Karnataka High Court
Mr Giselle D Mehta vs Union Of India on 22 May, 2023
Bench: Krishna S.Dixit
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WP No. 11158/2013
C/W W.P.Nos.43928/2012, 11966/2013
23287/2013, 62434/2016
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF MAY, 2023 R
BEFORE
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
W.P. No. 11158/2013(LR)
C/W
W.P.Nos.43928/2012, 11966/2013, 23287/2013,
62434/2016(LR)
IN W.P.No.11158/2013:
BETWEEN:
1. SRI. CLARENCE PAIS,
AGED ABOUT 84 YEARS,
S/O LATE L C PAIS,
ADVOCATE & NOTARY,
RESIDING AT LIGHT HOUSE HILL,
MANGALOREF-575 001.
DAKSHINA KANNADA DISTRICT.
2. THE DIOCESE OF MANGALORE,
Digitally signed REPRESENTED BY LORD BISHOP,
by SHARADA REV DR. ALOYSIUS P D SOUZA,
VANI B
AGED ABOUT 71 YEARS,
Location: HIGH
COURT OF SON OF LATE MATHIAS D SOUZA,
KARNATAKA RESIDING AT BISHOPS HOUSE,
KODIALBAIL, MANGALORE-575 003.
DAKSHINA KANNADA DISTTRICT.
3. SRIMAD ANANTHESHWARA TEMPLE,
MANJESHWAR KERALA STATE,
REPRESENTED BY ITS TRUSTEE,
K GOKULDAS BHAT,
AGED ABOUT 70 YEARS,
SON OF LATE A V P BHAT,
RESIDING AT "VARALAXMI"
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NEAR S V TEMPLE, KATAPADI 574 105.
UDUPI DISTRICT.
4. ROSARIO CATHEDRAL,
AGED ABOUT 55 YEARS,
CHURCH ROAD, PANDESHWAR,
MANGALORE,
DAKSHINA KANNADA DISTRICT.
REPRESENTED BGY ITS PARISH .
PRIEST, REV. FR. STANY GOVEAS
5. JANGAMA MUTT,
REPRESENTED BY ITS HEREDIATRY TRUSTEE
DR U C NIRANJAN,
AGED ABOUT 49 YEARS,
SON OF U CHOLAYA, HINDU,
RESIDING AT JANGAMA MUTT,
OPPOSITE CITY BUS STAND,
UDUPI-576 101.
UDUPI DISTRICT.
6. OUR LADY OF MIRACLES,
MILAGRES CHURCH FATHERS RESIDENCE
MILAGRES, MANGALORE-575 001.
REPRESENTED BY ITS PARISH PRIEST
REV. FR. VALERIAN D SOUZA.
7. SRI. SHASHIDHAR D PANDI,
AGED ABOUT 74 YEARS,
SON OF LATE DATTATREYA RAO,
PANDIT,
RESIDING AT KALYAN BHAVAN,
KADRI TOLL GATE,
MANGALFORE-575 002.
DAKSHINA KANNADA DISTRICT.
8. MRS. MARIETTE MASCARENHAS,
W/O LATE STANISLAUS TIMOTHY,
MASCARENHAS,
INDIAN CHRISTIAN CATHOLLC,
AGED ABOUT 71 YEARS,
RESIDING AT ALBERT MANSION,
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STURROCK ROAD, MANGALORE,
DAKSHINA KANNADA DISTRICT.
9. MULGARS AND LAND OWNERS ASSOCIATION(R)
LAW CHAMBERS, LIGHT HOUSE HILL,
MANGALORE-575 001.
DAKSHINA KANNADA DISTRICT,
REPRESENTED BY ITS PRESIDENT.
MR CLARENCE PAIS.
(PETITIONERS NO.1-3 AND 7-8 ARE SENIOR
CITIZEN BENEFIT NOT CLAIMED)
...PETITIONERS
(BY SRI. UDAYA HOLLA., SENIOR COUNSEL A/W
MISS. DESIREE., ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
REPRESENTED BY ITS CHIEF SECRETARY,
VIDHANA SOUDHA, DR AMBEDKAR VEEDHI,
BANGALORE-560 001.
2. MULAGENI VOKKALU RAKSHANA VEDIKE (R)
SILVA COMPLEX, CHURCH GATE, KULASHEKAR,
MANGALURU - 575 005,
REP. BY ITS PRESIDENT.
...RESPONDENTS
(BY SRI. B V ACHARYA., AND
SRI. B L ACHARYA., SENIOR COUNSELS & SPECIAL
COUNSELS A/W SRI. R SRINIVASA GOWDA., AGA FOR R1;
SRI.A G HOLLA., SENIOR COUNSEL A/W
SRI.K CHANDRNATH ARIGA AND
SRI.NANDEESH FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DECLARE THAT THE KARNATAKA CONFERMENT OF OWNERSHIP
ON MOOLAGENI OR VOLA MOOLAGENI TENANTS ACT 2011 IS
UNCONSTITIONAL & STRIKE DOWN THE SAME.
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IN W.P.No.43928/2012:
BETWEEN:
MR. GISELLE D MEHTA,
W/O D B MEHTA,
AGED ABOUT 47 YEARS,
RESIDING AT 8903, ACROPOLIS,
LIGHT HOUSE HILL, MANGALORE-575 001.
...PETITIONER
(BY SRI.B N PRAKASH., ADVOCATE)
AND:
1. UNION OF INDIA,
REPRESENTED BY REVENUE SECRETARY,
DEPARTMENT OF REVENUE,
C1/41 BAPA NAGAR,
NEW DELHI-110 001.
2. STATE OF KARNATAKA,
REPRESENTED BY REVENUE SECRETARY,
DEPARTMENT OF REVENU,
DR AMBEDKAR VIDHI,
BANGALORE.
...RESPONDENTS
(BY SRI. H SHANTHI BHUSHAN., DSG FOR R1;
SRI. B V ACHARYA., AND
SRI. B L ACHARYA., SENIOR COUNSELS & SPECIAL
COUNSELS A/W SRI. R SRINIVASA GOWDA., AGA FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DIRECT TO STRIKE DOWN THE KARNATAKA CONFERMENT OF
OWNERSHIP ON MOOLAGENI OR VOLAMOOGLAGENI TENANTS
AT, 2011 (VIDE ANNX-A) AS ULTRAVIRUS &
UNCONSTITUTIONAL.
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IN W.P.No.11966/2013:
BETWEEN:
1. SRI ADMAR MUTT, UDUPI
REP. BY ITS MATADHIPATHI.
SRI VISHWAPRIYA THEERTHA SWAMIJI,
49 YEARS, CAR STREET, UDUPI - 576 101.
2. SRI PALIMARU MUTT, UDUPI,
REP. BY ITS HOLINESS,
H.H.SRI VIDYADHEESHA THEERTHA SWAMIJI,
52 YEARS, CAR STREET, UDUPI - 576 101.
3. SRI KRISHNAPURA MUTT, UDUPI,
REP. BY ITS MATADHIPATHI,
SRI VIDYASAGAR THEERA SWAMIJI,
54 YEARS, CAR STREET, UDUPI - 576 101.
4. SRI PEJAVARA ADHOKSHAJA MATHA, UDUPI,
REP. BY ITS HOLINESS,
SRI H.H. VISHVESHA TIRTHA SWAMIJI,
50 YEARS, CAR STREET, UDUPI - 576 101.
4(A) SRI.VISHWA PRASANNA,
THEERTHA SWAMIJI,
AGED ABOUT 57 YEARS,
MATTADHIPATHI,
R/AT SRI.PEJAVARA ADHIKSHAJA MATTA,
CAR STREET, UDUPI - 576 101.
5. SRI PUTTIGE MATHA, UDUPI,
REP. BY ITS HOLINESS,
SRI SUGUNENDHRA THEERTHA SWAMIJI.
49 YEARS, CAR STREET, UDUPI - 576 101.
6. SRI SHIROOR MUTT, UDUPI,
REP. BY ITS HOLINESS,
SRI SRI LAXMIVARA THEERTHA SWAMIJI,
48 YEARS, CAR STREET, UDUPI - 576 101.
...PETITIONERS
(BY SRI.A KESHAVA BHAT., ADVOCATE AND
SRI.S K ACHARYA., ADVOCATE)
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AND:
STATE OF KARNATAKA,
REP. BY ITS SECRETARY,
REVENUE DEPARTMENT,
M.S. BUILDING, DR. B.R. AMBEDKAR VEEDHI,
BANGALORE 560 001.
...RESPONDENT
(BY SRI.B V ACHARYA AND
SRI. B L ACHARYA., SENIOR COUNSELS & SPECIAL
COUNSELS A/W SRI. R SRINIVASA GOWDA., AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DECLARE THE KARNATAKA CONFERMENT OF OWNERSHIP ON
MULAGENI OR VOLAMULAGENI TENANTS ACT 2011, IS
UNCONSTITUTIONAL FOR THE REASON THAT THE PROVISIONS
OF THE SAID ACT ARE ULTRAVIRES & VIOLATIVE OF
FUNDAMENTAL RIGHT OF THE PETITIONERS GUARANTEED
UNDER ARTICLE 14 OF CONSTITUTION OF INDIA.
IN W.P.No.23287/2013:
BETWEEN:
M. GANESH PAI,
AGED ABOUT 47 YEARS,
SON OF LATE MANJUNATH PAI,
OLD ROAD, BELTHANGADY - 574 214.DK.
...PETITIONER
(BY SRI.N RAVINDRA KAMATH., SENIOR COUNSEL FOR
SMT.VANAJAKSHI., ADVOCATE)
AND:
THE STATE OF KARNATAKA,
REPRESENTED BY ITS CHIEF SECRETARY
VIDHANA SOUDHA, DR AMBEDKAR VEEDHI,
BANGALORE 560 001.
...RESPONDENT
(BY SRI.B V ACHARYA AND
SRI. B L ACHARYA., SENIOR COUNSELS & SPECIAL
COUNSELS A/W SRI. R SRINIVASA GOWDA., AGA)
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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THAT
THE KARNATAKA CONFERMENT OF OWNERSHIP ON MOOLAGEN
OR VOLA MOOLAGENI TENANTS ACT, 2011 IS UN-
CONSTITUTIONAL AND STRIKE DOWN THE SAME.
IN W.P.No.62434/2016:
BETWEEN:
SRI. PETER J R PRABHU,
S/O H P P RODRIGUES,
AGED ABOUT 72 YEARS,
NO.78, KALMANE, LAVELLE ROAD,
BENGALURU-560 001.
(SENIOR CITIZEN BENEFIT NOT CLAIMED)
...PETITIONER
(BY SRI.ABHINAV RAMANAND A.,ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
DEPARTMENT OF REVENUE,
VIDHANA SOUDHA, DR AMBEDKAR VEEDHI,
BENGALURU-560 001.
REPRESENTED BY ITS CHIEF SECRETARY.
2. MRS. TAJIRABBA, MAJOR,
W/O NOT KNOWN TO THE PETITIONER,
3. MR. M. SYED, MAJOR,
S/O NOT KNOWN TO THE PETITIONER,.
4. MR. MOHD. ISMAIL, MAJOR,
S/O NOT KNOWN TO THE PETITIONER,
ALL ARE R/AT ATTARANA VILLAGE,
MANGALURU HOBLI,
MANGALURU DISTRICT.
...RESPONDENTS
(BY SRI. B V ACHARYA., AND
SRI. B L ACHARYA., SENIOR COUNSELS & SPECIAL
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COUNSELS A/W SRI. R SRINIVASA GOWDA., AGA FOR R1;
NOTICE TO R2 TO R4 ARE HELD SUFFICIENT
V.C.O DATED 11/09/2017)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DECLARE THAT THE KARNATAKA CONFERMENT OF OWNERSHIP
ON MOOLAGENI OR VOLA MOOLAGENI TENANTS ACT, 2011
NOTIFIED IN THE GAZETTE NOTIFICATION DTD.12.10.2012
ISSUED BY THE RESPONDENT AT ANNE-A IS UN-
CONSTITUTIONAL AND STRIKE DOWN THE SAME AND ETC.,
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDER, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:
ORDER
The following observations of Justice Krishna Iyer, in
STATE OF KARNATAKA vs. RANGANATHA REDDY1, at
paragraph 53, should prelude the framing of this
judgment:
"...a glance at the raw realities, to abolish
which Article 31(2), Article 31C and Articles 38
and 39 have been enacted, is necessary.
Poverty has, for ages, been the omnipresent
reality of Indian life. Stark inequalities have
been chronic and the 'hidden hunger' (to use
Myrdal's phrase) of the people have pushed the
Freedom Movement forward in the socialistic
direction toward a better life. The fasciculus of
clauses in the Constitution we have referred to
is calculated to prevent the revolution of rising
expectations from becoming a revolution of
(1977) 4 SCC 471
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rising frustrations. These compulsions must
inform legal interpretation..."
Petitioners claiming to be owners of tenanted non-
agricultural lands, are invoking writ jurisdiction of this
court for laying a challenge to the constitutionality of the
Karnataka Conferment of Ownership on Mulageni or
Volamulageni Tenants Act, 2011 (hereafter 'impugned
Act'), whereby full ownership is sought to be bestowed on
the tenants/sub-tenants on payment of compensation to
be determined by the Competent Authority on normative
basis. After service of notice, the Respondent-State has
entered appearance through the learned AGA and the
private Respondents are represented through their
Advocates on record. Statements of Objections, Addl.
Statements of Objections, Replies/Rejoinders &
Statements of Facts have been filed voluminously.
II. SUBMISSIONS MADE ON BEHALF OF THE
PETITIONERS:
(a) The State Legislature lacks competence to enact
the impugned Act inasmuch as the subject matter thereof
is relatable to Entries 6 & 7, List-III of Seventh Schedule
to the Constitution of India and that the field is already
occupied by the Central Legislations namely the Transfer
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of Property Act, 1882 & the Registration Act, 1908.
Respondents' reliance on Entry 18, List-II of Seventh
Schedule for supporting legislative competence is
misplaced since it does not authorize acquisition of
property.
(b) Presidential Assent purportedly granted under
Article 254(2) of the Constitution, is without due
application of mind; there was no sufficient material made
available to the President whilst securing his Assent. This
apart, purportedly the Assent being for a specific purpose,
its efficacy would be confined to that purpose only and
therefore, does not put the Act under the protective
umbrella of Article 31C, more particularly when it is not
intended to give effect to Article 39(b) & (c).
