Summary of Landmark Constitution Bench Judgments of 2024 (Part II of III)

This Article is a round-up of all the Constitution Bench judgments delivered in the year 2024 inclusive of all the judgments that showcased consideration, interpretation and evolution of important principles of Constitution law. This is Part II of III compendium comprising 5 judgments of the Constitution Bench out of the total 13 Constitution Bench judgments rendered in 2024.

The judgments are as follows:

(1) Mineral Area Development Authority v. SAIL¹

(Delivered on 25-7-2024) Supreme Court of India (SC)

Coram: 9-Judge Bench of Justices Dr D.Y. Chandrachud, C.J. and Hrishikesh Roy, Manoj Misra, Abhay S. Oka, Ujjal Bhuyan, Satish Chandra Sharma, J.B. Pardiwala, Augustine George Masih and B.V. Nagarathna, JJ.

Majority Opinion Authored by: Dr Justice D.Y. Chandrachud

Abbreviations for various common terminologies in the judgment

Art. — Article	CPIL — Centre for Public Interest Litigation
COI — Constitution of India ²	M&MR — Mine and mineral resources
CB — Constitution Bench	Govt. — Government
GOI — Government of India	CG — Central Government
GOI Act — Government of India Act³	Kesoram Industries judgment — State of W.B. v. Kesoram Industries Ltd.⁴
SL — State Legislature	SG — State Government
MMDR Act — Mines and Minerals (Development and Regulation) Act, 1957 ⁵	PL — Provincial Legislature
India Cement judgment — India Cement Ltd. v. State of T.N.⁶	SC — Supreme Court
UOI — Union of India	SADA — Special Area Development Authority
MCR, 1960 — Mineral Concession Rules, 1960 ⁷	ML — Mining lease
MMRD Act, 1948 — Mines and Minerals (Regulation and Development) Act, 1948

Background of the reference to the Constitution Bench

The Constitution Bench was constituted for interpreting the interrelation of entries between the Union and the States on the taxation of mineral rights, in the context of following entries of the Constitution of India:

Entry 54, List I	(for short, “E 54, L I”)
Entry 23, List II	(for short, “E 23, L II”)
Entry 49, List II	(for short, “E 49, L II”)
Entry 50, List II	(for short, “E 50, L II”)

Parliament enacted the Mines and Minerals (Development and Regulation) Act, 1957, which was held by the earlier judgments to be relatable to Entry 54, List I, as a comprehensive Code for regulation of mines and development of minerals, covering the entire field of legislation, including the field of taxation by the Union. A 7-Judge Bench in India Cement judgment⁸ held that State Legislatures lacked competence to levy taxes on mineral rights, the subject-matter and the field of legislation being covered entirely by the Mines and Minerals (Development and Regulation) Act enacted by the Union. Subsequently, another Constitution Bench in Kesoram Industries judgment⁹, held that India Cement judgment¹⁰ never intended royalty to be treated as a tax and therefore will remain outside the ken of legislative powers of the State Legislatures interpreting the relevant observations in India Cement judgment¹¹ to be “typographical error” having crept in by mistake whilst drafting. Interestingly, in India Cement judgment¹², the Constitution Bench also held that royalty cannot be used by the State Legislature as a measure of tax on mineral bearing lands under Entry 49, List II.

Thereafter, emboldened by the view of the Constitution Bench in Kesoram Industries judgment¹³, various States started imposing taxes with various nomenclatures on mineral bearing lands in pursuance of legislative powers available under Entry 49, ListII, by applying the mineral value of royalty as a measure of tax. So much so, States of Rajasthan and Uttar Pradesh imposed cess and fees under varied heads of environment, health cess, cold transportation, etc. over and above the royalty determined by them. These levies were all assailed on the ground of being violative of law laid down by the 7-Judge Bench in India Cement judgment¹⁴. The matter accordingly travelled up to the 9-Judges bench for resolving the inconsistency between India Cement judgment¹⁵ and Kesoram Industries judgment¹⁶, when on 30-3-2011 a Bench of 3 Judges referred the questions to provide a decisive ruling.

Issues under consideration before the Constitution Bench

Accordingly, after considering the submissions of the contesting parties, the Court formulated following main questions as the core issues for its determination:

(a) What is the true nature of royalty determined under Section 9¹⁷ read with Section 15(1)¹⁸ of the Mines and Minerals (Development and Regulation) Act, 1957? Whether royalty is in the nature of tax.

(b) What is the scope of Schedule 7 List II Entry 50? What is the ambit of the limitations imposable by Parliament in exercise of its legislative powers under Entry 54, List I? Does Section 9, or any other provision of the Mines and Minerals (Development and Regulation) Act, contain any limitation with respect to the field in Entry 50, List II?

(c) Whether the expression “subject to any limitations imposed by Parliament by law relating to mineral development” in Entry 50, List II pro tanto subjects the entry to Entry 54, List I, which is a non-taxing general entry? Consequently, is there any departure from the general scheme of distribution of legislative powers as enunciated in M.P.V. Sundararamier & Co. v. State of A.P.¹⁹

(d) What is the scope of Entry 49, List II and whether it covers a tax which involves a measure based on the value of the produce of land? Would the constitutional position be any different qua mining land on account of Entry 50, List II read with Entry 54, List I?

(e) Whether Entry 50, List II is a specific entry in relation to Entry 49, List II, and would consequently subtract mining land from the scope of Entry 49, List II?

Distribution of legislative fields relating to mine and mineral resources

Referring to the scattered distribution of minerals and its inherent diversity across the country, the Court held that mineral resources bear socio-economic importance for the economic development of the country and Constitution of India envisaged States also to play an important role in facilitating and regulating mining activities. Section 45-A of the Government of India Act, 1915 ²⁰ from the very beginning provided for classification and rationalisation of subjects between the Central and the Provincial Governments Pursuant to Sections 45-A and 129-A, Devolution Rules were framed by the Governor General, prescribing the distribution of subject-matter of regulation of mine and mineral resources. Parts I and II of these Devolution Rules titled respectively as “Central Subjects” and “Provincial Subjects” provided for division of powers between the Central Governor General and the Provincial Governments. The Provincial Legislatures always enjoyed limited power to the extent of development of mine and mineral resources. This was followed by the Government of India Act, 1935, again reiterating the demarcation of legislative powers between the Federal and the Provincial Legislatures. Entries 36 & 23 of List I (Federal Legislative List) and List II (Provincial Legislative List) respectively, divided the powers, whilst empowering the Provincial Legislatures as well.

On the enactment of the Constitution of India, the demarcation and the distribution of mine and mineral resources between the Central and the State was therefore continued with the same spirit vide its 7th Schedule. Entry 54, List I and Entries 23 & 50, List II therefore, vested powers with the Union and the States separately. Though the entries were substantially similar to the corresponding entries under the Government of India Act, 1935, however certain areas of legislation were omitted in the 7th Schedule of the Constitution of India, one of them being earlier existing “oil fields” from Entry 54, List I and Entry 23, List II.

Distribution of legislative powers and inherent constitutional limitations vis-à-vis interpretation of entries

Referring to Articles 245 ²¹ and 246 ²² of the Constitution of India, Court held that they were similar to the erstwhile preceding provisions of Section 100 of the Government of India Act, 1935.²³ Both the articles are the source of legislative powers of Parliament and State Legislatures. The entries under 7th Schedule delineates the subject-matter over which the appropriate legislature can enact laws. These entries are legislative heads and not the source of legislative power, with a legislation being at times also of a “composite nature” stretching upon several entries in a particular List. Such legislation is known as “ragbag legislation”.

The issue of repugnancy of two legislations made by the State Legislature and the Parliament would arise in the face of competency of both of them with respect to subjects enumerated under List III, and repugnancy would not arise if legislations deal with separate and distinctive legislative subject-matters. Article 246 was held to be incorporating the principle of federal supremacy with wider powers conferred on the Union to frame legislation. In case of inevitable conflict between powers of the Union and the State, the former prevails over the latter, when there is an irreconcilable direct conflict between entries in both the Lists.

Both the L-I and II are segmented into two different classes — “general” and “taxing” entries. Whereas under List I Entries 1 to 81 enumerate “general and regulatory” subject-matters’, Entries 82 to 92-C pertains to power of taxation. Similarly, Entries 1 to 45, List II enumerate the “general” entries, with Entries 46 to 63 providing for taxing entries. The power to tax can never arise from “general” entries, but is treated to be a distinct matter for the purposes of legislative competence in the 7th Schedule. In M.P.V. Sundararamier case²⁴ the Court explained that taxation is not intended to be comprised in the main subject, even on an extended construction, but is separately set out relatable to the entries enumerated thereunder.

Be it a “general or regulatory” or a “taxing” entry in either of the Lists, their ambit extends to all the ancillary and subsidiary matters, fairly and reasonably comprehended within their hemisphere. Being generally worded there is always a possibility of legislation purporting to deal with a subject in one List touching/overlapping/encroaching on the subject mentioned in another List. To resolve this conflict, doctrine of pith and substance is used to scrutinise whether the legislature has the competence to enact a law with regard to either of the 3 Lists under the 7th Schedule. A legislation shall be struck down as colourable legislation, where in its operation, in substance and reality, it transgresses its legislative competence to encroach upon the field earmarked vide entry in another List for the Parliament/State Legislature. What is to be seen is the substance of the legislation and subject-matter it intends to deal with substantively whilst treating the nature of any legislation overlapping over multiple entries of any 2 Lists.

The Court also referred to phraseology employed under various entries in the State/Concurrent List for subjecting or restricting their scope and ambit vis-à-vis powers of the Union under List I. The tabulation set out below refers to some of the phraseologies restricting the scope and ambit of entries under List II or List III, as follows:

Phraseology used	Entries in State List
Subject to the provisions of any law made by Parliament	37
Subject to the provisions of entries in List I	2, 17, 22, 24, 33
Subject to a particular field of legislation in List I	23
Subject to the provisions of entries in List III	26, 27, 57
Subject to the provisions of Lists I and III	13
“Subject to any limitations imposed by Parliament by law”	50
Other than	7, 12, 32, 63
Not including	1, 51, 54, 66

The phrase “subject to” was explained by the Court indicating the intention to displace, override or subordinate the powers of the States to the powers of the Union/Parliament.

Likewise, the Court also referred to various phrases, indicating restrictions or limitations on the legislative powers of the Union and the States under various entries in the 7th Schedule. The tabulated chart of phraseology used in various entries imposing inherent limitations on the power to legislate is as follows:

Phraseology used	Entries
“Declared by or under law”	23, 27, 67 of List I
Declared by Parliament by law	24, 52, 53, 54, 56, 62, 63, 64 of List I
Imposed by Parliament by law	50 of List II

The above phrases luminescently indicate how legislative intent could be effectuated either through the provisions of the statute or by any subordinate authority vested with powers in that behalf by the statute.

Federalism is one of the basic features of the Constitution of India, which is quite asymmetric in the Indian context being tilted towards the Centre. However, the Indian States are still sovereigns within the legislative competence assigned to them. Referring to the judgment of S.R. Bommai v. Union of India²⁵, it was held that States under the Constitution of India are not mere appendages of the Centre, but they are supreme within the spheres allotted to them. The Constitution must be interpreted in a manner which does not dilute the federal character of the constitutional scheme, nor does it lead to subordination of the State Legislatures to the Union.

In the context of mine and mineral resources, the Court must be mindful of uneven distribution of resources amongst the various States and thus the contribution of the mining sector in the State domestic product is higher for the States. Despite the abundance of mineral wealth, the States lag economically and suffer from “resource curse”, referring illustratively to the States of Jharkhand, Chhattisgarh and Orissa. Fiscal federalism therefore in this backdrop empowers the State to levy taxes within the legislative domain carved out to them under List II or List III. Fiscal federalism therefore in this backdrop empowers the State to levy taxes within the legislative domain carved out to them under List II or List III. The power of the States to tax their mineral resources must therefore be interpreted broadly and liberally to maintain the fine balance of Fiscal Federalism.

Natural resources and the public trust doctrine

Referring to the judgment of M.C. Mehta v. Kamal Nath²⁶ and Centre for Public Interest Litigation v. Union of India²⁷, the Court held that the State holds all natural resources as a trustee, which are by their very nature meant for public use and enjoyment. The distribution of natural resources must always be in consonance with the principles of equality and public trust to be bulwark against any lost public interest. Referring to the judgment of Reliance Natural Resources Ltd. v. Reliance Industries Ltd.²⁸ the Court held that the State holds all the categories of mine and mineral resources as a trustee of the public and is obligated to deal with them in a manner consistent with the nature of such a trust. The entrustment under Entry 23, List II to the State the responsibility to regulate the mines and mineral development is in consonance with the principles of “public trust doctrine” and sustainable development of mineral resources. Likewise, the Central Government is also empowered under the provisions of the Mines and Minerals (Development and Regulation) Act to prescribe the terms and conditions subject to which the auction shall be conducted. The Government has to ensure that mineral concessions are granted in a fair and transparent manner, without any licensee or allottee being singled out for special favour in its grant, especially when such licence or allotment is made to a private person.

Royalty and its purpose in the backdrop of provisions of the Mines and Minerals (Development and Regulation) Act

The Mines and Minerals (Development and Regulation) Act being a Parliamentary enactment under Entry 54, List I, indicates that Parliament has taken over the regulation and development of mines under its control to the extent indicated in the statute. Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 thereunder deals with royalties in respect of mining lease’s, payable by the holder of a mining lease at the rates prescribed under the 2nd Schedule. Section 9(3) of the Mines and Minerals (Development and Regulation) Act, 1957 empowers the Central Government to amend the 2nd Schedule, enhancing or reducing the rates of royalty, which are computed on the ad valorem basis or at a specified percentage of the average sale price or at specific rates on a per tonnage basis. The various provisions of the Mines and Minerals (Development and Regulation) Act, along with various forms appended to them specify the rate and mode of payment of dead rent, royalty, surface rent and other heads of monetary dues.

A provision akin to Section 9 was not present in the predecessor enactment of the Mines and Minerals (Development and Regulation) Act, 1957, viz. Mines and Minerals (Regulation and Development) Act, 1948. Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 enables the Central Government to examine from time to time the rates of royalty and review them periodically and maintain uniformity in the regime of royalty rates across the country.

Meaning of royalty, contours of mining lease and whether royalty can partake the nature of tax

Under mining lease, the owner of the land/surface transfers the interest in the minerals to the lessee in lieu of the payment of rent, which is otherwise also known as royalty. Examining the various provisions of the Mines and Minerals (Development and Regulation) Act, 1957 with the Mineral Concession Rules, 1960, the Court held that grant of mining lease happens in three situations, viz:

(a) Where the minerals constituting the subject-matter of mining lease vest in the Government — The royalty is payable to the State Government, in view of Rule 27(1) of the Mineral Concession Rules, 1960.

(b) Where the minerals vest in person other than the Government — Where the royalty is payable under Rule 45 to the person owning the land in respect of which the mining lease is granted. In case of default in payment of royalty, the lessor (the owner of the land) is empowered to determine the mining lease. Such a mining lease is granted by the owner of the minerals and not by the State Government, which has no authority to deal with grants of lease vested with the private owners.

(c) Where the minerals vest partly in the Government and partly in a private person — Here also the division of payment of royalty happens in proportion to the share of lease falling under the ownership of the Government and that falling under the ownership of the private person.

Royalty is therefore a compensation paid for rights and privileges enjoyed by the grantee. Referring to the Constitution Bench judgment, in H.R.S. Murthy v. Collector of Chittoor²⁹ and D.K. Trivedi v. State of Gujarat³⁰ the Court explained the distinction between “royalty” and “dead rent”. Royalty is a certain amount payable in respect of the minerals extracted proportionate to the quantities so extracted, whereas “dead rent” is a fixed amount payable by the lessee to the lessor for ensuring a regular income, whether the mine is worked or not. “Dead rent” is therefore calculated on the basis of the area leased, whilst royalty is computed on the basis of the quantity of minerals extracted or removed.

Meaning of royalty, contours of mining lease and whether royalty can partake the nature of tax

Whilst answering “whether royalty is a tax or not”, the Court delved into the characteristics of “taxation” and “tax”, being the mode of raising revenue to fund public expenditure by the State exchequer in exercise of its sovereign powers.

Referring to various judgments of Matthews v. Chicory Marketing Board³¹ and Commr., Hindu Religious Endowment v. Sri Lakshmindra Thirta Swamiar of Sri Shirur Mutt³² “tax” was stated to be possessing the following essential characteristics:

(1) It is a compulsory exaction of money by a public authority.

(2) It is imposed under statutory power without the consent of the taxpayer.

(3) The demand is enforceable by law.

(4) It is an imposition made for public purposes to meet the general expenses of the State without reference to any special benefit to be conferred on the payer of the tax.

Article 366(28) defines taxation to include “the imposition of any tax or impost, whether general or local or special”, with the word tax therefore interpreted in its widest amplitude to include all money raised through taxation. It includes any and every levy, which the State is constitutionally competent to legislate upon. The word “impost” means “any tax, tribute, or duty” imposed means compulsory levy and tax in its wider sense therefore includes all imposts. However, the power to levy any impost is thus an incident of sovereignty and a liability arising out of or under a contract and cannot be termed as an impost or tax. A consideration paid under a contract to the State Government as agreed to under various stipulations contained therein vide any statute as a consideration for acquiring exclusive privileges and rights with respect to any particular activity, cannot be termed as an impost or tax under Article 366(28). Therefore, the question “whether royalty is a tax or not” has to be answered in the context of the liability to pay as stipulated under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957.

Judgments of India Cement and Kesoram Industries and their overruling to hold that royalty is not a tax

The issue of the nature of royalty being tax had been subject-matter of adjudication in number of judgments. In India Cement judgment³³, the 7-Judge Constitution Bench determined the validity of the Madras Panchayat Act, 1958, through which a local cess was levied on the land revenue payable to the Government, which included royalty. The issue that thus arose in India Cement judgment³⁴ was whether the State Legislature could levy cess on royalty, once the Parliament had taken control of the regulation of mines and development of minerals under the Mines and Minerals (Development and Regulation) Act. The State justified its source of power, falling back upon the Entries 45, 49, 50, 66 and 23 of List II. The majority opinion held that royalty is a tax and thus the cess being a tax on royalty fell beyond the competence of State Legislature because the Mines and Minerals (Development and Regulation) Act covered the entire field deluding the State Legislature of its competence under Entries 23 and 50 of the State Legislature.

The divergence of opinion on the nature of royalty being tax thereafter arose before the Supreme Court in various judgments, viz. Raojibhai Jivabhai Patel v. State of Gujarat³⁵, Orissa Cement Ltd. v. State of Orissa³⁶, Saurashtra Cement & Chemical Industries Ltd. v. Union of India³⁷ and State of M.P. v. Mahalaxmi Fabric Mills Ltd.³⁸

Then came Kesoram Industries judgment³⁹, when reference was made to a larger Bench by the 3-Judge Bench. The Constitution Bench held that royalty is not a tax but payment made to the owner of the land, who may even be a private person, and not necessarily be the State. Observations made in India Cement judgment⁴⁰ about the royalty being in the nature of tax were held to be “an apparent typographical error or inadvertent error” and to not be understood as correct declaration of law. It is this cleavage and divergence of opinion between India Cement judgment⁴¹ and Kesoram Industries judgment⁴² that lead to reference to the 9-Judge Bench of whether the “royalty is or is not a tax”.

Royalty is not a tax

In view of the foregoing discussion, wherein royalty was found to be a compensatory consideration paid by the mining lessee to the lessor for the enjoyment of the mineral rights, towards compensation for the loss of value of minerals, Court held that it failed to meet the essential criterion of being a tax or an impost. The legislative intent behind Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 was simply to regulate the amount of consideration of royalty by the lessor from the lessee and the object was to empower the Central Government to specify uniform rates of royalty across the country for all the States. The fixation of rates of royalty under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 did not make it a compulsory exaction by the public authority for public purposes because of the following reasons:

(i) The compulsion stems from the contractual conditions of the mining lease agreed between the lessor and lessee.

(ii) The demand is not made by a public authority, but the lessor (which can either be the State Government or a private party).

(iii) The payment is not for public purposes, but a consideration paid to the lessor for parting with their exclusive privileges in the minerals.

Therefore, for the aforesaid reasons, the royalty could not partake the nature of tax, nor be treated as falling under one of the sub-categories/specie of tax.

The principles applicable to royalty were held to be applicable equally to “dead rent” as well because “dead rent” like royalty is also imposed in the exercise of proprietary rights (not as a sovereign right) by the lessor to ensure that the lessee works the mine and does not keep it idle. “Dead rent” is an alternative to royalty and a source of constant flow of income to the lessor/proprietor, where the mine remains unworked by the lessee.

Accordingly, the majority opinion held that both “royalty” and “dead rent” do not fulfil the characteristics of “tax” or “impost” and observations made in India Cement judgment⁴³ to the said effect were held to be incorrect and overruled.

Interrelation between Entry 23, List II and Entry 54, List I; meaning of “regulation of mines” and “mineral development”

Entry 23, List II “subjects the power of the State” to regulate mines and mineral development only to the extent to which the parliamentary law covers the field. Three requisites must be fulfilled under Entry 54, List I, viz. firstly, Parliament must make a law; secondly, the law must contain a legislative declaration that it brings regulation of mines and mineral development under its control in public interest; and thirdly, the law must lay down the extent to which Parliament desires to control the field.

Both the entries are “general or regulatory entries” dealing with the same subject-matter by the Union and the State. The word “regulation” was held to mean generally the governance of any enterprise by means of rules or laws. Referring to the judgment of K. Ramanathan v. State of T.N.⁴⁴ it was held that ordinarily regulation would not include prohibition within its ken. It would mean the management of both the process of extracting minerals as well as the place where such minerals will be extracted from beneath the surface/subsurface levels. The fixation of rates of royalty under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 by the Central Government is one of the facets of regulation of mines and mineral development. Both the entries under Lists I and II use the term “mineral development” and not “mineral” simpliciter. Referring to the judgment of Premium Granites v. State of T.N.⁴⁵ it was held that mineral development implies scientific exploitation of minerals without waste and whilst maintaining the ecological balance and taking into consideration environmental factors towards equitable distribution of mineral resources and mining leases. The expression mineral development includes all the activities and transactions relating to mines and minerals under its umbrella.

Referring to the judgment of Hingir-Rampur Coal Co. Ltd. v. State of Orissa⁴⁶ the Court held that earlier the view of the Supreme Court was that once the Parliament had enacted the Mines and Minerals (Development and Regulation) Act, the State Legislature lost its competence absolutely to pass any law or to impose any levy. If the subject-matter is covered by the parliamentary legislation, the subject-matter for/of the levy of fees for conservation and development of minerals was also lost for the State.

However, a different view was struck in State of Orissa v. M.A. Tulloch and Co.⁴⁷ where the Constitution Bench held that the legislative power of the State remains intact beyond the “extent” of the Mines and Minerals (Development and Regulation) Act and the crucial enquiry therefore has to be towards ascertainment of the “extent” of the Parliamentary legislation. If thus, whatever is specified and stipulated vide declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 ⁴⁸, the said area stands excluded and subtracted from the scope and ambit of Entry 23, List II of the State Legislature. On the same lines in Baijnath Kadio v. State of Bihar⁴⁹ following the law laid down earlier in Hingir-Rampur Coal case⁵⁰ and M.A. Tulloch case⁵¹, it was reiterated that the whole of field relating to mine and minerals came within the jurisdiction of Parliament, without any scope for the State Legislature to make any rules.

Discussion on “extent” of the Mines and Minerals (Development and Regulation) Act, 1957

Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 per se does not serve as limitation on the taxing powers of the State. Referring to the judgments of Firm Bansidhar Premsukhdas v. State of Rajasthan⁵² and Umeg Singh v. State of Bombay⁵³ it was held that any limitation on the preliminary legislative powers of either the Union or the State with respect to any subject in the relevant List must be express and specified by the Constitution of India and cannot ever be implied.

