1957 JTR(AP) 121
1957 AIR(AP) 1034 ; 1957 KHC 4246
HIGH COURT OF ANDHRA PRADESH
MOHD.AHMED ANSARI,JAGANMOHAN REDDY, JJ.
Veernath
Versus
State of Hyderabad (Now Andhra Pradesh)
Writ Petns. Nos. 44, 50, 51, 58 and 59 of 1954
Decided On : 17-07-1957
Cash grants were held to be property within the meaning of Art. 31 of the Constitution, and their abolition without compensation violated Art. 31. The compensation provided for holders of cash grants under Part B of the Schedule was not illusory, but S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2).
Act
Referred
:CONSTITUTION FOURT AMENDMENT ACT : S.2
CONSTITUTION OF INDIA : Art.31(2), Art.31, Art.13(2)
HYDERABAD ABOLITION OF INAMS AND CASH GRANTS ACT : S.3(2)(b)
HYDERABAD (ABOLITION OF CASH GRANTS) ACT, 1952 - CONSTITUTIONALITY - CASH GRANTS - PROPERTY - COMPENSATION - DISCRIMINATION - AMENDMENT OF ART. 31 - EFFECT.
Fact of the Case:
Five writ petitions challenged the constitutionality of the Hyderabad (Abolition of Cash Grants) Act, 1952, on grounds of discrimination and confiscation. The Act abolished cash grants specified in the Schedule without compensation, except for certain exemptions. Two petitioners held cash grants under Part B of the Schedule and challenged the compensation provided as illusory. Three petitioners held cash grants under Part C of the Schedule and received no compensation.
Finding of the Court:
1. Cash grants were held to be property within the meaning of Art. 31 of the Constitution, as they were heritable, enjoyed without rendering services, and subject to certain restrictions. 2. The abolition of cash grants without compensation under S. 3(1) of the Act violated Art. 31 as it stood before the Constitution (Fourth Amendment) Act, 1955. 3. The compensation provided for holders of cash grants under Part B of the Schedule was not illusory and satisfied the requirement of full and fair money equivalent. 4. S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2) as it contravened Art. 31. The subsequent amendment of Art. 31 did not revive the provision because it was void from its inception.
Issues: 1. Whether cash grants were property within the meaning of Art. 31 of the Constitution. 2. Whether the abolition of cash grants without compensation violated Art. 31. 3. Whether the compensation provided for holders of cash grants under Part B of the Schedule was illusory. 4. Whether S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2).
Ratio Decidendi: 1. The Court held that cash grants were property within the meaning of Art. 31, as they were heritable, enjoyed without rendering services, and subject to certain restrictions. The Court relied on its earlier decision in Venkat Mungabai v. Hyderabad State, where it held that abolishing cash grants without compensation was contrary to Art. 31. 2. The Court held that the abolition of cash grants without compensation under S. 3(1) of the Act violated Art. 31 as it stood before the Constitution (Fourth Amendment) Act, 1955. The Court relied on the Supreme Court decisions in State of West Bengal v. Subodh Gopal Bose and Dwarkadas Shrinivas v. Sholapur Spinning and Weaving Co. Ltd., which held that expropriation of property without compensation violated Art. 31. 3. The Court held that the compensation provided for holders of cash grants under Part B of the Schedule was not illusory. The Court noted that the compensation was based on a formula that took into account the amount of the grant and the number of years it had been received. The Court also noted that the grantees were subject to certain restrictions, such as a prohibition on alienation and a requirement to obtain permission for travel outside the Hyderabad State. 4. The Court held that S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2) as it contravened Art. 31. The Court noted that the provision was void from its inception and was not revived by the subsequent amendment of Art. 31.
Final Decision: The Court allowed W.P. Nos. 44, 50, and 51 of 1954 and declared the stoppage of cash grants to the petitioners invalid. The Court dismissed W.P. Nos. 58 and 59 of 1954.
HYDERABAD (ABOLITION OF CASH GRANTS) ACT, 1952 - CONSTITUTIONALITY - CASH GRANTS - PROPERTY - COMPENSATION - DISCRIMINATION - AMENDMENT OF ART. 31 - EFFECT.
Fact of the Case:
Five writ petitions challenged the constitutionality of the Hyderabad (Abolition of Cash Grants) Act, 1952, on grounds of discrimination and confiscation. The Act abolished cash grants specified in the Schedule without compensation, except for certain exemptions. Two petitioners held cash grants under Part B of the Schedule and challenged the compensation provided as illusory. Three petitioners held cash grants under Part C of the Schedule and received no compensation.