(c) Although after the 44th Amendment to the
Constitution in 1978, the Right to Property is no longer a
Fundamental Right in terms of erstwhile Article 19(1)(f),
its being recognized as a human right, assumes the
character of a Fundamental Right to the extent other
Fundamental Rights guaranteed under Articles 19(1) & 21
depend upon the property for their meaningful exercise;
under Article 26, the religious denominations too have a
Fundamental Right to own property. The impugned Act
being in gross violation of these rights, is liable to be
struck down.
(d) The impugned Act is violative of Article 300A
that guarantees Right to Property inasmuch as there are
no elements of public purpose/public interest; the doctrine
of eminent domain recognized under the said Article is not
invocable; further, the compensation normatively
determinable under the Act being apparently illusory,
renders the legislative action as a confiscatory measure
unsustainable on the anvil of Constitution.
(e) The impugned Act is grossly discriminatory
inasmuch as it singles out only permanent leases for a
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detrimental treatment leaving out leases of long tenures
such as 99 years, 999 years or the like. It is discriminatory
also because of its selective application to the districts of
Dakshina Kannada & Udupi, when leases of the kind do
obtain in all parts of the State if not the country.
(f) The impugned Act has been hastily made
without ascertaining the relevant factors such as the
number of mulagenidars that are intended to be benefited,
the number of muldars that would be detrimented, the
critical adjustment of financial positions of muldars &
mulagenidars, the number of litigations concerning the
mulageni and such other things; the legislature has been
swayed away by the untrue statistical data and other
factors; thus, the impugned Act suffers from a 'manifest
arbitrariness' and a 'massive unjustness' that render it
vulnerable for challenge under Article 14 of the
Constitution.
III. SUBMISSIONS MADE ON BEHALF OF THE
RESPONDENTS:
(a) The State has legislative competence for
making the impugned Act whose subject matter essentially
relates to Entry 18, List-II of Seventh Schedule to the
Constitution, since admittedly, it concerns non-agricultural
lands; the Entries in the legislative lists being only the
fields of legislation and not the units of legislative
enablement, have to be construed in their widest
amplitude and that there is a strong presumption in favour
of constitutionality of the plenary legislations.
(b) There was letter correspondence between the
legislative department of the State and the office of the
President of India which eventually resulted into the grant
of Assent to the impugned Act inter alia under Article
254(2); the said Assent being in general terms would
extend to other protective provisions of the Constitution
such as Article 31C; whether the President had applied his
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mind before according consent cannot be the subject
matter of deeper examination in judicial review.
(c) Petitioners cannot much bank upon Articles 14
& 19 of the Constitution for assailing the impugned Act
once President has Assented thereto; the very purpose of
Assent of the President under Article 31C is to insulate the
legislation from attack under these Articles, subject to all
just exceptions into which argued case of the Petitioners
does not fit.
(d) After 44th Amendment to the Constitution, the
Right to Property is no longer a Fundamental Right
although it enjoys constitutional protection under Article
300A; there is no property that is immune from acquisition
for public purpose and ordinarily, on payment of
compensation. 'Right to Property is a human right' does
not make much sense qua muldars in the context of the
case; mulagenidars too have human rights that need to be
protected and the impugned Act intends to do that by
giving effect to the Directive Principles enshrined in
Clauses (b) & (c) of Article 39.
(e) There is a very strong presumption that the
legislature understands needs of the people and
legislations are made to address such needs; the
impugned Act is made after ascertaining all the relevant
factors including the statistical data as to muldars &
mulagenidars and of the mulageni litigations pending or
potential, as broadly indicated in its Premble; Preambular
version of a plenary legislation cannot be challenged;
'manifest arbitrariness' is not a constitutional ground for
invalidating the legislation; even otherwise, such a ground
is not made out; no enactment can be struck down by just
saying that it is unjust & unreasonable especially when
because of Presidential Assent under Article 31C,
invocation of Articles 14 & 19 is barred.
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(f) The impugned Act is not confiscatory in nature;
it is a piece of acquisition law that is recognized under
Article 300A; it is made to effectuate a public purpose; it
provides for payment of compensation on capitalization
method, which is popularly operated in matters like this;
by no stretch of imagination, compensation determined at
the rate of 500 or 1000 times of the annual rent can be
said to be illusory; our Constitution does not require that
the compensation should be determined on the basis of
market value; muldars are not the absolute owners of the
properties in question, the absolute ownership being
vested in the State; in extreme cases, there can be
acquisition sans compensation too.
IV. Having extensively heard learned Advocates
appearing for the parties and having perused the Petition
Papers, in the light of relevant of the Rulings cited at the
Bar, the following questions are broadly framed for
consideration:
1. Whether the State has legislative
competence to enact the Karnataka
Conferment of Ownership on
Mulageni or Volamulageni Tenants
Act, 2011...?
2. Whether the Presidential Assent
accorded to the Act under Article
254(2) of the Constitution suffers
from any infirmity...?
3. If the Presidential Assent is
secured to the impugned Act under
Article 254(2) of the Constitution,
does it extend to the protective
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Proviso to Article 31C, as
well...?
4. Whether the impugned Act is
discriminatory inasmuch as it does
not critically differentiate between
the leases in perpetuity and leases of
very long tenures such as 99 years
or above and therefore falls foul of
Article 14...?
5. Whether the impugned Act is
manifestly arbitrary & massively
unjust and therefore, is liable to be
struck down in the light of Triple
Talaq Judgment of Apex Court...?
6. Whether the impugned Act
providing for transfer of property
from muldars to
mulagenidars/volamulagenidars
lacks in public purpose and
therefore, is violative of Articles 26 &
300A of the Constitution...?
7. Whether the compensation
payable to the muldars is illusory so
as to render the impugned Act void
under Article 300A of the
Constitution...?
V. AS TO THE CONCEPT OF MULAGENI
LEASES:
(a) Canara is the coastal region of Karnataka State.
It came under British Rule in 1799 after the defeat of
Tippu Sultan. In 1863 Canara was divided into two
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districts: The Northern part was brought under the
Bombay Presidency and the South Canara continued under
the Madras Presidency. The history of mulageni lands in
South Canara dates back to Vijayanagara Dynasty (1336)
of the fame of 'A Forgotten Empire'2 by Robert Sewell.
Harihara Raaya's Minister had published an official manual
on the basis of 'Paraashara Smruti' with copious
description about the assessment of the lands and
conversion of grain revenue/rent into money. Normally,
the tenant was paying 1/6th of the crop as rent3. At page
118, John Sturrock, Harold A Stuart4 write: "...The 'muli'
tenure is the characteristic tenure of Canara and the
position of the mulavargdar with regard to Government
has been definitely settled in the suit Vyakunta Bapuji v.
Government of Bombay5...1876. In the judgment ... the
origin of the term is explained...Mula is derived from the
Robert Swell, 'A Forgotten Empire (Vijayanagar): A
Contribution to the History of India', 1900
John Sturrock, Harold A Stuart, 'South Canara', Gazetteer of
India, Government of Karnataka, 95 - 96, (1894)
Id
12 Bom HCR App 1
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Sanskrit mul, signifying literally a root and figuratively,
inter alia, the root of a tree or origin of a family. Hence
arises the character of permanence or perpetuity which we
find in it when used in composition as in mulavarga and
mulvargdar...in mul-gaini...". Further, at page 119, they
write "...during the time of the Mysore government, when
the exactions of Hyder and Tippu and their officers were
more than many a States could bear, such escheats were
very numerous, but in large number of cases, the lands
were still cultivated by tenants or 'genigars' who were
either the old tenants or new occupiers put in by
government...".
(b) A Coordinate Bench of this court in
S.NARAYANACHARYA vs. KALIYAMARDHANA SRI
KRISHNADEVARU OF SRIKRISHNAPUR MUTT6 reproduced
an extract from the Standing Orders of the Board of
Revenue of Madras as under:
"A mulgenidar is a lessee of the registered
holder. The lease is called mulgeni and the
registered holder's right muli. A mulgenidar has a
perpetual lease and is not removable by the
1968 (2) Mys.LJ 439
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registered holder so long as he pays rent regularly
to him and does not break any of the conditions
of the lease..."
While discussing the nature of mulageni, the Apex Court in
RAGHURAM RAO vs. ERIC P MATHIAS7 quoted the
following observations in VYAKANTRAYA BIN
RAMKRISHNAPPA vs. SHIVARAMBHAT BIN NAGABHAI8,
'...the mulagenis were only tenants, although
tenants in perpetuity holding under their superior
landlords, the mulgars, whose estate like that of
tenants in fee simple in England, would appear to
have been the highest estates in the land known
to the law in Kanara; and, further, that originally
mulageni tenants were not restricted by the terms
of their leases from alienation, the practice had
grown up - of leasing the land in perpetuity at a
fixed rent, coupled with such and other
restrictions.'
Similarly, another Coordinate Bench in CHARLES REGO vs.
FATHER MULLERS CHARITABLE INSTITUTE9, referring to
'the law or land tenure in kanara' by J.H.A. Mascurenhas
quotes the following:
'A mulgenidar is a tenant holding a
perpetual lease not removable so long as he
pays his rent and so long as he does not violate
the stipulations of the lease entailing forfeiture"
(2002) 2 SCC 624
ILR (1883) 7 Bom.256
ILR 2009 KAR 487
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(Called out from Wilson's Glossary Page 354).
And further "....A mulgeni tenancy is a tenancy
forever at a fixed rent. This species of tenure is
as good as a freehold..." and "...The mulgeni
tenure is a permenant heritable tenure alienable
in some cases by the conditions of the
mulgenichit but in all cases perpetual, though
subject to forfeiture under certain
circumstances." "... ...Mulgeni tenants have a
perpetual and indefeasible right to occupy the
land so long as they pay the rent which is
sometimes nominal."
In Mulla's The Transfer of Property Act10, it is stated: 'In
India, a lease may be in perpetuity. In the case of a
benami kabulayet or agreement of lease without a term
for an annual rent, the Privy Council11 held that it operated
either as a permanent lease, or as a lease from year to
year and that no intermediate position was open.' The sum
& substance of the above discussion is: a mulageni in the
South Canara is a kind of permanent lease or a lease in
perpetuity;
VI. AS TO NATURE AND SCOPE OF THE
IMPUGNED ACT:
D.F.Mulla, 'Mulla: The Transfer of Property Act', Eleventh
Edition, Lexis Nexis, 773 - 74, (2013)
AIR 1931 PC 207
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(a) There was a statute called The Madras Mulgeni
Rent Enhancement Act, 1920 passed by the then Madras
Legislature. Its objects & reasons being relevant are
reproduced here:
"Under the terms of MULGENI lease in
South Kanara, the land is held in perpetuity at a
fixed rent. In most of such lease deeds granted
before the introduction of the settlement of
1902, the rent was fixed with reference to the
old assessment charged at the settlement of
1819, the lessors not having made any
provision for the contingency of increase.... 3. It
is therefore considered desirable to pass a short
enactment providing for the enhancement of
mulgeni rents, so as to secure an equitable
distribution of the increased assessment
imposed by the resettlement. 4. The scheme of
the Bill is to enable landlord whose lands were
leased on MULGENI tenures before the late
settlement to apply to the Collector to enhance
the rent payable on the lands by an amount not
exceeding the difference between the old and
the new assessment. The method proposed for
the distribution of the increase is the most
equitable that can be arrived at in view of the
difficulty of assessing the benefit derived by
either party from the land at the time when the
MULGENI lease was originally granted."
South Canara being part of Madras Presidency, this Act
was applicable to the mulageni leases in the region. After
the Reorganization of States, this region came to be
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comprised in the State of Karnataka. This Act came to be
repealed by the State Legislature vide the Karnataka
Repealing (Regional Laws) Act of 2011 w.e.f. 16.7.2011,
as a prelude to making of the impugned Act. Its Statement
of Objects & Reasons reads as under:
"In the districts of Dakshnina Kannada and
Udupi, some types of mulageni leases in respect
of non-agricultural lands mainly house sites are
prevailing for various reasons. The mulgar's or
intermediary's right to recover possession being
a remote possibility, the only right available is to
receive annual rent. Mulgenidars or
volamulgenidars have already invested
considerable amount by putting up structures,
and improvements to the property either
residential or commercial, but are unable to
enjoy the holding, to its full extent, on account
of reluctance of mulgar or intermediary to give
consent for putting up structures or alienation of
interest of mulgenidars or volamulgenidars.
Therefore, the prevailing system of mulgeni
lease is neither advantageous to mulgenidars or
volamulagendiars, nor really beneficial to
mulgars or intermediary... Therefore, in public
interest, it is proposed to provide for conferment
of ownership on mulgenidars or volamulgenidars
and for matters connected therewith or
incidental thereto. Hence the Bill..."
This Bill passed by the State Legislature, having been
reserved by the Governor under Article 200 for the
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consideration of President, has been accordingly assented
to under Article 201 of the Constitution on 13.07.2012.
(b) The salient features of the impugned Act are:
There is no dispute at the Bar as to subject lands being
non-agricultural in nature. Objects and Reasons as also
the very Preamble to the impugned Act employ the
expression 'mulageni leases in respect of non-agricultural
lands, mainly house sites'. Sec. 1(1) gives title to the Act;
sub-section (2) gives power to the State Government to
specify by Notification the date with effect from which the
Act shall come into force. Sub-section (3) provides for the
initial application of the Act to the district of Dakshina
Kannada & Udupi and authorizes the State Government to
extend its application to other parts of the State. Section 2
is the dictionary clause of the Act. Sec. 3 confers full
ownership on mulagenidar or volamulagenidar, who is in
possession of the leasehold, by the extinguishment of
interest of mulgar; the proviso preserves mortgage or
charge affecting such property. Sec. 4 requires payment of
compensation by the mulagenidar or volamulagenidar.
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Sec. 5 prescribes the procedure and Sec. 6 provides for
enquiry by the Competent Authority into the claims for
ownership. Sec. 7(1) provides for determination of
compensation; sub-section (2) provides for compensation
at the rate of 500 times of the rental where there is no
'non-alienation clause' and 1,000 times of the lease rent
where there is such a clause. Sec. 8 provides for the
issuance of certificate of ownership. Sec. 9 provides for
appeal within thirty days. Sec.10(1) bars jurisdiction of
Civil Courts; sub-section (2) provides for transfer of
pending suits to the Competent Authority. Sec. 11 enacts
removal of difficulties clause. Lastly, Sec. 12(1) is rule
making power; sub-section (2) provides for laying
procedure. In the case of mulageni, the lessor is called
'mulgar' or 'mulidar'; the lessee is called 'mulagenidar';
sub-lessee who is in possession, is called
'volamulagenidar'. These terms along with other such as
'mulageni lease', 'mulageni rent', 'Competent Authority'
are defined in Sec. 2 of the Act. The Act is published in the
Karnataka Gazette dated 25.7.2012.
