IN THE SUPREME COURT OF INDIA

Decided On: 15.01.1959

Appellants: Deep Chand
Vs.
Respondent: The State of Uttar Pradesh and Ors.

Hon'ble Judges: 
Sudhi Ranjan Das, C.J., B. P. Sinha, K. Subba Rao, K. N. Wanchoo and N. H. Bhagwati, JJ.

Subject: Constitution

Catch Words

Mentioned IN

Acts/Rules/Orders: 
Constitution of India - Article 13, Constitution of India - Article 13(1), Constitution of
India - Article 13(2), Constitution of India - Article 19(1), Constitution of India - Article
31, Constitution of India - Article 32, Constitution of India - Article 37, Constitution of
India - Article 132, Constitution of India - Article 133, Constitution of India - Article
245, Constitution of India - Article 246,Constitution of India - Article 254, Constitution of
India - Article 254(1), Constitution of India - Article 254(2); Uttar Pradesh Transport
Service (Development) Act, 1955 - Section 3, Uttar Pradesh Transport Service
(Development) Act, 1955 - Section 4, Uttar Pradesh Transport Service (Development)
Act, 1955 - Section 5, Uttar Pradesh Transport Service (Development) Act, 1955 - Section
8, Uttar Pradesh Transport Service (Development) Act, 1955 - Section 11(5); Motor
Vehicles (Amendment) Act, 1956 ;General Clauses Act - Section 6; Constitution of India
(Fourth Amendment) Act, 1955 ;Motor Vehicles Act, 1939

Cases Overruled / Reversed: 

Bhikaji Narain Dhakras and others. V. State of Madhya Pradesh and
another., MANU/SC/0016/1955

Citing Reference: 
Discussed
 
 15

Mentioned
 
 5

Case Note:
Constitution validity of scheme of nationalization Articles 13, 13 (1), 13 (2), 19
(1), 31, 32, 37, 132, 133, 245, 246, 254, 254 (1) and 254 (2) of Constitution of
India, Sections 3, 4, 5, 8 and 11 (5) of Uttar Pradesh Transport Service
(Development) Act, 1955, Motor Vehicles (Amendment) Act, 1956, Section 6 of
General Clauses Act, Constitution of India (Fourth Amendment) Act, 1955 and
Motor Vehicles Act, 1939 petitioners carrying on business as stage carriage
operators on different routes in Uttar Pradesh under valid permits issued under
the Motor Vehicles Act of 1939 along with buses owned by Government U.P.
Legislature passed U.P. Act under Section 3 Government issued a notification
nationalizing routes comparison of provisions of U.P. Act and amending Act
indicates both Acts are intended to operate in respect of the same subject
matter in same field unamended Motor Vehicles Act of 1939 did not make any
provision for nationalization of transport services State introduced amendments
to implement scheme of nationalization of road transport Act invalid if not
providing for compensation being in conflict with provisions of Article 31 (2) of
Constitution scheme made by State Government may provide for cancellation or
transfer of permit on acceptance of transfer of permit no compensation will be
paid compensation will be paid to those who refuse to accept transfer of permit
Act not violative of Article 31 (2) and cannot be challenged.

JUDGMENT

Das, C.J.

1. We have had the advantage of perusing the judgment prepared by our learned Brother
Subba Rao and we agree with the order proposed by him, namely, that all the above
appeals should be dismissed with costs, although we do not subscribe to all the reasons
advanced by him.
2. The relevant facts and the several points raised by learned counsel for the appellants
and the petitioners in support of the appeals have been fully set out in the judgment
which our learned Brother will presently deliver and it is not necessary for us to set out
the same here. Without committing ourselves to all the reasons adopted by our learned
Brother, we agree with his following conclusions, namely, (1) that the Uttar Pradesh
Transport Service (Development) Act, 1955 (Act IX of 1955), hereinafter referred to as
the U.P. Act, did not, on the passing of the Motor Vehicles (Amendment) Act, 1956 (100
of 1956), hereinafter referred to as the Central Act, become wholly void under
Art. 254(1) of the Constitution but continued to be a valid and subsisting law supporting
the scheme already framed under the U.P. Act; (2) that, even if the Central Act be
construed as amounting, under Art. 254(2), to repeal of the U.P. Act, such repeal did not
destroy or efface the scheme already framed under the U.P. Act, for the provisions of
s. 6 of the General Clauses Act saved the same; (3) that the U.P. Act did not offend the
provisions of Art. 31 of the Constitution, as it stood before the Constitution (4th
Amendment) Act, 1955, for the U.P. Act and in particular s. 11(5) thereof provided for the
payment of adequate compensation. These findings are quit sufficient to dispose of the
points urged by Mr. Nambiyar and Mr. Naunit Lal in support of the claims and contentions
of their respective clients.

3. In view of the aforesaid finding that the U.P. Act did not infringe the fundamental rights
guaranteed by Art. 31, it is wholly unnecessary to discuss the following questions,
namely, (a) whether the provisions of Part III of the Constitution enshrining the
fundamental rights are mere checks or limitations on the legislative competency conferred
on Parliament and the State Legislatures by Arts. 245 and 246 read with the relevant
entries in the Lists in the Seventh Schedule to the Constitution or are in integral part of
the provisions defining, prescribing and conferring the legislative competency itself and
(b) whether the doctrine of eclipse is applicable only to pre-Constitution laws or can apply
also to any post-Constitution law which falls under Art. 13(2) of the Constitution. As,
however, our learned Brother has thought fit to embark upon a discussion of these
questions, we desire to guard ourselves against being understood as accepting or
acquiescing in the conclusion that the doctrine of eclipse cannot apply to any post-
Constitution law. A post-Constitution law may infringe either a fundamental right
conferred on any person, citizen or non-citizen. In the first case the law will not stand in
the way of the exercise by the citizens of that fundamental right and, therefore, will not
have any operation on the rights of the citizens, but it will be quite effective as regards
non-citizens. In such a case the fundamental right will, qua the citizens, throw a shadow
on the law which will nevertheless be on the Statute Book as a valid law binding on non-
citizens and if the shadow is removed by a constitutional amendment, the law will
immediately be applicable even to the citizens without being re-enacted. The decision in
John M. Wilkerson v. Charles A. Rahrer (1891) 140 U.S. 545; 35 L. Ed. 572cited by our
learned Brother is squarely in point. In other words the doctrine of eclipse as explained by
the Court in Bhikaji Narain Dhakras v. The State of Madhya Pradesh
MANU/SC/0016/1955 : [1955]2SCR589 also applies to a post-Constitution law of this
kind. Whether a post-Constitution law of the other kind, namely, which infringes a
fundamental right guaranteed to all persons, irrespective of whether they are citizens or
not, and which, therefore, can have no operation at all when it is enacted, is to be
regarded as a still born law as if it had not been enacted at all and, therefore, not subject
to the doctrine of eclipse is a matter which may be open to discussion. On the findings
arrived at in this case, however, a discussion of these aspects of the matter do not call for
a considered opinion and we reserve our right to deal with the same if and when it
becomes actually necessary to do so.

Subba Rao, J.

4. These twenty-five appeals are by certificate under Arts. 132 and 133 of the

Constitution granted by the High Court of Judicature at Allahabad and raise the question
of the validity of the scheme of nationalization of State Transport Service formulated by
the State Government and the consequential orders made by it.

5. The said appeals arise out Writ Petitions filed by the appellants in the Allahabad High
Court challenging the validity of the U.P. Transport Services (Development) Act of 1955,
being U.P. Act No. IX of 1955 (hereinafter referred to as the U.P. Act), and the
notifications issued thereunder. All the appeals were consolidated by order of the High
Court.

6. The appellants have been carrying on business as stage carriage operators for a
considerable number of years on different routes in Uttar Pradesh under valid permits
issued under the Motor Vehicles Act, 1939, along with buses owned by Government. The
U.P. Legislature, after obtaining the assent of the President on April 23, 1955, passed the
U.P. Act and duly published it on April 24, 1955. Under s. 3 of the U.P. Act, the
Government issued a notification dated May 17, 1955, whereunder it was directed that
the aforesaid routes along with others should be exclusively served by the stage carriages
of the Government and the private stage carriages should be excluded from those routes.
On November 12, 1955, the State Government published the notification under s. 4 of the
U.P. Act formulating the scheme for the aforesaid routes amount others. The appellants
received notices under s. 5 of the U.P. Act requiring them to file objections, if any, to the
said scheme; and after the objections were received, they were informed that they would
be heard by a Board on January 2, 1956. On that date, the objections filed by the
operators other than those of the Agra region were heard and the inquiry in regard to the
Agra region was adjourned to January 7, 1956. It appears that the operators of the Agra
region did not appear on the 7th. The notification issued under s. 8 of the U.P. Act was
published in the U.P. Gazette on June 23, 1956, and on June 25, 1956, the Secretary to
the Regional Transport Authority, Agra, sent an order purported to have been issued by
the Transport Commissioner to the operators of the Agra region prohibiting them from
plying their stage carriages on the routes and also informing them that their permits
would be transferred to other routes. On July 7, 1956, a notice was sent to the other
operators in similar terms. The appellants filed Writ Petitions in the Allahabad High Court
challenging the validity of the U.P. Act and the notifications issued thereunder.

7. The facts in Civil Appeal No. 429 of 1958 are slightly different from those in other
appeals and they may be stated : The appellant's application for renewal of his permanent
permit was rejected in 1953; but, on appeal, the State Transport Authority Tribunal
allowed his appeal on September 6, 1956, and directed his permit to be renewed for three
years beginning from November 1, 1953. Pursuant to the order of the Tribunal, the
appellant's permit was renewed with effect from November 1, 1953, and it was made
valid up to October 31, 1956. The scheme of nationalisation was initiated and finally
approved between the date of the rejection of the appellant's application for renewal and
the date when his appeal was allowed. The appellant applied on October 11, 1956, for the
renewal of his permit and he was informed by the Road Transport Authority, Allahabad,
that no action on his application, under reference was possible. The appellant's
contention, among others, was that the entire proceedings were taken behind his back
and therefore the scheme was not binding on him.

8. The appellants in thirteen appeals, namely, Civil Appeals Nos. 387 to 389, 391 to 394,
396 to 399 and 401 and 429 were offered alternative routes. Though they tentatively
accepted the offer, presumably on the ground that it was the lesser of the two evils, in
fact they obtained stay as an interim arrangement and continued to operate on the old
routes.

9. The appellants filed applications for permission to urge new grounds in the appeals,
which were not taken before the High Court. The said grounds read :-

(i) That by reason of the coming into operation of the Motor Vehicles
(Amendment) Act, No. 100 of 1956, passed by Parliament and published in
the Gazette of India Extraordinary dated 31st December, 1956, the
impugned U.P. Act No. IX of 1955 has become void.
(ii) That by reason of Article 254 of the Constitution of India, the said
impugned Act No. IX of 1955, being repugnant and inconsistent with the
Central Act No. 100 of 1956, has become void since the coming into
operation of the aforesaid Act No. 100 of 1956". The judgment of the
Allahabad High Court, which is the subject-matter of these appeals, was
delivered on December 19, 1956. The Amending Act of 1956 was published
on December 31, 1956. It is therefore manifest that the appellants could
not have raised the aforesaid grounds before the High Court. Further, the
grounds raise only a pure question of law not dependent upon the
elucidation of any further facts. In the circumstances, we thought it to be a
fit case for allowing the appellants to raise the new grounds and we
accordingly gave them the permission.