The Court addressed two issues whilst answering whether the Mines and Minerals (Development and Regulation) Act amounts to limitation on taxing powers of the State under Entry 50, List II, which were as follows:

(a) Whether the Mines and Minerals (Development and Regulation) Act fulfills the requirement of being a limitation under Entry 50, List II?

(b) Whether the Mines and Minerals (Development and Regulation) contains any provision limiting the taxing powers of the States under Entry 50, List II?

On the first issue, it was held that what the Mines and Minerals (Development and Regulation) Act dealt with and covered were enumerating provisions, rules and regulations for ensuring that exploration, extraction and exploitation of minerals follow standards of conservation and sustainability. It was to preserve and ensure judicious utilisation of minerals being a natural and scarce resource. The Mines and Minerals (Development and Regulation) Act in fact aimed at uniformity in so far as powers of the States were concerned whilst regulating mine and mineral resources. It never intended to tax-mineral rights, a power vested with the States. To subordinate the powers of State under Entry 50, List II, Parliament has to “impose the limitations”, through the “authority of law” (an enactment brought into existence through the exercise of legislative power). Since there is no specific provision in the whole of the Mines and Minerals (Development and Regulation) Act imposing limitations on the taxing powers of the State on mineral rights, therefore the Mines and Minerals (Development and Regulation) Act could have never been presumed to be limiting the taxing powers by adopting the theory of “implied limitation”. The doctrine of implied limitation will not imply, nor the principle of constitutional silences be invoked to fill in the legislative vacuum.

Likewise, once it has been held that royalty is not in the nature of tax, but a compensatory consideration paid to the proprietor/lessor, the Mines and Minerals (Development and Regulation) Act thus has no provision providing for taxation of mineral rights. Section 9 nowhere expressly imposes any limitations on the taxing powers of the State, but is delimited to regulatory powers of the Central Government in fixing, enhancing or reducing the rates of royalty.

Though the Parliament under Article 246 read with Entry 54, List I could impose all and every possible limitation prohibiting the State Legislatures from taxing minerals, but nowhere has the Mines and Minerals (Development and Regulation) Act done so in present. Merely because mineral development is a responsibility entrusted to the Union, it cannot be presumed ipso facto that taxes levied by the State Legislature under Entry 50, List II are against mineral development. Legislative powers, especially the competence under List II to tax cannot be whittled down on presumptions that they will have adverse economic consequences on mineral development. Therefore, the States possess constitutional and sovereign authority within the bounds of the Constitution of India to raise adequate revenues for the welfare of their people by exercising their taxing powers.

Scope of Entries 49 & 50, List II: Taxes on lands & buildings and principles governing thereto

Levy of taxes by the State on activity carried out over the land

The Court thereafter answered the issue about the competence of the State to levy a tax on mineral bearing land with royalty as a unit under Entry 49, List II, as the base index. Since as stated above, royalty has been held not to be in the nature of tax, payable either to the Government or the private land owner (lessor), therefore the regulatory power of the State extends only to exercise of right to minerals either by the Government or by the private person.

Referring to the judgments of Raja Jagannath Baksh Singh v. State of U.P.⁵⁴ and Ajoy Kumar Mukherjee v. Local Board of Barpeta⁵⁵ it was held that the term “lands” under Entry 49 includes all types of lands and covers everything under or over the land. The incidence of tax in the aforementioned judgment was on the owner or the occupier of the land and not on any other person who may be coming to the market to transact. A tax levied on the activity or service rendered to or in connection with lands and buildings therefore, does not fall within the description of taxes under Entry 49, List II, though however, as a measure, the legislature may take into account the use of the land or building for determining the quantum of levy under Entry 49. The Court summarised the principles for levy of tax under Entry 49, List II as follows:

(i) the expression “lands” means all kinds of lands irrespective of the use to which the land is put;

(ii) the expression “lands” includes not only the surface, but everything under and over the surface;

(iii) a tax on lands and buildings is a tax on lands and buildings as units, which is different from composite taxes involving imposition of tax cumulatively on all assets such as under Entry 86 of List I;

(iv) the tax is not a tax on totality, that is, it is not a composite tax on the value of all lands and buildings, nor is it concerned with the division of interest in the building or land;

(v) a tax levied on the activity or service rendered on or in connection with lands and buildings does not fall within the description of taxes on lands and buildings under Entry 49, List II; and

(vi) the use to which the land is put does not affect the competence of the State Legislature to tax it. The legislature may take into account the use of land for determining the measure of taxation under Entry 49, List II.

The power to levy a tax on lands necessarily entails the power to classify lands sought to be taxed depending upon the use, productivity or location. A flat tax on all lands irrespective of their use, productivity or location would fail the test of reasonable classification of lands and therefore would become discriminatory and violative of Article 265 of the Constitution of India.

What Entry 49, List II contemplates is the levy of tax on land as a unit, irrespective of the use to which it is put and by the said rationale, tax on mineral bearing lands subjected to mining, quarrying and extradition of mineral resources, can also be imposed.

There is however a subtle difference between the subjects of taxation under Entries 49 and 50, List II. The subject of the former is land as a unit, whilst that of the latter are the mineral rights. The legislative competence of the States to tax lands under Entry 49, List II would not be affected by the Mines and Minerals (Development and Regulation) Act. Referring to the judgment of Western Coalfields Ltd. v. Special Area Development Authority⁵⁶ it was held that tax on lands and buildings as a unit had nothing to do with the development of mines and therefore it never collided with the powers of the Central Government or any parliamentary legislation enacted by virtue of Entry 54, List I. The legislative power of the State with respect to subjects other than mineral development will not be affected or controlled by the Mines and Minerals (Development and Regulation) Act, nor can be restrained on the ground of existence of declaration of a law by the Parliament under Entry 54, List I.

Levy and measure of taxes by State on mineral bearing lands under Entry 49, List II

There are three components of any taxing provision, viz. the charge (subject-matter) of tax; its incidence and the measure of the tax. The pith and substance or true nature and character of any taxing legislation must be determined with reference to its charging section, defining the persons who are liable to pay the tax constituting the core of the said statute. The measure of a tax is not a true test of the nature of tax, whereby standards adopted as a measure of tax may be a relevant consideration in determining the latter, but cannot be treated as conclusive. Referring to the judgment of Sir Byramji Jeejeebhoy v. Province of Bombay⁵⁷ it was held that the standard on which the tax is levied does not determine the nature of tax. Thus, always there ought to exist a nexus between the nature of tax and the measure of tax referring to the judgment of Union of India v. Bombay Tyre International Ltd.⁵⁸ it was held that the nature of tax and measure of the levy must have nexus with each other.

Taxes under Entry 49, List II are generally measured with respect to income derived from the land or building sought to be taxed. However, any measure adopted for taxing land should always bear a reasonable relationship to the actual or potential productivity of land. Royalty can be used as a measure to tax mineral bearing land. Referring to the judgment of Goodricke Group Ltd. v. State of W.B.⁵⁹ the Court held that income or yield of land can be adopted as a measure of tax, wherein assessment of tax depends upon the actual or potential activity of the land sought to be taxed. Royalty being relatable to the yield of the mineral bearing land as well as the income generated from it can be a valid basis to levy tax upon the land under Entry 49, List II. The view of India Cement judgment⁶⁰ that income from the mineral bearing land cannot be the basis for levy of tax under Entry 49 is therefore incorrect. The mere fact that the legislature uses mineral rights or income from minerals produced as a measure of taxation under Entry 49, List II, does not convert the nature of such tax from the one levied under Entry 49 to that levied under Entry 50, List II. It always continues to remain a tax on mineral bearing land as a unit. Referring to the judgment of Federation of Hotel & Restaurant Assn. of India v. Union of India⁶¹ it was held that the fact that two different taxes use the same measure does not make them identical being compartmentalised under the same entry. The fact that Entry 50, List II pertains to taxes on mineral rights would not preclude the State Legislatures to use the measure of income from mineral value or mineral produce to levy taxes under Entry 49, List II (viz. royalty). It is for the State Legislature to determine the appropriate measure for the purpose of quantifying taxes till and until there is a reasonable nexus between the measure and the nature of the tax. Therefore, royalty can also be used as a measure to determine and quantify the tax on mineral bearing lands.

Accordingly, the reference was answered by the majority and matters directed to be placed before the appropriate Bench.

* * *

(2) State of U.P. v. Lalta Prasad Vaish & Sons⁶²

(Delivered on 23-10-2024) Supreme Court of India (SC)

Coram: 9-Judge Bench of Justices Dr D.Y. Chandrachud, C.J. and Hrishikesh Roy, Abhay S. Oka, Ujjal Bhuyan, Satish Chandra Sharma, J.B. Pardiwala, Manoj Misra, Augustine George Masih and B.V. Nagarathna, JJ.

Majority Opinion Authored by: Dr Justice D.Y. Chandrachud

Abbreviations for various common terminologies in the judgment

Article — Article	Synthetics and Chemicals judgment (7-J) — Synthetics and Chemicals Ltd. v. State of U.P.⁶³
COI — Constitution of India	IDRA — Industries (Development and Regulation) Act
CB — Constitution Bench	Govt. — Government
GOI — Government of India	CG — Central Government
PL — Provincial Legislature	Kesoram Industries judgment — State of W.B. v. Kesoram Industries Ltd.⁶⁴
SL — State Legislature	SG — State Government
FL — Federal Legislature	HC — High Court
UPEA — United Provinces Excise Act, 1910	SC — Supreme Court
UOI — Union of India	Synthetics and Chemicals judgment (2-J) — Synthetics and Chemicals Ltd. v. State of U.P.⁶⁵
IDRA — Industries (Development and Regulation) Act, 1951

Entry 54, List I	(for short, “E-54, L-I”)	Entry 7, List I	(for short, “E-7, L-I”)
Entry 23, List II	(for short, “E-23, L-II”)	Entry 52, List I	(for short, “E-52, L-I”)
Entry 49, List II	(for short, “E-49, L-II”)	Entry 8, List II	(for short, “E-8, L-II”)
Entry 50, List II	(for short, “E-50, L-II”)	Entry 33, List III	(for short, “E-33, L-III”)
Entry 24, List II	(for short, “E-24, L-II”)	Entry 51, List II	(for short, “E-51, L-II”)
Entry 6, List II	(for short, “E-6, L-II”)

Various entries under consideration before the Constitution Bench

(a) Entry 24, List II, mentioning “industries, subject to the provisions of Entries 7 and 52, List I”.

(b) Entry 7, List I, mentioning industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.

(c) Entry 52, List I, mentioning industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.

(d) Entry 8, List II, mentioning “intoxicating liquors”, that is to say, the production, manufacture, possession, transport, purchase and sale of “intoxicating liquors”.

(e) Entry 33, List III, mentioning trade and commerce in, and the production, supply and distribution of:

(a) The products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products.

(f) Entry 51, List II, empowering the State to levy duties of excise on the following goods manufactured or produced elsewhere in India:

(a) alcoholic liquors for human consumption; and

(b) opium, Indian hemp and other narcotic drugs and narcotics.

but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this Entry.

In exercise of powers under Article 246 read with Entry 52, List I, Parliament enacted Industries (Development and Regulation) Act, 1951, whereunder vide Item 26 of the First Schedule the Union took control of the alcohol industry. The said Item 26 of the First Schedule to the Industries (Development and Regulation) Act was amended in the year 2016 to exclude potable alcohol from the ambit of the item.

Subject-matter and background of the reference

The issue which arose for adjudication before the Constitution Bench pertained to the scope of power of State Legislature under Entry 8, List II (State List) revolving around the phrase “intoxicating liquor”. Whether “intoxicating liquor” under Entry 8, List II includes only potable alcohol, such as alcoholic beverages or also includes other types of alcohol, viz. the non-consumptive alcohol, industrial alcohol or any other form of alcohol unfit for human consumption but used in the production of other products. The Constitution Bench was reconsidering the view laid down in Synthetics and Chemicals judgment (7-J)⁶⁶, wherein earlier the regulatory powers of the State Legislatures on “intoxicating liquor” were delineated and held to be restricted to the extent of field covered by the parlimanetary enactment as below.

The dispute started with the enactment of the United Provinces Excise Act, 1910⁶⁷ introducing a law relating to import, export, transport, manufacture and other facets of “intoxicating liquor” and of intoxicating drugs. A vend fee was levied on “denatured spirit” of various categories. The High Court on a challenge being laid to the same upheld the validity of the said Excise Act, holding that Schedule 7 List II Entry 8 to the Constitution of India includes “denatured spirits”, with the State Legislature competent to levy the vend fee on “denatured spirit”. Reference whilst ascertaining the meaning of the phrase “intoxicating liquor” was made to the earlier decisions of the Court in State of Bombay v. F.N. Balsara⁶⁸ and other judgments, wherein liquor was explained to be comprising alcohol, both potable and non-potable.

The matter traveled to the Supreme Court, when a 2-Judge Bench of the Supreme Court in Synthetics and Chemicals judgment (2-J)⁶⁹, which heard the challenge against the judgment of Allahabad High Court together, dealt with three issues, which were as follows:

(a) Firstly, whether under Entry 8, List II other categories of liquor, containing varied percentage of alcohol, both potable and non-potable are included within its definition.

(b) Secondly, whether in view of the Industries (Development and Regulation) Act, power of the State Legislature to regulate alcohol (both potable and non-potable) was denuded, especially in the context of notification issued by the Union under Section 18-G of the Industries (Development and Regulation) Act, 1951.

(c) Thirdly, whether the phrase “foreign liquor” employed under Section 24-A includes “denatured spirit” or only alcohol for human consumption.

Answering the above three issues, the 2-Judge Bench held that the meaning of the phrase cannot be restricted to alcohol for human consumption, but includes the manufacturing of all the articles, wherever liquor is consumed in their production. This view was subjected to review petitions by various parties along with multiple other petitions landing from other States and eventually the matter led to the constitution of Synthetics and Chemicals judgment (7-J)⁷⁰.

The Court in Synthetics and Chemicals judgment (7J)⁷¹ allowed the challenge to various legislations framed by various State Legislature, on the following broad grounds, constituting part of the detailed judgment:

(a) The phrase “intoxicating liquor” under Entry 8, List II means only that liquor as consumable by the human beings as it is. Since alcohol can be used also as industrial alcohol, levying of tax falls within the legislative competence of the Parliament (and not the State Legislature).

(b) The provisions under challenge of various legislations are not regulatory, but seek to levy a tax on industrial alcohol (unfit for human consumption) and thus outside the scope of Entry 8, List II.

(c) In view of amended Item 26 of the First Schedule to the Industries (Development and Regulation) Act, control of alcohol industries vests exclusively in the Union. Owing to this, the power to issue licences and other regulatory measures to manufacture both potable and non-potable alcohol vests only in the Union and not the States; in view of the provisions of the Industries (Development and Regulation) Act, alcohol industry became a “controlled industry” under Entry 33, List III with the Union occupying the whole field on industrial alcohol, in view of Section 18-G of the Industries (Development and Regulation) Act. The States are therefore divested of their power even to regulate product of “industrial alcohol”.

(d) The power of the States to legislate therefore is left only on the remainder of limited area and restricted to laws which inter alia:

(i) prohibit potable alcohol in terms of Entry 6, List II which concerns public health;

(ii) lay down regulations to ensure that non-potable alcohol is not diverted and misused as a substitute for potable alcohol;

(iii) charge excise duty on potable alcohol and sales tax under Entry 52, List II. However, sales tax cannot be charged on industrial alcohol; and

(iv) charge fees on a quid pro quo basis, in return for some service rendered by the State, as distinct from fees for grant of a privilege in terms of Indian Mica and Micanite Industries v. State of Bihar.⁷²

Subsequent to Synthetics and Chemicals judgment (7-J)⁷³, cleavage on opinion of Supreme Court whilst testing various legislations doubting its correctness arose, the description is provided in the judgment at length.

In the above backdrop the State of Uttar Pradesh levied an ad valorem licence fee on the sale of denatured alcohol especially by a wholesale vender to those holding a licence under the provisions of the Uttar Pradesh Excise Act and the Uttar Pradesh Spirit Rules framed thereunder. The Allahabad High Court allowed the petition treating the fee so levied on the sale of “denatured spirit” to be outside the competence of State Legislature. Eventually through its order dated 8-12-2010, the matter reached the Constitution Bench, after passing through Benches of lesser composition, in State of U.P. v. Lalta Prasad Vaish.⁷⁴ The following six questions were framed in the reference order for resolution to the Constitution Bench of 9 Judges, which were as follows:

(a) whether Schedule 7 List II Entry 52 to the Constitution overrides Entry 8, List II;

(b) whether the expression “intoxicating liquors” in Schedule 7 List II Entry 8 to the Constitution includes alcohol other than potable alcohol; and

(c) whether a “notified order” under Section 18-G of the Industries (Development and Regulation) Act, 1951 is necessary for Parliament to occupy the field under Schedule 7 List III Entry 33 to the Constitution.

Thus, the correctness of Synthetics and Chemicals judgment (7-J)⁷⁵ was subject-matter of reconsideration by the 9-Judges Bench. However, the 9-Judges Bench did not limit itself to the questions framed in the reference order by the 3-Judge Bench, but agreed to examine all the possible contentions surrounding the interpretation of entries involved.

Various categories of alcohol and the distinction between potable and non-potable alcohol

Before proceeding with the discussion on consideration of issues by the Court, the preliminary understanding of various types and categories of alcohol is necessary:

(i) “Potable alcohol” refers to alcohol used as a beverage, fit for human consumption. Raw material for “potable alcohol” is generally molasses and grain, fermented and distilled to produce “rectified spirit” (also known as ethyl alcohol containing 95% alcohol with certain impurities). “Rectified spirit” may be used to produce homemade liquors.

(ii) “Extra neutral alcohol” (ENA) is a highly purified form of ethanol containing more than 96% alcohol, possessing neutral taste, smell and used predominantly as a base for preparation of premium beverages.

(iii) “Absolute alcohol” is ethanol which contains less than 1% water and more than 99% alcohol, ideal for the preparation of pharmaceutical products, cosmetics and chemical manufacturing requiring a water free solvent.

(iv) “Industrial alcohol” is a term commonly used to denote alcohol used in industries. Whilst all the above three variants of ethanol, viz. “rectified spirit”, “ENA” and “Absolute alcohol” are used for preparation of alcoholic beverages fit for human consumption, they are subjected to a process of denaturation, through which it is deliberately made undrinkable, inconsumable with the addition of certain chemicals.

“Denatured spirit” is a type of ethanol, unfit for human consumption prepared after the process of denaturation, and in common parlance being unfit for human consumption is known as “non-potable alcohol”.

However, the Court underscored that the dividing line of distinction between all the above is so thin that it is difficult to distinguish or simplistically classify “potable alcohol” from “non-potable alcohol”. For the aforesaid reason, when even after being subjected to denaturation, the denaturant chemicals can be easily removed and made consumable again.

Constitutional distribution under 7th Schedule; scheme of legislative entries and their reconciliation in the case of inter se conflict

The Constitution of India provides for federal balance of the distribution of legislative powers between the Union and the States, in view of the wordings of Article 246(1) and (3). Though the Constitution of India provides predominance to Parliament over State Legislature, however the federal balance lies on the recognition and identification of the scope of such predominance of the Centre over the States. Article 246(3) grants State Legislature exclusive power to enact laws with respect to matter in List II. Though Article 246(3) is subjected to Article 246(1) with the usage of the phrases “notwithstanding” [Article 246(1)] and “subject to” [Article 246(3)] subjugating the competence of the State to that of the Parliament, but nowhere the Constitution of India permits Parliament to enact laws with respect to entries enumerated under L-II. Each of the legislative bodies (Parliament and the State Legislature) are sovereign and supreme within their sphere, allocated to them under the 7th Schedule. A combined reading of the non obstante clause (notwithstanding under Article 246(1)) and the subjugation clause (subject to under Article 246(3)) along with the phrase exclusive power means only one thing, viz. that whenever there is conflict between the entries under Lists I and II, the power of Parliament supersedes. Referring to the judgments of Hoechst Pharmaceuticals Ltd. v. State of Bihar⁷⁶ and State of W.B. v. Committee for Protection of Democratic Rights⁷⁷, it was held that the principle of federal supremacy in Article 246 can be resorted to only when there is an irreconcilable direct conflict between the entries in Lists I and II, but not otherwise.

Various entries under List II (State List) use the following phrases in their language, whilst subjugating the power of the State Legislature to that of the Parliament:

(a) “subject to” a specific provision of Entries 2, 17, 22, 24, 26, 27, 33 and 57, List I or List III;

(b) “subject to” provisions of an entire list with regard to the subject-matter: Entry 13;

(d) “subject to” law made by Parliament or “subject to” any limitations imposed by Parliament by law: Entries 37 and 50.

Wherever the entries in List II have been subjugated to entries under List I or List III, the legislative field of the State stands circumscribed by the domain covered by the entries in List I or List III to which the entry concerned in List II is subjugated. The field assigned to the States gets eclipsed only to the extent of the field assigned or covered by the Parliament. Baring the express legislative device of subordination, the States have complete, unbridled and sovereign power to enact laws over the field specified under List II of the 7th Schedule to the Constitution of India. Wherever the entries are not expressly made subject to any other entry of List I or List II, the authority of the State Legislature to enact laws is complete and absolute.

The legislations enacted by the State under List II may “overlap” or “conflict” with the legislation enacted by the Parliament under List I or List III. An “overlap” occurs when two or more things or fields partially intersect, whereas a “conflict” occurs when two or more entries operate in the exactly same field, in which situation the federal supremacy accorded to Parliament ticks in. The principle of parliamentary supremacy must be applied only when attempted reconciliation by the above methods of interpretation fails of the conflicting legislations enacted under two conflicting entries.

Fields covered under and scope of Entry 52, List I and Entry 8, List II

The Court then interpreted the scope of phrase “that is to say” occurring under Entry 8, List II. Referring to the judgment of Bhola Prasad v. King-Emperor⁷⁸, it was held that the phrase “that is to say” were explanatory or illustrative and not words of either amplification or limitation, employed to exhaustively enumerate the features and items included in the legislative entry. Referring further to the judgment of State of Punjab v. Devans Modern Breweries Ltd.⁷⁹, it was further stated that the phrase “that is to say” cannot be interpreted to circumscribe the scope of the entry and thus its scope could not be limited to the production, manufacture, possession and sale of “intoxicating liquor”, but everything flowing or correlated to it.

The VII Schedule has classified certain entries as “industry based”, while many others as “product based” for example Entries 26 and 27, List II. State Legislature have been vested with the powers to enact laws with respect to the “products” of industries covered by Entry 24, List IIEntry 24, L-II.List IIE-. If Entry 8, List II is a “product-based entry”, then it shall cover only the consumable end product, but if it is treated to be “industry-based entry”, then it would cover the whole gamut of manufacturing, processing and production of the end product as well. Since the wording of Entry 8, List II is expansive enough to cover all the processes of production, manufacturing, possession, transportation, etc. within its ken, therefore the said entry can be treated to be regulating everything from the stage of raw materials to the end consumption of “intoxicating liquor”. For this reason Entry 8, List II is therefore both an industry as well as a product based entry.

In so far as Entry 52, List I is concerned, the State Legislature will have the competence to enact laws with respect to each and every industry, till the Parliament takes control of the industry under Entry 52 or Entry 7, List I. The absence of the phrase “to the extent” to which is absent under Entry 52, List I will not give unbridled power to the Parliament, but an implied limitation can always be read into the Entry 52, List I. The necessity to ascribe implied limitation to Entry 52, List I is necessary for ensuring the federal balance between the Parliament and the State. The implied limitation stems from the phrase “the control of which by the Union” employed under Entry 52, List I. Thus, the law enacted by the Parliament must not be in an abstract declaration, but must be specifying the “extent of control” necessary in public interest so undertaken by the Union. Outside the area of control not so specified by the parliament in public interest, the State Legislature as the competence to legislate with respect to the field the legislative competence of the State gets denuded only to the extent of control by the Union so declared by the Parliament in the “public interest”, and not otherwise.

