This article is written by Prashant Prasad. It deals with the facts, issues, and arguments presented by the appellant and respondent, the various legal aspects involved, and the judgement that was delivered by the Apex Court in the case of K.C. Gajapati Narayan Deo vs. State of Orissa (1953). The article delves into the legal provisions pertaining to the Orissa Estates Abolition Act, 1952, and other relevant legal concepts, offering a comprehensive understanding of the entire case.

Introduction

In 1952, the Orissa Estate Abolition Act (hereinafter referred to as “the Act”) was introduced. The main aim of this legislation was to end the zamindari system and to bring the land under direct control of the state government. The government came up with such an Act in order to remove the intermediaries and bring the land cultivators and tenants in direct contact with the state. The landholders, aggrieved by the provisions of such an Act, challenged the constitutional validity of the Act.

The present case highlights the clash between the government’s legislation on land reform and the traditional rights of landholders on their land. The Act brought social changes in society as opposed to the conventional practice that has been perpetuated from time immemorial. The Orissa High Court, in this particular case, upheld the Act and dismissed all the claims made by the landholders. Aggrieved by such a decision of the High Court, there was an appeal to the Apex Court and finally, the judgement was delivered by the Apex Court in the case of K.C. Gajapati Narayan Deo vs. State of Orissa (1953). The present case is the finest example that depicts the fact that the judiciary can play a pivotal role in balancing the rights of an individual along with catering to the broader goals of social justice.

This case depicts the efforts to reform land ownership and redistribute surplus land so that land efficiency can be reached to its fullest. The judiciary in the present case tries to interpret some of the vital constitutional provisions on the subject, such as the right to property, just and fair compensation, and other relevant concepts that are necessary for understanding the rights related to property. On the basis of the present case, a landmark precedent has been set regarding the state’s ability to enact laws on land reform.

Details of the case 

• Case name: K.C. Gajapati Narayan Deo vs. State of Orissa
• Appellant: K.C. Gajapati Narayana Deo and other
• Respondent: The State of Orissa
• Name of the court: The Supreme Court of India

• Bench of Judges: Hon’ble M. Patanjali Sastri (Cj); Hon’ble B.K. Mukherjee; Hon’ble Sudhi Ranjan Das; Hon’ble Ghulam Hasan and H Natwarlal Bhagwati
• Case type: Civil Appeal
• Date of judgement: 29/05/1953 
• Equivalent Citations: 1954 SCR 1, 1953 AIR 375 

Facts of the case 

In the present case, the Orissa Estate Abolition Act, was introduced by the state of Orissa on 17^th January 1950 and was passed by the Orissa state legislature on 28^th September 1951 and finally, presidential assent was received on 23^rd January, 1952. After the assent, the Act thus receives protection under Article 31(4) and Article 31A (specifically under the sub-clauses of clause (1) of the Article 31A) of the Indian Constitution. However, it was not included under the list of statutes mentioned under the Ninth Schedule (the Ninth Schedule of the Constitution includes the list of central and state laws that cannot be challenged in the court). The present Act follows a similar pattern to the statute passed in the states of Bihar, Uttar Pradesh, and Madhya Pradesh Legislative Assemblies (i.e. The Bihar Land Reforms Act, 1950, Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, Madhya Pradesh Abolition of Proprietary Rights Act, 1950 etc.). The main purpose of the Act was to abolish all the zamindari and proprietary estates by eliminating all the intermediaries in order to bring the actual occupant of land in direct contact with the state government. The proprietors of the estates aggrieved by the provisions of the Act filed six appeals before the Orissa High Court under Article 226 of the Indian Constitution.     

Many grounds were put forward by the appellant regarding the unconstitutionality of the Act before the Orissa High Court. The appellant was of the view that the present Act is a piece of colourable legislation, as there is an exorbitant use of legislative power by the government. The court was of the opinion that the question regarding the validity of the similar legislation of Bihar, Uttar Pradesh, and Madhya Pradesh Legislative Assemblies was considered by the court, and all of them were held constitutional by the court except a few minor provisions of the Bihar Act. The argument that was raised by the appellant was classified in the judgement under three heads by the then Chief Justice (Hon’ble M. Patanjali Sastri), of the Orissa High Court. Under the first head, contentions were raised regarding the constitutional validity of the Act. Under the second head, the Act was challenged on the ground that it relates to certain items of property included in an estate, such as private land, buildings, wasteland, etc. Lastly, the grounds for challenging the Act are related to certain provisions of the Act regarding the procedure for determination of compensation payable to the intermediaries as enshrined under Section 37 of the Act, with reference to the calculation of gross assets or the deduction to be made for arriving at the net income. 

