1. In this batch of applications filed on behalf of several land-holders in the State a common question arises as to the validity of Madras Act XXX (30) of 1947 & of Madras Act VII (7) of 1951 which amended the former Act in certain particulars. Individual applications also raise other questions, but it was considered convenient to hear and dispose of the main question before dealing with other subsidiary questions. Madras Act XXX of 1947 received the assent of the Governor on the 6th January 1918. It is called the Madras Etsates Land (Reduction of Bent) Act, 1947 The descriptive title runs as follows:
'An act to provide for the reduction of rents payable by ryots in estates governed by the Madras Estate Land Act, 1908, approximately to the level of the assessments levied on lauds in ryotwari areas in the neighbourhood.'
The following is the preamble to the Act, 'Whereas the rents now payable by ryots in estates governed by the Madras Estates Land Act, 1908, are in many cases substantially higher than the assessments levied on lands in ryotwari areas in the neighbourhood; and whereas it is expedient to provide for reduction of such rents approximately to the level of the ryotwari assessments in the neighbourhood'.
The Act applies to all estates as defined in Section 3, Clause (2) of the Madras Estates Land Act, 1908. These estates include zamindaries and major inams. Section 2 of the Act provides for the appointment of a Special Officer for the purpose of recommending fair and equitable rates or rent in the ryoti lands in such estate or estates in respect of which he is appointed. He has to first determine in respect of each village in an estate the average rate of cash rent per acre prevailing at the commencement of the Act for each class of ryoti land in that village such as wet, dry and garden. Where no cash rents are prevalent in the village in respect of any class of land, the officer has to determine the average rate of cash rent per acre prevailing for such class of land in the nearest village in the estate for which cash rents are prevalent for such class of land and in which conditions are generally similar to those obtaining in the principal village, or where there is no such village in the estate in the nearest village in the nearest estate in respect of which village both the above requirements are satisfied. The Special Officer has then to determine the average rate of assessment per acre prevailing at the commencement of the Act in respect of each of the classes of land in the nearest ryotwari area in which conditions are generally similar to those obtaining in the estate village. He has then to compare the average rates of cash rent prevailing in the estate village or as determined in the manner aforesaid with the average rates of assessment in the nearest ryotwari area and after making due allowance for any difference in the conditions prevailing in the two cases determine the extent, if any, to which the rates of rent payable for each class of ryoti land in the estate village should be, in his opinion, reduced. He shall then fix the rates of rent payable for each such class of land after such reduction. Explanation I is important, as a point was made on its terms,
'The Special Officer shall have power only to determine that the rents payable for any class of ryoti land in the principal village shall be reduced: and he shall have no power to determine that such rents shall be enhanced'.
Explanation II declares that the extent of reduction shall also apply where rent in the village is paid in cash or on the estimated value of the share of the crop and in cases where rent is payable partly in kind and partly in cash. When the Special Officer has completed his task in any estate, he will submit his recommendations to the Provincial Government through the Board of Revenue specifying the extent if any to which the rents for each class of ryoti land in each village or group of villages In the estate should be reduced and the rate of rent payable for each such class after such reduction. The Provincial Government after considering the recommendations of the Special Officer and the remarks of the Board of revenue thereon shall by order published in Fort St. George Gazette fix the rates of rent payable in respect of each class of ryoti land in each village in the estate. It is specially provided, however, that where the rate of rent fixed in respect of ryoti land of any class exceeds the rate of rent payable in respect thereof at the commencement of the Act only the latter rate of rent shall be payable in respect of such land. The order of the Provincial Government shall take effect from the commencement of the fasli year 1357. Section 3(4) is another important provision which figures prominently in the arguments before this Court and may be set out in full:
'After such an order has taken effect in respect of any estate or portion of an estate, the rents due in respect of ryoti lands in such estate or portion with effect from the commencement of the fasli year 1357 as well as the rents which have fallen or may fall due in respect of such lands for any fasli subsequent to fasli 1357 until the commencement of the fasli year in which the estate may be finally taken over by the Provincial Government shall be recovered by the Provincial Government as if such rents were arrears of land revenue due to them; and the amount so recovered in respect of each fasli, after deducting therefrom the cost of such recovery as determined in accordance with such rules as may be made by the Provincial Government in that behalf, and also the peshkush; cesses, and other moneys due from the land-holder to the Provincial Government and constituting a charge on the estate shall be paid to the land-holder'.
Once an order is published under Section 3(2) in respect of any estate or portion thereof, a ryot is not bound to pay rent for any ryoti land held by him at a rate exceeding that fixed by the order, notwithstanding anything contained in the Madras Estates Land Act, 1908. Sections 5 and 6 deal specifically with the estates endowed for religious, educational and charitable institutions. Section 7 confers power on the Provincial Government to make rules to carry out the purpose of the Act. Section 8 declares that the validity of the following orders and proceedings shall not be liable to be questioned in any Court of law.
'(i) any order made under Section 3 Sub-section (2),
(ii) any recovery of rent effected by the Provincial Government under Section 3, Sub-section (4), or any payment made by them to the land-holder under the same sub-section;
(iii) any determination of net income or average net income made under Section 5 Sub-section (2).'
The Amending Act (No. VII of 1951) received the assent of the President on the 17th April 1951. Sections 2 and 3 of this Act are the most important. By Section 2 the following words were added both in the long title and in the second paragraph of the preamble at the end, 'and for the collection of such rents exclusively by the State Government.' Section 3 amended Section 3 of the original Act as follows:
'(i) in Sub-section (4) after the words 'finally taken over by the State Government', the words brackets and figure 'and any interest payable on such rents under Sub-section (6)' and after the words 'as if such rents', the words 'and interest' shall be inserted;
(ii) to the same sub-section, the following expanation shall be added namely:
'Explanation: The provisions of this sub section shall apply to an estate, whether the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, applies to it or not'.
2. After Sub-section (4) three new sub-sections were added. Of these sub-sections, Sub-section (7) is material. It runs thus:
'The land-holder shall not be entitled to collect, and the provisions of Chapters V and VI of the Madras Estates Land Act, 1908, shall cease to apply to, any rents or interest recoverable by the State Government under Sub-section (4)'.
Section 4 of the amending Act provides for the dismissal of all suits and proceedings pending at the commencement of that Act in which the land-holder seeks to establish against the State Government his right to correct or to recover from a ryot the rents to which the provisions of Section 3(4) of the Act shall apply. There is finally a provision (Section 4(2) ) which enables the Court on the application of any person affected by such decree to vacate a decree or order passed before the commencement of the Act which is inconsistent with the provisions of Section 3, Sub-sections (4), (5) and (6) of the Act as amended, and after vacating the decree the Court shall pass a fresh decree or order which shall be in conformity with the provisions aforesaid.
3. It is obvious that the amending Act by itself can have no place in the statute book and cannot remain in force if for any reason it is held that the original Act is invalid. There is one difference between the original Act and the amending Act and that is that while the former Act was passed when the Government of India Act, 1935, was in force, the later Act was passed after the coming into force of the Constitution of India. The validity of the Original Act was impugned by the petitioners firstly on the ground that it was void even when it was passed, because it contravened certain provisions of the Government of India Act, 1935, and secondly, on the ground that in any event after the Constitution came into force, the Act became null and void as being inconsistent with certain of the articles in Part III of the Constitution.
4. The first ground of attack is that the Act substantially reduces the rents payable to the landholders and also takes away from them the right to collect the rents and therefore the Act relates to acquisition of land and as the Act does not provide for the payment of compensation to the land-holders, it is in contravention of Section 299(2) of the Government of India Act, 1935, which says:
'Neither the Federal nor Provincial Legislature shall have power to make any law authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial undertaking, or any Interest in, or in any company owning, any commercial or industrial undertaking, unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, it is to be determined'.
The next ground is that if it be held that the Act did not relate to compulsory acquisition, then, the Act did not fall within the legislative competence of the Province, as the subject-matter is not covered by any of the entries in the provincial or concurrent lists. The only entry which could be pressed into service, leaving apart entry No. 9 of the provincial list, is entry No. 21. Even if this can comprise the provisions relating to reduction of rents, it cannot include within its ambit the provision which confers on the Government the exclusive right to collect the rents and deprives the landlords of such right.
5. These contentions are based on the Government of India Act, 1935. The contentions Based on the provisions of the Constitution of India are (1) that the Act infringes the fundamental right declared in favour of every citizen in and by Article 19(1)(f); (2) that the Act contravenes Article 31(2) of the Constitution.
6. It was then argued -- and this argument was the same whether the Government of India Act applied or the Constitution of India -- that in case it is found that either of the two main provisions of the Act is invalid, namely, either the reduction of rents or the taking over of the right to collect rents, then the Act in its entirety should be declared 'ultra vires' and void; the off ending provisions alone cannot be discarded and the remaining provisions be allowed to stand.
7. The Bill which ultimately became law as Act XXX of 1947 was first published in the Fort St. George Gazette dated 30th September 1947 as Bill No. XXIV of 1947. Along with this there were two other Bills published, namely, the Madras Estates Communal and Forest and Private Lands Prohibition of Alienation Bill (subsequently enacted as XIV of 1947 and (2) Madras Estates Repeal of Permanent Settlement and Conversion into Ryotwari Bill (No. XXXVII of 1947) which was afterwards passed as Act XXX of 1948. The statement of objects and reasons for Bill No. XXIV of 1947 (which eventually became Act XXX of 1947) was as follows:
'It is the policy of the Government to replace the zamindari by the ryotwari system at the earliest possible date. It will however take some time to pass the requisite legislation on the subject and to bring it into force in all the estates in this province.
2. The agrarian situation in estates, especially in the Circars, is worsening day by day and there is a growing agitation for the reduction of the high rents which prevail now. The Government consider that some immediate relief should be given to ryote and the object of this Bill is to provide for the reduction of rents in estates roughly to the level of the assessment prevailing in the neighbouring ryotwari areas. After the assessment has been finally fixed, the rights 'inter se' of land-holders and ryots in respect of the intervening period commencing with the current fasli will be suitably adjusted.'
It will be seen that eventually there were changes in the enactments as actually passed from the original provisions. Whereas Bill No. XXXVII contemplated an Act which applied to all estates to which the Bill No. XXIV of 1947 applied, actually when the Act came to be passed, there was an important difference. Act XXVI of 1948 was not made applicable to Inams falling within Section 3(d) of the Madras Estates Land Act.
8. We shall now take up the several contentions on behalf of the petitioners. Mr. Umamaheswaram who appeared on behalf of some of the land-holders put forward his case as regards Section 299(2) of the Government of India Act, 1935 on an alternative basis. He first contended that the reduction of rents and the taking over of the right of collection by the Government both amounted to compulsory acquisition, and in the alternative that in any event the latter at least amounted to such acquisition. Learned counsel relied on decisions of the Supreme Court of the United States and several other decisions of other Courts including the Supreme Court of India. In 'Pennsylvania Coal Co. v. Mehon', 260 US 393: 67 Law Ed. 322 it was held that a statute prohibiting the mining of coal under private dwellings or streets of cities in places where the right to mine such coal is reserved in the grant is unconstitutional as taking property without due process of law. This case is not of much assistance, because it was admitted that the statute did destroy previously existing rights of property and contract. The only question was whether the police power could be stretched so far as to justify the legislation. The Supreme Court held that it could not be. Mr. justice Holmes delivered the opinion of the Court and he summed up the true position thus:
'Government could hardly go on if, to some extent, values incident to property could not be diminisned without paying for every such change in the general law. As long recognized, some values are enjoyed under an implied limitation and must yield to the police power. But obviously the implied limitation must have its limits or the contract and due process clauses are gone. One fact for consideration in determining such limits is the extent of the dimunition. When it reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to sustain the act. So the question depends upon the particular facts. The greatest weight is given to the judgment of the legislature, but it always is open to interested parties to contend that the legislature has gone beyond its constitutional power'. The general rule was that 'while property may be regulated to a certain extent, if the regulation goes too far, it will be recognised as a taking'.
The following observations have been oft repeated in America and have been quoted by our own Supreme Court,
'We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change'.
Ultimately, however, the question was one of degree and could not be disposed of by general propositions. Mr. Justice Brandeis dissented. He pointed out that every restriction upon the use of property imposed in the exercise of police power deprives the owner of some right and is in that sense an abridgment by the State of rights in property without making compensation. Of course, the restriction could be lawfully imposed only when its purpose was to protect the public interests. But the purpose of the restriction, he observed 'does not cease to be public because incidentally some private persons may thereby receive gratutiously valuable special benefits'. Dealing with the point emphasised by Mr. Justice Holmes that the main consideration for determining whether the limits of the police power had been exceeded was the extent of the resulting diminution in value, the learned Judge laid stress on the fact that values are relative. On the facts of the case before him, he was of the opinion that it had not been proved that there was an unreasonable exercise of the police power. In 'United States v. Causby' 328 US 256: 90 Law Ed 1206 the facts were peculiar and as follows. The plaintiff in the case owned a dwelling house with a compound and outhouses which were used for raising chickens near an airport. The end of one of the airport's runaways was very near the plaintiff's barn and house. Various aircrafts of the United States used to fly over the plaintiff's property at a height below the prescribed minimum and interfered with the normal use of the plaintiff's chicken farm. There was also a great inconvenience to the plaintiff as the plaintiff and members of his family were frequently deprived of their sleep and the family became nervous and frightened. On the basis of these facts, it was found that the plaintiff's property had depreciated in value. The question was whether there was such a taking of the plaintiffs-property as to give him a constitutional right to compensation. It was held by the Supreme Court of the United States that there was. It was held that the damage to the property of the plaintiff in the case was not incidental and consequential from a legalised nuisance and therefore, there-would be a taking of an easement of flight. Here again the question was one of fact, because the normal inconveniences which the flight of aircraft may cause will not be compensate, but if the flights were so low and frequent as to have a direct and immediate interference with the enjoyment and use of private land, then there, would be a taking.