The Court then posed the next question as to whether the Parliament under Entry 52, List I had taken over the control of the industry of “intoxicating liquor”. For the following reasons, the Court held that the industry of “intoxicating liquor” cannot be taken over by the Parliament under Entry 52, List I:

(a) Entry 52, List I when read independent of other entries of other lists, does not preclude the inclusion of industry of “intoxicating liquor”, but Entry 8, List II is nowhere made subject to Entry 52, List I. Since there is no subjugation of the powers of the State, the State possesses exclusive competence to enact the law on its field under Entry 8.

(b) Thus the only way to reconcile both the entries is either to exclude the industry of “intoxicating liquor” from Entry 52 or from Entry 8, whilst ensuring that neither of the entries are rendered redundant in the said exercise. At this juncture the principle of “generalia specialibus non derogant” is resorted to ensure that harmonisation of the entries does not result in redundancy of an entry. Referring to the judgment of Jayant Verma v. Union of India⁸⁰, it was held that a “special entry” always prevails over a “general” entry, otherwise the “special entry” is rendered otiose.

In the view of the above analysis, therefore an Entry 8, List II being a “special entry” dealing with one particular industry of “intoxicating liquor” and all the processes appended to the said industry, viz. production, manufacture, transportation, processing, etc. therefore it is a “special entry”, including both the industry as well as the product of “intoxicating liquor”. To the contrary Entry 52, List I is a “general entry” including the industry of “intoxicating liquor”, but if allowed to include “intoxicating liquor” would render Entry 8, List II redundant and therefore “intoxicating liquor” has to be consequently excluded from Entry 52, List I. Thus, the Court reconciled both the entries by holding that Parliament does not possess any legislative competence to enact any law taking control of the industry of “intoxicating liquor”, since it fell exclusively under Entry 8, List II.

On the other hand, whilst elaborating upon the scope of Entry 8, List II, it was held that the said entries are “general” “regulatory entry” and not a “taxing entry”. Referring to various judgments, specially the twin judgments of Southern Pharmaceuticals & Chemicals v. State of Kerala⁸¹ and F.N. Balsara case⁸², it was held that the meaning of “intoxicating liquor” is capable of being misused or used as a beverage. It goes beyond the narrow definition of alcoholic beverage to include both the categories of liquids, which contain alcohol and which can possibly be used or misused as “intoxicating liquor” for producing intoxicating effects on the individual. All such categories of liquids are covered under Entry 8, List II.

Ascertaining the legal import and meaning of “intoxicating liquor”

The Court then delved into the exercise of determining the meaning of the phrase “intoxicating liquor”. Referring to various excise enactments and other enactments touching upon the trade of liquor enacted by various States likes Bombay, Madras, Bengal, Madhya Pradesh, etc. it was held that nowhere the phrase “intoxicating liquor” has been defined to have acquired a definite legal meaning or a legislative meaning for being ascribed for the interpretation of Entry 8, List II.

Thereafter reference was made to the evolution of the legislative list on “intoxicating liquor” with the mention vide Entry 16 of the Provincial List in the originally enacted Devolution Rules under the Government of India Act, 1919. The Devolution Rules contained a single entry in the Provincial List which included both alcoholic liquor as well as intoxicating drugs. However, when the Government of India Act, 1935 came to be enacted, the VII Schedule split the division of entries for “intoxicating liquor” between both the Federal Legislatures as well as the Provincial Legislatures. Entry 45, List I (Federal Legislature) stipulated about duty of excise, whereas Entries 31 and 40, List II stipulated for dominion of Provincial Legislatures over “intoxicating liquors” and narcotics. Thus, regulatory powers though remained with the Provincial Legislature under the Government of India Act, 1935, the taxation powers however were shifted to the Federal Legislature.

However, when Constitution of India came to be enacted, this whole scheme was altered in the VII Schedule, whereby the whole gamut of regulatory control with respect to “intoxicating liquor” was vested with the States under Entry 8, List II and the taxing powers conferred on the States through Entry 51, List II on all the alcoholic liquors for human consumption. The changes in the evolution of legislative entries relating to alcohol and “intoxicating liquor” from the year 1919 to the year of enactment of Constitution of India in 1950 is as follows:

Enactment	Taxing entry	Regulatory entry
Devolution Rules	“Alcoholic liquor”
White Paper	“Alcoholic liquor”	“Alcoholic liquor”
Joint Select Committee on Indian Constitutional Reform	“Potable alcoholic liquor”	“Liquor”
Government of India Act, 1935	“Alcoholic liquor for human consumption”	“Intoxicating liquor”
Constitution of India	“Alcoholic liquor for human consumption”	“Intoxicating liquor”

Thus, the evolution of the legislative entries though provides some context and background, but fails to provide any conclusive answer to the legislative meaning and import of the phrase “intoxicating liquor”. The Court thus resorted to the principle of “harmonious interpretation”.

The Constitution uses three distinct expressions relating to alcohol, viz. “intoxicating liquor”, “alcoholic liquor for human consumption”, and intoxicating drinks. The provision relating to “intoxicating liquor” is not limited to its consumption, but stretches to its production, manufacture, possession, transport and all other facets, being used with the expression intoxicating used as an adjective to liquor. The substitution of word alcohol with intoxication reflects legislative intent of moving from an ingredient-based definition to an impact-based definition, manifesting the intent to enhance the scope of the entry to cover any and every liquor having an impact of intoxication on health. Thus, the phrase “intoxicating liquor” clearly was never intended to be restricted to potable alcoholic liquor or as an alcohol sold as beverage or fit for human consumption, but all liquids or liquors that had the impact of intoxication on the individual. The entry intended to cover even that alcohol that could be prone to noxious use or could be misused to harm public health. It therefore covers “ENA”, “rectified spirit”, “denatured alcohol”, prone to be misused. The test therefore to be adopted is not whether the alcohol could be converted and used for preparation of alcoholic beverages, as that is an “ingredient-based test”, but the test to be adopted is the “impact-based test”, implying whether the alcohol could be mischievously used for its preparation or as a substitute. This interpretation promotes the workability of the provisions and also affects the intent behind the entry.

Correctness of the observations and judgment of Synthetics and Chemicals judgment (7-J)

The Supreme Court in Synthetics and Chemicals judgment (7-J)⁸³ never undertook any independent analysis of the meaning of the phrase “intoxicating liquor”, but simply adopted the reasoning and meaning ascribed to the phrase in the earlier judgment of F.N. Balsara case⁸⁴. There was thus no comparison of the differences in the language employed under different provisions of the Constitution of India to understand the significance of the difference in the said judgment.

Also, Entry 52, List I Parliament could not enact any legislation impacting adversely the taxing entries of List II, which was erroneously held so by the 7-Judge Bench. The Parliament as held above could not have legislated with respect to the field covered by Entry 8, List II, specially when it had the effect of rendering the entry of State List otiose. Accordingly, it was held that the reasoning adopted by the 7-Judge Bench was clearly erroneous and impermissible.

The State Legislatures were being held to possess control over the industry of “intoxicating liquor”, and the Parliament could have never taken control of the field covered by Entry 8, since “intoxicating liquor” includes both potable as well as non-potable alcohol. Item 26 of the Schedule 1 to the Industries (Development and Regulation) Act must be read therefore as excluding the industry of “intoxicating liquor” as discussed above. On this count also the opinion of the 7-Judges Bench in Synthetics and Chemical judgment⁸⁵ was not acceptable.

The majority opinion therefore concluded on various issues framed by it, in the following words:

(a) The Parliament never had any legislative competence to enact any law taking control of the industry of “intoxicating liquor” which was a field reserved for the State Legislature only.

(b) The interpretation of content of phrase “intoxicating liquor” must be premised on public interest, by enhancing the scope of the entry beyond potable alcohol. Alcohol is inherently a noxious substance, prone to misuse affecting public health at large and therefore Entry 8, List II covers even that alcohol (unfit for human consumption), which could possibly be used noxiously to the detriment of public health.

Accordingly, the reference was answered by the Constitution Bench in the above terms and pending matters directed to be placed before the appropriate Bench for further consideration.

* * *

(3) Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi⁸⁷

(Delivered on 6-11-2024) Supreme Court of India (SC)

Coram: 5-Judge Bench of Justices Dr D.Y. Chandrachud, C.J. and Hrishikesh Roy, P.S Narasimha, Pankaj Mithal and Manoj Mishra, JJ.

Majority Opinion Authored by: Justice Hrishikesh Roy

Abbreviations for various common terminologies in the judgment

Art. — Article	SC — Supreme Court
COI — Constitution of India	CB — Constitution Bench
MV Act — Motor Vehicles Act, 1988	MV Rules — Central Motor Vehicles Rules, 1989
LMV — Light motor vehicle	TV — Transport vehicle
GVW — Gross vehicle weight	MGV — Medium goods vehicle
MPMV — Medium passenger motor vehicle	HGV — Heavy goods vehicle
HPMV — Heavy passenger motor vehicle	MD, 2017 judgment — Mukund Dewangan v. Oriental Insurance Co. Ltd.⁸⁸
Ashok Gangadhar Maratha judgment — Ashok Gangadhar Maratha v. Oriental Insurance Co. Ltd.⁸⁹	Annappa Irappa Nesaria judgment — National Insurance Co. Ltd. v. Annappa Irappa Nesaria⁹⁰
Prabhu Lal judgment — New India Assurance Co. Ltd. v. Prabhu Lal⁹¹	Angad Kol judgment — Oriental Insurance Co. Ltd. v. Angad Kol⁹²
MD, 2016 judgment — Mukund Dewangan v. Oriental Insurance Co. Ltd.⁹³	Govt. — Government

Background of the reference to the Constitution Bench

The Constitution Bench addressed the legal issue of whether a “light motor vehicle” class licence holder can drive a “transport vehicle” without a specific endorsement as per the Motor Vehicles Act, 1988 or the Central Motor Vehicles Rules, 1989, when the “gross vehicle weight” of the vehicle does not exceed 7500 kg. under the existing legal framework of the Motor Vehicles Act and the Central Motor Vehicles Rules.

The issue was first raised by a 2-Judge Bench of the Supreme Court in MD, 2016 judgment⁹⁴, wherein the Court formed following questions for determination:

(i) “What is the meaning to be given to the definition of “light motor vehicle” as defined in Section 2(21) of the Motor Vehicles Act, 1988 ⁹⁵? Whether “transport vehicles” are excluded from it?

(ii) Whether “transport vehicle” and “omnibus” the “gross vehicle weight” of either of which does not exceed 7500 kg would be a “light motor vehicle” and also motor car or tractor or a road roller, “unladen weight” of which does not exceed 7500 kg and holder of licence to drive class of “light motor vehicle” as provided in Section 10(2)(d) would be competent to drive a “transport vehicle” or omnibus, the “gross vehicle weight” of which does not exceed 7,500 kg or a motor car or tractor or road roller, the “unladen weight” of which does not exceed 7500 kg?

(iii) What is the effect of the amendment made by virtue of Act 54 of 1994 w.e.f. 14-11-1994 while substituting clauses (e) to (h) of Section 10(2) which contained “medium goods vehicle”, “medium passenger motor vehicle”, “heavy goods vehicle” and “heavy passenger motor vehicle” by “transport vehicle”? Whether insertion of the expression “transport vehicle” under Section 10(2)(e) is related to the said substituted classes only or it also excluded “transport vehicles” of “light motor vehicle” class from the purview of Sections 10(2)(d) and 2(41) of the Act?

(iv) What is the effect of amendment of Form 4 as to operation of the provisions contained in Section 10 as amended in the year 1994 and whether the procedure to obtain a driving licence for “transport vehicle” of class of “light motor vehicle” has been changed?”

The matter was thereafter referred to 3-Judge Bench wherein the Court referred to 8different judgments of the Supreme Court and concluded as follows:

Firstly, a person having an “light motor vehicle” class licence need not have a separate endorsement to drive a “transport vehicle” if the vehicle itself falls under the “light motor vehicle” class i.e. its “ground mobility vehicle” is under 7500 kg.

Secondly, “light motor vehicle” as defined in Section 2(21) when read with Section 2(15) and 2(48) of the Motor Vehicles Act, 1988 would include a “transport vehicle”, as per the weight prescribed under Section 2(21). Any “transport vehicle” and “omnibus” or any motor car, road-roller or tractor of which the “unladen weight” does not exceed 7500 kg would come under the category of “light motor vehicle” and “light motor vehicle” licence holder as provided in Section 10(2)(d) would be competent to drive such vehicle. Therefore, no separate endorsement on the licence is required to drive a “transport vehicle” of “light motor vehicle” class as enumerated above.

Thirdly, the substitution of clauses (e) to (h) of Section 10(2) which contained “medium goods vehicle” in Section 10(2)(e), “medium passenger motor vehicle” in Section 10(2)(f), “heavy goods vehicle” in Section 10(2)(g) and “heavy passenger motor vehicle” in Section 10(2)(h) with substitution of expression “transport vehicle” under Section 10(2)(e), does not exclude “transport vehicle”, from the purview of being a “light motor vehicle” under Section 10(2)(d) read with Section 2(41) of the Act. Therefore, as per the Amendment Act 54/1994 a licence issued under Section 10(2)(d) continues to be valid after amendment for the “transport vehicles” with “gross vehicle weight” below 7500 kg.

Lastly, by the amendment of Form 4, no requirement to obtain separate endorsement to drive “transport vehicle” or change in procedure has taken place in obtaining driving licence for “transport vehicle” of class of “light motor vehicle”, as the expression “transport vehicle” so inserted is with respect to medium and heavy category vehicles so substituted in year 1994. Therefore, if a driver is holding licence to drive “light motor vehicle”, he can drive “transport vehicle” of such class without any endorsement to that effect.

The issue of requirement of separate endorsement for “light motor vehicle” class licence holders again came before the 2-Judge Bench of the Supreme Court on 3-5-2018 in Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi.⁹⁶ The Bench referred the ratio of MD, 2017 judgment⁹⁷ for reconsideration to a 3-Judge Bench. On 8-3-2022 the matter was referred to the 5-Judge Bench. In the reference order of the earlier Benches, it was rightly observed that there were many important provisions of the Motor Vehicles Act and Central Motor Vehicles Rules that had not been taken into consideration by the Court while deciding the issue in MD, 2017 judgment⁹⁸.

Importance of the reference

During the final stage of hearing of the matter dated 20-7-2023 the Union Government submitted that they are open to re-evaluate the position of law and that they had accepted the decision of MD, 2016 judgment⁹⁹ while issuing notifications and amending Rules to make them consistent with the judgment.

The Court acknowledged that since 1988, the transport sector has undergone significant infrastructural and technological upgrades thus, there is a need for balanced approach that considers road safety, livelihoods of individuals and the implications of overturning MD, 2017 judgment¹⁰⁰ particularly for those who may be driving commercial vehicles with light motor vehicle class licences. Therefore, it was necessary for the Government to freshly examine the provisions of the Motor Vehicles Act. Thus, to help the Government in framing proper guidelines/regulations while preventing any loopholes in law, the Court deemed it crucial to clarify the position of law with respect to the requirement of specific endorsement for “light motor vehicle” class licence holders.

Dual purpose of the Motor Vehicles Act

The Motor Vehicles Act is a social welfare legislation enacted to cater the need for streamlining the mechanism through which the claims for compensation of the victims of road accidents or their legal representatives can be expeditiously disposed of. The Court observed that it is true that instead of timely disposal of claims for adequate compensation, the families have to face legal battles that drag along in courts for years, somewhere defeating the purpose of the Motor Vehicles Act of timely disposal of claims.

The judgment while interpreting the provisions of the Motor Vehicles Act has addressed the dual purpose of the Motor Vehicles Act of public welfare as well as road safety, providing clarity and consistency in the use of provisions for maintaining commensurate licensing regime for drivers.

Interpretation of Sections 2(21), 3 and 10

Literal interpretation

The judgment lists relevant definitions provided under Section 2 of the Motor Vehicles Act, 1988 of the following:

2(10) “driving licence”; 2(15) “gross vehicle weight”; 2(16) “heavy goods vehicle”; 2(17) “heavy passenger motor vehicle”; 2(21) “light motor vehicle”; 2(23) “medium goods vehicle”; 2(24) “medium passenger motor vehicle”; 2(47) “transport vehicle”; 2(48) “unladen weight”

It further stated that the issue regarding licensing for “light motor vehicles” and “transport vehicles under the Motor Vehicles Act and Central Motor Vehicles Rules needed to be resolved by examining them on the combination of the three aspects of weight, intended use and the vehicle type.

The judgment stated that the definition of “light motor vehicle” uses the term “means” to include the expression “transport vehicle” under its definition. Therefore, it provides a strict and exhaustive definition and does not leave any space for the expression “transport vehicle” to not be a part of “light motor vehicle” class vehicles. The Court, while giving a literal interpretation to the definition clause, stated that the legislature never intended to distinguish between the two classes of vehicles. It further stated when application of these clauses read with provisions of the Act results in impractical outcomes then it is said that such definition is not applicable to that provision.

Purposive interpretation

The judgment refers to Section 3 of the Motor Vehicles Act, 1988 ¹⁰¹ which reads thus:

3. Necessity for driving licence.— (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle (other than a motor cab or motor cycle hired for his own use or rented under any scheme made under sub-section (2) of Section 75) unless his driving licence specifically entitles him so to do.

(2) The conditions subject to which sub-section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be prescribed by the Central Government.

The Court while referring to Section 3 of the Act stated that there is no mention of “transport vehicle” for the purpose of obtaining a driving licence. Also, there is no mention of a “light goods vehicle” or a “light passenger vehicle”. Therefore, if a person applies for a “light motor vehicle” class licence, then as per the definition provided under Section 2(21) “light motor vehicle” means a “transport vehicle” and it cannot be said that the person cannot drive a “transport vehicle” because “his driving licence specifically” does not “entitle him to do so”.

The judgment also observed that under Section 10 of the Act, the legislature did not mention expressions “light goods vehicle”, “light passenger vehicle” “medium passenger”, “heavy goods” and “heavy passenger” vehicles, with reason to simplify licensing with respect to the such categories. If they were there then that would have differentiated the “light motor vehicle” class from the “transport vehicles”. For the purpose of licensing, the second part of Section 3 refers to “medium goods vehicle”, “MPV”, “heavy goods vehicle”, and “heavy passenger vehicle” as they require greater maneuverability and skill as compared to drivers of the “light motor vehicle” class.

Interpretation must not result in impractical outcomes

Referring to the judgment of Annappa Irappa Nesaria judgment¹⁰², wherein the Court held that a driver holding a valid licence to drive a “light motor vehicle” was also authorised to drive a “light goods vehicle”, provided post 1994 Amendment he has separate endorsement to that effect.

Referring to this interpretation on prospective application of the amendment, the Court partially overruled Annappa Irappa Nesaria judgment¹⁰³, while stating that if Section 10 is interpreted to exclude “transport vehicles” from “light motor vehicle” class, then the medium or heavy vehicles do not need “specific” endorsements, as they were not included in the amendment and such an interpretation would lead to unworkable and impractical outcomes.

The legislative intention lies in the fact that the “transport vehicles” mentioned under Section 10 of the Motor Vehicles Act, 1988 ¹⁰⁴ would apply only to those vehicles whose “gross vehicle weight” is above 7500 kg. This interpretation aligns with objectives of the amendment to increase the efficiency of the licensing framework and also achieves practicality in the implementation of the Motor Vehicles Act.

The Court observed that an “light motor vehicle” licence also covers two-wheelers which can also be used for commercial activities like small-scale deliveries and transportation and for such activities, a separate endorsement is not required. Section 10(2) read with Section 2(21) provides that a driving licence “shall also be expressed as entitling the holder to drive a motor vehicle of one or more of the following classes”. Therefore, the driver of a “light motor vehicle” is not per se disentitled to acquire a licence for a “transport vehicle” class, for driving vehicles above the weight of 7500 kg or those classes which do not fall in the definition of “light motor vehicle” under Section 2(21). Thus, the classes under the Motor Vehicles Act cannot be said to be like watertight compartments and some degree of overlap is discernible.

Was MD (2017) judgment exhaustive of the provisions?

The judgment observed that in MD, 2017 judgment¹⁰⁵, the Bench failed to notice several provisions of the Motor Vehicles Act but at the same time gave due consideration to the important statutory provisions. The scheme of the Act provided a clear distinction between “light motor vehicle” and “transport vehicle” and in order to drive a “transport vehicle”, an “light motor vehicle” licence holder by law requires no additional endorsement. The judgment while considering argument upon non-consideration of several provisions providing differences between licensing for a “light motor vehicle” and a “transport vehicle”. There are provisions providing differences on the basis of age-limit for driving, restriction on grant of learner’s licence, training period for obtaining licence, requirement of medical for certificate learner’s licence, driving certificates, separate classes of vehicles, necessity for permits, validity of driving licence and several other differentiating factors w.r.t. uniform and badges, duties, functions and conduct.

Referring to the principle of harmonious interpretation stated under the judgment of Sultana Begum v. Prem Chand Jain¹⁰⁶ the Court held that the legislature did impose additional requirements for “transport vehicles” but that by itself did not make the “light motor vehicle” licence holder legally incapable of driving a “transport vehicle” if the “gross vehicle weight” is below 7500 kg.

Interpretation must not render a provision “dead letter”

The judgment observed that in case of ambiguity, out of the possible interpretations one must be avoided which render a provision a “dead letter”. The interpretation of mandating a requirement of specific endorsement by a “light motor vehicle” licence holder would render otiose the strict and precise definition of “light motor vehicle” provided under Section 2(21). The judgment further interprets that all “transport vehicles” are not “light motor vehicles” but vehicles below the load of 7500 kg may fall within both the classes.

Such harmonious interpretation of the statutory provisions would also require additional requirements such as age restrictions under Section 4 of the Motor Vehicles Act, medical certificate and the criteria under Section 7 of the Motor Vehicles Act, etc. for “transport vehicles” whose gross weight exceeds 7500 kg so as to impose additional licensing criteria to operate medium and heavy vehicles and to fulfil the legislative purpose of providing compensation to victims of road accidents while maintaining commensurate licensing regime for drivers.

It was also observed that weight has been kept as the demarcating factor between the “light motor vehicle” and the “transport vehicles”, specifically for purposes of determining the road tax. Therefore, a separate endorsement of a “transport vehicle” is not necessary for a “light motor vehicle” licence holder where the gross weight is below 7500 kg and the “light motor vehicle” licence would suffice for such vehicles.

Referring to a 3-Judge Bench decision in National Insurance Co. Ltd. v. Swaran Singh¹⁰⁷ the Court held that minor breaches of licensing conditions such as want of medical fitness certificate or age requirement of the drivers, are technical deviations. Where for an accident such technical breach is not the cause or when there is no nexus with the driver not possessing the requisite type of licence then such breaches shall not become a ground for the insurer to deny his liability.

Resolved the conflict among the precedents

The legal issue of whether a driver holding a “light motor vehicle” licence can operate a “transport vehicle” without a specific endorsement has been subject to eight conflicting judgments. These disputes were referred to a 3-Judge Bench in MD, 2017 judgment¹⁰⁸, addressing the liability of insurance companies in accidents involving transport vehicles driven by light motor vehicle licence holders.

Referring to Ashok Gangadhar Maratha judgment¹⁰⁹ the Court observed that a holder of “light motor vehicle” licence can drive a “transport vehicle”, without a specific endorsement. Referring to the judgment of Nagashetty v. United India Insurance Co. Ltd.¹¹⁰ the Court held that a person having a valid driving licence to drive a particular category of vehicle does not become unauthorised to drive that category of vehicle merely because a trailer is attached to it. The Court supported its reasoning and stated that the legal position is firm upon interpreting the term “transport vehicle” that it overlaps with the other vehicle classes.

