This article is written by Abanti Bose, studying at Amity University Kolkata, India. This article provides a detailed understanding of the 25th Amendment of Indian Constitution including the causes, effects and constitutionality of this amendment.
It has been published by Rachit Garg.
The Constitution of India is the most extensive Constitution in the whole world. The makers of the Indian Constitution made it as adaptable as possible so that it could be amended when the necessity arose. Under Article 368, the Parliament has the power to amend or repeal certain provisions of the Constitution.
The 25th Constitutional Amendment which is known as the Constitution (Twenty-Fifth Amendment) Act, 1971 was passed to overturn the judgement of the Supreme Court in R.C. Cooper v. Union of India, (1970).
Earlier, Article 31 of the Constitution provided the fundamental right to property and expressed that any person whose property was acquired by the Government was entitled to adequate compensation. However, with this amendment, it substituted the word “compensation” in the Article with “amount” which meant that the government will only be liable to pay a nominal amount in the cases of acquisition or requisition of property of landowners for public purposes. The amendment also inserted Article 31C mentioning any law passed to implement the objectives under Article 39 (a) and (b) could not be questioned, challenged or reviewed before the court of law for violating fundamental rights under Articles 14, 19 and 31. Thus, changing the relationship between Fundamental Rights and Directive Principles of State Policy and creating a tussle between the Judiciary and the Parliament.
Procedure to amend constitutional provisions
Article 368 states the procedure for amending the constitution of India. The steps to amend constitutional provisions are mentioned below:
- A bill to amend a constitutional provision is introduced in either house of the Parliament.
- The Bill must be passed by both absolute and special majority i.e., a total majority (irrespective of vacancies or absentees) and by a 2/3rd majority of people present and voting in both the houses.
- Now, if the Parliament wants to amend;
Then such amendments ought to be ratified by not less than one-half of the State Legislatures.
- Finally, the bill is presented to the President of India who shall give his assent and the Constitutional provision is amended in conformity with the terms stated in the bill.
Brief about R.C. Cooper v. Union of India, (1970)
In 1955, the Imperial Bank of India was nationalised under the State Bank of India Act, 1955 and seven of its subsidiaries were also taken over by the Government. The RBI also took prominent steps to reduce the number of commercial banking organisations in India from 566 in 1951, to just 89 by the end of the year 1969.
The then acting President of India, Justice M. Hidyatullah, issued the Banking Companies (Acquisition and Transfer of Property) Ordinance, 1969. The features of the ordinance are listed below:
- Fourteen banks were listed in the Ordinance which was going to be nationalised. These banks were short-listed on the basis of deposits that they held. The minimum criteria of the deposits were held to be Rs. 50 crore.
- All the directors of these banks were asked to vacate their offices. But the other employees continued working under the Indian Government.
- The Second Schedule of the Ordinance mentioned the compensation which was considered to be paid to the banks that were nationalised. The Ordinance mentioned two prominent ways of providing compensation to the aggrieved banks, such as;
- Where an amount of compensation could be fixed by an agreement; then the compensation would be determined by such agreement.
- If no agreement could be reached in the specified period then the matter would be referred to a tribunal. The compensation fixed by the tribunal will be awarded after 10 years from the date when the agreement failed.
After this when the Parliament came into session the Indira Gandhi Government framed the ‘Banking Companies (Acquisition and Transfer of Property) Act, 1969 with all the similar provisions as were stated in the Ordinance.
Mr. Cooper who was the director of the Central Bank of India Ltd., and he also held shares in numerous banks such as the Central Bank of India, Bank of Baroda Ltd. and Bank of India Ltd., filed a writ petition before the apex court under Article 32 of the Constitution claiming that his Fundamental Rights have been violated under Articles 14, 19(1)(f) and 31(2) of the Constitution. The petitioner further questioned whether the Ordinance was promulgated properly and whether the procedure of ascertaining compensation was valid.
The Supreme Court held that a shareholder was not authorised to move to the Supreme Court for administering the Fundamental Rights in the name of his company, until and unless the action that was being complained of, directly or indirectly also violated the petitioner’s Fundamental Rights. The Court further held that the Act is violative of Article 31 as it talks about compensation of acquired property of the property owner. Therefore, the court struck down the said Act as there was a clear violation of the said provision. However, the Court stated that the Act is not violative of Article 19(1)(g) as the state has the right to completely or partially monopolise any business.