Finding of the Court:
1. Cash grants were held to be property within the meaning of Art. 31 of the Constitution, as they were heritable, enjoyed without rendering services, and subject to certain restrictions. 2. The abolition of cash grants without compensation under S. 3(1) of the Act violated Art. 31 as it stood before the Constitution (Fourth Amendment) Act, 1955. 3. The compensation provided for holders of cash grants under Part B of the Schedule was not illusory and satisfied the requirement of full and fair money equivalent. 4. S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2) as it contravened Art. 31. The subsequent amendment of Art. 31 did not revive the provision because it was void from its inception.
Issues: 1. Whether cash grants were property within the meaning of Art. 31 of the Constitution. 2. Whether the abolition of cash grants without compensation violated Art. 31. 3. Whether the compensation provided for holders of cash grants under Part B of the Schedule was illusory. 4. Whether S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2).
Ratio Decidendi: 1. The Court held that cash grants were property within the meaning of Art. 31, as they were heritable, enjoyed without rendering services, and subject to certain restrictions. The Court relied on its earlier decision in Venkat Mungabai v. Hyderabad State, where it held that abolishing cash grants without compensation was contrary to Art. 31. 2. The Court held that the abolition of cash grants without compensation under S. 3(1) of the Act violated Art. 31 as it stood before the Constitution (Fourth Amendment) Act, 1955. The Court relied on the Supreme Court decisions in State of West Bengal v. Subodh Gopal Bose and Dwarkadas Shrinivas v. Sholapur Spinning and Weaving Co. Ltd., which held that expropriation of property without compensation violated Art. 31. 3. The Court held that the compensation provided for holders of cash grants under Part B of the Schedule was not illusory. The Court noted that the compensation was based on a formula that took into account the amount of the grant and the number of years it had been received. The Court also noted that the grantees were subject to certain restrictions, such as a prohibition on alienation and a requirement to obtain permission for travel outside the Hyderabad State. 4. The Court held that S. 3(2)(b) of the Act, which abolished cash grants under Part C of the Schedule without compensation, was void under Art. 13(2) as it contravened Art. 31. The Court noted that the provision was void from its inception and was not revived by the subsequent amendment of Art. 31.
Final Decision: The Court allowed W.P. Nos. 44, 50, and 51 of 1954 and declared the stoppage of cash grants to the petitioners invalid. The Court dismissed W.P. Nos. 58 and 59 of 1954.
Vinayak Rao Vaidya, for Petitioners; Govt. Pleader, for Respondents.
Judgement
MOHD. AHMED ANSARI, J. :- These five writ petitions challenge the constitutionality of the Hyderabad (Abolition of Cash Grants) Act on the ground of its provisions being discriminatory and confiscatory.
2. The Act came into force from July 30, 1952 and has since been amended twice. It consists of five Sections. Act No. 23 of 1954 has amended Ss. 2 and 3 of the Impugned Act as well as its Schedule, which the amending Act has expanded and divided into Parts A. B and C. By the other amending Act No. 14 of 1956, provisos have been added to S. 3 exempting minors, widows and grantees incapable of earning from the operation of S. 3 (2). Along with these amendments the important provisions of the Impugned Act are S. 3 and the Schedule; but before giving their details we would mention the substance of what other Sections enact.
Section 2 provides that the Act shall apply to all cash grants specified in the Schedule except those that are subject to rendering of service to religious or charitable institutions. Section 4 confers power to make rules and S. 5 enables the Government to remove difficulties, should they arise. Section 3 (1) provides that all cash grants specified in Part A of the Schedule and which are payable or enforceable during the year commencing on April 1, 1952, and in any subsequent financial year, shall be discontinued and cease to have effect immediately on the commencement of the Act.
The aforesaid Part comprises 5 clauses of Rusums enjoyed by Sardeshmukhs, Sardeshpandyas, Desmukhs, Deshpandayas and Dastbandars; but we are not concerned with these in the present Writ Petitions. For, by the decision of a Division Bench of the Hyderabad High Court in Venkat Mungabai v. Hyderabad State, (S) AIR 1855 Hyd 44 (A), of which one of us was a party, abolishing without compensation four out of five such grants has been held to be contrary to Art. 31 of the Constitution, and, therefore, void. An appeal against the decision is now pending before the Supreme Court.
