 194!!
(West
Bengal
Act XX/ of 1948)-Provisions of s. 8-(i) Declaration
under
s.
6-Conclusive
evidence-I~and-Subject
1natter
of decla1·ation needed for a public purposc-(ii) Con1pensation
of
land acquired under the Act not to exceed nzarket value of land as on
Dece1nber 31, 1946-ultra Yires the Constitution and void-Contti·
tution of India, ai·t. 31(2).
T'he \\Test Bengal Land l)evelop1nent and Planning Act, 1948,
passc<l prin1arily
for
the
scttlen1ent
of immigrants
\Vho
had
1nigrated into
\Vest Bengal due to communal disturbances in East
Bengal provi<les for
the
acquisition and
develop1nent of land ior
public purposes including the purpose aforesaid :
field, that
the
provisions
of
s.
8
of
the
West
Bengal
,Act XXI of 1948
n1aking
the declaration of the CJ-overnment con·
elusive as
to the public nature of the purpose of the acquisition
and
the lin1itation of the ainount of compensation so as not to
exceed the rnarket \'alue of the
land on December 31, 1946,
are
ultra vires the Constitution :;i,nd void :
•
•
•
'
•
S.C.R ..
SUPREME COURT REPORTS
559
(i) inasmuch as
art. 31(2)
o[ the
Constitution made the
existence
of a puhlic purpose a necessary condition of acqu1s1tion,
the existence of such a
purpose as
a fact
must be established
objectively ;
(ii) that in vie\v of the {act that the icnpugned Act is a perma~
ncnt cnact1nent an<l
lands may be acquired under it many years
after it catne into force,
the fixing of the 1narkct value on Dcce1nber 31, 1946,
as
the
ceiling on compensation without reference to
the value of the land at the time of acquisition, is arbitrary and
cannot be regarded as due co1npliance in "letter and spirit \Vith the
requirements of art. 31(2) :
(iii) the Act is not saved by art. 31(5) from the operation
of r,rt. 31 (2) as it was not certified by the President as proYi<led
for by rirt. 31(6).
Ile/d, further,
that while
entry
No. 42 • of List J[J of the
SeYcnth
Schedule
confers
on .the
legislature
the
discretionary
po\ver of laying do\vn
the
principles
\vhich
should goYern the
det~nnination of the a1nount to be giYen to the owner of the pro.-
perty
appropriated,
art. 31(2)
requires
that
such
principles
n1ust ensure that what is detern1ined as payable n1ust be "con1pensation", that is, a just
equivalent of \vhat the owner has been
deprived of. \\Thcther such principles .take
into account all the
ele1nents
\Vhich make up the true
value of the property appropriated and exclude matters which are to be neglected is oi. justiciahle issue to be a<lju<licatcd by the Court.
C1v1L
APPELLATE
J umsmcnoN : Civil Appeal
No.
123 of 1952.
Appeal against the Judgment and Order, dated the
22nd March, 1951, of the High Court of Judicature at
Calcutta
(Harries
C.J.
and
Banerjee
J.)
m
Reference No. 2 of 1951 in Civil Rules Nos. 20 and
21 of 1950.
1953. December 11. The Judgment of the Court
was delivered by
PATANJ ALI SASTRI C.J.-This is an appeal from a
judgment of the High Court of Judicature at Calcutta
declaring certain provisions of the West Bengal Land
Development and
Planning Act, 1948,
(hereinafter
referred to as
the "impugned Act")
unconstitutional
and void.
The impugned Act was passed on October 1,
1948,
primarily for the settlement of immigrants ·who had
migrated into the
Province of
West Bengal due to
communal
di,turbances
m
East
Bengal,
and
it
1953
The State of
We£t
Bengal
v.
Bela Banerjee
and Others.
Patanjali Sastri
C.J.
1953
The State of
West
Bengal
v.
Bela
Baneryti
and others.
Patanj2li Sastri
C.J.
560
SUPREME COURT REPORTS
[1954]
provides for the acquisition and development of land
for public purposes including the
purpose aforesaid.
A registered Society called the West Bengal Settlement
Kanungoe Co-operative Credit Society Ltd., respondent No. 4 herein, was authorised to undertake a development scheme, and the Government of the .state of
West Bengal, the appellant herein, acquired and made
over certain lands to the society for purposes of the
development scheme
on payment of the estimated cost
of the acquisition.
On July 28,
1950,
the respondents
1 to 3, the owners of the lands thus acquired, instituted a suit in the Court of the Subordinate Judge, II
Court at
Alipore, District 24-Parganas, against the
society for a declaration tb;it the impugned Act was
void as contravening the
Constitu~ion and that all
the
proceedings taken thereunder for the acquisition aforesaid were also void and of no effect and for other
consequential reliefs.
