Dniat ( 1 ) ON the 22nd October, 1065 the Presi- of India promulgated an Ordinance by which an undertaking l:the "metal Corporation of India" was transferred to and vested Central Government. The Company owning the undertaking, ]y, the Metal Corporation of India Limited, thereupon brought a on to this Court under Art. 226 of the Constitution (Civil Writ I of 1985), challenging the validity of the Ordinance and that peti- ras admitted by this Court on the 27th October, 1955. Before petition, however, came up for a regular hearing. Parliament which b the meantime assembled enacted the Metal Corporation of (Acquisition of Undertaking) Act, 1965, repealing the Ordinance but, at the same time, making almost identical provisions in the Act, section 3 of which says- "on the commencement of this Act, the undertaking of the Company shall, by virtue of this Act, be transferred to and vest in the Central Government". The Mstal Corporation of India then brought a second petition under Art. 226 of the Constitution (Civil Writ 832-D of 1965), challenging the validity of the Act of Parliament, tha grounds of challenge being the same as in the case of the Ordinance, so that, although we have before us two petitions, the one that is really alive is the second one (Civil Writ 832 D of 1965 ). 2. As a matter of form, there are two petitioners (i) the Metal Corporation of India Limited, which is public limited company owning the undertaking which h is been acquired by the impugned statute; and (ii) Shri Atul Chandra Dutt, a share-holder of fie Company. It is clear from the impugned statute that what has been transferred to and vested in the Central Government is the entire undertaking and it includes, by virtue of Section 4 of the Act all assets, rights, leaseholds, powers, authorities, privileges and all property belonging to the Company in relation to the undertaking . It is clear from the impugned statute that what has been transferred to and vested in the Central Government is the entire undertaking and it includes, by virtue of Section 4 of the Act all assets, rights, leaseholds, powers, authorities, privileges and all property belonging to the Company in relation to the undertaking . The preamble to the Act siys, as did the preamble to the President s Ordinance, that the legislation is "to provide for the acquisition of the undertaking of the Metal Corporation of India Limited for the purpose of enabling the Central Government in the public interest to exploit, to the fullest extent possible, zinc and lead deposits in and around the Zawar area in the State of Rajasthan and to utilise those minerals in such manner as to subserve the common good". In support of the petitions, it is said that although the preamble to the Act does declare that the purpose of this compulsory acquisition is a public purpose and it specifies that purpose, in reality, that is not the purpose but there is another and a collateral purpose behind the acquisition. This is one ground of challenge. The second ground is that while the impugned Act does provide far compensation, the principles laid down are not in accordance with Art. 31 of the Constitution and the Act is to that extent invalid and hence the acquisision is illegal. It is the second ground which has been, if I may say so, more seriously pressed before us, but before dealing with it, it is convenient to dispose of the first ground of attack. ( 2 ) IT is not suggested, and in view of the preamble to the Act it could not be, that the acquisition of the undertaking for the purpose of exploiting, to the fullest extent possible, the zinc and lead deposits in Rajasthan in order to subserve the common good would not be a public purpose , and Mr. Dutt very famly conceded that the exploitation of these two minerals, which are of considerable importance for defence purposes, would be in the public interest. Nor is it seriously suggested that Parliament was not competent to provide for the compulsory acquisition of the undertaking by the Central Government. Nor is it said that Parliament itsalf has in any manner acted dishonestly. Nor is it seriously suggested that Parliament was not competent to provide for the compulsory acquisition of the undertaking by the Central Government. Nor is it said that Parliament itsalf has in any manner acted dishonestly. What is suggested, however, is that although Parliament was pursuaded that the Central Government intended to take over the undertaking for the purpose of exploiting zinc and lead deposits in question for the common good of the nation, the fact is that the Central Government has no such intention and, on the other hand, as the petitions put it, the real purpose is "to take over the undertaking of the petitionercompany for the purpose of making it over to the other influential persons and/or other, undertakings". This allegation is firmly denied on behalf of the Central Government and although the return makes it dear that the Central Government. may later find it convenient to form a company for the purpose of exploiting the zinc and lead deposits which has been foreseen and provided for by the statute itself in