LexK. C. GAJAPATI NARAYAN DEO AND OTHERS versus THE STATE OF ORISSA.
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THE SUPREME COURT REPORTS
K. C. GAJAPATI NARAYAN DEO AND OTHERS
v.
THE STATE OF ORISSA.
[PATANJALI SASTRI C. J., MuKHERJEA, S. R. DAs,
GHULAM HASAN and BHAGWATI JJ.]
Orissa Estates Abolition Act, 1952, ss. 23, 26, 27, 37-0rissa
Agric1tlt1tral
Income-tax
(Amendment)
Act, 1950-Validity-
"Golourable
legislation"-Tests of va.lidity-E.ffect of itlterior
inotives-Provisions for vesting buildings and private lands in
Govermnent-Provisimi for paying compe11sation in 30 years-
Validity-Provisions introduced in Bill after coming into force of
new.Constitution-Whether protected by art. 31(4)-Gonstitntion of
India, 1950, arts. 31(2), 31(4); Sch. VII, List II entry 46, List III
entry 42.
The Bill relating to the Orissa Estates Abolition Act, 1952,
was published in the Gazette on the 3rd J an[\ary, 1950. It con-
tained a provision that any sum payable for agricultural income-
tax for the previous year should be deducted from the gross
asset of an estate for the purpose of arriving at its net income on
the basis on which compensation was payable to the· estate
owners.
On the 8th January, 1950, a Bill to amend the Orissa
Agricultural Income-tax Act of 1947 so as to enhance the highest
rate of tax from 3 annas in the rupee to 4 annas and reduce the
highest slab from Rs. 30,000 to Rs. 20,000 was published in the
Gazette. This Bill was dropped by the next Chief Minister who
introduced a revised Bill on the 22nd July, 1950, enhancing the
highest rate to 12 annas 6 pies in the rupee and reducing the
highest slab to Rs. 15,000 and this was passed into law in August;
1950. It was contended that the Orissa Agricultural Income-tax
(Amendment) Act of 1950 was a fraud on the Constitution and as
such invalid as it was a colourable legislation to effect a drastic
reduction in the compensation payable under the Estates Abolition
Act:
Held, (i) that the question whether ·a law was a colourable
legislation and as such void did not depend on the motive or bona
fides of the legislature in passing the law but upon the competency
of the legislature to pass that particular law, and what the courts
have to determine in such cases is whether though the legislature
has purported to act within the limits of its powers, it has in sub-
stance and reality transgressed those powers, the transgression
peing veiled by what appears, on proper examination, to be a mere
pretence or disguise.
The whole doctrine of colourable legislation
is based upon the maxim that you cannot do indirectly what you
cannot do directly.
•
1953
May Z9.
•
2
StJPREME COURT REPORTS
[1954]
(ii) The impngned Act \VB.Sin substance ancl form a la¥.• in
respect to tbe "taxing of agricultural income", as described in
K. 0. Gajapati entry 46 of List II of the Seventh Schedule to the Constitution
flarayan Deo
and, as the State Legislature was con1petent to legislate on this
and Others
subject, the Act was not void, and the fact that the object of the
19,JJ
v.
legislature \Vas to accomplish another purpose, viz., to reduce the
The State 01
compensation payable under the Estates Abolition Act, cannot
Orissa.
render this law a colourablo legislation and void as such. as the
ulterior object itself was not beyond the competence of the
legislature.
(iii) Assuming that in India there is no absolute rule of
law that whatever is affixed to or built on the soil becomes a part
of it and is subject to the same rights of property as the soil
itself, there is nothing in la'i\' which prevents the State Legisla-
ture from providing as part of an estate abolition scheme tbat
buildings lying within the ambit of an estate and used primarily
for the tnanagement or administration of the estate should vest in
the Government as appurtenances to the estate itself. Such
acquisition would come within article 31(2) of the Constitution
and if the conditions laid down in clause (4) of that article are
complied with, it would be protected by that clause even if the
compensation provided for is not just and proper.
(iv) The provisions in the Orissa Estates Abolition Act,
1950, relating to private lands in the possession of temporary
tenants are not unconstitutional.
Merely because compensation
was based on the produce rent payable by the tenants it cannot
be said that the landholder was given compensation only for the
landholder's rights and not for the kudivarain (tenant's) rights
also.
(v) Tho expression "passed by such leExcerpt shown. Read the full judgment & AI analysis in Lexace.