This article, authored by Valluri Viswanadham, provides a case analysis of State of West Bengal vs. Union of India, 1963. It examines the facts, issues, and judgement of the case, while exploring the Supreme Court’s original jurisdiction under Article 131 of the Constitution. The article also explores related topics such as federalism and property acquisition, referencing landmark cases to offer a comprehensive understanding of the discussed concepts and topics.

Introduction

The Constitution of India, while not totally flexible, provides the Parliament with the authority to amend it in reaction to the evolving needs of the people and the prevailing situations. The flexibility in the Constitution of India is very important to make sure that it remains relevant and effective over time. Fascinatingly, the term “India” is not explicitly mentioned as a federal nation in the Constitution. Instead, Article 1 of the Constitution refers to India as a “Union of States.” This language draws attention to the nature of India as a collective union of various states, each possessing an equal voice in the governance of the country. 

The Indian Constitution is designed in such a way that the states cannot secede from the Union of India, they are inherently part of the nation and lack the power to separate from the Union of India. In a true federal system, states would have the independence to extract from the union at any point. However, In India the states cannot extract from the union at any point. Accordingly, India is often referred to as a “quasi-federal” nation rather than a completely federal nation. This quasi-federal nature is distinguished by a balance of power between the state and the Centre. The Constitution of India grants considerable powers to both levels of government, allowing for decentralised governance. However, during times of crisis or unforeseen circumstances, the Parliament of India has the authority to override state powers to ensure national stability and integrity.

The relationship between the Centre and the states is further differentiated by the legislative structure. Each state has the freedom to enact its laws on subjects within its jurisdiction. However, the Union of India retains the power to ensure that certain laws have nationwide applicability to maintain uniformity across the country. This stability of power and legislative authority is a unique characteristic of India’s quasi-federal system. The Constitution  of India embodies elements of both federal and unitary systems. This duality is replicated in the portrayal of India as federal in its structure but unitary in its function. In essence, while the country operates with a federal structure, the Central Government holds significant authority to ensure coherence and uniformity, especially in critical situations. This mingle of federal and unitary characteristics makes India a unique quasi-federal state, with a federal essence and a unitary character.

Details of the case

Case Name

State of West Bengal vs. Union of India

Case No

Original Suit No. 1 of 1961

Equivalent Citations

AIR 1963 SC 1241, 1964 SCR (1) 371

Acts Involved

Constitution of India, West Bengal Estates Acquisition Act 1954, Coal Bearing Areas (Acquisition and Development) Act, 1957

Provisions Referred

Article 131 and Article 31 of the Indian Constitution.

Court

The Hon’ble Supreme Court of India 

Bench

Bhuvneshwar P. Sinha, Syed Jaffer Imam, J.C. Shah, N. Rajagopala Ayyangar, J.R Mudholkar   

Plaintiff

State of West Bengal

Defendants

Union of India

Date of decision

21st December, 1962

Background of the case

Property in simple terms is an asset that can be owned by any person. Property is of two types corporeal and incorporeal property which confer legal right on the person who owns it. Every property has some kind of fiscal interest in it, so it is termed as an asset. It usually confers a bunch of privileges to the owner by not excluding all the others from using or exploiting it. The expression property till now does not have a proper legal definition under any statute. The important Act that deals with the property is Transfer of Property Act, 1882 which does not have a definition for property. 

After the independence of the country, the Government of India decided to eliminate the Zamindari system in order to get hold of all the properties vested with the zamindars and prosperous citizens, and paid compensation to them for acquisition of their property. But a significant concern faced by the Government was concerning compensation. They felt it difficult to compensate the zamindars from the Government reserves and there was no unequivocal definition or amount of compensation specified in any law for payment of compensation to the aggrieved parties. Article 31(2) of the Constitution contained provision for compensation but it did not have any adjectives like “just” or “reasonable” to determine a limpid compensation. This Article had been challenged commonly before the court to look at the word “compensation”. The Supreme court in Bela Banerjee and others vs. State of West Bengal (1953), finally held the term compensation as “just compensation”.

Facts of State of West Bengal vs. Union of India (1963)

The plaintiff, State of West Bengal through its lawmaking authority ratified West Bengal Estates Acquisition Act, 1954. The Act enabled the West Bengal Government to get hold of land that was in custody by Ryotwari systems. Then, the Parliament of India enacted Coal Bearing Areas (Acquisition and Development) Act, 1957 with where the provisions were then made for acquisition by lease or else for prospecting licences or mining leases of land in any part of India and these provisions related only to coal bearing areas in India. This resulted in one action under this Act, which led to the issuance of two notifications by the Union Government, one in 1959 and an additional in 1960, correspondingly expressing its desire to obtain those coal lands owned by the State of West Bengal that became the cause for filing this suit. 