Section 12, the implication in the petitioner s allegation that the whole undertaking may later on be handed over to some private persons or company for their benefit, is totally denied. There is in the petitions no clear indication who those persons are or may be and to that extent the allegation is vague, but, apart from thit, it is clear that the statute, which is being challenged, does not envisage the possibility to which the petitioners allude and a mere suspicion that the provisions of the impugned Act may be abased or circumvented, can hardly be a ground for saying that the enactment itself is invalid. It is obvious that should the Central Government happen to violate or transgress the provisions of the enactment, that Act Would be open to question in the ordinary course, but we cannot at this stage anticipate any illegal action on the part of the Central Government. In these circumstances, it appears to me that the first ground of challenge has no great substance. ( 3 ) THE second ground is more serious. In these circumstances, it appears to me that the first ground of challenge has no great substance. ( 3 ) THE second ground is more serious. It is admitted that under our Constitution, no property can be compulsorily acquired unless there be a law which provides for compensation for the property acquired and either fixes the amount of compensation to be paid or specifies the principles on which and the manner in which, compensation is to be determined and given. The question, therefore, is whether the impugnied statute conforms to these requirements. It does not, of course, fix the amount ofcompensation and the question simply is whether it specilfies the principles on which and the manner in which compensation is to be fixed and paid. There is one thing more and it is that such a law, as is now being impugned, cannot be called in question in the Courts on he ground that the compensation provided by it "is not adequate", and the main argument before us has centred round the content and meaning of the two expressions used in Article 31, namely, conpensaon? and adequate . Prior to the Fourth Amendment to the Constitute in 1955, the provision that adequacy of compensation will not be considered by the Courts was not contained in Article 31, and Supreme court had on more than one occasion declared that the expression compensation used in Article 31 meant "a just equivalent of what the owner has been deprived of". In State of West Bengal V. Mrs. Bella Banerjee the learned Chief Justice dealt with the suggestion made on behalf of the State that the term compensation could not mean full cash equivalent and that the meaning was such compensation as was determined on the principles laid down by the law and he said on behalf of the Court - "we are unable to agree with this view. While it is true that the legislature is given the discretionary power of I lying down the principles which should govern the determination of the amount to be given to the owner for the property appropriated, such principles must ensure that what is determined as payable must be compansaltion , that is, a just equivalent of what the owner has been deprived of his view was confirmed by the Supreme Court in Messrs West Ramnad Distribution Company Limited v. The State of Madras and another and Gaajendragadkar J. observed at page 1762 - "*article 31 (2) requires that such principles must ensure that what is determined as payable must be compensation , that is , a just equivalent of what the owner has been deprived of. That is why in considering the validity of any statute in the light of Article 31 (2), it would be open to the Court to enquire whether all the elements which make up the true value of the property acquired have been taken into account in laying down the principles for determining compensation. " I am not referring to other cases, as Mr. De for the State frankly admitted that prior to the Fourth Amendment such was the position of law. The question then is, whether the amendment has made any difference to the concept of compensation mentioned in Article 31? This was the precise question considered by the Supreme Court in a recent case Vajrawlu v. Special Deputy Collector" and, dealing with it, Subba Rao. J. observed that the Fourth Amendment had come after the Supreme Court had authoritatively ruled that the expression compensation used in Article 31 (2) meant a just equivalent and the conclusion must be that the amended Article 31, when it used the same expression compensation used it in the precise sense in which it had been interpreted by the Supreme Court. He said at page 1024 of the report - "the fact that Parliament used the same expressions, namely, compensation and principles as were found in Article 31 before the Amendment, is a clear indication that it accepted the meaning given by this Court to those expressions in Mrs. Bella Banerjee s case. He said at page 1024 of the report - "the fact that Parliament used the same expressions, namely, compensation and principles as were found in Article 31 before the Amendment, is a clear indication that it accepted the meaning given by this