Referring to Prabhu Lal judgment¹¹¹ the Court held that where the vehicle was a “goods carrier” under Section 2(14) and is covered in definition of “transport vehicle” while weighing less than 7500 kg of “unladen weight”, would also be covered within the definition of “light motor vehicle” under Section 2(21). The Court also observed that the judgment, firstly, overlooked the ratio laid down in Ashok Gangadhar Maratha judgment¹¹² which clearly established the position that a “light motor vehicle” would include a light goods vehicle and secondly, it overlooked the difference in terminology of “permit” and “driving licence”, in the said judgment.

Referring to the judgment of Annappa Irappa Nesaria judgment¹¹³ the Court held it was correct to partially overrule the judgment due to the impracticability and unworkability of the classification of “transport vehicles” and the inconsistency that it creates with other provisions of the Motor Vehicles Act and Central Motor Vehicles Rules.

Referring to judgments in New India Assurance Co. Ltd. v. Roshanben Rahemansha Fakir¹¹⁴ (for short, “Roshanben Rahemansha Fakir”) and Angad Kol judgment¹¹⁵ the Court noted that where the weight of the vehicle falls within the weight limit of an “light motor vehicle” class, the driver’s light motor vehicle licence should have been deemed sufficient and to add a requirement for “light motor vehicle” licence holders to also obtain a separate endorsement for a “transport vehicle” is not correct. The Court further held that Angad Kol judgment¹¹⁶ was rendered when Prabhu Lal judgment¹¹⁷ and Annappa Irappa Nesaria judgment¹¹⁸ held the field. Where Prabhu Lal judgment¹¹⁹ conspicuously failed to notice the definition of “light motor vehicle”, it also wrongly distinguished Ashok Gangadhar Maratha judgment¹²⁰ with itself.

Referring to the judgments of S. Iyyapan v. United India Insurance Co. Ltd¹²¹ (for short, “S. Iyyapan”) and Kulwant Singh v. Oriental Insurance Co. Ltd.¹²² (for short, “Kulwant Singh”) the Court held that the insurance company could not avoid liability merely because the driver did not have an endorsement to drive a commercial vehicle.

Therefore, in Ashok Gangadhar Maratha judgment¹²³, Nagashetty case¹²⁴, S. Iyyapan case¹²⁵ and Kulwant Singh case¹²⁶, the Court correctly held that there was no need of separate endorsement for a “transport vehicle” when the person has licence for “light motor vehicle” vehicle, such reasoning and interpretation is an alignment with the purpose of the legislature behind the enactment. Whereas, the Prabhu Lal judgment¹²⁷, Roshanben Rahemansha Fakir case¹²⁸ and Angad Kol judgment¹²⁹ are overruled based on their reasoning along with the Annappa Irappa Nesaria judgment¹³⁰ which is partially overruled to the extent that the position even post-amendment would remain the same.

Md (2017) judgment was not passed per incuriam

The decision in MD, 2017 judgment¹³¹ was argued to be per incuriam. This was due to the fact that earlier the Court failed to interpret several provisions of the Motor Vehicles Act and Central Motor Vehicles Rules. These include, inter alia, Sections 4(1), 7, 14, the 2nd proviso to Sections 15, 180 ¹³² and 181 ¹³³ of the Motor Vehicles Act, 1988.

Referring to the Halsbury’s Laws of England,¹³⁴ which provides that:

“A decision should not be treated as given per incuriam, however, simply because of a deficiency of parties, or because the Court had not the benefit of the best argument, and, as a general rule, the only cases in which decisions should be held to be given per incuriam are those given in ignorance of some inconsistent statute or binding authority.”

The Court held that the decision overlooked certain statutory provisions or legal precedents but was not inconsistent to, rather it sufficiently addressed the legal issue in question, while maintaining the practicality of the legislation to serve dual purpose of the legislation to provide compensation to victims of road accidents and commensurate licensing regime for drivers. Therefore, the reasoning given in MD, 2017 judgment¹³⁵ could not have been found to be demonstrably wrong and it did not suffer from any glaring case of obtrusive omission running counter to the reasoning as established by the statutory provisions

Referring to the judgments of Mamleshwar Prasad v. Kanhaiya Lal¹³⁶ and A.R. Antulay v. R.S. Nayak¹³⁷ the Court stated that the concept of per incuriam strictly applies upon the ratio decidendi and not upon the obiter dicta. Even if the unnoticed provisions would have been interpreted, there would not have been a different outcome and the reasoning also would have been the same. Therefore, the possibility of decision given in MD, 2017 judgment¹³⁸ being per incuriam does not exist as due consideration was given to the important statutory provisions of the Motor Vehicles Act and the ratio decidendi of the judgment has correctly answered the legal issue in question.

No adverse impact on road safety

Referring to the judgment of Savelife Foundation v. Union of India¹³⁹ the Court held that the right to safety of persons travelling on the road is a fundamental right under Article 21 and that’s why road safety must be the paramount consideration. The main concern is with respect to the rapid increase in the number of road accidents. The Court observed that the main reasons for such accidents include using mobiles, drink and driving, rash driving, less spatial knowledge of the road, non-obedience to traffic rules, non-wearing of helmets and seatbelts, etc. but since no empirical data had been produced before the Court stating that the road accident have increased as a direct result to the light motor vehicle licence holders driving “transport vehicle” with gross weight not exceeding 7500 kg and thus remain unsubstantiated.

The decision in MD, 2017 judgment¹⁴⁰ was thus upheld for the following reasons:

Firstly, the whole licensing framework when interpreted through the provisions under the Motor Vehicles Act and Central Motor Vehicles Rules, does not provide for drivers holding a licence for “light motor vehicle” class, under Section 10(2)(d) to get a separate endorsement for driving transport vehicle where the gross weight is 7500 kg.

Secondly, an overlap can exist between “light motor vehicles” and “transport vehicles” as they are not entirely separate therefore, no additional authorisation is required in such cases.

Thirdly, the second part of Section 3(1), which emphasises the necessity of a specific requirement to drive a “transport vehicle”, does not supersede the definition of “light motor vehicle” provided in Section 2(21) of the Motor Vehicles Act.

Fourthly, the additional eligibility criteria specified in the Motor Vehicles Act and Central Motor Vehicles Rules generally for driving “transport vehicles” would apply only to those intending to operate for “medium goods vehicle”, “MGV”, “heavy goods vehicle” and “heavy passenger vehicle” where the “gross vehicle weight” exceeds 7500 kg.

Lastly, in the absence of any glaring error or non-interpretation of inconsistent provision of the Motor Vehicles Act or Central Motor Vehicles Rules, MD, 2017 judgment¹⁴¹ does not suffer from being per incuriam.

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(4) Tej Prakash Pathak v. High Court of Rajasthan¹⁴²

(Delivered on 7-11-2024) Supreme Court of India (SC)

Coram: 5-Judge Bench of Justices Dr D.Y. Chandrachud, C.J. and Hrishikesh Roy, P.S. Narasimha, Pankaj Mithal and Manoj Misra, JJ.

Majority Opinion Authored by: Justice Manoj Misra

Abbreviations for various common terminologies in the judgment

Art. — Article	SC — Supreme Court
COI — Constitution of India	CB — Constitution Bench
HC — High Court

Factual background of the reference and the issues before the Court

Reference was made through order dated 20-3-2013 by a 3-Judge Bench of the Court for revisiting and reconsidering the previous judgment of K. Manjusree v. State of A.P.¹⁴³ for not having noticed an earlier decision in State of Haryana v. Subash Chander Marwaha.¹⁴⁴ Accordingly matter was directed to be placed before the Chief Justice for Constitution of a larger Bench on the various facets of the principle that once the recruitment process commences, the State or its instrumentality cannot tinker with the rules of the game insofar as the prescription of eligibility criteria is concerned. The reference revolved around as to whether the said salutary principle would apply also to the procedure for selection, when the employer intends to select the most suitable and best talent from amongst those who have come in the pool for being finally selected after meeting the minimum eligibility criteria.

The reference arose out of the recruitment exercise initiated by the Rajasthan High Court for various posts, whereunder after commencement of the recruitment process, the High Court took the decision of fixing the minimum cut-off of 75% for being selected to fill up the posts in question. On a challenge being made, the High Court dismissed the writ petition holding that mere placement in the select list does not confer any indefeasible right upon the candidate for being appointed. The employer always enjoys the prerogative to fix a higher benchmark for ensuring that the person who is most suitable to the post is appointed.

When the matter reached the Supreme Court, it was referred for an authoritative pronouncement by a larger Bench of 5 Judges. Forming a preliminary view that in a case where appointments are made by selection from a number of eligible candidates, whether it is open to the Government to fix a score, much higher than the one required for mere eligibility towards maintaining the highest standards of competence amongst the selected candidates. And if the employer authority intends to impose a change, introducing more rigorous scrutiny for selection, whether it would be hit by Article 14 of the Constitution of India.¹⁴⁵

Origin, roots and basis of the “doctrine against change of the rules of the game midway”

It was held that the process of recruitment commences with the issuance of advertisement and concludes with the filling up of notified vacancies, consisting various steps in the intervening stages like invitation of applications, their scrutiny and rejection of defective applications, examinations, interviews, viva voce followed by preparation of final list of successful candidates.

The doctrine against change is predicated on the rule against arbitrariness enshrined in Article 14 of the Constitution of India. Good administration requires public authorities to act in a predictable manner, whilst honouring their promises made or practices established unless there are compelling reasons for departure. However, at the same time it was held that doctrine of legitimate expectation does not impede or hinder the power of public authorities to lay down a policy or withdraw it and courts always treat public interest as a limitation on the application of the doctrine of legitimate expectation. Referring to the judgment of Sivanandan C.T. v. High Court of Kerala¹⁴⁶ the Constitution Bench held that for any public authority to defeat the claim of legitimate expectation, it must objectively demonstrate that its decision was in public interest buttressed by relevant material and documents.

Applicability of K. Manjusree judgment for selection process after initial screening exercise

The judgment of K. Manjusree case¹⁴⁷ arose in the backdrop of vacancies advertised by the High Court. After the interview and written examinations were over, the Selection Committee decided to consider only those candidates who have scored minimum percentage separately in both the written examination as well as interview. The aggrieved candidates challenged the said decision seeking the relief of withdrawing the select list without adopting minimum qualifying marks for the interview. The Supreme Court finally held that introduction of the requirement of minimum marks for interview after the entire selection process consisting of written examination and interview was completed would amount to changing the rules of the game after the game is played which is clearly impermissible. However, the High Court held that the Selection Committee could not have prescribed minimum marks for the interview after the said stage was over and the same ought to have been done before the commencement of the selection process.

Earlier in the judgments of K. Manjusree case¹⁴⁸ and Subash Chander Marwaha case¹⁴⁹ it was held that higher score of marks for the purposes of selection can be fixed by the employer authority/recruiting authority and that it is always open to it to fix higher standards of competence and score much higher than the one required for mere eligibility. Thus, the judgment of Subash Chander Marwaha case¹⁵⁰ dealt with the right to be appointed from the select list whereas that of K. Manjusree case¹⁵¹ dealt with the right to be placed in the select list.

Referring to the judgment of K.H. Siraj v. High Court of Kerala¹⁵² it was held that it is always open to the High Court to supplement the rule with a view to implement them by prescribing relevant standards in the advertisement for selection. Thus, the decision of K. Manjusree case¹⁵³ is neither per incuriam nor any case is made out for referring the said judgment to larger Bench for reconsideration.

After the initial exercise of written examination gets over, there are multiple stages for testing the candidates overall intellectual and personal qualities and assessing his suitability. A candidate’s initiative, alertness, resourcefulness, dependableness, etc. have to be assessed for the purposes of his final recruitment. Thus, where on one hand, the written examination assesses the man’s intellect, the interview tests the man himself and “the twain shall meet” for a proper selection is the fond hope of the recruiting authorities.

Accordingly, it was held that in the absence of any specific rules to the contrary, the appointing/recruiting/competent authority can devise a procedure for selection of a candidate most suitable to the post and may also set benchmarks for different stages of the recruitment process including written examination and interview. However, the rider is that such benchmarks must be always prescribed or fixed before that stage is reached and not after the stage gets over.

Applicability of the doctrine to selection process

The recruiting authority always has the large leeway to determine basic issues pertaining to the selection process in the absence of any rules to the contrary, depending on the candidate’s performance during the interview or viva voce. Referring to the judgment of M.P. Public Service Commission v. Navnit Kumar Potdar¹⁵⁴, it was held that the Selection Board of the Commission has to decide about the procedure to be followed for selecting the best candidate. The procedure so adopted must be rational, fixing the determinate number of candidates to be called for an interview.

Shortlisting of eligible candidates on the basis of higher standards, in view of the large number of applicants compared to the vacancies so filled, is also permissible for the employer concerned. Shortlisting is permissible on the basis of administrative instructions provided the action is bona fide, reasonable and not done arbitrarily. In respect of fixing different cut-offs for different subjects of the examinations, even the courts have been lenient for successfully concluding the recruitment process provided the procedure so adopted is transparent, non-discriminatory/non-arbitrary and having a rational nexus to the object sought to be achieved.

The Court also held that contrary to the extant applicable rules and the advertisement, minimum marks for selection cannot be prescribed. However, when there are no rules or regulations, or they are silent, administrative instructions may be issued to supplement and fill in the gaps in the rules.

Appointment maybe denied even after placement in the select list

No candidate has a vested right to be appointed on mere participation in the selection process, even if the vacancy exists. This is predicated on the principle that the State is under no legal duty to fill up all or any of the vacancies so advertised by it, if such a decision is taken in a bona fide manner for appropriate reasons. Referring to the judgment of Shankarsan Dash v. Union of India¹⁵⁵ it was held that the State or its instrumentality cannot arbitrarily deny appointment to a selected candidate, and the burden to justify and persuade the Court that such a decision is taken rationally is on the State. It is for the State to justify that its decision of abandoning the selection process midway for not making appointments of the selected candidates from the select list is in larger public interest.

Accordingly, the reference was answered by the larger Bench with a direction to place the appeals before the appropriate Bench for further decision.

* * *

(5) Section 6-A of the Citizenship Act 1955: In re¹⁵⁶

(Delivered on 17-10-2024) Supreme Court of India (SC)

Coram: 5-Judge Bench of Justices Dr D.Y. Chandrachud, C.J. and Surya Kant, M.M. Sundresh, Manoj Misra and J.B. Pardiwala, JJ.

Majority Opinion Authored by: Justice Surya Kant (on behalf of himself, M.M. Sundresh, J., and Manoj Misra, J.)

Abbreviations for various common terminologies in the judgment

Art. — Article	SC — Supreme Court
COI — Constitution of India	CB — Constitution Bench
NRC — National Register of Citizens, 1951	CAD — Constitutional Assembly Debates
CG — Central Government	ICCPR — International Covenant on Civil and Political Rights, 1966
RPA — Representation of the People Act, 1950 ¹⁵⁷	SCOTUS — Supreme Court of the United States

Subject-matter and background of the reference to the Constitution Bench

The batch of matters involved the constitutional validity of Section 6-A of the Citizenship Act, 1955 ¹⁵⁸ (for short, “Section 6-A” and “Citizenship Act”). Section 6-A was incorporated through the 1985 Amendment to the Citizenship Act, delineating the criteria for granting Indian citizenship to migrants from Bangladesh (East Pakistan), who entered Assam before 25-3-1971 on various dates. No protection was however granted to those immigrants entering Assam after 25-3-1971, rendering their presence, consequentially in India, illegal and liable for deportation under other existing legislations. The reference thus revolved around the concept of “citizenship”, its dimensions under the Constitution of India and interrelation of various provisions under the Part II of the Constitution of India, especially Articles 5, 7 and 11 with Sections 5¹⁵⁹, 6¹⁶⁰ and 6-A of the Citizenship Act, 1955.

The dispute started when a petition was filed by Assam Public Works, a non-governmental organisation (NGO), seeking deletion of illegal migrants from electoral rolls in Assam and updation of National Register of Citizens, 1951, when the constitutionality of Section 6-A also came to be challenged on various grounds of being discriminatory, arbitrary and illegal. A 2-Judge Bench vide its judgment dated 17-12-2014 passed in Assam Sanmilita Mahasangha v. Union of India¹⁶¹ framed 13 questions regarding the constitutionality of Section 6-A arising from the batch of writ petitions and referred them for adjudication by the Constitution Bench. When disputes arose with the publication of the National Register of Citizens, 1951 List, the Court vide order dated 20-9-2023 retitled the proceedings as “Section 6-A of the Citizenship Act, 1955, In re¹⁶²”. The core issue on which the Court proceedings were rechristened was “whether Section 6-A of the Citizenship Act, 1955 suffers from any constitutional infirmity”. After hearing the submissions from various contesting parties, the Court accordingly framed the following issues for its consideration by the Constitution Bench:

(a) Does the power of judicial review extend to analysing the constitutionality of Section 6-A?

(b) Whether the present petitions are barred by delay and laches?

(d) Is Section 6-A ultra vires Part II of the Constitution?

(e) Does Section 6-A create an unreasonable classification which violates Article 14 or suffers from manifest arbitrariness?

(f) Does Section 6-A violate the rights provided to “indigenous” communities under Article 29?

(g) Is Section 6-A ultra vires Article 21 of the Constitution?

(h) Does Section 6-A violate the political rights of Indian citizens in Assam under Article 326?

(i) Does the operation of Section 6-A cause “external aggression” and “internal disturbance”, culminating in the invocation of Article 355?

(j) Does the Citizenship Act conflict with provisions of the Immigrants (Expulsion from Assam) Act, 1950? If so, how can the two legislations be harmoniously interpreted?

(k) Does Section 6-A violate international laws?

Meaning of and modes of acquiring citizenship

A 9-Judge Bench of the Supreme Court in State Trading Corpn. of India Ltd. v. CTO¹⁶³ explained citizenship as the “right to have rights” a prerequisite that leads to gaining legal status and other socio-political rights in any country. Though there is broad consensus on fundamental concept of citizenship, but specific rights and privileges associated with citizenship may vary from one jurisdiction to another. There are three approaches for granting or acquiring citizenship by any individual of any country, which are as follows:

(a) jus soli i.e. on the basis of birth within that particular country;

(b) jus sanguinis i.e. citizenship by blood/descent; and

(c) through special recognition provided under law, such as citizenship by registration, naturalisation, incorporation of a foreign territory, etc.

Citizenship under the Constitution of India is governed vide the various constitutional provisions as also the provisions of the Citizenship Act. Indian citizenship under the Constitution of India is governed by provisions of Part II, whilst being made subject to laws that the Parliament may make subsequently after enactment of the Constitution of India. The various provisions under the Constitution of India pertaining to the scheme of citizenship are as follows:

(a) Article 5 — Citizenship at the commencement of the Constitution.

(b) Article 6 — Rights of citizenship of certain persons who have migrated to India from Pakistan.

(d) Article 8 — Rights of citizenship of certain persons of Indian origin residing outside India.

(e) Article 9 — Persons voluntarily acquiring citizenship of a foreign State not to be citizens.

(f) Article 10 — Continuance of the rights of citizenship.

(g) Article 11 — Parliament to regulate the right of citizenship by law.

On the legislative front, through the provisions of the Citizenship Act, exercising the powers granted constitutionally under Article 11 of the Constitution of India ¹⁶⁴ read with E-17, L-I of VII Schedule, the Parliament enacted the Citizenship Act. The key provisions under the Citizenship Act:

(a) Section 3 — Citizenship by birth.

(b) Section 4 — Citizenship by descent.

(d) Section 6 — Citizenship by naturalisation.

(e) Section 6-A — Special provisions as to citizenship of persons covered by the Assam Accord.

(f) Section 7 — Citizenship by incorporation of territory.

Conjoint reading of various constitutional provisions as well as the statutory provisions under the Citizenship Act, provides for the scheme of citizenship summed up through the following table:

Condition on birth	Condition on residence	Condition on descent	Condition of registration	Other conditions	Ref.
Citizenship by birth (Jus Soli)
(i) Born before 26-1-1950. (ii) Born in India.	Had domicile in India at the commencement of the Constitution of India.	–	–	Is not barred by Article 7.	Article 5(a)
(iii) Born on/after 26-1-1950 but before 1-7-1987. (iv) Born in India.	–	Parents must not be covered by Section 3(2).	–	–	Section 3(1)(a)
(v) Born on/after 1-7-1987 but before 3-12-2004. (vi) Born in India.	–	(i) Either parent is a citizen of India at the time of birth. (ii) Parents must not be covered by Section 3(2).	–	–	Section 3(1)(b)
Born on/after 3-12-2004. (vii) Born in India.	–	Both parents are citizens of India, or one parent was a citizen of India, and the other was not an illegal immigrant at the time of birth. (iii) Parents must not be covered by Section 3(2).	–	–	Section 3(1)(c)
Citizenship by descent (Jus Sanguinis)
(viii) Born before 26-1-1950. (ix) Born outside India.	Had domicile in India at the commencement of the Constitution of India.	Either parent was born in India.	–	Is not barred by Article 7.	Article 5(b)
(x) Born on/after 26-1-1950 but before 10-12-1992. (xi) Born outside India.	–	Father was a citizen of India at the time of birth.	Registration with the Indian consulate is required if the father is a citizen of India by descent only and was not in service of the Government of India.	–	Section 4(a)
(xii) Born on/after 10-12-1992 but before 3-12-2004. (xiii) Born outside India.	–	Either parent was a citizen of India at the time of birth.	Registration with the Indian consulate is required if either parent is a citizen of India by descent only and was not in service of the Government of India.	–	Section 4(b)
(xiv) Born on/after 3-12-2004. (xv) Born outside India.	–	Either parent was a citizen of India at the time of birth.	Compulsory registration is required with the Indian consulate.	The parents shall declare that the minor does not possess a passport of another country.	Section 4(b)
Citizenship by registration
–	Is ordinarily residing outside India (India as defined in the Government of India Act, 1935, hereinafter “Undivided India”).	Person/Either parent/Any grandparent was born in Undivided India.	Compulsory registration with diplomatic/consular representative of India.	–	Article 8 and Section 5(5)
–	Ordinary resident 26 in India for seven years before making the application for registration.	Person/Either Parent was born in Undivided India or territories that became part of India after independence.	Must be compulsorily registered.	(i) Person who is not a minor must take the oath of allegiance (ii) Person must not be an illegal immigrant	Sections 5(1)(a) and 5(2)
–	–	–	Must be compulsorily registered.	(i) Spouse must be a citizen of India. (ii) Person who is not a minor must take the oath of allegiance. (iii) Person must not be an illegal immigrant.	Sections 5(1)(c) and 5(2)
–	Ordinary residents outside Undivided India or territories that became part of India after independence.	Person/Either parent was born in Undivided India or territories that became part of India after independence.	Must be compulsorily registered.	(i) Person who is not a minor must take the oath of allegiance. (ii) Person must not be an illegal immigrant.	Sections5(1)(b) and 5(2)
–	–	Parents are citizens of India.	Must be compulsorily registered.	(i) Person must be a minor child. (ii) Person must not be an illegal immigrant.	Section 5(1)(d)
–	–	Parents are registered under Section 5(1)(a) or naturalised under Section 6 as citizens of India.	Must be compulsorily registered.	(i) Person must be of full age and capacity. (ii) Person must take the oath of allegiance. (iii) Person must not be an illegal immigrant.	Sections 5(1)(e) and 5(2)
–	Ordinary resident in India for 12 months before making an application for registration.	Person/either of the parents was earlier a citizen of independent India.	Must be compulsorily registered.	(i) Person must be of full age and capacity. (ii) Person must take the oath of allegiance. (iii) Person must not be an illegal immigrant.	Sections 5(1)(f) and 5(2)
–		–	Must be compulsorily registered.	(i) Person must be registered as an Overseas Citizen of India Card-holder for five years. (ii) Person must be of full age and capacity. (iii) Person must take the oath of allegiance. (iv) Person must not be an illegal immigrant.	Sections 5(1)(g) and 5(2)
Citizenship by naturalisation
–	(i) Had domicile in the territory of India at the commencement of the Constitution. (ii) Was ordinarily residing in India for at least five years before the commencement of the Constitution.	–	–	Is not barred by Article 7.	Article 5(c)
–	Was residing in India/was in service of the Government of India/both for twelve months before making the application. (iii) During the 14 years preceding the 12 months mentioned above, the person has resided in India/has been in the service of the government for an aggregate of 11 years. (iv) After getting Citizenship, intends to reside in India/work with the Government of India or an international organisation of which India is a member or a society/company/body of persons established in India.	–	Must apply to the Government for getting the certificate of naturalisation.	(i) Is of full age and capacity. (ii) Is not an illegal immigrant. (iii) Takes oath of allegiance. (iv) Is of a good character and adequately knows languages specified in the Eighth Schedule. (v) Is not a subject/citizen of a Country where Indian citizens are barred from becoming subjects/citizens. (vi) Person undertakes to renounce previous Citizenship if Indian Citizenship is granted.	Section 6(1) and Third Schedule
Citizenship by incorporation of territory
–	–	–	–	(i) The person must be connected to the territory that is incorporated in India and is extended Indian citizenship by the Government of India. (ii) The person must fulfil the conditions prescribed by the governmental order granting citizenship.	Section 7

Limits of judicial review and limitation period for writs

Though the term “policy” is not expressly mentioned under Article 13, it becomes justiciable and subject to judicial review, if it takes the shape of a “law”. If such a “policy” is deemed void due to violation of any fundamental right, then it cannot be protected or defended merely on the grounds of being a “policy”. Designation of any decision as a “policy choice” cannot immunise it from the scope of judicial review, referring to the judgment of A.L. Kalra v. Project and Equipment Corpn.¹⁶⁵

Taking the preliminary objection of inordinate delay and laches in filing of the writ petition, challenging the amendments introduced 27 years back in the year 1985, the respondents prayed for dismissal of the writ petition. It was argued relying on the judgment of Tilokchand and Motichand v. H.B. Munshi¹⁶⁶ that even if Section 6-A violated fundamental rights, it cannot be declared unconstitutional at such a belated juncture.