3. In these Writ Petitions we are concerned with S. 3 (2) which provides that all cash grants specified in Parts B and C of the Schedule, and which are payable or enforceable during the year commencing on the first day of April 1954, and in any subsequent financial year, shall be discontinued and cease to have effect on the 1st day of July, 1954. Provisions for compensation to holders of cash grants mentioned in Part B have been made by S. 3 (2) (a), which says that compensation amounting to a sum equal to six times the annual amount payable to each of the aforesaid grantees shall be paid in cash either in full or in annual instalments not exceeding twelve.
Two out of the five petitioners before us, Mirza Mohd, Ali Baigand Ishwarlal in Writ Petitions Nos. 58/5 and 59/5 of 1954, were holders of cash grants enumerated in Part B of the Schedule. They challenge the constitutionality of S. 3 (2) (a) on the ground of the compensation provided for being illusory, and. therefore, contrary to Art. 31 as it stood before the Constitution (Fourth Amendment) Act, 1955. The remaining three petitioners belong to the classes of cash grantees who are grouped in Part C of the Schedule, and S. 3 (2) (b) directs their grants to be discontinued and cease to have effect.
As these holders have not been given any compensation, exceptions against discontinuance have been made in favour of old persons, widows, minors or those incapable of earning livelihood. The proviso to S. 3 (2) (b) says that in respect of each of the cases specified in Col. 1 to it, the grant shall be continued subject to the conditions specified against such case during the period mentioned in column 2. The first column comprises 3 classes. Firstly are those who were not less than sixty years on April 1, 1954 and their grants are to continue till their deaths. The next group consists of those who were less than sixty years on April 1, 1954. In such cases if the grantee be a widow, the grant is to continue till her death or during the continuance of widowhood; and if male, he will enjoy the benefit if he be incapable of earning livelihood on account of being blind, deaf, dumb, mute, mentally deranged, cripple or paralytic. The last group of grantees exempted from the operation of S. 3 (2) (b) are minors.
4. In case of males, if cash grant be the only source of income the grantee is to enjoy it till he attains the age of 18 years, and if females till her marriage or attainment of 18 years, whichever be earlier. There is a further proviso to these exemptions, that minor or cripple males, minor female or widow, if in receipt of more than one grant, and having no other source of income for livelihood will receive the grant of the highest amount if such a person be in receipt of more than one grant.
The aforesaid exemptions were added by the amending Act No. 14 of 1956, and make obsolete parts of the complaints in the Writ Petitions Nos. 44, 50 and 51 which were filed in October and November 1954, concerning the Impugned Act being without rational classification. These petitions allege that if the object of exempting persons who had reached the age of sixty, and this exemption was in the original Act, be to provide for persons who were not able to earn their livelihood, the legislature has not taken into consideration cases of widows, minors, invalids and others, who are not able to earn their own livelihood.
There is however, another complaint of discrimination, which consists of grantees grouped in Schedule B having been given compensation and those covered by Schedule C having been denied any such right. This complaint will have to be adjudicated in these writ Petitions.
The controversy, therefore, revolves itself under three heads :
1. Whether the cash grants which the Writ Petitioners enjoyed before the Impugned Act came into operation, can be treated as covered by the word property as used in Art. 31 of the Constitution, and cannot, therefore, be abolished without any or adequate compensation ;
2. Whether the amendments in Art. 31 by the Constitution (Fourth Amendment) Act, 1955, which came into operation after the Writ Petitions were filed, save the Impugned Act from being void, assuming the Impugned Act to be contrary to Art. 31 before its amendment; and
3. Whether the abolition without compensation of cash grants covered by group C of the Schedule falls within inhibition of Art. 14.
5. Veernath, the petitioner in W. P. No. 44 of 1954, claims to have been the holder of an ordinary mansab (mansab mamuli), which is one of the several grants in Part C of the Schedule. He alleges that the mansab which was originally issued in the name of one Dharnidhardas on Shawal 7, 1267-H (July 6, 1851) was heritable, was sanctioned in the name of Kishendas, after him to his widow, after her to his nephew, after the nephew to his nephew, and after the death of Narayan Pershad on May 12, 1953, the succession was granted in the name of the petitioner on January 7, 1954.