In a detailed judgement, the then Chief Justice discussed all the issues raised by the appellant and rejected all such contentions except a few, which remained open for further discussion. Another learned judge of the bench, Justice Narasimham, agreed with the Chief Justice on most of the points. However, he expressed his separate opinion about the Orissa Agricultural Income-tax (Second Amendment) Act, 1950. According to him, this Act appears to be a tax measure, but it may attempt to reduce the income of intermediaries, and hence further net income can be decreased. After considering various issues of the present case, it was finally decided by the Orissa High Court that all the petitions should stand dismissed. Hence, the Orissa High Court held the Act to be constitutional. Aggrieved by the decision, the petitioners filed an appeal under Article 132 and Article 133 of the Indian Constitution before the Hon’ble Supreme Court of India. 

Issues raised 

• Whether the Orissa Estate Abolition Act, 1952, is constitutionally valid?
• Whether the Orissa Estate Abolition Act, 1952, is a piece of colourable legislation?
• Is the procedure prescribed for making compensation to the proprietors valid?

Arguments of the parties

Petitioners 

Several contentions have been raised by the learned counsel of appellants, which are as follows:

• The questions were raised regarding the validity of the provisions of two statutes, namely, the Orissa Agricultural Income-tax (Amendment) Act, 1947 and the Madras Estate Land (Amendment) Act, 1947, as they affect the calculation of the net income of an estate, in order to determine the compensation to be payable under the present Act. It was contended by the appellant that such legislation is not bonafide legislation at all but is merely a piece of colourable legislation, as the real purpose of the legislation is to reduce the net income of the intermediaries.
• Some of the provisions of the Act were challenged as unconstitutional as they are applicable on the private lands and buildings of the owner, both of which form part of the estate in accordance with Section 5 of the Act.
• The manner in which the compensation is paid in accordance with Section 37 of the Act has been challenged as not valid and unconstitutional.
• Along with the above-mentioned contentions, the counsel relied on the case of State of Bihar vs. Maharaja Kameshawar Singh and Others (1952), in which two provisions, i.e. Section 4(b) and Section 23(f) of the Bihar Land Reforms Act, were held to be unconstitutional on the ground that provision constitutes fraud on the constitution. The counsel further relied on the case of Union Colliery Company of British Columbia Ltd. vs. Byrden (1899), in which the “doctrine of colourable legislation” came for consideration.

Respondent  

In reply to the contentions raised by the appellant, the learned Attorney-General contended that –

• The contentions that were raised by the appellant are not relevant for the purpose of the present case.
• It was further contended that the arguments put forward by the appellants are not the grounds to attack the validity of the Act.
• The provisions of the Act relating to the computation of gross assets based on the rent that is payable are not illegal.
• If the contentions of appellants are right, then they are free to raise objections regarding the computation of gross assets on the basis of rent settled under the provisions of the Act.
• If the prescribed rule for computing rent under the Act is found void, the rent that is set will be dismissed, and the appellant will be allowed to include the preceding year’s rent as rent settled.   

Legal provisions and concepts involved in this case

Doctrine of colourable legislation

Understanding of the concept laid under this doctrine is of crucial importance because this doctrine is involved in one of the issues of the case. The doctrine of colourable legislation is a principle that aims to prevent the exorbitant use of legislative power by the government. The primary use of this doctrine is to check the competency of the legislature on the law in question. This doctrine can be invoked in a situation when the legislature is not competent to make certain laws upon a particular matter but still makes the law on that subject either directly or indirectly. There may be instances where the law primarily appears to be within the constitutional power of the legislature, but in reality, that can be an attempt to achieve the objective beyond the jurisdiction of the legislature. Under that scenario, this doctrine can be invoked.