The Court while repelling the said preliminary objection held that the Limitation Act, 1963 does not apply to writ proceedings as no time-limit is prescribed under the Constitution of India when a writ needs to be filed. Even the Supreme Court Rules, 2013 do not specify any limitation period for filing a writ petition under Article 32 of the Constitution of India.¹⁶⁷ However, a writ petition filed belatedly is barred by operation of doctrine of laches, based on the maxim “vigilantibus non dormientibus jura subveniunt”, meaning that law assists those who are vigilant with their rights and not those who keep sleeping there upon. However, the doctrine of laches is less rigid in its application and not an inviolable legal rule, but only a rule of practice that must be supplemented with sound exercise of judicial discretion. Referring to the judgment of Kashinath G. Jalmi v. The Speaker¹⁶⁸ it was held that doctrine of laches cannot be used to expel a claim made on behalf of the public. Where it is found that denial of consideration on merits is likely to affect society in general, having a cascading effect on millions of citizens, the Court will proceed to decide the writs on merits, even though it is filed belatedly. Such a doctrine would not be applicable strictly in matters where the vires of a statute are challenged vis-à-vis the Constitution of India. Accordingly, the challenge to the maintainability of the writ petition on the ground of doctrine of delay and laches was repelled by the Supreme Court after observing that petitioners raised various substantial questions of law that affected millions of people at large having ramifications for the original inhabitants of Assam.

Socio-political history of Assam

The Court traced the political history of Assam before deciding upon the constitutionality of Section 6-A. Assam had historically been inhabited by diverse ethnic and linguistic communities, being predominantly governed by Ahom political authority until 1826, whereafter it came under British colonial dominance. With the British partition of the Bengal province, Assam became a constituent of the East Bengal region with Dhaka serving as its capital, often regarded as the inception of friction between the Assamese and the Bengali communities. In the midst of immense unrest during the period of Independence, the Nehru-Liaquat Pact of 1950 was signed between India and Pakistan, when both India and Pakistan mutually committed to safeguard minorities and their interests in both the nations. It is in this backdrop that Citizenship Act came to be enacted, empowering the Central Government to declare law on citizenship on nationality. A permit system was instituted between West Pakistan and India in the year 1948 through West Pakistan (Control) Ordinance, followed by a formal passport and visa system along the Eastern border. National Register of Citizens, 1951 was initially prepared exclusively for Assam in 1951 for identifying illegal immigrants entering the State from Bangladesh on the basis of 1951 census.

However, March 1971 is the landmark date when Pakistan initiated “Operation Searchlight” to quell the Bengali Nationalist Movement in East Pakistan and the onset of Bangladesh liberation war, when Bangladesh declared independence from Pakistan. In December 1971 India joined the war against Pakistan, which accelerated and accentuated the influx of immigrants from Bangladesh into the State of Assam and other Indian States at heightened scales. To handle the anxiety surrounding the preparation and issue of electoral rolls in the North-East region due to this high influx of refugees, accordingly long-term agitations started in the name of “Assam Movement”, fearing that Bangladeshi immigrants would overwhelm the indigenous population of Assam. Accordingly, on 15-8-1985 a Memorandum of Settlement known as the “Assam Accord” between the Central Government, the leaders of the All Assam Students’ Union (AASU) and the All Assam Gana Sangram Parishad (Aagsp), came to be finally executed. There were three categories of immigrants classified under this “Assam Accord”: first, those who came before 1-1-1966; second, those who came between 1-1-1966 and 24-3-1971; and third, those who came on or after 25-3-1971, with the third and last category declared as illegal immigrants, liable for expulsion and deportation.

It is in the above backdrop of execution of “Assam Accord” that corresponding amendments were incorporated with respect to the State of Assam introducing Section 6-A in the Citizenship Act.

Validity of Section 6-A being against the preambular notion and ethos of “fraternity” under the Constitution of India

As articulated in the Preamble, the term “fraternity” embodies a sense of collective brotherhood amongst all Indians, and as explained by Dr B.R. Ambedkar during the Constitutional Assembly Debates, it is the principle that gives unity and solidarity to social life, a difficult position to achieve. However, in the Indian context, the meaning of “fraternity” has been entirely diverged from its French counterpart of the term, and intricately woven into the fabric of fostering social solidarity, uplifting marginalised groups and achieving a more equitable society, as per the vision propounded by Dr B.R. Ambedkar. Since “fraternity” by its very essence was conceived to be fostering interconnectedness and unison amongst Indians it encourages people to fraternise and intermingle with people dissimilar to them and of their dislike. Therefore, the term “fraternity” cannot be interpreted in a negative manner that selectively applies to a particular segment, whilst labelling another faction as illegal immigrant solely based on the alleged unconstitutionality of Section 6-A.

Constitutionality of Section 6-A in the backdrop of provisions under Part II of the Constitution of India

Primary contention of the petitioner was that Parliament cannot legislate by introducing Section 6-A without amending the Constitution of India, especially when various provisions of Part II have already provided a different regime for granting Indian citizenship to individuals migrating to India from Pakistan/Bangladesh. The Court held that Article 6 only specifies the conditions for granting citizenship to people who have immigrated to India from Pakistan during the independence period and the formalities (like registration) associated with it. It provides certain cut-off date, when such a citizenship would stand conferred upon the immigrants and for this reason therefore Section 6-A aligns with the fundamental purposes of Articles 6 and 7 of aiming to safeguard rights of individuals who were previously Indian citizens, but found themselves residing in a foreign territory due to the political turmoil and circumstances surrounding migration. Thus, the constitutional philosophy of Articles 6 and 7 is not at odds with Section 6-A, nor Articles 6 and 7 impose any prohibition on conferral of citizenship after the cut-off date of 19-7-1948.

Referring to E-17, L-1 of the VII Schedule, titled as “Citizenship, naturalisation and aliens”, and Entry 19, it was held that Parliament has the sovereign power to enact laws on citizenship, by virtue of Article 246(1).

Interpreting the phrase occurring under Article 11 — “Nothing in the foregoing provisions of this part shall derogate”, and relying upon the 5-Judge Bench earlier judgment of the Supreme Court in Izhar Ahmad Khan v. Union of India¹⁶⁹ it was held that Article 11 grants Parliament the sovereign right to make laws on citizenship and such laws cannot be impeached on the ground that they militate against Articles 5-10. The Parliament can make any provision regarding citizenship, which is clear from the phrase mentioned above and such an authority cannot be restricted by the provisions of Part II of the Constitution of India.

On the argument of Section 6-A perpetuating the unconstitutionality of dual citizenship, the Court referred to the citizenship regime of various countries holding that many countries prohibit dual citizenship and large number of countries signed the treaty titled as “Convention on Certain Questions Relating to the Conflict of Nationality Law, 1930”, whereunder all the countries agreed to abolish dual citizenship.

However, it was held that Section 6-A does not grant citizenship, but is complementary to Section 9 of the Citizenship Act, 1955 ¹⁷⁰ terminating dual citizenship on various grounds specified thereunder. Any person being an immigrant retains Indian citizenship only after he has foregone or renounced their previous citizenship of Pakistan/Bangladesh. By electing not to opt out after migrating to India of the earlier citizenship, by default, on applicability of Section 6-A they attain the Indian citizenship. However, at the same time in view of the mandate of clauses (2) and (3) of Section 6-A, the individuals are presumed to have relinquished their previous citizenship of their original country from where they migrated.

Article 14 and classification under Section 6-A

The petitioners vehemently contended that selective application of Section 6-A solely to the State of Assam, to the exclusion of other states like West Bengal, Tripura, etc. where also the same problem persisted was unconstitutional being violative of Article 14 of the Constitution of India. Though the argument had an inherent defect that they never asserted exclusion from a benefit extended to similarly situated individuals, but they claimed infringement of Article 14 on the ground that they alone were statutorily compelled to bear the burden of Bangladeshi illegal immigrants.

Referring to the judgment of State of W.B. v. Anwar Ali Sarkar¹⁷¹ Court held that Article 14 takes care of liabilities also and not only the benefits/privileges conferred. The Supreme Court observed in the judgment of Anwar Ali Sarkar case¹⁷² that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Therefore, the plea requires scrutiny for being alleged to be violative of Article 14 on merits.

Yardsticks to check the reasonableness of classification

Any classification cannot be based on arbitrary criteria, but must withstand the test akin to the Wednesbury Principle, by considering all the relevant similarities and disregarding insubstantial or microscopic differences. For “gauging relevance, the Court must advert to the purpose of the law”. Referring to the judgment of Rustom Cavasjee Cooper (Banks Nationalisation) v. Union of India¹⁷³ propounded by 11-Judge Bench of the Supreme Court, it was held that classification becomes reasonable when the similarities and dissimilarities created by it have nexus with the purpose for which the statute has been enacted.

Apart from the relevance of classification, what is also necessary are the qualifications of the classification. The classification must be the optimal method to achieve the object in question, possessing the discernable principle emanating out of it. However, courts would not declare such a classification unconstitutional solely because it is marginally under-inclusive or proves to be perilous for few, when such under-inclusion is justified on the grounds of administrative convenience and legitimate experimentation.

Reasonableness of classification envisaged under Section 6-A

As stated supra, Section 6-A was enacted in the backdrop of humanitarian concerns as it was deemed inhumane to repatriate thousands of people, who had migrated to India during times of war and secondly, the gesture of India in cooperating with the newly found nation of Bangladesh and helping it in restoring normalcy. Further it was enacted to give a statutory recognition to commitments made by the Central Governments under the settlement of “Assam Accord”, which represented a political compromise for specifically granting citizenship to immigrants in Assam based on the terms agreed upon in the accord. Thus Section 6-A duly considered the pertinent factors, notably the “Assam Accord”, when it pertains solely to the State of Assam.

India’s federal structure allows for diverse relationships between the Union and the constituent States, enabling the Parliament to engage in a variety of ways based on distinct regional aspirations, political needs and State specific requirements of the State concerned. Thus, Section 6-A never suffered from the vice of under-inclusion, by treating Assam as a unit.

Examining Section 6-A on the anvil of manifest arbitrariness

The Court traced the ingredients of “manifest arbitrariness” as elaborated in the landmark judgments of Shayara Bano v. Union of India¹⁷⁴ and State of A.P. v. McDowell & Co.¹⁷⁵ as something done capriciously, irrationally and without any adequate determining principle. The term “irrationality” refers to the lack of reason or logic and expects any legislative statute or provision to be supported with the application of intelligent care, deliberations and observations in its enactment. However, “irrationality” does not merely denote the absence of reason, but also requires that such reasoning be in harmony with the spirit of constitutionalism. The legitimacy of the reason constituting the spine of any legislation must be tested on the anvil of public interest as well and in the absence of any public interest, the Doctrine of manifest arbitrariness is all the more attracted. For judicial review, arbitrariness should be not only palpable, but be also visible and tangible. However, the test of manifest arbitrariness is extremely limited whilst examining the “bright lined tests”, where fixed numerical cut-offs are introduced for deciding the validity of any executive action. For example, minimum age for marriage, maximum speed at which cars can drive on highways; cut-off date of determining citizenship, etc. all fall under the category of “bright lined tests”, in respect of which courts adopt extreme caution in treating them as arbitrary or excessive. If such bright lined tests are supported by rational intent and policy of the legislature, then they cannot be treated as manifestly arbitrary.

Applying the aforementioned test, it was held that there were humanitarian grounds and administrative reasons for fixing the cut-off date and due to political and historical circumstances the date of 1-1-1966 was fixed as the cut-off date under Section 6-A. People were displaced by wars and political turmoil that took place at the relevant point of time and the roles of 1-1-1966 served as the nearest definitive document to determine citizenship which was preceded by detailed deliberations. Therefore, the cut-off date of 1-1-1966 was never set arbitrarily but on proper evaluation of circumstances and due application of mind. Likewise, the subsequent cut-off date of 1971 was also fixed and incorporated as a result of “Operation Searchlight” launched in the neighbouring country of Bangladesh that led to mass influx and migration of immigrants from Bangladesh to India. Both the dates therefore cannot be treated as manifestly arbitrary and are in line with the political events surrounding them.

Apart from this the dates were also in line with the commitments made by the Central Government under the “Assam Accord” and could not be treated to be irrationally determined.

Challenge to Section 6-A on the grounds of being vague

It was contended that the phrase “ordinarily resident” employed under Section 6-A is vague as it does not prescribe any yardstick for the number of days required to qualify the same and being a key concept was left undefined under the Act. It was therefore liable to be struck down being full of vacuum.

The Court tested this argument by examining the concept of “vagueness in law”. Excessive vagueness in law can make the statute over broad and might make the exercise of discretion by executive authorities a capricious exercise. However, at the same time it might sometimes be desirable in the interest of justice to retain sufficient leg room and discretion available at the hands of the State machinery implementing the law. Example of Section 5 of the Limitation Act, 1963 ¹⁷⁶ was offered as containing the phrase “sufficient cause”, as a loosely worded phrase leaving the fact based analysis in the hands of the Court of applicability of bar of limitation. Therefore, vagueness per se is never unconstitutional, rather it is desirable in many circumstances for making the statute effectual and pragmatic.

However, when vagueness in the operative provisions fails to lay down any manageable standard for either the authorities applying the impugned law or the persons being regulated by the impugned law, then it becomes violative of Article 14. The law must be clear enough to provide necessary guidelines regarding its application and must not confer unfettered discretion. Referring to the judgment of Kartar Singh v. State of Punjab¹⁷⁷ it was held that it is essential to adopt an objective standard reflecting the view-point of a person of average intelligence within the affected group whilst employing any phrase or term used in the law to which they are subjected to. Vague laws offend important values and reinforce the need for laws to give a person of ordinary intelligence a reasonable opportunity to know what is prohibited.

Accordingly, the Court held that a provision can be struck down on the grounds of being vague after considering two perspectives, both of which to be taken into account, being as follows:

(i) the authority interpreting and applying the impugned law or provision is not sufficiently guided by such law or provision and is conferred unfettered discretion by virtue of the same; and

(ii) when confronted with the plain meaning, a person of ordinary intelligence, amongst the persons regulated by the impugned law or provision, faces difficulty in understanding the sphere of their application.

However, it was further held that courts must always endeavour to draw a demarcating line and decipher reasonable meaning from an impugned provision. Vagueness should always be inversely proportional to the gravity of the consequences involved i.e. the more penal the consequences, the less vague the legislation should be. Since Section 6-A is more akin to a beneficial legislation, than being a penal legislation, the Court extended greater laxity whilst testing the term “ordinarily resident” for vagueness. Referring to the judgment of Shanno Devi v. Mangal Sain¹⁷⁸ the Court held that it is reasonable to take the words to mean resident during this period without any serious break and the phrase “ordinarily resident” was not held to be undefined or vague. Further the fact that judicial officers man the foreigners’ tribunals; their orders being subject to review by superior courts and civil officers well conversant with the nuances of procedures contemplated under Section 6-A, the term “ordinarily resident” was not susceptible to misuse. A person of ordinary intelligence can understand the meaning simpliciter of the term and gain a basic idea of the scope or sphere of application of the same within the context of the impugned law. It implied that an immigrant from East Pakistan who has come before 25-3-1971 to Assam, not versed in law when confronted with the plain meaning of the words “ordinarily resident” since the date of his entry in Assam would readily be able to understand the import of the said words and be able to respond to it by providing sufficient proof of the same. Thus, Section 6-A was held not to be suffering from manifest arbitrariness, nor unconstitutional on the ground of being vaguely worded, enough to be treated as void.

Assail to Section 6-A on violation of Article 29

The petitioners argued claiming endogamous community rights through the route of Article 29 of the Constitution of India.¹⁷⁹ Since there have been drastic demographic changes in the State of Assam due to influx of illegal immigrants from erstwhile East Pakistan/Bangladesh, therefore Assamese culture was being lost to the immigrants. Right under Article 29(1) is absolute and provides a group the freedom to shape their cultural identity was so argued.

Tracing the background of Article 29 under Part III, two essential ingredients were mentioned in the judgment, viz. Firstly, whether there is a “section of citizens” seeking to conserve their language, script or culture and secondly, that such language, script or culture in question is “distinct”. The protection under this article extends to any and every citizen in the territory of India and not restricted only to minorities. Reference was made to the speech of Dr B.R. Ambedkar in the Constitutional Assembly Debates, wherein it was stated that protection under Article 29 was available to cultural, linguistic and minorities having a distinct script in a wider sense. They may not be technically minorities, but minorities nonetheless in the area/State/region concerned. Thus, it refers to any group seeking to conserve a distinct language, script or culture for themselves. Reference was made to the 9-Judge Bench judgment of Ahmedabad St. Xavier’s College Society v. State of Gujarat¹⁸⁰ and State of Karnataka v. Associated Management of English Medium Primary & Secondary Schools¹⁸¹ to state that it is not necessary that right under Article 29(1) must be invoked by the entirety of the “sections of citizens” belonging to a particular community or that such community must collectively seek redressal. Article 29(1) encapsulates the dimension of non-intervention by the State, or its agencies and this article was envisioned to forestall any potential harm to culture, language or script by fascist regimes, should such a scenario arise. Reference in this respect was made to extensive discussions between K. Santhanam and Hasrat Mohani during the Constitutional Assembly Debates.¹⁸²

Thus, it was held that Article 29 does not advocate for absolute governmental absentation in matters specified therein, as some amount of Government intervention is always inevitable and unavoidable as regulation is essential for the maintenance of public order and upholding constitutionalism. Thus, not all intervention by the State constitutes a curtailment of Article 29(1), but violation of Article 29 hinges entirely on the nature and decree of State intervention, not merely on the simpliciter fact of intervention. What Article 29(1) acts as bulwark against is that the State should not take any steps to erode a community’s culture, language or script, whilst concomitantly according freedom to section/group of citizens for preserving and conserving the same.

Applying the aforementioned interpretation of Article 29(1), the Court inferred thatpetitioners failed to show an actionable impact on Assamese culture due to the operation of Section 6-A. To the contrary Section 6-A when read holistically with the constitutional provisions and other surrounding provisions of the Citizenship Act, mandated timely detection and deportation of illegal immigrants, a large portion of whom entered Assam post 1971. Thus, the grievance of the petitioners in fact arose not out of implementation of Section 6-A, but its non-implementation in an effective and efficient manner. The contention of violation of Article 29(1) occasioned by implementation of Section 6-A of the Citizenship Act, 1955 was accordingly repelled.

Examining Section 6-A on the touchstone of Article 21 rights

It was contended that Section 6-A is violative of Article 21, as it infringes upon the rights of “indigenous” Assamese community, leading to disruptions of their socio-economic aspirations. Unidentified migrant population burdens the country’s natural resources, hindering sustainable development as also depriving the Assamese community from enjoying the full spectrum of socio-economic rights. The Court thus examined whether Section 6-A is violative of Article 21 rights. One of the facets of “right of self-governance” was discussed, relied upon by the petitioners, falling back especially upon Article 1 of the International Covenant on Civil and Political Rights, 1966.¹⁸³ The Court held that firstly, the right of self-determination/self-governance applies only to the people under foreign domination, and it would not apply to sovereign independent States or to a section of people or nation, which is the essence of national integrity. Even otherwise Article 1, International Covenant on Civil and Political Rights, 1966 would not be enforceable through writ jurisdiction. Referring to Article 326, Court stated that any opportunity to allow self-governance by providing the right to vote on the basis of adult franchise and thus conferring citizenship to a subset of immigrants from East Pakistan with a different language or culture would not amount to undermining the self-governance rights of the Assamese.

The Court thereafter discussed right of sustainable development as facet of Article 21, the right to utilise natural resources, to the exclusion of illegal immigrants. The Court held that mere fact that sub-class of immigrants whose status has been legitimised by Section 6-A also has access to the natural resources does not automatically imply a disruption of ecological balance or a violation of the original inhabitants’ rights to resource usage. Population growth can co-exist harmoniously with sustainable development and need not be mutually exclusive. Environmental challenges faced by any country can be effectively addressed by implementing policies that encourage environmental conservation, efficient resource management, and social integration and cannot be achieved by restricting population growth. If the petitioners’ argument is accepted and allowed, it can be espoused later on even to seek imposition of controls on domestic inter-State movement and the challenge must therefore be rejected.

Assail to Section 6-A on the anvil of Article 326 — The Right to Vote

It was contended that the application of Section 6-A violates the Assamese people’s right to vote under Article 326 of the Constitution of India ¹⁸⁴, the electoral rolls being impacted by intrusion of names of illegal immigrants. The Court examined the background and evolution of adult suffrage universally. Article 326 provides that “elections to the House of People and State Assemblies be on the basis of adult suffrage”. Reference was made to the judgment of N.P. Ponnuswami v. Returning Officer, Namakkal Constituency¹⁸⁵ wherein it was held that the right to vote or stand as a candidate for election is not a civil right, but statutory right, subject to limitations imposed by the statute. It cannot be construed as a fundamental right, but nonetheless a constitutional right. Referring to the judgments of People’s Union for Civil Liberties v. Union of India¹⁸⁶ and Rajbala v. State of Haryana¹⁸⁷ it was held that right to vote under Article 326 is not merely a statutory right, but a constitutional right and thus judicial construction has elevated the stature of the right to vote. The benign objective behind Article 326 is to enfranchise people as opposed to people disenfranchising them and to choose their elected representatives.