10. Mr. M. K. Nambiar, appearing for some of the appellants, raised before us the
following points : (i) The Motor Vehicles (Amendment) Act (100 of 1956) passed by the
Parliament is wholly repugnant to the provisions of the U.P. Act and therefore the latter
became void under the provisions of Article 254(1) of the Constitution; with the result
that, at the present time, there is no valid law whereunder the Government can prohibit
the appellants from exercising their fundamental right under the Constitution, namely, to
carry on their business of motor transport; (ii) the scheme framed under the Act, being
one made to operate in future and from day to day, is an instrument within the meaning
of s. 68B of the Amending Act, and therefore the provisions of the Amending Act would
prevail over those of the scheme, and after the Amending Act came into force, it would
have no operative force; and (iii) even if the U.P. Act was valid and continued to be in
force in regard to the scheme framed thereunder, it would offend the provisions of
Art. 31 of the Constitution, as it was before the Constitution (Fourth Amendment) Act,
1955, as, though the State had acquired the appellant's interest in a commercial
undertaking, no compensation for the said interest was given, as it should be under the
said Article. The other learned Counsel, who followed Mr. Nambiar, except Mr. Naunit Lal,
adopted his argument. Mr. Naunit Lal, in addition to the argument advanced by Mr.
Nambiar in regard to the first point, based his contention on the proviso to Art. 254(2) of
the Constitution rather than on Art. 254(1). He contended that by reason of the Amending
Act, the U.P. Act was repealed in toto and, because of s. 68B of the Amending Act, the
operation of the provisions of the General Clauses Act was excluded. In addition, he
contended that in Appeal No. 429 of 1958, the scheme, in so far as it affected the
appellant's route was bad inasmuch as no notice was given to him before the scheme was
approved.
11. We shall proceed to consider the argument advanced by Mr. Nambiar in the order
adopted by him; but before doing so, it would be convenient to dispose of the point raised
by the learned Advocate General, for it goes to the root of the matter, and if it is decided
in his favour, other questions do not fall for consideration. The question raised by the
learned Advocate General may be posed thus : whether the amendment of the
Constitution removing a constitutional limitation on a legislative to make a particular law
has the effect of validating the Act made by it when its power was subject to that
limitation. The present case illustrates the problem presented by the said question. The
U.P. Legislature passed the U.P. Act on April 24, 1955, whereunder the State Government
was authorized to frame a scheme of nationalization of motor transport. After following
the procedure prescribed therein, the State Government finally published the scheme on
June 23, 1956. The Constitution (Fourth Amendment) Act, 1955, received the assent of
the President on April 27, 1955. The State Government framed the scheme under the U.P.
Act after the passing of the Constitution (Fourth Amendment) Act, 1955. Under the said
Amendment Act, clause (2) of Art. 31 has been amended and clause (2A) has been
inserted. The effect of the amendment is that unless the law provides for the transfer of
ownership or right 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 requisition of property within the meaning of clause (2) of that Article and
therefore where there is no such transfer, the condition imposed by clause (2), viz., that
the law should fix the amount of compensation or specify the principles on which and the
manner in which the compensation is to be determined and given, is not attracted. If the
amendment applies to the U.P. Act, as there is no transfer of property to the State, no
question of compensation arises. On the other hand, if the unamended Article governs the
U.P. Act, the question of compensation will be an important factor in deciding its validity.
The answer to the problem so presented depends upon the legal effect of a constitutional
limitation of the legislative power on the law made in derogation of that limitation. A
distinction is sought to be made by the learned Advocate General between the law made
in excess of the power conferred on a legislature under the relevant List in the Seventh
Schedule and that made in violation of the provisions of Part III of the Constitution. The
former, it is suggested, goes to the root of the legislative power, whereas the latter, it is
said, operates as a check on that power, with the result that the law so made is
unenforceable, and as soon as the check is removed, the law is resuscitated and becomes
operative from the date the check is removed by the constitutional amendment.

12. Mr. Nambiar puts before us the following two propositions in support of his contention
that the law so made in either contingency is void ab initio : (i) the paramountcy of
fundamental rights over all legislative powers in respect of all the Lists in the Seventh
Schedule to the Constitution is secured by the double process of the prohibition laid by
Art. 13(2) and the restrictions imposed by Art. 245, unlike the mere implied prohibition
implicit in the division of power under Art. 246; and (ii) where the provisions of an
enactment passed by a legislature after January 26, 1950, in whole or in part - subject to
the doctrine of severability - are in conflict with the provisions of Part III, the statute, in
whole or in part, is void ab initio. This question was subjected to judicial scrutiny by this
Court, but before we consider the relevant authorities, it would be convenient to test its
validity on first principles.

13. The relevant Articles of the Constitution read as follows :

Article 245 : "(1) Subject to the provisions of this Constitution, Parliament

may make laws for the whole or any part of the territory of India, and the
Legislature of a State may make laws for the whole or any part of the
State."

Article 246 : "(1) Notwithstanding anything in clauses (2) and (3)

Parliament has exclusive power to make laws with respect to any of the
matters enumerated in List I in the Seventh Schedule (in this Constitution
referred to as the "Union List").

(2) Notwithstanding anything in clause (3), Parliament and, subject to

clause (1), the Legislature of any State also, have power to make laws
with respect to any of the matters enumerated in List III in the Seventh
Schedule (in this Constitution referred to as the "Concurrent List").

(3) Subject to clauses (1) and (2), the Legislature of any State has
exclusive power to make laws for such State or any part thereof with
respect to any of the matters enumerated in List II in the Seventh
Schedule (in this Constitution referred to as the "State List").

(4) Parliament has power to make laws with respect to any matter for any
part of the territory of India not included in a State notwithstanding that
such matter is a matter enumerated in the State List."

14. Article 13 : "(1) All laws in force in the territory of Indian immediately before the
commencement of this Constitution, in so far as they are inconsistent with the provisions
of this Part, shall, to the extent of such inconsistency, be void.
(2) The State shall not make any law which takes away or abridges the rights conferred
by this Part and any law made in contravention of this clause shall, to the extent of the
contravention, be void."

15. Article 31 (Before the Constitution (Fourth Amendment) Act, 1955) :

"(1) No person shall be deprived of his property save by authority of law.

(2) No property, movable or immovable, including any interest in, or in

any company owning, any commercial or industrial undertaking, shall be
taken possession of or acquired for public purposes under any law
authorising the taking of such possession or such acquisition, unless the
law provides for compensation for the property taken possession of or
acquired and either fixes the amount of the compensation, or specifies the
principles on which, and the manner in which, the compensation is to be
determined and given".

16. The combined effect of the said provisions may be stated thus : Parliament and the
Legislature of States have power to make laws in respect of any of the matters
enumerated in the relevant lists in the Seventh Schedule and that power to make laws in
subject to the provisions of the Constitution including Art. 13, i.e., the power is made
subject to the limitations imposed by Part III of the Constitution. The general power to
that extent is limited. A Legislature, therefore, has no power to make any law in
derogation of the injunction contained in Art. 13. Article 13(1) deals with laws in force in
the territory of India before the commencement of the Constitution and such laws in so
far as they are inconsistent with the provisions of Part III shall, to the extent of such
inconsistency be void. The clause, therefore, recognizes the validity of the pre-
Constitution laws and only declares that the said laws would be void thereafter to the
extent of their inconsistency with Part III; whereas clause (2) of that article imposes a
prohibition on the State making laws taking away or abridging the rights conferred by
Part III and declares that laws made in contravention of this clause shall, to the extent of
the contravention, be void. There is a clear distinction between the two clauses. Under
clause (1), a pre-Constitution law subsists except to the extent of its inconsistency with
the provisions of Part III; whereas, no post-Constitution law can be made contravening
the provisions of Part III, and therefore the law, to that extent, though made, is a nullity
from its inception. If this clear distinction is borne in mind, much of the cloud raised is
dispelled. When clause (2) of Art. 13 says in clear and unambiguous terms that no State
shall make any law which takes away or abridges the rights conferred by Part III, it will
not avail the State to contend either that the clause does not embody a curtailment of the
power to legislate or that it imposes only a check but not a prohibition. A constitutional
prohibition against a State making certain laws cannot be whittled down by analogy or by
drawing inspiration from decisions on the provisions of other Constitutions; nor can we
appreciate the argument that the words "any law" in the second line of Art. 13(2) posits
the survival of the law made in the teeth of such prohibition. It is said that a law can
come into existence only when it is made and therefore any law made in contravention of
that clause presupposes that the law made is not a nullity. This argument may be subtle
but is not sound. The words "any law" in that clause can only mean an Act passed or
made factually, notwithstanding the prohibition. The result of such contravention is stated
in that clause. A plain reading of the clause indicates, without any reasonable doubt, that
the prohibition goes to the root of the matter and limits the State's power to make law;
the law made in spite of the prohibition is a still-born law.

17. Cooley in his book "Constitutional Limitations" (Eighth Edition, Volume I), states at
page 379 :

"From what examination has been given to this subject, it appears that whether a
statute is constitutional or not is always a question of power; that is, a question
whether the legislature in the particular case, in respect to the subject-matter of
the act, the manner in which its object is to be accomplished, and the mode of
enacting it, has kept within the constitutional limits and observed the constitutional
conditions."

18. The Judicial Committee in The Queen v. Burah I.L.R (1878) A. 178 observed at page
193 as under :

"The established courts of Justice, when a question arises whether the prescribed
limits have been exceeded, must of necessity determine that question; and the only
way in which they can properly do so, is by looking to the terms of the instrument
by which, affirmatively, the legislative powers were created, and by which,
negatively, they are restricted."

19. The Judicial Committee again in Attorney-General for Ontario v. Attorney-General for
Canada (1912) A.C. 571 crisply stated the legal position at page 583 as follows :-

"...................... if the text is explicit the text is conclusive, alike in what it directs
and what it forbids."
20. The same idea is lucidly expressed by Mukherjea, J., as he then was, in K. C. Gajapati
Narayan Deo v. The State of Orissa MANU/SC/0014/1953 : [1954]1SCR1 . It is stated at
page 11 as follows :-

"If the Constitution of a State distributes the legislative powers amongst different
bodies, which have to act within their respective spheres marked out by specific
legislative entries, or if there are limitations on the legislative authority in the shape
of fundamental rights, questions do arise as to whether the legislature in a
particular case has or has not, in respect to the subject-matter of the statute or in
the method of enacting it, transgressed the limits of its constitutional powers."

21. The learned Judge in the aforesaid passage clearly accepts the doctrine that both the
transgression of the ambit of the entry or of the limitation provided by the fundamental
rights are equally transgressions of the limits of the State's constitutional powers.

