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1950 DIGILAW 105 (PAT)

Sir Kameshwar Singh v. Province of Bihar

1950-06-05

DAS, SHEARER, SINHA

body1950
Judgement Shearer, J - This Special Bench has been constituted to try a suit instituted by the Maherajadhiraja of Darbhanga in the Court of the Subordinate Judge at Laheriasarai which has been removed to this Court to be tried by it in the exercise of its extraordinary original civil jurisdiction. In this suit the plaintiff has asked for a declaration that the Bihar State Management of Estates and Tenures Act, 1949, is an unconstitutional law and for an injunction restraining the defendant from taking possession, through its officers, of his estate. The defendant in the suit, which was instituted prior to the enactment of the Constitution, is the Province of Bihar. Along with this suit, there have been set down for hearing a number of applications under art.226 of the Constitution. These applications are by zamindars who have instituted suits similar to the suit instituted by the Maharajadbiraja of Darbhanga. They too asked for injunctions restraining the State of Bihar or any of its officers from taking possession of their estates, and, on one ground or another, their applications for an ad interim injunction, pending the disposal of the suits, were refused. At a very early stage, we pointed out that, if the suit instituted by the Mabarajaihiraja of Darbhanga was decreed, the State of Bihar would, preen mably, refrain from taking possession of the estates of the petitioners, unless and until the decree had been reversed on appeal, and that, if, on the other hand, the suit was dismissed, the applications under Art. 226 of the Constitution would, necessarily, have to be dismissed also. The learned Government Pleader subsequently assured us that the State would take the course which, we had suggested, was proper. In these circumstances we thought it unnecessary to consider what other protection could or ought to be afforded to the various petitioners, and intimated that their applications would be dismissed, but, in the circumstances, without costs. 2. It is unnecessary to set out in more than their broad outlines the provisions contained in the impugned Act. In these circumstances we thought it unnecessary to consider what other protection could or ought to be afforded to the various petitioners, and intimated that their applications would be dismissed, but, in the circumstances, without costs. 2. It is unnecessary to set out in more than their broad outlines the provisions contained in the impugned Act. The draftsman apparently took as his model, the Chota Nagpur Encumbered Estates Act, and one somewhat curious result of this is that, while the Act professes to provide for the State management of estates and tenures in the Province of Bihar," the management is, in fact, to be vested in a Manager who is to be an officer not below the rank of Deputy Collector. Although the Manager, being a public servant, may be amenable to the control of the Provincial Government, it is the Manager alone, and not the Provincial Government, who stands responsible in law for fidelity in the discharge of the entire duties of management, disposal, realisation and restoration, with regard to the estate under his care/vide Flukum Chand v. Ran Bahadur Singh, 51 A, 208 at p. 214 : (AIR (11) 1924 P.C.156)." As from the commencement of the period of management, which is to be 20 years, the proprietor is disabled from recovering rent, including arrears of rent, which have already accrued due, and from making a valid lease or a valid mortgage, although not from selling the estate outright or making a gift of it. The Manager is required to pay him a quarterly allowance not exceeding 20 per cent. of the gross annual income in the case of estates yielding an income of not more than Rs. 10,000 and not exceeding 5 per cent. in the case of estates yielding an income exceeding RS.5 lakhs. Although the quarterly allowance to be made to the proprietor is comparatively small, the Manager is, nevertheless, required, at the end of the year, to make over the surplus income to him. The proprietor may, however, have some difficulty in ascertaining what that surplus is or ought to be, as he is not entitled to inspect the accounts until they have been audited, and is then entitled only to inspect them once in the course of every twelve months. The proprietor may, however, have some difficulty in ascertaining what that surplus is or ought to be, as he is not entitled to inspect the accounts until they have been audited, and is then entitled only to inspect them once in the course of every twelve months. He is not free to institute a suit for accounts or, indeed any other suit, and can only bring any grievance which he may have regarding the management or the payments made to him to the notice of an Advisory Committee, and, through the Advisory Committee, to the notice of the Provincial Government. The Manager is empowered to remove mortgagees and lessees in the possession of any part of the estate, and, as a necessary corollary, to ascertain, or rather determine the amounts due to them, and to frame a scheme for the liquidation of the proprietors debts. The main purpose of the Legislature, in enacting the Chota Nagpur Encumbered Estates Act, was to discharge the liabilities of the disqualified proprietor, and so prevent his estate passing into the hands of other persons whose acquisition of the property was likely to be resented