Article 326 does not possess any powers to impose limitations on exclusion of any individual (otherwise a citizen of the country) from possessing voting rights. Such exclusion of individual is generally exercised by the legislature itself, and no other authority. Reference was made to the legislations of United Kingdom (UK) and United States of America (USA), wherein the power in discretion to enforce the right to vote of citizens are bestowed upon the Congress. In the Indian context, Representation of the People Act, 1950 enactments encapsulate provisions relating to disqualification from voting and various prohibitions against seeking votes by appealing to divisive factors. The Representation of the People Act, 1950 on bare reading provides for mechanism and procedure for disqualifying individuals from voting and removal of their names from the electoral rolls. Thus, exclusion from right to vote cannot be invoked merely by alleging violation of Article 326. The right of any individual to be included in the electoral rolls stems from Article 326, which right cannot be easily throttled. What Article 326 grants is the right to vote and be included in the electoral rolls, which continues to subsist even today devoid of any interruption.

Challenge to Section 6-A, on being heads-on with Article 355

It was contended by the petitioners that Section 6-A is violative of Article 355 of the Constitution of India ¹⁸⁸ on account of continued presence of millions of Bangladeshi immigrants in Assam, leading to transformation in the demographic composition of the State. It was contended that the indigenous population finds itself effectively reduced to a minority in their own State. Repelling this contention, Court held that migration sought to be legitimised by Section 6-A does not constitute internal disturbance. Section 6-A was a crucial step in bringing quietus to the political upheaval in Assam and marked the culmination of various agitations surrounding illegal immigration. Thus, it cannot be accepted that Section 6-A is contrary to Article 355.

Accordingly, the Court declined to strike down Section 6-A holding that the same cannot be treated as unconstitutional, nor does it intervene or interfere in the culture of Assamese people. However, feeling it imperative to acknowledge and address the valid concerns regarding large scale illegal immigrations in the State of Assam post March 1971, directions were issued to the Union of India as follows:

(a) The estimated inflow of illegal migrants into India after March 1971, number of cases pending before the Foreigner Tribunals for such immigrants and extent to such which border fencing has been carried out was directed to be updated to the Court timely.

(b) As a necessary corollary thereto, immigrants who entered the State of Assam on or after 25-3-1971 are not entitled to the protection conferred vide Section 6-A and consequently, they are declared to be illegal immigrants. Accordingly, Section 6-A has become redundant qua those immigrants who have entered the State of Assam on or after 25-3-1971.

(c) The directions issued in Sarbananda Sonowal case¹⁸⁹ are required to be given effect to for the purpose of deporting illegal immigrants falling in the category of direction (b) above.

(d) The statutory machinery and Tribunals tasked with the identification and detection of illegal immigrants or foreigners in Assam are inadequate and not proportionate to the requirement of giving time-bound effect to the legislative object of Section 6-A read with the Immigrants (Expulsion from Assam) Act, 1950, the Foreigners Act, 1946, the Foreigners (Tribunals) Order, 1964, the Passport (Entry into India) Act, 1920 and the Passport Act, 1967.

(e) The implementation of immigration and citizenship legislations cannot be left to the mere wish and discretion of the authorities, necessitating constant monitoring by this Court.

Accordingly, the majority disposed of the writ petitions in terms of the above judgment and the directions issued thereunder.

Concurring judgment of Dr D.Y. Chandrachud, C.J.

The concurring judgment framed the issues separately as follows arising in the matter:

(a) Whether the grant of citizenship to migrants from Bangladesh to Assam was within the legislative competence of Parliament under Article 11 of the Constitution.

(b) Whether Section 6-A of the Citizenship Act, 1955 adopts unreasonable cut-off dates and singles out the State of Assam thereby violating Article 14 of the Constitution.

(c) Whether Section 6-A of the Citizenship Act, 1955 can be regarded to be violative of Article 355 on the ground that the provision does not curb undocumented immigration which amounts to “external aggression”

(d) Whether Section 6-A of the Citizenship Act, 1955 is violative of Article 29(1) of the Constitution on the ground that the Assamese cultural identity is lost as a direct consequence of granting citizenship to migrants from Bangladesh residing in Assam.

(e) Whether Section 6-A(3) of the Citizenship Act, 1955 is unconstitutional on the ground of temporal unreasonableness.

(f) Whether Section 6-A(2) of the Citizenship Act, 1955 is unconstitutional on the ground that it neither provides a method for implementation nor empowers the executive to implement the provisions.

Legislative competence of parliament to enact Section 6-A

Adopting the same reasoning as laid down by the majority, referring to various articles under Part II of the Constitution of India, it was stated that they recognised citizenship by birth, naturalisation and by descent. The provisions on conditions for acquiring citizenship after the commencement of Constitution of India were not part of the Draft Constitution, 1948 submitted by the Drafting Committee in February 1948. It simply contained provisions as to who would be citizens on the date of the commencement of the Constitution of India, whilst granting plenary powers to the Parliament to make provisions on acquisition and termination of citizenship thereafter. Dr Ambedkar, as the Chairperson of the Drafting Committee introduced Articles 5-A (corresponding to Article 6), 5-B (corresponding to Article 7) and 5-C (corresponding to Article 10) providing separate provisions for migrants to acquire citizenship. The objective of these provisions was not to lay down a permanent law of citizenship, but only to decide who would be a citizen on the date of commencement of the Constitution of India, including the migrants. At the time of independence, tracing the history of legislations that introduce the permit system at the time of independence and partition of India, the Court referred to West Pakistan (Control) Ordinance 1948, (for short, “WP Ordinance”) stipulating the necessity of possession of permits for entry into India from any place in West Pakistan. It did not apply to migrants from East Pakistan (present day Bangladesh). The Government of India in exercise of powers conferred under the aforementioned WP Ordinance introduced the permit rules, providing the various categories of permits. Thereafter, the Governor General promulgated the influx from Pakistan (Control) Ordinance, 1948 through which permit system was introduced as a precondition for any person to enter from any place in Pakistan to enter India. Thus, this ordinance included immigrants from both the West as well as East Pakistan. However, these acts were repealed in January 1952, putting an end to the permit system governing the travel between Pakistan and India, whereafter passports and visa schemes so introduced regulated the travel between both the countries. After analysing the discussions about Articles 5¹⁹⁰, 6¹⁹¹, and 7¹⁹² of the Constitution of India, the concurring judgment detailed the analysis of various provisions as follows:

(a) The Constitution only prescribes who would be citizens upon the commencement of the Constitution. This is evident from the language of Articles 5 and 6 which uses the phrase “at the commencement of the Constitution” and the drafting history of the provision.

(b) Article 6 covers a limited class of migrants from both Pakistan and Bangladesh to India (including Assam). The provision only covers those who migrated to India till 26-7-1949 (based on the six months residence requirement).

(c) The benefit of citizenship to the class covered by the proviso to Article 7 depended on the permit system prescribed by law. The Permit System Rules, 1949 framed in exercise of the power under the Influx from Pakistan (Control) Act, 1949 did not cover those who remigrated from East Pakistan (today’s Bangladesh) to India. It only covered those who emigrated from West Pakistan (today’s Pakistan) to India. Thus, though the proviso to Article 7 does not distinguish between migrants from West Pakistan and East Pakistan, migrants from the latter were unable to secure the benefit of citizenship in the absence of Rules on the implementation of the permit system along the eastern border. Thus, the proviso to Article 7 only covered those who remigrated to India from West Pakistan after 1-3-1947 but before 26-7-1949.

(d) Article 6 and the proviso to Article 7 confer citizenship on a limited class upon the commencement of the Constitution: (i) migrants from West Pakistan and East Pakistan till 26-7-1949; and (ii) persons who re-migrated from West Pakistan to India (who had earlier migrated from India to Pakistan after partition) under the permit system till 26-7-1949.

Section 6-A when juxtaposed with the above articles, it operates in a different territory conferring citizenship on those who migrated from Bangladesh to Assam until 24-3-1971. Thus, Section 6-A does not deal with the citizens who are covered by the constitutional provisions, but it overlaps partially with the existing constitutional provisions to cover those who migrated in the timeline/period mentioned under the constitutional provisions. This limited degree of overlap does not amount to alteration or amendment of the constitutional provisions as Section 6-A confers citizenship from 1-1-1966 to those who migrated before that date.

Interrelation between Article 11 of the Constitution of India and Section 6-A

The concurring opinion elaborated upon the phrase “nothing in the foregoing provisions of this Part shall derogate” occurring under Article 11. The said phrase is used to indicate that certain provisions do not reduce the effect or scope of the provision, thereby delinking both from each other. The usage of the phrase indicates that: (a) the Constitution of India confers power elsewhere; and (b) another provision does not override or in any manner impact the power conferred in the former. In the context of interrelation between Article 11 and Section 6-A, the import of the aforementioned phrase was held to be producing the following meaning:

(a) The legislative competence of Parliament to enact laws related to citizenship is traceable to E-17 of L-I and not Article 11.

(b) The provisions in Part II do not impact or limit the legislative competence of Parliament.

Referring to the judgment of Izhar Ahmad Khan case¹⁹³ it was held that non obstante clause cannot be artificially read into Article 11 by expanding the meaning of the phrase “shall not derogate from”. It is always open to the Parliament to affect the rights of citizenship and provisions made by the parliamentary statute in that behalf cannot be impeached on the ground that they are inconsistent with the provisions of Part II of the Constitution of India. Constitutional provisions on citizenship are redundant for all purposes after the commencement of the Constitution of India. Thus, the law enacted in exercise of the power under Article 246 read with E-17, L-I on the subject of citizenship operates in an entirely different field vis-à-vis the constitutional provisions under Part II.

Section 6-A is not violative of Article 14 of Constitution of India

Whilst deciding the Article 14 challenge, the Court articulated 3 arguments for its consideration pertaining to the scrutiny of Section 6-A:

(a) Section 6-A is under-inclusive because it confers citizenship only to migrants to Assam.

(b) There was no justification to single out Assam to the exclusion of other border States that border Bangladesh since they all form a homogenous class.

(c) The provision prescribes a different cut-off date for granting citizenship to migrants who enter Assam as opposed to other States.

The Court discussed the history of the Citizenship Act, upto the Citizenship (Amendment) Act, 2003. The 2003 Amendment expressly bars illegal immigrants from acquiring citizenship by registration or naturalisation and thus, undocumented migrants could be registered as Indian citizens under the Citizenship Act only up to the date of the 2003 (Amendment) Act, which was introduced on 3-12-2004.

The scope of judicial review under Article 14 is generally tested on the grounds of unreasonable classification and arbitrariness. Referring to the judgment of Assn. for Democratic Reforms v. Union of India¹⁹⁴ the test of manifest arbitrariness was stated to be including the following two applications:

(a) The determination of whether the provision lacks an “adequate determining principle” or if the adequate determining principle is not in consonance with constitutional values.

(b) If the provision does not make a classification by identifying the degrees of harm.

Apart from the two-pronged test of intelligible differentia and nexus with the object sought to be achieved, a more substantial enquiry has evolved into the following factors:

(a) Objective: The Courts test the: (i) genuineness of the objective by making a distinction between the ostensible objective and the real objective. The ostensible purpose is the purpose which is claimed by the State and the real purpose is the purpose identified by Courts based on the surrounding circumstances; and (ii) unreasonableness of the objective by determining if it is discriminatory.

(b) Means: The courts undertake the following analysis while identifying the means: (i) whether there is a yardstick (that is, the basis) to differentiate those included and others excluded from the group; (ii) whether the yardstick is in compliance with constitutional provisions and values; (iii) whether all those similarly situated based on the yardstick have been grouped together; and (iv) whether the yardstick has a rational nexus with the objective.

Examining the scope of judicial review of under-inclusive provisions, the Court explained the difference between statutes being under-inclusive and over-inclusive. The under-inclusiveness or over-inclusiveness depends on whether those who are similarly situated have either not been included or those who are not similarly situated have been included. Referring to the judgment of State of Gujarat v. Ambica Mills Ltd.¹⁹⁵ it was stated that the Court must determine if all persons similarly situated for the purpose of law have been grouped. Whilst dealing with the challenge on the ground of under-inclusiveness, the administrative convenience of the State must also be taken into consideration. Referring to the judgment of Missouri Kansas & Texas Railway v. May¹⁹⁶ especially the judgment of Justice O.W. Holmes of the Supreme Court of the United States, it was observed that the Court should interfere only when there is no fair reason for under-inclusion. The Court accordingly deduced following principles from the various precedents and judgments on the constitutionality of under-inclusive statutes on the basis of the various precedents, as follows:

(a) There is no general principle that the constitutional validity of under-inclusive provisions must be assessed with judicial deference.

(b) The degree of judicial scrutiny of an under-inclusive provision depends on the subject-matter. The courts must adopt a higher degree of judicial scrutiny if the law deals with core rights of individuals or groups (as opposed to economic policy).

(c) The determination of the yardstick for classification will help in the assessment of whether a provision is under-inclusive or over-inclusive. The yardstick must have a nexus with the object and must be in consonance with constitutional principles. If the yardstick satisfies the test, then the State must determine if all persons/situations similarly situated based on the yardstick have been included. The State must on the submission of cogent reason justify if those who are similarly situated have not been included (under-inclusiveness) or those who are not similarly situated have been included (over-inclusiveness). The degree of justification that the State is required to discharge depends on the subject-matter of the law, that is whether the matter deals with economic policy or fiscal matters, whether it is a beneficial provision such as a labour provision or whether it deals with the core or innate traits of individuals. The degree of justification is the least for economic policy, higher for a beneficial provision and the highest if it infringes upon the core or innate trait of individuals.

Referring thereafter to the legislative objective behind Section 6-A, especially the execution of “Assam Accord”, it was stated that the Section was enacted towards meeting of national commitments and for humanitarian considerations as spelled out therein. It was a political solution designed with the objective of reducing the influx of migrants to India and dealing with those who had already migrated. The impact of 40 lakh migrants in Assam was conceivably much greater than the impact of 57 lakh migrants in West Bengal owing to Assam’s lesser population and land area compared to West Bengal and therefore singling out of Assam was found to be based on rational considerations.

The determination of under-inclusiveness cannot therefore be made without a reference to the yardstick, as doing so would limit the ability of the legislature to identify the degrees of harm. The yardstick for framing an under-inclusive statutory provision can be always challenged where another yardstick related to the same objective in a comparable manner exists, but does not result into under-inclusion. Especially after “Operation Searchlight” in East Pakistan, the migration to Assam had increased multifold and therefore it became necessary in view of such mass influx to treat Assam in a different manner. Therefore, Section 6-A carves out exceptions in the special circumstances for the State of Assam, for the reasons discussed above as a nexus with its objective of balancing humanitarian considerations for partition refugees.

On the question of Section 6-A being violative of Article 355 of the Constitution of India, it was held that if the duty of the Union to safeguard States against external aggression is held to be justiciable, then petitions would be filed claiming that Union has not appropriately dealt with any of the situations referred to in Article 355 and it can also be contented that emergency powers ought to have been invoked by the Union to deal with the situations appropriately. Thus, the duty of the Union under Article 355 could not be translated into a right being used in the hands of the citizens and courts as such a consequence would be catastrophic for the Constitution of India. Article 355 cannot be elevated as an independent ground of judicial review in view of its solemn purpose. Thus, Article 355 cannot be made or treated as an independent ground for judicial review of legislative action, which is clearly beyond the scope of the provision.

On the ground of challenge to Section 6-A being violative of Article 29(1), the concurring view held that mere presence of different ethnic groups in a State is not sufficient to infringe the right so guaranteed thereunder. The petitioners failed to prove that the necessary effect of Section 6-A was that due to the presence of various ethnic groups in a State another ethnic group was unable to take steps to protect and preserve their cultural language and inability of the State to do so has led to the infringement of Article 29. The Constitution of India has made abundant provisions for preserving the cultural and political identity of Assam by virtue of Articles 244-A, 330 and 371-B which are all special provisions pertaining to the State of Assam. Thus the cultural and linguistic interests of the citizens of Assam are well protected by constitutional provisions and also various legislative enactments like the Assam Official Language Act, 1960 ¹⁹⁷, adopting Assamese as the language for all official purposes of the State. In the backdrop of all these enactments, therefore Section 6-A cannot be held to be violating Article 29(1).

The objective of Section 6-A is not limited only to conferring citizenship, but also extends to excluding a class of migrants from securing citizenship who have migrated after the particular cut-off date mentioned thereunder. This provision is one pea in the pod of a long-time redressal of issues as part of the larger citizenship project.

Section 6-A(3) can also not be treated as unconstitutional on the grounds of temporal unreasonableness (when the classification which was reasonable at a particular point of time becomes unreasonable over the passage of time having been passed). Since Section 6-A had been devised in the light of the stipulations of the “Assam Accord”, its purpose was to provide long-term solution to the large influx of migrants from Bangladesh to Assam. Its purpose therefore cannot be treated as being restricted to speedy and effective identification of foreigners of the 1966-1971 stream as the classification is still relevant to the objective of the provision. The process of detection and conferring citizenships in Assam is a long drawn-out process spanning many decades and striking it down on the ground of passage of time is to ignore the context in object of the provision for which it was introduced.

Dissenting Opinion of Justice J.B. Pardiwala

Out of the twelve issues discussed by Justice Suryakant, the dissenting judgment comprehensively discussed issues relating to manifest arbitrariness and temporal unreasonableness of Section 6-A of the Citizenship Act, 1955 and while keeping itself separate from other issues framed a single issue on the basis of submissions on temporal limits and manifest arbitrariness as follows :

“Whether the absence of any temporal limits in the scheme of Section 6-A of the Citizenship Act, 1955 has rendered the said provision manifestly arbitrary and thus violative of Article 14 of the Constitution? To put it in other words, whether the efflux of time has rendered Section 6-A of the Citizenship Act, 1955 temporally unreasonable and thus liable to be struck down in consequence of violation of Article 14?”

Inherent and manifest arbitrariness in the scheme of Section 6-A of the Citizenship Act, 1955 was amended by the Parliament through Citizenship (Amendment) Act, 1985 and inserted Section 6-A in the Citizenship Act, 1955, whereby it sought to give statutory avatar to the political settlement of “Assam Accord”, arrived at through a series of negotiations and to provide clarity with respect to the status of citizenship of immigrants who came to Assam between 1950 to 1971 from Bangladesh.

The judgment thus thoroughly discussed the nature and scope of Section 6-A(3), governing upon the immigrants belonging to the 1966-1971 stream. It states that the benefit of citizenship to an immigrant is not automatically conferred as in the case of Section 6-A(2) but rather can be availed on fulfilment of conditions provided therein.

Referring to the White Paper,¹⁹⁸ it was stated that due to the inherent and manifest arbitrariness in the mechanism prescribed under the Section 6-A(3), the number of immigrants belonging to the 1966-1971 stream and detected as “foreigner” is significantly smaller in comparison to the approximate number of immigrants who had entered into Assam from Bangladesh between 1-1-1966 and 24-3-1971.

Objective of two separate cut-off dates

The dissenting judgment then observed that Section 6-A has created three categories of immigrants and prescribed two distinct cut-off dates in the following manner:

Category I

Immigrants who came before 1-1-1966.

Category II

Immigrants who came between 1-1-1966 — 24-3-1971.

Category III

Immigrants who came after 24-3-1971.

Governed by Section 6-A(2) of the Citizenship Act, 1955.

Governed by Section 6-A(3) of the Citizenship Act, 1955.

Not entitled to citizenship under Section 6-A of the Citizenship Act, 1955.

The cut-off date of 1-1-1966 categorised the immigrants into two categories, first, where under Section 6-A(2) citizenship is conferred automatically if the immigrant has arrived before this date and second, under Section 6-A(3) wherein mechanism with regard to detection, deletion and registration as citizens is provided.

The judgment explains that a large number of illegal immigrants had managed to get themselves on the electoral rolls. In a proximate event wherein the publication of the electoral rolls for the by-election of the Mangaldohi constituency in 1979, led the local population to apprehend that they would become a minority in the coming by-elections, which led to statewide protests and demonstrations against illegal immigration in Assam.

Section 6-A was a humanitarian and beneficial provision for the immigrants. The legislature had also to form a middle ground during the negotiations to alleviate the resistance from the student protestors to confer citizenship to the immigrants. It was necessary to adopt a humanitarian approach towards the immigrant population in Assam, multifaceted in design and purpose which could also protect the culture, economy and political rights of the local population of Assam. To assuage the apprehensions of the protesting students, Section 6-A(3) was enacted for en-masse deletion of immigrants belonging to the 1966-1971 stream in the electoral rolls.

The second purpose was to confer citizenship on the immigrants in a graded manner. The judgment stated that the immigrants who crossed the border and came to Assam before 1-1-1966 were automatically conferred deemed citizenship on date of coming into force of Section 6-A i.e. 7-12-1985, while an immigrant who reached Assam between 1-1-1966 and 24-3-1971 had to undergo the process of detection, deletion and registration as specified under Section 6-A(3), and any immigrant who came into Assam after 24-3-1971 was not considered entitled to citizenship at all.

Thus, it is evident out of the categories stated above that the acquisition of citizenship was more stringent for the immigrants belonging to the 1966-1971 stream, while there was a complete denial of citizenship to immigrants belonging to the post 1971 stream.

Onus of detection of foreigners of the 1966-1971 stream lies on the State

The judgment observed that Section 6-A(3) does not prescribe or provide for self-declaration, registration or voluntary detection as a foreigner in a fixed time period for any immigrant to avail the benefit of citizenship by registration. It is clear that the onus of detection of an immigrant as a foreigner is solely upon the State and this onus shifts upon the suspected person when he has been once detected as a foreigner.

The judgment termed it as “illogically unique” as the statutory scheme of Section 6-A(3) does not provide a mechanism at the option of the immigrant wanting to avail the benefit of citizenship by registration to approach voluntarily to get detected as a foreigner or to make an application for conferment of citizenship and further it is palpably irrational in the scheme that there is no end date provided after which the benefit of the Citizenship Act under Section 6-A(3) cannot be availed.

The provision provides no intelligible reason for such clear departure of the fundamental principle of voluntary detection which has been provided even across other international jurisdictions where citizenship by registration on naturalisation is a process that can be initiated at the behest of the person seeking to avail the benefit of citizenship by registration or naturalisation. Articles 6(b) and 7 of the Constitution of India deals with citizenship by registration and the permit system, respectively, also place the onus of registration and obtaining permit on the person who is to claim such benefit.

No time-limit under Section 6-A(3) for detection of a foreigner

The judgment observed that there is no limit of time for initial detection of an immigrant as a foreigner but once detected the further process that follows is completely based on specified time-limits. The judgment further observed that an immigrant who arrived in 1966-1971 stream, whose name figures in the electoral rolls would not out of his own volition want to get detected as a foreigner as upon detection such immigrant has to face inherent subjectivity that is involved in the process of scrutiny and becomes liable to having his/her name struck off from the electoral rolls for the next 10 years and is also required to register with the registering authority within a specified time period failing which he/she would become liable for deportation. Referring to the Latin maxim “Cessante ratione legis cessat ipsa lex”, which means that reason is the soul of the law and when the reason of any particular law ceases, so does the law itself, the judgment states that when the reason for which a particular law was enacted ceases to exist due to efflux of time, then the law too must cease to exist.

Referring to the judgments of Independent Thought v. Union of India¹⁹⁹, Satyawati Sharma v. Union of India²⁰⁰ and Malpe Vishwanath Acharya v. State of Maharashtra²⁰¹ the judgment stated that the concept and the position of law on temporal reasonableness provides that a legislation which may be quite reasonable and rational at the time of its enactment may with the lapse of time and become arbitrary, unreasonable and violative of the doctrine of equality. Even if the validity of such legislation may have been upheld at a given point of time earlier, the Court may in subsequent litigation strike down the same as if it is found that the rationale of classification has become non-existent.