22. It is, therefore, manifest that in the construction of the constitutional provisions
dealing with the powers of the legislature, a distinction cannot be made between an
affirmative provision and a negative provision; for, both are limitations on the power. The
Constitution affirmatively confers a power on the legislature to make laws within the
ambit of the relevant entries in the lists and negatively prohibits it from making laws
infringing the fundamental rights. It goes further and makes the legislative power subject
to the prohibition under Art. 13(2). Apparent wide power is, therefore, reduced to the
extent of the prohibition.

23. If Arts. 245 and 13(2) define the ambit of the power to legislate, what is the effect of
a law made in excess of that power ? The American Law gives a direct and definite answer
to this question. Cooley in his "Constitutional Limitations" (Eighth Edition, Volume I) at
page 382 under the heading "Consequences if a statue is void" says :-

"When a statute is adjudged to be unconstitutional, it is as if it had never

been. ............. And what is true of an act void in toto is true also as to any part of
an act which is found to be unconstitutional, and which, consequently, is to be
regarded as having never, at any time, been possessed of any legal force."

24. In Rottschaefer on Constitutional Law, much to the same effect is stated at Page 34 :

"The legal status of a legislative provision in so far as its application involves

violation of constitutional provisions, must however be determined in the light of
the theory on which Courts ignore it as law in the decision of cases in which its
application produces unconstitutional results. That theory implies that the
legislative provisions never had legal force as applied to ceases within that clause."

25. In "Willis on Constitutional Law", at page 89 :

"A judicial declaration of the unconstitutionality of a statute neither annuls nor

repeals the statute but has the effect of ignoring or disregarding it so far as the
determination of the rights of private parties is concerned. The Courts generally say
that the effect of an unconstitutional statute is nothing. It is as though it had never
been passed. ..................."

26. "Willoughby on Constitution of the United States", Second Edition, Volume I, page
10 :

"The Court does not annul or repeal the statute if it finds it in conflict with
the Constitution. It simply refuses to recognize it, and determines the
rights of the parties just as if such statute had no application.

...........................

27. 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 thus 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. 'An after-acquired power cannot,
ex proprio vigore, validate a statute void when enacted'.

"However, it has been held that where an act is within the general legislative power
of the enacting body, but is rendered unconstitutional by reason of some
adventitious circumstance, as, for example, when a State legislature is prevented
from regulating a matter by reason of the fact that the Federal Congress has
already legislated upon that matter, or by reason of its silence is to be construed as
indicating that there should be no regulation, the act does not need to be re-
enacted in order to be enforced, if this cause of its unconstitutionality is removed."

28. For the former proposition, the decision in Newberry v. United States (1921) 256 U.S.
232; 65 L. Ed. 913 and for the latter proposition the decision in John M. Wilkerson v.
Charles A. Rahrer (1891) 140 U.S. 545; 35 L. Ed. 572.) are cited. In Newberry's Case the
validity of the Federal Corrupt Practices Act of 1910, as amended by the Act of 1911,
fixing the maximum sum which a candidate might spend to procure his nomination at a
primary election or convention was challenged. At the time of the enactment, the
Congress had no power to make that law, but subsequently, by adoption of the 17th
Amendment, it acquired the said power. The question was whether an after-acquired
power could validate a statute which was void when enacted. Mr. Justice McReynolds
delivering the opinion of the court states the principle at page 920 :

"Moreover, the criminal statute now relied upon ante-dates the 17th Amendment,
and must be tested by powers possessed at time of its enactment. An after-
acquired power cannot, ex proprio vigore, validate a statute void when enacted."

29. In Wilkerson's Case (1891) 140 U.S. 545; 35 L. Ed. 572.) the facts were that in June
1890, the petitioner, a citizen of the United States and an agent of Maynard, Hopkins and
Co., received from his principle intoxicating liquor in packages. The packages were
shipped from the State of Missouri to various points in the State of Kansas and other
States. On August 9, 1890, the petitioner offered for sale and sold two packages in the
State of Kansas. The packages sold were a portion of the liquor shipped by Maynard,
Hopkins & Co. It was sold in the same packages in which it was received. The petitioner
was prosecuted for violating the Prohibitory Liquor Law of the State of Kansas; for, under
the said law, "any person or persons who shall manufacture, sell or barter any
intoxicating liquors, shall be guilty of a misdemeanor". On August 8, 1890, an Act of
Congress was passed to the effect that intoxicating liquors transported into any State
should upon arrival in such State be subject to the operation and effect of the laws of
such State. It will be seen from the aforesaid facts that at the time the State Laws were
made, they were valid, but they did not operate upon packages of liquors imported into
the Kansas State in the course of inter -State commerce, for the regulation of inter-State
commerce was within the powers of the Congress; and that before the two sales in the
Kansas State, the Congress made an act making intoxicating liquors transported into a
State subject to the laws of that State, with the result that from that date the State Laws
operated on the liquors so transported. Under those circumstance, the Supreme Court of
the United States held :

"It was not necessary, after the passage of the Act of Congress of August 8, 1890,
to re-enact the Law of Kansas of 1899, forbidding the sale of intoxicating liquors in
that State, in order to make such State Law operative on the sale of imported
liquors."

30. The reason for the decision is found at page 578 :

"This is not the case of a law enacted in the unauthorized exercise of a power
exclusively confided to Congress, but of a law which it was competent for the State
to pass, but which could not operate upon articles occupying a certain situation
until the passage of the Act of Congress. That Act in terms removed the obstacle,
and we perceive no adequate ground for adjudging that a re-enactment of the
State Law was required before it could have the effect upon imported which it had
always had upon domestic property."

31. A reference to these decisions brings out in bold relief the distinction between the two
classes of cases referred to therein. It will be seen from the two decisions that in the
former the Act was void from its inception and in the latter it was valid when made but it
could not operate on certain articles imported in the course of inter-State trade. On that
distinction is based the principle that an after acquired power cannot, ex proprio vigore,
validate a statute in one case, and in the other, a law validly made would take effect
when the obstruction is removed.

32. The same principle is enunciated in Carter v. Egg and Egg Pulp Marketing
Board (1942) 66 C.L.R. 557. Under s. 109 of the Australian Constitution "when a law of a
State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the
former shall, to the extent of the inconsistency, be invalid." Commenting on that section,
Latham, C.J. observed at page 573 :

"This section applies only in cases where, apart from the operation of the section,
both the Commonwealth and the State Laws which are an question would be valid.
If either is invalid ab initio by reason of lack of power, no question can arise under
the section. The word "invalid" in this section cannot be interpreted as meaning that
a State law which is affected by the section becomes ultra vires in whole or in part.
If the Commonwealth law were repealed the State law would again become
operative."

33. We shall now proceed to consider the decisions of this Court to ascertain whether the
said principles are accepted or departed from. The earliest case is Keshavan Madhava
Menon v. The State of Bombay MANU/SC/0020/1951 : 1951CriLJ680 . There the question
was whether a prosecution launched under the Indian Press (Emergency Powers) Act,
1931, before the Constitution could be continued after the Constitution was passed. The
objection taken was that the said law was inconsistent with fundamental rights and
therefore was void. In the context of the question raised, it became necessary for the
Court to consider the impact of Art. 13(1) on the laws made before the Constitution. The
Court, by a majority, held that Art. 13(1) of the Indian Constitution did not make existing
laws which were inconsistent with fundamental rights void ab initio, but only rendered
such laws ineffectual and void with respect to the exercise of the fundamental rights on
and after the date of the commencement of the Constitution and that it had no
retrospective effect. Das, J., as he then was, observed at page 233 :

"It will be noticed that all that this clause declares is that all existing laws, in so far
as they are inconsistent with the provisions of Part III shall, to the extent of such
inconsistency, be void. Every statute is prima facie prospective unless it is expressly
or by necessary implications made to have retrospective operation."

34. At page 234, the learned Judge proceeded to state :

"They are not void for all purposes but they are void only to the extent they come
into conflict with the fundamental rights. In other words, on and after the
commencement of the Constitution no existing law will be permitted to stand in the
way of the exercise of any of the fundamental rights. Therefore, the voidness of the
existing law is limited to the future exercise of the fundamental rights................
Such laws exist for all past transactions and for enforcing all rights and liabilities
accrued before the date of the Constitution."

35. At page 235, the same idea is put in different words thus :-

"............. Article 13(1) only has the effect of nullifying or rendering all inconsistent

existing laws ineffectual or nugatory and devoid of any legal force or binding effect
only with respect to the exercise of fundamental rights on and after the date of the
commencement of the Constitution."

36. At page 236, the learned Judge concludes :

"So far as the past acts are concerned the law exists, notwithstanding that it does
not exist with respect to the future exercise of fundamental rights."

37. Mahajan, J., as he then was, who delivered a separate judgment, put the same view
in different phraseology at page 251 :

"The effect of Article 13(1) is only prospective and it operates in respect to the

freedoms which are infringed by the State subsequent to the coming into force of
the Constitution but the past acts of a person which came within the mischief of the
law then in force are not affected by Part III of the Constitution."

38. The learned Judge, when American law was pressed on him in support of the
contention that even the pre-Constitution law was void, observed thus, at page 256 :
"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 on 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 Indian
Act, 1935. Of course, if any law is made after the 25th January, 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."

39. Mukherjea, J., as he then was, in Behram Khurshed Pesikaka v. The State of Bombay
MANU/SC/0065/1954 : 1955CriLJ215 says at page 652 much to the same effect :

"We think that it is not a correct proposition that constitutional provisions in Part III
of our Constitution merely operate as a check on the exercise of legislative power.
It is axiomatic that when the law making power of a State is restricted by a written
fundamental law, then any law enacted and opposed to the fundamental law is in
excess of the legislative authority and is thus a nullity. Both these declarations of
unconstitutionality go to the root of the power itself and there is no real distinction
between them. They represent but two aspects of want of legislative power. The
legislative power of Parliament and the State Legislatures as conferred by
articles 245 and 246 of the Constitution stands curtailed by the fundamental rights
chapter of Constitution. A mere reference to the provisions of article 13(2) and
articles 245 and 246 is sufficient to indicate that there is no competency in
Parliament or a State Legislature to make a law which comes into clash with Part III
of the Constitution after the coming into force of the Constitution."

40. The effect of the decision may be stated thus : The learned judges did not finally
decide the effect of Art. 13(2) of the Constitution on post-Constitution laws for the simple
reason that the impugned law was a pre-Constitution one. Art. 13(1) was held to be
prospective in operation and therefore did not affect the pre-existing laws in respect of
the things done prior to the Constitution. As regards the post-Constitution period,
Art. 13(1) nullified or rendered all inconsistent existing laws ineffectual, nugatory or
devoid of any legal force or binding effect with respect to the exercise of the fundamental
rights. So far as the past acts were concerned, the law existed, notwithstanding that it did
not exist with respect to the future exercise of the said rights. As regards the pre-
Constitution laws, this decision contains the seed of the doctrine of eclipse developed by
my Lord the Chief Justice in Bhikaji Narain Dhakras v. The State of Madhya Pradesh
MANU/SC/0016/1955 : [1955]2SCR589 where it was held that as the pre-Constitution law
was validly made, it existed for certain purposes even during the post-Constitution period.
This principle has no application to post-Constitution laws infringing the fundamental
rights as they would be ab initio void in toto or to the extent of their contravention of the
fundamental rights.