After a number of differences had arisen between them concerning their respective interests involved, each side wanted the court to determine Constitutional questions arising from this case and State of West Bengal contended that Parliament of India lacks capability under the Constitution and plaintiff was seeking injunction restraining defendant from carrying out any orders towards acquisition of the property of state thereof particularly acquisition of coal territories belonging to State. 

Issues raised in the case

Whether the Parliament of India possesses the legislative authority to enact a law for the compulsory acquisition of State property by the Union of India?

Arguments of the parties

Plaintiff

The State of West Bengal contended that the Constitution of India is federal and the State is equivalent in sovereignty so, the Parliament of India cannot take away property rights of the State. It was contended that there is no provision in the Constitution to legislate upon acquisition of State’s property. If power is exercised by the Union to acquire property of the State under entry 42 of Concurrent List, similar power may be exercised by the States in respect of such property and even to reacquire the property from the Union. 

The Petitioners contended that it could not have been the intent of Constitution makers to confer unlimited authority upon Parliament of India and hence, they submitted that the act cannot be sustained. The Plaintiff also relied on the Australian Constitution which had not granted the legislature exclusive authority to acquire State property and compared to the Constitution of India stating that framers did not intend for the Union Parliament to have this authority under the general legislative head.

Defendant

Appearing for the Union of India, Learned Attorney General contended that Entry 42 of Concurrent List III supports the above  law according to its natural and grammatical meaning and relied on entries 52 and 54 of Union List and Entry 33 of Union List to support his contentions. He argued that Article 148 of the Constitution and entry 97 of Union List I authorised the Parliament to enact the above law and he disagreed that the Union and the States are independent powers in their separate domains and put forth the contention that the States are subservient to the Union under our Constitution. 

The Union of India contended that all the arguments concerning the legal capability of Parliament of India to ratify the impugned Act as well as the authority of the defendant to obtain any property of the State are malafide. It was contended that the State of West Bengal is not a sovereign authority, rather a subordinate authority and the Union of India defended the Act, by strongly emphasising and reiterating that Act is in public importance as per its aim for planned and rapid industrialization of the country, due to which it is necessary that the manufacture of coal should be considerably promoted as it is the fundamental essential for industries. 

The Union of India contended to declare the Coal Bearing Areas (Acquisition and Development) Act, 1957 as Constitutional, because it was important for industrialization and essential for regulating coal production and to dismiss the plaint filed by the State of West bengal.

Laws involved in State of West Bengal vs. Union of India (1963)

Article 131 of Indian Constitution

Article 131 of Indian Constitution, states that the Supreme Court of India has exclusive jurisdiction over disputes between the Union and the State Governments. The difference of opinion must concern a question of law, fact, or legal right. Article 131 of the Indian Constitution gives Original jurisdiction to the Supreme Court of India in any dispute among:

• The Central Government of India and one or more States;
• The Government of India and any State(s) on one side, and one or more States on the other;
• Two or more States, if and insofar as the dispute includes any questions (whether of law or of fact) on which a legal right’s existence or extent depends;
•  Any two or more States on one side and the Union of India on the other.

Let us understand the concept and the scope of Article 131 through a few landmark cases.

In the case the State of Rajasthan vs. Union of India (1977), during elections in 1977, the Janata party secured crushing majority in the Lok Sabha. In the states, the Congress was continuing in power. But after people had completely rejected the congress government in General Elections, without mercy, the Union Home Minister addressed a letter to the nine states asking them to recommend their relevant Governors to suspend the Assemblies and seek a brand new term of office from the public. On April 22, Union Law Minister said that “a clear case had been made out for the termination of the Assemblies in the nine Congress-ruled states and holding of new elections”. Later, the States of Rajasthan, Madhya Pradesh, Punjab, Bihar, Himachal Pradesh and Orissa filed suits in the Supreme Court praying for a declaration that the letter of the Home Minister was unlawful and ultra vires the Constitution and not binding on the plaintiff States and prayed for an interim injunction preventing the Central Government from resorting to Article 356 of the Constitution. 