No outer temporal limit on the applicability of Section 6-A(3) defeats the objective implicit in the scheme of Section 6-A

The judgment observed that Section 6-A(3) does not provide any outer time-limit for the completion of the detection of any person who belongs to 1966-1971 stream, as a foreigner. The absence of any prescribed time-limit has twofold adverse consequences — firstly, it relieves the State from the burden of effectively identifying, detecting, and deleting from the electoral rolls, in accordance with law, all immigrants of the 1966-1971 stream. Secondly, it incentivises the immigrants belonging to the 1966-1971 stream to continue to remain on the electoral rolls for an indefinite period and only get themselves registered under Section 6-A once detected by a competent tribunal. Hence, the manner in which the provision is worded, counter-serves the very purpose of its enactment, which is the speedy and effective identification of foreigners of the 1966-1971 stream, their deletion from the electoral rolls, registration with the registering authority and conferring of regular citizenship.

The temporal limit in the provision is absent only to the stage of detection of an immigrant as a foreigner. Once the detection has been made, the mechanism for implementation of Section 6-A is circumscribed by specific temporal limits. The judgment further stated that if the conferment of citizenship under Section 6-A(3) would have been a one-time exercise which was to be mandatorily undertaken in a time-bound manner by the person who want to avail the benefit of citizenship then they would have abided by such time-bound procedure and in the absence of such obedience it would have resulted into the abatement of their claim to citizenship.

Section 6-A(3) of the Citizenship Act, 1955 was never meant to maintain the status quo regarding the immigrants of the 1966-1971 stream but was enacted with the objective of achieving an en-masse deletion of this category of immigrants from the electoral rolls. The open ended nature of Section 6-A(3) goes against its avowed objective and also somewhat fails to subserve the legislative intent behind the enactment of Immigrants (Expulsion from Assam) Act, 1950 and the spirit of “Assam Accord”.

Absurd consequences arising in the absence of any temporal limits to its application

The judgment observed that the absurdity lies in the fact that despite being a foreigner, an immigrant continues to be eligible to vote in the election till that person is detected as a foreigner. Once the person has been detected his name will be struck off from the electoral rules for the next 10 years and after that such person would receive de-jure citizenship. The judgment observed another absurdity under the scheme of Section 6-A(3) that once an immigrant belonging to the 1966-1971 stream is detected as a foreigner, that person has to mandatorily register within a fixed time period, otherwise the person concerned would be liable to deportation. However, a similarly situated immigrant, who is yet to be detected by the State, can continue to stay in Assam without incurring any liability of deportation.

The permit system which was brought in after the partition of the country to allow the immigrants from Pakistan to migrate to India had a temporal limit to its applicability. The said system was brought to an end on 26-12-1952 by the influx from Pakistan (Control) Repealing Act, 1952 and with respect to Section 6-A it becomes unreasonable that rather than providing a one-time solution to the extraordinary situation, the provision has now been framed to allow immigrants to enter India for all times to come. This indefinite exercise of detection would not only allow any immigrant to continue to stay without detection but would also allow immigrants residing in the neighbouring States to come into Assam in the hope of never being detected as a foreigner.

Long time distance between allocative time trigger and de-jure citizenship

The judgment further examined the provision of Section 6-A(3) through the concept of “temporal triggers” which means that it is a point in time that initiates or terminates a legal event and stated that the date of detection under Section 6-A(3) becomes the allocative trigger, conferring upon the person the right to register for citizenship.

Section 6-A(2) acts as the terminative time trigger with respect to the status of the person from illegal immigrant and allocative time trigger to the status of a citizen of India. The object of Section 6-A(3) was to make conferment of citizenship a stricter affair as compared to Section 6-A(2) and to facilitate the detection of immigrants of 1966-1971 stream from the electoral rolls through the exercise of the detection however the shifting of onus of detection on the State coupled with the absence of any temporal limits ensures that such an immigrant continues to stay on the electoral rolls and enjoy the rights of a de-facto citizen till the time detection take place, if it ever takes place.

All this not only incentivised illegal immigrants to continue to stay into the country, but also prevented from moving outwards as that would potentially jeopardise the claim to citizenship under Section 6-A pending detection as a foreigner as the statute provides that the immigrant belonging to 1966-1971 stream becomes eligible for the conferment of citizenship only if on the date of his detection as a foreigner he is able to establish that he “has been ordinarily resident in Assam since the date of entry”.

Illegal immigration continued even after 24-3-1971

Referring to the report submitted to the Indian Council of Social Science Research 2016 titled “Cross Border Migration in Assam During 1951-2011: Process, Magnitude, and Socio-Economic Consequences”,²⁰² it was stated that the open-ended nature of Section 6-A has not only allowed to stay indefinitely the illegal immigrants but has also, with the passage of time has resulted into abuse due to the advent of forged documents to establish false date of entry into Assam, inaccurate lineage, falsified Government record created by corrupt officials, dishonest collaboration of the date of entry by the relatives so as to aid illegal immigrants who are otherwise not eligible under Section 6-A by virtue of having entered into Assam after 24-3-1971. Therefore, Section 6-A(3) without any end date of application has not only incentivised continued stay of immigrants but has also promoted continued illegal immigration into Assam even after the date of 24-3-1971.

The objective of en-masse deletion of illegal immigrants from electoral rolls to be done in a time-bound manner could not have been achieved as intended. The classification made between the immigrants of pre 1966-1971 stream, today has become irrelevant with respect to the object of Section 6-A. To allow Section 6-A to continue indefinitely for all times to come would tantamount to taking a reductive and one-sided view of the historical context in which the Section 6-A came to be enacted. It rather harms the delicate balance which it sought to make between the two competing interests.

Temporal reasonableness: The three-pronged test

The judgment states that it is a settled law that even if a statutory provision fulfills the two-pronged test of reasonable classification and rational nexus with the object of enactment, it can still suffer from the vice of manifest arbitrariness and be violative of Article 14 if the provision may lead to differential application on similarly situated persons. The absence of any temporal limit to application of Section 6-A with the efflux of time is rather counter serving the object for which it was enacted.

Referring to the judgment of Joseph Shine v. Union of India²⁰³ the Court stated that the arbitrariness present in the mechanism devised under Section 6-A has evidently been brought to light with the efflux of time, and the provision can no longer serve the purpose for which it was enacted. The very objective of having a category of immigrants who are to be deleted from the electoral rolls for a period of 10 years has disappeared with more than 40 years having passed since the enactment of the provision.

Whether the two-prong test of manifest arbitrariness, which involves a further examination with respect to the reasonable classification based on an intelligible differentia and the rational nexus with the object sought to be achieved by such classification, have continued to remain relevant with the passage of time. Thus, the test of temporal unreasonableness would require examining the provision in two different time frames — first, when the provision was enacted; and second, when such provision comes to be challenged on the ground of temporal unreasonableness. This could be said to be the “3rd prong” in the test of manifest arbitrariness under Article 14 as envisaged by the doctrine of temporal unreasonableness.

The judgment states that the infirmity of Section 6-A lies in the fact that it puts the sole responsibility of detecting a person as a foreigner initially on the State. Absence of any provision for self-declaration or registration by the immigrant and absence of any time during which the benefit of Section 6-A may be availed, collectively have the effect of making the provision constitutionally invalid when subjected to the three-prong test of temporal unreasonableness.

Section 6-A(3) has become invalid due to efflux of time

The judgment further states that Section 6-A came into effect to dispel and discourage incoming illegal immigrants but what it turned out to become a beacon for the illegal immigrant from Bangladesh to come into Assam by taking advantage of the poor mechanism which is prone to open abuse. This added another layer of complexity for the Foreigners Tribunal to examine the legitimacy of claim for citizenship, in the very detection process of illegal migrants who have illegally mingled amongst those who have legitimately availed the benefit under Section 6-A. This complexity has also slowed down the entire process of detection and deportation in Assam.

Referring to the judgments of Sarbananda Sonowal v. Union of India²⁰⁴, Motor General Traders v. State of A.P.²⁰⁵ and Satyawati Sharma v. Union of India²⁰⁶ the judgment stated that the application of Section 6-A has far exceeded the time-limit within which it should have been made applicable and has become vulnerable to misuse owing to the inherent arbitrariness. The extraordinary conditions existing in the year 1979 to 1985 cannot provide a permanent and perennial ground for continuation of a manifestly arbitrary provision which is uncertain and indeterminable owing to its sui generis mechanism. The provision instead of achieving the object of the legislation defeats the very purpose for which the legislation has been made and therefore for having become obsolete and discriminatory with the passage of time the provisions must be struck down for having become temporarily unreasonable.

Section 6-A to be considered unconstitutional with prospective effect

Referring to the judgments of Somaiya Organics (India) Ltd. v. State of U.P.²⁰⁷ wherein the Court stated that the Supreme Court has been endowed with the power to mould the relief so as to do complete justice in a given situation, and to avoid the possibility of chaos and confusion that may be caused in the society at large. Section 6-A, being manifestly arbitrary, temporarily unreasonable and demonstrably unconstitutional cannot be allowed to continue for all times to come. It would be appropriate therefore to declare Section 6-A as unconstitutional at least with prospective effect. This would ensure that the benefit which has already been derived by the immigrants in Assam is not taken away, more particularly when the challenge to Section 6-A has been made after a considerable delay.

Conclusion

The judgment declared Section 6-A unconstitutional with prospective effect and has summarised the conclusion as follows:

(a) Immigrants who migrated between 1-1-1966 and 24-3-1971 (both inclusive) and whose applications are pending for adjudication before the Foreigners Tribunal, or who have preferred any appeal against any order of such tribunal which is pending before any Court will continue to be governed by Section 6-A(3) as it stood immediately prior to the pronouncement of this judgment, till their appeals are disposed of.

(b) From the date of pronouncement of this judgment, all immigrants in the State of Assam shall be dealt with in accordance with the applicable laws and no benefit under Section 6-A shall be available to any such immigrant. To be precise, if someone is apprehended as an illegal immigrant after the pronouncement of this judgment, Section 6-A of the Citizenship Act, 1955 will have no application.

Section 6-A was a statutory codification of a political settlement reached between the Government and the people of Assam and thus was not violative of the equality clause enshrined under Article 14 at the time of its enactment in 1985. It has brought further the element of manifest arbitrariness in the scheme of Section 6-A(3) on the account of the “systematic failure of the legislative vision”, which fails to provide a temporal limit to its applicability. The prescribed mechanism under Section 6-A(3) shifts the initial and only burden of detection of a foreigner solely on the shoulders of the State thus, counter-serves the very objective of the enactment of the provision.

Referring to Articles 6 and 7 of the Constitution, the judgment stated that under these articles respectively, for the registration and permit system, the onus of registration for a person seeking citizenship is upon the individual immigrant and not upon the State. Thus, both the conditions of onus of registration upon the person himself and specified cut-off date are absent from the very scheme of Section 6-A. With respect to the 3rd prong test of temporal unreasonableness, this glaring absence renders the scheme of Section 6-A arbitrary and as a result unconstitutional.

The judgment ultimately concludes holding that despite there being “sufficient measures”, as stated by the Court, the problem of illegal immigration continued to persist in Assam even after the amendment because of the inadequacies in Section 6-A and its faulty implementation which are inextricably linked to the fallacious mechanism that has been prescribed under it.

(6) State of U.P. v. Lalta Prasad Vaish²⁰⁸

(Delivered on 23-10-2024) Supreme Court of India (SC)

Dissenting judgment of Mrs Justice B.V. Nagarathna

The sum and substance of all the questions referred to the 9-Judge Constitution Bench (for short, “CB”) was articulated in the dissenting judgment as follows:

Whether the expression “intoxicating liquors” in Entry 8, List II of the 7th Schedule of the Constitution of India includes within its scope and ambit “industrial alcohol” and consequently, whether a State Legislature has the competence to legislate on “industrial alcohol”.

Ans. The short answer given to the aforesaid question in the introductory paragraph itself. That there is complete lack of legislative competence in the State Legislature when viewed from the constitutional framework, and statutory framework of Section 18-G of the Industries (Development and Regulation) Act, 1951 ²⁰⁹ passed by the Parliament on the strength of Entry 52, List I, read with Section 2 of the said Act, and Item 26 of the Schedule 1 (enlisting fermentation industries). Synthetics and Chemicals judgment (7-J)²¹⁰ has been correctly decided by the Constitution Bench.

Articles 245 and 246 & interpretation of legislative entries

The dissenting judgment discussed the facets of interpretation of legislative entries, with respect to (for short, “w.r.t.”) which Union and States have been conferred powers to legislate under Articles 245 and 246 of the Constitution of India.²¹¹ Whenever there is an apparent overlap between two entries owing to any legislation framed, the “doctrine of pith and substance” is applied to find out the true character of the enactment and the entry within which it would fall. Referring to the judgment of Prafulla Kumar Mukherjee v. Bank of Commerce, Ltd.²¹², it was stated that if the law in its “pith and substance” falls within the competence of the legislature which has made it, it will not be invalid merely because it incidentally or partially touches upon the subject lying within the competence of another legislature (another entry in another List).

Whilst construing the entries in the respective lists, every attempt should be made to harmonise the contents of the entry so that interpretation of one does not render another entry as negatory, as laid down in the judgment of Calcutta Gas Co. (Proprietary) Ltd. v. State of W.B.²¹³ State of West BengalW.B..²¹⁴ However, even though an entry is worded widely, it cannot be so interpreted as to negate or override another entry or make another entry meaningless. In case of an apparent irreconcilable conflict between different entries, the Court must attempt to reconcile them in the first instance, whereafter in case of failure to do so, it is the legislation made by the Union that shall prevail over that of the State.

Referring to the judgment of M.P.V. Sundararamier v. State of A.P.²¹⁵, it was stated that closed perusal of entries in the three Lists shows that the topics of legislation are divided into three broad categories, as follows:

(i) entries enabling laws to be made;

(ii) entries enabling taxes to be imposed; and

(iii) entries enabling fees and stamp duties to be collected.

Article 47 — Directive Principles of State Policy and constitutionality of legislations framed by the States towards enforcement thereof

Referring to Article 47, titled as “Duty of the State to raise the level of nutrition and the standard of living and to improve public health”, the Court mentioned that prohibition and excise laws enacted by several States towards improving the health of people in the context of prohibition of consumption of “intoxicating liquors” had been affirmed from time to time by the Supreme Court. The manufacture, export, import, transport or sale of “intoxicating liquors” had been prohibited by the States except in accordance with a licence permit or pass granted in that behalf by the State Governments and “imposition of excise duty” in respect thereof had also declared constitutional on various occasions. Reference was made to the following judgments by the Court to arrive at the aforesaid conclusion:

(a) Cooverjee B. Bharucha v. Excise Commissioner and the Chief Commissioner²¹⁶.

(b) State of Assam v. Sristikar Dowerah²¹⁷.

(d) Nagendra Nath Bora v. Commr. of Hills Division and Appeals²¹⁹.

(e) Amar Chandra Chakraborty v. Collector of Excise, Government of Tripura²²⁰.

(f) State of Orissa v. Harinarayan Jaiswal²²¹.

(g) Nashirwar v. State of M.P.²²²

(h) Har Shankar v. Excise Commr.²²³

The State was held to be competent in all the aforementioned judgments (under its regulatory powers) to even prohibit absolutely every form of activity in relation to intoxicants/intoxicating liquors (for short, “IL”). These rights were held to have been vested in the State to the extent of prohibiting, as a facet of regulation. Accordingly, it was held that it is always open to the Government to part with those rights (of dealing with IL) for a consideration as a price for parting with its rights and privileges with the private players. It is this price charged by the State in the nomenclature of “licence fee” or “fixed fee”, which is the essence of the dispute. The object of imposing this price was towards the purpose of regulation so that number of persons who wish to engage in liquor trade are kept under check within reasonable limits. This was held to be neither a fees, nor a tax but in the nature of the price for parting with the privilege. It was further held that potable liquor as a beverage is dangerous and injurious to health, being inherently harmful. Therefore, no citizen can claim any fundamental right to do trade or business in liquor, which can even be completely prohibited in the larger interest of the society. However, the State can carry on trade or business in portable liquor, notwithstanding that it is an intoxicating drink and Article 47 envisages prohibition of its consumption.

Journey of judicial precedents and their analysis in relation to laws on “intoxicating liquors”

In Indian Mica and Micanite Industries v. State of Bihar²²⁴, the Court struck down levy of fees under the Bihar and Orissa Excise Act, 1915 on “denatured spirit” used and possessed by the appellants as being unjustified and excessive, there being absence of any correlation between the fee levied and the services rendered. In Southern Pharmaceuticals and Chemicals v. State of Kerala²²⁵, challenge was laid to the provisions of the Kerala Abkari Act, 1077 and Kerala Rectified Spirit Rules, 1972 through which State had enacted laws for regulating medicinal and toilet preparations containing alcohol in exercise of powers under Entry 8, List II. Repelling the challenge, it was held that the main purpose of the impugned Act was to consolidate the laws relating to manufacture, sale and possession of IL, which was well within the competence of the State, whereas the Central Act was on a different and distinct field. Even though the provisions seemingly overlapped with the Central Act providing for the levy and collection of excise duty on medicinal and toilet preparations, the said was relatable to Entry 84, List I. The partial overlapping does not warrant the striking down of the impugned State enactments and rules framed thereunder. In Synthetics and Chemicals judgment (7-J)²²⁶, the question for consideration was whether different legislations and rules enacted by various States were valid, where the competence of the State Legislatures to levy excise duty on “industrial alcohol” was considered a seminal issue. Imposts such as vend fees were assailed, which was the point of controversy. Synthetics and Chemicals judgment (7-J)²²⁷ Constitution Bench held that alcoholic liquor or IL under Entry 8, List II must be understood in common parlance and not what certain alcoholic products may be capable or susceptible to being transformed or converted into. Merely because certain variants of “industrial alcohol” or “denatured spirit” could be treated and transformed into human consumption, by misuse of the original product of “industrial alcohol” or “denatured spirit”, it never vested the States with the legislative competence to levy excise duty under Entry 51, List II.

Subsequently in Synthetics and Chemicals judgment (2-J)²²⁸, it was clarified that Synthetics and Chemicals judgment (7-J)²²⁹ actually held the scope of Entry 8, List II to be confined only to “potable liquor” or other liquors also, but never intended to include “industrial alcohol”. The 2-Judge Bench declared Synthetics and Chemicals judgment (7-J)²³⁰, per incuriam on the accidental mention of “industrial alcohol” vide para 86 in its judgment, authorising the levy by the States on “industrial alcohol”. Since “industrial alcohol” was inherently unfit for human consumption, the State Legislature was therefore incompetent to levy any excise duty under Entry 51, List II.

Reference was made to the judgment of Shri Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. v. State of Gujarat²³¹, to state that alcohol can be divided into two categories, viz. “potable” and “non-potable alcohol”. The alcohol which is “potable” is “intoxicating liquor”, fit for human consumption directly as a beverage, falling within the scope and ambit of Entry 8, List II, with the State Legislature not only competent to regulate such IL by making relevant laws, but also charging certain price or levying certain fees in respect thereof. However, “non-potable liquor” or “industrial liquor”, even though can be diluted, misused and consumed as a beverage, would not be within the authority of the States to impose any levy thereupon. It is completely excluded from their competence. However, in line with the constitutional intent behind Article 47 of the Constitution of India, being Directive Principles of State Policy (for short, “DPSP”) the State can well make laws for prevention of production, possession, sale, etc. of non-potable alcohol as IL, which regulation (including prohibition as well) would be intra vires Entry 8, List II, and shall not conflict with any other entry of any List under 7th Schedule. Further Entry 8, List II is completely outside the purview of Entry 24, List II, whereby the Union cannot take control of IL by making any declaration under Entry 52, List I, till and until it is not concerning “industrial alcohol” or “denatured rectified spirit”. Reference in this respect was made to the judgments of Bihar Distillery v. Union of India²³², Vam Organic Chemicals Ltd. v. State of U.P.²³³ (for short, “Vam Organic I”) and State of U.P. v. Vam Organic Chemicals Ltd.²³⁴ (for short, “Vam Organic II”).

Thus, the golden thread of continuity from the analysis of all the judgments referred to above shows that the expression “industrial alcohol” refers simplistically to all types of alcohol which are not fit for human consumption as a beverage or “non-potable alcohol”. This leads to the following inferences and conclusions:

(a) The expression “potable alcohol” or “intoxicating liquors” (both being same) is used for all classes of alcohol, fit for human consumption as a beverage or as a drink.

(b) Even the States cannot themselves manufacture “industrial alcohol” without the permission of the Union, nor can it be amenable to States claim to possession or exclusive privilege of the States by falling back upon Entry 8, List II, or Entry 33, List III as the basis for such claim.

(c) Insofar as intoxicating liquor or “potable alcohol” is concerned E-8, L-II is a “regulatory entry” whilst Entry 51, List II is a “taxation entry”, providing for imposition of excise duty on potable liquor, fit for human consumption. As a necessary corollary, therefore the control of “industrial alcohol” is vested with the Union owing to Section 2 of the Industries (Development and Regulation) Act, 1951 ²³⁵ read with other provisions and schedule of the Act, the enactment be made by virtue of Entry 52, List I.

(d) Item 26 of the Schedule 1 of the Industries (Development and Regulation) Act titled as “fermentation industries”, refers to various products, which are all “industrial alcohol” (non-potable alcohol), and thus the subject of the legislation is clearly divided between the Parliament and the State.

(e) State Legislature cannot tax or impose any levy on such “industrial alcohol”, but in view of Article 47 may prohibit manufacture or negate the conversion or abuse of “industrial alcohol” towards any intoxicating liquid fit for human consumption.

Therefore, Synthetics and Chemicals judgment (7-J)²³⁶ in the above backdrop rightly declared the imposition of vend fee on “industrial alcohol” as unconstitutional by the Uttar Pradesh State, when the same is a product of “fermentation industries”, falling under the control of the Union.

Meaning and interpretation of expression “intoxicating liquor”

The dissenting opinion then delved into various lexicons, historical perspectives, Constituent Assembly Debates to deduce the interpretation of the phrase “intoxicating liquor” under Entry 8, List II. It was held that the “effect of intoxication” is a sine qua non for the legislative competence of States on any liquor to claim its jurisdiction to legislate on the subject. Not all kinds of human consumption, direct or indirect, but it is only the direct consumption which is the direct determining factor of the beverage concerned or the drink. Any indirect consumption by use of alcoholic liquor as a raw material for any other product, industrial, medicine or toilet item cannot be included under Entry 8, List II. Also, merely because there is possibility of potential misuse of IL, would not classify as possessing the intoxicating effect envisaged under Entry 8, List II. Thus, what is left out/carved out/not included under the “fermentation industries” specified under the Industries (Development and Regulation) Act is only that class of “intoxicating liquor” which has the intoxication effect on direct consumption, on being used as a beverage. Rest of the “fermentation industries” would fall under Entry 52, List I, being controlled by Union Legislation of the Industries (Development and Regulation) Act.

The governing norm thus is that potable alcohol is used for human consumption as the norm, having intoxicating effect, whereas the exception being its mischievous use, where non-potable alcohol is transformed and converted to potable alcohol by misuse of industrial alcohol. Therefore, exception (mischievous use) cannot lead to the governing of the norm (original intended ordinary use) whilst construing the word “intoxicating” under Entry 8, List II. It is entirely different from saying that States have the right to regulate industrial alcohol or non-potable alcohol from saying that States have legislative competence to legislate on industrial alcohol. A power to legislate on any principal matter specifically mentioned in the entry also includes within its expanse legislation touching incidental and ancillary matters. However, in an attempt to interpret any entry widely, ancillary matters falling in another entry cannot be included through backdoor within the entry beyond what is covered by disguising as the principal. The ancillary matter being prevention of mischievous use of industrial alcohol would fall within Entry 8, List II but in the guise thereof, industrial alcohol per se cannot be included within its ambit as the principal.