The doctrine of colourable legislation is derived from a Latin maxim – “quando aliquid prohibetur ex directo, prohibetur et per obliquum” which is based on the objective that the power of legislature must be exercised within the constitutional limit and if any attempt is made to exceed that limit, then such legislation will be considered as a piece of colourable legislation. Therefore, this doctrine grants the judiciary the authority to verify whether the legislation is in compliance with the jurisdictional requirement or not. Hence, the main motive of this doctrine is to ascertain that if the legislature cannot enact certain laws directly, then they cannot employ any indirect method to enact such laws.  

To know more about the doctrine of colourable legislation, click here. 

Orissa Estate Abolition Act, 1952

Various provisions of the Orissa Estate Abolition Act, 1952, were discussed by the court for clarity on the case and issues associated with it. Some of the discussed provisions of the Act are as follows:

Section 3 of Orissa Estate Abolition Act, 1952

This Section describes the notification and vesting of an estate in the state. The State Government has the power to declare, by notification, that the estate described in the notification has vested in the state free from all encumbrances. This Section further states that the notification must contain particulars of the estate, such as tauzi number (if any), name, and address of the intermediaries as recorded in the register, which is maintained by the collector.

Section 4 of Orissa Estate Abolition Act, 1952

This Section describes the surrender of an estate by an agreement. Before the issuance of notification under Section 3, the State Government must invite intermediaries to submit proposals for the surrender of their estate. If such a proposal is accepted, then the surrendered estate shall vest in the government as soon as the agreement regarding the surrender is executed. Such a proposal must be in writing, and it shall contain all the specific terms and conditions on which the surrender is proposed to be made.

Section 5 of Orissa Estate Abolition Act, 1952

This Section describes the consequences of vesting either by the issuance of notification under Section 3 or by surrender under Section 4. The entire estate, including other properties associated with it, should absolutely be vested to the state free from any encumbrances, and such intermediaries whose land is being vested shall cease to have any interest in such estate apart from those interest which is saved under the provisions of the Act.

Section 6 of Orissa Estate Abolition Act, 1952

This Section describes some of the things that are retained by the intermediaries even after the estate is vested in the government. The intermediaries are allowed to keep homesteads, buildings, and structures that are used for residential or trading purposes, such as golas, mills, and factories, for the purpose of trade, manufacturing, commerce, etc. However, the building that is used for official or other estate purposes would vest to the government.      

Section 7 of Orissa Estate Abolition Act, 1952

This section provides that the intermediaries would be entitled to retain such land used for agriculture and horticulture purposes that are under their khas possession at the date of vesting. However, it is pertinent to note that the private land of the intermediaries, which is held by the temporary tenant under him, would be vested in the government, and the temporary tenant would be deemed to be the tenant of the government.

Section 37 of Orissa Estate Abolition Act, 1952

This Section is the most crucial and marks the core issue in the present case as it discusses the manner in which the compensation would be paid.

It has been stated under this provision that after the compensation assessment is finalised, the compensation officer needs to compensate those who are mentioned in the list. While paying compensation, the officer can deduct such an amount as specified under the different clauses of the provision. The deduction can’t exceed 35% when the compensation is an annuity. However, the deduction can go up to 50% if the debt can’t be cleared in 30 years.

This section further discusses that if the person who is entitled to the compensation dies, then their legal heirs would be entitled to such compensation. The compensation follows 2.5% annual interest, which is payable in 30 annual instalments. If the compensation remains unpaid due to legal issues, then such compensation will be deposited as a revenue deposit and will not earn interest after a specified period. The Section further elucidates that the intermediaries, by way of deed, can agree to receive compensation as reduced rent for any kind of land settlement.    

Article 31 of the Indian Constitution 

Article 31 is relevant to the present case because this Article initially provided “right to property” as a fundamental right. However, the Act involves provisions regarding the state’s acquisition of estates. 

Article 31(4) is majorly relevant because it states that if any bill is discussed in the state legislature at the commencement of the Constitution and if that bill is passed by the legislature and sent to the President for approval and, it becomes law upon the President’s approval. Such law cannot be challenged in any court for going against (2) of the Article 31 of the Indian Constitution. In the present case the Act in question received the approval of the President and was thus protected under Article 31(4), but subsequently a dispute arose which was addressed in the case.    