41. The observations of the learned judges made in the decision cited above bring out the
distinction between pre and post-Constitution laws which are repugnant to the
Constitution and the impact of Art. 13 on the said laws.

42. In Behram Khurshed Pesikaka's Case MANU/SC/0065/1954 : 1955CriLJ215 , this

Court considered the legal effect of the declaration made in the case of The State of
Bombay v. F. N. Balsara MANU/SC/0009/1951 : [1951]2SCR682 that clause (b) s. 13 of
the Bombay Prohibition Act (Bom. XXV of 1949) is void under Art. 13(1) of the
Constitution in so far as it affects the consumption or use of liquid medicinal or toilet
preparations containing alcohol and held that it was to render part of s. 13(b) of the
Bombay Prohibition Act inoperative, ineffective and ineffectual and thus unenforceable.
Bhagwati, J. at page 620, cited all the relevant passages from text-books on
Constitutional Law and, presumably, accepted the view laid down therein to the effect
that an unconstitutional Act in legal contemplation is an though it had never been passed.
Jagannadhadas, J., at page 629, noticed the distinction between the scope of cls. (1) and
(2) of Art. 13 of the Constitution. After citing a passage from Willoughby on Constitution
of the United States", the learned Judge observed :

"This and other similar passages from other treatises relate, however, to cases
where the entire legislation is unconstitutional from the very commencement of the
Act, a situation which falls within the scope of article 13(2) of our Constitution. They
do not directly cover a situation which falls within article 13(1). ........... The
question is what is the effect of article 13(1) on a pre-existing valid statute, which in
respect of a severable part thereof violates fundamental rights. Under
article 13(1) such part is "void" from the date of the commencement of the
Constitution, while the other part continues to be valid. Two views of the result
brought about by this voidness are possible, viz., (1) the said severable part
becomes unenforceable, while it remains part of the Act, or (2) the said part goes
out of the Act and the Act stands appropriately amended pro tanto. The first is the
view which appears to have been adopted by my learned brother, Justice
Venkatarama Aiyar, on the basis of certain American decisions. I feel inclined to
agree with it. This aspect, however, was not fully presented by either side and was
only suggested from the Bench in the course of arguments. We have not had the
benefit of all the relevant material being placed before us by the learned advocates
on either side. The second view was the basis of the arguments before us. It is,
therefore, necessary and desirable to deal with this case on that assumption."

43. This passage shows that his opinion - though a tentative one - was that the severable
part became unenforceable while it remained part of the Act. But the learned Judge made
an incidental observation that the American view applied to cases that fall within the
scope of Art. 13(2) of the Constitution, i.e., the entire legislation would be
unconstitutional from the very commencement of the Act. Venkatarama Aiyar, J., founded
his decision on a broader basis. At page 639, the learned Judge observed :

"Another point of distinction noticed by American jurists between unconstitutionality

arising by reason of lack of legislative competence and that arising by reason of a
check imposed on a competent Legislature may also be mentioned. While a statute
passed by a Legislature which had no competence cannot acquire validity when the
Legislature subsequently acquires competence, a statute which was within the
competence of the Legislature at the time of its enactment but which infringes a
constitutional prohibition could be enforced proprio vigore when once the
prohibition is removed."

44. On the basis of this distinction, the learned Judge held that Art. 13(1) of the
Constitution only placed a check on a competent legislature and therefore the word "void"
in that article meant "relatively void", i.e., the law only condemned the Act as wrong to
individuals and refused to enforce it against them. In support of the said conclusion the
learned Judge cited a passage from "Willoughby on the Constitution of the United States."
A comparison of the passage cited with that in the text book discloses that one important
sentence which makes all the difference to the legal position is omitted by mistake and
that sentence is "An after-acquired power cannot ex proprio vigore validate a statute void
when enacted". The second paragraph in the extract on which the learned Judge placed
reliance and also the decision relied upon by him did not support his conclusion. As
already stated, the decision and the passage dealt not with a case where the State had no
power to make the law, but with a case where the law lay dormant till a law of the
Federal Congress removed the conflict between the State Law and the Federal Law. That
case may by analogy be applied to Art. 13(1) in respect of laws validly made before the
Constitution but cannot be invoked in the case of a statute which was void when enacted.
By a subsequent order, this Court granted the review and reopened the case to enable
the Bench to obtain the opinion of a larger Bench on the Constitutional points raised in
the judgment delivered by the learned Judges. That matter came up before a
Constitutional Bench, and Mahajan, C.J., who was a party to the decision in Keshavan
Madhava Menon's Case MANU/SC/0020/1951 : 1951CriLJ680 explained the majority view
therein on the meaning of the word "void" in Art.13(1) thus, at page 651 :-

"The majority however held that the word "void" in article 13(1), so far as
existing laws were concerned, could not be held to obliterate them from
the statute book, and could not make such laws void altogether, because
in its opinion, article 13 had not been given any retrospective effect. The
majority however held that after the coming into force of the Constitution
the effect of article 13(1) on such repugnant laws was that it nullified them,
and made them ineffectual and nugatory and devoid of any legal force or
binding effect. It was further pointed out in one of the judgments
representing the majority view, that the American rule that if a statute is
repugnant to the Constitution the statute is void from its birth, has no
application to cases concerning obligations incurred or rights accrued in
accordance with an existing law that was constitutional in its inception, but
that if any law was made after 26th January, 1950, which was repugnant
to the Constitution, then the same rule shall have to be followed in Indian
as followed in America. The result therefore of this pronouncement is that
the part of the section of an existing law which is unconstitutional is not
law, and is null and void. For determining the rights and obligations of
citizens the part declared void should be nationally taken to be obliterated
from the section for all intents and purposes, though it may remain written
on the statute book and be a good law when a question arises for
determination of rights and obligations incurred prior to 26th January,
1950, and also for the determination of rights of persons who have not
been given fundamental rights by the Constitution. Thus, in this situation,
there is no scope for introducing terms like "relatively void" coined by
American Judges in construing a Constitution which is not drawn up in
similar language and the implications of which are not quite familiar in this
country."

The learned Judge, as we have already pointed out, rejected the distinction made by
Venkatarama Aiyar, J., between lack of legislative power and the abridgment of the
fundamental rights. Though that question did not directly arise, the learned Judge
expressed his view on the scope of Art. 13(2) at page 653 thus :
"The authority thus conferred by Articles 245 and 246 to make laws subjectwise in
the different Legislatures is qualified by the declaration made in article 13(2). That
power can only be exercised subject to the prohibition contained in article 13(2). On
the construction of article 13(2) there was no divergence of opinion between the
majority and the minority in Keshava Madhava Menon v. The State of Bombay
(supra). It was only on the construction of article 13(1) that the difference arose
because it was felt that that article could not retrospectively invalidate laws which
when made were Constitutional according to the Constitution then in force."

45. Das, J., as he then was, in his dissenting judgment different from the majority on
other points put does not appear to have differed from the aforesaid views expressed by
Mahajan, C. J., as regards the scope of Keshava Madhava Menon's case on the meaning
of the word "void" in Art. 13(1). This judgment is therefore an authority on two points
and contains a weighty observation on the third : (i) when the law-making power of a
State is restricted by written fundamental law, then any law opposed to the fundamental
law is in excess of the legislative authority and is thus a nullity; (ii) even in the case of a
statute to which Art. 13(1)applies, though the law is on the statue book and be a good
law, when a question arises for determination of rights and obligations incurred prior to
January 26, 1950, the part declared void should be notionally taken to be obliterated from
the section for all intents and purposes; and (iii) on the construction of Art. 13(2), the law
made in contravention of that clause is a nullity from its inception.

46. The next case is a direct one on the point and that is Saghir Ahmad v. The State of
U.P. MANU/SC/0110/1954 : [1955]1SCR707 . There, the U.P. Road Transport Act (II of
1951) was passed enabling the State to run stage carriage service on a route or routes to
the exclusion of others. Under that Act, the State Government made a declaration
extending the Act to a particular area and issued a notification setting out what purported
to be a scheme for the operation of the stage carriage service on certain routes. At the
time the said Act was passed, the State had no such power to deprive a citizen of his right
to carry on his transport service. But after the Act, Art. 19(1) was a amended by the
Constitution (First Amendment) Act, 1951, enabling the State to carry on any trade or
business either by itself or through corporations owned or controlled by the State to the
exclusion of private citizens wholly or in part. One of the questions raised was whether
the amendment of the Constitution could be invoked to validate the earlier legislation.
The Court held that the Act when passed was unconstitutional and therefore it was still-
born and could not be vitalized by the subsequent amendment of the Constitution
removing the constitutional objections but must be re-enacted. At page 728, Mukherjea,
J., as he then was, who delivered the judgment of the Court, has given the reasons for
the said view :-
"As Professor Cooley has stated in his work on Constitutional Limitations (Vol. I,
page 304 note.) "a statute void for unconstitutionality is dead and cannot be
vitalised by a subsequent amendment of the Constitution removing the
constitutional objection but must be re-enacted". We think that this is sound law
and our conclusion is that the legislation in question which violates the fundamental
right of the appellants under article 19(1)(g) of the Constitution and is not shown to
be protected by clause (6) of the article, as it stood at the time of the enactment,
must be held to be void under article 13(2) of the Constitution."

47. This is a direct authority on the point, without a dissenting voice, and we are bound
by it.

48. The decision given in Bhikaji Narain's Case MANU/SC/0016/1955 : [1955]2SCR589 is

strongly relied upon by the learned Advocate General in support of his contention. Shortly
stated, the facts in that case were : Before the Constitution, the C.P. & Berar Motor
Vehicles (Amendment) Act, 1947 (C.P. III of 1948) amended the Motor Vehicles Act, 1939
(Central Act IV of 1939) and conferred extensive powers on the Provincial Government
including the power to create a monopoly of the motor transport business in its favour to
the exclusion of all motor transport operators. It was contended by the affected parties
that by reason of Art. 13(1)of the Constitution, the Act became void. On behalf of the
State, it was argued that the Constitution (First Amendment) Act, 1951, and the
Constitution (Fourth Amendment) Act, 1955, had the effect of removing the inconsistency
and the Amendment Act III of 1948 became operative again. This Court unanimously
accepted the contention of the State. This decision is one given on a construction of
Art. 13(1) of the Constitution and it is no authority on the construction and scope of
Art. 13(2) of the Constitution. The reason for the decision is found in the following
passages in the judgment, at page 598 :

".................... on and after the commencement of the Constitution the existing

law, as a result of its becoming inconsistent with the provisions of article 19(1)
(g) read with clause (6) as it then stood, could not be permitted to stand in the way
of the exercise of that fundamental right. Article 13(1) by reason of its language
cannot be read as having obliterated the entire operation of the inconsistent law or
having wiped it out altogether from the statute book............. In short,
article 13(1) had the effect of nullifying or rendering the existing law which had
become inconsistent with article 19(1)(g) read with clause (6) as it then stood
ineffectual, nugatory and devoid of any legal force or binding effect only with
respect to the exercise of the fundamental right on and after the date of the
commencement of the Constitution. Therefore, between the 26th January, 1950,
and 18th June, 1951, the impugned Act could not stand in the way of the exercise
of the fundamental right of a citizen under Article 19(1)(g). The true position is that
the impugned law became, as it were, eclipsed, for the time being, by the
fundamental right. ................... 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. ................. Such law
were not dead for all purposes. They existed for the purposes 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."