Interpretation of expression “subject to” occurring under entries under Lists II and III

The dissenting judgment thereafter proceeded to analyse the interpretation of phrase “subject to”. Referring to the judgments of Hingir-Rampur Coal Co. Ltd. v. State of Orissa²³⁷ and Gujarat University v. Shri Krishna Ranganath Mudholkar²³⁸, it was held to mean that out of the scope of the former entry (List I entry), field of legislation covered by the latter entry has been reserved to be specifically dealt with by the appropriate legislature. It conveys the idea of a provision yielding place to another provision to which it is made subject to.

In the context of the present matter, whilst comparing Entry 51, List II and Entry 84, List I, what is excluded is a duty of excise on alcoholic liquor meant for human consumption. Meaning thereby, whatever is unfit for human consumption, like medicinal and toilet preparations or any other subject, shall be subject to excise duty under Entry 84, List I by the Union or Central Government. The framers of the Constitution of India therefore deliberately bifurcated alcoholic liquors into two categories: one for human consumption and other distinct from such category. This distinction is luminescent also from comparative reading of fields of levy of excise duty earmarked vide Entry 51, List II and Entry 84, List I, demarcating the powers to levy excise duty between the States and the Union respectively.

Impact of Item 26, Schedule 1 of the Industries (Development and Regulation) Act, 1951 on powers under Entry 8, List II

In exercise of powers under Entry 52, List I, Parliament has enacted Section 18-G of the Industries (Development and Regulation) Act, 1951, whereunder Union has been authorised to issue notified orders for regulating and governing the trade and commerce of any article of the scheduled industry towards securing the equitable distribution, availability at fair price. The field thus stands entirely covered by the Parliament, insofar as products mentioned therein are concerned. Article 246 envisages parliamentary supremacy over laws made by the State Legislature even in respect of subjects enumerated under List II.

By the very insertion of Section 18-G in the Industries (Development and Regulation) Act, 1951 in October 1953, there is complete denudation of State’s legislative competence vis-à-vis Entry 33-A, List III, qua the products of scheduled industry, which in the present matter is “fermentation industries”. Item 26 of Schedule 1 to the Industries (Development and Regulation) Act, 1951 after the 2006 Amendment includes “fermentation industries”, as industries excluding potable alcohol. Once an industry is a scheduled industry, then the Union may by a notified order provide for regulating the supply, distribution, trade and commerce of the product specified thereunder. By virtue of the “doctrine of occupied field”, as developed under Article 254, the parliamentary law occupies the field on its enactment in its entirety, leaving the States without any legislative competence to make a law on the very same subject. Applying the aforesaid doctrine of the occupied field, therefore once it is found that there is a direct conflict between the State laws or legal regime in place with the order issued by the Union under Section 18-G, then parliamentary legislation shall prevail over the latter.

The next question which was posed was whether it is necessary for a notified order to be duly issued by the Union for denuding the States of their legislative competence or even in the absence of issuance of a notified order under Section 18-G of the Industries (Development and Regulation) Act, 1951, the States are constricted from enacting any law under Entry 33-A, List III read with Entry 52, List I.

Answering the aforesaid question, referring to Constitution Bench judgment in State of Kerala v. Mar Appraem Kuri Co. Ltd.²³⁹, it was held that parliamentary legislation shall predominate by virtue of non obstante clause under Article 246(1) and to test the repugnancy, one has to go by the making of the law and its very existence, not by its commencement or implementation. Once there is a central law on the same subject made by the Parliament, there is a pro tanto repeal of the State Act, which could not have legislated anything contrary till and until Presidential assent under Article 254(2) was duly obtained. In the same view thereof, it was held that with the insertion of Section 18-G to the Industries (Development and Regulation) Act, 1951, the Union exhibited its intention to occupy the entire field, denuding the States of their power and merely for want of issuance of a notified order formally, it could not be contended that States continue to possess the legislative competence to enact laws under Entry 8, List II or Entry 33-A, List III. Item 26 (fermentation industries) is therefore a controlled and a scheduled industry under the Industries (Development and Regulation) Act having been so specific under Entry 52, List I and other than potable alcohol/intoxicating liquor, all other classes and categories of alcohol fall under the said nomenclature.

Accordingly, the dissenting judgment answered various questions formulated by it broadly as follows:

(a) Entry 8, List II deals with “intoxicating liquors”. The misuse, diversion or abuse of “industrial alcohol” as “intoxicating liquors” can also be controlled and prevented under Entry 8, List II by the State Legislatures having regard to Article 47 of the Constitution of India. “Fermentation industries” under the Industries (Development and Regulation) Act would clearly exclude “intoxicating liquors”.

(b) Parliament can occupy the field of the entire industry by merely issuing a declaration under Entry 52, List I and the State Legislatures competence under Entry 24, List II gets denuded completely to the extent of the field covered by the law of Parliament under Entry 52, List I.

(c) The meaning of the expression “intoxicating liquors” is limited to its popular meaning i.e. “alcoholic beverages” that produce intoxication. Therefore, in the context of prohibition of “intoxicating liquor” as a beverage, there could not have been prohibition of production of alcohol used for medicinal and toilet preparation as well as “industrial alcohol” or non-potable alcohol.

(d) The members of the Constituent Assembly were clear in what they envisaged within the scope and ambit of the expression “intoxicating liquors” in Entry 8, List II. This is also evident from Item 26 of the Schedule 1 of the Industries (Development and Regulation) Act, 1951. “Intoxicating liquors” is only a segment of the “fermentation industries”, namely, potable alcohol. There was no intention on the part of the members of the Constituent Assembly to read non-potable or “industrial alcohol” as included within the expression “intoxicating liquors”. Further, in order to have a consistency between what was envisaged under Entry 84, List I and Entry 51, List II in the context of alcoholic liquors for human consumption, the taxing entry in List II which is within the legislative competence of the States follows the regulatory entry in Entry 8, List II. Therefore, the use of the expression “industrial alcohol” or non-potable alcohol in Synthetics and Chemicals judgment (7-J)²⁴⁰ was only to crystallise all variants of alcohol which were non-potable and to distinguish the same from potable alcohol meant only for human consumption as a beverage.

(e) The potential misuse of alcohol cannot be the basis for interpreting an entry such as Entry 8, List II. The aspect of public health having a correlation to Entry 8, List II dealing with “intoxicating liquor” and the misuse of alcohol cannot be a guide while interpreting the content of the said entry and therefore, its scope and ambit being amplified beyond what it really envisages as a field of legislation for the States to legislate upon.

(f) The judgment in Synthetics and Chemicals judgment (7-J)²⁴¹ need not be overruled in relation to Section 18-G of the Industries (Development and Regulation) Act, 1951 and it continues to be good law in the context of what is comprised in the expression “industrial alcohol” and “intoxicating liquors” except what has been clarified above in Entry 8, List II.

(g) Item 26 of the Schedule 1 of the Industries (Development and Regulation) Act, 1951 must be read excluding from its scope only what is contained in the expression “intoxicating liquors” as interpreted above in Entry 8, List II.

(h) Judgment of Indian Aluminium Co. Ltd. v. Karnataka Electricity Board ²⁴² is held to be not good law insofar as the requirement of issuance of a notified order as a condition precedent for the field to be occupied, has been mandated therein.

(i) “Denatured spirit/alcohol” belongs to the family of “industrial alcohol” and therefore, Section 18-G of the Industries (Development and Regulation) Act, 1951 has a bearing on the said product. It is covered by Section 18-G and class of articles related to a scheduled industry i.e. “fermentation industries”.

Accordingly, the matters were referred after answering the reference as aforementioned to the respective Benches handling the validity or legality of the State Legislatures before them.

* * *

(7) Mineral Area Development Authority v. SAIL²⁴³

(Delivered on 25-7-2024) Supreme Court of India (SC)

Dissenting judgment of Mrs Justice B.V. Nagarathna

The dissenting opinion formulated the sum and substance of all the issues before the Constitution Bench in a singular question is as follows:

Whether royalty as envisaged under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 ²⁴⁴ (for short, “MMDR Act, 1957”) is a tax or an exaction.

Ans. The summary of the entire discussion to follow was also stated. It was clarified that the concept of “royalty” is being considered from the perspective of Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 and not from any other context. Viewed from the statutory framework of parliamentary enactment on the strength of Entry 54, List I of the 7th Schedule along with Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 ²⁴⁵, “royalty” is in the nature of tax or an exaction. Section 9 is a “limitation” within the meaning of Entry 50, List II for the States, denuding them of any legislative competence to levy any other tax, impost or fee on the exercise of mineral rights. Further Entry 49, List II is also not applicable to mineral bearing lands, which are a special category covered by Entry 54, List I. The 7-Judge Bench in India Cement judgment²⁴⁶ has been correctly decided and the majority judgment of Kesoram Industries judgment²⁴⁷ is incorrect and accordingly overruled.

Interpretation of legislative entries within the constitutional framework

Referring to Articles 265 and 366(28), it was held that any levy assuming the characteristics of tax or akin to it is included within the definition of “taxation”. No tax can be levied or collected without any authority of law vide the mandate of Article 265.

The entries do not empower the legislatures to levy tax, but only define the areas of legislative competence of the Union or State Legislature as envisaged under Article 246. Elucidating the “pith and substance doctrine”, it was held that merely because a law in its pith and substance within the legislative competence of one legislature, it will not be invalid merely because it incidentally touches upon the subject lying within the competence of another legislature. Once the legislation is found to be “with respect to” the legislative entry in question, unless there are other constitutional prohibitions, the legislative power would be unfettered. Referring to the judgment of R.M.D. Chamarbaugwalla v. Union of India²⁴⁸, it was held that if the legislature passes a law beyond its legislative competence it is nullity ab initio. The taxing power can be derived only from a specific taxing entry in an appropriate list, which has to be determined by the nature of the tax and not by the measure of machinery set up by the statute.

Viewed in the above backdrop, power of the State Legislature vide Entry 50, List II to impose taxes on mineral rights is “subject to any limitations imposed by the Parliament relating to mineral development”, implying that if there is any limitation imposed by Parliament by law relating to mineral development, it would adversely impact the competence of State Legislature to impose tax under Entry 50, List II on mineral rights. What is required is that the law must be relating to mineral development. Even though Entry 50, List II is a taxation entry, being of a specific nature, it is subject to limitation imposed by the Parliament by a law relating to mineral development. Likewise Entry 54, List I uses the expression “to the extent to which”, which is similar to Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957. Both the expressions are consistent with each other possessing the same content.

“Royalty” under the Mines and Minerals (Development and Regulation) Act, 1957 “as a taxing provision”

The dissenting judgment thereafter examined and analysed various statutory provisions, specifically Sections 18 and 25 of the Mines and Minerals (Development and Regulation) Act, 1957 ²⁴⁹. The Mines and Minerals (Development and Regulation) Act obligates Central Government to take all such steps necessary for conservation and development of minerals in India and framing of rules in respect thereof. Section 25 provides that recovery of any rent, “royalty”, tax or other sum due to the Government under the Mines and Minerals (Development and Regulation) Act or the rules made thereunder shall be recovered in the same manner as arrears of land revenue. Examining Sections 9 and 9-A, it was held that holder of any mining lease conducts mining operation for the purposes of winning any mineral, and thus mining operation is an exercise of mineral right falling within the ambit of Section 2 thereof, in respect of which through a declaration, the Union has taken control of. Whatever be the activity under the Act, be it reconnaissance, prospecting operations or mining operations, everything has been taken under the control of the Union in view of the declaration under Section 2. “Royalty” is the charge paid in exercise of mineral rights as its consideration for conducting a mining operation, without payment of which the mining operation may even be suspended. The event that triggers payment of “royalty” is the removal/consumption of mineral excavated from the land, on an ad valorem basis. However, “dead rent” is paid when no mining activity is carried out, but “dead rent” also is payable by virtue of the land proposed to be subjected to the activity of mining. The rates of “royalty” and “dead rent” have been determined and fixed on the basis of minerals as stipulated under the schedule to the Mines and Minerals (Development and Regulation) Act.

In view thereof, therefore there can be no cavil in treating “royalty” as an aspect within the scope and ambit of the parliamentary law accompanied with a declaration (vide Section 2) aimed towards regulation of mines and mineral development being taken over by the Union. In light of Entry 54, List I read with Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 therefore “royalty” is a subject falling completely under the control of the Union (not of the States). Clearly both the heads of charges are imposed by the Parliament in the interests of mineral development of the country and exaction of “royalty” therefore assumes statutory character and nature.

The four components for classifying any levy as a “tax” or an “impost” were explained by the dissenting judgment by referring to Govind Saran Ganga Saran v. Commissioner of Sales Tax²⁵⁰, as follows:

(i) the character of the tax which is determined by its nature which prescribes the taxable event attracting the levy;

(ii) a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax;

(iii) rate at which the tax is imposed; and

(iv) the measure or value to which the tax will be applied for computing the taxing liability.

All the four components were held to be satisfied in case of “royalty”/“dead rent” in view of the following rationale:

(i) Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 deals with payment of “royalty” in respect of any mineral removed or consumed;

(ii) by a holder of mining lease who is obliged to pay the “royalty”;

(iii) at the rate specified in the Schedule 2 to the Mines and Minerals (Development and Regulation) Act, 1957 ²⁵¹; and

(iv) a percentage of the average sale price on ad valorem basis. For instance, in respect of Iron Ore: [calibrated lump ore (CLO), lumps, fines and concentrates all grades] fifteen per cent of average sale price on ad valorem basis.

Thus, Section 9 levying “royalty” was held to be in the form of a taxing provision and “royalty” being in the nature of a tax or a statutory exaction.

The dissenting judgment then made elaborate references to the judgments of Hingir-Rampur Coal Co. Ltd. v. State of Orissa (for short, “Hingir-Rampur”)²⁵², State of Orissa v. M.A. Tulloch and Co.²⁵³ and Baijnath Kadio v. State of Bihar²⁵⁴, tracing the view taken by the Supreme Court in the past affirming the parliamentary supremacy denuding States from levying any taxes or fees on mineral bearing lands.

Thereafter elaborate reference was made to the view taken in India Cement judgment (7-Judge Bench)²⁵⁵, wherein it was held that the levy in the form of cess imposed by the State of Tamil Nadu was declared unconstitutional on mineral bearing lands. Referring specifically to para 34 of India Cement judgment (7-Judge Bench)²⁵⁶, the Court inferred that cess on “royalty” being indirectly a tax on “royalty” is beyond the State’s competence since Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 and entirely covers the field. The State Legislature is resultantly denuded of its legislative powers under Entry 50, List II, and the cess cannot be sustained even under Entry 49, List II by being accorded the colour of tax on lands. “Royalty” paid under Section 9 could not be construed as land revenue as affected by the Tamil Nadu legislation, since it was paid by the lessee under the Central Act as a “tax”. The Court further held that if over and above the payment of “royalty”, (treating it as the base index) the lessee of mining lease is required to pay any other head of levy or cess, it would be repugnant and resultantly contrary to Entry 54, List I read with declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 and thus unconstitutional.

The dissenting judgment then also examined the correctness of Kesoram Industries judgment²⁵⁷ which treated observations made vide para 34 of India Cement judgment²⁵⁸ (7-Judge Bench) to be a “typographical error”. Kesoram Industries judgment²⁵⁹ vide para 57 proceeded on the basis that typographical error has inadvertently crept in para 34 of India Cement judgment²⁶⁰ and thus it felt supplying/attributing “sensible reading” to the said omission or error committed by the Bench. The dissenting judgment held that reasoning adopted in Kesoram Industries judgment²⁶¹ was clearly erroneous and unacceptable. All the precedents right from the judgment in Hingir-Rampur case²⁶² up to India Cement judgment²⁶³ had treated “royalty” as a tax and gave primacy to the Mines and Minerals (Development and Regulation) Act as superseding all the powers of the State Legislature’s available under Entry 50, List II. The dissenting opinion of Justice S.B. Sinha, especially vide para 309, highlighted that State of West Bengal in the garb of imposition of impugned land tax on the strength of Entry 49, List II had attempted to levy cess on mineral and mineral rights, which field was covered by Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957. Justice S.B. Sinha held that impugned levy by way of cess is nothing but an imposition of tax on exercise of mineral rights, barred by Articles 245 and 246 of the Constitution of India. Thus, Kesoram Industries judgment²⁶⁴ was incorrectly decided was so held in the dissenting opinion.

Kannadasan judgemnt and its reaffirmation of view in India Cement judgment

The P. Kannadasan v. State of T.N.²⁶⁵ (for short, “Kannadasan judgment”) is another landmark and stockpoint where it was clarified by the Supreme Court how State’s power would completely (not partially) denuded of levying any tax on mine and mineral resources (M&MR) in view of declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957. After India Cement judgment²⁶⁶ (7-J), when the State Legislature’s were held to have been incompetent to levy any tax on minerals, to save the taxes already realised by the various States in the country; not forced to refund them, the Union stepped in and promulgated the Cess and other Taxes on Minerals (Validation) Act, 1992 (for short, “Validation Act”) w.e.f. 4-4-1992. This Act was introduced and enforced to validate the imposition and collection of cesses and various taxes on minerals levied vide realised under various State laws. Section 2 titled as “validation clause” through a deeming fiction gave validity to various statutory provisions enacted by the various States by treating them as having been enacted by Parliament and having been remained in force up to 4-4-1991 [the date when Orissa Cement Ltd. v. State of Orissa²⁶⁷ (for short, “Orissa Cement judgment”) was delivered]. When the constitutionality of this Validation Act was challenged before the Supreme Court, it was held that since only the Union could have imposed a levy such as “royalty” or any other tax, therefore there was no limitation upon Parliament’s power, which can also create an exception (as created through the Validation Act) to meet the exigency of preserving the funds of taxes already received by various State Governments. It was reasoned that in light of judgments of India Cement case²⁶⁸ and Orissa Cement case²⁶⁹, denudation of the State’s competence was total.

The dissenting view accordingly held that Kannadasan judgment²⁷⁰ is a clear indication of how Parliament had by a legal fiction validated the levies made by various States, protecting them from being compelled to refund the amounts collected by them under unconstitutional statutes. Kannadasan judgment²⁷¹ therefore reaffirmed that Sections 9 and 9-A are an embargo on the State’s power to impose any tax on exercise of mineral rights, especially when “royalty” as a compulsory exaction meets all the parameters of tax. The Validation Act was enacted by the Parliament only to confer life to void statutes, which had become a dead letter of law by virtue of India Cement judgment²⁷².

The dissenting opinion thereafter proceeded to hold that Kesoram Industries judgment²⁷³ for holding that “royalty is not a tax” is liable to be overruled for the following reasons:

(A) The doubt expressed was premised on “typographical error” under para 34 of India Cement judgment²⁷⁴, was so expressed without appreciating and comprehending the entire reasoning of the 7-Judge Bench.

(B) The Court had looked into only the dictionary meaning of word “royalty”, ignoring that contextual meaning ought to have been ascribed to interpret the said word, instead of dictionary or literal meaning.

(C) The India Cement judgment²⁷⁵ was doubted even in the absence of there being any conflict of the judgment with any other 7-Judge Bench decision or of coequal strength.

(D) Fourthly, Kesoram Industries judgment²⁷⁶ was per incuriam as it could not have questioned judgment of larger Bench on the basis of an imagined “typographical error”.

(E) Kesoram Industries judgment²⁷⁷ overlooked and ignored the law discussed and laid down in Kannadasan judgment²⁷⁸, wherein the Validation Act of 1992 was affirmed, whilst acknowledging the complete denudation of powers of the State to levy any tax on mine and mineral resources.

(F) Sixthly, the power to impose taxes on mineral rights had always been “subject to law relating to mineral development”, made by the Parliament. The proper coalescing of Entry 54, List I and Entry 50, List II had been overlooked in Kesoram Industries judgment²⁷⁹.

Accordingly, the dissenting view recorded its difference of opinion from the view of the majority, holding that India Cement judgment²⁸⁰ and other line of judgments following it were all correctly decided and therefore are binding precedent and cannot be overruled.

Entries 49 & 50, List II and competence of the State to levy taxes by adopting “royalty as a measure of tax”

The dissenting judgment referring to India Cement judgment²⁸¹ whilst examining that Cess imposed on “royalty” was not relatable to land as a unit, but was relatable to minerals extracted thereupon, especially the rates fixed under Schedule 2 to the Mines and Minerals (Development and Regulation) Act, 1957. The Cess on “royalty” was held in pith and substance to be a tax on “royalty” and not a tax on land under Entry 49, List II. “Royalty” therefore could have never been added within the definition of “land revenue” for the purposes of imposition of cess, when “royalty” itself has been held to be a tax paid by the holder of mining lease.

The dissenting judgment quoted detailed reasons for holding that especially in case of mineral bearing lands, there cannot be both a tax on such land per se as well as tax on mineral rights exercised on such land, based upon the value of the minerals produced as determined by a Central Act. The reasons were broadly as follows:

(A) “Royalty” is paid as a tax and not on the basis of a private negotiation or consensus between the lessor or the lessee. The rate is statutorily fixed as prescribed in the II Schedule, which can be amended only by the Central Government and none else, making it uniform across the country.

(B) Once “royalty” is imposed as a tax, there cannot be another tax imposed under Entry 49, List II on such mineral bearing land, which is valuable solely because of the mining activity carried thereupon. A mineral bearing land cannot be equated with agricultural and non-agricultural land, subjected to taxes separately under Entry 49, List II.

(C) Once in view of the value of the minerals payment of “royalty” as a tax happens under a parliamentary Legislation, such land cannot be subjected to another tax imposed by the State under another entry. In other words, there cannot be a tax on mineral bearing lands twice over by the State Government; one under Entry 50, List II and thereafter again under Entry 49, List II. A tax on mineral bearing land cannot fall under 2 entries within the same List II/State List.

In view thereof, it was held that mineral value of mineral produce cannot be used as a measure to tax mineral bearing land under Entry 49, List II, nor the word “lands” under the said entry can include mineral bearing land within its ambit. This would amount to double taxation on the mineral bearing land, one by the State and other by the Parliament, but payable to the State Government.

Impact of overruling of India Cement judgment on federalism in India

The dissenting judgment further held that once the view of India Cement judgment²⁸² is overruled, then it would open floodgates for the States to impose levies under Entry 50, List II as well as Entry 49, List II separately. This would result in mineral development in the country in an uneven and haphazard manner, increasing competition between the States and engage into a “race to the bottom” in a nationally sensitive market. The States would start indulging in unhealthy competition to derive additional revenue and consequently would lead to steep, uncoordinated and uneven increase in cost of minerals, resulting in turn thereby to a breakdown of the federal system envisaged under the Constitution of India. The Constitution of India employs the word “Union”, instead of “federation” as India’s founding fathers opted for parliamentary supremacy with a strong centre to prevent further secessionist movements. The effort was always to hold together the fledgling Union, whilst fostering a nationalist, civic identity rather than parochial identification with local or linguistic identities. Referring to the Sarkaria Commission Report on Centre-State Relations, it was further stated that federal supremacy must always be ensured to avoid the absurdity of simultaneous operation of two inconsistent laws and ensuring harmony between the Union and the State laws. It is only the Union legislation that can ensure a systematic and uniform regulation and development of minerals across the country. Towards this, under Lists I and II, the entries have been so drafted to ensure there is overall mineral development in the country rather than particular States possessing the mineral wealth acting contrary to the overall welfare of the nation.

The dissenting judgment accordingly accepted the arguments made by the Union and held various legislations imposing levy of Cess or any other charges with “royalty” as the base index to be unconstitutional along with other conclusions as aforementioned.

The Registry in view of the majority judgment of the Court was directed to place the matters before the appropriate Benches for final resolution.

*Practising Advocate at the Supreme Court of India and Delhi High Court.

**Advocate, Supreme Court of India & Associate, SVS Attorneys, New Delhi

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