Initially, when the Indian Constitution was made, the right to property was one of the fundamental rights. This right was provided under Article 31 of the Indian Constitution, which dealt with the property rights of an individual, and any kind of compulsory acquisition of property was prohibited in accordance with this provision. This Article provided that no citizen can be deprived of owning their property. However, one of the exceptions provided under this Article was that if the property is being acquired by the authority of law, then it would be a legally valid acquisition. Further, reasonable compensation must be paid if any individual’s property is being acquired for a public purpose. 

However, this right was removed from the list of fundamental rights vide the 44th Amendment Act, 1978 and thereby, the right to property was made as a constitutional right under Article 300A. 

Article 31A of the Indian Constitution

Article 31A is relevant to this case because this provision provides an avenue for the acquisition of an estate and the savings related to it, and in the present case, the question arose regarding the acquisition of an estate and, further, the compensation associated with it.  

This Article was enacted with the purpose of providing an exception to the right to property, Article 14 and Article 19(1)(g). The object of this provision is to protect and validate the law that extinguishes Zamindari and other similar rights. This Article states that, notwithstanding anything contained under Article 13 of the Indian Constitution, no law providing for –

• The acquisition by the state of any estate or to change or remove such rights.
• Taking over the management of property by the state for an interim period, either for the public good or to ensure the proper management.
• The merger of two or more corporations, either for public good or for better management.
• Modify or remove the rights of managing agents, secretaries, treasurers, directors, or managers of corporations or the voting rights of shareholders.
• Change or remove the rights which are acquired by way of an agreement, lease, or licensee related to searching for or extracting minerals or mineral oils or the premature termination or cancellation of any such agreement, lease, or licence.    

The laws made on the above-mentioned subject shall be deemed void if it is inconsistent with the rights conferred under Article 14 or Article 19 of the Indian Constitution. However, it is pertinent to note that if such a law is made by the state legislature, then the President’s approval is needed to make it legally valid. It has been further stated that if any of such laws allow for the acquisition of land under personal cultivation, then such land cannot be acquired by the state within the certain ceiling limit or any building or structure on it without paying at least the market value as compensation.      

Judgement in K.C. Gajapati Narayan Deo vs. State of Orissa (1953)

The court was of the opinion that it is necessary to examine what exactly the doctrine of “colourable legislation” means. The court considers that the doctrine does not involve any question of bonafide or malafide intention on the part of the legislature. The entire doctrine revolves around the question regarding the capability of the legislature to enact any particular law. It was stated by the court that if the legislature is competent to enact any law, then in that situation, the motive that forces it to act is completely irrelevant. However, if the law enacted is such that the legislature is not competent to pass such a law, then the question of motive does not arise at all. Therefore, determining whether a statute is constitutional or not is always a question of power or competency. On this particular question, the court finally concluded that the substance of the matter is material, and if the subject matter of legislation is beyond the power of the legislature to legislate, then the form in which the law is presented would not be saved from being judged negatively. Therefore, the legislature cannot employ indirect methods to complete something which cannot be done directly.

After critically analysing and taking into consideration various facts and circumstances of the case, it was ruled by the court that Section 37 of the Act, which states regarding the payment of compensation along with interest in 30 annual equated instalments, leaving open for the state to make payment any time before the expiration of period is not a piece of colourable legislation. The court, on this particular ruling, relied on the reasoning that this legislation comes under Entry 42 of List III of Schedule VII of the Indian Constitution.

The court was of the opinion that if any bill receives the assent of the President, then it is protected from any attack on the ground that Article 31(2) has not been complied with. The court, on one of the contentions made by the parties, that the bill was passed without any alteration, and hence Article 31(4) is attracted. The court ruled that the expression “passed by such Legislature” must mean “passed with or without alterations” in accordance with the procedures as enshrined under Article 107 of the Indian Constitution. Therefore, it was ruled that all the requirements of Article 31(4) have been complied with, and there is no scope for any objection on the grounds that the compensation provided was inadequate. It was further ruled that the State Legislature is empowered under Article 31(2) of the Indian Constitution to place buildings under the ambit of the estate in order to cater to the management or administration purpose of the government. Finally, the Supreme Court of India ruled that there was no substance in the contentions, and the court had no hesitation in overruling it. Therefore, all the points raised by the appellant were dismissed. However, some important constitutional question was involved in the case which needed to be cleared, and apart from that, the appeal stands dismissed. 

