Full Judgment Text
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PETITIONER:
MUNICIPAL COMMITTEE, AMRITSAR & ORS.
Vs.
RESPONDENT:
STATE OF PUNJAB & ANR.
DATE OF JUDGMENT:
12/09/1969
BENCH:
GROVER, A.N.
BENCH:
GROVER, A.N.
SHAH, J.C.
RAMASWAMI, V.
CITATION:
1970 AIR 2182 1970 SCR (2) 375
1969 SCC (2) 823
ACT:
Constitution of India, 1950, Art. 31A (1)(b) and
31(2)--Management schools taken over for limited
period--Property pertaining also acquired-Acquisition in
violation of Art. 31(2)--If protected by Art. 31A(1)
(b)--Punjab Municipal Act (3 of 1911), ss. 52(1)(g) and 59
Constitutional validity of--Punjab Local Authorities (Aided
Schools) Act (22 of 1959), ss. 3(2) and 6--Scope of--Act
retrospective--Whether notification issued thereunder also
retrospective.
HEADNOTE:
The appellant-Committee was constituted under the Punjab
Municipal Act 1911, and was running a number of municipal
schools, for some of which it was getting grant-in-aid from
the respondent-State. The respondent took an administrative
decision, without any statutory authority, to provincialise
all the schools run by the local bodies in the State
with effect from October 1, 1957, and till June 1959,
various steps in the process of provincialisation were
taken. In June 1959. the Punjab Local Authorities (Aided
Schools) Act, 1959. was passed after obtaining the assent of
the President. The Act was deemed to have come into force
with effect from October 1, 1957.
The scheme of the Act is that it is initially left to
the local authority to pass a resolution to transfer the
management and control of aided schools to the State
Government. In order to employ compulsive persuasion the
State Government can withdraw the grant-in-aid in respect of
the aided schools if such authority does not pass a
resolution in terms of .s. 3 within a period of 3 months
from the date of the enactment of the statute. Section 5
gives power to the State Government to take over aided
schools where the local authority neglects to perform its
duty or if it is considered necessary in public interest to
take over the management for a period not exceeding ten
years, but only after giving the local authority a
reasonable opportunity for showing cause. The proviso to
the section arms the State Government with powers, in case
of emergency and in the interests of students, to take over
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the management straight away after publication of a
notification to that effect. There is no provision,
however, for an automatic retransfer of the property after
lapse of the period o.f 10 years. Section 6 introduces
amendments in ss. 52 and 59 of the Punjab Municipal Act.
Clause (g), introduced in s. 52(1), enables the State
Government to get an annual contribution from the local
bodies, and the amendments to s. 59, vest in the State not
only the management of the schools taken over but also the
interests in the movable and immovable properties pertaining
thereto.
As the appellant decided no.t to. pass the resolution
under s. 3 the respondent issued a notification on September
26, 1960. taking over for a period of 10 year’s, the
management of the aided schools specified in the schedule tO
the notification. On the question of payment of the
contribution it was resolved on January 3, 1962, that the
payment be made with effect from October 1, 1957, while
retaining the proprietary rights in the schools; but the
appellant subsequently passed several resolutions
practically rescinding this resolution with respect to the
payment of any
376
contribution. On April 10, 1964, the appellant was required
by order to pay about Rs. 53 lakhs on account of the
contribution for the maintenance of the provincialised
schools for the period 1957-58 to 1963-64. Thereupon, the
appellant filed a petition under Arts. 226 and 227 in the
High Court, challenging the orders and the constitutional
validity of the Act. The petition was dismissed.
In appeal to this Court it was contended: (1 ) The
taking over of the movable and immovable property of the
appellant did not fall within Art. 31A(1)(b) and the action
was in direct contravention of Art. 31(2); (2) The
notification dated September 26, 1960, was not protected by
the proviso to s. 5, because, there was no question of any
emergency, nor was such emergency pleaded or proved by the
respondent; (3) The notification could not and did not
validate the action prior to the date when it was issued;
(4) Section 6 of the Act which effected amendments of the
provisions of the Punjab Municipal Act could not be
attracted; and (5) Section 3(2) and the amendments which
would become operative under s. 6 in respect of ss. 52(1)
and 59 of the Punjab Municipal Act, are void and
unconstitutional.