Court to those expressions in Mrs. Bella Banerjee s case. It follows that a legislature In making a law of acquisition or requisition shall provide for a just equivalent of what the owner has been deprived of or specify the principles for the purpose of ascertaining the just equivalent of what the owner has been deprived of". The learned Judge then dealt with the problem of reconciling the notion of a just equivalent with the Ouster of the Courts jurisdiction, to question the law on the ground of inadequacy of compensation and he said this- "it will be noticed that the law of acquisition or requisition is not wholly immune from scrutiny by the Court, but what is excluded from the Court s jurisdiction is that the said law cannot be questioned on the ground that the compensation provided by that law is not adequate. It will further be noticed that the clause excluding the jurisdiction of the Court also used the word compensation indicating thereby that what is excluded from the Court s jurisdiction is the adequacy of the compensation fixed by the legislature. The argument that the word compensation means a just equivalent for the property acquired and. therefore, the Court can ascertain whether it is a just equivalent or not, makes the Amendment of the Constitution nugatory, will be arguing in a circle. Therefore, a more reasonable interpretation is that neither the principle. * prescribing just equivalent nor the just equivalent can be questioned by the Court on the ground of the inadequacy of the compensation fixed or arrived at by the working of the principle. To illustrate; a law is made to acquire a house; its value at the time of acquisition has to be fixed; there are many modes of valuation, namely, estimate by an engineer, value reflected by comparable sales, capitalisation of rent and similar others. The application of different principles may lead to different results. The adoption of one principle may give a higher value and the adoption of another principle may give a lesser value. But nonetheless they are principles on which and manner in which compensation is determined. The application of different principles may lead to different results. The adoption of one principle may give a higher value and the adoption of another principle may give a lesser value. But nonetheless they are principles on which and manner in which compensation is determined. The Court cannot obviously say that the law should have adopted one principle and not the other, for it relates only to the question of adequacy. On the other hand, if a law lays down principles which are not relevant to the property acquired or to the value of the property at or about the time it is acquired, it may be said that they are not principles contemplated by Article 31 (2) of the Constitution. If a law says that though a house is acquired, it shall be valued as a land or that though a house site is acquired, it shall be valued as an agricultural land or that though it is acquired in 1950 its value in 1930 should be given: or though 100 acres are acquired, compensation shall be given only for 50 acres, the principles do not pertain to the domain of adequacy but are principles unconnected to the value of the property acquired. In such cases, the validity of the principles can be scrutinised. The law may also prescribe a compensation which is illusory; it may provide for the acquisition of a property worth lacks of rupees for a paltry sum of Rs. 100. 00 The question in that context does not relate to the adequacy of the compensation, for it is nocompensation at all. The illustrations given by us are not exhaustive. There may be many others falling on either side of the line. But this much is clear. If the compensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition, it can be said that the legislature committed a fraud on power and, therefore, the law is bad". his authoritative pronouncement makes it clear that, in spite of the fourth Amendment, compensation in Article 31 (2) still means a just eq ivalent of the property acquired and a law for compulsory acquisition [property must, therefore, lay down principles which ensure to the ownern a just equivalent. The question, whether a particular law does or snot lay down such a principle is justiciable. The question, whether a particular law does or snot lay down such a principle is justiciable. Once, however, this condition is satisfied, the Courts will not stop to enquire whether the acasnal compensation is adequate or not. Mr. De REFERRED TO the obvious ficulty of understanding how a just equivalent could ever fail to be equate compensation. Subba Rao J. relers to that difficulty and, I ink, he resolve.