9. Besides citing these two cases, learned counsel for the petitioners also cited certain passages from text-books. In Corwins 'The Constitution and what it means to day', the author sets out when property can be deemed to be taken. At page 174 he says,
'Property is 'taken', generally speaking, only when, title to it is transferred to the Government or the Government takes over or assumes to control its valuable uses, or when, in the case of land, it commits a deliberate and protracted trespass, as by the repeated and persistent discharge of heavy guns across the grounds of a summer resort, with the natural result of frightening off the public; or the frequent flight at low altitudes of Army and Navy planes over a commercial chicken farm, with the natural result of destroying the value of the property for that use'.
Willis in his Constitutional law after referring to-the divergence of opinion as to what will amount to a taking of private property for a public use says that a newer, view point on the subject is not to take a too narrow and mechanical view as to what amounts to 'taking'. 'Ownership relates to rights, powers, privileges, and immunities concerning either land or chattels'. Whenever any of these incidents of ownership are taken or destroyed, there would be taking of property according to the broader view point. The broader rule is thus stated,
'there is a taking whenever any incident of property whether a right, power, privilege, or immunity of ownership, is taken from the owner.'
10. Learned counsel relied upon the observations made in the 'Sholapur Mills case', 'Charanjitlal v. Union of India', 1951 S C J 29 that acquisition of property need not mean necessarily an acquisition of the totality of interests of the owner in that property. Mukherjee J. though he discussed the question, did not think it necessary to decide whether the word 'property' as used in Article 31(2) of the Constitution (corresponding to Section 299(2) of the Government of India Act, 1935) connotes the entire property; that is to say, the totality of the rights which the ownership of the object connotes. But His Lordship was evidently not inclined to accept the broad contention of the learned Attorney General that so long as the owner is not deprived of all the rights in and to the property, and some rights, however insignificant they might be still remain in the owner, there cannot be any dispossession as contemplated, by that article. The test would be as to 'whether the owner has been dispossessed substantially from the rights held by him or the loss is only with regard to some minor ingredients of the proprietary right'. Das J. was more pronounced in his opinion. He said,
'In my judgment the question whether the Ordinance or the Act has deprived the share-holder of his 'property' must depend, for its answer, on whether it has taken away the substantial bulk of the rights constituting his 'property'. In other words, if the rights taken away by the Ordinance or the Act are such as would render the rights left untouched illusory and practically valueless, then there can be no question that in effect and substance the 'property of the shareholder has been taken away by the Ordinance of the Act.'
But their Lordships referred to a well known passage from the judgment of Rich J. in the 'Minister of State for the Army v. Dalziel' (1944) 68 CLR 261, which runs thus,
'Property, in relation to lands, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle. But there is nothing in the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it was expropriating'.
11. The judgment of the High Court of Australia in 'McClintock v. The Commonwealth' 75 C L R 1 was also relied by the learned counsel for the petitioners. In that case growers of pineapples were directed by orders made under the National Security (General Regulations) to deliver a prescribed per centage of their pineapples to a specified representative committee as agent for a department of the Commonwealth, payment for pineapples so delivered was to be made at rates fixed from time to time by another committee. This provision was impugned on the ground that there was acquisition, of property without providing just terms for such acquisition. The action was dismissed by the Supreme Court of Queensland on the ground that although the order was invalid because they did not provide just terms, the plaintiff had delivered his pineapples voluntarily and therefore was not entitled either to compensation or damages. We are not concerned with the decision in this case which has no direct bearing on the questions which fall to be decided in this, but Mr. Umamaheswaram relied on the following passage in the judgment of Starke J.:
'The effect of Order No. 1 and the direction given under it is to require the grower to pick and deliver his pineapples as directed and fixes the price which is to be paid therefor. It certainly regulates the distribution and sale of the pineapples and controls the prices at which they may be sold. In operation it compels a grower to deliver his pineapples to canners at a fixed price. Such a transaction is a forced sale and results in the acquisition of property by some manner. And, therefore, the legislation, regulation and order must be founded on the constitutional power to make laws with respect to the acquisition of property.'
12. In my opinion much assistance cannot be derived from the American cases cited to us and similar cases not cited. The Fifth Amendment to the American Constitution declared inter alia that no person shall be deprived of life, liberty or property without due process of law and that private property shall not be taken for public use without just compensation. Due process of law as a matter of substance has not been understood and interpreted as forbidding all social control. It protects personal liberty including property rights against social control, unless such social control is in the constitutional exercise of either the police power or the power of taxation or the power of eminent domain. Police power is the power vested in the legislature of the State to make reasonable laws for the good and welfare of the people and designed to promote public convenience and general prosperity as well as to make regulations designed to promote public health, public policy and public safety and to preserve public order. Taxation is the legal capacity of a Government to impose charges upon persons or their property to raise revenue for governmental purposes. Under the due process clause, personal liberty is protected against taxation only when such taxation is unreasonable (in the eyes of the Supreme Court). As a general rule, taxation is reasonable when it is for a public purposes. Eminent domain is the legal capacity of a sovereign or a governmental agent to take private property for public use upon the payment of just compensation. Like police power and taxation, eminent domain is 'the offspring of political necessity'. There are times when it is difficult to draw a clear line of distinction between the exercise of police power and the exercise of the power of eminent domain, though the distinction becomes very important on account of the fact that in the case of the former no compensation is required; whereas in the latter case, compensation is required.
13. The express limitation contained in the Fifth amendment prohibits the 'taking' of private property for a public use without just compensation. Property would obviously comprise not only land and buildings but also rights in and to property just as water rights, easements etc. As the passage cited earlier from Willis Indicates, even in America there has been a divergence of opinion as to the interpretation of the word 'taking'. Of course where physical property is taken or there is a physical occupation of property, there can be no doubt, though all the incidents of ownership are not taken. It has been held that there is a 'taking' where some incident of ownership is taken, but there are also many instances of taking to be found in American reports when there is no direct appropriation. In many cases a very extended meaning is given to the word 'taking'. To give an example the installation by railway of a fanning system in a tunnel which causes the emission of gas and smoke to the injury of the owners located near by the railway has been held to amount to taking. 'Pennsylvania Coal v. Mehon' 260 U S 393: 67 Law Ed 322 above referred and cited by the petitioners is a similar example, while the case in 'United States v. Causby' 328 US 256 : 90 Law Ed 1206 is an extreme instance of the application of the broad rule as to when taking occurs within the meaning of the Fifth Amendment.
14. In my opinion, I do not think we shall be justified in importing all these rules into a discussion as to the interpretation of the word 'acquisition' in Section 299 of the Government of India Act, 1935. In my opinion, though every instance of acquisition of property would be an instance of taking of property, the converse is not true. Every instance of taking as understood by later American decisions would not amount to acquisition within the meaning of that term in Section 299. Even giving, the word 'property' or 'land' the widest connotation, I think there should be an element of transference before it can be said that there is an acquisition of any interest in land or in property. Even in America, the earlier view was narrow and a strict conception of 'taking' was adopted and it was held that it required a physical invasion of the property affected by the appropriation, an actual seizure of the premises or a permanent ouster of the owner or such an interference with the rights of an owner as to deprive him of control of his property. But later authority abandoned this strict construction. Nichols in his 'The Law of Eminent Domain' (1950 Edition) sums up the later view thus:
'The modem and prevailing view is that any substantial Interference with private property which destroys or lessens its value, or by which the owner's right to its use or enjoyment is in any substantial degree abridged or destroyed, is, in fact and in law, a 'taking' in the constitutional sense, to the extent of the damages suffered, even though the title and possession of the owner remains undisturbed.'
Thus it has been held that a legal restriction upon the use of the land will constitute a taking although the title is unaffected and the land is physically untouched, and likewise when the owner's enjoyment of the land Is physically interfered with, although his legal rights remain unimpaired. Nichols says the same thing in another place in the following term:
'It is well settled that a taking of property within the meaning of the Constitution may be accomplished without formally divesting the owner of his title to the property or of any interest therein. Any limitation on the free use and enjoyment of property constitutes a taking of property within the meaning of the constitutional provision. It is sufficient that the person claiming compensation has some right or privilege in the appropriated property, which right or privilege is destroyed, injured or abridged by such appropriation.'
I am clearly of opinion that this extended connotation of the word 'taking' cannot be given to the term 'acquisition' in Section 299. 'Acquisition' is the nominative of the verb 'acquire' which means 'gain by oneself and for oneself'. When one speaks of acquiring the property of another, there are two ideas, namely, the idea of one gaining something which the other is deprived of. There is a divesting and a vesting of property or any interest in property, whether tangible or intangible.
15. The Australian cases do not in any way help the petitioners to compel us to adopt the American view. The relevant provision in the Australian Constitution, namely, Section 51, placiturn 31 contains the expression 'acquisition of property'. The decision in the 'Minister of State for the Army v. Dalziel' (1944) 68 CLR 261 is quite consistent with my construction of the word 'acquisition'. In that case Dalziel was a weekly tenant of certain vacant land upon which he carried on the business of a parking station for motor cars. The Minister for the Army purporting to act under Regn. 54 of the National Security (General) Regulations took possession of this land for defence purposes. The taking of possession was for an indefinite period and it was exclusive. In these circumstances it was held that there was an acquisition of property. Rich J. in the leading judgment of the Court observed:
'The language used is perfectly general. It says the acquisition of property. It is not restricted to acquisition by particular methods or of particular types of interests, or to particular types of property. It extends to any acquisition of any interest in any property..... .Not only is a right to possession a right of property, but where the object of proprietary rights is a tangible thing it is the most characteristic arid essential of those rights.'
The view which I have been adumberating, namely, that the word 'acquisition' in Section 299 of the Government of India Act imports the idea of transference of rights in property receives support from the following observations of Spens C. J. in 'Kunwar Lal Singh v. C. P. & Berar' (1944) 1 M. L. J. 510 :
'It further seems to us that the word 'acquisition' implies that there must be an actual transference of, and It must be possible to indicate some person or body to whom is or are transferred, the land or rights referred to.'
In that case there was an increase of assessmentof land revenue and it was held that such increasewould not involve the acquisition of any right inor over immovable property, though the positionof the landholder would certainly be made worseby the increase of the revenue payable by him,because by a mere increase of the revenue therewas no interference by the Government of any landor rights in or over immovable property which remained in the same possession and ownership asimmediately before the increase of the assessment.A case very much in point is that relating to theconstitutional validity of the united provinces Tenancy Act (XVII of 1939), 'Jagannath Baksh Singh v.United Provinces' (1943) 2 M. L. J. 114. That Actinter alia cut down the absolute rights claimed bythe Talukdars to be comprised in the grant of theirestates as evidenced by sanads issued to them. Itwas contended that the case fell within Section 299(2)of the Government of India Act, 1935, and a Provincial Legislature had no power to pass a lawauthorising the compulsory acquisition for publicpurposes of any land unless the law provided forthe payment of compensation for the property acquired. The contention was rejected by the Federal Court. Gwyer C. J. said (at page 118):
'The answer to this is that a law which regulatesthe relations of landlord and tenant and thereby diminishes the rights which the landlord hashitherto exercised in connexion with his landdoes not authorise the compulsory acquisition ofthe land for public or any other purposes; andtherefore the question of compensation does notarise.'
The case went up to the Privy Council, 'Jagannath Baksh Singh v. United Provinces' (1946) 2 M.L.J. 29 and the view of the Federal Court was approved, speaking of the general scope of the Act Lord Wright said:
'It regulates and secures the rights of the tenants in various respects on lines sufficiently familiar in modern agricultural legislation, it is not contended that in doing so, it impunges on the powers which, but for such a measure, the taluqdars might have exercised within their estates'.
The contention based on Section 299 was disposed of thus:
'The appellant relies on certain express provisions of the Government of India Act. Thus he relies on Section 299 of the Act which provides that no person shall be deprived of his property in British India save by authority of law, and that neither the Federal nor a Provincial Legislature shall have power to make any law authorising the compulsory acquisition of land for public purposes save on the basis of providing for the payment of compensation. But in the present case there is no question of confiseatory legislation. To regulate the relations of landlord and tenant and thereby diminish rights, hitherto exercised by the landlord in connection with his land, is different from compulsory acquisition of the land.'