49. The aforesaid passages are only the restatement of the law as enunciated in
Keshavan Madhava Menon's CaseMANU/SC/0020/1951 : 1951CriLJ680 reaffirmed in
Pesikaka's Case MANU/SC/0065/1954 : 1955CriLJ215 and an extension of the same to
meet a different situation. A pre-Constitution law, stating in the words of Das, J., as he
then was, exists notwithstanding that it does not exist with respect to the future exercise
of the fundamental rights. That principle has been extended in this decision, by invoking
the doctrine of eclipse. As the law existed on the statute book to support pre-Constitution
acts, the Court held that the said law was eclipsed for the time being by one or other of
the fundamental rights and when the shadow was removed by the amendment of the
Constitution, the impugned Act became free from all blemish or infirmity. The Legislature
was competent to make the law with which Pesikaka's Case MANU/SC/0065/1954 :
1955CriLJ215 was concerned at the time it was made. It was not a case of want of
legislative power at the time the Act was passed, but one where in the case of a valid law
supervening circumstances cast a cloud. To the other class of cases to which
Art. 13(2) will apply, the views expressed by the American authorities, by Mahajan, J., as
he then was, in Pesikaka's Case, and by Mukherjea, J., as he then was, in Saghir Ahmad's
Case MANU/SC/0110/1954 : [1955]1SCR707 directly apply. To the fats in Bhikaji Narain's
Case MANU/SC/0016/1955 : [1955]2SCR589 , the principle laid down in Keshavan
Madhava Menon's Case is attracted. But it is said that the observations of the learned
Judges are wide enough to cover the case falling under Art. 13(2) of the Constitution and
further that a logical extension of the principle laid down would take in also a case falling
under Art. 13(2). The first contention is based upon the following passage :-

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 could 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 express provisions of article 13 rendered void to the extent of such
inconsistency. Such laws were not dead for all purposes. They existed for the
purposes 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."

50. The first part of the said observation states nothing more than the plain import of the
provisions of Art. 13(1) and (2), namely, that they render laws void only 'to the extent' of
such inconsistency. The second part of the observation directly applies only to a case
covered by Art. 13(1), for the learned Judge say that the laws exist for the purposes of
pre-Constitution rights and liabilities and they remain operative even after the
Constitution as against non citizens. The said observation could not obviously apply to
post-Constitution laws. Even so, it is said that by a parity of reasoning the post-
Constitution laws are also void to the extent of their repugnancy and therefore the law in
respect of non-citizens will be on the statute book and by the application of the doctrine
of eclipse, the same result should flow in its case also. There is some plausibility in this
argument, but it ignores one vital principle, viz., the existence or the non-existence of
legislative power or competency at the time the law is made governs the situation. There
is no scope for applying the doctrine of eclipse to a case where the law is void ab initio in
whole or in part. That apart, in the present case - we do not base our decision on that -
Art. 31(1) infringed by the Act, applies to all persons irrespective of whether they are
citizens or non-citizens, and therefore the entire law was void ab initio. That Judgment,
therefore, does not support the respondent as it has bearing only on the construction of
Art. 13(1) of the Constitution.

51. In Ram Chandra Palai v. State of Orissa MANU/SC/0009/1956 : [1956]1SCR28 , this

Court followed the decision in Bhikaji Narain's Case MANU/SC/0016/1955 :
[1955]2SCR589 in the case of a pre-Constitution Act. In Pannalal Binjraj v. Union of India
MANU/SC/0020/1956 : [1957]1SCR233 , Bhagwati, J., quoted with approval the extract
from Keshavan Madhava Menon's CaseMANU/SC/0020/1951 : 1951CriLJ680 , wherein it
was held that Art. 13(1) has only the effect of nullifying or rendering all inconsistent
existing laws ineffectual or nugatory or devoid of any legal force or binding effect only
with respect to the fundamental rights on or after the commencement of the Constitution.

52. The learned Advocate General relied upon certain decisions in support of his
contention that the word "void" in Arts. 13(1) and13(2) means only "unenforceable"
against persons claiming fundamental rights, and the law continues to be in the statute
book irrespective of the fact that it was made in infringement of the fundamental rights.
The observations of Mukherjea, J., as he then was, in Chiranjit Lal Chowdhuri v. The
Union of India MANU/SC/0009/1950 : [1950]1SCR869 are relied on and they are :
"Article 32, as its provisions show, is not directly concerned with the determination
of constitutional validity of particular legislative enactments. What it aims at is the
enforcing of fundamental rights guaranteed by the Constitution, no matter whether
the necessity for such enforcement arises out of an action of the executive or of the
legislature. ........... The rights that could be enforced under article 32 must
ordinarily be the rights of the petitioner himself who complains of infraction of such
rights and approaches the court for relief."

53. He also relies upon the decision of Das, J., as he then was, in The State of Madras
v. Srimathi Champakam Dorairajan MANU/SC/0007/1951 : [1951]2SCR525 , wherein the
learned Judge states thus, at page 531 :

"The directive principles of the State Policy, which by article 37 are expressly made
unenforceable by a Court, cannot override the provisions found in Part III which,
notwithstanding other provisions, are expressly made enforceable by appropriate
Writs, Orders or directions under article 32."

54. Basing his argument on the aforesaid two observations, it is contended that in the
case of both the directive principles and the fundamental rights, it must be held that the
infringement of either does not invalidate the law, but only makes the law unenforceable.
This argument, if we may say so, mixes up the Constitutional invalidity of a statute with
the procedure to be followed to enforce the fundamental rights of an individual. The
Constitutional validity of a statue depends upon the existence of legislative power in the
State and the right of a person to approach the Supreme Court depends upon his
possessing the fundamental right, i.e., he cannot apply for the enforcement of his right
unless it is infringed by any law. The cases already considered supra clearly establish that
a law, whether pre-Constitution or post-Constitution, would be void and nugatory in so far
as it infringed the fundamental rights. We do not see any relevancy in the reference to
the directive principles; for, the legislative power of a State is only guided by the directive
principles of State Policy. The directions, even if disobeyed by the State, as they are only
directory in scope and operation. The result of the aforesaid discussion may be
summarized in the following propositions : (i) whether the Constitution affirmatively
confers power on the legislature to make laws subject-wise or negatively prohibits it from
infringing any fundamental right, they represent only two aspects of want of legislative
power; (ii) the Constitution in express terms makes the power of a legislature to make
laws in regard to the entries in the Lists of the Seventh Schedule subject to the other
provisions of the Constitution and thereby circumscribes or reduces the said power by the
limitations laid down in Part III of the Constitution; (iii) it follows from the premises that a
law made in derogation or in excess of that power would be ab initio void wholly or to the
extent of the contravention as the case may be; and (iv) the doctrine of eclipse can be
invoked only in the case of a law valid when made, but a shadow is cast on it by
supervening constitutional inconsistency or supervening existing statutory inconsistency;
when the shadow is removed, the impugned act is freed from all blemish or infirmity.
Applying the aforesaid principles to the present case, we hold that the validity of the Act
could not be tested on the basis of the Constitution (Fourth Amendment) Act, 1955, but
only on the terms of the relevant Articles as they existed prior to the Amendment.

55. We shall now proceed to consider the first contention of Mr. Nambiar. He contends
that the Motor Vehicles (Amendment) Act (100 to 1956) passed by Parliament was wholly
repugnant to the provisions of the U.P. Act and therefore the law became void under the
provisions of Art. 254(1) of the Constitution, with the result that at the present time there
is no valid law whereunder the State can prohibit the appellants exercising their
fundamental right under the Constitution, namely, carrying on the business of motor
transport.

56. Mr. Naunit Lal bases his case on the proviso to Art. 254(2) of the Constitution rather
than on clause (1) thereof. He contends that by reason of the Amending Act, the U.P. Act
was repealed in toto; and because of Section 68B, the operation of the provisions of the
General Clauses Act saving things done under the repealed Act was excluded. The learned
Advocate General Attempted to meet the double attack by pressing on us to hold that
there was no repugnancy at all between the provisions of the Central Act and the U.P. Act
and therefore the U.P. Act had neither become void not was repealed by necessary
implication by the Central Act. We shall now examine the provisions of
Art. 254(1) and 254(2).

57. Article 254 :

(1) If any provisions of a law made by the Legislature of a State is

repugnant to any provision of a law made by Parliament which Parliament
is competent to enact, or to any provision of an existing law with respect
to one of the matters enumerated in the Concurrent List, then, subject to
the provisions of clause (2), the law made by Parliament, whether passed
before or after the law made by the Legislature of such State, or, as the
case may be, the existing law, shall prevail and the law made by the
legislature of the State shall, to the extent of the repugnancy, be void.

(2) Where a law made by the Legislature of a State with respect to one of
the matters enumerated in the Concurrent List contains any provision
repugnant to the provisions of an earlier law made by Parliament or an
existing law with respect to that matter, then, the law so made by the
Legislature of such State shall, if it has been reserved for the consideration
of the President and has received his assent, prevail in that State.

Provided that nothing in this clause shall prevent Parliament from enacting
at any time any law with respect to the same matter including a law
adding to, amending, varying or repealing the law so made by the
Legislature of the State."

58. Article 254(1) lays down a general rule. Clause (2) is an exception to that Article and
the proviso qualifies the exception. If there is repugnancy between the law made by the
State and that made by Parliament with respect to one of the matters enumerated in the
Concurrent List, the law made by Parliament shall prevail to the extent of the repugnancy
and the law made by the State shall, to the extent of such repugnancy, be void. Under
clause (2), if the Legislature of a State makes a provision repugnant to the provisions of
the law made by Parliament, it would prevail if the legislation of the State received the
assent of the President. Even in such a case, Parliament may subsequently either amend,
vary or repeal the law made by the Legislative of a State. In the present case, the Uttar
Pradesh Legislative Assembly, after obtaining the assent of the President on April 23,
1955, passed the U.P. Act. Parliament subsequently passed the Motor Vehicles
(Amendment) Act (100 of 1956). Therefore, both the clauses of Art. 254 would apply to
the situation. The first question is whether the provisions of the Union Law, i.e., the Motor
Vehicles (Amendment) Act (100 of 1956), are repugnant to the provisions of the U.P. Act
and if so to what extent. Before we proceed to examine the provisions of the two Acts, it
may be convenient to notice the law pertaining to the rule of repugnancy.