The Supreme Court observed that merely for the reason that a question had a political shade, the court cannot collapse its hands in dejection and announce “Judicial hands off”. So long as a question arises whether an authority under the Constitution had acted within the limits of its power or exceeded it, it can definitely be decided by the court. The Supreme Court reiterated that, here, there is noticeably unauthorised exercise of authority under the Constitution, it is the duty of the court to intervene. 

The Apex Court made it clear that the Constitutional authority of the Supreme Court is confined only to saying whether the limits on the influence conferred by the Constitution have been observed or there is misdemeanour of such limits. The “directive” of the Union Home Minister is a recommendation or proposal to the Chief Minister of States to suggest to the Governor to terminate their Legislative Assembly of the concerned State, because the parties they were representing in the State lost the General Elections. It had been wrongly described as a “directive” and it had no Constitutional power behind it. 

In the case of State of Tamil Nadu vs. State of Kerala (2014), less than three weeks of the verdict of the Supreme Court which restrained State of Kerala and its officers from causing any obstruction, Kerala amended the 2003 Act by introducing the Kerala Irrigation and Water Conservation (Amendment) Act, 2006. The State of Tamil Nadu owned and controlled the Mullaperiyar Dam. The State of Tamil Nadu instantly thereafter, instituted the present suit under Article 131 of the Constitution of India against the State of Kerala challenging the Kerala Irrigation and Water Conservation (Amendment) Act, 2006 to the extent that it had amended the provision of Mullaperiyar Dam. 

The Supreme Court remarked that there is yet one more surface that in federal disputes, the Legislature of State (Parliament of India and Legislature of States) cannot be judged in their own cause in the case of any dispute with another state. The Supreme Court had noted that the rule of law which is the essential characteristic of our Constitution forbids the Union and the States from deciding, by legislation, an argument between two States or between the Union and one or more States. 

The Supreme Court stated that the Constitution makers in order to avert any likelihood of clashing and incompatible laws being enacted had provided for self-determining negotiation of federal disputes. In relation to disputes relating to water of inter-state rivers or river valleys, Article 262 provides for creation of a tribunal or forum for their adjudication. The Supreme Court of India held in favour of Tamil Nadu, stating that Kerala’s Irrigation and Water Conservation (Amendment) Act, 2006 was unconstitutional to the extent it dealt with Mullaperiyar dam. The court granted Tamil Nadu’s prayers for relief, and restrained the State of Kerala from enforcing the legislation and interfering with rights of State of Tamil Nadu to increase the water level and carry out necessary repairs as per court directives

Article 31 of Indian Constitution

Article 31 of the Constitution consists of two clauses. The first clause deals with the acquisition of property by the State, while the second clause deals with the compensation to be paid to the possessor of the property. Article 31(1) of the Constitution states that no individual shall be deprived of his property except by authority of law. This means that the State can attain property only by ratifying a law that provides for such attainment. The law must be legally binding, which means that it must be surrounded by the lawmaking capability of the authority that ratifies it. Article 31(2) of the Constitution states that when the State acquires property, it is obliged to give compensation to the possessor

. The payment should be a fair and just amount, determined in accordance with the principles laid down in the law. The law must supply for the purpose of the quantity of compensation, and the principles on which it is grounded. The 44th Amendment Act of 1978 brought about a noteworthy amendment to Article 31 of the Constitution. The amendment deleted both clauses of Article 31 and replaced them with a new provision, Article 300A. Article 300A provides that no person shall be deprived of his property except by authority of law. The State can acquire property for public purposes, but it must pay compensation that is just and fair.

Article 294 of the Constitution

Article 294 states that all the property and assets which instantly before the initiation of the Constitution, were vested with the Dominion of India or a province or a princely State of India became vested in the Union or its consequent State.

Article 297 of the Constitution

According to Article 297, things of worth within territorial waters or continental shelf and resources of the exclusive fiscal zone of India vest in the Union. It also empowers the Parliament of India to make law for the limits of the territorial waters, the continental shelf, the exclusive economic zone and other maritime zones of India. At present, India’s territorial zone and exclusive economic zone extends up to 12 nautical miles and 200 nautical miles from the baseline correspondingly.

Article 249 of the Constitution

This provision gives power to the Parliament of Indiato make laws concerning the state List, if the Council of states had affirmed by motion supported by not less than two-third of the members in attendance and vote, that it is compulsory for a law to have the nationwide attention and ramifications if Parliament of Indiawants to make that law with respect to any matter enumerated in the State List. 

Article 252 of the Constitution

Under this provision, the power is conferred upon Parliament of India to legislate for two or more States by consent even though the Parliament of India may have no power under Article 246 to make laws for the State except as provided in Articles 249 and 250. Such a law may be adopted by a Legislature of State of any other state. 