16. In Kameshwar Singh v. State of Bihar, 20 Pat 790 a Full Bench of the Patna High Court had recently occasion to examine the validity of a Bihar Act very similar in scope to the Act now under consideration, namely, the Bihar state Management of Estates and Tenures Act, 1949. It is not necessary to set out the several provisions of that Act. It suffices to state that by that Act the management of certain estates were vested in a manager who was to be an officer, not below the rank of a Deputy Collector. The consequences of placing an estate under the management of the Government were, among others, (a) the proprietor shall cease to Have any power of management, (b) the manager shall take charge of the estates together with buildings, papers and other properties appertaining to the estates, (c) the pro-praetor shall be incompetent to mortgage or lease the estates or tenures or any portion thereof, (d) all rents and profits arising from the estate including arrears of rents and profits shall be payable to the manager. After making certain disbursements the manager is directed to pay to the proprietor the surplus, if any, remaining out of the moneys collected by him at the end of each financial year. Of the several questions raised in that case one was whether the Act contravened Section 299(2) of the Government of India Act, 1935, because there was an acquisition of property without payment of compensation. Two of the three learned Judges who constituted the Special Bench took the view that the provisions of the Act did not involve an acquisition of land and therefore no question of compensation arose. Shearer J. found himself unable to accept the argument of Mr. P.R. Das that by the taking over of the management of the estate there was an acquisition. He points out that the proprietor is the main owner of the estate and is alone to be competent to sell or make a gift of it and he is to continue to derive a considerable, although, perhaps, a much reduced, income from it. Sinha J. dealing with this contention said:
'As already pointed out, the impugned Act is a mixture of restraints on the power of alienation of land by a proprietor or a tenure holder, a suspension of his rights of management without acquisition of any rights by the Government to be exercised for the benefit of the public or for the benefit of any particular section of the public.'
According to him the pith and substance of the Act was to deprive proprietors of their valuable right to manage their property, but it was not acquisition of any rights in property by the Government (see pages 891 and 892).
17. Now let us look at the Act now impugned. It provides (a) for the reduction of rents and (b) for the collection of the reduced rents by the Government. I have no hesitation in holding that by reducing the rent payable by a tenant to a landlord, there cannot be an acquisition by the Government of any right or property of the landlord. Undoubtedly, a reduction of rent would adversely affect the landlord. It would deprive him of a part of the benefit which he had been deriving from his property. But that element alone would not render the legislation confiscatory or expropriatary. There is no transference of any right of the landlord to the Government. There is no vesting in the Government of any right of the landlord. The provision merely regulates the relationship between the landlord and the tenant. The landlord is entitled to collect from his tenant only the lawful rent and the Act determines what that lawful rent is. I think that this part of the petitioners' contention is concluded by the decision of the Federal Court in 'Jagannath Baksh Singh v. United Provinces' (1943) 2 M.L.J. 114 affirmed on appeal by the Privy Council in 'Jagannath Baksh Singh v. The United Provinces' (1946) 2 M.L.J. 29 .
18. Does then the provision relating to the collection of rents by the Government amount to an acquisition? Obviously one of the rights of a landlord in respect of the land which he owns is the right to collect and appropriate the rents and profits from it. If this right is taken over by the Government it may be said that the Government has acquired that interest, but have the Government done so. I think not. All that Section 3(4) of the Act provides is that after a particular date the collection of the rente shall be by the Provincial Government. This collection must be deemed to be made only on behalf of the landholder, because the Government does not have any beneficial interest in the amount collected, except of course, to pay themselves the cost of the collection. The balance of the rents is payable to the land-holder. The Government is, as it were, a statutory agent of the land-holder for collection. When the land-holder appoints an agent to collect the rent from the tenants of his estate, there is no transference of any property right from the land-holder to the agent. There is no divesting of any right of the land-holder and no corresponding vesting of the same in the agent. In the same way I think that there is no vesting of any property right in Government simply because under the provisions of the Act, the Government alone can recover the rents due to the land-holder.
19. For these reasons I hold that the Act does not in any particular involve an acquisition of land (including by that term any interest in land) and the Act therefore does not contravene the provisions of Section 299(2) of the Government of India Act, 1935.
20. The next contention on behalf of the petitioners related to the competence of the Provincial Legislature to pass the impugned enactment. The only entries which could possibly cover the subject-matter of the Act are entries Nos. 9 and 21 of List II, Provincial Legislative List of Schedule VII of the Government of India Act, 1935. Item 9 is 'Compulsory acquisition of land'. As I have held that the Act does not involve any acquisition, it follows that entry No. 9 can have no application. That leaves us with entry No. 21 which runs as follows:
'Land, that is to say, rights in or over land, land tenures, including the relation of landlord and tenant, and the collection of rents; transfer, alienation and devolution of agricultural land; land improvement and agricultural loans; colonization; Courts of Wards; encumbered and attached estates; treasure trove.'
It was not disputed that so far as the provisions relating to reduction of rent are concerned, they would fall within entry No. 21. Regulation of rent payable by the tenant to the landlord would certainly come within the expression 'the relation of landlord and tenant.' There was an attempt made by one of the counsel who appeared for some of the petitioners to contend that the relationship between the landholder and the ryot in an estate is not that of landlord and tenant and he called in aid the observations made in several of the early cases in Madras, namely, 'Venkata Mahalakshmamma v. Ramajogi, 16 Mad 271 'Venkatanarasimha Naidu v. D. Kotayya', 299, and 'Lakshminarayana Pantulu v. Venkatarayanam' 21 Mad 118 that the land-holder and the ryot own two distinct interests in land, the melwaram and the Kudiwaram, and in one sense, even the tenant is a proprietor, in 'Lakshminarayana v. Venkatarayanam' 21 Mad 116 the ryot is referred to as a 'peasant proprietor', whatever may be the legal conception in this matter and there has not been uniformity as to this, I think the words 'landlord and tenant' in entry No. 21 are used in their widest sense and so long as the ryot is under an obligation to pay rent either in cash or in kind to the landholder and so long as the estate stands registered in the name of the landholder, it is not inappropriate to describe their relationship as that between landlord and tenant.
21. It was, however, pressed strongly upon us that the provisions relating to the Government taking over the collection of the rente would not fall within the scope of entry No. 21. Reliance was placed on the judgment of the Pull Bench of the Patna High Court in 'Kameshwar Singh v. State of Bihar' 29 Pat 790 . It was there held that entry No. 21 would not cover the provisions of the Bihar State Management of Estates and Tenures Act which deprived proprietors and tenure-hotders of their rights to manage their property. After referring to a ruling of Judicial Committee in 'Meghraj v. Allah Bakhia', 74 Ind App 12 in which their Lordships pointed out that the words 'that is to say' following the opening word 'land' in entry No. 21 are not words of limitation but of explanation or illustration of the wide meaning which the Legislature intended to give to the word 'land' the learned Judges held that the subject-matter of the impugned Act, namely, the taking over and managing the estates by Government officers Is not to be found in any of the items of the Legislative Lists. The reasoning of Shearer, J., is as follows:
'It seems to me Impossible to say that the subject-matter of the enactment is 'the relation of landlord and tenant', still less, that it is 'rights in or over 'land.' When the attention of the learned Government Pleader was drawn to the latter words in item No. 21, Mr. Lalnarayan Sinha said that the right of the plaintiff to manage his property, to collect rent from his raiyats and to make a valid mortgage or lease were taken away by the impugned Act. These, however, are not, strictly speaking, rights in property, but are powers incident to ownership ........There can, I think, be no doubt whatever that the draftsman used the words 'rights in land' as connoting an interest or estate in land, and not a mere power incident to the right of ownership, and used the words 'rights over land' as connoting an easement, such as right of way or some other incorporeal right.'
22. Sinha, J., said (at page 846):
'The provisions of Item 21 of List II do not Include the power to take over management of property of such persons as do not come within any of the disabilities imposed by the Court of Wards Act or the Chota Nagpur Encumbered Estates Act, as indicated above.'
Das, J., took a slightly different view. He thought that Item 21 of List II is limited by Item 2 of that list and Items 4, 8, 9 and 10 of List III would cover some of the provisions of the impugned Act. Sinha, J., was prepared to hold that Item 21 may cover some of the provisions of the Bihar Act in so far, for instance, as it dealt with collection of rents. But according to him. Item 21 would not cover deprivation of the proprietors' right to manage their property, irrespective of whether they were disqualified persons.
23. The decision of Bhagwati, J., in 'Tan Bug Taim v. Collector of Bombay' : AIR1946Bom216 was also relied on by the petitioners' Counsel. The learned Judge held that the requisition of immovable property under Section 2 (2) (xxiv) of the Defence of India Act read with Rule 75-A of the Defence of India Rules would not be covered by Entry No. 21. He considered that the rights which were created in the Government by the requisition of land did not create in the Government any interest in the land. They only created rights to temporary use and possession of land akin to the rights of a licensee. The learned Judge therefore concluded as follows:
'These rights of temporary use and possession which are created in the Government are not, in my opinion, ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in the expression Tights in or over land' and which are by reason of the amplification of the general topic or category of legislation 'land' mentioned in Item 21 deemed to be comprised within that topic or category of legislation 'land' as already indicated above. I have, therefore, come to the conclusion that the requisition of immovable property which is the subject-matter of these proceedings is not included in Item 21 in List II of the seventh schedule to the Government of India Act.'
I do not think that either of these two rulings has any application to the case before us. Section 3 (4) of the Act in question only provides for one method of the collection of the rents due from the tenant to the landholder. Except collecting rents the Government do not, unlike in the Bihar Act, take over possession or management of the estate. A provision making the provisions of Revenue Recovery Act applicable to the collection and recovery of rents in an estate would obviously fall within the scope of Entry No. 21. Such a provision would be covered by the expression 'the collection of rents.' The fact that this method of collection is made the only method would not take away the subject-matter from the purview of that entry. If the Act had said that Immediately there is an arrear of rent, the landholder shall notify the fact to a prescribed Revenue Officer, who shall thereupon proceed to recover the rent as if it was an arrear of land revenue, I do not think it can be contended with any justification that the provision would not be covered by the expression 'the collection of rents.' Section 3 (4) of the Act is substantially such a provision. I do not see why the expression 'the collection of rents' should be confined to the collection of rents by the landlord alone. It can as well cover collection by agents on behalf of the landlord, and the Government under Section 3 (4) of the Act is no more than a statutory agent. In my opinion, the impugned Act even in so far as it provides for the compulsory collection of rents by the Government Is covered by Entry No. 21 of the Provincial List and therefore the Provincial Legislature was competent to enact it.
24. In this view it is not necessary to deal at any length with the contention of Mr. Kesava Alyangar that in case it be held that the provisions relating to the collection of rents are declared invalid, the entire Act should be declared invalid because these provisions cannot be severed from the provisions relating to the reduction of rent. He contended that the reduction of rents1 and the collection of such reduced rents by the Government were parts of the same scheme and based upon the same policy of the Government of converting the zamindari and Inam tenure into ryotwari tenure and therefore if one integral part of the scheme failed, the entire thing must fail. The law relating to severability is discussed in the judgment of the Privy Council in 'Attorney-General for Alberta v. Attorney-General for Canada', (1947) A C 503. When a part of an enactment is declared Invalid, the real question is in the words of Viscount Simon in that case:
'Whether what remains is so inextricably bound up with the part declared invalid that what remains cannot independently survive or, as it has sometimes been put; whether on a fair review of the whole matter it can be assumed that the Legislature would have enacted what survives without enacting the part that is ultra vires at all.'
In 'Attorney-General for Saskatchewan v. Attorney-General for Canada', 1949 A C 110 the test laid down in 'Attorney-General for Alberta v. Attorney-General for Canada', 1947 A C 503 was applied. Applying this test, I do not find any difficulty in holding that even if the provisions relating to the collection of rent by the Government are declared invalid for any reason, the remaining provisions relating to the reduction of rent can stand by themselves.
25. The impugned Act must therefore be held to have been validly passed. The question then arises whether on the coming into force of the Constitution, the Act in its entirety or any part of it has become void under Article 13(1) of the Constitution as being inconsistent with the provisions of Part III thereof. Mr. Umamaheswaram for some of the petitioners first contended that the provisions of the Act both in respect of the reduction of rents and the taking over by the Government of the collection of rents were inconsistent with Article 19(1)(f) of the Constitution which declared the right of every citizen 'to acquire, hold and dispose of property.' As the exercise of this right is subject to the provision in Article 19(5), he also contended that the restrictions imposed on the landholders by the Act are not reasonable and not in the interests of the general public. Admittedly, nothing in the Act to any extent takes away or abridges the rights conferred by Article 19(1)(f) to acquire and dispose of property. It therefore remains to be considered whether the Act or any part of it affects materially the night of the petitioners to 'hold' the property. I think the proper meaning to be attached to the word 'hold' there is to 'enjoy.' Enjoyment of property consists in actual occupation and possession of it and will also comprise the perception of the rents and profits from it. Now in the case of these landholders in respect of ryoti land which is the only kind of land directly sought to be affected, the only way in which they can be said to hold the property is by appropriating the rents payable to them thereon. It may therefore be contended that inasmuch as the Act reduces substantially the rents and also takes away from the landholders the right to collect the rents, the Act does diminish their rights. But that is only a superficial aspect of the scope of the Act. The landholder will be entitled only to collect such rent as is lawful and la the exercise of the admitted right conferred on the Provincial Legislature to regulate the relation between landlord and tenant, an enactment could declare what that lawful rent is or provide for its determination. It is not as if there is an invoidable and absolute right in the land-holder to collect any particular rent. It may be a matter of contract or of usage, but the legislature could always provide for the ascertainment of a fair and proper rent, notwithstanding any contract or usage. What the Act purports to do is to reduce the rents payable by ryots in estates governed by the Madras Estates Land Act approximately to the level of the assessment levied on lands in ryotwari areas in the neighbourhood. Of course the legislature presumes that the ryotwari assessment is fair and reasonable and evidently for the reason that ryotwari lands are held directly under the State. If, therefore, rents substantially higher than the corresponding ryotwari assessments are being collected. It may be said that the landholder is collecting rents which are neither fair nor reasonable. If the object of the legislation is to prevent the landholder making an excessive use of his right, it would be open to the legislature to make such use unlawful. It is on this principle that forced exactions ostensibly based on contract and usage have been abolished in recent tenancy legislation.