and so cause trouble. From Mr. Reids Settlement Re. port on the District of Ranohi (pp. 37-38), it appears that, in the earlier part of the 19th century, the raiyats in Chota Nagpur were much attached to their zamindars and that in several instances serious disorders had occurred when the estate of a zemindar was sold for arrears of revenue and a purchaser, who was not known and esteemed in the locality, sought to take possession of it. If, under the Chota Nagpur Encumbered Estates Act, possession was taken of estates, this was not done in exercise of what, to American jurists, is known as the right of eminent domain, but rather in exercise of the police power of the State. It was necessary to deprive the owners of these estates of their right to manage them in order to prevent the disorders that might arise if they were sold up by their creditors. Mr. Lal Narayan Sinha, for the defendant, suggested that the impugned Act could be supported on somewhat similar grounds. The learned Government Pleader drew on our attention to certain recent enactments and, more particularly, to the Bakasht Disputes Settlement Act. Mr. Lal Narayan Sinha, for the defendant, suggested that the impugned Act could be supported on somewhat similar grounds. The learned Government Pleader drew on our attention to certain recent enactments and, more particularly, to the Bakasht Disputes Settlement Act. It may well be that the impugned Act is part of a scheme for agrarian reform, and that i3 certainly suggested by cl. (6) in sub-s. (1) of S. 25, under which the Manager is required to expend a certain proportion of the income on the maintenance of irrigation works for the benefit of the tenantry. The enactment, however, with which the impugned Act is most closely connected is one which was not mentioned by Mr. Lalnarayn Sinha, namely the Bihar Abolition of Zamindaris Act, 1948. That is made clear by the comparison of the provisions contained in sub-ss. (2) and (3) of S. 5 of the impugned Act and the provisions contained in Ss. 5 and 6, Bihar Abolition of Zamindaris Act. Under the former, the Manager is restrained from taking charge of land in the khas possession of the proprietor or of buildings or structures in the possession of the proprietor and used "as golas, factories or mills for the purpose of trade, manufacture or commerce or used for storing grains or keeping cattle or implements for the purposes of agriculture". Under the latter, the proprietor is, when his estate is acquired, to be entitled to retain buildings so used on payment of a fair and equitable ground rent and is to be deemed to be a raiyat with a right of occupancy in land in his khas possession. These provisions, regarding which little or nothing was said in the course of argument, are, in my opinion, of considerable significance. The intention of the Legislature appears to be that, in so far as proprietors and tenureholders derive an income from land which, in the language of economists, is an unearned income, they are to be expropriated, while, in so far as they themselves utilise the land as a means of production and derive an earned income from it, they are to be left in undisturbed possession. 3. 3. The greater part of the lengthy and very able argument which has been addressed to us on behalf of both parties has proceeded on the assumption that, not merely is the impugned Act part and parcel of a scheme which aims at the extinguishment or abolition of one form of property, but is itself an expropriatory measure. Mr. P. R. Das, for the plaintiff, has strongly contended that the word "law" as used in sub-s. (1) of S. 299, Government India Act and in cl. (1) of Art. 31 of the Constitution must be understood as meaning a general law, or, as he put it, lex terrae or the law of the land and as excluding any law passed for the express purpose of depriving an individual or individuals of their rights to property. The learned counsel referred to a passage in Black stones Commentaries, vol. 1, p. es, in which it was said that "a particular act of the legislature to confiscate the goods of Thins, does not enter into the idea of a municipal law" and to the decision of the Supreme Court of the United States in the Trustees of Dartmouth College v. Woodword, 4 U. S. S. C. L. Ed. 629. In that case the plaintiff, in an action to reco. ver some documents from persons who, under an Act of a State Legislature, had been constituted the trustees of certain property complained that he and certain other persons bad been granted a charter by the Crown and that the effect of the Act had been to transfer property, which was vested in himself and these other persons as trustees, to another and different body of persons who had also been constituted trustees under it. The plaintiff succeeded in the action on the ground that, in passing the Act which deprived him and his co-trustees of a vested right, the State Legislature had exceeded its legislative jurisdiction and that, in consequence, the Courts were entitled to treat the Act as a nullity. The impugned Act is not, however, an Act under which the plaintiff, as an individual, has been deprived of his rights, in property. The Act purports, on the face of it, to affect not merely the plaintiff, but all persons belonging to a particular class, namely, proprietors of estates and tenureholders. The impugned Act is not, however, an Act under which the plaintiff, as an individual, has been deprived of his rights, in property. The Act purports, on the face of it, to affect not