- it by assuming that a just equivalent need not necesly be an exact equivalent so long as the gap is narrow and it is narrow gap which is rendered non-justiciable by the Fourth Am endit, If. however, the gap be glaringly large, then, according to the preme Court, the question ceases to be one of adequacy and becomes a of principles. The illustrations in the judgment make the clear. Where the property worth several lakhs is acquired and compensation fixed by law is one hundred rupees, the gap between value of the property and the compensation fixed is so large that it possible to call it a just equivalent, and Subba Rao J. , therefore, that hundred rupees as no compensation at all , although, of e, in strict terms, one hundred rupees is not nothing at all . Simiaccording to the other illustrations, if the principle lor determining compensation would necessarily result in a glaring gap between the of the property and the compensation, then the principle would be id as, for instance, when property acquired in 1950 is valued in the of 1930 or a building site is valued as agricultural land. It is light of these principles that the petitioners objections to the red statute (Act 44 of 1965) have to be considered. ( 4 ) THE principles of compensation are con contained in the Schedule annexed to the Act, Paragraph I of the Schedule says-and to that no serious objection is taken that the compensation will be "an amount equal to the sum total of the value of the properties and assets of the Company on the date of commencement of the Act less the sum total of the liabilities and obligations of the Company as on the said date". The paragraph, however, adds that the value of the-assets is to be "calculated in accordance with the provisions of Paragraph II" and it is to that paragraph that objection is taken. The paragraph, however, adds that the value of the-assets is to be "calculated in accordance with the provisions of Paragraph II" and it is to that paragraph that objection is taken. In order to appreciate the argument in support of the objections, it is necessary to quote the whole of that paragraph:- " (A) The market value of any land or building; (b) the actual cost incurred by the Company in acquiring any plant, machinery or other equipment which has not been worked or used and is in good working condition and the written down value. (determined in accordance with the provisions of the Income Tax Act 1961) of any other plant, machinery or equipment; (c) the market value of any shares, securities or other investments held by the Company; (d) the total amount of the premiuirns paid by the Company in respect of all the leasehold properties reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease; (e) the amounts of debts due to the Company, whether secured or unsecured, to the extent to which they are reasonably considered to be recoverable; (f) the amount of cash held by the Company, whether in deposit with a bank or otherwise; (g) the value of all tangible assets and properties other than those falling within any of the preceding clauses". Mr. Dutt s first objection is general. The undertaking, which has been acquired, is admittedly a running concern, and Mr. Dutt, therefore, says that it should have been valued as a running concern and not broken up into its components as if it were defunct. There is some point in the objection; but it would become immaterial, should it transpire that for practical purposes the method adopted in paragraph II yields, in substance, the Same result, for after all, there can be more than one fair method of valuing anundertaking, and, if we find that paragraph II does essentially contain sound principles for valuing the. assets, there would be no point in the theoretical objection that a more appropriate method might have different to the one adopted. would, therefore, proceed to copsidrr the detailed objections concerning the valuation oi items contained in paragraph II. assets, there would be no point in the theoretical objection that a more appropriate method might have different to the one adopted. would, therefore, proceed to copsidrr the detailed objections concerning the valuation oi items contained in paragraph II. ( 5 ) AS fai as (a) is conceined, no objection is raised, as the land and buildings belonging to the Company are to be taken at their market! value. The item (b), however, which concerns the plant, machinery and other equipment, very serious objection has been taken. Tile, Company admittedly owns valuable machinery and plant and other equipment, this lias been split up into two parts. Such plant and. machinery and other equipment, which has not been worked or Used but is in good working condition, is to be , acquired at the actual cost incurred by the Company, whilee the rna hinery, plant or other equipment which has been worked, is to be acquired at the written down valus determined in accordance with the provisions of the Income Tax Act, 1961. The petition says and Mr. Dutt has emphasised this before usthat a good deal of the Company s machinery and plant and equipment were acquired many years before the present statute and the purchase price including other incidental expenses at that time can in no sense represent the present value of such machinery, plant and other equipment, and the principle contained in the Schedule, therefore, that the machinery, etc, compulsorily acquired in 1965 should be valued in terns of its cost to that Company many years ago, cannot be called relevant to the determination of just equivalent, as it takes no notice of the notorious fact that prices have