Article 253 of the Constitution

By Article 253, the Parliament of India had the authority to formulate any act for the complete or any fraction of the land of India for implementing any accord, treaty or conference through any further country or countries or any conclusion prepared at any global seminar, society or supplementary organisation.

Federalism In India: Judicial Lens

A nation may have both a Central Government and State Governments concurrently because of the convoluted process of federalism. Both administrations get their power from the Constitution. The Federal Government can enact laws for the entire nation, while the State Governments can enact laws for their own states. This allows each Government to maintain legal independence within its own borders. Governments are not subservient to one another; rather, they cooperate because each has its own set of powers and exercises them independently of the others. This system is predicated on striking a balance between national unity and regional diversity, as well as the need for an efficient Central authority and mechanisms to check and balance it.

Judicial actions are one more imperative aspect that affects the functioning of Indian federalism. Courts have played an important role in protecting the federal structure of the Constitution, mainly in more recent decades. In the landmark case of Kesavananda Bharati vs. Union of India (1973), the Supreme Court confirmed federalism as part of the ‘basic structure’ of the Constitution which was outside the amending power of the Parliament. 

Relevant judgements referred to in State of West Bengal vs. Union of India (1963)

Chiranjit Lal Chowdhuri vs. The Union of India (1950)

In this case, the Governor General of India found there was a situation in the mismanagement and neglect of administration of Sholapur Spinning and Weaving Company Ltd (“Company”), which had negatively affected the production of essential commodities and also the serious unemployment in the particular sections of society. Ordinance was issued, which was enacted as an Act known as ‘Sholapur Spinning and Weaving Company (Emergency Provisions) Act, 1950’, in which it was stipulated that the Managing agents of the company were terminated and the directors had to vacate the office and the Government appointed new directors, and the voting rights of the shareholders of the company were terminated and they have no role in appointment of directors, passing of resolutions etc. 

One of shareholders of the company had filed an application under Article 32 of Constitution arguing that ordinance and which was later enacted into Act was unconstitutional and prayed for the writ of mandamus against the Central Government on the grounds that Act was not within legislative competence of the Parliament and also that it violated Article 31 of the Constitution of India, which stated that no person could be deprived of their property except by authority of law, and that the government could not take private property through an executive order. 

The Supreme Court had noted that the contested Act did not violate the petitioner’s fundamental rights under Article 31(1) as it did not involve the deprivation of legally held property, neither for the petitioner nor the company. The Supreme Court clarified that Article 31(2) was not infringed since the Act did not authorise the acquisition or taking possession of the Company’s property or the petitioner’s shares. The Supreme Court made the observation that in spite of this, the Act did impose restrictions on certain shareholder rights, such as voting, director appointment, and the ability to apply for winding up. 

Despite these restrictions, the court emphasised that the Act did not impede the petitioner’s right to acquire, hold, or dispose of their shares. The Supreme Court stated that the Act is within the legislative competence of Parliament because Entry 43 of the Union List talks about the Incorporation, regulation and winding up of financial corporations and provisions of the Ordinance and the Act relating to the appointment of directors by the Government and the termination of the shareholders concerning the appointment of directors, passing of resolutions are matters touching with regulation of financial corporations and within the legislative competence of the appropriate legislative authority. 

Navinchandra Mafatlal vs. The Commissioner Of Income-Tax (1954)

In this case, the assessee had 1/2 shares in immovable properties of Mumbai, which he along with his co-owners during calendar 1946, sold it to Mafatlal Gagalbhai & Company Ltd. The profits on the sale of the said properties was 18,76,023 and the appellant’s (Navinchandra Mafatlal) half share was around Rs. 9,38,011. In 1948, the appellant was assessed by the Income-tax Officer, Bombay, for the assessment year 1947-1948 on a total income of Rs. 19,66,782 including a sum of Rs. 9,38,011 representing capital gains assessed in the hands of the appellant under Section 12-B of the Income-tax Act, 1922. In April, 1948, the appellant had appealed from the said order to the Appellate Assistant Commissioner contending that Section 12-B of the Act authorising the levy of tax on capital gains was ultra vires. The Appellate Assistant Commissioner dismissed the appeal and Income-tax Appellate Tribunal also dismissed his further appeal. 