26. Though at first sight the argument that depriving the landholder of his right to collect the rents would amount to an interference with his right to hold the property looks plausible, yet on a close examination, it appears to me that there is really no abridgement of any property right by reason of the Government taking over exclusively the collection of rents. In the 'Sholapur Mills case, 1951 S C J 29 his Lordship Mukherjee, J., pointed out the difference between rights which would be comprised in the term 'property' and privileges which are appurtenant to or now from the ownership of property but by themselves and taken independently could not be reckoned as 'property' capable of being acquired, held or disposed of as is contemplated by Article 19(1)(f) of the Constitution. In that case before the Supreme Court, the petitioner undoubtedly was precluded from exercising his right of voting at the election of directors, from getting a resolution passed by the shareholders without the sanction of the Central Government and from instituting any winding up proceedings in a Court of law; but these disabilities were not restrictions on the rights of the shareholders. Das, J., described these disabilities as curtailment of Incidental privileges not amounting to deprivation of any property.
27. The decision of the Special Bench in 'Kameshwar Singh v. State of Bihar' 29 Pat 190 was relied on by Mr. Umamaheswaram. I do not think that the Bihar Act and the Act now impugned are in 'pari materia.' It is impossible to say what the learned Judges would have held if the provisions of the Bihar Act had been exactly similar to the provisions of our Act I shall only cite one passage from the judgment of Shearer, J., by way of Illustration. The learned Judge said:
'If the object of the impugned Act had merely been to confer power on the executive to take over the management of estates and tenures' in order to prevent waste or the disappearance of village papers or the like during some comparatively short interval, which was expected to elapse before the estates or tenures could be acquired permanently by the State, the Act might, possibly, have been supported.'
Now, Section 3 (4) of our Act expressly refers to the contemplated taking over of the estates finally by the Provincial Government.
28. Even assuming that the provisions of the impugned Act do restrict the exercise of the petitioners' enjoyment of their property, I am prepared to hold that they can well be supported as reasonable restraints imposed in the interests of a large section of the public and therefore saved by Article 19(5) of the Constitution. In this State, agricultural tenants form a very large part of its people and any legislation undertaken with the object of ameliorating their condition must be held to be in the interests of the general public. Prima facie reduction of the prevailing rents to ryotwari level cannot be said to be unreasonable. Whether in a particular case the actual reduction effected is so drastic and there are other circumstances which lead to the inference that the landholder is practically deprived of all enjoyment of his property, then it may be in that case there has been an unreasonable restriction; but the Act as such cannot be declared to be void as necessarily being inconsistent with the provision of Article 19(1)(f) , read with Article 19(5).
29. Mr. Umamaheswaram referred us to observations in the judgments of the Supreme Court of India dealing with the test to find out what restrictions can be deemed to be reasonable. In 'Chintamanrao v. The State of Madhya Pradesh' 1950 S C J 571, his Lordship Mahajan J., delivering the judgment of the Court said:
'The phrase 'reasonable restriction' connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public.'
His Lordship the Chief Justice of India in 'Dr. N.B. Khare v. State of Delhi' 1950 S C J 328 said:
'In my opinion, Clause (5) must be given its full meaning. The question which the Court has to consider is whether the restrictions put by the impugned legislation on the exercise of the right are reasonable or not. The question whether the provisions of the Act provide reasonable safeguards against the abuse of the power given to the executive authority to administer the law is not relevant for the true interpretation of the clause .......... The law providing reasonable restrictions on the exercise of the right conferred by Article 19 may' contain substantive provisions as well as procedural provisions. While the reasonableness of the restrictions has to be considered with regard to the exercise of the right, it does not necessarily exclude from the consideration of the Court the question of reasonableness of the procedural part of the law.'
It was asked how the collection of rents by the Government is in the interests of the general public. It was evidently considered to be because the legislature apprehended that in spite of the reduction of rents by the State, the landholders might continue to collect at higher rates using their influence and power. While the application of the Revenue Recovery procedure would result in prompt and satisfactory collection beneficial to the landholder, the collection by a disinterested agency as the Revenue department of Government would avoid the danger of exaction. Applying these tests, I do not find anything unreasonable in the substantive or procedure provisions of the impugned Act.
30. It was then contended that the provisions of the Act are inconsistent also with Article 31(2) of the Constitution. But as this is substantially similar to Section 299(2) of the Government of India Act, 1935, no further argument was addressed by counsel for the petitioners. But I would like to deal briefly with an argument put forward by the learned Advocate-General, though it is not necessary to pronounce finally on it. He argued that Article 31(1) which provides that no person shall be deprived of his property save by authority of law implies that any person may be deprived of his property by the authority of law. 'Law' meant 'enacted law.' Therefore, if the deprivation of property by any law did not amount to taking possession or acquisition covered by Article 31(2), then such law would be valid under Article 31(1) and Article 19(1)(f) would not have any operation in such a case. It is only so long as a person has any property that the right declared by Article 19(1)(f) could be exercised. If the person has been deprived of the property lawfully, it cannot be said that there has been an infringement of the exercise of any of his rights under Article 19(1)(f). There is one passage in 'Charanjitlal v. The Union of India' 1951 S C J 29 in the judgment of Das, J., which might lend support to this contention. His Lordship referring to what he had said in 'A.K. Gopalan v. State of Madras' 1950 S C J 174 observed:
'the right to property guaranteed by Article 19(1)(f), would likewise continue until the owner was, under Article 31, deprived of such property by authority of law.'
I am afraid that the argument when logically pushed to the extreme would be subversive of all private right of property. If any law which deprived a person of property would be quite valid even without payment of compensation so long as such deprivation did not amount to taking possession or acquisition falling under Article 31(2) and nothing in Article 19(1)(f) or Article 19(5) would apply to such an enactment, then there is nothing to restrain the State from depriving persons of property at their will and pleasure. Everything then would depend on the reasonableness of the legislature and the position would be equated to that which obtains in England. I do not think it necessary, having regard to my findings on the other questions to decide finally on the tenability of this contention.
31. Mr. Kesava Aiyangar learned Counsel for some of the petitioners also addressed us an argument founded on Article 14 of the Constitution. He contended that there was discrimination between landholder and tenant, because though the tenant was to get the benefit of a reduction, when the rent being paid by him exceeded the ryotwari rate, the landholder was not entitled to have an enhancement of rent in cases where the rents payable were less than the ryotwari rates. He drew our attention to explanation I to Section 2 of the Act which has already been extracted. Though at first sight it might appear to be making a discrimination, it is really not, when the scope and intendment of the Act are taken into account. The preamble to the Act says that rents now payable by ryots in estates are in many cases substantially higher than the assessments levied on lands in ryotwari areas in the neighbourhood and it is expedient to provide for the reduction of such rents approximately to the level of the ryotwari assessment. Any provision for enhancement of rent would be completely out of place in an enactment like this. There is nothing in the Act which makes a distinction between one landholder and another or one tenant and another. The Act is only an illustration of the constitutional practice of classification which is reasonable and permissible. The Act is not void on the ground that it contravenes Article 14.
32. The contention of Mr. Vedantachariar, another counsel for the petitioner, deserves separate consideration. His contention was first pitched at a higher key. He attempted to demonstrate that the inevitable result of the scheme of the Act with reference to reduction of rent was a total deprivation of the benefits of enjoyment of the property by the landholder. He wanted the Court to take into account the peshkash which had been fixed at a very high figure in most cases, the cesses and other outgoings payable by the landholder, the expenditure on irrigation works which are statutory incumbent on him. In addition to these financial obligations he laid stress on the fact that the basis of ryotwari assessment differed radically from the basis of the rent in estates. The ryotwari rent would necessarily be much lower than the rents in estates. While on one hand the commitments and obligations of the landholder remain constant, his income is so much reduced that nothing or very little would be left as surplus. He submitted that if 16 annas in the rupee belonging to the landholder is taken away from him by the Act, then it would amount to an unreasonable restriction and contravened Article 19(1)(f) read with Article 19(5). It will also contravene Article 31(2) as it would virtually amount to an acquisition of property without compensation. He relied upon the decisions of the American Supreme Court which recognised the right of Judicial review of the actual application of a statutory provision or order to concrete cases to give relief if the guarantee of equal protection of the laws or the due process clause had to be given effect to. In 'Reagan v. Farmers Loan and Trust Co.' (1894) 154 U S 361 : 38 Law Ed. 1014 it was held that the fixing and enforcement by a rail road commission of unjust and unreasonable rates for transportation by rail road companies is an unconstitutional denial of the equal protection of the laws. The legislature of the State of Texas passed an Act to establish a rail road commission with power and authority vested in them to adopt all necessary rates charges and regulations to govern and regulate rail road freight and passenger tariffs etc. The rail road commission proceeded to establish certain rates for the transportation of goods over the rail roads in the state. The International and Great Northern Railway Company and the debenture trustees under a trust deed executed by the said railway company challenged the validity of the tariff fixed by the commission on the ground that the rates were unreasonable and unjust and worked a destruction of the company's rights of property. Mr. Justice Brewer delivering the opinion of the Court observed:
'The Courts are not authorised to revise or change the body of rates imposed by a legislature or a commission; they do not determine whether one rate is preferable to another, or what under all circumstances would be fair and reasonable as between the carriers and shippers; they do not engage in any mere administrative work; but still there can be no doubt of their power and duty to Inquire whether a body of rates prescribed by a legislature or a commission is unjust and unreasonable, and such as to work a practical destruction to rights of property, and if found so to be, to restrain its operation.''
In that case facts were disclosed regarding the indebtedness of the company, its capital. Its earnings in previous years, its operating expenses exclusive of taxes etc., and it was shown that the actual reduction by virtue of the new tariff in the receipts made it impossible to work the company at a profit. Though an absolute rule could not be laid down in every case that a failure to bring some profit to those who have invested their money in the company is conclusive that the tariff is unjust and unreasonable, yet justice demanded that everyone should receive some compensation for the use of his money or property if it be possible without prejudice to the rights of others. The Court therefore issued an injunction restraining the railroad commission from enforcing the rates already established.
33. In 'Convington and L. Turnpike Road Co. v. Sandford' (1898) 164 U S 578 : 41 Law Ed. 560 there is a full discussion of the principles which should apply to a judicial review of statutes and administrative orders reducing the income of persons including corporations. It was decided by the Supreme Court of the United States in that case that a statute reducing the tolls that may be charged by a turn pike company and requiring it to conform to a tariff of rates that is unjust and unreasonable, which prevents it 'out of its receipts, from keeping its road in proper condition for public use or from earning any dividends is unconstitutional as a deprivation of property without due process of law' and was a denial of the equal protection of the laws. While one limit of the rule is that merely because a company is not allowed to charge as high rates as they have been accustomed to charge or as high rates as are charged by other companies differently located, it cannot be said that equal protection of the laws has been denied; the other limit of the rule is that the company can demand the right to receive such compensation as will be 'just both to itself and to the public under all the circumstances of the case. Mr. Justice Harian who delivered the opinion of the Court cited the following passage from 'St. Louis and S F R Co. v. Gill' (1695) 156 U S 649 : 39 Law Ed. 567:
'there is a remedy in the Courts for relief against legislation establishing a tariff of rates which is so unreasonable as to practically destroy the value of the property of companies engaged in the carrying on business, and that especially may the Courts of United States treat such a question as a judicial one, and hold such acts of legislation to be in conflict with the Constitution of the United States, as depriving the companies of their property without due process of law, and, as depriving them of the equal protection of the laws.'
As Chief Justice Waite said in 'Stone v. Farmers' Loan & T Co. 116 U S 307 the power to regulate is not a power to destroy, and 'limitation is not the equivalent of confiscation.'
34. The same principle we find applied in 'Chicago M & St. P. R. Co. v. State of Minnesota' (1890) 134 U S 418 : 33 Law Ed. 970 and 'Smith v. Ames' (1898) 169 U S 466 : 42 Law Ed. 819.
35. I see no reason why this salutory principle enunciated in several American decisions should not be applied in this country, in construing Arts. 14, 19 and 31 of the Constitution. Even applying this principle, I am, however, not persuaded by Mr. Vedantachariar to hold that the provisions of the Act as such inevitably transgress the limits allowed to the legislature by conflicting with the provisions of Part III of the Constitution. The impugned Act governs several zamindaries differently situated and held under different engagement with the Government. The sources of income of one zamindari are not necessarily the same as those of the other zamindaris. Besides zamindaries major Inams are also covered by the Act. Different considerations would arise in the case of these Inams many of which are either revenue free or are subject only to a nominal quit rent or jodi. Mere hypothetical calculations of the kind which Mr. Vedantachariar wanted to make cannot form the basis of a generalisation covering all the estates to which the Act applies. As the learned Advocate-General rightly pointed out, the income from the ryoti lands is not the only source of income for the landholder. Home farm lands, minerals, forest produce are some of other sources of income. These sources vary largely with each estate. I am therefore not prepared to hold that the Act itself is void, on the ground it virtually deprives the landholder of all beneficial enjoyment of his property.
36. As pointed out in 'Covington and L. Turnpike Road Co. v. Sandford' (1896) 164 U S 578 : 41 Law Ed. 560 each case must depend upon its special facts:
'and when a Court, without assuming itself to prescribe rates, is required to determine whether the rates prescribed by the legislature for a corporation controlling a public highway are, as an entirety, so unjust as to destroy the value of its property for all the purposes for which it was acquired, its duty is to take into consideration the Interests both of the public and of the owner of the property, together with all other circumstances that are fairly to be considered in determining whether the legislature has, under the guise of regulating rates, exceeded its constitutional authority, and practically deprived the owner of property without due process of law. What those other circumstances may be, it is not necessary now to decide. That can be best done after the parties have made their proofs.'
