The Supreme Court on Tuesday held that public purpose was a pre-condition for deprivation of a person of his property under Article 300A of the Constitution and the right to claim compensation was also inbuilt in that Article.
A five-judge Constitution Bench headed by Chief Justice S.H. Kapadia said: “The requirement of public purpose is invariably the rule for depriving a person of his property, violation of which is amenable to judicial review. Acquisition of property for a public purpose may meet with a lot of contingencies, like deprivation of livelihood, leading to violation of Article 21, but that per se is not a ground to strike down a statute or its provisions.”
The Bench including, Justices Mukundakam Sharma, K.S. Radhakrishnan, Swatanter Kumar and Anil R. Dave, said: “For example, a political party in power with a massive mandate enacts a law to acquire the property of the political party in Opposition not for public purpose, with or without compensation.” In that situation, the Bench said that such a statute would not be immune from being challenged in a Constitutional Court.
Writing the judgment, Justice Radhakrishnan said: “Rule of law as a concept finds no place in our Constitution, but has been characterised as a basic feature of our Constitution which cannot be abrogated or destroyed even by Parliament and in fact binds Parliament. Deprivation of property may also cause serious concern in the area of foreign investment, especially in the context of International Law and international investment agreements. Whenever, a foreign investor operates within the territory of a host country, the investor and its properties are subject to the legislative control of the host country, along with the international treaties or agreements.”
The Bench said: “Even, if the foreign investor has no fundamental right, let them know, that the rule of law prevails in this country. Public purpose is a pre-condition for deprivation of a person from his property under Article 300A and the right to claim compensation is also inbuilt in that Article and when a person is deprived of his property, the State has to justify both the grounds which may depend on scheme of the statute, legislative policy, object and purpose of the legislature and other related factors. Statute, depriving a person of his property is, therefore, amenable to judicial review.”
The Bench upheld the acquisition of properties owned by film actress Devika Rani and her husband near Bangalore under the provisions of the Devika Rani Roerich Estate (Acquisition & Transfer) Act, 1996 and Karnataka Land Reforms Act, 1961. It dismissed a batch of appeals filed by K.T. Plantations Private Limited, which had acquired a part of the lands and others challenging the acquisition.
The Karnataka Legislative Assembly had passed the Roerich & Devika Rani Roerich Estate (Acquisition and Transfer) Act, 1996 to acquire all lands and movable assets of the Roerich couple, who had developed the ‘Tataguni Estate' which, included a house having paintings by Dr. Roerich.
K.T. Plantations Private Limited had acquired a part of the lands owned by the Roerich couple under a registered sale deed in the year 1991. It bought more land from Devika Rani in 1992, and were handed possession of the land immediately.
The Bench said: “We dismiss all the appeals and direct the notified authority under the Acquisition Act to disburse the amount of compensation fixed by the Act to the legitimate claimants in accordance with law, which will depend upon the outcome of the pending litigations between the parties. Further, we also order that the land acquired be utilised only for the purpose for which it was acquired.”