State Of West Bengal V. Union of India

CASE BRIEF

Court: Supreme Court of India

Citation: (1964) 1 SCR 371; AIR 1963 SC 1241

Date of Pronouncement: December 21, 1962

Plaintiff: State of West Bengal

Defendant: Union of India

Interveners:

1. Advocate- Generals for the States of:
2. Madhya Pradesh
3. Punjab
4. Assam
5. Orissa
6. Madras
7. Bihar
8. Uttar Pradesh
9. Rajasthan
10. Gujrat
11. The National Coal Development Corporation

Bench: 6 judge bench comprising of-

1. Bhuvaneshwar Prasad Sinha, C.J
2. S.J. Imam, JJ.
3. K. Subba Rao, JJ.
4. J.C. Shah, JJ.
5. Rajagopala Ayyangar, JJ.
6. J.R. Mudholkar, JJ.

Laws Referred: Coal Bearing Areas (Acquisition and Development) Act, 1957, Constitution of India, 1950, Companies Act, 1956, Industry Policy Resolution of 1956

Facts:

• A suit was filed by the State of West Bengal against the Union of India which contended that the Parliament is not competent to make a law authorizing the Union to acquire land and right in/over the land, which are vested in a State. The suit challenged the Coal Bearing Areas (Acquisition and Development) Act, 1957, enacted by the Parliament and that specifically Sections 4 and 7 of the said Act were ultra vires; thereby challenging the legislative competence of Parliament. The suit also asked for an injunction in order to restrain the Union Government from proceeding under the provisions of the Act with regard to the coal-bearing lands which are vested in the State of West Bengal.
• The Supreme Court issued notices to all the Advocates-General of the States of India. The States appeared through their respective Advocates-General or through other Counsel. The States included Assam, Bihar, Gujrat, Madras, Orissa, Punjab, Rajasthan and Uttar Pradesh. Due to a pending matter between it as one of the defendants, the National Coal Development Corporation Limited also intervened.

Issues Involved:

• Whether the Parliament is competent to enact a law which provides for compulsory acquisition by the Union Government of land and other properties which are vested in/owned by a State?
• Whether the State of West Bengal is a sovereign authority?
• Assuming that the State of West Bengal is a sovereign authority, is the Parliament entitled to enact a law for compulsory acquisition of its lands and properties?
• Whether the Act or any of its provisions are ultra vires of the legislative competence of the Parliament?
• Whether the plaintiff is entitled to any relief and if so what relief?
• Whether the Coal Bearing Areas (Acquisition and Development) Act, 1957 on its true construction applies to lands which are vested/owned by the State of West Bengal?

Contentions by the parties:

1. Contentions of the Plaintiff

• All the property and assets which were vested in His Majesty for the purpose of Government of the province of Bengal, due to Article 294 of the Constitution of India, for the purposes of the State, were conferred to the State of West Bengal.
• The State of West Bengal, by a notification issued under the West Bengal States Acquisition Act, 1954 which it enacted in exercise of its exclusive legislative powers, conferred all estates and rights of intermediaries and Ryots in the State, free from encumbrances, together with rights in the sub-soil, including mines and minerals.
• The Union of India, in exercise of the powers conferred to it under the impugned Act by the Parliament was authorized to acquire any land or any right in/ over land, in any part of India and by notifications, the Union expressed its alleged intention to prospect for coal lying within the lands which are vested in the State of West Bengal- the plaintiff.
• This led to questions and conflict between the State of West Bengal and the Union Government regarding the Parliament’s competence to enact the impugned Act along with its power to acquire the properties of a sovereign authority, i.e., the State of West Bengal.
• Since the impugned Act enacted by the Parliament, i.e., the Coal Bearing Areas (Acquisition and Development) Act, 1957 does not, on its true construction, apply to the lands vested in/owned by the Plaintiff State, therefore, the notifications which were issued under the impugned Act are to be considered as void and must be of no effect.