merely the plaintiff, but all persons belonging to a particular class, namely, proprietors of estates and tenureholders. As will appear presently, the British Parliament, in enacting sub-s. (3) of S. 299, Government of India Act, contemplated the possibility of legislation affecting the rights of this class of individuals in land. It is true that the impugned Act confers very wide powers on the executive and leaves a great deal to their discretion. That discretion does not, however, extend to the making of an order depriving a particular individual of his estate or tenure. The Act may be open to criticism on the ground of the wide delegation of power made to the executive but, as it purports to affect an entire class of persons, it is, in the ordinary sense in which the term is used, a municipal or civil law, and the Courts are not entitled to disregard it as something done by the Legislature wholly in excess of its jurisdiction. 4. Turning to sub-s. (2) of S. 299, Government of India Act, Mr. Das contended that it was proposed to acquire the property of his client and that, as the property was not to be acquired for public purposes and as no compensation was to be paid, the proposed acquisition was unlawful. The learned Government Pleader denied that the property of the plaintiff was to be acquired, although he conceded that possession was to be taken of it, and contended that compensation was, in fact, to be paid and that possession was to be taken for public purposes, Sub-section (2) of S. 299, Government of India Act must be read in close conjunction with sub-s. (3) which immediately follows it. It seems clear that, in enacting the former subsection, the British Parliament had in view a case in which the property of a particular individual or particular individuals was to be acquired by the State. It seems clear that, in enacting the former subsection, the British Parliament had in view a case in which the property of a particular individual or particular individuals was to be acquired by the State. In such a case, it was made a condition prerequisite to the acquisition that compensation, meaning thereby the value of the property in money to the owner, should be paid and that, when acquired, the property should be used for public purposes; that is, that the use to be actually made of it by the State or by the local body or company for which it was acquired should subserve the interests of the community and not those of an individual or a number of individuals. In enacting the latter, the British Parliament would appear to have had in mind a case in which the property of every individual in a particular class or classes was to be acquired or rather a case in which a certain species of property in land was to be extinguished or modified by legis. lative enactment. It is significant that neither the word "compensation" nor the words "for public purposes" appear in sub-s, (3), and it may, I think, well be that the British Parliament was not unmindful of the Irish Land Act of 1923 under which the interest of certain land-holders in Ireland was compulsorily acquired, but payment was not made in money, but in bonds which, incidentally, were subsequently guaranteed by the British Government. That this is the proper construction to be put on sub-s. (2) and (3) of s. 299, Government of India Act is strongly suggested, to my mind, by what is contained in para.369 of the Report of the Joint Committee on Indian Constitutional Reform. This is as follows: "369. We think that some general provision should be inserted in the Constitution Act safeguarding private property against expropriation, in order to quiet doubts which have been aroused in recent years by certain Indian utterances. It is obviously difficult to frame any general provision with this object without unduly restricting the powers of the Legislature in relation particularly to taxation; in fact, much the same difficulties would be presented as those which we have discussed above in relation to fundamental rights. It is obviously difficult to frame any general provision with this object without unduly restricting the powers of the Legislature in relation particularly to taxation; in fact, much the same difficulties would be presented as those which we have discussed above in relation to fundamental rights. We do not attempt to define with precision the scope of the provision we have in mind, the drafting of which will require careful consideration for the reasons we have indicated; but we think that It should secure that legislation expropriating, or authorising the expropriation of, the property of particular individuals should be lawful only if confined to expropriation for public purposes and if compensation is determined, either in the first instance or on appeal by some independent authority. General legislation, on the other hand, the effect of which would be to transfer to public ownership some particular class of property, or to extinguish or modify the rights of individuals in it, ought, we think, to require the previous sanction of the Governor General or Governor (as the case may be) to its introduction; and in that event he should be directed by his Instrument of Instructions to take into account as a relevant factor the nature of the provisions proposed for compensating those whose interests will be adversely affected by the legislation." Reference may also be made to paragraph 372 of the Report in which the Joint Committee referred to the possibility of "an Indian Ministry