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VII. AS TO LEGISLATIVE COMPETENCE:
(a) Article 1(1) of our Constitution says 'India, that
is Bharat, shall be a Union of States'. It means a
federation of States, may be with peculiarities of its own.
Every federation requires a division of powers between the
federal government and the provincial ones. In our
system, this is effected by Part XI of the Constitution.
Articles 245 to 255 deal with the distribution of legislative
powers. As was under the Government of India Act, 1935,
there is a three-fold distribution of legislative powers
between the Union and the States under this Article in
terms of three Legislative Lists in the Seventh Schedule.
List-I i.e., Union List includes subjects which the Union
shall have exclusive power of legislation including 98
items/subjects. List-II i.e., State List comprises 59 items
or Entries over which the State Legislature shall have
exclusive power of legislation. List-III i.e., Concurrent List
simultaneously gives power of legislation to the Union and
the State Legislatures over 52 items; the repugnancy
between the Central Law and the State Law is resolved in
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terms of Article 254. This matter has been succinctly
discussed by the Apex Court in UNION OF INDIA vs.
RAJENDRA N SHAH12:
"A cursory reading of these Articles would
show that whereas Parliament may make laws
for the whole or any part of the territory of
India, the legislation of a State may make laws
for the whole or any part of the State. Article
246 then goes on to refer to laws with respect
to any of the matters enumerated in 3 Lists
contained in the 7th schedule to the
Constitution of India. List I contains subjects or
topics on which Parliament has exclusive power
to make laws; List III in the Concurrent List
contains topics on which both Legislatures may
make laws; and List II ... gives the States
exclusive power to make laws for such State or
part thereof with respect to any of the matters
contained therein. So far as Union territories
are concerned, Parliament is given power under
Article 246(4) without constraint as to subject
matter as it may also legislate with respect to
topics covered by List II... In a catena of
judgments of this Court, it has been declared
that whereas Article 246 contains the power to
legislate, the topics of legislation contained in
the three Lists are described as 'fields of
legislation'...It is equally well settled that the
various entries in the three Lists are not
'powers' of legislation, but 'fields' of legislation.
The power to legislate is given by Article
246 and other Articles of the Constitution..."
(2021) SCC OnLine SC 474
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(b) Learned Sr. Advocate Mr.Uday Holla who led
the arguments on behalf of the Petitioners questioned
legislative competence of the State to make the impugned
Act. Placing reliance on INDU BHUSHAN BOSE vs. RAMA
SUNDARI DEVI13, he argued that the impugned Act is
referable to Entries 6 & 7 of Concurrent List which relate
to transfer of property other than agricultural lands,
whereas Entry 18 of State List relates to agricultural lands.
In the second half of paragraph 13 of the decision, the
Apex Court has observed as under:
"We have felt considerable doubt whether the
power of legislating on relationship between
landlord and tenant in respect of house
accommodation or buildings would
appropriately fall in Entry 21 of List II of the
Seventh Schedule to the Government of
India Act, 1935, or in the corresponding Entry
18 of List II of the Seventh Schedule to the
Constitution. These Entries permit legislation in
respect of land and explain the scope by
equating it with rights in or over land, land
tenures including the relation of landlord and
tenant, and the collection of rents. It is to be
noted that the relation of landlord and tenant is
mentioned as being included in land tenures
and the expression "land tenures" would not, in
our opinion, appropriately cover tenancy of
buildings or of house accommodation. That
(1969) 2 SCC 289
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expression is only used with reference to
relationship between landlord and tenant in
respect of vacant lands. In fact, leases in
respect of non-agricultural property are dealt
with in the Transfer of Property Act and would
much more appropriately fall within the scope
of Entry 8 of List III in the seventh Schedule to
the Government of India Act read with Entry 10
in the same List, or within the scope of Entry 6
of List III in the Seventh Schedule to the
Constitution read with Entry 7 in the same List.
Leases and all rights governed by leases,
including the termination of leases and eviction
from property leased, would be covered by the
field of transfer of property and contracts
relating thereto..."
(c) Mr.B.V.Acharya, learned Sr. Advocate appearing
for the State and Mr.A.G.Holla, learned Sr. Advocate
appearing for the private Respondents per contra
contended that the subject matter of impugned Act is not
the private transfer of property by way of contract as is
contemplated under Sec. 5 of the Transfer of Property Act,
1882 (hereafter '1882 Act') but, it is statutory transfer;
Entry 18, List II is widely phrased and therefore, needs to
be construed expansively to include transfer of all kinds of
land by operation of law. In support of this, they bank
upon UNION OF INDIA vs. VALLURI BASAVAIAH
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CHAUDHARY14. Mr.A.G.Holla submitted that strictly
speaking, the subject matter of the Act does not involve
transfer of property as is understood in the realm of law of
contract. He reasons out this by telling that there is
extinction of the interest of muldars and enlargement of
that of mulagenidar to the level of full ownership.
(d) This court is broadly in agreement with the
submissions made on behalf of the Respondents. Reasons
for this are concisely stated as under:
(i) The Five Judge Bench in INDU BHUSHAN,
supra had said something about Entry 18, List II,
sans articulation, and rightly so because, that case
apparently related to regulation of house
accommodation in cantonment area in terms of Entry
3, List I. In the middle of paragraph 13, the Bench
specifically clarified the position: '...However, it is not
necessary for us to express any definite opinion in
this case on this point because of our view that the
relationship of landlord and tenant in respect of
house accommodation situated in cantonment area is
clearly covered by the Entries in List I...' That being
the position, a passing observation on which Mr.Uday
AIR 1979 SC 1415
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Holla heavily banked upon cannot be treated as "the
law declared" for the realm under Article 141 of the
Constitution nor as the ratio decidendi; In view of
said clarification, remark of the kind would not
partake the character of an obiter dicta, too. This
view gains support from what Salmond on
Jurisprudence15 at page 27 writes:
"...A precedent is not destroyed merely
because it was broadly argued,
inadequately considered, and fallaciously
reasoned. Thus, a rather arbitrary line has
to be drawn between total absence of
argument on a particular point, which
vitiates the precedent, and inadequate
argument, which is a ground for
impugning the precedent only if it is
absolutely binding and indistinguishable.
There appears to be an exception if the
court in deciding the precedent expressly
intimated that the matter had not been
fully considered..."
(ii) The observations made in VALLURI
BASAVAIAH, supra by another Five Judge Bench as to
State's legislative competence under Entry 18, List II
renders the question no longer res integra, the same
having been answered in so many words in the
affirmative; following are the observations at
paragraphs 27, 28 & 29:
P.J. Fitzgerald, 'Salmond on Jurisprudence', Sweet &
Maxwell, Twelfth Edition, 27, (1966)
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"Next, it is urged that the impugned Act
passed by the Parliament was without
legislative competence. It is said that the
resolution, as passed by the State Legislature,
gave authority to Parliament to legislate on a
particular subject, i.e., 'ceiling on immovable
property', whereas the Parliament contrary to
the resolution, passed a law on a different
subject i.e., 'ceiling on urban land'...It is,
accordingly, urged that the impugned Act,
insofar as it provides for ceiling for acquisition
of vacant land by the State was not in
conformity with the real intendment of the
resolution.
We are afraid, the contention cannot be
accepted. It is not disputed that the subject
matter of Entry 18, List II of the Seventh
Schedule i.e., 'land' covers 'land and buildings'
and would, therefore, necessarily include
'vacant land'. The expression 'urban
immovable property' may mean 'land and
buildings', or 'buildings' or 'land'. It would take
in lands of every description, i.e., agricultural
land, urban land or any other kind and it
necessarily includes vacant land.
...The State Legislatures were, therefore,
aware of the position when they passed a
resolution authorising the Parliament to make
a law in respect of urban immovable property.
Their intention was to include the lands within
the territorial area of a municipality or other
local body of an urban area and also its
peripheral area..."
(iii) A Division Bench of the Apex Court having
examined several Entries including Entry 18, List II in
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JILUBHAI NANBHAI KHACHAR vs. STATE OF
GUJARAT16, at paragraphs 10 & 12 has said as follows:
"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 holders
inter se or the land holder or the State or the
land holder or the tenant. It is seen that
restriction or extinction of existing interest in
the land includes provision for abolition and
extinguishment of the rights in or over the
land... 12. Land in its widest signification would
therefore include not only the surface of the
ground, cultivable, uncultivable or waste lands
but also everything on or under it. In
Jagannath Singh v. State of U.P., AIR (1960)
SC 1563 p. 1568, this Court held that the word
"land" is wide enough to include all lands
whether agricultural or non-agricultural land..."
(iv) In RAM KRISHAN GROVER vs. UNION OF
INDIA17, which Mr.A.G.Holla pressed into service a
three Judge Bench of the Apex Court inter alia having
considered INDU BHUSHAN, has made the following
observations at paragraph 27:
"A Constitutional Bench judgment of this
Court in Indu Bhushan Bose v. Rama Sundari
Debi and Another 8 had inter alia examined
Entry 3 in List I, Entry 18 in List II and Entries
6, 7 and 13 in List III to observe that the
general power of legislating in respect of
relationship between landlord and tenant can
(1995) 1 SCC 596
(2020) 12 SCC 506
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be traced either under Entry 18 of List II or
Entries 6 and 7 of List III. The expression 'land
tenures including the relation of landlord and
tenant' appearing in Entry 18 of List II, it was
observed, was used only with reference to the
relationship of landlord and tenant in respect
of vacant lands and does not cover tenancy of
buildings or house accommodation.
Nevertheless, the Court did not give a finding
in definite terms as the relationship of landlord
and tenant in question was in respect of a
house accommodation situated in a
cantonment area and therefore was covered by
Entry 3 of List I which vests exclusive power to
make laws for the cantonment areas in the
Parliament..."
(v) It has been a settled position of law that
ordinarily, when a decision of a larger Bench is
construed by a smaller Bench of the Apex Court in a
particular way, it is not open to any court lower in the
hierarchy to construe it in variance thereof. Added, the
Division Bench of this court in H.MUNISWAMY GOWDA
vs. MANAGEMENT OF KARNATAKA STATE ROAD
TRANSPORT CORPORATION18 while stressing the need
for Smaller Benches to follow the decisions of larger
Benches, reiterated the position that the hierarchical
system of courts prevalent in our country mandates
upon each lower tier including the High Court to accept
loyally the decisions of the highest tiers. That being
the position, the plea of per incuriam which Mr.Uday
ILR 1997 KAR 509
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Holla vehemently pressed into service, has to remain
miles away.
In the light of above discussion, this court answers the
first question as to legislative competence of the State
to make the impugned Act, in the affirmative.
VIII. AS TO INVALIDITY OF ASSENT OF THE
PRESIDENT:
(a) It was argued on behalf of the Petitioners that
Assent of the President is no Assent in its true sense and
therefore, the impugned Act is not a legislation; Assent
was secured without furnishing necessary & relevant
material; due application of mind in the assenting process
is not demonstrable by records; the Assent of the
President being even otherwise unsustainable, the
impugned Act is liable to be struck down in its entirety. In
support of this, they pressed into service the doctrine of
occupied field. Learned Sr. Advocates Mr.B.V.Acharya and
Mr.A.G.Holla controverted the same, adding that the
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Assent of the President having been secured in general
terms, is in lieu of that of the Governor and therefore,
there need not be duplication of Assent by the Governor;
Assent of the President under Article 254(2) is essentially
that of the Central Government which had a dozen letters
of the State Government as to the subject matter; the
very clarification sought for by the Central Government
and furnished by the State Government demonstrates due
application of mind; even otherwise, the constitutional
functions like the assenting should be presumed to have
been done with due application of mind and in accordance
with law. In support of these rival contentions, they
banked upon certain rulings.
(b) Petitioners' contention as to invalidity of
Presidential Assent granted under Article 254(2) of the
Constitution is essentially structured on a premise that the
subject matter of impugned Act relates to Entries 6 & 7,
List III, with which the 1882 Act & the 1908 Act are
relatable. However, as already discussed above, the
impugned Act is relatable exclusively to Entry 18, List II.
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This court finds it difficult to agree with Petitioners' plea as
to there being any repugnancy of the kind because:
Firstly, the impugned Act provides for 'compulsive transfer'
by the competent authority in favour of
mulagenidar/volamulagenidar by order to be made under
Sec. 3 read with Sec. 8. Thus, not only there is no
essential element of choice with the muldars but transfer
happens despite their dissent/objection. The 1882 Act,
subject to certain exceptions, does not apply to the cases
of transfer by operation of law; the very Preamble to the
said Act employs the expression 'law relating to the
transfer of property by act of parties'. Sec. 5 of the Act
reads: '...transfer of property means an act by which a
living person conveys property... to one or more other
living persons;..." Added, Sec. 2(d) also excludes cases of
transfer of property by operation of law vide BHARAT
PETROLEUM CORPORATION LIMITED vs. P.KESAVAN19
wherein, it is observed:
"As would appear from the preamble of
the Transfer of Property Act, the same applies
(2004) 9 SCC 772
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only to transfer by act of parties. A transfer by
operation of law is not validated or invalidated
by anything contained in the Act. A transfer
which takes place by operation of law, therefore,
need not meet the requirement of the provisions
of the Transfer of Property Act or Indian
Registration Act."
(c) There is force in the submission of Mr.A.G.Holla
that extinguishment of landlords' interest in the subject
property and simultaneous enlargement of lessee's to full
ownership that happen by operation of law, may not
amount to 'transfer' even in the generic sense of the term.
It is more so in view of very distinct scheme of the
impugned Act which unlike in several kindred statutes
does not provide for vesting of the property in the State
first and then conveying it to the intended beneficiaries.
Further, what is payable to the landlord is not the price as
understood in common parlance but the compensation
whose determination has nothing to do with the market
value, notwithstanding its normative determination. On
the same analogy, the 1908 Act too essentially focuses on
the transfer of property by 'act of parties' and not by
operation of law, regardless of dissent of its owner. This
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Act arguably has the trappings of fiscal legislation, does
not make it any the less adjective law vis-a-vis the 1882
Act. Section 90 of the 1908 Act, inter alia exempts
documents executed by the State effecting transfer of
property be it realty or chattel. Whatever reasons for
treating the subject matter of impugned Act as not relating
to transfer of property stricto sensu, as discussed in the
immediately preceding sub-paragraph, would hold good
for this Act, as well.