HELD: (1) Under Art. 31A(1)(b) it is only the management
and control of the aided schools, that could be taken over
for a limited period in the public interest or in order to
secure their proper management, but proprietary interests in
movable and immovable properties pertaining to the schools
and belonging to the appellant could not be acquired. In
the present case in view of the terms of the resolution of
January 3, 1962 and the subsequent resolutions of the
appellant it could not be said that the resolution fell
within the first part of s. 3 and that action was taken by
the State pursuant to such resolution. The action was taken
by the respondent only under s. 5 and when once action was
so. taken all the properties, movable and immovable,
belonging to the local body pertaining to the schools taken
over, became the property of the State, by virtue of the
amendments made in s. 59 of the Punjab Municipal Act. When
the proprietary interest in the movable and immovable
property pertaining to the schools and belonging to the
Committee is thus acquired, the action is not protected by
Art. 31A(1)(b) as it is nothing short of compulsory
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acquisition within the meaning of Art. 31(2) of the
Constitution and is in violation of that .Article when there
is no provision for payment of compensation. [386; A---F;
387 F--G]
(2) In the notification there was no indication that the
management of the schools was being taken over because any
emergency existed. The State could not show by placing
material before the court that it was a case of emergency
justifying the action under the proviso, to s. 5. when no
foundation in that behalf had been laid, in the writ
petition. [388 B--C; D--E]
(3) The mere fact that the Act in terms was
retrospective would not make the notification issued under
the proviso. to s. 5, retrospective, in the absence of
express words or appropriate language from which
retroactivity would be implied. The notification only meant
that the management was taken over from the date of the
notification and not from any prior date. Therefore.
whatever was done before the date of the notification
regarding the assumption of management and vesting of the
Committee’s property was void and illegal. [389 A--C]
(4) Under s. 6 of the Act it is only after the local
authority has passed a resolution under s. 3 or the State
Government has taken over management of the aided schools
under s. 5, that ss. 52 and 59 of the ’ Punjab Municipal
Act would be deemed to have been amended in the
377
manner specified in the Schedule with effect from October 1,
1957. If the notification in the present case, could. not be
given retrospective operation, the amendments in the Punjab
Municipal Act would be effective only after the date of the
notification and not for the prior period. Thus, even on
the assumption that the provisions of the Act are valid the
State could not ask for any contribution from the Committee
for the period prior to the date of the notification. [389
D--F]
(5) By asking the Committee to make contributions from
its funds under the newly introduced el. g in s. 52(1), to
the cost of the schools which have been taken over by the
State, part of its funds are being compulsorily acquired by
the State, which could not be done except in accordance with
the provisions contained in Art. 31(2). [390 C--D, E-F]
When the State Government makes a direction under s.
3(2) that the aided schools shall be taken over, the
proprietary and ownership rights of the Committee also vest
in the State Government. Further, s. 6 comes into operation
as soon as a local authority has passed a resolution under
s. 3 or the State Government has taken over management under
s. 5, and the provisions relating to acquisition of property
of the Committee as also of its funds by way of
contribution, come immediately into operation by virtue of
the amendments effected in ss. 52(1) and 59 of the Punjab
Municipal Act. [391 A--D]
Since there is no. provision for compensation in the
Aided Schools Act or s. 59 of the Municipal Act, s. 3(2).of
the Aided Schools Act and the amendments in ss. 52(1) and 59
of the Punjab Municipal Act are void and unconstitutional.
[391 D]
Hence, the order by which, the movable and immovable
property of the Committee has been transferred to the State
contribution was sought be recovered, and the sum of Rs. 53
lakhs was demanded, is illegal, [391 D--E]
Municipal Committee, Amritsar v. State o! Punjab, [1969]
3 S.C.R. 447, followed.
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JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1321 of 1966.
Appeal by special leave ,from the judgment and order
dated November 15, 1965 of the Punjab High Court in Civil
Writ No. 878 of 1964.
Niren De, Attorney-General and Naunit Lal, for the
appellants.
Hardev Singh and R.N. Sachthey, for the respondents.
The Judgment of the Court was delivered by
Grover, J. This is an appeal by special leave from a
judgment of the Punjab High Court dismissing a petition
under Arts. 226 and 227 of the ConStitution which had been
filed by the appellant Municipal Committee challenging the
taking over by the State of all the schools which were being
run by it together with all the buildings in which the
schools were functioning and other movable and immovable
properties connected with these institutions
378
which belonged to the Committee. The order of the State for
payment of an annual contribution which upto the date of the
filing of the writ petition i.e. May 10, 1964 had reached
the figure of 53 lakhs was also challenged.