We have only to substitute the word 'rents' for 'rates' and 'landholders' for 'corporation controlling a public highway' in the above passage, when it can appropriately be applied to the cases before us. The decision of the Question would ultimately depend upon the circumstances of each estate. Rents which may be reasonable and just with respect to one estate may be unreasonable and unjust with respect to another. It is necessary therefore before any landholder can be given relief on the principle above mentioned, that he should allege and prove facts which conclusively show that' as a result of the reduced rates of rent fixed under the Act, he has been totally or substantially deprived of the net income available to him. Each case must be property presented in the pleadings and there must be opportunity to the Government to traverse the allegations in such cases. In the absence of a detailed statement of the relevant facts, an application founded on mere general allegations must be dismissed.
37. It is contended on behalf of the petitioners that the impugned Act was really in the nature of a colourable device to achieve something which the legislature could not achieve directly, namely, to acquire the entire interest of the landholder but without paying compensation. The decision of the Judicial Committee of the Privy Council in 'Attorney-General of Alberta v. Attorney-General for Canada' 1939 A C 117 was relied on in support of this contention. The rule is thus stated by Lord Maugham, L.C.
'It is not competent either for the Dominion or a Province under the guise, or pretence, or in the form of an exercise of its own powers, to carry out an object which is beyond its powers and a trespass on the exclusive powers of the other.'
Having regard to the view which I have already expressed that there is no acquisition by the State of landholder's interest I must reject this contention. The Government under the provisions of the impugned Act do not obtain any benefit by the reduction of rents. Even in cases in which the net balance of the landholder's income is nil or negligible, the State itself does not gain thereby. In such circumstances, it cannot be said that there has been an acquisition by the Government. So, It cannot be said that the legislature has adopted a device to escape from the provisions of Article 31(2) by calling the same Act by a different name. As I have already held that the reduction of rents and the taking over of the collection of the rents by the Government do not amount to taking up possession or acquisition of the landholder's property the Act would not fall within the scope of Article 31(2) in any instance. There is therefore no attempt by the legislature in trying to do Indirectly what it cannot do directly.
38. In the result I hold that the impugned Act, Madras Act XXX of 1937 did not become void after the coming into force of the Constitution. It equally follows that the amending Act, Act VII of 1951 is also not void.
Venkatarama Ayyar, J.
39. These petitions raise the question of the validity of the Madras Estates Land (Reduction of Rent) Act, Act XXX of 1947 which came into force on 6-1-1948. In furtherance of a comprehensive scheme of land reform the Government of Madras introduced three bills of an allied character on 13-9-1947. The first of them called the Madras Estates Communal, Forest and Private Land (Prohibition of Alienation) Act, 1947 became law as Act XIV (14) of 1947, on 25-10-1947. This Act prohibited the landholders from alienating communal forest and private lands. The second bill No. 24 of 1947, the Madras Estates Land (Reduction of Rent) Bill became law as Act XXX of 1947 and this is the legislation which is now impugned as 'ultra vires' and void. By this Act the rates of rent payable by the ryots In estates became reduced to those prevailing on ryotwari areas, and there are also provisions providing for collection of rent through Government Agency. Lastly there was a Bill No. XXXVII of 1947, called the Madras Estates (Repeal of Permanent Settlement and Conversion into Ryotwari) Act of 1947 which became law on 19-4-1948, as the Madras Estates Abolition and Conversion into Ryotwari Act, XXVI of 1948. Under this Act all the notified estates were to vest in the Government and the ryoti lands were to be held by the ryots and private lands by the landholder as under ryotwari settlement. In their Original Draft both Bill No. 24 of 1947 and Bill No. 31 of 1947 were intended to comprehend all the estates which came within the definition in Section 3 (2) of the Madras Estates Land Act, 1908. But actually while Bill No. 24 Of 1947 included as passed, all the estates falling within Section 3 (2) of the Madras Estates Land Act, Bill No. 37 of 1947 underwent a change in its passage through the Legislature. The estates which became such by virtue of the Amendment Act of 1936 were excluded from the operation of Act No. 26 of 1948. When Act No. 30 of 1947 was passed the intention was that all the estates covered by that legislation should be taken over by the Government (Vide Section 3, Clause 4), but as Act 26 of 1948 was not co-extensive in its operation with Act 30 of 1947 and as there were estates which would come under Act 30 of 1947 but could not be taken under Act 26 of 1948 a further amendment was made to Act 30 of 1947 by Act 7 of 1951 in which 'inter alia' the following explanation was added to Section 3 (4).
'Explanation': 'The provisions of this sub-section shall apply to an estate, whether the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 applies or not.'
There are other provisions in this Act to which I shall advert in due course but suffice it to note at this stage that the declared object of all these Acts is to effect agrarian reforms of a far-reaching character on the basis of two principles, namely that there should be no intermediary tenure-holder between the state and the tillers of the soil and that there should be uniformity in the extent of the obligations of the ryots all over the state.
40. Now the grounds on which the validity of Act 30 of 1947 is assailed fall under two groups. Firstly, it is contended that the Act was void when it was passed as being repugnant to the provisions of the Government of India Act, 1935 which was the Constitution Act in force at the time of enactment. Secondly, it is argued that even if Act 30 of 1947 was valid when it was passed it became void under Article 13 of the Constitution as being Inconsistent with the fundamental rights guaranteed under Part III of the Constitution. The objections that have been put forward under the first group are that under the Act the owners of the properties are deprived of substantial rights, and that as there is no provision for compensation it is opposed to Section 299(2) of the Government of India Act and is therefore void. Another contention put forward under this heading is that the subject-matter of the legislation is not covered by any of the entries in list 2 to Schedule 7 of the Government of India Act and therefore the Act is not within the legislative competence of the Madras Legislature. The objections falling under the second group are that the provisions of Act No. 30 of 1947 infringe the fundamental rights guaranteed under Article 31, Article 19 and Article 14 of the Constitution and therefore the Act has become void under Article 13. Those are the contentions common to all the petitions. There are besides some special contentions raised in some of the cases. It will be convenient to deal in the first instance with the common contentions. For determining whether the impugned legislation is open to the objections advanced by the petitioners it is necessary to examine the provisions of the Act with a view to ascertain its true character and operation. The Act is described as one to provide for the reduction of rents in estates governed, by the Madras Estates Land Act, 1908 approximately to the level of the ryotwari assessment levied on land in ryotwari areas in the neighbourhood.' The preamble to the Act runs as follows:
'Whereas the rents now payable by ryots in estates governed, by the Madras Estates Land Act, 1908, are in many cases substantially higher than the assessments levied on lands in ryotwari areas in the neighbourhood; and whereas it is expedient to provide for the reduction of such rents approximately to the level of the ryotwari assessments in the neighbourhood.'
Under Section 1 the Act is made applicable to all estates as defined in the Madras Estates Land Act, 1908. Section 3 (1) provides that the Government may appoint a 'Special Officer for any estate or estates for the purpose of recommending fair and equitable rates of rent for the ryoti lands in such estate or estates.' Then follow provisions which prescribe how the rate is to be fixed. Explanation (1) enacts that the special officer shall have power only to determine that the rents payable for any class of ryoti land shall be reduced and not enhanced. Under Section 3, Clauses 1 to 3 It is provided that the Provincial Government should after considering the recommendations of the special officer and the remarks of the Board of Revenue fix the rates of rent payable in respect of each class of ryoti lands in the estate. Then follows Sub-clause 4 which has been one of the main targets of attack in these proceedings. It provides:
'that the rent shall be recovered by the Provincial Government as if such rents were arrears of land revenue due to them and the amount so recovered in respect of each fasli after deducting therefrom the cost of such recovery as determined in accordance with such rules as may be made by the Provincial Government in that behalf and also the peshkush, cesses and other moneys due from the landholder to the Provincial Government and constituting a charge on the estate shall be paid to the land-holder.'
The above are the provisions in Act 30 of 1947 that are material for the purpose of these applications. The amendments introduced by Act 7 of 1951 may now be noticed. The preamble to the main Act has been enlarged by the addition of words 'and for the collection of such rents exclusively by the State Government'. The addition of explanation to Section 3 (4) has already been mentioned. One of the provisions newly incorporated by the Amendment Act is Section 3, Sub-clause (7) which is in these terms:
'The landholder shall not be entitled to collect and the provisions of Chapters V and VI of the Madras Estates Land Act, 1908 shall cease to apply to any rents or interest recoverable by the State Government under Sub-section (4).'
There are other amendments but they are not material for the purpose of this case.
41. From the above analysis it will be seen that the provisions of Act 30 of 1947 fall into two distinct categories; (1) Sections 2, 3, Sub-clauses 1 to 3 Sections 4 and 5 relate solely to reduction and fixation of rent payable by the ryots in an estate, (2) Section 3 (4) of the main Act and Subjections 6 to 7 of the Amending Act 7 of 1951 confer on the Provincial Government power to collect the rents due to the landholder as fixed under the Act and to pay him the net balance. The former category is tenancy legislation pure and simple while the latter is constitution of the Government as a statutory agency for collection of rents on behalf of the landholder. The question is whether either or both of them is void under the Government of India Act of 1935. Now the argument on behalf of the petitioners is that under both these categories valuable rights of the petitioners have been taken away; that it amounts to acquisition of property within the meaning of Section 299(2) and as there is no compensation provided it is expropriatory and bad under that section. As the considerations applicable to the two categories differ I shall deal with them separately.
42. Taking first, the sections relating to reduction of rent the contention as developed by counsel on behalf of the several petitioners is this: The landholder has a right to recover rent from the tenant at a particular rate; the effect of reducing the rent is to transfer to the tenant the landholder's right to the rent to that extent and that this is acquisition of right over immovable property as defined by Section 299, Clause (5). When rent payable by a tenant is reduced, the obligation is 'eo extanti' extinguished; it is thereafter not alive in any form and it is incapable of being transferred or acquired. The case is analogous to partial discharge of an obligation by a debtor in which case it will not be contended, I presume, that the debtor is an assignee of his own debt. It is unnecessary to discuss this matter at any great length because it is concluded by authority. In 'Jaganatha Baksh Singh v. United: Provinces' 1943 2 Mad L J 114, the Federal Court had to consider the effect of tenancy legislation in the United Provinces. Under Act 17 of 1939 the quantum of rent recoverable by taluqdars, who held estates under Sanads corresponding to those of zamindars in the Madras Presidency was reduced. It was contended that the Act was opposed to Section 299(2) of the Government of India Act, 1935, as the effect of reduction of rent amounted in taking property without compensation. This contention was rejected and the Court observed! as follows:
'First it is said that the provisions of the Act which are complained about in this case fall within Section 299(2) of the Constitution Act. It provides that the provincial legislature has no power to pass a law authorizing compulsory acquisition for a public purpose of any land unless the law provides for payment of compensation for the property acquired. The answer to this is that the law which regulates the relations of the landlord and tenant and thereby diminishes the rights which the landlord has hitherto exercised in connection with his land does not authorize compulsory acquisition of the land for public or any other purpose; and therefore the question of compensation does not arise.'
This decision was taken on appeal to the Privy Council and was confirmed by the Judicial Committee. Vide 'Jagannath Baksh Singh v. United Provinces' 1946 2 Mad. L.J. 29 Dealing with the contention that the reduction of rent was repugnant to Section 299 of the Act Lord Wright observes as follows:
'The appellant relies on certain express provisions of the Government of India Act. Thus he relies on Section 299 of the Act, which provides that no person shall be deprived of his property in British India save by authority of law, and that neither the Federal nor a provincial legislature shall have power to make any law authorising the compulsory acquisition of land for public purposes save on the basis of providing for the payment of compensation. But in the present case there is no question of confiscatory legislation. To regulate the relations of landlord and tenant and thereby diminish rights, hitherto exercised by the landlord in connection with his land, is different from compulsory acquisition of the land.'
In 'Lal Singh v. C. P. & Berar' 1944 1 Mad. L. J. 510 the Federal Court had to deal with a case in which there was enhancement of the land revenue payable by the zamindars. It was contended that the increase of assessment amounted to acquisition of property, within the meaning of Section 299(2). In repelling this contention Spens, C. J., delivering the judgment of the Court observes:
'In our judgment this view is misconceived. His rights over his land or his rights in or over his immovable property remain exactly the same, and only his liability for payment of takoll is increased. It is, we think, impossible to hold that the mere increase of an assessment for land revenue involves any acquisition of the land or any rights in or over immovable property. It further seems to us that the word 'acquisition' implies that there must be an actual transference and it must be possible to indicate some person or body to whom is or are transferred, the land or rights referred to. It is impossible in our view to suggest that when the land revenue is increased, there is any transference to the provincial government or any other person of any land or rights in or over immovable property, which remain in the same possession or ownership as immediately before the increase of assessment. In our judgment the attempt to bring the case within Section 299-2 roust fail.'
In view of these authorities I am clearly of opinion that the mere reduction of rent is not acquisition of property within the meaning of Section 299(2) of the Government of India Act.