The High Court considered the contention of assessee that Section 12-B which authorised the imposition of a tax on capital gains was unconstitutional as the Central Legislature did not have the powers to enact Section 12-B of the Indian Income-tax Act, 1922. Section 12-B was inserted in the Act by the Indian Income-tax and Excess Profits Tax (Amendment) Act, 1947 which was a Central Act and the petitioner also contended that Entry 54 which deals with “taxes on income” does not come within its scope to tax on capital gains. The Bombay High Court held that Section 12-B was well within the scope of the legislative powers of the Central Legislature within Entry 54 of Union List of Indian Constitution. The petitioner, dissatisfied with the judgement of Bombay High Court has appealed in the Supreme Court

The Supreme Court stated that there is no clear distinction among income and capital gains under law. The legislative approach relies on judicial interpretations of the term ‘income’ in income-tax and budgetary legislation. This interpretation does not necessarily diminish the natural meaning of the term ‘income’ as used in item No. 54 of List I of the Seventh Schedule.  The Supreme Court remarked that the rule of interpretation is to read words in their natural and grammatical sense. In spite of this, phrases in a Constitution providing legislative powers should be interpreted broadly. The Supreme Court stated that Section 12-B, expanded the definition of “income”, and is beyond the authority of the Parliament of India, acting under Entry 54 in Union List.

Director of Rationing and Distribution vs. The Corporation of Calcutta and Others (1960)

In this case, the appellant utilised premises in Calcutta to store rice flour without a licence. The respondent filed a complaint against the appellant for violating Section 386(1)(a) of the Calcutta Municipal Act, 1923 and under this provision the Municipal Commissioner may issue a written notice requiring the owner or occupier of a place deemed dangerous or causing inconvenience due to lack of repair, protection, enclosure, or ongoing work, to take necessary steps. The Magistrate acquitted the appellant stating that requirements under Section 386(1)(a) did not bound the Government they represented. The High Court held that the Government must follow a legislation unless explicitly or implicitly excluded by the Legislature of State. 

The Supreme Court had remarked that the State was not bound by Section 386(1)(a) of the Calcutta Municipal Act, 1923, and that the appellant cannot be punished for violating the law. The Supreme Court stated that the Laws in effect before January 26, 1959 are still legal under the new system, unless they contradict the specific requirements in the Constitution. The Supreme Court stated that the Act does not indicate that the state is bound by it, nor does it imply that the law’s efficacy or operation is impacted if Section 386 is not applied to the State. It was decided by the Supreme Court that we must not forget that good law still applies to the norm of statutory interpretation, which states that the State is not obliterated by a legislation unless it expressly states so or by necessary inference. 

Judgement of the case

The Supreme Court stated that it is clear that the West Bengal Estates Acquisition Act, 1954 is applicable to coal-bearing regions which the State is owning or controlling. Further, the Supreme Court of India noted that the Coal Bearing Areas (Acquisition and Development) Act, 1957, was valid and the Court asserted it is not beyond the authority of Parliament. The Parliament of India may enact laws for the acquisition of State property under Entry 42 of List III of the Seventh Schedule to the Constitution. The Hon’ble Court reiterated that India’s Constitution is not really federal in nature. The basis for the division of powers between the Union and the States is that the Union had the majority of the powers, particularly those that pertain to preserving the nation’s industrial and commercial unity, while States are only granted the authority to regulate local issues.

The Supreme Court stated that the Union’s ability to enact laws pertaining to property located in the states would not be limited, even in the event that the Constitution were to be interpreted as a Federation and the States were recognized as autonomous entities within the Union. We must understand that no provision of the Constitution limits the power of Parliament of India granted by Entry 42, List III, as an adjunct to the exercise of the authority under Entries 52 and 54, List I. 

The Apex Court stated that this power may also be used with regard to state property. Although Article 298 gives the States the authority to transfer property, this does not mean that property cannot be acquired by the States without a Constitutional amendment. The Supreme Court of India stated that so long as the property is capable of being transferred by the State, it can be acquired by the Union Government. Section 127 of the Government of India Act, 1935 gave the Central Government, the authority to order the Province to acquire land on behalf of the Federation in the event that it was private land and to transfer it to the Federation in the event it was province-owned land. 

The Supreme Court stated that the Provincial Government was forced to comply with the order. Giving the Central Government this kind of authority was not seen as violating provincial autonomy. The Government of India Act, 1935 gave Provinces the exclusive authority to take property by force, but the Constitution gives the Union the same authority. 