been steadily rising during the past several years, particularly of imported machinery and plant. This objection has a good deal of force, and the principle laid down in the Schedule comes very close to the one of the illustrations mentioned by Subba Rao J. In Vajravelu v. Special Deputy Collector. The question is whether actual cost incurred by the Company. This objection has a good deal of force, and the principle laid down in the Schedule comes very close to the one of the illustrations mentioned by Subba Rao J. In Vajravelu v. Special Deputy Collector. The question is whether actual cost incurred by the Company. irrespective of when the machinery was purchased, can in law be called compensation for the compulsory acquisition of such machinery, and, if I understand the Supreme Court decision rightly, it cannot be so called unless there be grounds for thinking that the value of the machinery at the time of its acquisition would roughly correspond to its cost when it was purchased. No such ground is made out, while the general rise in prices is a fact of which we can take notice. ( 6 ) THEN comes the machinery and plant and equipment, which has been used, and for valuing that the provision is that its written down value is to be determined in accordance with the Income Tax Act, 1961. It is here that a most formidable objection arises. Mr. Dutt says and he is, I think, entirely justified that the concept of written down value contained in the Income Tax Act has and can have no conceivable relation to the real value of any machinery or plant or equipment, and the principle contained in the Schedule is, therefore, utterly irrelevant. The Income Tax Act, 1961, section 43, defines "written down value" as the "actual cost to the assessee less all depreciation actually allowed to him under this Act or under the previous Income Tax Act". Depreciation is allowed to an assessee as a matter of concession in accordance with the fixed rule, which has nothing very much to do with real depreciaton. The Income Tax Act is a taxing Statute, which takes away a person s property and depreciation, accirdmg to certain rules, is a concession which the legislature has chosen to allow to an assessee. That depreciation rule does not even pretend to determine the actual depreciation in a particular case and it is obvious that such depreciation has no real relationship with the actual value of any machinery at any particular point of time. That depreciation rule does not even pretend to determine the actual depreciation in a particular case and it is obvious that such depreciation has no real relationship with the actual value of any machinery at any particular point of time. It is, therefore, very hard to see how the written down value of any machinery, plant or equipment determined in accordance with the Income Tax Act can be called a principle for determining the just equivalent of such machinery, plant or equipment. IF It is true. as was said in the course of arguments, that with use, machinery does deteriorate and, therefore, depreciates in value. The ,,fact of such deterioration may, however, be wholly offset by a rise in price in the market. In any case, it is clear that such depreciation on. account of user is a fact, which must be determined with reference to "the condition of the machinery and its use. It cannot be arbitrarily determined by rule in the Income Tax Act, which rule is designed for a wholly different purpose. The Income Tax Act permits depreciation at la rate, which rapidly reduces the book value of machinery etc. to almost nothing and a reference to the balance-sheet of any company would bear that out. I am satisfied in the circumstances that this principle laid down in the Schedule for valuing the machinery, plant and equipment is utterly irrelevant to the matter of compensation. ( 7 ) THERE are other objections to the Schedule, such as the total omission of all intangible assets of the company, but since machinery, plant and equipment form a large part of the company s assets, it is unnecessary to go into those objections. On the facts placed before us, it is, I think, impossible to hold that the impugned Statute (Act 44 of 1969) conforms to the requirements of Article 31 of the Constitution and the compulsory acquisition of the undertaking called - the Metal Corporation of India Ltd.-must, on that ground, be held invalid. On the facts placed before us, it is, I think, impossible to hold that the impugned Statute (Act 44 of 1969) conforms to the requirements of Article 31 of the Constitution and the compulsory acquisition of the undertaking called - the Metal Corporation of India Ltd.