43. I shall now take up the second category of Sections in Act 30 of 1947 and Act No. 7 of 1951 and consider how far they are opposed to Section 299(2) of the Government of India Act. For this purpose it is necessary first to examine what rights the landlord possessed before the impugned legislation came into force and how far these rights have been affected or modified thereby. It is essential to bear in mind that the rights and obligations of the landholders and tenants in estates as regulated by the Madras Estates Land Act are in many respects different from those of the landlords and tenants under the general law. The ryots have occupancy rights in their holding. So long as they pay rent they cannot be ejected. In other words the estate holders have no right to physical possession of the lands but only to rent accruing thereon. They have a charge on the holding for the rent due and they have also a right of distraint. These are not rights possessed by the landlords under the general law. For recovery of rent, proceeding had to be taken not in the ordinary civil Courts but in revenue Courts specially constituted under the Act. These are some of the special incidents attaching to the relationship of the landlord and the ryots in an estate under the Estates Land Act. Now under Section 3 (4) the rent is to be collected not by the landlord taut by the Government and it is to be recovered as arrears of land revenue. The provisions of the Estates Land Act which provide for proceedings being taken by the landlord in revenue Courts for recovery of rent are repealed. The most important provision, however, is that the Government is to pay over to the landlord all the rent realised deducting the amounts payable as mentioned in Section 3 (4). The result of this legislation may thus be summed up: The landlord continues to be the owner of the estate as before his title being left untouched. As for possession it was the tenant who was entitled to it, the right of the landlord being only to recover rent and that right again is left unaffected by the legislation. The only change that has been effected is that the collection of rent is to be made not by the landlord but by the Government. The question is does this amount to acquisition within the meaning of Section 299(2) of the Government of India Act?
44. Mr. K. Umamaheshwaran the learned Counsel for some of the landholders argues that it does. He contends that that section is of sufficient reach to take in all cases in which properties suffer diminution in value as a result of legislation, that the right to recover rent is of the substance of the right of landlords and that when the Government takes it over there is acquisition within the meaning of Section 299(2) and he died a number of authorities in support of this position.
45. With reference to the American authorities, it must be remembered that they are decisions given under a different statute and under conditions vastly different from ours. The 5th amendment, which was construed as a limitation on the powers of the Congress provided that no person shall be 'deprived of the liberty or property without due process of law nor shall private property be taken, over for public use without just compensation.' The 14th amendment which operates as a limitation on the powers of the States provides 'Nor shall any state deprive any person of life, liberty or property without due process of law.' The power to take private property for a public purpose is stated to be an attribute of the sovereignty of the State and it is termed 'Eminent Domain' in American jurisprudence. The statute requires-that when property is taken under 'Eminent Domain' there should be just compensation to the owner. There is another power also inherent in the States as an attribute of its sovereign character that is the power to regulate the use of private property in such a manner as to advance the welfare of the public. That is called the police power and, the law is that when the owner of property suffers loss or damage in relation to property by reason of the exercise of the police regulation it is 'damnum absque injuria' and no compensation can be recovered therefor. In such cases the attempt of the owner is to establish that the police regulations are in excess of what is required in the interests of the public welfare, that it is unreasonable and arbitrary and that it should not be upheld as a valid exercise of the police power, in which case it will be invalid. Thus the American decisions are based on a construction of the 5th and 14th amendments and on a consideration of the requirements of the due process clause and the reasonableness of the police power regulations. Great caution must be exercised in applying these decisions for determining the rights of the parties under Section 299(2) of the Government of India. Act and Article 31(2) of the Constitution. Both these provisions speak of acquisition of property; whereas the 5th amendment refers to taking of property. Are the two expressions of the same import? While it has been held that acquisition of property in Section 299(2) implies that there must be actual transference Vide 'Lal Singh v. Central' Provinces and Berar' 1944 1 Mad. L. J. 510 the expression taking of property has been construed as of much wider significance. Willis in his treatise on Constitutional Law states that at one time a narrow view was taken of the meaning of the word 'taking' limiting it to physical possession and then refers to cases which have taken a broader view, Vide pages 821 to 823 and the law is stated by him in these terms:
'The true effect of the Constitutional amendments referred to was only to require the Courts to do what they should have done without such amendments to wit; to hold that there is a taking whenever there is any injury to property other than by the police power or taxation which would be actionable if done by a private individual, that is, a tort; in other words, that there is a taking whenever any incident of property, whether a right, power, privilege, or Immunity of ownership, is taken from the owner.'
Another learned writer Nichols has the following on the meaning of the word taking:
'It is well settled that a taking of property within the meaning of the constitution may be accomplished without formally diverting the owner of his title to the property or of any interest therein. Any limitation on the free use and enjoyment of property constitutes a taking of property within the meaning of the constitutional provision. It is sufficient that the person claiming compensation has some right or privilege in the appropriated property, which, right or privilege is destroyed, injured or abridged by such appropriation.'
It is not necessary, in order to render a statute obnoxious to the restraint of the constitution, that it must in terms or in effect authorize an actual physical taking of the property or the thing itself, so long as it affects its free use and enjoyment or the power of disposition at the will of the owner. Property in land is 'taken' whenever any one of the qualified privileges of which it is imposed is taken. Vide Nichols on Law of Eminent Domain (1950 Edn.) Vol. 12 pp. 236-237. See also Corwin on Constitution and What it Means Today, p. 179.
46. Thus under the American law taking includes not merely the transfer of title and taking physical possession but any act which interferes with the use and enjoyment of any right over property. The cases cited by Mr. Umamaheswaran, the learned advocate for the petitioners are instances of the extended meaning put upon the word 'taking'. Thus in 'Pensylvania Coal Co. v. Mahon', 280 US 393: 67 Law Ed 322 a state law which prohibited the owners from carrying on mining operations under certain circumstances was held to amount to taking property without compensation and therefore bad. Mr. Justice Holmes put the matter thus :
'The general rule, at least, is that while property may be regulated to a certain extent, if regulation goes too far it will be recognised as a taking.'
This reasoning will clearly be inadmissible in construing Section 299(2) or Article 31(2) because a mere prohibition cannot be acquisition under these provisions. In 'United States v. Causby' 328 U S 256: 90 Law Ed 1206 there was a chicken farm adjacent to an airport and the complaint of the owner was that the flight of the planes at low altitudes at all hours of the day and night and the frequent noise and glare of lights seriously interfered with the enjoyment of the property as chicken farm and diminished its value and that the acts amounted to taking of property without compensation. This contention was upheld. Mr. Justice Douglas observed:
'It is ancient doctrine that at common law ownership of the land extended to the periphery of the universe 'Cajus est colum ejus est usoue ad colum'. But that doctrine has no place in the modern world. The air is a public highway as Congress has declared
* * * But that general principle does not control the present case. For the United States conceded an oral argument that if the flights over respondents' property rendered it uninhabitable there would be a taking compensable under the fifth Amendment.'
On the same principle it was held in 'Portsmouth Harbour Land and Hotel v. United States' 260 U S 326: 67 Law Ed 287 that the continuous firing and discharging of guns across a land which was used as a summer resort and which had the effect of frightening off the, visitors would constitute taking of that land, if it was of an abiding character. These and similar decisions proceed on a principle of law which is different from that embodied in Section 299(2) and Article 31(2) and cannot be relied on as furnishing a safe guide for interpreting them. It is essential under the Indian Law that there should be a transfer before these sections could be invoked. A case nearer home is the one reported in 'Minister of State for the Army v. Dalziel' 1944 68 C.L.R. 261). That was a decision under placitum 31 to Section 51 of the Constitution Act of Australia which is in these terms:
'The Parliament shall subject to this constitution have power to make laws for the peace, order, and good government of the Commonwealth with respect to the acquisition of property on just terms from any state or person for any purpose in respect of which the Parliament has power to make laws'.
47. The question arose with reference to a vacant site belonging to the Bank of New South Wales of which the claimant was in possession as lessee. In 1942 the Government required it for the purpose of war and acting under certain regulations entered into possession of the same. Some compensation was awarded but the claimant contended that he was entitled to compensation on just terms treating the action of the Government as acquisition under Section 51 Placitum 31. The argument for the Government was that the acquisition under Placitum 31 could only mean an acquisition of the entire bundle of rights as owner or as tenant, that the tenancy of the respondent, claimant, was not acquired and the mere taking of possession was not acquisition. Latham C. J. was of the opinion that there was a distinction between acquisition of property and taking possession thereof and that on the facts there was no acquisition but only taking of possession as licensee. The following passages from his judgment may be quoted:
''But possession and ownership of land, though closely connected, are not identical. And accordingly in my opinion the facts that the right to possession is the most valuable attribute of ownership, that possession is prima facie evidence of ownership, and that possession may develop into ownership, do not justify any identification of possession with ownership but on the contrary, emphasize the distinction between the two ideas. The fact that the Commonwealth is in possession of land as a result of action under the Regulation does not show that the Commonwealth has become the owner of the land or of any estate in the land'.
But the majority of the Court held that when a substantial portion of a right is taken away it must be treated as an acquisition notwithstanding that certain unessential elements of the right remains unaffected. Thus though the tenancy of Dalziel was not acquired as such, when possessios of the property was taken away from him for an idefinite period there was nothing more left to him of his rights as a tenant excepting the 'husk of tenancy' which the Court held amounted to an acquisition. The following oft-quoted passage from the judgment of Rich J. brings out the reasoning behind this decision:
'Property in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession' has the largest possible bundle. But there is nothing in the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short the whole bundle owned by the person whom it was expropriating. 'Possession vaut titre' in more sense than one. Not only is a right to possession a right of property but where the object of proprietary right is a tangible thing it is the most characteristic and essential of those rights.'
It will be noticed that this judgment does not dissent from the clear opinion of Latham C. J. that acquisition is different from taking of possession; It only decides that in determining whether there has been acquisition of property or not one must have regard to the substance of the matter and not its mere form. That is how this decision has been understood in 'Charanjit Lal v. Union of India,' 1951 14 S. C. J. 29 by Mukherjee, J. at page 50 and by Das J. at page 59.
48. A question may be raised as to whether taking of possession apart from the acquisition of ownership is within Section 299(2) of the Government of India Act.
Article 31, Clause 2 of the Constitution mentions both acquisition and taking of possession suggesting thereby that the two are distinct and that acquisition does not comprehend taking of possession. In 'Charanjit Lal v. Union of India' 1951 14 S. C. J. 29 already cited the following observations occur in the judgment of Mukherjee J.
'Article 31(2) of the Constitution itself makes a clear distinction between acquisition of property and taking possession of it for a public purpose, though it places both of them on the same footing in the sense that a legislation authorising either of these acts must make provision for payment of compensation to the displaced or expropriated holder of the property.'
I have already referred to the observations of Latham C. J. in the 'Minister of State for the Army v. Dalziel' 1944 68 C.L.R. 261 where ownership and possession are treated as different. As Section 299(2) of the Government of India Act refers only to acquisition but not to taking of possession it may be a debateable question as to whether mere taking of possession would be within that section. In Tan Bug Taim v. Collector of Bombay' : AIR1946Bom216 . Bhagavathi J. held that a requisition of immovable property could not be held to be acquisition within the meaning of Section 299(2) even with the aid of the definition in Section 299(5). The effect of this decision was nullified by an ordinance and now under the Constitution requisition has been expressly included along with acquisition in Entry No. 36 in list No. II and in Entry No. 42 in List No. 3. It is however unnecessary to discuss this question further because even if it is to be assumed that Section 299(2) would cover cases of possession there has been no such taking of possession in this case. The petitioners had only a right to receive rent and that is wholly left in tact and has not been taken away. The decision in 'The Minister of state for the Army v. Dalziel' 1944 68 C.L.R. 261 therefore does not help the petitioners.
49. I shall now deal with the Indian authorities cited on behalf of the petitioners. In the case in 'Charanjit Lal Chowdhury v. Union of India' 1961 14 S. C. J. 29 the facts were that under a special ordinance the Government superseded the existing directorate of the Sholapur Spinning and Weaving company and appointed a fresh set of directors with authority to take over the property, the effects and actionable claims of the company and to manage the same. Certain rights of the shareholders such as moving for winding up or appointment of receiver were suspended. An individual snare-holder challenged the validity of this ordinance by a writ under Article 32 of the Constitution. It was held that none of the fundamental rights of the share-holders were violated by the ordinance and that therefore the application by him was not maintainable. One of the points raised was whether the provisions of the ordinance were repugnant to Article 31(2). In discussing this question a distinction was made between the rights of the company as a juristic person and the individual rights of a share-holder. Mukherjee J. with whom Kama C. J. and Fazi Ali J. agreed observed that an acquisition under Article 31(2) must be of the right in its entirety.
'It cannot be disputed that acquisition means and implies the acquiring of the entire title of the expropriated owner, whatever the nature or extent of that title might be. The entire bundle of rights which were vested in the original holder would pass on acquisition to the acquirer leaving nothing in the former.'
and again concludes:
'In the context in which the word 'Acquisition' appears in Article 31(2) it can only mean and refer to acquisition of the entire interest of the previous holder by transfer of title and I have no hesitation in holding that there is no such acquisition either as regards the property of the company or of the share-holders in the present case.'
This is clear authority against the petitioners' contention that taking over of the right to collect rent under Section 3(4) could be regarded as an acquisition under Section 299(2). Then taking up the question of possession Mukherjee J. held that there was no dispossession so far as individual share-holders were concerned because their right to dividend and their right to dispose of the property were not affected by the legislation; that they were a substantial portion of their rights as share-holders and that even applying the test enunciated by Rich J. in 'The Minister of State for the Army v. Dalziel' 1944 68 C.L.R. 261 there was no such dispossession as would in substance amount to acquisition. The question was raised as to whether the provisions relating to management by the new directors could not amount to dispossession of the company as ft juristic person. It was contended by the learned Attorney General that the dispossession was not of the entire rights of the company and that, there-fore, the case did not fall under Article 31(2) of the Constitution. As to this the learned Judge observed.
