# Zamindatof Etrayapuram v. TM Slate of Madras

- **Citation:** [1954] 1 S.C.R. 761
- **Court:** Supreme Court of India
- **Decided:** 1952-08-22
- **Case number:** CIVIL APPEALS Nos. 170 to 176 and 178 to 183 of 1953
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/zamindatof-etrayapuram-v-tm-slate-of-madras-338
- **Pages:** 7

## Headnote

<
S.C.R.
SUPREME COURT REPORTS
ZAMINDAR OF ETTAYAPURAM
11.
THE STATE OF MADRAS.
(and connected appeals)
•
rMEHR CHAND
MAHAJAN c. J., MuKHERJEA,
761
S. R. DAs, VIVIAN BosE and GHULAM HASAN JJ.]
Madras Estates (Abolition and Conversion into Ryotwari) Act,
(Act
XXV/
of
1948)-Volidity thereof-Article 31(~ of the
Constitution.
1~he !v1adras
Estates (Abolition and Conversion into Ryotwari)
Acl, (Act XXVI of 1948) was passed by the Provincial Legislature
of Madras functioning under the Government of
India
Act, 1935
and it received
the
assent
of the Governor-General
of India On
the 2nd of April, 1949.
After the advent of the Constitution. the
ACt was reserved for the certification of the President and it \Vas.
certified on the 12th of April, 1950 :
Held, that
in view
of the
provisions
of art. 31(6) of the
Constitution the validity of the Act could not be challenged on the
ground that
it
contravened the
provisions
of s. 299(2)
of the
Govcrnn1ent of India Act, 1935 .
. Shankari Prasad Singh Deo v. Union of India ([1952] S.C.R.
89), The State of Bihar v. Maharajadhiraja Sir Kameshwar Singlr
((1952] S.C.K. 889) and Narayan Deo v. The State of Oriua ([1954J
S.C.R. I) referred to.
·
CIVIL
APPELLATE
JURISDICTION :
CIVIL
APPEALS
Nos. 170 to 176 and 178 to 183 of 1953.
Appeals from the Judgment and Order dated the
22nd August, 1952, of the High Court of Judicature at
Madras in Civil Miscellaneous
Petitions Nos. 13386,.
13388, 13390, 7812, 12003, 13188, 13262, 7822, 13123,
13347, 13341, 12997, 12494 of 1950 and Order dated
8th September, 1952, in C. M. P. No. 13936 of 1950.
' K. S . . Krishnaswamy Iyengar (K. S. Champakesa
Iyengar, with him) for the appellants.
. - ' V. K. T.
Chari,
Advocate-General
of
Madras
(R. Ganapathy Iyer and V. V. Raghavan, with him) for
the respondent (State of Madras) in Civil Appeals Nos.
170 to 176 and 178 to 181.
. M. Seshachalapathi for
the respondent
(State of
Andhra) in Civil Appeals Nos. 182 and 183.
1954. February 5. The Judgment of the Court
was delivered by MuKHERJEA J.
12-95 s. c. r./59
I95t
. Fe.biuary, 5·
1954
Zamindatof
Etrayapuram
v.
TM Slate of
Madras.
Mukhetjea J.
762
SUPREME COURT REPORTS
[1954]
MuKHERJEA J.-These consolidated appeals, numbering foufteen in all, are directed against a common
judgment of a Division Bench of the Madras High
Court dated the 23rd of August, 1952, by which the
learned Judges dismissed the petitions of the different
appellants made under article 226 of the Constitution.
The appellants are
landholders of
Madras, holding
zamindaries within that State, and in their applications
under
~rticle 226 of the Constitution they prayed for
writs in the nature of mandamus, directing the State
of Madras to forbear from notifying and taking over
possession
of the estates held by them and also to
cancel the notifications
already issued, in exercise of
its powers under the Madras Estates (Abolition and
Conversion into Ryotwari) Act, (Act XXVI of 1948).
This Act, the constitutional validity of which has been
assailed by the appellants, was passed by the Provincial Legislature of Madras functioning under the Government of India Act, 1935, and it received the assent
<if the Governor-General of India on the 2nd of April,
1949. The avowed object of the Act is to abolish the
·zamindary system by repealing the Madras Permanent
-Settlement Regulation of 1802, to acquire the rights
of landholders in the permanently settled and other
-estates and to introduce the R yotwari system in all
such estates.
After the advent of the Constitution,
the Act was reserved for certification of the President
and it was certified on the 12th of April, 1950. In the
petitions presented by the appellants, a large number
·of grounds were put forward by way of attacking the
validity of the legislation which was characterised as
·confiscatory in its character and subversive of
the
fundamental
right of property, which the petitioners had in the zamindaries held by them under the
Permanent
Settlement
Regulation.