The Supreme Court observed that the Union and the State may use their concurrent authority to acquire and attain the property, but as a result, there cannot be a conflict in the use of that power since Articles 31(3) and 254 forbid such a conflict. An important consideration is that according to the Constitution, the State may sometimes assert its fundamental rights in addition to people and companies. A statute established under Entry 42, List III may not be used to acquire property vested in the State unless it conforms with conditions in Article 31, it states that no person could be deprived of their property except by authority of law, and that the government could only take over private property for public purposes after paying due compensation to the owner and it also guarantees the right to compensation for compulsorily acquired property, and stated that the compensation must be equivalent in money to the value of the property and the article further states that laws that acquired property could not be challenged in court on the grounds that the compensation was inadequateThe Supreme Court had held that the rule of interpretation is that the State is not obligated by a law unless it is either mentioned or implied by necessity. Considering the broader implications of the provisions of the Constitution of India, granting legislative authority should typically be read broadly and to the fullest extent possible. The Supreme Court of India asserted that, given these circumstances since the Constitution makes no mention of the term “property” in Entry 42 of List III being interpreted in any limited meaning, it must be held to cover property owned by the States as well.

The court stated that the contested Act is ultra vires to the Constitution in as much as it gives the Union, authority to acquire state-owned territory, including coal mines and coal-bearing land. As per the Constitution, the political sovereignty is split between the Union and the State, which are considered legal personalities with qualities and functions that are facilitated by the Constitutional mechanisms. The Supreme Court made the observation that the Constitution recognizes the idea of a federal Government and divides the sovereign powers between the Union and the States, which are the coordinate Constitutional units. This idea suggests that unless the Constitution expressly permits it, no one may interfere with the other’s Governmental operations or apparatus. 

The Supreme Court noted that implied powers of the sovereign include the ability to appropriate a citizen’s property for public use. This sovereign authority is split between the Union and the states under the Indian Constitution.  The court reiterated that the need that the power of acquisition by a sovereign pertain only to the governor’s property is implied. because a sovereign is unable to obtain its own property. The idea of acquisition and requisition also implies that they must be used for public purposes and be compensated for.  

The court observed that Parliament of India is not given any authority to acquire state property by virtue of the residuary Article 248 and entry 97 of List I. Legislative lists are not used to divide power between the Union and the State, hence, it is impossible for the residual legislative field to address interstate relations. The Supreme Court made the observation that it would be inconsistent to limit the entry to properties other than those of the States and to use the residuary authority to acquire state property when a particular provision for property acquisition is created. The Coal Bearing Areas (Acquisition and Development) Act, 1957 only addresses the regulation of mines, and the statements made in these Acts are specifically limited to the scope of the regulations made thereunder. The court stated that the statements made in these Acts cannot be used to uphold the legality of the Act. We must not forget that, when interpreting the specific provisions of our Constitution in light of its unique setup, precedents from other Constitutions or judgments made thereunder should not be used.

According to the court, the Indian Constitution depicts the idea of a federal government and divides sovereign powers between the Union and the states. The theory suggests that unless the Constitution specifically permits it, no one may interfere with functions and operations of each other. One should not overlook the fact that the Supreme Court of India is tasked with upholding the balance of federation by preventing overt or covert invasion. This is a challenging and sensitive constitutional authority and obligation. According to the Supreme Court of India, this is an example of a case where the court should prevent the Union from over its bounds and invading the state. The court concluded that the contested Act is ultra vires to the extent as it grants the Union the authority to acquire state-owned assets.

Analysis of the case

In this case, various concepts were deeply discussed by the Apex Court. The important question concerned in the judgement was regarding autonomous power of States in India.The Parliament of India’s authority to enact laws that mandate the Union of India to acquire land and other assets controlled or owned by states, while respecting the autonomy of states as distinct entities, was also discussed. 

The Supreme Court stated that nowhere in the Constitution of India there is mention of absolute federalism. The powers among the state and centre were separated because of the hard task of governing the large territory with a huge population. The Supreme court stated that federalism in India is different from other countries in the world, the Constitution of India is not a “traditional federal constitution”.

It is important to note that under traditional federalism, there needs to separate constitution for each and every state, but in India we have one single constitution and all states are governed and should exercise their powers with respect to boundaries of constitution of India. One must consider that the Constitution can be amended by the Parliament of India and the State has no authority to modify it. The separation of powers is to make sure that local authority is with the states and countrywide policies to be decided by the Centre. Last but not least, as in opposition to a federal Constitution, which enclose internal checks and balances, the Indian Constitution renders ultimate authority upon the courts to nullify any actions of state violative of the Constitution of India. 