responsible to an Indian Legislature wishing to alter the enactments embodying the permanent settlement." I find myself unable to accept the contention of Mr. P.R. Das that sub-s. (3) of S. 299, Government of India Act dealt with nothing more than a matter of procedure. In the Instrument of Instructions to the Governor, the Governor was directed not to withhold his sanction to the introduction of such a bill as is referred to in the sub-section, but in every case to reserve it, if and when it was passed by the Legislature for the consideration of the Governor General. The Governor General was similarly required by his Instrument of Instructions to reserve for the assent of His Majesty any law altering the permanent settlement. Mr. Das contended that, by reason of what was contained in sub-s. (2), it was implicit that any bill referred to in sub-s. (3), should contain provisions for the payment of compensation. The Governor General was similarly required by his Instrument of Instructions to reserve for the assent of His Majesty any law altering the permanent settlement. Mr. Das contended that, by reason of what was contained in sub-s. (2), it was implicit that any bill referred to in sub-s. (3), should contain provisions for the payment of compensation. I have no doubt myself that a British Secretary of State would have advised His Majesty to refuse his assent to an Act expropriating proprietors of estates or tenure-holders unless the Act provided for adequate compensation, that compensation not necessarily, however taking the form of immediate cash payments. It is obvious that, if compensation in the form of hard cash had had to be paid to the vast number of proprietors and tenure holders, the repercussions on the economy of the state would have been very serious, whereas, if, instead of money being paid, bonds were issued, the repercussions would, almost certainly, have been much less serious, and, if there was no great danger of the bonds depreciating to any marked extent in the market, the compensation given might have been not inadequate. To sum up, the position under the Constitution embodied in the Government of India Act was that a particular individual or individuals, whose property was sought to be acquired, had their remedy in the Courts. Individuals belonging to a class, whose rights in land were extinguished or modified by the Legislature, would, no doubt, to a certain extent have been entitled to have recourse to the Courts, but the extent to which they would have been so entitled would have depended solely on the provisions contained in the statute extinguishing or modifying their rights, and not on any. thing contained in the Constitution Act itself. Nevertheless, the Constitution Act provided them with a very real and valuable safeguard in that any legislation of this kind had to he reserved for the consideration and assent of His Majesty. In the interregnum which occurred between 15th August 1917, and 26th January 1950, this safeguard, of course, did not exist. Di The Constitution, which the Indian people gave to themselves on 26th January 1950, recognises the sanctity or inviolability of property. In the interregnum which occurred between 15th August 1917, and 26th January 1950, this safeguard, of course, did not exist. Di The Constitution, which the Indian people gave to themselves on 26th January 1950, recognises the sanctity or inviolability of property. Article 19 (1) (f) states: "All citizens shall have the right to acquire, hold and dispose of property." Under the growing complexities of modern life, the right of an individual to acquire, hold and dispose of property must necessarily be subject to numerous restrictions, ranging, at one end of the scale, from an absolute incapacity in certain individuals to hold certain property, for example, land in certain area in Chota Nagpur, and, at the other, to a provision requiring a resident in a municipal area to obtain the previous sanction of the Municipality before making some quite trifling alteration in his premises. Again the right of an individual to retain his property is always subject to the overriding condition that the state may deprive him of it, permanently or temporarily, in the interest of the community as a whole. The Constituent Assembly recognised the existence of each of these two limitations and embodied the former in Art.19 (5), and the latter in Art.31. These two articles, it is clear, deal with matters which are quite separate and distinct. Clause (1) of Art.31, in terms reproduces sub-s. (1) of S. 299, Government of India Act. Clause (2) of does not, in terms, reproduce the provisions contained in sub-s. (2) of s. 299, but such modifications, as have been made, are purely verbal and cl. (2) has precisely the same effect as had sub-s. (2) of S. 299. The words "for public purposes" and the word "compensation" which occur in cl.