1. Contentions of the Defendant

• All the legal contentions regarding the legal competency of Parliament of India to enact the impugned Act as well as the power of the defendant to acquire any property of the State are incorrect.
• The State of West Bengal is not a sovereign authority.
• The impugned Act is in public interest as per its underlying policy for planned and rapid industrialization of the country, due to which it is imperative that the production of coal should be significantly increased as it is the basic essential for industries.
• It is expedient in the public interest that the regulation for the mines as well as mineral development should be under the control of the Union Government due to which the acquisition of coal bearing areas by the defendant is essential not only for the regulation of mines and mineral development but also for increase in production of coal.

1. Contention of the Other States:

• The other states supported that on its true construction, the impugned Act, does not aim to acquire/ in any way affect the interests of the States of India. To support this contention, reliance on the Statement of Objects and Reasons of the impugned Act was placed.

Obiter Dicta/ Observations:

• The word “State” in the phrase “acquisition by the State” which occurs in the preamble implies only to the Union Government.
• The preamble does not sustain the contention that the impugned Act aimed to “acquire only the rights of individuals, derived from prospecting licenses or based on leases, and so exclude from the purview of the Act the rights of States in coal-bearing lands.”
• While giving a bare reading of the Sections of the impugned Act, the mention of the phrase “any land” or “any rights in/over such land” under Sec.9 seems to cover “every interest regardless of the person or authority who owns them, including those of a State Government.” It does not hold true either by express terms or by necessary implication that the sections of the impugned Act are not applicable to the rights or the interests of a State or that such lands of a State are not to be included. Thus, the said Act is proposed to include land as well as the rights in/over land which belong to individuals or to juristic persons. This may encompass not only the surface rights but also the mineral rights of the land.
• The Court opined that a statute, enacted by the Parliament, is “the expression of the collective intention of the legislature as a whole, and any statement made by an individual, albeit a Minister, of the intention and objects of the Act cannot be used to cut down the generality of the words used in the Statute.”
• The Parliament is competent to pass a law which is aimed for compulsory acquisition by the Union Government of any land as well as other properties vested in/owned by a State. The power of the Union Government to enact laws for the regulation as well as development of mines and minerals would by indispensable consequence comprise the power to also acquire mines and minerals. Thus, the power to enact laws for the acquisition of property which are vested in a State cannot be deprived to the Parliament, provided it is exercised consistently with the shelter which is given under Art 31 of the Constitution.
• The provision of Entry 42 in List III and Art 31 (2) of the Constitution operate in the same arena of legislation. The former articulates the legislative authority whereas the latter puts limitations on the exercise of that authority. While determining whether a part of a legislation concerning the acquisition or requisition of property is competent to be enacted, it is essential that the two provisions of law be read together, which are pieces of a solitary legislative pattern related to “the exercise of the right which may for the sake of convenience be called eminent domain, the expression ‘property’ in two provisions must have the same import in defining the extent of the power and delineating restraints thereon.”

Hence, Art 31(2) of the Constitution inflicts limitations on the exercise of the legislative power provided under Entry 42 of List III. Due to which property vested in a State may not be acquired by the Union under a legislation which is enacted in exercise of the power under Entry 42 except if the legislation complies with the conditions of Art 31.

• “While considering the true meaning of words or expression used by the Legislature, the Court must have regard to the aim, object and scope of the statute to be read in its entirety. The Court must ascertain the intention of the Legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs. In interpreting a constitutional document, provisions which confer legislative power must normally be interpreted liberally and in their widest amplitude.”

• “Art 31 is couched in negative form, but recognizes the existence of at least one important power vested in every sovereign State, not by virtue of its Constitution, but springing from its very existence as a State, viz., the power to acquire property for public purposes on payment of compensation which the American jurists call ‘eminent domain’. Art 31(2) enunciates the restriction subject to which the power of eminent domain is to be exercised.”

