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1989 Supreme(SC) 234

SUPREME COURT OF INDIA
R.S. PATHAK, CJI., SABYASACHI MUKHARJI, S. NATARAJAN, M.N. VENKATACHALIAH AND S. RANGANATHAN, JJ.
Tinsukhia Electric Supply Co. Ltd., Petitioner
Versus
State of Assam and others, Respondents
Writ Petitions Nos. 457 and 458 of 1972, D/-13-4-1989.
Advocates appeared :
 Mr. Soli J. Sorabji and MR.S. Rangarajan, Sr. Advocates, Mr. Harish N. Salve, Mr. D. N. Mukharji, Mr. Ranjan Mukherjee, Mr. Udhey K. Lalit, MR.S. K. Nandi and MR.S. Parekh, Advocates with them, for Petitioner; Dr. Shankar Ghosh and Mr. G. L. Sanghi, Sr. Advocates, Mr. P. Chowdhary, Mr. C. S. Vaidyanathan and Mr. C. V. Suba Rao, Advocates with them, for Respondents; Mrs. A. K. Verma, Advocate, for the Intervener.

Advocates:
M.N.VENKATACHALIAH, R.S.PATHAK, S.NATARAJAN, S.RANGANATHAN, SABYASACHI MUKHARJEE,

Headnote:ELECTRICITY ACT—TINSUKIA AND DIBRUGARH ELECTRIC SUPPLY UNDERTAKINGS (ACQUISITION) ACT—DEDUCTION OF amount FROM THE AMOUnT PAYABLE IS NOT UNREASONABLE OR ARBITRARY - ELECTRICITY ACT—TINSUKIA AND DIBRUGARH ELECTRIC SUPPLY (UNDERTAKINGS) ACQUISITION ACT—THE FACT THAT THE PROPERTY OF THE LICENcEES REPRESENTED BY THE UNEXPIRED PORTION OF THE LICENCE HAS NOT BEEN TAKEN INTO ACCOUNT IN COMPUTING THE AMOUNT PAYABLE FOR THE ACQUISITION OF UNDERTAKING WOULD NOT RENDER IT UNREASONABLE OR ARBITRARY - ELECTRICITY ACT—TAKING OVER OF ELECTRICITY SUPPLY UNDERTAKINGS—NATIONALIZATION FOR ECONOMIC CONSI­DERATION - ELECTRICITY ACT—TINSUKIA AND DIBRUGARH ELECTRIC SUPPLY (UNDERTAKINGS) ACQUISITION ACT—PAYMENT OF “BOOK VALUE” OF ASSETS ACQUIRED ON ACQUISITION OF UNDERTAKING - TINSUKIA AND DIBRUGARH ELECTRIC SUPPLY (UNDERTAKINGS) ACQUISITION ACT

       - as the law providing for acquisition of undertaking was protected under Article 31C as held in the case of

       - held to be not illusory in the case of Tinsukia Electric Supply Co. Ltd. v. State of Assam, AIR 1990 SC 123 = 1989(2) JT 217 = 1989(3) SCC 709 = 1989(2) UJ (SC) 712 = 1989(2) Comp.L.J. 377. The determination of value thereof and the substitution of the book value in place of the market value, are only methods for such acquisition and do not disclose the true nature and character of the legislation, but are incidental provisions thereof.

       - not colourable legislation in the sense that there was no direct nexus with Article 31 (b) and (c) as held in

Judgment

SABYASACHI MUKHARJI, J.:- I agree with Brother Venkatachaliah, that the contentions urged on behalf of the petitioner in support of the challenge to the impugned legislations must fail and the writ petitions must be dismissed. I would, however, like to express my views only on one aspect of the matter, which is common to this case as well as the writ petition No. 458/ 72, civil appeal No. 4113,185 and writ petition No. 5(N)/ 74, i.e. the scope of judicial review of legislation whether there is declaration in the legislation under Art. 31C of the Constitution.

2. In these writ petitions we are concerned with two legislations, namely, the Indian Electricity (Assam Amendment Act, 1973, (Assam Act IX of 1973), and the Tinsukhia & Dibrugarh Electric Supply Undertakings (Acquisition) Act, 1973 (Act X of 1973). The main point which is significant in these writ petitions, is the extent and scope of judicial review of legislation where there is declaration under Art. 31 C of the Constitution which enjoins that no law giving effect to the policy of the State towards securing all or any of the principles laid down, inter alia, namely, Arts. 38, 39, 39A, 40, 41, 42, 43A, 44 to 48, 48A and 49 to 51 shall be deemed to be void on the ground that those are inconsistent or take away or abridge any of the rights conferred by Art. 14 or 19, and further provides that no law containing a declaration that it is for giving effect to such a policy, shall be called in question in any court on the plea that it does not give effect to such a policy. The two legislations in question are covered by the declaration under Art. 31C of the Constitution.

3. The principal question which falls for consideration is, whether that declaration is justiciable and open to judicial review and the extent of that judicial review. Art. 39(b) of the Constitution enjoins that the State in particular should direct its policy towards securing that the ownership and control of the material resources of the community are so 128 distributed as to best subserve the common good and that the operation of the economic system does -not result in concentration of wealth and means of production to the ,common detriment. See, in this connection, the observations of Ray, J. as the learned Chief Justice then was, in Kesavananda Bharati v. State of Kerala, 1973 Suppl SCR 1 at Pp. 451-452. Hence, in order to decide whether a Statute is within Art.31C, the Court, if necessary, may examine the nature and the character of legislation and the matter dealt with as to whether there is any nexus between the law and the principles mentioned in Art. 39(b) and (c). On such an examination if it appears that there is no such nexus between the legislation and the objectives and the principles mentioned in Art. 39(b) and (c), the legislation will not enjoy the protection of Art. 31C. In order to see the real nature of the Statute, if need. be, the Court may also tear the veil.

4. Justice Jaganmohan Reddy in the same decision at page 530 (of SCR) : (at p. 1761 of AIR) of the report reiterated that a law not attracting Art. 31C cannot be protected by a declaration by just mixing it with other laws really falling within Art. 31 C with those that do not fall under that Article. Hence, in such a case the Court will always be competent to examine the true nature and character of the legislation in the particular instance and its design and the primary matter dealt with - its object and scope. In this connection, reliance was placed on the observations of the Privy Council in Charles Russell v. The Queen, (1882) 7 AC 829 (at 838-840). Justice Palekar in the same decision at page 631 also reiterated that if the Court ,comes to the conclusion that the object of the legislation was merely a pretence and the real object was discrimination or something other than the object specified in Art. 39(b) and (c), Art. 31C would not be attracted and the validity of the Statute would have to be tested independently of A


































































































































































































































































































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