The appellant Committee is a first class. Municipal
Committee and has been in existence from a long time. It
has been managing its local affairs through the elected
representatives from the city who are called Municipal
Commissioners. It is constituted and functions under the
provisions of the Punjab Municipal Act 1911. A number of
primary schools were being run by the Committee within the
municipal limits of the town of Amritsar for which it was
getting grant-in-aid from the Punjab Government. It was,
however, running schools upto the middle and high standards
for girls and boys for which all the expenses were incurred
by itself without any grant from the Government. The
primary liability, however, for incurring the extra
expenditure even in connection with the aided schools was of
the Committee. The Punjab Government took an administrative
decision. to provincialise all the schools run by all local
bodies in the State with effect from October 1, 1957. This
information was conveyed by means of a letter dated July 19,
1957 by the Secretary to the Government, Education
Department, through the Deputy Commissioners in Jullundur
and Ambala Divisions. At a meeting of the appellant
Committee held on July 31, 1957 a resolution was passed that
a strong representation be made to the Government against
the decision to provincialise the schools run by the local
bodies. On September 26, 1957 the Assistant Director of
Schools wrote to the District Inspector that "as all the
local body schools are being provincialised with effect from
October 1, 1957 the tuition fees etc. to be realized in such
schools after that date should be credited to the Government
in the treasury under the head ......... " Without
enacting any legislation the State took over all the schools
run by the local bodies on October 1, 1957. A memorandum
from the Director of Public Instructions, Punjab to the
District" Inspector of Schools sent on October 5, 1957
conveyed the following direction:
"All the erstwhile Local Body Schools
which have been provincialised with effect
from the 1st October, 1957 will henceforth be
known. as Government High/ Middle/Primary
Schools for Boys or Girls as the case may be".
The Executive Officer of the appellant Committee (appointed
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under the Punjab Municipal Executive Officers Act 1931)
wrote to the Deputy Commissioner, Amritsar on November 21,
1957 that no formal orders had been received from the
Government requiring the Committee to give up possession of
the schools and it appeared
379
that no procedure had so far been devised in that behalf or
for the settlement of terms and conditions on which the
buildings, furniture, fittings and other materials were to
be transferred. He pressed for proper steps being taken.
The Secretary to the Government, Punjab, Health and Local
Government Department sent a memorandum dated September 10,
1958 to all the Deputy Commissioners saying that the work
of proper maintenance of the buildings of the provincialised
schools of the local bodies would be entrusted to the
Public Works Department, Buildings and Roads. A letter was
addressed by the same authority dated September 30,/October
4, 1958 to the Deputy Commissioners requesting them to
supply immediate information showing the contributions
actually deposited into the treasuries by the local bodies
in respect of the provincialisation of the schools. This
was followed by the memorandum dated December 12, 1958 to
the effect that all local bodies "be advised to execute the
transfer notes in respect of the school buildings etc. by
their respective Engineering Establishments in favour of the
Superintending Engineers concerned". By means of another
memorandum dated December 26, 1958 orders of the Government
were conveyed that immediate steps should be taken for
getting the contribution from local bodies and also for
obtaining transfer of buildings and equipment. The. Deputy
Commissioners were? requested to get the requisite
resolutions passed by the local bodies in the prescribed
form. The appellant Committee at its meeting held on
January 10, 1959 decided not to pay any contribution for the
time being. It was also resolved that the Committee was not
in favour of transferring the proprietary rights in movable
and immovable property which was in possession of the
schools.
It appears that up till June 17, 1959 the State continued
the process of provincialisation of the schools mentioned
before without any authority of law. There was no statutory
provision which entitled the State to take over the schools
of the local bodies including the buildings in which the
schools were being run as. also furniture etc. which
belonged to the local bodies. Moreover the extraordinary
step of demanding annual contribution was also taken
without any sanction or authority of law. The appellant
Committee which is one of the biggest Committees in the
State seems to have resisted the attempt on the part of the
Government to take over the schools and acquire or
requisition its properties in the manner in which it was
done. Legislation was for the first time enacted in the
shape of the Punjab Local Authorities (Aided Schools) Act
1959, (Act No. XXII of 1959), hereinafter called the Act.