(d) There is a wealth of material that repels
Petitioners' contention of repugnancy and as to non-
application of mind by the President to the material on
record:
(i) The letter correspondence between
legislative department of the State and office of
the President reveals that the impugned Act
relates to Entry 18, List II [wrongly printed in
this Bill as List III]. In fact, the very Bill itself
mentions this. When President's office vide letter
dated 18.4.2011, had sought for clarification, the
State Govt., vide letter dated 2.5.2011
specifically stated "...the subject matter of the
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Bill falls under entry 18 of list II of the Seventh
Schedule to the Constitution of India which
relate to land... no other Articles of Constitution
of India are attracted to any of the provisions of
the Bill, other than those already mentioned in
letter dated 23.3.2011". This letter of March also
states '...The subject matter of the Bill falls under
entry 18 of list II of the Seventh Schedule to the
Constitution of India.' It further reads
'Accordingly, His Excellency, the Governor of
Karnataka is pleased to reserve the said Bill for
the consideration of the President under Article
200 as required by clause (2) of Article 254 and
Article 300A of the Constitution of India.' This
was on the assumption of the Government
Officials (not of Governor) that clause 3 of the
Bill which provides for conferment of ownership
was repugnant to the provisions of 1882 Act and
clause 8 which provides for issuance of
ownership certificate to the
mulagenidars/volamulagenidars, was repugnant
to the provisions of 1908 Act, even when there
was no question of such repugnancy. It is
pertinent to note that the Principal Secretary to
the Governor on 21.2.2011 only stated "H.E. the
Governor has reserved the Bill for the
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consideration of the President" and nothing was
mentioned about Article 254. It is only from the
State Government's letter dated 23.03.2011 that
was addressed to the Central Government that
the word 'repugnant', and Articles 200, 254(2) &
300A are forthcoming. In other eight letters
dated 2/7.05.2011, 18.06.2011, 19.07.2011,
26.08.2011, 24.10.2011, 22.11.2011,
23.12.2011 & 19.01.2012, there is not even a
whisper as to repugnancy, Article 200, Article
254(2), Article 300A or Article 304(b).
(ii) Of the above letters, one dated
7.5.2011, only rectifies Entry 18 of List III as
Entry 18 of List II, by way of reply to the
clarification sought for by the Central
Government vide letter dated 18.04.2011. In
view of this, court has to assume that the
Governor had reserved the Bill in his discretion
under Article 200 and not under Article 254(2),
more particularly when no material is placed on
record that these letters were prepared after
drawing advertence of the office of Governor.
Noticeably, each of these letters enlists the
offices to which copies thereof were
marked/mailed and that the office of Governor is
conspicuously absent therein.
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(iii) The expression 'reserves for consideration'
employed in Article 200 and an almost identical term
'reserved for consideration' occuring in Article 201
are of significant import. In D.D.BASU's 'Shorter
Constitution of India'20, it is aptly stated:
"Reserved for consideration.-The words
'reserved for consideration' indicate that
there should be active application of mind
by the President to the repugnancy pointed
out between the proposed State law and
the earlier law made by Parliament and
necessity of having such a law, in the facts
and circumstances of the matter, which is
repugnant to a law enacted by Parliament.
The word 'consideration' would manifest
that after careful thinking over and due to
application of mind regarding the necessity
of having State law which is repugnant to
the law made by Parliament, the President
may grant assent. This aspect is further
reaffirmed by the use of word 'assent' in
Art.254(2) which implies knowledge of the
President to the repugnancy between the
State law and the earlier law made by
Parliament on the same subject-matter and
the reasons for grant of such assent. The
word 'assent' would mean in the context as
an express agreement of mind to what is
proposed by the State. It indicates the
affirmative action of the proposal made by
the State for having law repugnant to the
earlier law made by Parliament. It would
amount to accepting or conceding and
D.D.Basu, 'Shorter Constitution Of India' 15th Edition, Lexis
Nexis, 1399-1400, (2019)
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concurring to the demand made by the
State for such law. This cannot be done
without consideration of the relevant
material."
In KAISAR-I-HIND (P) LTD vs. NATIONAL TEXTILE
CORPORATION21 supra, at paragraph 73, the Apex
Court echoed the same as under:
'The assent of the President envisaged
under Article 254(2) is neither an idle or
empty formality, nor an automatic event,
necessitated or to be given for the mere
asking, in whatever form or manner and
whether specific, vague, general of
indefinite - in the terms sought for the
claim that once sought and obtained as well
as published, a curtain or vell is drawn, to
preclude any probe or contention for
consideration that what was sought and
obtained was not really what should and
ought to have been, to claim the protection
envisaged under Clause (2) in respect of a
particular State law vis-a-vis or with
reference to any particular or specified law
on the same subject made by the
Parliament or an existing law, in force. The
repugnancy envisaged under Clause (1) or
enabled under Clause (2) to get excepted
from under the protective coverage of the
assent obtained from the President, is such
that there is a legislation or legislative
provision(s), covering and operating on the
same field or identical subject matter made
by both the Union and the State, both of
them being competent to enact in respect
of the same subject matter or the
2002 (8) SCC 182
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legislative field, but the legislation by the
Parliament has come to occupy the entire
field...'
(iv) The substantive part of Article 200 vests
discretion in the Governor to Assent to or reserve the
Bill for the consideration of President. Apparently, it
is his individual discretion vide M/S HOECHST
PHARMACEUTICALS LIMITED vs. STATE OF BIHAR22,
unlike in other matters where the Governor acts on
the aid and advice of the State Government as
discussed in MARU RAM vs. UNION OF INDIA23. This
court is not sure if such a discretion avails to the
Governor when it comes to his reserving the Bill for
the consideration of President under Article 254(2) if
the government so requests him on account of
repugnancy. The Bill itself having mentioned Entry
18, List II specifically, one can safely assume that
the Governor had reserved the same for the
consideration of President in his individual discretion
under Article 200, and the matter did not travel to
the precincts of Article 254(2), State Official's letter
dated 23.3.2011 to the contra, notwithstanding.
(e) It is also relevant to state that a Bill passed by
the State Legislature may be reserved for consideration of
(1983) 4 SCC 45
(1981) 1 SCC 107
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the President inter alia under Article 200, Article 254(2),
Article 31A or Article 31C of the Constitution. The process
of consideration that takes place at the hands of the
President i.e., the Central Government, arguably varies in
degrees though not in kind, depending upon the provision
under which such Assent has been sought for and granted.
If there was no repugnancy question, why at all the Bill
was referred by the Governor for the Assent of President,
is answered in the immediately preceding paragraph.
There is yet another perspective to the same. A Full Bench
of Andhra Pradesh High Court in ANDHRA PRADESH STEEL
WOOL INDUSTRIES COOPERATIVE SOCIETY LIMITED vs.
LABOUR COURT24, at paragraph 15, has observed as
under:
"15. We do not find any substance in the
argument that the very fact that the President's
assent was sought and obtained, established
beyond doubt that there was repugnancy
between the two legislations. There is no
provision in the Constitution which lays down
that a Bill which has been assented to by the
President would be ineffective as an Act if there
was no compelling necessity for the Governor to
reserve it for the assent of the President. There
AIR 1987 AP 182
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might be a genuine doubt about the
applicability of any of the provisions of the
Constitution which required the assent of the
President to be given to it in order that it might
be effective as an Act. If the Governor in
exercise of his discretion decided to reserve the
Bill in such a situation for consideration of the
President to avoid any future complication, that
act could not be put forward as a proof of the
existence of repugancy between the
parliamentary enactment and the Bill which had
been reserved for the assent of the President."
(f) Such precaution of securing Presidential Assent
was warranted because of arguable confusion owing to
some passing observation in INDU BHUSHAN, supra, as to
which item of which Legislative List, the subject matter of
the impugned Act in essence was falling into. Bifurcation of
legislative powers is not a thing of ease since the
legislative power is one thing and the subject matter upon
which it is exercised is another. Entries in several
Legislative Lists have blurred contours. The legislative
items at times keep their arms on each other's shoulders,
like row houses leaning on each other. Entry 18 in List II
and Entries 6 & 7 in List III may arguably have a common
penumbra. In this regard, if conflict arises, it can be
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likened to the case of boundary dispute; such a dispute is
not as to the existence of boundary but only as to where
the blurred boundary lines lie. It is not uncommon for the
Governors to reserve certain Bills in their discretion under
Article 200 for the consideration of President, if there is a
genuine doubt as to repugnancy. What the Apex Court
observed in HOESCHT PHARMACEUTICALS, supra, at
paragraph 86 being instructive is reproduced:
"There may also be a Bill passed by the State
Legislature where there may be a genuine
doubt about the applicability of any of the
provisions of the Constitution which require the
assent of the President to be given to it in order
that it may be effective as an Act. In such a
case, it is for the Governor to exercise his
discretion and to decide whether he should
assent to the Bill or should reserve it for
consideration of the President to avoid any
future complication. Even if it ultimately turns
out that there was no necessity for the
Governor to have reserved a Bill for the
consideration of the President, still he having
done so and obtained the assent of the
President, the Act so passed cannot be held to
be unconstitutional on the ground of want of
proper assent. This aspect of the matter, as the
law now stands, is not open to scrutiny by the
courts..."
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In KAISAR-I-HIND, supra, at paragraph 73, it is
pertinently observed:
"...The repugnancy envisaged under
Clause (1) or enabled under Clause (2) to get
excepted from under the protective coverage of
the assent obtained from the President, is such
that there is a legislation or legislative
provision(s), covering and operating on the
same field or identical subject matter made by
both the Union and the State, both of them
being competent to enact in respect of the
same subject matter or the legislative field, but
the legislation by the Parliament has come to
occupy the entire field..."
Article 254(2) deals with the question of supremacy and
not of legislative competence. In respect of conflicting
legislation under the Concurrent List, if the State
legislation has received the assent of the President, it will
prevail over the Central legislation in that State. The
article does not provide that the State legislation without
the assent of the President is incompetent vide ITC LTD
vs. AGRICULTURAL PRODUCE MARKET COMMITTEE25.
Merely because a law is assented to by the President, at
times by abundant caution, one cannot hastily jump to the
conclusion that such a law invariably fits into some or the
(2002) 9 SCC 232
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other Entry in List III only. Otherwise, one would be
putting the cart before the horse.
(g) A perusal of copies of these letters produced by
both the sides leaves no manner of doubt that due
consideration of the Bill took place at the hands of
President followed by his Assent. No case is made out as
to the non-application of mind. Allegations of non-
application of mind against high constitutional
functionaries discharging constitutional functions
associated with legislative process, cannot be entertained
as a matter of course. One has to keep in mind the
constitutional dignity of such functionaries, before taking
up contentions of the kind. There may be qualitative
difference between Assent of the President to a Bill
reserved by the Governor in his discretion under Article
200 and to the one reserved as compulsorily required
under the second Proviso to Article 200 or Article 254(2).
However, in the context of case, this aspect of the matter
does not assume significance, especially when the subject
matter of the impugned Act relates to Entry 18, List II and
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apparently, not to Entries 6 & 7, List III and as a
consequence, Article 254(2) stricto sensu was not required
to be invoked. The Bill passed by the State Legislature
having been reserved by the Governor on 20.2.2011 for
the consideration of President under Article 200 of the
Constitution, has secured Assent thereto under Article 201
on 30.7.2012. The President wrote "I assent to this Bill".
There was letter correspondence between the State
Government and the Central Government that inter alia
mentioned Article 254(2), on the assumption that the
impugned Act was in derogation of 1882 Act & 1908 Act.
As already mentioned above, none of these letters was
written with the concurrence of the Governor, nor any
copy thereof was marked to his office.
(h) Added, the Certificate issued by the State
Government through its Secretary, Department of
Parliamentary Affairs, as a matter of protocol in the
proforma as prescribed in Letter No.19/23/17/JUDL dated
3.8.1972 of the Ministry of Home Affairs of Government of
India, mentioned no Article under which Assent of the
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President was solicited. This is immensely significant.
There being no repugnancy, as already observed, this
Assent of the President cannot be referred to Article
254(2), stricto sensu. Further, the entire Bill as passed by
the State Legislature was sent to the President, is not in
dispute. That being the position, it can be safely assumed
that the Assent of the President has been given under
Article 201 in lieu of Assent of the Governor under Article
200 and resultantly, the Bill became a choate enactment.
It is now well settled position of law that a Bill passed by a
State Assembly becomes law if the Governor gives his
Assent to it or if, having been reserved by the Governor
for consideration of the President under Article 200, it is
assented to by the President under Article 201. Therefore,
Petitioners' contention that in the absence of any question
of repugnancy, the impugned Act being relatable only to
Entry 18, List II, Assent of the President secured under
Article 254(2) is no Assent and therefore, there is no
choate statute, is liable to be rejected.
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In view of the above discussion, the second
question as to the argued infirmity in the Presidential
Assent is answered in the negative.
IX. AS TO PROTECTION OF THE IMPUGNED
ACT UNDER ARTICLE 31C OF THE CONSTITUTION
AND CONSEQUENT NON-INVOCABILITY OF ARTICLE
14 FOR ITS INVALIDATION:
(a) Mr.Uday Holla & Mr.Abhinav Ramanand
appearing for the Petitioners sought to falter the impugned
Act on the grounds of 'manifest arbitrariness' in the light
of SHAYARA BANO vs. UNION OF INDIA26, and 'massive
unjustness'. Mr.B.V.Acharya & Mr.A.G.Holla per contra
repelled the contention and its invocation contending that
the impugned Act is made to effectuate the Directive
Principles enshrining in Article 39(b) & (c) of the
Constitution and therefore, it enjoys protection under
proviso to Article 31C, since President has accorded Assent
in general terms. They read aloud what the Apex Court
said in SANJEEV COKE MANUFACTURING CO. vs. BHARAT
COKING COAL LIMITED 27:
(2017) 9 SCC 1
AIR 1983 SC 239
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"When Article 31-C comes in, Article 14 goes
out. There is no scope for bringing in Article 14
by a side wind as it were, that is, by equating
the rule of equality before the law of Article 14
with the broad egalitarianism of Article 39(b)
or by treating the principle of Article 14, as
included in the principle of Article 39(b)..."
They also quoted what TINSUKHIA ELECTRIC SUPPLY CO.
LTD VS STATE OF ASSAM28 observed:
"...Articles 31-A and 31-C were significant
Constitutional milestones in the harnessing and
socialisation of the concept of the right to
property which, in its laissez-faire trappings,
became an unruly horse. Article 31-C in effect
and substance is to urban property what Article
31-A is to agricultural-property..."
Mr.Uday Holla countered them by saying that SANJEEV
COKE to the extent of being in variance with MINERVA
MILLS, is per incuriam and therefore, impugned Act cannot
seek refuge under its umbrella. He also argued that the
added provisions of Article 31C vide 42nd Amendment Act,
1976 which extended protection to the statutes made to
give effect to any of the Directive Principles in Part IV
having been struck down in MINERVA MILLS, the original
(1989) 3 SCC 709
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position therein is restored and that does not extend
protection to the impugned Act under Article 31C.