59. Nicholas in his Australian Constitution, 2nd Edition, page 303, refers to three tests of
inconsistency or repugnancy :-

"(1) There may be inconsistency in the actual terms of the competing

statutes;

(2) Though there may be no direct conflict, a State law may be inoperative
because the Commonwealth law, or the award of the Commonwealth
Court, is intended to be a complete exhaustive code; and

(3) Even in the absence of intention, a conflict may arise when both State
and Commonwealth seek to exercise their powers over the same subject
matter."
60. This Court Ch. Tika Ramji v. The State of Uttar Pradesh MANU/SC/0008/1956 :
[1956]1SCR393 accepted the said three rules, among others, as useful guides to test the
question of repugnancy. In Zaverbhai Amaidas v. The State of Bombay
MANU/SC/0040/1954 : [1955]1SCR799 , this Court laid down a similar test. At page 807,
it is stated :

"The principle embodied in section 107(2) and Article 254(2) is that when there is
legislation covering the same ground both by the center and by the Province, both
of them being competent to enact the same, the law of the Center should prevail
over that of the State."

61. Repugnancy between two statutes may thus be ascertained on the basis of the
following three principles :

(1) Whether there is direct conflict between the two provisions;

(2) Whether Parliament intended to lay down an exhaustive code in

respect of the subject matter replacing the Act of the State Legislature;
and

(3) Whether the law made by Parliament and the law made by the State
Legislature occupy the same field.

62. We shall now examine the provisions of both the Acts in some detail in order to
ascertain the extent of the repugnancy between them. The Scheme of the U.P. Act may
be summarized thus : Under the U.P. Act. "State Road Transport Service" is defined to
mean transport service by a public service vehicle owned by the State Government.
Under s. 3 :

"Where the State Government is of the opinion that it is necessary in the interests
of the general public and for subserving the common good, or for maintaining and
developing efficient road transport system so to direct, it may, by notification in the
official Gazette declare that the road transport services in general, or any particular
class of such service on any route or portion thereof as may be specified, shall be
run and operated exclusively by the State Government, or by the State Government
in conjunction with railways or be run and operated partly, by the State
Government and partly by others under and in accordance with the provisions of
the Act."
63. After the publication of the notification under s. 3, the State Government or, if the
State Government so directs, the Transport Commissioner publishes in such manner as
may be specified a scheme as to the State Road Transport Service providing for all or any
of the matters enumerated in clause (2) of s. 4 Clause (2) of s. 4 directs that, among
others, the scheme should provide the particulars of the routes or portions thereof over
which and the date on which the State Transport Service will commence to operate, the
roads in regard to which private persons may be allowed to operate upon, the routes that
will be served by the State Government in conjunction with railways, the curtailment of
the routes covered by the existing permits or transfer of the permits to other route or
routes. Section 5 enjoins the Transport Commissioner to give notice to the permit-holder
requiring him to lodge a statement in writing whether he agrees to the transfer of the
permit and in clause (2) thereof, it is prescribed that in case he accepts the transfer, he is
not entitled to any compensation, but if he does not agree to the transfer, his permit will
be cancelled subject to his right to get compensation under the Act. Under s. 6 any
person whose interests are affected may within 30 days from the publication of the
scheme, file objections on it before the Transport Commissioner who shall forward them
to the Board constituted under s. 7, consisting of the Commissioner of a Division,
Secretary to Government in the Transport Department and the Transport Commissioner.
The Board shall consider the objections, if any, forwarded under s. 6 and may either
confirm, modify or alter the scheme. The scheme so confirmed or modified or altered
under s. 7 shall be published in the Official Gazette. Any scheme published under s. 8
may at any time be cancelled or modified or altered by the State Government. Section 10
gives the consequences of the publication under s. 8. Section 11 provides compensation
for premature cancellation of permits or curtailment of route to routes, as may be
determined in accordance with the principles specified in Schedule I. In Schedule I,
compensation is payable as follows :

"(1) For every complete month or Rupees one part of a month exceeding hundred.
fifteen days of the unexpired period of the permit. (2) For part of a month not
exceeding Rupees fifteen days of the unexpired period fifty of a permit.

Provided always that the amount of compensation shall in no case be less than rupees
two hundred."

64. Section 12 authorises the State Government, in a case where the permit has been
cancelled, to purchase the motor vehicle covered by it if the holder of the permit offers to
sell, upon terms and conditions laid down in Schedule II provided the vehicle is of the
type of manufacture and model notified by the State Government and provided secondly
that the vehicle is mechanically in a sound condition or otherwise declared fit by the
Transport Commissioner or his nominee. Sections 13 to 18 provide for a State Machinery
for the development of motor transport industry. Section 19 to 22 are provisions which
are consequential in nature. Shortly stated, under the U.P. Act the State Government
initiate a scheme providing for the nationalization of the road transport in whole or in
part; the objections filed by the persons affected by the scheme are heard by a Board of
three officers appointed by the State Government; the Board after hearing the objections
may confirm, modify or alter the scheme; the scheme so confirmed may be cancelled,
modified or altered by the State Government by following the same procedure adopted for
framing the original scheme; and the holders of permits cancelled may be given new
permits if they choose to accept and if not they will be paid such compensation as
prescribed under the Act. Under the Amendment Act 100 of 1956, whereby a new chapter
was inserted in the Motor Vehicles Act of 1939, the procedure prescribed is different.
Under s. 68-A of that Act, 'State Transport Undertaking' is defined to mean any
undertaking providing road transport service, where such undertaking is carried on by, -
(i) the Central Government or a State Government; (ii) any Road Transport Corporation
established under s. 3 of the Road Transport Corporation Act, 1950; (iii) the Delhi
Transport Authority established under s. 3 of the Delhi Road Transport Authority Act,
1950; and (iv) any municipality or any corporation or company owned or controlled by
the State Government. Under s. 68C, the State Transport Undertaking initiates a scheme
if it is of opinion that for the purpose of providing an efficient, adequate economical and
properly co-ordinated road transport service, it is necessary in the public interest that
road transport service in general, or any particular class of such service in relation to any
area or route or portion thereof should be run and operated by the State Transport
Undertaking, whether to the exclusion complete or partial, of other persons or otherwise.
Section 68D says that any person affected by the Scheme may file objections to the said
Scheme before the State Government; the State Government may, after considering the
objections and after giving an opportunity to the objectors or their representatives and
the representatives of the State Transport Undertaking to be heard in the matter, approve
or modify the Scheme. Any Scheme published may at any time be cancelled or modified
by the State Transport Undertaking following the same procedure; for the purpose of
giving effect to the Scheme, the Regional Transport Authority, inter alia, may cancel the
existing permits or modify the terms of the existing permits. Section 68G lays down the
principles and method of determination of compensation. Under that section
compensation is payable for every completed month or part of a month exceeding fifteen
days of the unexpired period of the permits at Rs. 200 and for part of a month not
exceeding fifteen days of the unexpired period of the permit at Rs. 100. Under the
Amending Act, the gist of the provisions is that the Scheme is initiated by the State
Transport Undertaking carried on by any of the four institution mentioned in s. 68A,
including the State Government; objections are filed by the affected parties to the
Scheme, the affected parties and the Undertaking are heard by the State Government,
which, after hearing the objections, approves or modifies the Scheme. There is no
provision for transfer of permits to some other routes, or for the purchase of the buses by
the State Government. Compensation payable is twice that fixed under the U.P. Act. One
important thing to be noticed is that the U.P. Act is prospective, i.e., comes into force
only from the date of the passing of the Amending Act and the procedure prescribed
applies only to schemes that are initiated under the provisions of the U.P. Act.

65. A comparison of the aforesaid provisions of the U.P. Act and the Amending Act
indicates that both the Acts are intended to operate in respect of the same subject matter
in the same field. The unamended Motor Vehicles Act of 1939 did not make any provision
for the nationalization of transport services, but the States introduced amendments to
implement the scheme of nationalization of road transport. Presumably, Parliament with a
view to introduce a uniform law throughout the country avoiding defects found in practice
passed the Amending Act inserting Chapter IV-A in the Motor Vehicles Act, 1939. This
object would be frustrated if the argument that both the U.P. Act and the Amending Act
should co-exist in respect of schemes to be framed after the Amending Act, is accepted.
Further the authority to initiate the scheme, the manner of doing it, the authority to hear
the objections, the principles regarding payment of compensation under the two acts
differ in important details from one another. While in the U.P. Act the scheme is initiated
by the State Government, in the Amendment Act, it is proposed by the State Transport
Undertaking. The fact that a particular undertaking may be carried on by the State
Government also cannot be a reason to equate the undertaking with the State
Government; for under s. 68A the undertaking may be carried on not only by the State
Government but by five other different institutions. The undertaking is made a statutory
authority under the Amending Act with a right to initiate the scheme and to be heard by
the State Government in regard to objections filed by the persons affected by the
scheme. While in the U.P. Act a Board hears the objections, under the Amending Act the
State Government decides the disputes. The provisions of the scheme, the principles of
compensation and the manner of its payment also differ in the two Acts. It is therefore
manifest that the Amending Act occupies the same field in respect of the schemes
initiated after the Amending Act and therefore to that extent the State Act must yield its
place to the Central Act. But the same cannot be said of the schemes framed under the
U.P. Act before the Amending Act came into force. Under Art. 254(1) "the law made by
Parliament, whether passed before or after the law made by the Legislature of such
State........ shall prevail and the law made by the legislature of the State shall, to the
extent of the repugnancy, be void."
66. Mr. Nambiar contends that as the U.P. Act and the Amending Act operate in the same
field in respect of the same subject-matter, i.e., the nationalization of bus transport, the
U.P. Act becomes void under Art. 254(1) of the Constitution. This argument ignores the
crucial words "to the extent of the repugnancy" in the said clause. What is void is not the
entire Act but only to the extent of its repugnancy with the law made by Parliament. The
identity of the field may relate to the pith and substance of the subject-matter and also
the period of its operation. When both concide, the repugnancy is complete and the whole
of the State Act becomes void. The operation of the Union Law may be entirely
prospective leaving the State Law to be effective in regard to thing already done. Sections
68C, 68D and 68E, inserted by the Amending Act, clearly show that those sections are
concerned only with a scheme initiated after the Amending Act came into force. None of
the sections, either expressly or by necessary implication, indicates that the schemes
already finalised should be reopened and fresh schemes be framed pursuant to the
procedure prescribed thereunder. Therefore, under Art. 254(1), the law under the U.P.
Act subsists to support the schemes framed thereunder and it becomes void only in
respect of schemes framed under the Central Act. A similar question arose in the context
of the application of Art. 13(1) to a pre-Constitution law which infringed the fundamental
rights given under the Constitution.