It received the assent of the President on June 9, 1959.
According to the preamble the Act was enacted to provide for
the management and control of local authorities’ schools
receiving grants in aid from the. State of Punjab. By a
deeming provision
380
the Act was to come into force with effect from October 1,
1957. Section 2 gave the definition of "aided schools",
"local authority". and "school". "School" has been defined
to include land, buildings, play-grounds and hostels of the
school and the movable property such as furniture, books,
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apparatus, maps and equipment pertaining to the school. The
following provisions of the Act as amended may be
reproduced:
S. 3 "Power of local authorities to
transfer management and control of aided
schools to State Government.
(1) A local authority may pass a
resolution to transfer the management and
control of aided school to the State
Government and communicate the same to the
State Government.
(2) On receiving such a resolution, the
State Government may direct that the aided
schools shall be taken over under its
management and control and thereafter all
rights and interests including the right of
maintenance, management and control shall be
transferred to and vest in the State
Government and the rights and interests of the
local authority in respect of such schools
shall cease."
S. 4 "Power to withdraw grant-in-aid.--The
State Government may withdraw the grant-in-
aid from any local authority in respect of
aided schools if the resolution mentioned in
section 3, has not been passed and
communicated to the State Government within a
period of three months from the date on which
this Act is published in the Official
Gazette."
S. 5 "Power to take over aided schools
where local authority neglects to perform
duty.--(1) Whenever the State Government is
satisfied that a local authority has neglected
to perform its duties in respect of aided
schools or that it is necessary in public
interest to take over their management for a
period not exceeding ten years, it may after
giving the local authority a reasonable
opportunity for showing cause against the
proposed action, make an order to take over
the management:
Provided that in cases of emergency, where
the State Government is satisfied that such a
course is necessary in the interests of the
students, it may, without giving such notice,
take over the management of such schools after
publication _of a notification to that effect
in the.
Official Gazette." :
(2) & (3) ..............................
381
S. 6 "Amendment of Punjab Acts No. III of
1911 and No. XX of 1883.--Where a local
authority has passed a resolution under s. 3
or the State Government has taken over
management of aided schools of a local
authority under section 5, the Punjab
Municipal Act, 1911, and the Punjab District
Boards Act, 1883, shall be deemed to have been
amended in the manner specified in the
Schedule appended to this Act with effect from
the 1st October, 1957."
Section 52(1) of the Punjab Municipal Act relates to the
setting apart of the municipal funds and apply the same for
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different purposes as mentioned in clauses (a) to (f). By
means of the Schedule to the Act after clause (f) of sub-s.
(1), cl. (g) was added which is in the following terms:
"(g) seventhly, such sum to be paid
annually by the committee to the State
Government by way of contribution as is
equivalent to--
(i) the total provision made in the budget for
the year 1957-58 under the main head
’Education’ excluding educational grants and
the provision made for ’original works’
relating to schools; and
(ii) a sum representing one per centum of the
total income from its own resources for the
year 1957-58, in lieu of the deductions made
for ’original works’ made under clause (i):
Provided that in respect of the financial
year 1957-58 the committee shall make a
payment to the State Government of the sums
which have remained unexpended on 31st March,
1958, out of the provisions under the head
’Education’ in the budget of 1957-58".
Section 59 of the Punjab Municipal Act provides that the
Committee may with the sanction of the State Government
transfer to the Government any property vesting in the
Committee under s. 56 or s. 57 but not so as to affect any
trusts or public rights subject to which the property is
held. A proviso was added to the section by the Schedule
which was as follows :--
"Provided that where a committee has
passed a resolution under section 3 of the
Punjab Local Authorities (Aided Schools) Act,
1959, or the State Government has taken over
the management of aided schools of a committee
under section 5 of that Act, all rights and
interests in the establishment, maintenance
and management of the aforesaid schools
immediately before the Ist October 1957,
including all interests in the lands,
382
buildings, play grounds, hostels of the said
schools as also in the movable properties like
furniture, books, apparatus, maps and
equipment pertaining thereto shall be deemed
to have been transferred to the State
Government on that date, and all unspent
balances in respect of grants and
contributions received for the maintenance and
promotion of these schools shall be deemed to
have been surrendered to the State
Government."
