LexSTATE OF MADHYA PRADESH versus RANOJIRAO SHINDE & ANR.
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STATE OF MADHYA PRADESH
v.
RANOJIRAO SHINDE & ANR.
March 21, 1968
[M. HIDAYATULLAH, C.J., R. S. BACHAWAT, C. A. VAIDIALINGAM,
K. S. HEGDE AND A. N. GROVER, JJ.]
Constitution of India, Arts, 19(1)(/), (5) and 31-Enactment aboli-
shing cc.oh grant-If violative of Art. 19(1)(/) and 31(2)-Choses in
action and money, i/ could be acquired under Art. 31(2).
Madhya Pradesh Abolition of Cash Grants Act (M.P. 16 of 1963)-
lf violates Art. 19(l)(f) or Art. 31(2) of the Constitution.
'The appellant.State abolished by an executive order cash grants pay-
able by it. This order was quashed by this Court. Thereupon the State
passed the Madhya Pradesh Abolition of Cash Grants Act, 1963 to abolish
the c~b grants, but provided for the payment of certain comjlensation to
the grantees-;-respondents. Tho respondents challenged the vires of the
Act before the High Court The High Court held the Act to be ultra
vires of Art. 19(1) (f) of the Constitution and not saved by sub-Art.
(5) thereof. In appeals by certificate, this Court,
HELD : ·The Act is either violative of Art. 31 (2) or, in the !lltema-
tive, Art. 19(1)1f) of the Constitution. (490 F]
Choses in action and money could not be acquired under Art. 31(2}.
If it is held that State by the exercise of its pOwer of eminent domain can
acquire choses in action and money belonging to its . citizens, by paying
a fraction of the money taken as compensation, the fundamental right
gnaranteed under Art. 19(1 )(f) would be deprived of all its contents and
that Article will cease to have any meaningful purpose.
Article 31(2)
must be construed harmoniously with .Art. 19(1)(1). If so constr'Jed,
it is obvious that the public purpose contemplated by the Article does not
include enrichment of the colfe'rs of the State. Further the compensation•
referred to in Art. 3112) is the just equivalent of the value of the property
taken. (495 E-H]
A law which authorises the State to deprive a persOn of bis property
must be a valid law. It must not violate Art. 19(1)(f) which means that
it must satisfy the r~uirements of Art. 19(5). The word "law" used in Art.
31(1) 'indicates its limitations and refers back to Art. 19 and any law
made under Art. 31( I) can be sustained only if the restrictions it imposes,
are reasonable and in the interest of general public. The Act which em-
powers the State to approp'riate some one else's property for itself solely
with a view to augment the resources of the State cannot be considered
as .a reasonable restriction in the interest of the general public. If Art.
19(5) is inteqireted to mean that the State can take by authority of law
anyone's property for the purpose of increasing its assets or revenues, the
g\Jarantee gjveli by Art. 19(1)(f) would become illusory [496 D-497 _El
Madhorao Phalke v. State of Madhya Bharat [1961) I S.C.R. 957,
Kamuhwar Prasad v. State of Bihar, A.I.R. 1962 S.C, 1166, Stale of
Bihar v. Kcmeshwar Singh, [1952) S.C.R. 889, Kavalappara Kottarathil
Kochunl v. State of Madril$, [1960] 3 S.C.R. 887, followed.
Bombav Dyein11 and Manufacturing Co. Ltd. v.
State of Bombay,
[1958] S.C.R. 1122, referred to.
I
-490
SUPREME COURT REPORTS
[1968] 3 s.c.R.
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1730
.and 1731of1966.
Appeals from the judgment and order dated August 18, 1964
.of the Madhya Pradesh High Court in Misc. Petition Nos. 21
.and 22 of 1963 (G.).
I. N. Shroff, for the appellant (in both the appeals).
B. Sen, P. W. Sahasrabuddhe, S. K: Dholakia and A. G.
Ratnaparkhi, for the respondent (in both the appeals).
The Judgment of the Court was delivered by
Hegde, J. In these connected appeals by certificates the ques·
non that arises for decision is whether the Madhya Pradesh Abo·
lition of Cash Grants Act of 1963 {Act No. XVI of 1963) is
.ultra vires the provisions of tbe Constitution. The respondents in
these appeals were entitled to receive cash grants from tbe Gov-
ernment of Madhya Pradesh. The impugned Act abolished such
grants but provided for the payment of certain compensation to tbe
:grantees. The respondents <;hallenged the vires of the Act before
the High Court of Madhya Pradesh in Miscellaneous Petitions
Nos. 21 and 22 of 1963, on various grounds. The High Court
rejected ;111 the contentions advanced on behalf of the respondents
excepting one namely that the Act is ultra v/res of Art. 19(l)(f)
of the Constitution and is not saved by sub-Art. (5) tExcerpt shown. Read the full judgment & AI analysis in Lexace.