-must, on that ground, be held invalid. ( 8 ) FOR these reasons, I would allow the petition (Civil Writ 832-D of 1965) and declare that Act 44 of 1965 does not specify the principles on which compensation can be determined and, therefore, violates Article 31 (2) of the Constitution and that the undertaking, the Metal Corporation of India Limited, cannot be compulsorily acquired by virtue of that Act as it stands A writ should in these terms issue. The other petition (Civil Writ 631-D of 1905) is infructuous. In view of all the circumstances, I would leave the parties to their own costs. ( 9 ) I concur with every word said by my learned brother Dulat J. in his very elaborate and able judgment allowing the Writ Petition (Civil Writ No. 832-D of 1965) and declaring the Metal Corporation of India (Acquisition of Undertaking) Act, 1965, as violative of Article 31 (2) of the Constitution. Though I am not unconscious of the fact that what I say is bound to be eclipsed by the eminent exposition by my learned brother of the principles having a bearing on the construction of Article 31 of the Constitution; but still I would venture to say a few words regarding the impact of Article 31 on the principles laid down in the said Act for determination of compensation for the acquisition of the undertaking. ( 10 ) ARTICLE 31 (2) comprises two parts : (1) the property can be compulsorily acquired only for a public purpose and that too by an authority of law which provides for compensation for the property so acquired. Such a law must either fix the amount of compensation or specify principles on which and the manner in which the compensation is to be determined and given, and (2) such a law cannot be called in question in any Court on the ground that the compensation provided by that law is not adequate. Such a law must either fix the amount of compensation or specify principles on which and the manner in which the compensation is to be determined and given, and (2) such a law cannot be called in question in any Court on the ground that the compensation provided by that law is not adequate. The first part of the Article, therefore, even after the 1955 amendment of Article 31 protects the property rights of the subjects and enjoins the legislature to provide for compensation for the property acquired and to either fix theamount of compensation or specify the principles on which and the manner in which the compensation is to be determined. Thus far there has been no change by the constitutional amendment in 1955. Before the amendment, the Supreme Court, while construing Article 31 in the State of West Bengal v. Mrs. Bella. Banerje held that in all cases where Article 31 (2) was attracted the law would fail unless it provided for componsation in the sense of full market value of the property at the time of acquisition or requisition. The only change brought about by the amendment of Article 31 is that, though the obligation of the legislature to either fix the compensation or to specify the principles for the determination thereof is still kept intact, the right to challenge the legislation on the ground that the compensation provided is not adequate has been taken away. In other words, the question of adequacy of compensation has been rendered non justiciable leaving it to the final judgment of the legislature. It fellows that if the legislature fixes the amount of compensation or specifies the principles on which the compensation is to be determined, the aggrieved owner is not entitled to challenge the constitutionality of the law on the ground that it does not give him the full monetary equivalent of the property taken. Non-justiciabillty of the adequacy of compensation has, therefore, to be seen and interpreted in the light of obligation cast on the legislature by the earlier part of Article 31 (2 ). Non-justiciabillty of the adequacy of compensation has, therefore, to be seen and interpreted in the light of obligation cast on the legislature by the earlier part of Article 31 (2 ). lam not for a moment suggesting that the entire Article 31 (2) must not be read together or that each part must be read in isolation but at the same time I do feel that the limitation on the power of the Court must be strictly confined to the terms of the article and the non-justiciability should not be extended beyond, what may be strictly called adequacy or inadequacy of compensation. Consequently, where the law, under which the acquisition is made, does not provide for compensation at all or lays down principles, which, in effect, provide for payment of no-compensation or illusory compensation, it would still be open to the Courts to pronounce upon its validity on the ground that it violates Article 31 (2) of the Constitution. Where in reality the compensation in given circumstances results in more than mere inadequacy of the compensation, I think the enquiry by the Courts is not shut out. It must be remembered that individual rights under our Constitution are, subject to prescribed limitations, immutable against all hostile legislation. No doubt, every consitntional light or privilege must be enjoyed with such limit limtaition as are necessary to make its enjoyment by each individual consistent with its like enjoyment by all, since the right of all is recognised as superior to the right of any one by our Constitution, and it is for this reason that powers have been conferred on the legislature by Art cle 19 to impose reasonable restrictions, in public interest, on the vaibus rights guaranteed thereby and deprivation of private property templated only for a public purpose, but a Constitution is