After the promulgation of the above legislation the
appellant Committee passed a resolution on February 24, 1960
reiterating the decision taken in the Local Bodies
Conference held at Jullundur and its own decision to request
the Punjab Government to restore the schools run by the
local bodies to them. At another meeting held on June 9,
1960 the appellant Committee decided not to pass the
resolution under s. 3 of the Act transferring its schools
and property to the State Government. The Punjab
Government, however, issued a notification dated September
26, 1960 saying that the Governor was satisfied that it was
necessary in the interests of the students to take over for
a period of ten years the management of the schools
specified in the schedule and administered by the Municipal
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Committee, Amritsar, and therefore in exercise of the powers
conferred by the proviso to s. 5 of the Act the Government
took over for a period of ten years the management of the
said schools. The schedule contained the list of 42 such
schools. The question of the payment of the contribution
which was being demanded by the Government came up for
consideration at a meeting of the appellant Committee on
January 3, 1962. It was decided that the payment be made on
the basis of a formal laid down by the State Government in
that behalf with effect from October 1, 1957 but that the
proprietary rights of the Committee in the school buildings
be retained and the use of these buildings free of charge be
allowed to the Government for the purpose of running the
schools. At a subsequent meeting held on March 28, 1963,
the appellant Committee, however, revised its previous
decision in view of a resolution passed in the meeting of
the Standing Committee of Urban Local Bodies Conference held
on June 21, 1962. It was decided that the State Government
was not entitled to charge contributions from the Municipal
Committee. On April 10, 1964 the Deputy Commissioner,
Amritsar, made an order in exercise of the powers vested in
him under s. 234(1) of the Punjab Municipal Act requiring
the appellant Committee to pay an amount of Rs. 53,66,146/-
on account of contribution for the maintenance of the
provincialised schools for the period 1957-58 to 1963-64
failing which realization was to be made under sub-s. (2) of
that section. Thereupon the petition under Arts. 226 and
227 of the Constitution was filed by the appellant Committee
in which apart from other matters the validity and
constitutionality of the Act were challenged. In the
383
return filed on behalf of the State reliance was placed on
the pro-visions of the Act, the resolution passed by the
Committee itself on. January 3, 1962 agreeing to pay the
contribution and allow the use of school buildings to the
Government free of charge and the notification which had
been issued under s. 5 of the Act on September 26, 1960
whereby the management of the schools of the: Committee had
been taken over for a period of 10 years.
The High Court was of the view that since the Government
had taken over the control and management of the aided
schools it was considered necessary that the property in
possession of these institutions should also be taken over
and managed for a limited period. of 10 years. Since no
compensation was being paid for what may be called
compulsory acquisition the legislation could be struck down
as being in contravention of Art. 31(2) of the Constitution.
In the present case, however, the management of the property
in possession of the schools was being taken over for a
period of 10 years in the public interest by virtue of the
provisions of Art. 31A(1)(b), and the contravention of Art.
31(2) was of no consequence. The argument raised on behalf
of the State that the resolution of the appellant Committee
dated January 3, 1962 consenting to the payment of the
contribution with effect from October 1, 1957 had been
passed m terms of s. 3 of the Act was refuted. As regards
the notification issued on September 26, 1960 under the Act
the High Court was of the opinion that although it did not
contain any provision for retrospective operation it should
be considered that it had retroactive effect since the Act
itself had been enforced from October 1, 1957. It was
conceded before the High’ Court that the notification did
not apply to. those schools which did not receive any aid
from the Government.
The learned Attorney General for the appellant
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Committee, raised the following main contentions: (1) The
material provisions of the Act were ultra vires Art. 31 (2)
of the Constitution (2) The taking over of movable and
immovable property of the Committee could not possibly fail
within Art. 31A(1)(b) and such action was in direct
contravention of Art. 31(2). (3) The notification dated
September 26, 1960 could not have been issued under the
proviso to s. 5 because there was no question of any
emergency nor such an emergency has been pleaded or proved
by the State. (4) The said notification could not and did
not validate the action taken prior to the date when it was
issued nor s. 6 of the Act could be attracted which effected
amendments of the provisions of the Punjab Municipal Act as
per the Schedule. (5) The annual contributions which were
being demanded from the appellant Committee were wholly
illegal and could not be levied on account of legislative
incompetence.