'It is difficult in my opinion to accept the contention formulated in such broad terms.'
and he adds:
'It is not, however, necessary for my purpose to pursue the matter any further, as in my opinion there has been no dispossession of the rights of a share-holder in the present case.'
Das J. also held that the restrictions imposed up-on the rights of the share-holders did not take away their right to receive dividends or to dispose of the shares and as these rights were substantial Article 31(2) did not apply. He also held that the curtailment of a right to elect directors, pass resolutions and present winding up petitions are really in the nature of privileges incidental to the ownership of the shares and not property within the meaning of that Article. Then dealing with the question whether the company was 'dispossessed the learned Judge refers to the argument of the learned Attorney-General that the possession by the new directors may be construed as possession by the company and observed that that could not be the position as the directors were not under the control and direction of the company and accordingly there was great force in the contention that the company had been dispossessed. That, however, was held to give no right to the individual share-holder to apply under Article 32. These observations do not help the petitioners because the position of the land-holders in these petitions is analogous to that of the share-holders, their right to receive rent and dispose of the property being unaffected by the legislation.
50. Another decision relied on before us is the case in 'Kameshwar Singh v. State of Bihar' 29 Pat 790. I shall have to revert to this decision in dealing with another point. On the application of Section 299(2) this case does not support the petitioners. Shearer J. in dealing with this question says:
'There has been much controversy at the Bar as to whether or not, what is proposed to be done under the impugned Act amounts to the acquisition of the plaintiff's property. Mr. Das strongly relied on 'Minister of State for the Army v. Dalziel' 1944 68 C.L.R. 261 and adopting the words of Rich J. contended that, once the management of his client's estate had been taken over, nothing would be left to him but 'the empty husk of ownership' I find myself quite unable to accept this view. The plaintiff is to remain the owner of his estate and is alone to foe competent to sell or make a gift of it, and he is to continue to derive a considerable, although perhaps a much reduced, income from it.'
These words aptly describe the position of the present petitioners Sinha, J., also takes the same view. He observes:
'As already pointed out, the impugned Act is a mixture of restraints on the power of alienation of land by a proprietor or a tenure-holder, a suspension of his rights of management without acquisition of any rights by the Government to be exercised for the benefit of the public or for the benefit of any particular section of the public.'
and he held that the legislation did not amount to acquisition within Section 299(2). Das, J., however was of a different opinion: vide the discussion at pages 888 to 892.
51. In discussing the applicability of Section 299(2) to this category of sections it has to be borne in mind that that section applies only to a acquisition of land which as defined in Section 299(5) includes also rights over land. But what is the right to land which Section 3 (4) of XXX of 1947 takes away? The right to rent may be correctly described as a benefit to arise out of the ownership of the land but that as we have seen is not touched by Section 5 (4). Is the right to collect rent apart from the right to the rent itself an interest in immovable property? Clearly not. It is a mere power which the owner possesses as an incident to his ownership. It is only this power that has been transferred to the Government and not the interest in the land in respect of which this power is to be exercised. The argument for the petitioners fails to take into account the fundamental distinction which in law exists between an estate and a power. A right to collect rent even putting it as high as a right to manage the properties is nothing more than a power. The creation of a power does not in any way vest the property in the donee.' (Halsbury's Laws of England, Vol. 25 para 934) and Section 299(2) is limited to acquisition of land or interests in land and not to grants of powers.
52. Again when Section 299(2) refers to acquisition of property and payment of compensation therefor, it obviously refers only to property for which there is a value. What is the value to be put on a right to recover rent apart from the rent itself?
53. Under Section 3 (4) the Government undertakes a duty of collection and deducting the collection charges and dues it has to pay over the balance to the owner. Is this a right or an obligation? It appears to me to be clear beyond doubt that the right of management can in no sense be regarded as property within the meaning of Section 299(2). To sum up:
(1) For Section 299(2) to apply there must be a transfer of land or interest in land;
(2) mere reduction of rent or enchancement of assessment is not acquisition even though the value of the property might suffer diminution;
(3) an acquisition contemplated by Section 299(2) is of the entire bundle of rights of the expropriated owner but if all, the substantial elements of rights have been taken away it can be treated as an acquisition notwithstanding that some unessential ingredients of the rights are left unaffected and
(4) a legislation which merely takes away the right of management without interfering with the title of the owner or his right to income from the property is not within Section 299(2).
I am accordingly of opinion that Act 30 of 1947 is not bad as infringing the requirements of Section 299(2) of the Government of India Act.
54. I shall now deal with the contention that Act XXX of 1947 was beyond the competence of the provincial legislature as the subject-matter could not be brought under any of the entries either in the provincial or concurrent list in Schedule 7 of the Government of India Act. The learned Advocate-General conceded that this legislation does not fall under Entry No. 9 of the Provincial list, which is 'compulsory acquisition of land'; if it did, it will of course be hit by Section 299(2) but he contends that it falls under Entry No. 21 of List No. 2 which is as follows:
'Land, that is to say, rights in or over land, land tenures, including the relation of landlord and tenant and the collection of rents; transfer, alienation and devolution of agricultural land; land improvement and agricultural loans; colonisation; Courts of Wards, encumbered and attached estates, treasure trove.'
His argument is that the legislation is one in respect of collection of rent and that it is within the competence of the provincial legislature. That this is legislation relating to collection of rents cannot be disputed. The rent has to be paid by the tenant to the Provincial Government. In default it could be recovered as arrears of land revenue and the chapters of Estates Land Act relating to recovery of rent through revenue Courts are repealed by Act 7 of 1951. Thus these sections enact special provisions for collection of rent and they constitute the Government as statutory agents for the landlords and provide appropriate provisions for realising of the rents. It should also be remembered that from 1865 there have been special laws relating to collection of rents in estates; that under these laws proceedings are to be taken before a deputy collector and there are special rules enacted for the conduct of these proceedings. Section 3 (4) is one more step in the same direction and that instead of the landlord applying to the deputy collector to take action the provincial Government is itself to take action and in the place of the cumbersome machinery of suit and execution proceedings for the recovery of rent there is substituted a procedure for realising rent as if it were arrears of land revenue. I am unable to see anything in Section 3 (4) which is outside the scope of Entry No. 21, nor is there anything in the language of Entry No. 21 to exclude Act 30 of 1947 from its purview.
55. In the 'United Provinces v. Atiqa Begum' 1941 1 Mad. L. J. 65 Sup, a question arose as to the validity of the United Provinces Regularization of Remission Act, 14 of 1938. Certain remissions of rent had been, made by the Collector under the provisions of certain regulations and these were legalised by the Act 14 of 1938. In 'Atiqa Begum v. Abdul Maghni Khan' I.L.R. (1940) All 455 a Pull Bench of the Allahabad High Court had held that the impugned Act was 'ultra vires' as being opposed to Section 292 of the Government of India Act. Iqbal Ahmed, J., had further held that the legislation was not within the ambit of Entry No. 21 of List No. 2 and was therefore beyond the competence of the legislature. He observed:
'By the authority given to it to make laws about the 'collection of rents' the Provincial Legislature is in my Judgment authorised to provide about payment of rent in cash or in kind; to fix the instalments' in which rent is to be collected, to make provision about abatement or enhancement of rent, to prescribe the conditions under which the rent may be remitted, to regulate the method by which the rent is to be collected to to legislate about kindred matters.
The impugned Act, however, is not with respect to any such matter. It is therefore outside the scope of Entry 21 of the Provincial List.'
In commenting upon the correctness of these observations Gwyer, C. J., stated:
'I do not know why the learned Judge should assume that the list of illustrations which he gives is necessarily exhaustive ......* * * The general descriptive words in Item No. 21 include 'the collection of rents' and if a Provincial Legislature can legislate with respect to the collection of rents it must also have power to legislate with respect to any limitation on the power of the landlord to collect rents that is to say, with respect to the remissions of rents as well as to their collections.' * * * I have no doubt that legislation with respect to the remission of rents is legislation with respect to a matter included in Item No. 21.'
He also observes:
'I think, however, that none of the items in the list is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it.'
Varadachariar, J., expressed himself in similar terms, vide P. 110. 'Uday Chand v. Samrendranath', A.I.R. 1947 F.C. 19 is another decision of the Federal Court in which the validity of a legislation was considered with reference to Entry No. 21; Section 168(A) of the Bengal Tenancy Act prohibited the landlord from realising the rents due from a tenant from any property excepting the holding in respect of which it was due. It was held that this was 'clearly a piece of legislation in respect of the right of landlord and tenant with regard to rent which had accrued due in respect of the property let to the tenant' and that it was 'intra vires' under Entry No. 21. These authorities show that the subject 'collection of rent' is of wide import. This is in accordance with the view which is well settled that the words 'with respect to any matter enumerated in the list,' occurring in Section 100 of the Government of India Act should receive a liberal construction and that they should not be interpreted narrowly so as to invalidate legislation. Moreover there being a presumption in favour of the validity of an Act, it is a well settled rule of construction that when Courts are called upon to pronounce upon the validity, of an Act they would be justified in putting as wide a construction on the words of the statute as possible for the purpose of giving effect to it. The following observation of the Federal Court in 'Re. In the matter of the powers of the Federal Legislature to provide for the levy of an estate duty , in the judgment of Spens, C. J., and Varadachariar, J., is relevant:
'When a Court is called upon to pronounce an actual legislation 'ultra vires' the view point of ascertaining the probable intention of Parliament becomes slightly different because though the intention of the Constitution Act is even then the test, the presumption in favour of validity --weak as it may sometimes be -- inclines the Court to put as wide a construction as possible on the words used in the enactment.'
I am accordingly of opinion that the language of Entry No. 21 should be construed as sufficiently wide to comprehend Act No. 30 of 1947.
56. It is urged for the petitioners that under the Act the Government has in effect taken over the management of the estates and that is not a subject within the competence of the provincial legislature. The decision in 'Kameshwar Singh v. State of Bihar', 29 Pat 790, was strongly relied in support of this contention. There the question related to the validity of Bihar State Management of Estates and Tenures Act (Bihar Act XI of 1949) and it was held that that legislation was not covered by any of the entries in the Provincial list and that, therefore it was unconstitutional. An examination of the provisions of that Act shows that in its scope and operation it is altogether different from the Madras Act. It is unnecessary to set out in any detail the provisions of that Act because they have been exhaustively analysed in the judgments of the three learned Judges who pronounced that Act to be invalid. Some broad features wherein that Act differs from the Madras Act No. 30 of 1947 may be noted. That Act purports to 'Provide for the State management of estates' and not merely 'for the collection of rents' as does the Madras Act. Under that Act the management is to be by an officer to be appointed by the Government whereas in the Madras Act the Provincial Government itself is constituted the collecting agency. The manager under the Bihar Act is empowered to take charge of the estates and such buildings and papers and other properties as are essential for the management and he has the power to cancel lease and mortgages, to ascertain amounts due to creditors and frame scheme for the liquidation of the debts of the proprietor and the period of management is to last for twenty years. The substance of the Act was stated by Shearer, J., in the following terms:
'The conclusion is, to my mind, irresistible and is that the impugned Act is to be used as a device for making the estate of the plaintiff and the estates of other substantial zamindars the 'vile corpus' of a vast and hazardous experiment. If it Is found that the estates can be successfully managed and made a source of revenue to the Provincial Government, other estates wilt gradually be taken charge of. If on the other hand, the experiment proves a dismal failure the estates will be restored to their owners, and the latter will be left to do what they can to rehabilitate themselves. Was the Provincial Legislature competent to enact such a law.'
The learned Judge held that it was not. It will be seen that in the Madras Act the proprietors are not dispossessed of any properties of which they bad possession prior to the Act. No building and no papers are taken possession of and no management of their estates is generally undertaken. The Act does what it purports to do and only provides for recovery of rent due from the ryots. The decision in 'Kameshwar Singh v. State of Bihar' 29 Pat 190 is inapplicable to Act 30 of 1947.
57. It is noteworthy that while the petitioners contend that this legislation does not fall under Entry No. 21 they do not suggest that it falls under any entry in List No. 1 so as to bar the Jurisdiction of the provincial legislature. If their argument is to be accepted then the position would be that the subject does not fall within the scope of any of the entries enumerated in the three lists and that, therefore, it should form part of the residuary power in respect of which there could be legislation only in the manner provided in Section 104 of the Government of India Act.
58. In 'Manikkasundara Bhattar v. R.S. Nayudu' 1946 F. L. J. 57 a similar contention was put forward with reference to Entry No. 34, List No. 11 which was in these terms:
'Charities and charitable institutions; charitable and religious endowments.'
The argument was that religious institutions were mot within this entry and that there being no other entry relating to that subject it fell within Section 104 and that the legislation by the provincial legislature was incompetent. Rejecting this argument the Federal Court observed as follows:
'We should moreover in any event prefer a construction which would enable legislation on a subject of such vital importance in India to be enacted by some legislative body rather than leave it to be delt with under Section 104 * * *. But when there is a choice between two possible constructions of an entry or entries one of which will result in legislative power being conferred by some entry or entries in the lists and the other in a finding of no existing power, but if legislation is required that recourse must be had to Section 104 the first construction should on principles analogous to those applied to the Canadian Constitution be preferred.'
These observations furnish a strong ground for construing Entry No. 21, as wide enough to cover Act 30 of 1947.