This class of cash grants is claimed to be heritable by heirs according to the personal law of the holder, commutable for the amount which the holder would have received during sixteen years, and attachable in execution of a decree without sanction of any Department. These incidents are not denied by the Government in its reply to the Writ Petition, but the right to receive the cash is asserted not to amount to property, because of prohibition against the grant being alienated, liability to being stopped in case of conviction of the holder, deduction of 25% on each succession, prohibition against holders entering any profession without permission, and the liability of the holder to be called upon to perform any duty.
6. The applicant in W. P. No. 50 of 1954 is Devishanker, whose grant also belongs to Part C of the Schedule. What he held was Yomia or cash paid on daily basis. His Writ Petition alleges that the Yomia was issued in the name of Seetaram during the time of Nasir-ud-dowla, that the rate was Re. 1 per day, the hoiders being entitled to Rs. 360 annually, that the grant was made specifically heritable by its Sanad; that after Seetaram it was given to the son of the grantee; that during the Inam Enquiry the holder was given land which he declined, insisted on the cash grant being continued and the order of the Inam Department was accordingly amended; and that the Yomia was inherited by the petitioner in 1321-F. (1911-12).
The several incidents claimed for treating the grant to be property are that it was heritable, irrespective of whether the heirs had any other means of livelihood, and was not subject to the rendering of services. The objections of the Government for this grant being treated as property, are prohibition against alienation and its stoppage in case the Youmiadar be convicted.
7. The last Writ Petition in which the petitioner belongs to Part C class of cash grantees, is W. P. 51. wherein the holder is of Mahawar Walajahi, other than one issued in lieu of Jagirs. The grant is called Walajahi because Nawab Walaja of Carutak had originally granted it to the ancestor of the petitioner. During the Asafjahi period, it was being paid from the revenue of Ghanapura Jagir. Nawab Nasir-ud-dowla had stopped it. The matter was referred to the Governor-General-in-Council, and on recommendation of its being continued, its continuance was ordered. The grant is heritable because the heirs of the original grantee had enjoyed it from generation to generation. It would be computed on payment of the amount which the holders would have received during 25 years.
It was attachable in execution of a decree without prior sanction. The grounds mentioned by the Government for holding it not to be property, are prohibition against alienation, stop-page in case of conviction, a cut of 25 percent on granting succession, permission for going out of the State, for taking up profession and liability to be called upon to perform any duty whenever necessary.
8. The petitioners in the remaining Writ Petitions belong to holders of cash grants enumerated in Part B of the Schedule. Mirza Mohd. Ali Baig, the original Petitioner in W. P No. 58 of 1954, died after the filing of the petition, and his heirs have been brought on record. He is claimed to have been the holder of mansab-e-imtiyazi which was issued to Hafisullah Baig in 1276-H. The grant is further claimed to be heritable consisting of Rs. 20 payable per month and the compensation provided by the Act is alleged to be illusory. The last petitioner in W. P. No. 59 of 1954 is Ishwarlal. He claims to be the holder of mansab Maviza Jagir or cash in lieu of Jagir, and the grant to have been made because the original grantee was holder of a Jagir called Rajanpally, Pargana Kohir.
The petition further alleges that the grantee had the grant transferred in the name of his sisters son; that it amounts to Rs. 54-12-0; that his widow succeeded after him, that the petitioner commuted part of the mansab for his lifetime and that the succession to the rest was granted in favour of the petitioner and another. The mansab is claimed to be property, because it is alienable and attachable in execution of a decree, and its abolishment on payment of compensation is still claimed to be unconstitutional because the amount of compensation is illusory.
9. It will have been observed that all the five grantees were entitled to receive periodically cash payments; that their rights were inheritable, but subject to deduction of certain amounts on each succession, and the heirs being recognised by the State in proper proceedings, that the grants were attachable in execution of a decree and were computable. It is equally true that the grantees were placed under certain restrictions such as permission being required for travel outside the Hyderabad State, entry into profession and there was the liability for stoppage in case of conviction. There has been later simplification of Law covering all grants by the enactment of the Hyderabad Atiyat Enquiries Act, 10 of 1952.
The phrase holder of an Atiyat Grant has been defined by the Act as a person actually holding the grant, and the phrase holding the grant has been further defined as in enjoyment of the grant. Atiyat grants, moreover, have been defined to include cash grants. Section 3 of the aforesaid Act provides that subject to the provisions of the Hyderabad Enfranchised Inams Act, all atiyat grants shall be continued to be held by the Holders thereof, and after them by their successors subject to the conditions laid in the muntakabs. The future succession was governed by S. 7.