Now the scheme of the Act is that it is initially left
to the local. authority to pass a resolution to transfer the
management and con--
384
trol of aided schools to the State Government. In order to
employ compulsive persuasion the State Government can
withdraw the grant-in-aid from any local authority in
respect of aided schools if such authority does not pass a
resolution in terms of s. 3 within a period of three months
from the date of enactment of the Act (vide s. 4). Section 5
gives the power to the State Government to take over aided
schools where the local authority neglects to perform the
duty but that can be done only after the local authority has
been given a reasonable opportunity for showing cause
against the proposed action and also if it is considered
necessary in public interest to take over the management for
a period not exceeding 10 years. The proviso, however, arms
the State Government with powers in case of emergency and in
the interests of students to take over the management
straightaway after publication of a notification to that
effect. The amendments which are effected in ss. 52 and 59
of the Punjab. Municipal Act enable the State Government to
get an annual contribution from the local bodies and further
to vest in the State not only the management of the school
taken over but also all interests in the lands, buildings
etc. of the school along with the movable properties
pertaining thereto which shall be deemed to have been
transferred to the State. There is no provision whatsoever
for an automatic retransfer of these properties after a
lapse of a period of 10 years for which the taking over of
the schools can be effective. This means that once action
is taken under s. 5 which can be done pursuant to a
resolution passed under s. 3 or after giving a notice to the
local authority or without giving such notice in case of
emergency all the properties movable and immovable belonging
to the local body pertaining to the schools. taken over
become the property of the State. This is nothing short of
compulsory acquisition within the meaning of Art. 31(2) of
the Constitution. Under that Article no’ property can be so
acquired or requisitioned unless it is under an authority of
law which either fixes the amount of compensation or
specifies the principles on which and the manner in which
the compensation is to be determined and given. There is no.
provision in the Act or in the amendment of s. 59 of the
Punjab Municipal Act made by the Act for payment of any
compensation. On the assumption that taking over of the
property for a period of 10 years would be an act of
requisitioning, the requirements of Art. 31(2) must be
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satisfied to sustain the validity of the law. The High
Court entertained no doubt that under that Article property
could not b.e acquired or requisitioned without complying
with its provisions but it fell into an error in applying
Art. 31(A)(1)(b) to the provisions under consideration.
Under the above Article. it is only the management of
any property which can be taken over for a limited period
either in the public interest or in order to secure its
proper management. Ac-
385
cording to the High Court the Committee was indisputably
the: owner of the property which was being taken over by the
State: but P.C. Pandit J, who delivered the judgment of the
division bench proceeded to say :--
"In the present case, the management of
the property in possession of the schools was
being taken over for ten years in public
interest and, as such, by virtue of the
provisions of Article 31 A ( 1 )(b ), the
contravention of Art. 31(2) was of no.
consequence. Learned Counsel for the
petitioner submits that Art. 31A(1)(b) does
not apply to the facts of the instant case,
because here the management and control of an
institution namely, the school, was being
taken over by the Government, whereas this
Article applied where the management of any
property was being taken over by the
Government for a limited period in the public
interest. This argument is without any merit,
because the property may belong to anybody,
whether it be an individual, or a Committee or
an industrial or commercial undertaking or
any kind of other institution. In all these
cases, where the management of the property is
taken over for a limited period in public
interest, this Article would be attracted and
the legislation would not be hit by the
provisions of Article 31 of the
Constitution".
Clause (b) in Art. 31A(1) came to be inserted for the first
time by the Constitution (Fourth Amendment) Act 1955. It
was intended apparently to counteract the effect of the
decisions in the two Sholapur cases, Charanjit Lal
Chowdhuri v. The Union of India & Ors.(1) and Dwarkadas
Shrinivas of Bombay v. The Sholapur Spinning & Weaving Co.
Ltd., & Ors.(2). The purpose. therefore, of inserting this
provision was to remove any legislation from the pate of
attack on the ground of contravention not only of Art. 3 but
also of Arts. 14 and 19. Although management and control of
the aided schools under the impugned legislation could be
taken over for a limited period in the public interest it is
not possible to understand how even the proprietary
interests in the movable and immovable property pertaining
to the schools, which have been found to belong to the
Committee, could have been acquired under clause (b) of Art.
31-A(1). With all deference to the High Court we have not
been able to. properly appreciate the decision on this point
given in the paragraph extracted above. The High Court did
not consider the true import and effect of the amendment
made in s. 59 of the Punjab Municipal Act by virtue of which
all rights and interests in the lands, buildings,
playgrounds, hostels of the schools as also in the movable
property like furniture, books, apparatus, maps and
equipment pertaining thereto
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(1) [1950] S.C.R. 869. (2) [1954] S.C.R.476.