Pending
the

## Text

<
S.C.R.
SUPREME COURT REPORTS
ZAMINDAR OF ETTAYAPURAM
11.
THE STATE OF MADRAS.
(and connected appeals)
•
rMEHR CHAND
MAHAJAN c. J., MuKHERJEA,
761
S. R. DAs, VIVIAN BosE and GHULAM HASAN JJ.]
Madras Estates (Abolition and Conversion into Ryotwari) Act,
(Act
XXV/
of
1948)-Volidity thereof-Article 31(~ of the
Constitution.
1~he !v1adras
Estates (Abolition and Conversion into Ryotwari)
Acl, (Act XXVI of 1948) was passed by the Provincial Legislature
of Madras functioning under the Government of
India
Act, 1935
and it received
the
assent
of the Governor-General
of India On
the 2nd of April, 1949.
After the advent of the Constitution. the
ACt was reserved for the certification of the President and it \Vas.
certified on the 12th of April, 1950 :
Held, that
in view
of the
provisions
of art. 31(6) of the
Constitution the validity of the Act could not be challenged on the
ground that
it
contravened the
provisions
of s. 299(2)
of the
Govcrnn1ent of India Act, 1935 .
. Shankari Prasad Singh Deo v. Union of India ([1952] S.C.R.
89), The State of Bihar v. Maharajadhiraja Sir Kameshwar Singlr
((1952] S.C.K. 889) and Narayan Deo v. The State of Oriua ([1954J
S.C.R. I) referred to.
·
CIVIL
APPELLATE
JURISDICTION :
CIVIL
APPEALS
Nos. 170 to 176 and 178 to 183 of 1953.
Appeals from the Judgment and Order dated the
22nd August, 1952, of the High Court of Judicature at
Madras in Civil Miscellaneous
Petitions Nos. 13386,.
13388, 13390, 7812, 12003, 13188, 13262, 7822, 13123,
13347, 13341, 12997, 12494 of 1950 and Order dated
8th September, 1952, in C. M. P. No. 13936 of 1950.
' K. S . . Krishnaswamy Iyengar (K. S. Champakesa
Iyengar, with him) for the appellants.
. - ' V. K. T.
Chari,
Advocate-General
of
Madras
(R. Ganapathy Iyer and V. V. Raghavan, with him) for
the respondent (State of Madras) in Civil Appeals Nos.
170 to 176 and 178 to 181.
. M. Seshachalapathi for
the respondent
(State of
Andhra) in Civil Appeals Nos. 182 and 183.
1954. February 5. The Judgment of the Court
was delivered by MuKHERJEA J.
12-95 s. c. r./59
I95t
. Fe.biuary, 5·
1954
Zamindatof
Etrayapuram
v.
TM Slate of
Madras.
Mukhetjea J.
762
SUPREME COURT REPORTS
[1954]
MuKHERJEA J.-These consolidated appeals, numbering foufteen in all, are directed against a common
judgment of a Division Bench of the Madras High
Court dated the 23rd of August, 1952, by which the
learned Judges dismissed the petitions of the different
appellants made under article 226 of the Constitution.
The appellants are
landholders of
Madras, holding
zamindaries within that State, and in their applications
under
~rticle 226 of the Constitution they prayed for
writs in the nature of mandamus, directing the State
of Madras to forbear from notifying and taking over
possession
of the estates held by them and also to
cancel the notifications
already issued, in exercise of
its powers under the Madras Estates (Abolition and
Conversion into Ryotwari) Act, (Act XXVI of 1948).
This Act, the constitutional validity of which has been
assailed by the appellants, was passed by the Provincial Legislature of Madras functioning under the Government of India Act, 1935, and it received the assent
<if the Governor-General of India on the 2nd of April,
1949. The avowed object of the Act is to abolish the
·zamindary system by repealing the Madras Permanent
-Settlement Regulation of 1802, to acquire the rights
of landholders in the permanently settled and other
-estates and to introduce the R yotwari system in all
such estates.
After the advent of the Constitution,
the Act was reserved for certification of the President
and it was certified on the 12th of April, 1950. In the
petitions presented by the appellants, a large number
·of grounds were put forward by way of attacking the
validity of the legislation which was characterised as
·confiscatory in its character and subversive of
the
fundamental
right of property, which the petitioners had in the zamindaries held by them under the
Permanent
Settlement
Regulation.
Pending
the
.disposal
of
thes~ petitions,
the Constitution
(First
Amendment) Act of 1951 was passed on 1st of June,
1951, and this amendment introduced two new articles
namely, article
31-A
and 31-B
in the
Constitution,
:appartently with a view to protect the various
laws
-enacted for acquisition of estates from being challenged
under
the
relevant
articles
of Part III of
the
•
•
:S.C.R.