The dissent judgement was rendered by Justice Subba Rao, he stated that under the Indian Constitution, legislative powers are separated among the Union and the State within their respective spheres. The lawmaking powers of Parliament of India is much wider than that of the state legislative assemblies, the laws passed by the Parliament of India will prevail over the state laws in case of any disagreement between the both. In a few cases of legislation where inter-state disputes are involved, the assent of the President is made obligatory for the legitimacy of those laws.

The Apex Court observed that together the lawmaking and administrative authority of the States are subject to the respective supreme powers of the Union. Legislative independence of States in India is with the Indian citizens, Political powers are separated among Union and States, with higher weight on the Union, and another point which supports the view of superiority of Union, is there is no dual citizenship existing in India.

In continuation, the Supreme Court observed that Judiciary is an important ingredient of federalism. The framers of the Indian Constitution imagined a judicial system, which was liberated from the power of the administration and government. The Constitution of India established a unified judicial system in all State and Union Territories. It had established a three tier judicial system namely. The Supreme Court of India, the top court of the country, each state had its judiciary with the State High Court and District Courts. 

In this case, as the Supreme Court of India stated that both the Union and states in India derive the powers from the Constitution of India, the court concluded that even though separation of powers among the Union and the states by the Constitution, the Parliament of India had an implied power to obtain property vested in the states while exercising the lawmaking powers granted to the Union by List 1 of the 7th Schedule. The Indian Constitution, which stipulates a separation of powers between the Union and the states, is not predicated on this theory or the idea that the Union is more dominant than the States. 

The dissenting verdict mentioned a significant aspect of the Indian Constitution, which is the clear separation of independent authority between the Union and the states within their respective domains. The separation authority between the Union and the states is fundamental to quasi-federal structure of India, where both levels of government have distinct areas of legislative competence. 

The dissent verdict also pointed out that the lawmaking power of the Parliament of India is broader and more wide-ranging compared to that of the states. The expansive authority of Parliament means that in cases of conflict or divergence between Union laws and state laws, the laws enacted by the Parliament will prevail. This principle of parliamentary supremacy makes sure that there is a coherent and unified legal framework across the nation, especially on matters of national importance.

The dissent judgement noted that in certain legislative areas where inter-state disputes are likely to arise, the Indian Constitution has provided additional safeguards to ensure fairness and legality. In such cases, the consent of the President of India is required for the legislation to be valid. This requirement acts as a check on potential conflicts and ensures that laws affecting multiple states receive careful consideration at the highest level of the Union Government. The consent of the President of India is particularly important in situations involving inter-state water disputes, trade, commerce, and other matters that inherently cross state boundaries .

The dissent opinion in the judgement held that, Indian Constitution is federal, which separates sovereign powers between the Union and the States, which ensures that neither can encroach on the other’s functions or responsibilities unless explicitly permitted by the Constitution. The stability of India, with its diverse unity, depends on strict adherence to this federal principle, as envisioned by the framers of the Constitution. 

The court has the constitutional authority and the responsibility to prevent any encroachment by the Union into State territories or vice versa, thereby preserving the federal balance. In this context, the Minority Verdict held that the Supreme Court should prevent the Union from exceeding its bounds and intruding into State matters. Therefore, It was held that the challenged act, which grants the Union power to acquire State-owned lands, including coal mines and coal-bearing lands, is unconstitutional.

Recent cases

In Re: Article 370 of the Constitution (2023)

In this case, the Indian subcontinent’s northern portion of Jammu and Kashmir, which is a component of the wider area of Kashmir, was granted special treatment under Article 370 of the Constitution.  It said that the constituent assembly of Jammu and Kashmir will have the authority to suggest how much of the Indian constitution should be applied to the State. The Indian government promulgated a presidential order on August 5, 2019 and extended to Jammu and Kashmir all the articles of the Indian constitution. Furthermore, the parliament of India enacted the Jammu and Kashmir Reorganisation Act, 2019. The petitioners went before the Supreme Court of India to contest the validity of the repeal of Article 370 of the Constitution. 

The Supreme Court stated neither that the parliament of India nor any of the states have the unobstructed authority to make laws. Every law had its own specialty of legislation, as distinguished by the three lists in the Seventh Schedule to the Constitution. Everything is paramount in its own domain. The court believed that the state of Jammu and Kashmir does not have ‘internal autonomy’ which is distinguishable from the powers and privileges enjoyed by other states in the country. In asymmetric federalism, a particular state may enjoy a degree of autonomy which another state does not. The divergence, nevertheless, remnants one of extent and not of variety. The Supreme Court outlined that the dissimilar states may enjoy dissimilar benefits under the federal system but the universal fibre is federalism. 