Section 6 prohibits alienation, exempts half the income from attachment in execution of a decree, and requires the succession to be regulated by the personal law of the last holder. No doubt, S. 5 preserves to the Government the right to resume the grants, yet it makes such a right exercisable only in the prescribed manner. In these circumstances, the objection that the petitioners were before the Impugned Act enjoying grants which were not property, is hardly sustainable.
10. After considering several authorities, it was held in (S) AIR 1955 Hyd 44 (A), that the word property occurring in Art. 31 is not confined to immovable property, and the elements of hereditability and enjoyment of the benefit without any rendition of services were sufficient insignia of property to invest the cash grants with the characteristic of property as used in Art. 31. We do not think sufficient grounds have been made out to vary the view. The elements of hereditability as well as enjoyment of benefit without rendition of services are common to both the cases.
Restriction against alienation in (S) AIR 1955 Hyd 44 (A), was not treated as sufficient to exclude the grants from being property and it should not lead to different conclusion in the present cases. Moreover, in Sagir Ahmad v.
State of U. P., AIR 1954 SC 728 (B), Mukherjea J., observed at page 740 :
"Under the statute the Government may not deprive the appellants of their buses or any other tangible property but they are depriving them of the business of running buses on hire on public road. We think therefore that in these circumstances the legislation does conflict with the provision of Art. 13 (2) of the Constitution." It follows that all the grants covered by the Writ Petitions before us were properties.
11. We have next to determine whether under the unamended Art. 31 the stoppage of cash grants without compensation constitutes infringement of the aforesaid Article.
12. There are two decisions of the Supreme Court on this point. In State of West Bengal v. Subodh Gopal Bose, AIR 1954 SC 92 (C), it has been held that legislature alone can compel individuals to part with their property and Cls. (1) and (2) of Art. 31 imposes two further limitations on the legislature, namely, that the expropriation must be for public purpose, and cannot be made except on payment of compensation. Again in Dwarkadas Shrinivas v. Sholapur Spinning and Weaving Co. Ltd., AIR 1954 SC 119 (D), Mahajan, J., as he then was, observed that Art. 31 gives complete protection to owners of properties and by virtue of it no person can be deprived of possession of property without payment of compensation and that too, if there was a public purpose behind the action.
Following the aforesaid authorities, the Division Bench of the Hyderabad High Court in (S) AIR 1955 Hyd 44 (A), has held that expropriation of properties of all kinds has under the Constitution been made subject to the payment of compensation, and it is immaterial whether the property be moveable or immoveable. It was further held in the case that the absence of any compensation in S. 3 (1) of the impugned Act was fatal to its constitutionality. It is true that this was said of the Hyderabad Cash Grants Act before its First Amendment Act No. 23 of 1954, which came into operation on August 9, 1954.
But the authority would be relevant in deciding constitutionality of any provision whereby expropriation of any property has been made without compensation. By the aforesaid amending Act, both parts B and C were added to the Schedule, and the new sub-s. (2) (b) to S. 3 provides for abolishing cash grants in Part C without providing for compensation to the holders. These may be contrasted with abolishing cash grants in Part B of the Schedule with compensation, which has been made basis of complaint of the impugned Act being discriminatory.
But in the light of the authorities mentioned above, S. 3 (2) (b) of the impugned Act, contravened the provisions of Art. 31, as it then stood. It was, therefore, void under Art. 13 (2).
13. We will presently consider whether the Constitution (Fourth Amendment) Act, 1955, saves this part of the impugned. Act. even though it had become void before the amendment came into operation in 1955. The Constitutional position of the two petitioners who belong to grantees covered by Part B of the Schedule, however, must be determined first. It was argued that the compensation provided for these holders is illusory and, therefore, void.
Section 3 (2) (a) enacts that compensation to such grantees must amount to a sum equal to six times the annual amount payable to the grantees. Reliance was placed on State of West Bengal v. Mrs. Bela Benerjee, AIR 1954 SC 170 (E). In that case compensation payable for land acquired at any time under the Act was the market value of land on the particular date of the year, 1946, no matter when the land was acquired. The Supreme Court in these circumstances, has said at page 172 :
"................... While it is true that the legislature is given the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner for the property appropriated, such principles must ensure that what is determined as payable must be compensation, that is, a just equivalent of what the owner has been deprived of Within the limits of this basic requirement of full indemnification of the expropriated owner, the Constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable. Whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected, is a justiciable issue to be adjudicated by the Court......"