386
shall be deemed to have been transferred to the State
Government with effect from October 1, 1957. We are,
therefore, unable to uphold the view which leads to the
result that property can be acquired while taking over
management and control under Art. 3l-A (1)(b) in complete
negation and contravention of Art. 31(2) of the
Constitution.
The next question is whether there was due compliance
with the provisions of the proviso to s. 5 of the Act. In
the notification which was issued on September 26, 1960
there is no indication that the management of the schools
was being taken over because of certain emergency having
arisen. If any emergency existed it was the creation of the
government itself which had proceeded to take over
management and control of the aided schools along with the
properties pertaining to them without any authority of law
prior to the enactment of the Act. That was the reason why
the Act had to be given retrospective operation. According
to the High Court the moment the State Government was
satisfied that it was in the interest of the students to
take over the management of the schools it became a case of
emergency. It also relied on the principle that it was not
necessary to mention the actual emergency which had arisen
in the notification itself or to make a recital that an
emergency had arisen. The State could not show by placing
material before the court that it was a case of emergency
justifying the action under the proviso to s. 5 because no
foundation in this behalf had been laid in the writ
petition. The third point pressed by the learned Attorney
General, therefore, cannot be acceded to.
The fourth point of the. learned Attorney General may
now be considered. There was some argument before the High
Court and the same has been repeated before us on behalf of
the State that the question of validity of the notification
and the action taken thereunder did not arise because. the
Committee itself had passed a resolution on January 3, 1962
which should be regarded as having been passed under the
provisions’ of s. 3 transferring the management and control
of the schools to the Government and agreeing to pay the
contribution with effect from October 1, 1957. The High
Court has rightly pointed out that a reading of the
resolution would show that the Committee agreed to the
payment of contribution with effect from October 1, 1957 in
accordance with the formula laid down by the State
Government. It was, however, made clear that the
proprietary rights of the Committee in the movable and
immovable property pertaining to the schools would be
retained by it. The Committee had subsequently passed
several resolutions which had the effect of almost
rescinding the previous resolution. The submission on
behalf of the State that the resolution dated January 3,
1962 passed by the Committee fell within the first part of
s. 3 of the Act is wholly devoid of merit and has rightly
not been accepted.
387
As regards the notification having retrospective
operation we are unable to agree with the High Court that
any such effect could be given to it. There is nothing to
indicate in the notification that it was intended to operate
retroactively. The mere fact that the Act in terms was
retrospective would not make the notification issued under
the proviso to s. 5 retrospective in the absence of express
words or appropriate language from which retrospectivity
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would be implied. All that the notification says is that
the Governor of Punjab is taking over for a period of 10
years. the management of the schools of the Committee. in
exercise of the powers conferred by the proviso to s. 5 of
the Act. This clearly means that the management is taken
over from the date of the notification and not from any
prior date. It would follow that whatever was done before
the date of the notification regarding the assumption of
management and vesting of the Committee’s properties was
wholly void and illegal.
Under s.6 of the Act it is only after the local
authority has passed a resolution under s.3 or the State
Government has taken over management of the aided schools
under s.5 that ss. 52 and 59 of the Punjab Municipal Act
would be deemed to have been amended in the manner
specified in the schedule with effect from October 1, 1957
or from the date aided schools are taken over as the case
may be. If the notification dated September 26, 1960 could
not be given retrospective operation the amendments in the
aforesaid provisions of the Punjab Municipal Act would be
effective only after the date of the notification and not
for the prior period. Thus even on the assumption that the
provisions of the Act are valid the State could not ask for
any contribution from the committee for the period prior to
the date of the notification. But, the addition of cl.(g)
after cl.(f) in sub-s.(1) of s.52 of the Punjab Municipal
Act is void and wholly ineffective for the reasons which
will be presently noticed.