(b) A question arises as to whether the said Assent
of the President can be construed as the one inter alia
referable to the proviso to Article 31C so that the
impugned Act would get insulation from attack on the
grounds that traditionally fall under Article 14 of the
Constitution. The significance of Assent and the sanctity of
assenting process have been discussed by the Apex Court
in KAISAR-I-HIND, supra, at paragraph 77, as under:
"The assent of the President or the Governor,
as the case may be, is considered to be part of
the legislative process only for the limited
purpose that the legislative process is
incomplete without them for enacting a law and
in the absence of the assent the Bill passed
could not be considered to be an Act or a piece
of legislation, effective and enforceable and not
to extend the immunity in respect of procedural
formalities to be observed inside the respective
houses and certification by the presiding officer
concerned of their due compliance, to areas or
acts outside the besides those formalities. The
powers actually exercised by the President, at
any rate under Articles 31A, 31C, 254(2) and
304(b) is a special constituent power vested
with the Head of the Union, as the protector
and defender of the Constitution and safety
valve to safeguard the Fundamental Right of
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citizens and Federal structure of the country's
policy as adopted in the Constitution. A
genuine, real and effective consideration would
depend upon specific and sufficient information
being provided to him inviting, at any rate, his
attention to the Central law with which the
State law is considered or apprehended to be
repugnant, and in the absence of any effort or
exercise shown to have been undertaken, when
questioned before courts, the State law cannot
be permitted or allowed to have predominance
or overriding effect over that Central enactment
of the Parliament to which no specific reference
of the President at all has been invited to. This,
in my view, is a must and an essential
requirement to be satisfied; in the absence of
which the 'consideration' claimed would be one
in vacuum and really oblivious to the hoard of
Legislations falling under the Concurrent List in
force in the country and enacted by the
Parliament. To uphold as valid the claim for any
such blanket assent or all round predominance
over any and every such law - whether brought
to the notice of the President or not, would
amount to legitimization of what was not even
in the contemplation or consideration on the
basis of some assumed 'consideration'..."
(c) There is absolutely no material placed on record
from the side of Respondents to indicate that the
consideration of the Bill at the hands of the President was
sought for under the Proviso to Article 31C or that the
President having otherwise adverted to that aspect of the
matter has accorded the Assent. In none of the letters
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(i.e., nine from the State Government & one from the
Central Government) that constituted the official
correspondence, there is any whisper as to Article 31C nor
to Article 39(b) & (c). The expression 'general term'
occurring in RAJIV SARIN vs. STATE OF UTTARAKHAND29
cannot be construed out of the context. It has to be
understood keeping in view the broad theme of the said
decision. That being the position, the contention that the
subject Assent of the President arguably granted in
general terms could be effective for all purposes including
the Proviso to Article 31C and therefore, the impugned Act
is insulated from challenge on the grounds that normally
fall under Article 14, cannot be countenanced. An
argument to the contrary would undermine the
significance of the Assent and its processual sanctity which
the Apex Court has emphasized several times. Courts have
to keep in mind that the provisions of the Constitution
cannot be construed as those of a Cattle Trespass Act.
AIR 2011 SC 3081
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(d) The other contention of Mr.Uday Holla as to
SANJEEV COKE arguably being in variance with MINERVA
MILLS, is per incuriam and therefore, the impugned Act
does not get any protection in terms of Proviso to Article
31C, does not merit examination, because: Firstly the
impugned Act is made to give effect to the Directive
Principles in Articles 39(b) & (c) which figured in the
original text of Article 31C and continue till date; if that be
so, one need not see what happened to 42nd Amendment
of 1976 in MINERVA MILLS. Secondly, whether such a
protection extends to the laws made to give effect to all
other Directive Principles contained in Part IV is being
examined by a Bench of Nine Judges in PROPERTY
OWNERS ASSOCIATION vs. STATE OF MAHARASHTRA30.
Thirdly, as already discussed above, no Assent of the
President is secured to the impugned Act in terms of
proviso to Article 31C. Fourthly, SANJEEV COKE, supra,
having adverted to MINERVA MILLS, extends protection to
the statutes that are made to give effect to any of the
(2013) 7 SCC 522
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Directive Principles in Part IV of the Constitution, of course
subject to Assent under the Proviso to Article 31C. Even in
the latest decision in UNION OF INDIA vs. TARSEEM
SINGH31, the view of SANJEEV COKE is not diluted.
D.D.BASU, supra, at page 539, writes:
"5. But the decision of the majority in the
Minerva Mills case to the effect that the 1976
amendment, extending the shield of Art. 31C to
all the Directives included in Part IV was
unconstitutional, so that Art. 31C is confined to
its pre-1976 position, namely, protecting only
laws implementing Art. 39(b)-(c), has not yet
been overruled by any larger Bench."
In view of the above, the third question as to Assent of
the President being in general terms can be construed as
the one given under Proviso to Article 31C and
therefore, challenge to the impugned Act under Article
14 does not lie, is answered in the negative.
X. AS TO IMPUGNED ACT DOING RANK
DISCRIMINATION & THEREFORE, FALLING FOUL OF
ARTICLE 14 OF THE CONSTITUTION:
(a) Learned Sr. Advocate Mr.Uday Holla
vehemently argued that the impugned Act suffers from the
vice of a blatant discrimination and therefore, the same is
liable to be struck down under Article 14. He submitted
(2019) 9 SCC 304
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that all leases of immovable property constitute one
homogenous class and therefore, singling out only leases
in perpetuity for a detrimental treatment offends the rule
of reasonable classification. He highlighted that when
leases of 99 years and 999 years are permissible and do
obtain all over the country, there is no logic in putting an
end to mulagenies, artificially treating them as a class
apart. M/s B.V.Acharya & A.G.Holla appearing for the
Respondents per contra contended that the impugned Act
having been made to give effect to the Directive Principle
specified in clauses (b) & (c) of Article 39, the State has
done the classification of the leases on normative basis in
its legislative wisdom and therefore, it cannot be struck
down as being discriminatory. Mr.Uday Holla disputed the
'argument of nexus' between the Act & Article 39
contending that there is not even a whisper in the text of
impugned Act about this Article. Mr.Acharya rightly
retorted that there is no such requirement in the
Legislative Practice and that even otherwise, nexus can be
ascertained from the text & context of such a statute.
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(b) Article 14 of the Constitution which guarantees
equal protection of the laws and equality before the law
does not prohibit reasonable classification founded on the
basis of intelligible differentia which bears a rational nexus
with the object sought to be achieved by the legislation.
When a statute is challenged as being violative of Article
14, it is necessary in the first place to ascertain its
underlying policy and the object which it seeks to achieve;
thereafter, the Court has to apply the dual test namely,
whether the classification is rational and based upon an
intelligible differentia which distinguished the persons or
things that are grouped together from others left out and
whether the basis of differentiation has rational nexus with
its avowed policy & objects. Added, Article 14 does not
insist that the legislative classification should be
scientifically perfect or logically complete, since the
legislature & the judiciary are not doing their exercise in
the realm of theoretical physics. The legislature in its
wisdom has chosen mulagenidars/volamulagenidars for a
protective discrimination keeping in view the enormous
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difficulty being faced by them despite holding the subject
properties on the basis of lease in perpetuity. All other
leases are left out by the legislature in its wisdom and
court cannot falter the same, when these lessees
constitute a separate class. Which group of people being
distinct requires preferential or protective discrimination,
again is a matter falling within the domain of legislature
which understands the difficulty of its people and knows
how it should be tackled. The Apex Court in RAM KRISHNA
DALMIA vs. JUSTICE S.R.TENDOLKAR32 observed as
under:
"...that there is always a presumption in favour of
the constitutionality of an enactment and the
burden is upon him who attacks it to show that
there has been a clear transgression of the
constitutional principles; that it must be
presumed that the legislature understands and
correctly appreciates the need of its own people,
that its laws are directed to problems made
manifest by experience and that its
discriminations are based on adequate grounds;
that the legislature is free to recognise degrees
of harm and may confine its restrictions to those
cases where the need is deemed to be the
clearest..."
(1959) SCR 279
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An enactment cannot be struck down on the ground that
Court thinks it to be unwise or unwarranted. Legislatures
being composed of the elected representatives of the
people are supposed to know what is good for the
citizenry.
(c) The impugned Act conferring ownership on the
mulagenidars/volamulagenidars is to non-agricultural
property what the agrarian laws which confer occupancy
on the tillers of the land or abolish zamindari is to the
agricultural land, the difference in modalities of
accomplishment of their objects not being relevant. Sub-
section (4) of section 5 of the impugned Act provides for
the conferment of ownership on
mulagenidar/volamulagenidar even when his application in
Form 7 filed under Section 48A of the Karnataka Land
Reforms Act, 1961 has been rejected by the Land Tribunal
on the ground that the land is not agricultural. Mr.Uday
Holla's reliance on the Division Bench decision of Kerala
High Court in RATNA BAI vs. STATE OF KERALA33 does not
ILR 2004 (1) KER 124
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come to his aid: Firstly, it did not relate to 'estate' as
defined under Article 31A and therefore, did not enjoy its
protection; secondly, it simply intended to give property of
one to another without any real compensation; thirdly, it
was apparently arbitrary in taking possession of the
property of poor persons that too with a clock running
reverse by three decades. That is not the case here and
thus, the fact matrix of the case at hands is miles away. It
hardly needs to be stated that a decision is an authority
for a proposition that it actually lays down in a given fact
matrix and not for all that which logically follows from
what has been laid down vide QUINN vs. LEATHEM34. The
said decision is affirmed by the Apex Court in
S.L.P.No.2018-2042/2005 dismissed on 28.2.2005, is of
no consequence. The aspects of compensation are dealt
with separately infra wherein, Petitioners' argument as to
compensation being illusory, is repelled.
(1901) AC 495.
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(d) The objects & reasons specifically mention why
the Act is made and what it seeks to achieve. The
Preambular text of the Act is as under:
"Whereas some types of mulageni leases in
respect of non-agricultural lands mainly house
sites are mostly prevailing in Dakshina Kannada
and Udupi districts; Whereas, for various reasons
the mulgar's or intermediary's right to recover
possession being a remote possibility, the only
right available is to receive annual rent;
Whereas, mulgenidars or volamulgenidars have
already invested considerable amount by putting
up structures, and improvements to the property
either residential or commercial, but are unable
to enjoy the holding to its full extent, on account
of reluctance of mulgar or intermediary to give
consent for putting up structures or alienation of
interest of mulgenidars or volamulgenidars;
Whereas, the prevailing system of mulgeni lease
is neither advantageous to mulgenidars or
volamulagendiars nor really beneficial to mulgars
or intermediary, but on the other hand
differences between the two have given rise to
speculative transactions. Whereas, conferment of
ownership on mulagenidars or volamulagenidars
on their paying certain amount to mulgars or
intermediary in respect of conferment of their
rights and interests in the holdings will put an
end to multiplicity of litigation and eliminate
scope for vested interests to indulge in
speculative transactions and thus benefit
mulgars, intermediary, mulagenidars or
volamulgenidars; And whereas, for the purposes
hereinbefore stated, it is expedient in the public
interest to provide for conferment of ownership
on mulgenidars and volamulgenidars..."
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(e) The vehement submission of Mr.Uday Holla that
the very contents of Preamble are not true, and that the
legislature without any basis has assumed certain things
on the basis of which the impugned Act is enacted, is a bit
difficult to countenance. In English Legislative Practice,
ordinarily the Preamble to the legislation is not quoted in
the Parliament and therefore, is not treated as part of the
statute unlike in our Legislative Practice. A Preamble
unless inserted to a statute retrospectively is a key to
open the mind of a legislature. True it is that it has some
ideal elements and something in it may not be true too. 'A
Preamble cannot be used to control or qualify precise &
unambiguous language of the enactment' said Apex Court
in TRIBUVAN PRAKASH NAYYAR vs. UNION OF INDIA35.
The repeal of the preamble simplicitor will not affect the
construction of the statute36. As the House of Lords in A.G
(1969) 3 SCC 99
M.J. Goodman, D. Greenberg, 'Craies on Statute Law: A
Practitioner's Guide to the Nature, Process, Effect and
Interpretation of Legislation', 8th Edition, Sweet & Maxwell, 206
- 207, (2004)
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vs. H.R.H PRINCE ERNEST AUGUSTUS37 observed, there
may be no exact correspondence between Preamble and
the enactment. No judicial authority nor any juristic
opinion is cited at the Bar to the effect that a statute can
be struck down on the ground that what is stated in its
Preamble is demonstrably untrue or runs counter to its
avowed policy content. Mr.A.G.Holla is right in drawing
attention of the court to the observations in SARDAN
INDER SINGH vs. STATE OF RAJASTHAN38 wherein, at
latter part of paragraph 13, it is observed: "...We should
add that the petitioners sought to dispute the correctness
of the recitals in the preamble. This they clearly cannot do
vide observations of Holmes J. in Block v. Hirsh [1920]
256 U.S. 135..."
(f) Mr.Uday Holla's contention that mulageni leases
i.e., leases in perpetuity, do obtain all over the country in
general and in several regions of the State in particular, is
supported by a catena of decisions cited by him namely:
(1957) 1 All ER 49
AIR 1957 SC 510
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(i) mulageni in Sirsi town39; (ii) permanent tenancy in old
Mysore area40; (iii) grant of permanent lease in Delhi
Municipal area41; (iv) permanent lease of Connaught place
on perpetual basis42; and (v) perpetual lease of 'Srirangam
Mutt' properties43. However, his further contention that the
impugned Act detrimentally singling out the lessors of
mulageni lands in South Canara region is geographically
discriminatory, is bit difficult to countenance. The
impugned Act though initially made applicable to
Mangalore & Udupi Districts, can be extended by the
government vide notification, to other parts of the State.
The enabling provision in this regard i.e., sub-section (3)
of section 1 reads:
"The Provisions of this Act initially apply to the
Districts of Dakshina Kannada and Udupi. The
State Government may, by notification, extend
the application of the provisions of the Act to
other parts of the State."
AIR 1973 MYS 207
(1986) 2 KAR.LJ 146
AIR 1983 DEL 376
1998 DEL.LT 152
AIR 2005 MAD 129
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The impugned Act can be termed as a 'Conditional
Legislation' notion of which is not alien to jurisprudence,
world over. The Australian High Court speaking through
O'Connor J., in BAXTER vs. A.H.WAY44 observed as under:
"Legislation from the very earliest times, and
particularly in modern times has taken the form
of conditional legislation leaving it to some
specified authority to determine the
circumstances in which the law shall be applied,
or to what its operation shall be extended, or
the particular class of persons or goods to
which it shall be applied."