The
State of West Bengal was
subsequently impleaded as a defendant. As the suit
involved questions of interpretation of the Constitution
respondents 1 to 3 also moved the High Court under
article 228 of the Constitution to withdraw the suit
and determine the constitutional question. The suit
was accordingly transferred to the High Court and the
matter was
heard
by a Division
Bench (Trevor
Harries C.J. and Banerjee J.) who, by their final judg--
ment, held that the impugned Act as a whole was not
unconstitutional or void save
as
reg-ards two of the
provisions contained in section 8 which, so far as it is
material here, runs as follows :-
"A declaration under section 6 shall be conclusive
evidence that the land in respect of which the declaration is made is needed for a public purpose and, after
making such declaration. the Provincial Government
may acquire the land and thereupon the ·provisions of
the Land Acquisition Act,
1894,
(hereinafter in thi.s
section referred to as the said Act), shall, so far as
may be, apply :
Provided that-
"
"
(b) in determining the amount of compensation
to be awarded for land acquired in pursuance of this
•
S.C.R.
SUPREME COURT REPORTS
561
Act the market value referred to in clause first of subsection ( 1) of section 23 of the said Act shall be deemed to be the market value of the land on the date of
publication
of the notification under sub-section ( 1) of
section 4 for the notified area in which the land is
included subject
to the following condition, that is to
. sayif such market value exceeds by any amount the
market value of the land on the 31st day of December,
1946, on the assumption that the land had been at that
·date in the state in which it in fact was on the date of
publication of the said notification, the amount of such
excess shall not be taken into consideration."
The provision making the declaration of the Government conclusive
as
to the public nature of
the
purpose of the acquisition and the limitation of the
amount of compensation so
as not to
exceed the
market
value of the land on December 31, 1946,
were declared ultra vires the Constitution and void.
The Attorney-Genera\, appearing for the appellant,
rightly conceded that inasmuch as article 31 (2) made
the existence of a public purpose a necessary condition
·of acquisition the existence of such a purpose as a fact
must be established objectively and the provision in
section 8 relating .to the conclusiveness of the declaration of Government as to the nature of the purpose
·of the acquisition must be held unconstitutional but he
·.contended tbat the provision was
saved by
article
31(5) of the Constitution which provides: "Nothing .in
dause (2) shall affect-( a) the provisions of any existing law other than a law to which the provisions of
dause (6) apply, or .............. " Clause (6) reads
thus:
"Any law of the State enacted not more than
eighteen months
hefore the commencement of this
Constitution may within three months
from
such
commencement be submitted io the President for his
certification ; and,
thereupon,
if
the President by
public notification so certifies, it shall not be called in
question in any court on the ground that it contravenes
the provisions of clause (2) of this article or has
1953
The State of
J11est
Bengal
v.
Bela Banerjee
and Others.
Patanjali Sastri
C.J .
The State of
West
Brngal
v.
Bela
Banerjee
and Ot1iers.
Patanjali Sajtri
C.J.
se2
SUPREME COURT REPORTS
[1954]
contravened the
prov1s10ns
of
sub-section
(2)
of
section 299 of the Government of India Act, 1935."
It was argued that the impugned Act having been
passed within 18 months before the commencement of
the Constitution and not having been submitted
t<>
the President for
his certification, it was a law to
which the provisions of clause ( 6) did not apply and,
therefore, as ·an existing law, the impugned Act was
not affected by clause (2)
of that article. The argument is manifestly unsound. Article 31(6)
is intended
to save a State law enacted within 18 months before
the commencement of the Constitution provided the
same was
certified
by
tht President while, article
31 (5) saves all existing laws passed more than 18
months before the commencement of the Cof)stitntion.
Reading the two clanses together, the intention is clear
that an existing law passed within 18 months before
January 26, 1950, is not to be saved unless it was
submitted to the President within three months from
such date for his certification and was certified by him.
The argument, if accepted, would reduce article 31(6)
to ameaningless redundancy.
The only serious controversy in the appeal centred
round the
constitutionality of the "condition"
in
proviso
(b)
to
section 8 limiting the compensation
payable so as not to exceed the market value of the
lorn! on December 31,
1946. The Attorney-General,
while conceding that the word "compensation'' taken
by itself must mean a full and fair money equivalent,
urged that, in the context of article 31 (2) read with
entry No. 42 of List III of the Seventh Schedule, the
term was not used in any rigid sense importing equivalence in value but had reference to what the
legislature might think was a proper indemnity for the loss
sustained by the owner. Article 31(2) provides :
No property,
movable
or immovable, including
any
interest
in, or
in
any
company owmg,
anycommercial or industrial undertaking, shall be taken
possession of or acquired for public purposes under
any law
authorising
the
taking
of such
possession
or such
acquisition,
unless
the
law
provides
for
•
•
,.
S.C.R.
· SUPREME COURT REPORTS
563
compensation for the property taken possession
of or
acquired and either fixes the amount of the compensation, or specifies the principles on which, and the
manner in which, the compensation is to be determined and given.
and entry 42 of List III reads thus :
Principles on which compensation
for property acquired or requisitioned for the purposes of the Union
or of a State or for any other public purpose is to be
determined, and the form and the manner in which
such compensation is to be given.