14. In other words, under the unamended Art. 31 (2) of our Constitution the word compensation has been held to mean a full and fair money equivalent of the property taken.
15. The question, therefore, for determination in the two writ petitions is whether the compensation provided for takes into account all the elements, which make up the true value of the property appropriated. We have seen that some of the cash grants were commutable; but no uniform rule apparently existed for fixing the amount. The petitioner in W.P. No. 44 alleges the rule for converting ordinary mansabs to be what the holder would get for sixteen years whereas the allegations in other writ petitions, excepting that of the yomiadar, are for commutation at twenty-five years amount of the grants. We think these earlier Rules furnish no guidance; for what may be fair compensation when privileges are particularly cherished, may not be regarded as such in a Republic.
In these circumstances, there is bound to be divergence of views between the mansabdars and an average citizen as to what would be the fair equivalent of the property. Moreover, there was the difficulty of providing a rule common to holders of cash grants whose varieties come to nine. The legislature in these circumstances, was held in Suryapal Singh v. State of U. P., AIR 1951 All 674(FB) (F), authorised under Art. 31, before its amendment to specify the principle on which the compensation is to be determined.
"Nor does the conferment of power to determine the principles on which the compensation shall be given enable the legislature to depart from the basic rule. That provision is intended to enable the legislature to lay down rules for the assessment of compensation in cases where its determination may be difficult or where different persons may take different views as to what is the equivalent value of the property acquired".
16. The Act has provided for six times the amount, which the grantee is receiving and we do not think the compensation is so low as to render the amount arbitrary. We are of the opinion that the grounds of complaint against the compensation being illusory have not been made out, and, therefore, Writ Petitions Nos. 58 and 59 fail.
17. Now we come to the second head of controversy in the case, which is whether S. 3 (2) (b) of the impugned Act is saved by the subsequent amendments in Art. 31 under the Constitution (Fourth Amendment) Act, 1955. This Act came into force on April 27, 1955, by S. 2 of the Act. Article 31 was amended and for clause (2) of this Article, the following clauses were substituted :
"(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principle on which, and the manner in which the compensation is to be determined and given; and no such law shall be called in question in any Court on the ground that the compensation provided by that law is not adequate.
(2A) Where a law does not provide for the transfer of the ownership or title to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property."
18. The learned Government Advocate has urged that the amendment should govern the decisions in the Writ Petitions Nos. 44, 50 and 51. He argues that S. 3 (2) (b) does not provide for acquisition or requisition of any property; but, on the other hand, directs the rights to receive cash payments to cease from a particular date, and such a provision is no longer inconsistent with constitutional guarantee, now contained in Art. 31. In support of this argument, he relies on Bhikaji Narain v. State of M. P., (S) AIR 1S55 SC 781 (G). The petitioners in the case had been carrying on business at stage carriage for considerable number of years under permits granted under S. 58, Motor Vehicles Act, 1939.
Far reaching amendments were introduced by the C. P. and Berar Motor Vehicles (Amendment) Act 1947 in the application of the Central Act to Central Provinces and Berar, and as a result power was given to the Government to fix fares, to cancel any permit after the expiry of three months from the date of notification, to declare its intention to engage in the business of road transport, to limit the period of the licence to a period of less than the minimum specified in the Act and to direct the specified Transport Authority to grant a permit to the Government.
The amending Act was No. 3 of 1948. In exercise of the powers under the newly added Sub-s. (3), S. 58. the period of the permit was limited to four months at a time and a notification was issued declaring the intention of the Government to take up certain routes. The Writ petition was filed in the case on May 27, 1955, challenging the constitutionality of the provisions as being violative of Art. 19 (1) (g) and Art. 31.
The Supreme Court held that the effect of the Constitution (First Amendment) Act 1951 was to remove the shadow and to make the impugned Act free from all blemish or infirmity," that the law continued in force even after the commencement of the Constitution with respect to persons who were not citizens, and when the amendment was made in the Constitution it becomes operative again even as against a citizen. The Supreme Court further held that the inconsistency with Art. 31 was removed by the Constitution (Fourth Amendment) Act, 1955 from April 27, 1955, and the constitutionality of the impugned Act cannot, thereafter be challenged.