This view of the Foreign Court has been approved by our
Apex Court in EDWARD MILLS COMPANY vs. STATE OF
AJMER45. Hon'ble Justice Alok Aradhe who edited
G.P.Singh's PRINCIPLES OF STATUTORY
INTERPRETATION46, having referred to IN RE DELHI LAWS
ACT47 eruditely states as under:
"A distinction is said to exist between what is
called conditional legislation and delegated
legislation proper. In case of conditional
legislation, the legislation is complete in itself
(1909) 8 CLR 626
(1955) 1 SCR 735
G.P. Singh, 'Principles of Statutory Interpretation', 15th
Edition, Lexis Nexis, 12.2.2,738-38, (2021)
AIR 1951 SC 332
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but its operation is made to depend on
fulfillment of certain conditions and what is
delegated to an outside authority, is the power
to determine according to its own judgment
whether or not those conditions are fulfilled...
The distinction between the two exists in this
that whereas conditional legislation contains no
element of delegation of legislative power and
is, therefore, not open to attack on the ground
of excessive delegation, delegated legislation
proper does confer some legislative power on
some outside authority and is therefore open to
attack on the ground of excessive delegation..."
(g) All the above having been said, what the 46th
Law Commission Report had said about the introduction of
Article 31C assumes relevance:
""By introducing this clause (31-C),
Parliament is taking the first major and
significant step towards implementing two of the
Directive Principles enshrined in clause (b) and
(c) of Article 39 in Part IV of the Constitution,
and , in that sense, the clause under
consideration can be appropriately described as
historic. After it is adopted, Parliament will have
heralded a new era in the pursuit of the goal
placed before the nation by the Constitution to
establish social and economic justice in this
country... In the Directive Principles, however,
one finds an even clearer statement of the social
revolution. They aim at making the Indian
masses free in the positive sense, free from the
passivity engendered by- centuries of coercion
by society and by nature, free from the abject
physical conditions that had prevented them
from fulfilling their best selves."
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[This version of the Law Commission finds imprimatur in
RANGANATHA REDDY, supra].
In KESAVANANDA BHARATI vs. STATE OF KERALA48, at
pages 502-503, it is observed:
"Part IV of the Constitution is designed to bring
about the social and economic revolution that
remained to be fulfilled after independence. The
aim of the Constitution is not to guarantee
certain liberties to only a few of the citizens but
for all... To ignore Part IV is to ignore the
substance provided for in the Constitution, the
hopes held out to the Nation and the very ideals
on which our Constitution is built. Without
faithfully implementing the Directive Principles,
it is not possible to achieve the Welfare State
contemplated by the Constitution, a society like
ours steeped in poverty and ignorance
satisfying the minimum economic needs of
every citizen of this country. Any Government
which fails to fulfil the pledge taken under the
Constitution cannot be said to have been
faithful to the Constitution and to its
commitments..."
That being the position, while adjudging vires of a socio-
welfare legislation like the one at hands, the fact that it
has been made to give effect to one or the other
Constitutional Directives assumes some significance, even
(1973) 4 SCC 225
In view of the above, the fourth question as to the
impugned act being discriminatory, is liable to be voided
under Article 14, is answered in the negative.
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in the absence of Presidential Assent under the Proviso to
Article 31C.
XI. AS TO IMPUGNED ACT BEING MANIFESTLY
ARBITRARY & MASSIVELY UNJUST:
(a) Mr.Uday Holla vehemently argued that the
impugned Act suffers from a 'manifest arbitrariness' &
'massive unjustness' and therefore, is liable to be struck
down in terms of SHAYARA BANO, supra. He contended
that without ascertaining the socio-economic status of
muldars & mulagenidars, the legislature has brought about
the impugned Act, being swayed away by certain statistics
furnished by the officials despite their apparent falsity. He
presses into service the 'doctrine of proportionality'
contending that the arguable difficulties of the
mulagenidars would have been trimmed off by making
suitable provisions in the impugned Act itself like the one
that voids the restraint on alienation in absoluto.
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Employing an old English adage from John Wycliffe's
Select English Works (1380), he said, the Act provides for
'robbing Peter to pay Paul'. He also highlighted about
frugality of the compensation payable under the Act which
aspect will be dealt with in due course under a separate
heading. Lastly, he said that in the legislative history of
the State, there is no parallel to the Act in question.
Learned Sr. Advocates Mr.B.V.Acharya & A.G.Holla per
contra contended to the contrary and thereby, sought to
justify the impugned Act. They reiterated that Apex Court
decisions which broke new ground namely 'manifest
arbitrariness' for invalidation of statutes are simply per
incuriam, being contrary to half a decade of constitutional
jurisprudence.
(b) It has been a well settled position of law that
arbitrariness, being opposed to reasonableness, is an
antithesis to law. There cannot, however, be any exact
definition of arbitrariness neither can there be any strait-
jacket formula evolved therefor, since the same is
dependent on the varying facts and circumstances of each
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case. Arbitrary action is described as one that is irrational
and not based on sound reason or as one that is
unreasonable. Any decision, be it a simple administrative
decision or a policy decision, if taken without considering
the relevant facts, can only be termed as an arbitrary
decision and violative of the mandate of Art. 14 of the
Constitution. Actions of the State or its instrumentality
uninformed by reason, may amount to being arbitrary and
be liable to be questioned. Arbitrariness is contrary to rule
of law, equity, fair play and justice. In SHAYARA BANO,
the Apex Court delineated the idea of 'manifest
arbitrariness' with the following observations:
"Manifest arbitrariness, therefore, must be
something done by the legislature capriciously,
irrationally and/or without adequate
determining principle. Also, when something is
done which is excessive and disproportionate,
such legislation would be manifestly arbitrary.
We are, therefore, of the view that arbitrariness
in the sense of manifest arbitrariness as pointed
out by us above would apply to negate
legislation as well under Article 14".
Legislative action that is too disproportionate or excessive,
may suffer invalidation on the ground of 'manifest
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arbitrariness' under Article 14. Judge Aharon Barak of
Supreme Court of Israel in his book 'PROPORTIONALITY:
CONSTITUTIONAL RIGHTS AND THEIR LIMITATIONS',
succinctly delineates the doctrine as: "...It requires that a
rights-limiting measure should be pursuing a proper
purpose, through means that are suitable and necessary
for achieving that purpose and that there is a proper
balance between the importance of achieving that purpose
and the harm caused by limiting the right...". A Five Judge
Bench of the Apex Court in SHAYARA BANO, supra,
reiterated that 'manifest arbitrariness' avails as a ground
for invalidation of plenary legislation. That being the
position, this court rejects the contention that this decision
and other, are per incuriam. It is not that what the Apex
Court said is for the first time and in a sporadic way and
therefore, this decision lacks precedential value. Contra
contention of Mr.B.V.Acharya & Mr.A.G.Holla cannot be
accepted without offending the text of Article 141 of the
Constitution and the rudiments of law of precedent as
discussed in H.MUNISWAMY GOWDA, supra.
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(c) Manifest arbitrariness availing as a ground for
invalidation of a legislation is one thing and substantiation
of such a ground is another. Contention of the kind needs
to be substantiated by cogent material with which the
impugned Act is woven or by demonstrating that it brings
about massively unjust result which no legislature in any
circumstances would have intended, in the constitutional
scheme. Despite strenuous submission, counsel for the
Petitioners could not make out such a case, to say the
least. If tenants of agricultural lands can be conferred with
permanent occupancy/ownership under the agrarian
legislations like Sec. 48A of the Karnataka Land Reforms
Act, 1961, this court sees no reason or rhyme as to why
something of that kind cannot be done in respect of
urban/housing lands, so that the suffering tenants in
actual possession thereof get emancipation from the
clutches of landlords/lessors. Therefore, the argument of
'no parallel' does not merit acceptance. Even otherwise,
plenary power of legislation does not admit an argument
of the kind inasmuch as it is always open to the legislature
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to enact whatever measure it wants to and that the
exercise of such power is not controlled by availability or
non-availability of precedent or form of the kind. That is
how the legislative power conferred by the Constitution
becomes plenary in nature and restrictions de hors
constitutional jurisprudence are spurned in any civilized
jurisdictions. No ruling nor any authority to the contrary is
cited from the side of Petitioners. This Act is made
apparently to give effect to the Directive Principles
enshrined in Article 39(b) & (c), as widely interpreted by
the Apex Court in decisions that galore. What Krishna Iyer
J., eruditely said in RANGANATHA REDDY, supra, is
profitably reproduced:
"...The social philosophy of the Constitution
shapes creative judicial vision and orientation.
Our nation has, as its dynamic doctrine,,
economic democracy sans which political
democracy is chimerical. We say so because our
Constitution, in Parts III and IV and elsewhere,
ensouls such a value system and the debate in
this case puts precisely this soul in peril... Our
thesis is that the dialectics of social justice
should not be missed if the synthesis of Part III
and Part IV is to influence State action and
court pronouncements. Constitutional problems
cannot be studied in a socio-economic vacuum,
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since socio-cultural changes are the source of
the new values, and sloughing off old legal
thought is part of the process of the new
equity-loaded legality... The credal essence of
the Constitution consists in its Preamble,
Articles 38, 39 (b) and (c), 31 and the bunch of
Articles 31A, 31B and 31C... Our emphasis is on
abandoning formal legalistics or sterile
logomachy in assessing the vires of statutes
regulating vital economic areas, and adopting
instead a dynamic,, goal-based approach to
problems of constitutionality. It is right that the
rule of law enshrined in our Constitution must
and does reckon with the roaring current of
change which shifts our social values and
shrivels our feudal roots, invades our lives and
fashions our destiny... So we have to view the
impugned provisions from the vantage point of
socio-legal perception."
(d) The impugned Act intends to relieve the tenants
in actual possession by excluding all the intermediaries
from any interference whatsoever, so that they become
absolute owners of the subject properties and therefore,
are no longer subject to any form of feudalistic shackles at
the hands of 'landlords'. It hardly needs to be stated that
full ownership enables persons make optimum use of
properties. When nature of holding of a property,
agricultural or non-agricultural, undergoes statutory
change as a matter of State Policy, there will be some
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victimization which is inevitable. That is the price the
victims, if any, pay for being members of a civilized
society, that is opening up to the new constitutional order.
After all, it is not a case of acquisition sans compensation,
to brand the impugned measure as being massively
unjust. The Apex Court in JILU BHAI, supra which
Petitioners too banked upon observed at paragraph 47 as
under:
"It is accordingly clear that 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 standard 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 created 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 delegated power
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of command is means as of quasi-
governmental private control over the major
assets of a nation. Properly, thereby, is subject
to regulation. The directive principles enjoin the
State to reorganise the economic system by law
or administrative means and the Fundamental
rights are means to that end to make right to
life meaningful, equality of opportunity and of
status and dignity of person a reality...".
Mr.A.G.Holla appearing for the private Respondents is
right in telling the court that the legislative measure in
question would bolster the psyche of
mulagenidars/volamulagenidars and even such factors
lend legitimacy to legislative the actions of the State. In
support of this submission, he is more than justified in
banking upon STATE OF BIHAR vs. SIR KAMESHWAR
SINGH wherein, at concluding portion of paragraph 208, it
is observed as under:
"In my opinion, legislation which aims at
elevating the status of tenants by conferring
upon them the bhumidari rights to which status
the big zamindars have also been leveled down
cannot be said as wanting in public purposes in
a democratic State. It aims at destroying the
inferiority complex in a large number of citizens
of the State and giving them a status of
equality with their former lords and prevents
the accumulation of big tracts of land in the
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hands of a few individuals which is contrary to
the expressed intentions of the Constitution..."
Mr.Uday Holla's reliance on MANISH KUMAR vs. UNION OF
INDIA49 instead of supporting his case, adumbrates that of
his opponents. The Apex Court, in the said case reiterated
the rule of non-invocability of malice or capriciousness,
qua legislature. It also observed at paragraph 211 as
under:
"...It is well settled that a legislature which
has to deal with diverse problems arising out of
an infinite variety of human relations must, of
necessity, have the power of making special
laws to attain particulars objects; and for that
purpose it must have large powers of selection
or classification of persons and things upon
which such laws are to operate. Mere
differentiation or inequality of treatment does
not per se amount to discrimination within the
inhibition of the equal protection clause..."
(e) The vehement submission of Mr.Uday Holla that
the tenants in possession of the property could have been
relieved by making restrictive conditions of lease void,
appears attractive at a first blush. However, a deeper
examination thereof shows its demerits. Firstly, by what
measure difficulty of citizenry should be diminished is a
(2021) 5 SCC 1
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matter of legislative policy and judiciary as of necessity
has to show due deference to such decisions consistent
with the 'doctrine of separation of powers' which is
recognized as a Basic Feature of the Constitution vide
INDIRA NEHRU GANDHI vs. RAJ NARAIN50. Secondly, this
court is not sure if by voiding the restrictive conditions of
non-alienation or the like, the interference of the landlord
would be minimized. Measures of the kind are taken in the
accumulated wisdom of the legislatures and that cannot be
substituted by the views of Judges. Accepting Petitioners'
argument of the kind, would virtually amount to judiciary
evolving a policy much in variance with the one enacted
by the legislature in its domain. It hardly needs to be
stated that power of the State to change its policy from
time to time consistent with changing circumstances
cannot be subjected to judicial review even when the
changed policy deviated from pronouncements of the Apex
Court vide STATE OF PUNJAB vs. LUBHAYA BAGGA51.
AIR 1975 SC 2299
(1998) 4 SCC 117
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(f) Petitioners' contention as to impugned Act
being massively unjust, is not substantiated. It is not that
the impugned Act snatches away their possession &
enjoyment and put the property at the hands of
mulagenidars/volamulagenidars. It is tritely said:
'possession, is nine points of law'52. The lessees of
mulagenies have been possessing and enjoying the
properties since decades and many of them have put up
structures by investing money. Whatever development has
been made, does not ipso facto belong to muldars, who
will be paid compensation for only the land lost. After all,
law shuns concentration of material resources at the
hands of few. If distribution of these resources amongst
the needy is aimed at, the holders cannot complain
especially when the compensation is being paid. The
impugned legislative measure is fair both in substance and
procedure. The contention of the kind as advanced by the
Petitioners can be answered also by adverting to what an
G.W.Keeton, 'The Elementary Principles of Jurisprudence' 2nd
Edition, Chapter XV, (1949)
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acclaimed American jurist T.M.Cooley53 [1824-1898]
wrote. The same is profitably reproduced:
"The rule of law upon this subject appears
to be, that, except where the constitution has
imposed limits upon the legislative power, it
must be considered as practically absolute,
whether it operate according to natural justice or
not in any particular case. The courts are not the
guardians of the rights of the people of the
State, unless those rights are secured by some
constitutional provision which comes within the
judicial cognizance. The remedy for unwise or
oppressive legislation, within constitutional
bounds, is by an appeal to the justice and
patriotism of the representatives of the people. If
this fail, the people in their sovereign capacity
can correct the evil; but courts cannot assume
their rights. The judiciary can only arrest the
execution of a statute when it conflicts with the
constitution. It cannot run a race of opinions
upon points of right, reason, and expediency
with the law-making power..."