not a beginning of a community only and it does not originate and create institutions of Government. Instead, it assumes the existence of an establishred system, which is still to continue in force and it is based on pre-exis-ting rights, laws and modes of thought. Written constitutions sanctify land confirm great principles and do not bring them into existence and the Constitution is not a cause but a consequence of personal and political freedom. Instead, it assumes the existence of an establishred system, which is still to continue in force and it is based on pre-exis-ting rights, laws and modes of thought. Written constitutions sanctify land confirm great principles and do not bring them into existence and the Constitution is not a cause but a consequence of personal and political freedom. The citizens of a free Government are justly jealous of I their constitutional rights and privileges and this would be attributed to them as a virtue rather than a. vice. The struggle for maintenance of rule. of law and of the constitutional protection keeps the subjects on the alert and inspires them with courage and determination in their effort to resist the aggression of arbitrary powers. It is just as obligatory upon the citizens to resist encroachments upon their rights and liberties guaranteed by the Constitution, as it is for them to upholl and maintain its integrity. Constitutional provisions curtailing the rights held sacred by all civilised people must be read in that background. It is for this reason that I am not prepared to extend the scope of nun-justi-liability of compensation beyond what has been expressed in Article 31 (2 ). It is, therefore, necessary that wherever the question raised is got merely as to adequacy or inadequacy of the compensation, but whether compensation has, at all, been provided or whether the compensation provided is so illusory as to amount to no compensation i at , I think the statute is not immune from the scrutiny of the Courts. he principles laid down by a statute for determination of compensa tion must, in all cases, be directed towards ascertainment of compensation rather than towards taking away the property under the garb of what the statute calls compensation though, in reality none may have been provided. Applying these principles, I cannot help thinking that the impugned statute does not in effect, lay down the principle for determination and payment of compensation. Having said this, I will now proceed to read the provisions of section 10 and the Schedule which deal with the determination of compensation. Section 10 provides that compensation shall be paid for the acquisition of the undertaking and such compensation shall be determined in accordance with the principles specified in the Schedule. Having said this, I will now proceed to read the provisions of section 10 and the Schedule which deal with the determination of compensation. Section 10 provides that compensation shall be paid for the acquisition of the undertaking and such compensation shall be determined in accordance with the principles specified in the Schedule. My learned brother has already dealt with the various provisions of the Schedule and I would confine my attention only to the latter part, paragraph 2 (b ). The said part says that with respect to plant, machinery and other equipments, other than plant etc. in good working condition, which has not been worked or used. the compensation shall be the written down value determined in accordance with the provisions of the Income Tax Act (43 of 1961 ). Under Rule 5, read with appendix I,- of the Income Tax Rules, 1962, the general rate of depreciation on the written down value is seven percent while special rates have been fixed for certain specified types of plant and machinery. A machinery or plant purchased 10 years before the date of acquisition would, therefore, depreciate by about seven percent or more of fie written down value every year calculated in accordance with the said rules and vet the machinery or plant may be in an extremely good condition. Even in that case, the compensation payable would be just nominal inspite of the fact that it is a matter of common knowledge that the prices of plant and machinery, particularly the imported ones, have risen several times, in the course of last few years. It cannot, in the circumstances, be said that the principles laid down in the Schedule to the impugned Act are principles directed to the determination of compensation of the. property acquired. They are, on the other hand, if I may use that expression, directed towards payment of no compensation . Compensation must in the contextof Article 31 mean just value and the principles laid down in the statutes acquiring the property must be directly related to the determination of the value having regard to the condition and nature of the property acquired. If they are not so directly related they cease to be the principles for determination of compensation. Compensation must in the contextof Article 31 mean just value and the principles laid down in the statutes acquiring the property must be directly related to the