59. Mr. Vedantachariar appearing for the zamindar landholders sought to argue that the true relationship between a zamindar and a ryot was not that of a landlord and a tenant and he referred to passages from the fifth report and the observations in 'Venkatanarasimha Naidu v. Kotayya', 20 Mad 299, and 'Vellanki Venkatarama Rau v. Papanna Rao' 21 Mad 299 Venkatamahalakshmamma v. Ramajogi' 16 Mad 271 . It is true as already pointed out that the rights of the samindar differ in material particulars from those of the landlords under the general law but those differences do not affect the relationship of the zamindar and the ryots in law which is that of a landlord and a tenant; nor do they alter the character of the payments made by the ryot to the zamindar whether in kind or money which is rent. The legislation on this subject has proceeded for nearly a century on the basis that they stand in the relation of a landlord and tenant and it is too late in the day to dispute that position. If the argument of Mr. Vedantachariar is to be accepted them the zamindar and the ryot will have to be regarded as being in the position of joint proprietors of the estate and the impugned legislation will then fall directly under the category of land under Entry No. 21. The following observations of the Privy Council in 'Meghraj v. Allah Rakhla' 1947 2 Mad. L. J. 1 may in that context be quoted:
'The key to Item 21 is to be found in the opening word 'land'. That word is sufficient in itself to include every form of land, whether agricultural or not. Land is indeed primarily a matter of provincial concern...................
The land in each province may have its special characteristics in view of which it is necessary to legislate and there are local customs and traditions in regard to land-holding and particular problems of provincial or local concern which require provincial consideration. * * *.
It would be strange if the land in a province were to be broken into separate portions some within and some outside the legislative powers of the province. Such a conflict of jurisdiction is not to be expected. Item No. 21 is part of a Constitution and would on ordinary principles, receive the widest construction, unless for some reason it is cut down either by the terms of Item No. 21 itself or by other parts of the Constitution which has to be read as a whole.'
60. Nor am I impressed by the contention that this is a colourable legislation. When the legislature intends to legislate on a subject which is ouside its competence and it seeks to usurp that jurisdiction by disguising itself as a legislation on subjects which are ostensibly within its Jurisdiction then it can be characterised a colourable legislation and that, of course, will be invalid; but both the subjects covered by the Madras Act No. 30 of 1947 are within its competence and apart from those two subjects the Act does not in form or in substance legislate on any topic which is beyond its competence. There is no basis for the contention that the Government derives indirectly any benefit under this legislation. This contention must also be overruled. The result then is that the Act No. 30 of 1947 is within the ambit of Entry No. 21 of the provincial list and that it is a valid piece of legislation.
61. In this view it becomes unnecessary to discuss whether the entire legislation should be regarded as bad in case Section 3 (4) and the connected sections are held to be beyond the competence of the legislature, it would be relevant for this purpose to note that the two categories of sections in the statute relating to reduction of rent and realisation of rent are distinct and severable, that the Bill in its original form related only to reduction of rent and Section 3 (4) came to be added only during the passage of the Bill in the Legislature. The two classes of sections are not so interwoven as to be inextricable. Reliance was placed on behalf of the petitioners on the following observations of Viscount Simon occurring in Attorney-General for Alberta v. Attorney-General for Canada', 1947 A C 503:
'This sort of question arises not infrequently and is often raised (as In the present instance) by asking whether the legislation is 'intra vires' 'either in whole or in part', but this does not mean that when Part II is declared invalid what remains of the Act is to be examined bit by bit in order to determine whether the legislature would be acting within its powers if it passed what remains. The real question is whether what remains is so inextricably bound up with the part declared invalid that what remains cannot independently survive or as it has sometimes been put, whether on a fair review of the whole matter it can be assumed that the legislature would have enacted what survives without enacting the part that is 'ultra vires' at all.'
Applying the above principles I should be prepared to hold that even if Section 3 (4) is 'ultra vires' of the legislature the other portions of the statute 'relating to reduction' of rent would be valid. I am accordingly of opinion that Act 30 of 1947 is not opposed to Section 299(2) of the Government of India Act, 1935, nor is it 'ultra vires' of the powers of the Provincial Legislature and that it was therefore a valid piece of legislation when it was passed.
62. Now I shall consider the second group of objection whether Act 30 of 1947 became void under Article 13 of the Constitution as being inconsistent with the fundamental rights declared in Article 31(2), Article 19 and Article 14. The objections put forward on the basis of Article 31(2) are identical with those urged in connection with Section 299(2) of the Government of India Act, 1935 and for the reasons already given they must be overruled.
63. It has been strongly pressed upon us that the provisions of Act 30 of 1947 are opposed to Article 19(1)(f), as imposing restrictions on the rights of an owner to 'hold' property and that they could not be upheld as either reasonable or made in the interests of the public. Here again it is necessary to consider separately the provisions relating to reduction of rent and those relating to realization of rent. It was argued by Mr. Kesava Iyengar who appeared for some of the petitioners that the Act avowedly reduced rents to a substantial extent and that it is, therefore, an invasion of the right of the owner to hold property which means, of course, his right to enjoy the income from the property. Indeed he argued that the reduction of rent payable to a landlord to any extent will be hit by Article 19(1)(f). But the relationship of the land-holder and the ryot in an estate has peculiar incidents attaching to it, many of them having their roots in custom. The rights of a landlord in an estate are often variable and not seldom undefined. This is particularly so with reference to quantum of rent payable by ryots. Tenancy legislation has generally been directed to the ascertainment of these rights and it may be doubted whether Article 19(1)(f) can in strictness be applied to such a legislation. The true scope of Article 19(1)(f) is not to determine what rights a citizen possesses but only to confer on him a power to enjoy those rights to which he may be found to be entitled and the tenancy legislation which has for its object the determination of those rights cannot be said to be inconsistent with Article 19(1)(f). It is true that there has been substantial reduction of rent and it is possible to contend that this is much more than ascertainment of rights and in reality an expropriation thereof but then the claim of the ryots is that they are liable to pay only what the tenants in the ryotwari areas pay and that the excess which they have been paying is illegal exaction by the landholder and if the legislature takes the view that that is the correct position, then the reduction of rent in estates to ryotwari levels will not deprive the landlord of what is Justly due to him but would only limit his rights to what he is lawfully entitled. It is difficult to say that Section 19(1) (f) stands in the way of such a legislation. In [any event I am prepared to hold that the Act is saved by Article 19(5) as a reasonable limitation on the rights of the proprietor made in the interests of the public. The occasion for the legislation was that a large population of tenantry in the estates was groaning under a heavy rate of rent and the Act was passed for granting a relief to them. Such a legislation will be within Article 19(5). This objection must accordingly be overruled.
64. Mr. Vedantachariar appearing for some of the zamindars raised a contention which was special to them. In order to appreciate this contention it is necessary to bear in mind that in the definition of Estates in the Madras Estates Land Act Section 3, Clause 2 are comprised different varieties of them. The Zamindars holding sanads under permanent settlement form one class. They are assessed to the payment of fixed peshkush to the Government. Then we have Jagirdars who bear analogy to zamindars in the nature of their estates but differ from them in that there is no permanent settlement and no liability to pay peshkush. In this respect they resemble inamdars who hold estates either free of assessment or on payment of favourable rates of assessment. These three classes differ considerably among themselves though they have this in common that the tenants in all of them have occupancy rights. The reduction of rent must operate with varying effects on the several classes of landholders. The zamindars unlike others are under an obligation to pay peshkush which was fixed in relation to income from the estate. In their case reduction of rent must operate more harshly than on the Jagirdars or inamdars who pay little or no assessment and in whose case the reduction of rent is only a reduction of income. Now the contention of Mr. Vedantachariar is that the effect of this legislation must be confiscatory so far as zamindars are concerned because if the peshkush and cess and collection charges and other liabilities are deducted out of the reduced rent income there may be little or nothing left for them out of the estate, if indeed there be not any deficiency to be made good by them. He accordingly contended that if in the working of the Act the Zamindar is unjustly deprived of his property he will be entitled to protection under Article 19(1)(f), and he relied on the cases in 'H. Reagan v. Farmers Loan & Trust Co.' 1894 154 U S 361: 38 Law Ed. 1014 and 'Con-vington & L. Turnpike Road Co. v. Sandford' 1896 164 US 578: 41 Law Ed 560. In these cases certain commissioners acting under the powers granted to them by the statute which created them fixed rates of tariff for railroad traffic in the former case and tolls in the latter. The complaint was that the rates were unreasonably high and unjust and amounted to destruction of rights of property. This contention was upheld. It might be conceded that by reducing the rent without reducing peshkush much injustice might result in particular cases. At the same time it must be remembered that Act 30 of 1947 operates only in respect of ryoti lands; that zamindars have other valuable incomes such as forestry, fishery and so forth and private lands of the zamindars are also left untouched. It is, therefore, difficult to hold without more than the Act must necessarily deprive the Zamindars as a class of their entire estate. It is just likely that some of them might be hit to such an extent as to bring their case within Article 19(1)(f), and that in turn will depend upon investigation of facts but we are now concerned only with validity of the legislation as a whole and there is no legal basis for holding that it is invalid.
65. I shall now consider whether the provisions relating to collection of rents are hit by Article 19(1)(f). It appears to me that this question is concluded by the decision of the Supreme Court in 'Charanjit Lal v. Union of India', 1951 14 S. C. J. 29. There one of the contentions put forward by the share-holder was that the restrictions placed on his right as a shareholder were void under Article 19(1)(f). In dealing with this contention Mukherjee, J., observed:
'It is quite clear that there is no restriction what so ever upon the petitioner's right to acquire and dispose of any property. The shares, which he holds do remain his property and his right to dispose them of is not fettered in any way. If to 'hold' a property means to possess it, there is no infringement of this right either for as I have stated already, the acts complained of by the petitioner do not amount to dispossession of him from any property in the eye of law. It is argued that 'holding' includes enjoyment of all benefits that are ordinarily attached to the ownership of a property. The enjoyment of the fruits of a property is undoubtedly an incident of ownership. The pecuniary benefit, which a shareholder derives from the shares he holds, is the dividend and there is no limitation on the petitioner's right in this respect.'
Then dealing with the restrictions on the right of the shareholder to elect directors, pass resolutions or to institute proceedings in a Court of law the learned Judge observed:
'In my opinion, these rights are privileges which arc appurtenant to or now from the ownership of property but by themselves and taken independently they cannot be reckoned as property capable of being acquired, held or disposed of as is contemplated by Article 19(1)(f) of the Constitution.'
Das, J., expressed himself to the same effect, vide page 59. On this reasoning it must be held that no eights of the petitioners have been infringed under Article 19(1)(f), because their title to the estate is unaffected; their right to dispose of it is untouched; and their right to receive rent has been expressly preserved. I am also prepared to hold that the provisions of Section 3 (4) of Act 30 of 1947 can be upheld as a reasonable restriction made in the general interests of the public, under Article 19(5). I have already held that the provisions relating to reduction of rent are reasonable and in the interests of the public. Section 3, Clause (4) which is intended to give practical effect to the provisions relating to reduction of rent must also be held to be valid as being reasonable and in the interests of the public. To fix a reasonable rate of rent is not to bring home relief to the tenants so long as the landlords are unwilling to reconcile themselves to substantial reduction of rent which they had hitherto been receiving and resort to Courts might become necessary to work out the rights of the tenants. The relief might become slow and tardy and it is this state of affairs that is sought to be remedied by Section 3 (4). The landlord does not thereby lose any of his substantial rights; on the other hand the realisation of rent by the Government will be more speedy and less costly. Under the circumstances these provisions must also be held to be valid. I am, therefore, of opinion that none of the provisions of Act 30 of 1947 infringe the fundamental rights under Article 19.
66. It remains to deal with, the contention of Mr. Kesava Iyengar that the provisions of Act 30 of 1947 are opposed to Article 14 and that, therefore, it is invalid. This contention is based upon explanation I to Section 2 that the special officer has power only to reduce rent and not to enhance it. It is stated that in they same estate the rates of rent vary with different tenants, that while many of them pay more than the ryotwari rates, it is a legislation in respect of a class and reduction of rent but not enhancement thereof is discrimination within Article 14. So argues the learned Advocate. But it has been held that Article 14 does not apply where there is classification and as the legislation has for its object the reduction of rent where it is higher than the ryotwari rates, it is a legislation in respect of a class and not open to challenge under Article 14. Moreover if even after the enactment of Act 30 of 1947 there is difference in the rights of the several classes of tenants that is not discrimination arising by reason of the Act. The disparity in rates existed prior to the legislation and it is no objection to the validity of the Act that it has not entirely obliterated the pre-existing inequalities. The case is analogous to that in 'Ramjilal v. Income-tax Officer, Mohindar Garh' 1951 S. C. J. 203. The facts of that case were that there was no income-tax law in the State of Nabha while the State of Kapurthala had one and after these states were Integrated the residents of Nabha State were assessed to income-tax under the law of Pepsu Union. This rate was higher than the rates of income-tax in Kapurthala. Nabha contended that there was discrimination in that Kapurthala was paying less income-tax and that, therefore, the Pepsu regulation was discriminatory under Article 14. The Supreme Court rejected this contention, Das, J., observing:
'The discrimination, if any, was not brought about by the two ordinances, but by the circumstance that there was no income-tax Act in Nabha.'
67. The result then is that Act 30 of 1947 was valid when it was passed and has not become in valid under the Constitution and that Act 7 of 1951 is also valid.
68. I agree with the conclusions of my Lord the Chief Justice and in the order to be passed on these petitions.