In view of the above, the fifth question, as to the
impugned Act being manifestly arbitrary and
massively unjust, is liable to be struck down as
violating Article 14 of the Constitution, is answered in
the negative.
XII. AS TO IMPUGNED ACT PROVIDING FOR
ACQUISITION OF PROPERTY SANS PUBLIC PURPOSE
AND THEREFORE VIOLATIVE OF ARTICLE 300A OF
THE CONSTITUTION:
Thomas M. Cooley, 'A Treatise on the Constitutional
Limitations', 168-169 (1868)
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(a) Mr.Uday Holla, Mr.Keshav Bhat, Mr.Abhinav
Ramanand & Mr.Ravindra Kamath, learned Sr. Advocates
vehemently argued that notwithstanding relegation of
right to property from Part III to Part XII, it enjoys the
constitutional guarantee as a human right/basic right vide
STATE OF HARYANA vs. MUKESH KUMAR54; public purpose
& just compensation though not textually prescribed, they
are indispensible components of valid acquisition of
property under Article 300A; that being the position, by a
stroke of legislative pen, the subject properties would not
have been snatched away from the muldars and handed to
mulagenidars by paying illusory compensation that is
determinable on irrelevant principles, when over the
decades, rupee value has slided abysmally low. Mr.Uday
Holla argued that the official number of mulagenidars
being less than muldars, the pleaded public purpose is
liable to be brushed aside; viewed from any angle, the
impugned Act cannot be sustained on the touchstone of
doctrine of Basic Structure. Learned Sr. Advocates
(2011) 10 SCC 404
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Mr.B.V.Acharya & Mr.A.G.Holla controverted these
submissions contending that the Act is made for public
purpose; the compensation payable thereunder is
determinable & payable thereunder, is normative &
reasonable; Petitioners argument as to sliding rupee value
is irrelevant; in a social welfare legislation, acquisition of
private property for public purpose even sans payment of
any compensation, is permissible vide K.T.PLANTATION
PVT. LTD vs. STATE OF KARNATAKA55; strictly speaking,
Article 300A is not invocable since impugned Act is not a
case of acquisition of property. They too cited certain
decisions.
(b) The terms 'public purpose' & 'public interest'
that are at times interchangeably employed in legislative
instruments and executive decisions do not have fixed
contours. The very concept is of variable import. The Apex
Court in KAMESHWAR SINGH, supra, paragraphs 208 &
210:
"...The expression 'public purpose' is not capable
of a precise definition and has not a rigid
(2011) 9 SCC 1
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meaning. It can only be defined by a process of
judicial inclusion and exclusion. In other words,
the definition of the expression is elastic and
takes its colour from the statute from which it
occurs, the concept varying with time and
society and its needs... In my opinion, the
contentions raised by Dr. Ambedkar, though
interesting, are not sound because they are
based on the assumption that the concept of
public purpose is a rigid concept and has a
settled meaning, Dr. Ambedkar is right in saying
that in the concept of public purpose there is a
negative element in that no private interest will
be created in the property acquired
compulsorily; in other words, property of A
cannot be acquired to be given to B of his own
private purpose and that there is a positive
element in the concept that the property taken
must be for public benefit...."
An acclaimed jurist Dr.D.D.Basu56 having surveyed a
catena of decisions has succinctly stated the legal position
in the following words:
"Public purpose, which is part of the concept of
eminent domain, is a condition precedent for
invoking Article 300A of the Constitution and
therefore a person can be deprived of his
property by the legislature only for a public
purpose. The question whether the purpose is
primarily public or private, however, has to be
decided by the Legislature. It is primarily for
the State to decide whether for acquiring land
there exists a "public purpose" or not. Where
D.D.Basu, 'Shorter Constitution Of India' 15th Edition, Lexis
Nexis, 1517-1518, (2019)
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such power of the State is exercised mala fide
or for collateral purposes or the purported
action is de hors the Act, irrational or otherwise
unreasonable, or the so-called purpose is "no
public purpose" at all and fraud on the Statute
is apparent, a writ Court can interfere under
Arts. 32 and 226 of the Constitution, but except
in such cases, the declaration of public purpose
made by the Government is not subject to
judicial review. The Court while exercising
powers under Arts. 32, 226 or 136 of the
Constitution cannot be substitute its own
judgement for the judgement of the
Government, as to what constitutes public
purpose..."
To the above needs to be superadded that when it comes
to legislative decision as to public purpose, whether
articulate or inarticulate, the scope of its scrutiny in writ
jurisdiction is further diminished consistent with the
doctrine of separation of powers. In K.T.PLANTATION, at
paragraph 92, it is observed:
"Our Constitution makers were greatly
influenced by the Western doctrine of eminent
domain when they drafted the Indian
Constitution and incorporated the right to
property as a Fundamental Right in Article
19(1)(f), and the element of public purpose and
compensation in Articles 31(2). Of late, it was
felt that some of the principles laid down in the
Directive Principles of State Policy, which had
its influence in the governance of the country,
would not be achieved if those articles were
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literally interpreted and applied. The Directive
Principles of the state policy lay down the
fundamental principles for the governance of
the country, and through those principles, the
state is directed to secure that the ownership
and control of the material resources of the
community are so distributed as best to sub-
serve the common good and that the operation
of the economic system does not result in the
concentration of wealth and means of
production to the common detriment. Further, it
was also noticed that the fundamental rights
are not absolute but subject to law of
reasonable restrictions in the interest of the
general public to achieve the above objectives
specially to eliminate Zamindari system..."
(c) In the light of delineation of this aspect of law
as above, let me examine if the impugned Act is
structured on public purpose: Firstly, the Act intends to
address the difficulties of mulagenidars/volamulagenidars
who, because of restrictive clauses in the lease such as
non-alienation, non-development, etc., are put to massive
disadvantage; they are not in a position to exploit the
leasehold properties to their fullest potential, despite
holding the same in eternity. As already mentioned above,
the muldars & intermediaries were taking undue
advantage of servient position of these persons by denying
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permission for alienation or development of the holdings;
at times, they were requiring them to pay exorbitant
monies for securing such permission; the persons who
apparently constitute a class of small-holders had been in
the predicament of an otherwise vulnerable position also,
as rightly contended by Mr.A.G.Holla. Therefore, the
government having secured necessary information & data
in this regard, introduced the Bill; there were interactive
sessions between the government and the stakeholders; it
is not that the impugned Act came overnight, as a bolt
from the blue. The Bill was preluded by the objects &
reasons that are duplicated in Preamble to the Act. This
statute intends to extinguish interest of the muldars and
enlarge that of the mulagenidars/volamulagenidars to the
level of full ownership. As of necessity, it excludes all
intermediaries in a wholesale way so that the vulnerable
section of occupants does not suffer any longer at their
hand. It is pertinent to see paragraph 89 of
K.T.PLANTATION:
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"The US Supreme Court in Hawaii Housing
Authority v. Midkiff, 467 US 229 (1984) allowed
the use of eminent domain to transfer land from
lesser to lessees. In that ruling the court held
the government does not itself have the use the
property to legitimate taking, it is a takings
purpose and not its mechanics that must pass
the muster under the public use clause...."
This legislative measure would relieve the vulnerable
section of the society from the aforementioned
predicament.
A careful examination of the purpose & policy content of
the impugned Act unmistakably brings to the fore
abundant elements of public purpose, in the light of Apex
Court observations in the following two cases:
In K.T.PLANTATION, supra at paragraph 117:
"Deprivation of property within the meaning
of Art.300A, generally speaking, must take place
for public purpose or public interest. The concept
of eminent domain which applies when a person
is deprived of his property postulates that the
purpose must be primarily public and not
primarily of private interest and merely
incidentally beneficial to the public. Any law,
which deprives a person of his private property
for private interest, will be unlawful and unfair
and undermines the rule of law and can be
subjected to judicial review. But the question as
to whether the purpose is primarily public or
private, has to be decided by the legislature,
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which of course should be made known. The
concept of public purpose has been given fairly
expansive meaning which has to be justified
upon the purpose and object of statute and the
policy of the legislation..."
In RANGANATHA REDDY, supra at paragraph 6:
"It is indisputable and beyond the pale of any
controversy now as held by this Court in several
decisions including the decision in the case of His
Holiness Kesavananda Bharati Sripadagalaveru
v. State of Kerala(1) popularly known as
Fundamental Rights case-that any law providing
for acquisition of property must be, for a public
purpose. Whether the law of acquisition is for
public purpose, or not is a justiciable issue. But
the decision in that regard is not to be given by
any detailed inquiry or investigation of facts. The
intention of the legislature has to be gathered
mainly from the Statement of Objects and
Reasons of the Act and its Preamble. The matter
has to be examined with reference to the various
provisions of the, Act, its context and set up, the
purpose of acquisition has to be culled out
therefrom and then, it has to be judged whether
the acquisition is for a public purpose within the
meaning of Article 31(2) and the law providing
for such acquisition."
(d) The vehement submission of Mr.Uday Holla and
other advocates appearing for the Petitioners that the
number of mulagenidars being less than muldars, the idea
of public interest stands logically excluded, cannot be
accepted. Firstly, in matters like this, numerics are not the
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decisive factors as to there being public purpose.
Secondly, official statistical data relating to muldars and
mulagenidars which the Petitioners heavily banked upon,
is confined only to Dakshina Kannada & Udupi districts;
however, as already mentioned above, the Act keeps in
view the vulnerable sections of mulagenidars kind
throughout the State. In a particular region, number of
beneficiaries of a legislation may be arguably less, but that
does not assume much relevance in adjudging elements of
public purpose, as rightly contended by Mr.A.G.Holla. Any
legislative measure intended to give effect to any of the
Directive Principles will cause some prejudice to a small
section of people. This invariably & inevitably happens in
any civilized jurisdiction. Ours being a constitutionally
ordained Welfare State, a sectarian utilitarianism has no
significant role in matters like this. The following
observations at paragraphs 47 of JILUBHAI, supra in this
background assume importance:
"It is accordingly clear that in a welfare State
envisioned in the directive principles of State
policy, the basic perquisites are that everyone
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is entitled to minimum material well being, such
as food, clothing, and decent housing.
Expanding living standard 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 created 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 delegated power of command
is means as of quasi- governmental private
control over the major assets of a nation.
Properly, thereby, is subject to regulation. The
directive principles enjoin the State to
reorganise the economic system by law or
administrative means and the Fundamental
rights are means to that end to make right to
life meaningful, equality of opportunity and of
status and dignity of person a reality. The
fundamental rights and the directive principles
are the two wheels of the chariot as an aid to
make social and economic democracy a
truism..."
In view of the above discussion, the sixth
question, as to the absence of public purpose in the
impugned Act, is answered in the negative.
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XIII. AS TO FRUGALITY OF COMPENSATION
PAYABLE TO MULDARS AND CONSEQUENT
INVALIDATION OF THE IMPUGNED ACT:
(a) All the learned advocates appearing for the
Petitioners vehemently contended that the right to
property is guaranteed as a Fundamental Right under
Article 26 to the religious institutions/denominations and it
enjoys constitutional protection under Article 300A, even
after the 44th Amendment of 1978 and therefore, the
frugality of the compensation strikes at the validity of
impugned Act. In support of this submission, they heavily
banked upon certain observations in COMMISSIONER,
HINDU RELIGIOUS ENDOWMENTS, vs. SRI LAKSHMINDRA
THIRTHA SWAMIAR57 in re Article 26 and K.T.PLANTATION
in re Article 300A. Mr.Uday Holla and Mr.Abhinav
Ramanand apprised the court of apportionment of
compensation amount as between the lessor and lessee in
the ratio of 40:60 when the property is acquired and that
even this norm is also spurned by the scheme of impugned
AIR 1954 SC 282
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Act. Mr.Uday Holla & Mr.Keshava Bhat invoked the idea of
devaluation of rupee over the decades and this aspect has
not been taken care of by the Act while providing the
framework for determination of compensation. To put it
shortly, in their opinion, what is payable to the muldars is
an illusory compensation and therefore, the Act is a fraud
on the constitutional guarantee. Mr.B.V.Acharya &
Mr.A.G.Holla per contra contended that Articles 26 & 300A
do not guarantee against acquisition of private property
for public purpose especially when compensation is being
paid; the determination of compensation is on the norms
usually obtaining in the realm; the interest of the muldars
is frugal; muldars getting the property back is almost
unthinkable; the Fundamental Right to Property in the
sense of erstwhile Article 19(1)(f) is not guaranteed to the
religious institutions/denominations and what is protected
is their right to own/acquire & administer property vide
Article 26(c) & (d). In any circumstance, the property is
taken away from the land owners by paying compensation
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that is determined normatively; lastly, the idea of rupee
devaluation is alien to the matter.
(b) Sub-section (2) of section 7 of the impugned
Act reads:
"The amount payable under sub-section (1)
shall be 500 times of the lease rental as is
evidenced in the records. However, where the
Mulageni lease is conditional requiring the
permission of the Mulgar for alienation of the
property the amount payable shall be calculated
at 1000 times of the lease rent."
Thus, at the outset, it is not a case of acquisition of
property sans compensation. Whether the amount to be
determined as compensation, is illusory, as argued by the
Petitioners needs a deeper examination. It has been
observed in K.T.PLANTATION that the obligation of State
to pay compensation to a person who is deprived of his
property in acquisition is in-built in Article 300A of the
Constitution. Ordinarily, a law providing for acquisition of
private property for public purpose cannot say that no
compensation shall be paid. Though in the scheme of
constitutional guarantee to right to property, acquisition
sans payment of compensation is not totally excluded.
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However, the State in such extreme cases will have a very
burden to justify a measure of the kind; otherwise, such a
confiscatory legislation is liable to be voided on the
touchstone of constitutional guarantees. In LAKSHMINDRA
THIRTHA SWAMIAR, there is some discussion about the
scope & invocability of Article 26(c) & (d), is true. This
Article inter alia guarantees the right of religious
institutions/denominations to own, acquire & manage their
property; but this right too, as any other, is not absolute
and does not insulate such properties from acquisition by
authority of law. The observations at paragraph 3 of
MAHANT RAM KISHAN DASS vs. STATE OF PUNJAB58 are
aptly reproduced:
"The second objection, grounded on a decision
of this Court and using a Constitution missile is
that the freedom guaranteed under Article
26(c) of the Constitution to own and acquire
property by a religious denomination is
imperilled on account of this acquisition, and
also has no basis. It is not as if a religious
denomination cannot own land. It can under our
Constitution hold properties. But such a right is
not an absolute one nor unlimited altogether...