• Art 31(2) bestows protection of the widest amplitude against compulsory acquisition/ requisition of property. Nothing in the Article directs security of property of individuals or corporations. The framework within which the word ‘person’ is used does not allow the interpretation that “property is not to be available against acquisition of State property.”

Any other interpretation would imply that properties which would fall within the ambit of State in Part III of the Constitution, i.e., of municipalities or other local authorities cannot be either acquired at all or if they are acquired then they may be taken without any compensation.

• On the discussion of fundamental rights, the Supreme Court opined that “the fundamental rights are primarily for the protection of rights of individuals and corporations enforceable against executive or legislative action of a governmental agency, but it has to be remembered that all laws (i.e., pre-existing laws which are inconsistent with and post-constitutional laws which contravene the prohibitions) are to the extent of the inconsistency or contravention void. Some of these rights are declared in form of positive, but subject to restrictions authorizing the State to make laws derogating from the fullness of protection.”

• Certain articles in the Constitution merely declare rights like Art 17, 25(1), 26, 29(1) and 30(1); certain others merely prohibit lacking any mention to the right of any person, body or agency to implement them like Art 18(1), 23(1), 24 as well as 28(1). Prima facie, such declaratory rights include an obligation which is imposed upon the “State” and all persons to respect the declared rights which are enforceable unless it is indicated in the context otherwise against every person or agency which is pursuing to violate them.

“The rights declared in the form of prohibition must have a concomitant positive content; without such positive content they could be worthless. Relief may be claimed from the High Court or from the Supreme Court against infringement of the prohibition, by any agency, unless the protection is expressly restricted to State action. ”There are other different articles which are in form not of rights due to fundamental disabilities such as Art 18(2), 18(3), 18(4) of the Constitution. There are some other particular articles which seem to identify affirmative rights of the States like Art 19(g), Art 24(2) as well as Part II of the Constitution.

• Justice Subba Rao gave the dissenting opinion on the question relating to the relation between the Union and the State Legislatures with respect to the acquisition of property under Art 246. The majority opinion was that the power of legislation of the Parliament to acquire property is unobstructed, subject to the express provisions of the Constitution and that to denote restrictions on that power on the notion that the degree of political sovereignty due to which the States synchronize with and free of the Union, is to envision a scheme, constitutional in nature, which does not exist in law or in practice.

Thus, the distribution of legislative and executive powers does not sustain the notion of full sovereignty of the States thereby making it exceptional from the legislative power of the Union Parliament especially with respect to the acquisition of property of States. However, Justice Subba Rao dissented and opined that the political sovereignty lies with the people of the nation and the sovereignty, which is legal in nature is distributed between the Union and the States (constitutional entities), who are juristic authorities which possess properties and which function via the instrumentalities generated by the Constitution.

Though within the territorial limit of both the States and the Union in terms of legislative and executive arenas determined by the Lists, their jurisdiction can only be found in the specific constitutional articles which forge links between the two. The provisions which grant emergency powers to the Union to encounter extraordinary situations do not affect the exclusive field of operation of the Union during normal times.

Judgment:

• The Court confirmed that the Parliament does have legislative competence to enact a Statute for compulsory acquisition of land and other properties by the Union Government which are vested in/owned by a State.
• Though the State of West Bengal is a sovereign authority, but it does not disentitle the Parliament under Entry 42, List III of the Constitution to exercise its legislative powers.
• The impugned act – Coal Bearing Areas (Acquisition and Development) Act, 1957 is not ultra vires the legislative competence of Parliament and that it applies to lands which are vested in/owned by the State, on its true construction.
• The suit was dismissed with costs and the Plaintiff State was not entitled to any relief.

Conclusion:

Being the first momentous case where the issue of federalism was deliberated in depth, the case of State of West Bengal v. Union of India not only notes the legislative competency of the Parliament but also touches various aspects of law, such as the proper interpretation of statutes as well the scope of certain Constitutional provisions.

Prepared by Nikita Sethi