Chapter IV of the Punjab Municipal Act relates to
municipal fund and property. Section 51 deals with the
constitution of the municipal fund. Section 52 provides for
the application of the fund. Before the amendment made by
the Act sub-s.(1) had six clauses containing the provisions
for the application of the fund. It is noteworthy that
although the State Government has been empowered to require
the Committee to make contributions but in each case that
is confined to an eventuality or a situation where
certain cost has been incurred by the Government which had
to be defrayed by the Committee, e.g., clauses (b), (d)
and (f). According to clause (e), however, the Committee
may be required by the State Government to contribute
towards the maintenance of pauper lunatics or lepers sent
from any place in the State to mental hospitals or public
asylums
388
whether in or outside the State. Sub-section (2) says that
subject to the charges specified in sub-s. (1 ) the
municipal fund shall be applicable to the payment of the
matters set out in clause (a) to (1 ). Clause (c) is in
these terms:
"the constitution; establishment and
maintenance of schools, hospitals and
dispensaries, and other institutions for the
promotion of education or for the benefit of
the public health ...................... "
In the context of s.52 it is difficult to envisage that the
municipal fund of a particular Committee could be diverted
to such institutions which had no connection with the
Committee. We are, however, not called upon to pronounce
upon the true scope, ambit and validity of all the
provisions in s. 52. Clause (g) which has now been inserted
by means of s. 6 of the Act has to be tested by the
guarantees in Part Ill of the Constitution. By asking the
Committee to make contributions from its funds to the cost
of the schools which have been taken over by the State part
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of its funds are being compulsorily acquired by the State.
This is something which could not be done except in
accordance with the provisions contained in Art. 31(2) of
the Constitution. In Writ Petition No. 295 of 1968,
Municipal Committee, Amritsar v. State of Punjab(1) in
which the provisions of the Punjab Cattle Fairs (Regulation)
Act 1968 came up for examination, it was laid down by this
Court that the State was incompetent to declare land
belonging to the Municipal Committee as falling within the
fair area and to take possession of that land in exercise of
the power conferred by the Act without providing for
payment of compensation guaranteed by Art. 31(2). Clause
(g), therefore, which has been inserted in s. 52 of the
Punjab Municipal Act is void and illegal as it contravenes
Art. 31 (2) of the Constitution.
It may be mentioned that the learned Attorney General
has also pointed out that the State legislature did not have
the competence, under any of the entries in List II of the
Seventh Schedule, to enact legislation of the nature
embodied in clause (g) which was inserted in s. 52 relating
to compulsory contribution by the Committee to the State
Government. Counsel for the State has sought to rely on
entries 5 and 1 l in List II which relate to local
government and education. It is unnecessary to decide this
matter since it has been held by us that the impugned
provisions with regard to contribution contravene Art, 31
(2) of the Constitution.
We may now determine the provisions of the Act which are
unconstitutional and invalid. There is nothing in ss. 3(1),
4 and 5 of the Act per se which would bring them into
conflict with the constitutional provisions, particularly,
in view of Art. 31 A ( 1 )(b)
(1) [1969] 3 S.C.R. 447.
389
under which the management of the schools could be taken
over by the State for a limited period in public interest.
But the difficulty arises about ss. 3(2) and 6 which have to
be read together. When the State Government makes a
direction under s. 3(2) that the aided schools shall be
taken over. all rights and interests of the Committee
including the right of maintenance, management and control
shall be transferred to and vest in the State Government.
This essentially has reference to proprietary and ownership
rights apart from the rights pertaining to management and
control. Section 6 comes into operation as soon as a local
authority has passed a resolution under s. 3 or the State
Government has taken over management under s. 5. Then the
provisions relating to acquisition of property of the
Committee as also of its funds by way of contribution come
immediately into operation by virtue of the amendments
effected in ss. 52(1) and 59 of the Punjab Municipal Act.
These provisions are clearly unconstitutional as they
contravene Art. 31 ( 2 ) of the Constitution.
In the result the appeal is allowed with costs and the
judgment of the High Court is set aside. It is declared
that s. 3(2) of the Act and the amendments which would
become operative under s. 6 in respect of ss. 52(1) and 59
of the Punjab Municipal Act are void and unconstitutional.
The orders by which the movable and immovable property of
the Committee have been transferred to the State are hereby
quashed and such transfers are declared to be wholly void.
The respondents are further directed not to recover any
contribution in accordance with clause (g) of s. 52 of the
Punjab Municipal Act as also the sum of Rs. 53 lakhs
mentioned in the order of the. Deputy Commissioner dated
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April 10, 1964. from the appellants Committee. Appropriate
writs and directions. shall issue in this behalf.
V.P.S. Appeal allowed.
Sup. CI/70--13
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