(2), as they occurred in sub-s. (2) of s. 299, must be construed in the manner in which they have always hithereto been construed by the Courts in India and the Courts in Great Britain and in Dominions of the British Commonwealth. In the course of the argument, reference was frequently made to Cooleys Constitutional Limitations. In the course of the argument, reference was frequently made to Cooleys Constitutional Limitations. At page 1131, volume II of the 8th edition of this work, there occurs the following passage: "it is certain that there are very many cases in which the property of some individual owners would be likely to be better employed or occupied to the advancement of the public interest in other hands than in their own; but it does not follow from this circumstance alone that they may rightfully be dispossessed." But for the existence of other clauses in Article 31, it is, I think, perfectly clear that a law extinguishing such rights as proprietors and tenure-holders have in land would be a law which offended against clause (2) of Article 31. The clauses in question are clauses (4) and (6) of the Article. These clauses, in fact, proceed on the assumption that an enactment which extinguishes the rights of an entire class of individuals in land is an unconstitutional law. What they do or attempt to do is to prevent the Courts from taking notice of this and pronouncing the law to be an unconstitutional law. On the production of a certificate by the President, the Courts are to refrain from considering and deciding whether or not, on certain grounds, the law is a law, in enacting which the legislature has exceeded its jurisdiction. What exactly is the extent of the restriction or disability imposed on the Courts is a matter with which I will deal more fully later. For the present, I propose to deal with two subsidiary points raised by Mr. P. R. Das. Mr. Das contended that it was an implied condition of the exercise by the President of the power conferred on him by el. (6) of Art.31 that the President should refrain from certifying any law unless that law provided for compensation. The compensation might, Mr. Das conceded, not be compensation in the sense in which the word is used in al. (2), that is, the equivalent in money of the property taken, but might be compensation in the form of bonds. It is not really necessary to decide this point, and I must not be taken as deciding it. The compensation might, Mr. Das conceded, not be compensation in the sense in which the word is used in al. (2), that is, the equivalent in money of the property taken, but might be compensation in the form of bonds. It is not really necessary to decide this point, and I must not be taken as deciding it. In my opinion, the President of the Republic, when invited to certify an Act, is in very much the same position as a British Secretary of State would have been, if called upon to advise His Majesty to assent or withhold his assent to an Act extinguishing or modifying the rights of proprietors of estates in their land. It may be that such considerations as the engagements, which were entered into in 1793, would have weighed with a Brithish Secretary of State and might not at all weigh with the President of the Indian Republic and that a British Secretary of State might have regarded as not wholly adequate, provisions for compensation which the President of the Indian Republic might regard as sufficient. In each case, however, such a restriction as exists on the exercise of the power is not a legal, but rather a moral and political restriction. The other subsidiary point! taken by Mr. P. R. Das is that the words "it shall not be called in question" are words of futurity and that, as the suit of the plaintiff was instituted prior to the enactment of the Constitution, the certificate is of no avail to the andAn. dant. The decisions on which Mr. Das mainly relied in this part of his argument were Simithies v. National Association of Operative Plasterem 1909-1 K. B. 310 at p. 319 : (79 L.J.K.B. 259) and Moon v. Durden, (1848) 164 E. R. 389 : (12 Jur 138). In the former, the Court of Appeal had to construe the words "an action against a trade union . . . . shall not be entertained", and they declined to construe them as if they meant "shall cease to be entertained". In the former, the Court of Appeal had to construe the words "an action against a trade union . . . . shall not be entertained", and they declined to construe them as if they meant "shall cease to be entertained". In the latter, an action was brought to recover money won on a wagering contract prior to 8th August 1845, on which date a statute was enacted that: "All contracts and agreements by way of gaming or wagering shall be null and void and that no suit shall be brought or maintained in any Court of law or equity for recovering any sum of money or valuable thing alleged to be won upon any wager." It was held that the action was maintainable, the writ having issued on 12th June 1845. The decision in each case proceeded mainly on the ground that an intention to confiscate vested rights retrospectively could not or ought not to be imputed to Parliament. In my opinion, neither of these decisions is directly applicable. In the one case, the plaintiff was seeking to recover damages in respect of a tort which was not, as it were, legalised by the subsequent enactment, and, in the other, the plaintiff was seeking to recover property which, in the opinion of the Court, the legislature had no intention of confiscating or extinguishing as from a date prior to the date on which the action was instituted. The intention of the Constituent Assembly was, however, it appears to me, that certain rights in land should be or be liable to be extinguished with effect from the data of the enactment purporting to extinguish them. The Constituent Assembly cannot possibly have intended that individual proprietors or tenure holders, who had had the foresight or the means to institute a suit, should be permitted to retain their rights, whereas the rights of others, who had not been so fortunately situated, should be extinguished or expropriated.