One thing is, however, clear that Article
26 guarantees inter alia the right to own and
(1983) 1 SCC 377
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acquire movable and immovable property for
managing religious affairs. This right, however,
cannot take away the right of the State to
compulsorily acquire property in accordance
with the provisions of Article 31(2). If, on the
other hand, acquisition of property of a religious
denomination by the Stale can be proved to be
such as to destroy or completely negative its
right to own and acquire movable and
immovable properly for even the survival of a
religious institution the question may have to
be examined in a different light..."
It is not the case of Petitioners that the properties that are
subject matter of the impugned Act are required for the
survival & maintenance of the religious institutions, be
they Mutt, Church or Mosque. There is no specific plea in
the petitions, nor any evidentiary material on record in
this regard. The Apex Court in BIRA KISHORE DEB. RAJA
vs. STATE OF ORISSA59, said that this Article cannot be
casually invoked unless the Petitioners claim the property
in question on behalf of a denomination and such
denomination is specified in the pleadings, with full
particulars. The right guaranteed by clauses (c) & (d) of
Article 26 not being absolute is subject to reasonable
regulation by the State provided the substance of such
(1964) 7 SCR 32
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right is not affected. The power of State to regulate
interests of social welfare as a whole, comes from the
Directive Principles enshrined in Part IV of the
Constitution; court's duty is to strike a golden balance
between competing claims of different interests. That is
how properties of religious denominations are permitted to
be regulated and at times, taken away by legislative
measures devised for implementing any of the Directive
Principles so long as the core of religion is not interfered
with. The following observations in KHAJAMIAN WAKF
ESTATES vs. STATE OF MADRAS60, lend support to this
view:
"...It was next urged that by acquiring the
properties belonging to religious denominations
the legislature violated Art. 26(c) and (d) which
provide that religious denominations shall have
the right to own and acquire movable and
immovable property and administer such
property in accordance with law. These
provisions do not take away the right of the
State to acquire property belonging to religious
denominations. Those denominations can own
acquire properties and administer them in
accordance with law. That does not mean that
the property owned by them cannot be acquired.
As a result of acquisition they cease to own that
(1970) 3 SCC 894
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property. Thereafter their right to administer
that property ceases because it is no longer their
property. Art. 26 does not interfere with the
right of the State to acquire property..."
(c) The vehement submission advanced on behalf
of Petitioners that decades ago, the properties were given
on lease prescribing frugal sums of money as the annual
rents, when the purchasing power of rupee was high and
the rental income was being used by the religious
institutions (Mutts & Churches), may be true; but is
irrelevant, to say the least. Firstly, it is not their case that
the rentals fixed in mulagenies are variable on the basis of
fluctuating rupee value. Secondly, the compensation on
normative determination payable under the Act if
deposited in any Nationalized Bank, the interest that
would accrue even at lesser rates would far exceed the
fixed rentals, as rightly shown by Mr.A.G.Holla by
arithmetical calculation. Even if Act is struck down, the
rentals payable under the mulageni arrangements would
be the same as originally fixed. Lastly, this question is no
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longer res integra in view of following observations in
JILUBHAI at paragraph 56:
"... the loss of rupee value is not relevant
consideration to adjudge the principle laid by the
statute. Giving acceptance to the contention
renders every statute ultra vires by the nature of
the litigation that the time lag inevitably
intervenes an rupee value, during the
interregnum gets eroded and every Act thereby
because, on its account, unworkable. In normal
acquisition, the principle of depletion of rupee
value has repeatedly been held to be not
relevant to determine market value..."
(d) The contention of Petitioners that real estate
prices having skyrocketed, their properties are very
valuable and therefore, the rental values long time ago
stipulated in mulageni arrangements, cannot be the basis
for determination of compensation, again is difficult to
agree with. A plea of unreasonableness, arbitrariness,
proportionality, etc., always raises an element of
subjectivity and therefore, courts cannot strike down a
statute that too when the right to property is no longer a
fundamental right. In each case, courts have to examine
the scheme of impugned Act, its object while treating plea
of the kind. In legislative measures designed for giving
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effect to the Directive Principles of the kind, the
compensation need not be determined on the basis of
market value, nor be it just or adequate in common
parlance. Different statutes prescribe different norms to
determine the amount payable to the deprived owner. If
these norms bear a just relation to the object of
determining the compensation, further examination in
judicial review is ordinarily barred. While examining the
land owners challenge to the acquisition in a petition filed
under Article 226 of the Constitution, courts should not
adopt a pedantic approach but should decide the matter
keeping in view the constitutional goals of social &
economic justice. A host of factors enter the fray whilst
adjudging validity of norms prescribed by the statute for
determining the compensation. Pragmatically speaking,
the real worth of muldars interest in the property is not
that great or worthy when compared to a case of any
other lease where the prospects of regaining the property
by sheer efflux of time, are concrete and assuring. Where
rental values decades ago stipulated in these mulagenies
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being admittedly frugal [in fact, that is the ground urged
by the Petitioners for faltering the normative basis enacted
for determining the compensation], it is unrealistic to
assume that the mulagenidars/volamulagenidars would
not pay such rents and thereby, venture the risk of
termination of lease. Even in breach, it is not that, muldar
would invariably get right of re-entry in no time,
reprieve/protection arguably availing under Section 111 of
the 1882 Act or the Karnataka Rent Act, 1999. Thus, the
possibility of muldars getting the property to their supardi
despite breach of covenants, are too remote to be
mentioned. The Apex Court in a case involving mulageni
i.e., AMBALAL MANSUKHRAM JOSHI vs. THE ADDITIONAL
SPECIAL LAND ACQUISITION OFFICER, AHMEDABAD61 at
paragraph 3 observed about the interest of muldar: '...The
value of his right to reversion - a remote one - is a little
or nothing...'. It negatived the contention as to frugality of
compensation when the amount if deposited would fetch
periodic interest which was in excess of periodic rentals.
AIR 1974 SC 591
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(e) There is lot of force in the submission of
Mr.B.V.Acharya & Mr.A.G.Holla that the method of
capitalization of income derived from the land is a
popularly accepted norm for determination of
compensation payable to the land losers. The Apex Court
in RAJIV SARIN, supra, at paragraph 68, observed:
"...It is to be noted that Article 300A was
inserted by the Constitution (44th Amendment)
Act, 1978 by practically reinserting Article
31(1) .... Therefore, right to property is no
longer a fundamental right but a right
envisaged and conferred by the Constitution
and that also by retaining only Article 31(1)...
and specifically deleting Article 31(2), as it
stood. In view of the aforesaid position the
entire concept to right to property has to be
viewed with a different mindset than the
mindset which was prevalent during the period
when the concept of eminent domain was the
embodied provision of fundamental rights. But
even now as provided under Article 300A of the
Constitution the State can proceed to acquire
land for specified use... When the State
exercises the power of acquisition of a private
property thereby depriving the private person
of the property, provision is generally made in
the statute to pay compensation to be fixed or
determined according to the criteria laid down
in the statute itself. It must be understood in
this context that the acquisition of the property
by the State in furtherance of the Directive
Principles of State Policy was to distribute the
material resources of the community including
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acquisition and taking possession of private
property for public purpose. It does not require
payment of market value or indemnification to
the owner of the property expropriated.
Payment of market value in lieu of acquired
property is not a condition precedent or sine
qua non for acquisition. It must be clearly
understood that the acquisition and payment of
amount are part of the same scheme and they
cannot be separated. It is true that the
adequacy of compensation cannot be
questioned in a court of law, but at the same
time the compensation cannot be illusory..."
Even the compensation payable to landlords under Section
40 of the Karnataka Land Reforms Act, 1961 after vesting
of the agricultural land in the State is also structured on
capitalization method.
In view of this, the seventh question, as to illusory or
frugal compensation payable to the muldars under the
XIV. AS
impugned TO
Act is answered SOME MISCELLANEOUS
in the negative.
CONTENTIONS:
(a) This court does not agree with Petitioners'
contention that the idea enacted in the impugned Act has
nothing to do with 'distribution of material resources of
community' in the sense of Article 39(b) of the
Constitution since the said expression has been
expansively construed by the Apex Court in decisions that
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galore e.g. RANGANATHA REDDY, supra. Petitioners'
contention that right to property is treated as the 'basic
right' or 'human right' by the Apex Court in a catena of
decisions, may be true when exercise of other
fundamental rights guaranteed inter alia under Articles 19
& 21 is dependent upon property, and not otherwise. It is
not the case of Petitioners that the mulageni properties
are the only source of livelihood and if they are taken
away, it amounts to taking away the means of livelihood.
The contention that where the tenanted properties are
acquired, the lessor and the lessee generally apportion the
compensation in the ratio of 40:60, does not advance case
of the Petitioners' even in the least. Added, such a
contention is speculative, there being no plea or material
on record as to any mulageni property having been
acquired, there is claim by the muldars for apportionment
of compensation and the mulagenidar/volamulagenidar is
repudiating the same.
(b) This court does not cotton with the submission
of Mr.A.G.Holla appearing for the private Respondents that
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the interest of muldars in the subject properties is not of
full ownership and that it is akin to 'ryotwari tenure'. The
text & context of the impugned Act presuppose that
muldars are full owners of subject properties. His reliance
on BALMADIES PLANTATIONS LTD. vs. THE STATE OF
T.N62 which essentially involved agrarian lands unlike the
case at hands, does not much support his canvass. In the
said decision, the court was examining the status of land
holders under ryotwari settlement brought about by Col.
Read in 1792 consequent to ceding of territories by Tippu
Sultan, as described in the Manual of Administration
quoted by Baden-Powell, in Vol. III of Land Systems of
British India. His reliance on Full Bench decision of Kerala
High Court in SUKAPURAM SABHAYOGAM vs. STATE OF
KERALA63, again is of no avail. Conversely, the Bench
treated 'mulgar' or 'mulga' as meaning the owner of land
keeping in view observation of Justice Gajendragadkar as
he then was in LAKSHMAN GOPAL vs. VISHNU
AIR 1972 SC 2240
AIR 1963 KER 101
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RAGHOBA64. It observed at the latter half of paragraph 61:
"...the point to be noted is that in the decision of the
Bombay High Court, referred to above, a mulawargadar
has always been understood in South Canara to be an
owner or original proprietor...". At the same time, it
referred to a variant view of the Apex Court in KARIMBIL
KUNHIKOMAN vs. STATE OF KERALA65, does not make
much difference. Mr.A.G.Holla's contention that despite
breach of covenant by the mulagenidar/volamulagenidar,
no right of entry accrues in favour of muldar being of
peripheral significance, does not merit examination.
However, his contention that there is no cognizable
prejudice to the muldars by statutory adoption of
capitalization method for determination of compensation
has force, since as already discussed infra, what they get
as interest by investing such amount in any financial
institution would be far in excess of the fixed rental value.
He is also right in submitting that one need not keep in
mind the value of whatever constructions the
AIR 1951 Bom. 355
AIR 1962 SC 723
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mulagenidars/volamulagenidars have done in the subject
property and that what needs to be focused is only the
bare land comprising in mulageni, more particularly when
the doctrine of dual ownership obtaining in the realm of
1882 Act. He is also right in contending that the idea of
adequacy or reasonableness of compensation does not
have much place where a legislative measure is to give
effect to the Directive Principle in Article 39(b), even when
right to property is constitutionally guaranteed under
Article 300A. Lastly, this court does not agree with
Mr.B.V.Acharya & Mr.A.G.Holla that 'manifest arbitrariness'
cannot be a ground for invalidation of plenary legislation,
such a ground having been reiterated by the Apex Court in
K.S.PUTTASWAMY vs. UNION OF INDIA66.
XV. A FEW WORDS BEFORE PARTING WITH
THE CASE:
(a) In RANGANATHA REDDY supra, the Apex Court
quoted the following words of Sir Alladi Krishnaswami
Ayyar, a prominent member of Constituent Assembly:
(2017) 10 SCC 1
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"..Law, according to me, if it is to fulfil its larger
purpose, must serve as an instrument of social
progress. It must reflect the progressive social
tendencies of the age. Our ancients never
regarded the institution of property as an end in
itself. Property exists for dharma... the duty
which the individual owes to the society from the
whole basis of social framework. Dharma is the
law of social well-being and varies from yuga to
yuga. Capitalism as it is practised in the West
came in the wake of the Industrial Revolution
and is alien to the root idea of our civilisation.
The sole end of the property is yagna and to
serve a social purpose..."
In an organized State, law operates as an instrument of
social change which the Fundamental Document of the
country aspires for. Any such change invariably affects a
few, and at times, badly. This cannot be more aptly
answered than by the following words of Justice Krishna
Iyer at the fag end of paragraph 67 in RANGANATNHA
REDDY, supra.
"These extreme lurid, recondite picturisations
cannot be transformed into probabilities and
realities, especially in a case where we find little
to complain in fairness of procedure or delivery
of the end product. Of course, in a 'radical
change' situation, certain classes, invoking
varnishing values, may cry 'wolf' and in any
welfare legislation stray injustice is unavoidable.
Perfection is God's property, to aim at it is
- 108 -
WP No. 11158/2013
C/W W.P.Nos.43928/2012, 11966/2013
23287/2013, 62434/2016
human progress. We find no legal flaw in the
measure under attack."
(b) All the above having been said, this court is of a
considered view that ours being a constitutionally ordained
Welfare Governance, State action be it legislative,
executive or otherwise should not give scope for grievance
of the kind which muldars are debating in these cases.
Their arguable grievance regardless of its legal tenability
would hopefully disappear, if the rate of compensation i.e.,
500 times the rental value in the absence of non-
restrictive clause in the lease and 1000 times in the case
of restrictive clauses, is upwardly revised. After all, State
can legislate mass justice, courts not being the only
sanctuary in a democracy. Matter essentially lies in the
domain of legislature. This court hopes and trusts that
something in this regard would happen at the hands of
Powers That Be, before long.
In the above circumstances, challenge to the
impugned Act fails and all these Petitions are dismissed,
costs having been made easy.
- 109 -
WP No. 11158/2013
C/W W.P.Nos.43928/2012, 11966/2013
23287/2013, 62434/2016
This Court places on record its deep appreciation for
the research and assistance rendered by its official Law
Clerk Cum Research Assistant, Mr. Faiz Afsar Sait.
Sd/-
JUDGE
cbc/snb