19. The next case relied by the Government Pleader is Chhaya Devi v. State of Bihar, (S) AIR 1957 Pat 44 (H), wherein a question arose whether provisions of Bihar Act, 30 of 1951, were, constitutionally valid and operative. It was held that though the provisions violated Art. 31 (2), the Act was revivified and revitalised with effect from the date of the passing of the Constitution (Fourth Amendment) Act, 1955, and the Act became constitutionally valid and operative with effect from April 27, 1955, on which date the Constitution (Fourth Amendment) Act, 1955, was passed. The learned Chief Justice observed at page 48 :
"Counsel on behalf of the petitioners also said that there was some difference to the language of Arts. 13 (1) and 13 (2). But I do not think that the difference in the language is material so far as the interpretation of the word void in Art. 13 (2) is concerned. Indeed, S. R. Das, C. J., has specifically said in his judgment that the difference between the language of Arts. 13 (1) and 13 (2) was not the basis of the decision of 1955-2 SCR 589: (S) AIR 1955 SC 781) (G). I am inclined to think, on the contrary, that the reasoning of His Lordship is wide enough to cover the language of both Arts. 13 (1) and 13 (2) of the Constitution......"
The learned Chief Justice of the Patna High Court then refers to the following observation of His Lordship the Chief Justice of the Supreme Court in (S) AIR 1955 SC 781 (G) at p. 785 :
"The true position is that the impugned law became as it were, eclipsed, for the time being by the fundamental right. The effect of the Constitution (First Amendment) Act, 1951, was to remove the shadow and to make the impugned Act free from all blemish or infirmity. If that were not so, then it is not intelligible what existing Law could have been sought to be saved from the operation of Art. 19 (1) (g) by the amended clause (6) in so far as it sanctioned the creation of State monopoly, for, ex-hypothesi, all existing laws creating such monopoly had already become void at the date of the commencement of the Constitution in view of clause (6) as it then stood.
"The American authorities refer only to post-constitution laws which were inconsistent with the provisions of the Constitution. Such laws never came to life but were still born as it were. The American authorities, therefore, cannot fully apply to pre-Constitution laws which were perfectly void before the Constitution.
But apart from this distinction between pre-Constitution and post-Constitution laws on which, however, we need not rest our decision, it must be held that these American authorities can have no application to our Constitution. All laws existing or future, which are inconsistent with the provisions of Part III of our Constitution, are, by the express provision of Art. 13, rendered void "to the extent of such inconsistency".
Such laws were not dead for all purposes. They existed for the purpose of pre-Constitution rights and liabilities and they remained operative even after the Constitution, as against non-citizens. It is only as against the citizens that they remained in a dormant or moribund condition".
20. We do not take the aforesaid observations as laying down that a post-Constitution legislation infringing such fundamental guarantees as are not confined to Citizens, revives on subsequent constitutional amendment without any indication of the amendment having retrospective operation. It should not be overlooked that the aforesaid observations of his Lordship the Chief Justice of India were not made when dealing with the repugnancy of the Act to Art. 19 (1) (g), and, therefore, the Act would be operative as against persons other than Indian Citizens. It follows that the Act had legal operation against certain class of persons and because it was before the Constitution, transactions prior to January 26, 1950, were covered by it.
Consequently, the enactment had curtailed legal operation. As a result of the removal of the constitutional bar the limitations on the Act were lifted so as to enlarge the field whereupon the Act would thereafter operate. The position is fundamentally different where a legislation from its inception binds neither persons nor transactions due to its having contravened some provisions of the ruling instrument under which the enacting authority derives its power. In such a case there is no limitation on the operation, but entire absence of binding force in the enactment. We do not consider the observation of his Lordship the Chief Justice of India in the aforesaid case as over-ruling the earlier observations of the Supreme Court concerning enactments that were contrary to Fundamental rights.