67. In Keshavan Madhava Menon's Case MANU/SC/0020/1951 : 1951CriLJ680 , which we

have referred to in a different context the question was whether Indian Press (Emergency
Powers) Act, 1931, was void as infringing the provisions of Art. 13(1) of the Constitution;
and the Court held that the said Act was valid and would continue to be in force to sustain
a prosecution launched for an act done before the Constitution. In the words of Das, J., as
he then was :

"Such laws exist for all past transactions and for enforcing all rights and
liabilities accrued before the date of the Constitution." (P. 234).

"So far as the past acts are concerned the law exists, notwithstanding that
it does not exist with respect to the future exercise of fundamental rights."
(pp. 235-236).

68. Article 13(1), so far as it is relevant to the present inquiry, is pari materia with the
provisions of Art. 254(1) of the Constitution. While under Art. 13(1) all the pre-
Constitution laws, to the extent of their inconsistency with the provisions of Part III, are
void, under Art. 254(1) the State Law to the extent of its repugnancy to the law made by
Parliament is void. If the pre-Constitution law exists for the post-Constitution period for
all the past transactions, by the same parity of reasoning, the State law subsists after the
making of the law by Parliament, for past transaction. In this view, both the laws can co-
exist to operate during different periods.

69. The same decision also affords a solution to the question mooted, namely, whether if
the law was void all the completed transactions fall with it. Mahajan, J., as he then was,
draws a distinction between a void Act and a repealed Act vis-a-vis their impact on past
transactions. At page 251, the learned Judge Says :

"The expression "void" has no larger effect on the statute so declared than the word
"repeal". The expression "repeal" according to common law rule obliterates a
statute completely as if it had never been passed and thus operates retrospectively
on past transactions in the absence of a saving clause or in the absence of
provisions such as are contained in the Interpretation Act, 1889, or in the General
Clauses Act, 1897, while a provision in a statute that with effect from a particular
date an existing law would be void to the extent of the repugnancy has no such
retrospective operation and cannot affect pending prosecutions or actions taken
under such laws. There is in such a situation no necessity of introducing a saving
clause an it does not need the aid of a legislative provision of the nature contained
in the Interpretation Act or the General Clauses Act. To hold that a prospective
declaration that a statute is void affects pending cases is to give it indirectly
retrospective operation and that result is repugnant to the clear phraseology
employed in the various articles in Part III of the Constitution."

70. The said observation directly applies to a situation created by Art. 254(1). As the U.P.
Act was void from the date of the Amending Act, actions taken before that date cannot be
affected. In whichever way it is looked at, we are satisfied that in the present case, the
scheme already framed subsists and the State Law exists to sustain it even after the
Parliament made the law. In this view we reject the contention of Mr. Nambiar based on
Art. 254(1) of the Constitution.

71. The alternative argument advanced by Mr. Naunit Lal may now be considered. It is
not disputed that under the proviso to Art.254(2), the Parliament can repeal the law
made by the Legislature of a State and that Parliament can repeal the repugnant State
law whether directly or by necessary implication. Assuming that Parliament in the present
case by enacting the Amending Act repugnant to the State law with respect to the same
subject-matter i.e., nationalization of road transport, impliedly repealed the State law,
would it have the effect of effacing the scheme already made ? If there was a repeal, the
provisions of s. 6 of the General Clauses Act of 1897 are directly attracted. The relevant
part of s. 6 of the General Clauses reads :
"Where this Act, or any Central Act or Regulation made after the
commencement of this Act, repeals any enactment hitherto made or
hereafter to be made, then, unless a different intention appears, the repeal
shall not -

(a) revive anything not in force or existing at the time at which the
repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or

anything duly done or suffered thereunder."

72. The express words used in clause (b) certainly take in the scheme framed under the
repealed Act. It was a thing duly done under the repealed Act. But it is said that a
comparison of the provisions of s. 6 with those of s. 24 would indicated that anything duly
done excludes the scheme. Section 24 deals with the continuation of orders, schemes,
rules, forms or bye-laws, made or issued under the repealed Act. But that section applies
only to the repeal of a Central Act but not a State Act. But the exclusion of the scheme is
sought to be supported on the basis of the argument that in the case of a repeal of a
Central Act, both the sections apply and, in that context, a reasonable interpretation
would be to exclude what is specifically provided for from the general words used in s. 6.
Whatever justification there may be in that context, there is none when we are concerned
with the repeal of a State Act to which s. 24 does not apply. In that situation, we have to
look to the plain words of s. 6 and ascertain whether those words are comprehensive
enough to take in a scheme already framed. We have no doubt that a scheme framed is a
thing done under the repealed Act.

73. A further contention is raised on the basis of the provisions of s. 68B to achieve the
same result, namely, that the said section indicates a different intention within the
meaning of s. 6 of the General Clauses Act. Section 68B reads :

"The provisions of this Chapter and rules and orders made thereunder shall have
effect notwithstanding anything inconsistent therewith contained in Chapter IV of
this Act or in any other law for the time being in force or in any instrument having
effect by virtue of any such law."

74. This section embodies nothing more than the bare statement that the provisions of
this Act should prevail notwithstanding the fact that they are inconsistent with any other
law. We have expressed our view that the provisions of this Act are prospective in
operation and, therefore, nothing in those sections, which we have already analysed, is
inconsistent with the provisions of the State law in regard to its operation with respect to
transactions completed thereunder. Assuming without deciding that the word 'instrument'
in s. 68B includes a scheme, we do not see any provisions in the Act which are
inconsistent with the scheme framed under the State Act. The provisions starting from s.
68C only contemplate a scheme initiated after the Amending Act came into force and
therefore they cannot obviously be inconsistent with a scheme already framed under the
State Act before the Amending Act came into force. We, therefore, hold that s. 6 of the
General Clauses Act saves the scheme framed under the U.P. Act.

75. The next contention of the learned Counsel Mr. Nambiar, namely, that the scheme
being a prescription for the future, it has a continuous operation even after the Amending
Act became law, with the result that after the Amending Act, there was no valid law to
sustain it, need not detain us; for, we have held that the State law subsists even after the
Amending Act to sustain the things done under the former Act.

76. This leads us to the contention of the learned Advocate General that even if the
Constitution (Fourth Amendment) Act, 1955, could not be relied on to sustain the validity
of the U.P. Act, there was no deprivation of property of the appellants within the meaning
of the decisions of this court in The State of West Bengal v. Subodh Gopal Bose
MANU/SC/0018/1953 : [1954]1SCR587 ; Dwarkadas Shrinivas of Bombay v. The
Sholapur Spinning and Weaving Co. Ltd. MANU/SC/0019/1953 : [1954]1SCR674 and
Saghir Ahmad's Case MANU/SC/0110/1954 : [1955]1SCR707 . Those cases have held
that cls. (1) and (2) of Art. 31 relate to the same subject matter and that, though there is
no actual transfer of property to the State, if by the Act of the State, an individual has
been substantially dispossessed or where his right to use and enjoy his property has been
seriously impaired or the value of the property has been materially reduced, it would be
acquisition or taking possession within the meaning of clause (2) of the said Article. After
a faint attempt to rise this question, the learned Advocate General conceded that in view
of the decision in Saghir Ahmed's Case he could not support his argument to the effect
that the State did not deprive the petitioners of their interest in a commercial
undertaking. In the said case, this Court held in express terms that U.P. Transport Act,
1951, which in effect prohibited the petitioners therein from doing their motor transport
business deprived them of their property or interest in a commercial undertaking within
the meaning of Art. 31(2) of the Constitution. Mukherjea J., as he then was, observed at
page 728 :

"It is not seriously disputed on behalf of the respondents that the appellants' right
to ply motor vehicles for gain is, in any event, an interest in a commercial
undertaking. There is no doubt also that the appellants have been deprived of this
interest."
77. The learned Judge proceeded to state at page 729 :

"In view of that majority decision it must be taken to be settled now that clauses
(1) and (2) of article 31 are not mutually exclusive in scope but should be read
together as dealing with the same subject, namely, the protection of the right to
property by means of limitations on the State's powers, the deprivation
contemplated in clause (1) being no other than acquisition or taking possession of
the property referred to in clause (2). The learned Advocate General conceded this
to be the true legal position after the pronouncements of this Court referred to
above. The fact that the buses belonging to the appellants have not been acquired
by the Government is also not material. The property of a business may be both
tangible and intangible. 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 roads. We think therefore that in
these circumstances the legislation does conflict with the provisions of
article 31(2)of the Constitution and as the requirements of that clause have not
been complied with, it should be held to be invalid on that ground."

78. The above observations are clear and unambiguous and they do not give scope for
further argument on the subject. It follows that if the Act does not provide for
compensation, the Act would be invalid being in conflict with the provisions of
Art. 31(2) of the Constitution.

79. The next question is whether in fact the provisions of Art. 31(2) of the Constitution,
before the Constitution, (Fourth Amendment) Act, 1955, were complied with. Under
Art. 31(2) no property shall be taken possession of or acquired save for a public purpose
and save by authority of law which provides for compensation for the property so
acquired or requisitioned and either fixes the amount of the compensation or specifies the
principles on which, and the manner in which, the compensation is to be determined and
given. In The State of West Bengal v. Mrs. Bela Banerjee MANU/SC/0017/1953 :
[1954]1SCR558 , Patanjali Sastri, C.J., has defined the meaning of the word
'compensation' at page 563, as under :

"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. This, indeed,
was not disputed."

80. On the basis of the aforesaid principle, Mr. Nambiar contends that the U.P. Act does
not provide for compensation in the sense of giving the operator deprived of his interest a
just equivalent of what he has been deprived of, or fix any principles to guide the
determination of the amount payable. The U.P. Act, the argument proceeds, does not
provide at all for compensation payable in respect of the interest of the operator in a
commercial undertaking, but only gives compensation for the unexpired period of the
permit. On the other hand, the learned Advocate General contends that the appellants
would be entitled only to just equivalent of the interest that they are deprived of, namely,
the interest in a commercial undertaking and that the cumulative effect of the provisions
of the U.P. Act is that just equivalent of the said interest is given. As it is common case
that what the Act should give is just compensation for the interest of the operator in a
commercial undertaking, we shall now examine the provisions of the U.P. Act to ascertain
whether it provides a quid pro quo for the interest the operator is deprived of.

81. The provisions of the U.P. Act relating to compensation may usefully be read at this
stage :

Section 5 : "(1) Where the scheme published under section 4 provides for
cancellation of any existing permit granted under Chapter IV of the Motor
Vehicles Act, 1939, or for the transfer of such permit to any other route or
routes the Transport Commissioner shall cause notice thereof to be served
on the permit holder concerned and on any other persons to whom in his
opinion special notice should be given. The notice shall also require the
permit-holder to lodge a statement in writing within the period to be
specified therein whether he agrees to the transfer of the permit.

(2) If the permit-holder agrees to the transfer of his permit, he shall,

provided the permit is actually so transferred ultimately, be not entitled to
claim compensation under section 11 but the transference of the permit
shall be deemed to be in lieu of compensation and complete discharge
therefore of the State Government. Where, however, the permit-holder
does not agree to the transfer, the permit shall, without prejudice to the
right of the permit-holder to get compensation under the said section be
liable to be cancelled."