SUPREME COURT REPORTS
763
Constitution. Article 31-B specifically refers to a number of statutes mentioned in the ninth Schedule to the
Constitution and it declares expressly that none of them
shall be deemed to be void on the ground that they
<:ontravened any of the fundamental rights, notwithstanding the decision of a court or tribunal to the
contrary. It is
not disputed that Madras Act XXVI
<Jf 1948 is one of the statutes included in this schedule.
It may be remembered that an attempt was made to
:impeach the validity of the Constitution (First Amendment) Act itself before this court in the case of
Shankari Prasad Singh Deo v. Union of India (1 ). The
:attempt failed and after
the pronouncement
of
this
,court in Shankari Prasad's case, the grounds upon
which the writ petitions of the appellants were sought
to be supported
became
for the most part unavailing'.
It appears that at the time of the final hearing of the
:applications the arguments actually advanced on behalf of the petitioners were aimed not at invalidating
the enactment as a whole, but only some of its provisions, firstly on the ground that there was no public
purpose behind the acquisition of some of the items of
property mentioned
therein and
secondly,
that the
provisions for compensation in certain aspects were
<:olourable exercise of legislative powers and constituted a fraud upon the Constitution Act of 1935. These
arguments were sought to be supported entirely on the
:authority of the majority
decision of this court in the
<:ase of The State of Bihar v.
Maharajadhiraja Sir
Kameshwar Singh (2 )
to the extent that it pronounced
two of the provisions of the Bihar Land Reforms Act.
1950-a legislation similar in type to the Madras Act
of 1948-to be
unconstitutional.
These
contentions
did not find favour with the learned Judgel ?f the
High Court who-heard the petitions and holding that
the principles enunciated by the majority of this court
in. the Bihar case referred to
above were not applicable to the impugned provisions of the Madras Act,
they dismissed all the petitions. Certificates,
howev~r,
were granted by the High Court to the petitioners
(1) [1952JS.C.R. 89.
(>) [1952) S.C.R. 889.
I95-4
Z•min'1•r•f
E1ta;1apur11m
v.
Thi S1a_l1 of
Madr111.
MukherjtaJ.
·~54
Zamindarof
Ettayapuran
v.
The Stale of
Madras.
Mukh'1jea J.
•
764
SUPREME COURT REPORTS
[19541
under article 132( 1) of the Constitution and it is on
the strength of these certificates that the appeals have·
come before us.
Mr. Ayyangar, appearing in support of these
appeals, has taken his stand solely upon the doctrine of
'colourable legislation'
as enunciated by the majority
of this court in the Bihar case referred to above. He
has very propertly not attempted to make any point
as to the absence of a public purpose in regard to any
of the items of acquisition, since it is clear that according to the majoriy view of this court, as explained in
Narayan Deo v. State of Orissa (' ), the existence of a
public purpose is not a justiciable issue in case
of
an
enactment which having fulfilled the requirements of
.clause ( 4)
of article 31 of the Constitution enjoys the
protection afforded by it.
The contentions of Mr. Ayyangar, in substance, are
that the provisions of section 27(i) as well as of section
30 of the impugned Act are colourable legislative provisions which have been enacted in fraud of the Constitution Act of 1935.
It appears that in determining
the amount of compensation, that is to be paid under
the Act, in respect of an acquired estate, it is necessary, first of all, to ascertain what has been described
as the 'basic annual sum' in regard to that estate. The
basic
annual sum comprises several items or parts
which have been set out in section 27 and the subsequent sections of the Act, and it is upon the amount
of the basis annual sum determined in accordance
with the provisions of these sections that the total
amount of compensation money payable to a proprietor is made to depend.
Mr. Ayyangar contends that
section 27(i) of the Act, which lays down that in computing , the basic annual sum only one-third of the
gross annual R yotwari demand of specified kinds is to
be taken into. account, is a colourable provision which
ignores altogether the actual income derived from the
property and introduces an artificial and an arbitrary
standard for determining the income or profits which
has absolutely no relation to facts. Similarly, in computing the net miscellaneous revenue, which is an
(1) [1945] S.C.R. 1. A.l.R. 1953 S. C. 375 at P. 3Bo.
..
:S.C:R .
SUPREME COURT REPORTS
765
.element in the computation of the basic annual sum,
what is to be taken into account under section 30 is
not the average of net annual income which the proprietors themselves derived from the sources, mention-
.ed in the Act, when they were in possession of tha
·estates, but which the Government might derive from
them in future years after the date of notification.
Thus if on account of mismanagement or for other
:reasons the Government does not derive any income
from these sources, the proprietor would not have any
compensation under this head at all. It is argued
:that these are mere devices or contrivances aimed at
-confiscation of private property
and they neither
lay
down nor are based upon any principle of compensa-
:tion.