determination of the value having regard to the condition and nature of the property acquired. If they are not so directly related they cease to be the principles for determination of compensation. The mandate of Article 31 is not that the statute should provide for some 1 payment, but that it should lay down the principles for determining I compensation and if such principles ignore the nature or the condition of the assets acquired: I think the requirements of Article 31 are not satisfied. May be, that a statute after paying attention to all the relevant factors lays down a principle for calculating compensation, which works to less than the just equivalent, then the enquiry into adequacy is barred, but the case is different where such factors are completely ignored and some imaginary basis evolved for paying some money. Again, the plant and machinery may have been purchased even more than 10 years back; in such an event the compensation for plant and machinery, though in good working condition, may work to nil. Yet, another example which would demonstrate the artificiality of tlie method: employed for determining compensation, is that under rule 5 full depreciation is allowed if an asset is used for 180 days or more in an accounting year, hall it the asset is used for less than 180 (lays but mole than I 30 days. In case of plant and macahinery which is used only of days in any accounting year, it would be depreciated by fifty percent of the rates prescribed in Appendix I to the rule, irrespective of its actual. value or condition. The written down value calculated in accordance with the Income Tax Act, 1961, would have. consequently, no ]ust relation with the actual value of such a plant and machinery. In short. what emerges is that the legislature has not directed its attention to formulating the principles fcr payment of compensation . Considerable reliance was placed by the learned Additional Solicitor General on the decision of the Supreme Court in Messrs Barrakur Coal Company Limited v. The Union of India. In short. what emerges is that the legislature has not directed its attention to formulating the principles fcr payment of compensation . Considerable reliance was placed by the learned Additional Solicitor General on the decision of the Supreme Court in Messrs Barrakur Coal Company Limited v. The Union of India. In that case, sections 13 and II of the Coal Bearing Areas (Acquisition and Development) Act, 1956 specified the principles on which and the manner in which the compensation should be determined and given. The compensation was provided for the land sought to be acquired under the Act. The Supreme Court repelled the contention that the Act was violative of Article 31 (2), because th ( provisions made by the Parliament for computing the amount of cornpensation for the land did not take into account the value of the minerals. It was held that the challenge was, in effect, a challenge to the adequacy of compensation and the concluding words of Article 31 precluded such a challenge being made. The Supreme Court disposed of the contention thus:- ( 11 ) IT will be clear from these" provisions that the Act. specifies the principles on which and the manner in which the co;npensatior should be determined and given. This is all that is required of law relating to the acquisition of property by Article 31 (2) of the Constitution. Where provisions of this kind exist in a law that article lays down that such law cannot be called in question in any Court on the ground that the compensation provided by that law is; not adequate. Here compensation is specifically provided for the land which is to be acquired under the Act. The land includes all that lies beneath the surface or, as Mr. Dass put it, all that is locked" up in the land. Parliament has laid down in sub-section (5) o section 13 how the value of this land is to be calculated. The contention that the provisions made by the Parliament for computing the amount of compensation for the land do not take into account the value of the minerals is in effect a challenge to the adequacy o the compensation payable under the Act. The concluding words of Article 31 (2) preclude such a challenge being made". The contention that the provisions made by the Parliament for computing the amount of compensation for the land do not take into account the value of the minerals is in effect a challenge to the adequacy o the compensation payable under the Act. The concluding words of Article 31 (2) preclude such a challenge being made". It is therefore, obvious that the Supreme Court dealt with the case or the basis that the property acquired was land which included all that lay beneath the surface and principles for determination of compensation had been laid down in the statute. Following the test laid down in P. Vajravelu Muclaliar v. The Special Deputy Collector, I must con elude that the impugned Act does not lay down the principles for deter mining compensation in accordance with the mandate of Article 31 (2) I would, therefore, allow the writ petition and declare that Act 44 o 1965 is violative of Article 31 (2) of the Constitution.