Relevant judgements referred in the case

Union Colliery Company of British Columbia Ltd. vs. Bryden (1899) 

In this case, the question arose regarding Section 4 of the British Columbia Coal Mines Regulation Act, 1890, which prohibited the entry of Chinese men of full age from employment in underground coal work. It was contended that such provision is ultra vires of the Provincial legislature. The present question was answered by the court in an affirmative way, and it was ruled that such prohibition was indeed beyond the Provincial legislature’s power. It was further stated that if it were merely regarded as a coal-working regulation, then it could certainly come under Section 92(10) or Section 92(13) of the British North America Act, 1867. However, since the current provision in question specifically targeted Chinese men, then it fell into Section 91(25) of the Act, which is the exclusive domain of the federal Parliament. Subsequently, it was clarified by the Judicial Committee that the British Columbia Coal Mines Regulation Act, 1890 was not actually about coal mine safety, but instead, it was a way to discriminate against the Chinese.

The State of Bihar vs. Maharaja Kameshwar Singh and Ors. (1952)

In this case, the Bihar Land Reforms Act, 1950 was challenged on the grounds that there were classifications of zamindars for the purpose of giving them compensation. It was contended that such classification is discriminatory, and it denies equal protection of law as guaranteed under Article 14 of the Indian Constitution. As a result, two provisions, namely Section 4(b) and Section 23(f) of the Bihar Land Reforms Act, were held to be unconstitutional on the grounds that these provisions constitute a fraud on the constitution. The court in the present case observed that although some of the provisions of the Act are harsh and bad against Zamindars, they do not render the whole Act a fraud on the Constitution. 

Attorney-General for Ontario vs. Reciprocal Insurers and Others (1924)

In this case, it was opined by Duff J. that if the law-making authority is of a limited or qualified character, then under those conditions, it may be necessary to examine with strictness the substance of such legislation in order to get a clear idea as to what the legislature is actually doing. 

Conclusion 

The Supreme Court of India, through its decision in the present case, has demonstrated that the Act in question is one of the vital legislation and is significant for the land reforms in India. This case highlighted the government’s commitment to abolish the perpetuating zamindari system, ensuring that the persons who are actual cultivators or tenants get benefits through the Act. The landholder’s challenge regarding the Act’s unconstitutionality couldn’t be sustained, and the court ruled that the state legislature was competent to make such laws and did not violate the principles of the Constitution.

Therefore, the major issue persistent in the case regarding compensation was resolved, and it was clarified that the state has the authority to implement reforms like this and that the modes of payment for compensation were fair and legally valid. However, it was admitted by the court that there are a few constitutional questions that need to be addressed in the present case, but merely on the basis that the Act cannot be held to be violative of the Indian Constitution. This case marks a landmark decision aimed at eradicating poverty along with supporting the marginalised section of society.

Frequently Asked Questions

What is the implication of this judgement on the zamindari system in Orissa?

After the Orissa Estate Abolition Act, 1952 was held to be legally valid, the zamindari system was abolished, and thereby, the cultivators and the tenants benefitted hugely from the decision of Apex Court, marking a great step towards land distribution and social justice.

How did the Apex Court interpret the right to property in relation to the issues present in this case?

The Supreme Court of India was of the opinion that, although the right to property is the right of an individual. However, along with that, the government has the power to acquire certain property for public purposes, and such an act of acquiring must be compensated with reasonable compensation, which was given in the present case in accordance with Section 37 of the Act.

What is the relevance of the decision given in The State of Bihar vs. Maharaja Kameshwar Singh and Ors. in the present case?

The State of Bihar vs. Maharaja Kameshwar Singh and Ors. is one of the cases referred to in the present case and has helped in shaping the decision of the case because it involves similar questions of the constitutional validity of land reforms and issues regarding compensation.

References

• INDIAN CONSTITUTIONAL LAW by M.P. Jain