What was the cause of the 25th Amendment of Indian Constitution
The Constitution (Twenty-Fifth Amendment) Act, 1971 was passed by Parliament on 20 April, 1972. It sought to reverse the Supreme Court’s ruling in the case, R.C. Cooper v. Union of India (1970), where the Apex Court struck down the legislation i.e., Banking Companies (Acquisition and Transfer of Property) Act, 1969 because it violated the Indian Constitution. Thus, it triggered Parliament to pass the 25th Constitutional Amendment to overturn the Supreme Court’s decision.
The purpose of the 25th Constitutional Amendment was to strip the Supreme Court of the power to determine the quantum of compensation for the takeover of property for public use. It amended the word ‘compensation’ to the word ‘amount’ for property acquired or requisitioned for public purposes by the Government of India.
The Act also amended Article 31 of the Constitution and introduced Article 31C, effectively deterring citizens from challenging laws relating to the acquisition of property under Article 14, Article 19 or Article 31.
Understanding 25th Amendment of Indian Constitution
Article 31 prior to the Amendment guaranteed not only the right of private ownership but also the right to enjoy and dispose of property without any restrictions other than reasonable restrictions. It expressed that no individual shall be deprived of their property except by the authority of law and if any person was deprived of their property then they are liable to adequate compensation.
Amendments brought forth in the Constitution (Twenty-fifth Amendment) Act, 1971
- The 25th Constitutional Amendment sought to overcome the complications placed in the way of providing effect to the Directive Principles of State Policy. In clause (2) of Article 31, the word “compensation” for acquisition or requisitioning of the property was replaced with the word “amount”. It further stated that the said amount could be paid otherwise than cash. It read as;
“(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash:
Provided that in making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority, referred to in clause (1) of Article 30, the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.”
- Clause (2B) was inserted after clause (2A) which stated that Article 19(1)(f) shall not apply to any law relating to the acquisition or requisitioning of property for a public purpose.
- The Bill also introduced a new Article that is Article 31C, mentioning any law passed to give effect to the Directive Principles contained in clauses (b) and (c) of Article 39 and contains a declaration to that effect, such law could not be challenged or reviewed by the Court for violating fundamental rights contained in Article 14, 19 or 31.
The effect of such amendment by the legislature is to prioritise the Directive Principles of State Policy over Fundamental Rights. Before the amendment, Fundamental Rights prevailed over Directive Principles of State Policy, and if any law conflicted or violated any provisions of Fundamental Rights it would be struck down. But the 25th Constitutional Amendment challenged this dynamic as Article 31C gave precedence to clauses (a) and (b) of Article 39 over Articles 14, 19, and 31.
Article 31C also mentioned that any law made to give effect to the policy under Article 39(b) and (c), would not be open to judicial review.
Constitutionality of Article 31C
Kesavananda Bharati v. State of Kerala, (1973)
In this case, Keshvananda Bharati was the chief of Edneer Mutt, a religious sect in Kerala. In 1969, the Kerala State Government introduced the Land Reforms Amendment Act, 1969 enabling the government to acquire some of the sect’s land of which Kesavananda Bharati was the chief.
Subsequently, Kesavananda Bharati moved to the Supreme Court under Article 32 of the Indian Constitution for enforcing his rights which were guaranteed under Articles 25, 26, 14, 19 and 31. And thereby during this case, the constitutional validity of the 25th Constitutional Amendment was challenged.
It was held by the Supreme Court that Parliament cannot amend the basic structure of the Constitution which would make it lose its essence. Thus, the Parliament can amend Fundamental Rights as long as it does not alter the basic structure of the Constitution. The 25th Constitutional Amendment changed the dynamic between Fundamental Rights and Directive Principles of State Policy, giving the latter precedence over the former. Thereafter, the Court struck down the second part of the 25th Constitutional Amendment, and upheld the first part subject to two conditions; firstly, the “amount” given to the landowners after the acquisition of property for public purposes shouldn’t be unreasonable and second, the provisions are not barred from judicial review.
The makers of our Constitution gave enough power to the Parliament so that they could amend it to keep up with changing times. However, having unrestricted power could also lead to the totalitarian rule of the leading party, preventing the citizens from questioning such laws. The 25th Constitutional Amendment is an example of such a rule, which barred the citizens from questioning any laws relating to the acquisition of property by the Government of India. The 25th Constitutional Amendment not only altered the basic structure of the Constitution but also established the supremacy of the Legislature over the Judiciary. However, the judiciary took the necessary steps with landmark judgments to restore the basic structure of the Constitution of India.
- https://www.constitutionofindia.net/blogs/desk_brief__the_25th_amendment#:~:text=This%20triggered%20 Parliament%20to%20 pass,could%20pay%20a%20nominal%20amount.
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