It is
argued that the term "compensation" m
mtry 42 could not mean full cash equivalent, for then,
the power conferred on the legislature to lay down the
principles on which compensation is to be determined
and the form and the manner in which such compensation is to be given would be rendered nugatory. On
the other hand, the entry showed that the compensation
to be "given"
was only "such co111pensation"
as
was determined on the principles laid down by the law
enacted in exercise of the power, and, as the concluding words used in article 31(2) are substantially the
same as in the entry, the Constitution, it was claimed,
left scope for legislative discretion m determining the
measure of the indemnity.
We are unable to agree with this view. While it is
true that the legislature is given
the discretionary
power of laying down the principles which · should
govern the determination of the amount to be given to
the owner for the property
appropriated,
such principles must ensure tl\at what is
determined as payable
must be compensation, that is,
a just equivalent of
what the owner has been deprived of.
Within the
limits of this basic requirement of full indemnification
of
the
expropriated owner,
the Constitution
allows
free play to the legislative judgment as to what principles should
guide
the determination of the amount
payable. Whether such principles take into account
all the elements which make up the true value of the
· property appropriated and exclude matters which are
1953
The State
O
H'est
Bengal
v.
Bela
Banerjee·
and OthersPatanjali SastrfC.J.
1953
The State of
·Wesl
Bengal
v.
Bela BanerJe1
and OtherJ.
Palanjali Sastri
C.J.
564
SUPREME COURT REPORTS
[1954]
to be neglected, is a justiciable issue to be adjudicated
by the court. This, indeed, was not disputed.
Reference was made to certain Australian cases
where the opinion was expressed that the terms of
compulsory acquisition of property were matters of
legislative policy and judgment. The decisions largely
turned on the absence of any· constitutional prohibition in regard to deprivation of private property without compensation as in the Fifth Amendment of the
American Constitution and on the use of the words
"just terms" instead of "compensation" in section
51
(xxxi) of the Commonwealth Constitution which conferred power on the Parliament to make laws with
respect to "the acquisition of property on just terms
from any
State or person ...... "
(cf. Grace Brothers
Pty. Ltd. v. The Commonwealth(')).
Those decisions,
therefore, are of no assistance to the appellant here.
Turning now to the provisions relating to compensation under the impugned Act, it will be seen that the
latter part of the proviso to section 8 limits the
amount of compensation so as not to exceed the
market value of the land on December 31, 1946, no
matter when the land is acquired. Considering that the
impugned Act is a permanent enactment and lands
may be acquired under it many years after it came into force, the fixing of the market value on December
31, 1946,
as the ceiling on compensation, without reference to the value of the land at the time of the acqumt10n is arbitrary and cannot be
regarded as due
compliance in letter and spirit with the requirement of
article 31 (2). The fixing
of an anterior date for the
ascertainment of value may not, in certain circumstances, be a ·violation of the constitutional requirement
as, far instance, when the proposed scheme of acquisition becomes known before it is launched and prices
rise
sharply in anticipation of the benefits to be
derived under it, but the fixing of an anterior date,
which might have no relation to the value of the land
when it is acquired, may be, many years later, cannot
but
be
regarded
as
arbitrary. The learned
Judges
(1) 72 C.L.R. 269.
..
S.C.R.
SUPREME COURT REPORTS
565
below· observe that it is common knowledge that since
the end of the war land, particularly around Calcutta,
has increased enormously in value and might still
further increase very considerably in value ·when the
pace of industrialisation increases. Any principle for
determining compensation which denies to the owner
this increment in value cannot result in the .ascertainment of the true equivalent of the land appropriated.
We accordingly hold that the latter part of proviso
(b) to section 8 of the impugned Act which fixes the
market value on December 31, 1946, as the maximum
compensation for lands acquired under it offends against
the provisions of article 31 (2)
and is unconstitutional
and void. The appeal is dismissed with costs.
Appeal dismissed.
Agent for the appellant : P. K. Bose.
Agent for respondents Nos.
1, 2 and 3 : S. C.
Banerjee.
Agent for the intervener: C. H. Rajadhyaks?a.
WARYAM SINGH AND ANOTHER
v.
AMARNATH AND ANOTHER.
[MEHR CHAND MAHAJAN C.J., B. K.
MuKHERJF.A, S. R. DAs, VIVIAN BosE and
GHULAM HASAN JJ. J
Constitution of India, art,·. 227 and 241-High Court-Whether conferred power of judicial superintendence-Rent
Controller
and
District fudge-Whether Tribunals within the meaning of
art. 227-East Punjab Urban Rent Restriction Act
(III of 1949)
as
extended to
Himachal Pradesh,
s.
13(2)(i), ProvisoNon-payment of arrears of rent on first hearing of application for
ejectment-Legal effect thereof.
The Court of the Judicial Commissioner of Himachal Pradesh
exercises jurisdiction in
relation to the \Vhole
of the territories of
Himachal Pradesh.
The Rent Control and the
District Judge exercising juris·
diction under the East Punjab Rent Restriction Act, 1949, are
certainly tribunals if not courts within the meaning of art. 227 of
the
Constitution
and
they' function
within
the territories
of
1953
TM State of·
West
Bengal
and Othtrs.
Patanjali Sastrf
C.J.
1954
Jan. 19·.