Atmaram Saraogi vs. Union of India (2023)

In this case, the petitioner has filed the Public Interest Litigation (PIL)contending that the Union of India should stop itself from using the phrases  “Central Government” or “Centre” and instead use the term “Union Government.” The petitioner contended that Section 3(8)(b) of the General Clauses Act, 1897 should be declared unconstitutional. The petitioner have argued that the phrase “Centre” depicts the misphrased idea that every State Government in India is subordinate to the Union Government of India and demonstrated the Union Government as the main authority holding all the power. 

The Delhi High Court opined that even though the phrases “Union” and “Union of India” have been used frequently in the Constitution, “Government of India” and “Central Government” have also been used frequently in the Indian Constitution at various points. Therefore, the Constitution of India  indeed utilises the multiplicity of vocabulary to pass on to the Government that is the nationalised Government, such as the Government of India, the Central Government, or the Union of India. Article 300 of the Constitution makes this authenticity even more obvious by stating unambiguously that the “Government of India” may bring legal action under the name “Union of India” or be sued under that name. It is obvious from the illustration to Article 73 of the Indian Constitution that the “Government of India” is incorporated in the term “Union”. The Delhi High Court our central government of our nation is built upon the fundamental framework of our Constitution 

Conclusion

There are two important things to keep in mind after reading this case. The state or the Union Government itself may be the sole parties in dispute. When addressing a case, the court should give importance to the objectives of the draftsperson of Article 131 within its intended use at the time of drafting it during the Constitution. The “true” purpose of Article 131 must be determined by the court, particularly concerning any potential threats perceived to undermine fundamental rights and neutrality. Further, Article 131 was intended to keep in spirit the federalist cooperative rather than the competitive aspect of Indian federalism between governments. The current article proves to be a detailed piece in the current situation since it addresses the judiciary’s responsibility in cases involving constitutional interpretation while also addressing the balance of power among state and centre.

In spite of this, if we look closely at both federal and unitary aspects of the Constitution it is easy to understand that a lot of authority is vested with the Central Government in every federal attribute. Therefore, much remains to be done and achieved. From this point of view, it would be apt to say that the Indian Constitution is partly federal and had a federal structure with a unitary nature. The practice of separation of powers is being followed as both the Union and the state by strictly not in terms of the separation. This is how India became a Union of states, known as a quasi-federal country. It is clear from an examination of all federal and unitary provisions of the Constitution that every federal feature has a power which gives more authority to the Central Government. Quoting this, it looks like proper to end that the Indian Constitution is quasi-federal in a few ways, federal in shape but these are unitary in spirit. So, one can say that America and India share most of the federalism characteristics. On the other hand, extreme federal structuring of Constitutions is seen in India and the United States of America. For all their problems, the federalisms of the United states and India are mostly successes.

Frequently Asked Questions (FAQs)

What are the advantages and disadvantages of federalism?

The biggest merit of federalism is that India is the most populated and diverse nation, in some places there is no possibility to administer and govern every state and its citizens. Therefore, giving powers to States to deal with their citizens on certain subjects reduces the influence of the Union Government and it makes the administration at the local level more efficient. The federal systems make sure of democratic state and autonomy as there is no particular regime that will act like a tyrant or create domination. 

Coming to disadvantages, In India, the concept of federalism cannot be seen in its true sense as the Union had more power in certain cases like constitutional amendments, emergency provisions and the divergence of financial circumstances.

Is India considered a true federal nation?

Federalism is an arrangement where the authority is alienated among the centre and states. Centre and state have the space in which they can regulate and show their authority without any infringement from each other. In India, authority is alienated among the centre and local establishments but there is no stringent separation, to a certain extent here presented is harmonised implementation among the Union and states and at periods the federation is twisted into a unitary system. Therefore, India is a quasi-federal country. 

What is the Doctrine of eminent domain?

Eminent domain is a principle that permits governments to confiscate private property for public use, also referred to as forced acquisition or expropriation. The Eminent domain empowers the central and state governments to confiscate the property and the proprietor of the property should be compensated at the existing market value. The governments can only use the eminent domain only if the proprietors of the property are offered fair and equitable compensation.

 References

• https://www.britannica.com/topic/political-system/Federal-systems
• https://www.orfonline.org/expert-speak/indian-federalism-75-the-foundation-of-a-strong-democracy