Whatever the merits of these contentions might be,
·it appears to us that there is an initial and an insuper-
:able difficuity in the way of the learned counsel's
-invoking the authority of the majority decision of this
·court in the case of The State of Bi liar v. M a!zarajadhi-
.raja Sir Kameslzwar Singh( 1 ) to the
circumstances of
·the
present case.
The
Bihar Land Reforms Act,
which was the subject matter of decision in that case,
was a legislation which was pending at the time when
the Constitution came into force. It was reserved for
consideration of the President and received his assent
:in due course and consequently under clause ( 4) of
·article 31 of the Constitution it was immune from
judicial scrutiny on the ground that the compensation
provided by it was inadequate or unjust. With regarcl
to two of the provisions of the Act, however, which
were embodied in sections 4 (b) and 23(f) of the Act,
it was held by the majority of this court
that they
were void as they really did not come within entry
42 of List III of Schedule VII of the Constitution,
·under which they purported to have been enacted.
Entry 42 of List III speaks of "principles oq 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
(1) [1952] S.C.R. 889.
1954
:(aminda. of
Ettayapuram
v.
Thi Stale of
ModrtJJ.
Mukhnjta ].
1954
Zamin.dar of
Ettayapuram
v.
Thi State of
Madras.
M,kh,,feaJ.
7()6
SUPREME COURT REPORTS
(1954J
to be given." It was pointed out that entry 42 W:lS'
undoubtedly
the
description
of
a
legislative
head
and in deciding the competency of a legislation under
this
entry, the court was not concerned with thejustice or propriety of the principles upon which the
determination of the compensation was to be made or
the form or manner in which it was to be given. But
even then, the legislation must rest upon some
principle of giving compensation and not of denying or withholding it, and a legislation could not be supported
which was based upon something which was non-existent or was unrelated to facts and consequently could
not have
a conceivable
bearing on any principle of
compensation. The initial difficulty
in the way of
invoking this doctrine in the present case lies in thefact that the legislation, which is impugned here, waspassed by the Madras Provincial Legislature functioning under the Government of India Act, 1935, and'
there was no entry in any of the lists attached to the
Act of 1935 corresponding to entry 42 in List III of
the Indian Constitution. The only entry relevant to·
this point in the Act of 1935 was entry 9
of List II
which spoke merely of 'compulsory acquisition of land' ;
and it is clear that a duty to pay compensation or of
laying down any principle regarding it was not inherent in the language of that entry. The guarantee for
payment of compensation, so far as the Constitution
Act of 1935 is concerned, was contained in section 299'
clause (2) which was worded as follows :
"Neither the Federal Legislature nor a Provincial Legislature shall have power to make any law
authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial
undertaking ........ unless the law provides for the payment of compensation for the property acquired and'
either fixes the amount of the compensation, or specifies the principles on which, and the manner in which,.
it is to be determined."
The appellants could have very well relied uponthis guarantee if a bar had not been created in their
way by the provision of article 31 ( 6) of the Constitution. That clause of article 31 stands of follows :
S.C.R.
SUPREME COURT REPORTS
767
"Any law of the
State enacted not more than
eighteen months before the commencement of this
Constitution may within three months from such commencement be
submitted
to 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
contravened
the provisions of sub-section (2) of section
299 of the Government of India Act, 1935."
It is not disputed that the Madras Act XXVI of
1948 does fulfil all the requirements mentioned above.
Consequently, it is not possible for us to allow the appellants
to
raise the contentions which the learned
counsel on their behalf wants to raise. The result is
that the appeals would stand dismissed, but in the
circumstances of this case we shall make no order as
to costs.
Appeals dismissed.
Agent for the appellants : S. Subramanian.
Agent for the respondents : R. H. Dhebar.
THE LIQUIDATORS OF PURSA LIMITED
v.
COMMISSIONER OF INCOME-TAX,
BIHAR.
[MEHR CHAND MAHAJAN C.J., s. R. DAS, GHULAM
HASAN and JAGANNADHADAS JJ. J
Income-tax
Act (XI
of
1922)
s. 10(2) (vii)
proviso 2Any such machinery or. plant must have been used in the accountJ·ng
year-Section
66-Finding
of fact-When appeal court can
intervene.
The fundamental
idea
underlying
the
words used in
the
definition
of
"business" in s. 2( 4)
of the
Income-tax
Act
is
the continuous
exercise
of an activity
and the same central idea
is
implicit
in
the
w~r?s ."carried
on by him"
occurring in
s. 10( 1)
and
those
cr1ttcal
\Vords are an
essential
constituent
of that which is to be produce the taxable income, and therefore the
1954
z...,Wlt1' ef
it:H"7";-..
v.
T lw St<h ef -·
MW.hnj<a].
1954
p,......, 9·