Such observations are qualified to this extent that where the enactment be partly invalid, the subsequent defeasance of the limitation by constitutional amendment cures the partial invalidity. They can still be relied upon for holding that a legislation after the inauguration of the constitution and void due to its contravening a fundamental guarantee shared by all persons, would not be revived by subsequent removal of the constitutional objection. We, therefore, do not agree with the learned Judges in the Patna case that the word void in Art. 13 (2) should always be construed like void in Art. 13 (1). There are observations to the contrary in decisions of the Supreme Court. In Keshavan v. State of Bombay, AIR 1951 SC 128 (I), Mahajan, J., as he then was, observed at
P. 138
"Reference was also made to the rule of construction laid down by the American Courts in respect of Statutes declared void because of their being repugnant to the Constitution of the United States of America. It is obvious that if a statute has been enacted and is repugnant to the constitution, the Statute is void since its very birth and anything done under it is also void and illegal. The Courts in America have followed the logical result of this rule and even convictions made under such an unconstitutional Statute have been set aside by issuing appropriate Writs. If a statute is void from its very birth, then anything done under it, whether closed, completed, or inchoate, will be wholly illegal and relief in one shape or another has to be given to the person affected by such an unconstitutional law.
This rule, however, is not applicable in regard to laws which were existing and were constitutional according to the Government of India Act, 1935. Of course, if any law is made after 26-1-1950 which is repugnant to the Constitution, then the same rule will have to be followed by Courts in India as is followed in America and even convictions made under such an unconstitutional law will have to be set aside by resort to exercise of powers given to this Court by the Constitution."
Again in Behram Khurshid v. Bombay State, (S) AIR 1955 SC 123 (J), Mahajan, C. J., says at page 145 :
"The legislative power of Parliament and the State Legislatures as conferred by Arts. 245 and 246 of the Constitution stands curtailed by the fundamental rights chapter of the Constitution. A mere reference to the provisions of Art. 13 (2) and Arts. 245 and 246 is sufficient to indicate that there is competency in Parliament or a State Legislature to make a law which comes into clash with Part III of the Constitution."
21. It would be useful to refer now to two text books concerning the effects of subsequent constitutional amendments on earlier laws not in conformity with the Constitution existing on the dates of their enactments. The reference is merely to show what is generally accepted as the correct legal position of such laws. Willoughby on the Constitution of the United States, Volume I, at page 11, states the position as follows :
"The validity of a statute is to be tested by the constitutional power of a legislature at the time of its enactment by that legislature, and if, that tested, it is beyond the legislative power, it is not rendered valid, without re-enactment, if later, by constitutional amendment, the necessary legislative power is granted."
Cooley also says in note to page 384 of Volume I of his Constitutional Limitations :
"A statute void for unconstitutionally is dead and cannot be vitalised by a subsequent amendment of the Constitution removing the constitutional objection, but must be reenacted."
22. The result is that any legislation after January 26, 1950 contravening Art. 31 would have no legal operation. There is no authority of the Supreme Court to the contrary; for the legislation in Purshottam v. B.M. Desai, (S) AIR 1956 SC 20 (K), where (S) AIR 1955 SC 781 (G), was referred to was also prior to the Constitution. On the other hand, there are observations already referred to that post-Constitution enactments contravening the Constitution have no legal existence, and consequently cannot be revived.
We, therefore, disagree with the authority of the Patna High Court regarding the interpretation of Art. 13 (2) and hold that S. 3 (2) (b) of the Hyderabad (Abolition of Cash Grants) Act, XXXIII of 1952, is void under Art. 13 (2) because of the particular Section being opposed to Art. 31 as it then stood, and is not revived because the bar was removed under the Constitution (Fourth Amendment) Act, 1955. There are also in S. 3(2) words "and part C" which make the direction of stoppage from a particular date contained in the sub-section applicable to these grants.
These words alone are of no constitutional validity because the abolition effected is not accompanied by any provision for compensation. That these are easily severable from the rest of the Sub-section is obvious. Therefore, their invalidity does not affect the other provisions of the sub-s. (2) of S. 3 which would be valid and legally operative.
23. We will now come to the third point in controversy in this case. But as the decisions on the first two are in favour of the petitioners in W. P. Nos. 44, 50 and 51 of 1954, any further adjudication on the last point is unnecessary.
24. The result is that W. P. Nos. 44, 50 and 51 of 1954 are allowed and stoppage of their cash grants is invalid. The petitioners are also given costs, which we fixed at Rs. 150/- i.e., Rs. 50/- to each petitioner in each of the three petitions. The W. P. Nos. 58 and 59 of 1954 are dismissed with costs, which we fixed at Rs. 100/- i.e., Rs. 50/- against each petitioner in each of the two petitions. This judgment will govern all the petitions.
Order accordingly.