Section 11 : "(1) Where in pursuance of the Scheme published under

section 8 any existing permit granted under Chapter IV of the Motor
Vehicles, Act, 1939, is or is deemed to have been cancelled or the route or
routes covered by it are curtailed or are deemed to have been curtailed,
the permit-holder shall, except in cases where transfer of the permit has
been agreed to under sub-section (2) of section 5, be entitled to receive
and be paid such compensation by the State Government for and in
respect of the premature cancellation of the permit or, as the case may be,
for curtailment of the route or routes covered by the permit as may be
determined in accordance with the principles specified in Schedule I.

(2) The compensation payable under this section shall be due as from the
date of order of cancellation of the permit or curtailment of the route
covered by the permit.

(3) There shall be paid by the State Government on the amount of

compensation determined under sub-section (1) interest at the rate of two
and one-half per cent. from the date of order of cancellation or curtailment
of route to the date of determination of compensation as aforesaid.

(4) The compensation payable under this section shall be given in cash.

(5) The amount of compensation to be given in accordance with the

provisions of sub-section (1) shall be determined by the Transport
Commissioner and shall be offered to the permit-holder in full satisfaction
of the compensation payable under this Act and if the amount so offered is
not acceptable to the permit-holder, the Transport Commissioner may
within such time and in such manner as may be prescribed refer the
matter to the District Judge whose decision in the matter shall be final and
shall not be called in question in any Court."

Section 12 : "Where a permit granted under Chapter IV of the Motor

Vehicles Act, 1939, has been cancelled or the route to which the permit
relates has been curtailed in pursuance of the scheme published under
section 8, the State Government may if the holder of the permit offers to
sell, choose to purchase the motor vehicles covered by the permit upon
terms and conditions laid down in Schedule II :
Provided, firstly, that the vehicle is of a type, manufacture and
model notified by the State Government; and

Provided, secondly, that the vehicle is in a mechanically sound

condition and is otherwise declared fit by the Transport
Commissioner or his nominee."

SCHEDULE I.

84. "PARAGRAPH 1 : The compensation payable under section 11 of the Act for
cancellation of a contract carriage or stage carriage or public carrier's permit under clause
(e) of sub-section (1) of section 10 of the Act shall be computed for every vehicle covered
by the permit as follows, namely :

(1) For every complete month or part Rupees of a month exceeding fifteen days of
one the unexpired period of the permit. hundred (2) For part of a month not
exceeding Rupees fifteen days of the unexpired period of fifty a permit

Provided always that the amount of compensation shall in no case be less than rupees
two hundred.

Paragraph 2 : The compensation payable under section 11 for curtailment of the route or
routes covered by a stage carriage or public carrier permit under clause (d) of sub-section
(1) of section 10 of the Act shall be an amount computed in accordance with the following
formula :

Y x A ----------- R

In this formula -

Y means the length in mile by which the route is curtailed.

A means the amount computed in accordance with paragraph I above.

R means the total length in miles of the route covered by the permit."

85. The aforesaid provisions constitute an integrated scheme for paying compensation to
the person whose permit is cancelled. The gist of the provisions may be stated thus : The
scheme made by the State Government may provide for the cancellation of a permit, for
curtailment of the route or routes or for transfer of the permit to other routes. Where a
transfer of the permit is accepted by the operator, he will not be entitled to any
compensation; if he does not accept, compensation will be paid to him with interest in
respect of the premature cancellation of the permit, or as the case may be for the
curtailment of the route or routes covered by the permit. The amount of compensation to
be given shall be determined by the Transport Commissioner in accordance with the
provisions of the Act, and if the amount so offered is not acceptable to the permit-holder,
the Transport Commissioner may, within such time and in such manner as may be
proscribed, refer the matter to the District Judge whose decision in the matter shall be
final. There is also a provision enabling the Government to purchase the motor vehicles
covered by the permit, if the holder of the permit offers to sell and if the vehicles satisfy
the specifications laid down in the Act. The question is whether these provisions offer a
quid pro quo for the interest of the petitioners in the commercial undertaking i.e.,
business in motor transport. Let us examine the question from the standpoint of a
business deal. If the transport business is sold, the seller gets his value for the assets
minus the liabilities and for his good-will. In the case of a scheme creamed under the Act,
the assets are left with the holder of the permit and under certain conditions the State
purchases them. As the scheme is a phased one, it cannot be said, though there will be
difficulties, that the assets cannot be sold to other operators. If a permit is not cancelled
but only transferred to another route, it may be assumed that if the transfer is voluntarily
accepted by the permit-holder, he is satisfied that the route given to him is as good as
that on which he was doing his business. On the other hand, if he chooses to reject the
transfer of his permit to another route and takes compensation, the question is whether
the compensation provided by s. 11 is anything like an equivalent or quid pro quo for the
interest in the commercial undertaking acquired by the State. If clause (5) of s. 11 had
not been there, we would have had no hesitation to hold that a flat rate of Rs. 100 or less
irrespective of the real loss to the holder would not be compensation within the meaning
of Art. 31(2). But, in out view, s. 11(5) gives a different complexion to the entire question
of compensation. Under that clause, a permit-holder aggrieved by the amount of
compensation given by the Transport Commissioner may ask for referring the matter to
the District Judge for his decision in regard to the adequacy of the compensation. This
clause is susceptible of both a strict as well as a liberal interpretation. If it is strictly
construed, it may be held that what the District Judge can give as compensation is only
that which the Transport Commissioner can, under the provisions of s. 11(1) i.e., at the
rates mentioned in the Schedule. But a liberal interpretation, as contended by the learned
Advocate General, can be given to that clause without doing violence to the language
used therein and that interpretation will carry out the intention of the legislature. If the
jurisdiction of the District Judge relates only to the calculation of figures, the said clause
becomes meaningless in the present context. Section 11 read with the Schedule gives the
rate of compensation, the rate of interest, the dates from which and up to which the said
compensation is to be paid with interest. The duty of calculating the said amount is
entrusted to the Transport Commissioner who will be a fairly senior officer of the
Government. If he made any mistake in mere calculations, he would certainly correct it if
the permit-holder pointed out the mistake to him. In the circumstances, is it reasonable
to assume that the legislature gave a remedy for the permit-holder to approach the
District Judge of the mere correction of the calculated figures ? It is more reasonable to
assume that the intention of the legislature was to provide prima facie for compensation
at flat rate and realising the inadequacy of the rule of thumb to meet varying situations, it
entrusted the duty of the final determination of compensation to a judicial officer of the
rank of a District Judge. The provisions of s. 11(5), in our view, are certainly suspectible
of such an interpretation as to carry out the intention of the legislature indicated by the
general scheme of the provisions. The crucial words are "if the amount so offered is not
acceptable to the permit-holder". The amount offered is no doubt the amount calculated
in accordance with s. 11(1). But a duty is cast on the Transport Commissioner to refer the
matter to the District Judge if the amount offered is not acceptable to the permit-holder.
The word "acceptable" is of very wide connotation and it does not limit the objection only
to the wrong calculation under s. 11(1). The permit-holder may not accept the amount on
the ground that compensation offered is inadequate and is not a quid pro quo for the
interest of which he is deprived. It is therefore for the District Judge, on the evidence
adduced by both the parties, to decide the proper compensation to be paid to him in
respect of the right of which he is deprived by the cancellation of the permit. The
language of s. 11(5) not only bears the aforesaid construction but also carries out the
intention of the legislature, for it cannot be imputed to the legislature that it intended to
deprive a valuable interest by giving a nominal amount to the permit-holder.

86. Section 11(5) speaks of the time limit within which such reference may be made to
the District Judge, but no such rule has been brought to our notice. We hope and trust
that, without standing on any such technicality, the Transport Commissioner, if so
required, will refer the matter of compensation to the District Judge. Having regard to the
entire scheme of compensation provided by the Act, we hold that the Act provided for
adequate compensation for the interest acquired within the meaning of Art. 31(1) of the
Constitution.

87. It is said that out of the twenty five appeals appellants in thirteen appeals had
accepted to take a transfer of the permits to different routes; but on behalf of the
appellants it is denied that the acceptance was unequivocal and final. They say that it was
conditional and that, as a matter of fact, they have not been plying the buses on the
transferred routes and indeed have been operating them only on the old routes. In these
circumstances, we cannot hold that the said appellants accepted the alternative routes. If
they or some of them choose to accept any alternative routes, they are at liberty to do
so, in which event they will not be entitled to any compensation.

88. Lastly, the learned Counsel for the appellants contends that clause (2) of s. 3 of the
U.P. Act infringes their fundamental rights under Art. 31(2) inasmuch as it prevents them
from questioning the validity of the scheme on the ground that it is not for public
purpose. Section 3 reads :

"(1) Where the State Government is of the opinion that it is necessary in

the interest of the general public and for subserving the common good, or
for maintaining and developing efficient road transport system so to direct,
it may, by notification in the official Gazette declare that the road transport
services in general, or any particular class of such service on any route or
portion thereof as may be specified, shall be run and operated exclusively
by the State Government, or by the State Government in conjunction with
railways or be run and operated partly by the State Government and partly
by others under and in accordance with the provisions of this Act.

(2) The notification under sub-section (1) shall be conclusive evidence of

the facts stated therein."

89. The argument of the learned Counsel on the interpretation of this section appears to
be an after-thought; for the records do not disclose that the appellants attempted to
question the said fact before the Government and they were precluded from doing so on
the basis of clause (2) of s. (3). We are not, therefore, prepared to allow the appellants to
raise the contention for the first time before us.

90. The last contention, which is special to Civil Appeal No. 429 of 1958, is that during the
crucial period when the scheme of nationalization was put through, the appellant had no
permit, it having been cancelled by the order of the appropriate tribunal; but
subsequently, after the scheme was finalised, the said order was set aside by the
Appellate Tribunal retrospectively and therefore the order of the State Government made
behind the back of the appellant does not bind him. The appellant's permit was not
renewed by the Regional Transport Authority. Against the said order, he preferred as
appeal to the State Transport Tribunal, which by an order dated September 6, 1956,
allowed the appeal and directed that the appellant's permit be renewed for three years
beginning from November 1, 1953. In disposing of the appeal the State Transport
Tribunal observed :
"We are told that in the meantime this route has been notified and the Government
buses are plying on it. The effect of this order will be that the appellant shall be
deemed to be in possession of a valid permit and he shall have to be displaced after
following the usual procedure prescribed by the U.P. Road Transport Services
(Development) Act."

91. Pursuant to their order, it appears that the Regional Transport Authority renewed his
permit on October 11, 1956 with effect from November 1, 1953 to October 31, 1956. In
the circumstances, as the petitioner was not a permit-holder when the Government made
the order, no relief can be given to him in this appeal. This order will not preclude the
appellant in Civil Appeal No. 429 of 1958, if he has any right, to take appropriate
proceedings against the State Government.

92. In the result, all the appeals are dismissed with one set of costs to the State of Uttar
Pradesh.

93. Appeals dismissed.

© Manupatra Information Solutions Pvt. Ltd.