‘ROYALTY’ AS TAX AND POWER OF STATE TO LEVY CESS ON MINING & MINERAL-USE ACTIVITIES
9-Judge Bench: Dr. DY Chandrachud, CJI, Justice Hrishikesh Roy, Justice Abhay S Oka, Justice BV Nagarathna, Justice JB Pardiwala, Justice Manoj Misra, Justice Ujjal Bhuyan, Justice Satish Chandra Sharma and Justice Augustine George Masih
Issues: What is the true nature of royalty determined under Section 9 read with Section 15(1) of the MMDR Act? Whether royalty is in the nature of tax?
Decision: In the majority verdict penned by CJI Dr. DY Chandrachud, it was held that ‘royalty’ is not a ‘tax’. Royalty is a contractual consideration paid by the mining lessee to the lessor for enjoyment of mineral rights. The liability to pay royalty arises out of the contractual conditions of the mining lease. The payments made to the Government cannot be deemed to be a tax merely because the statute provides for their recovery as arrears.
Dissent: The dissent was taken by BV Nagarathna, J. holding that ‘royalty’ is in the nature of a ‘tax’ or an exaction. It is not merely a contractual payment but a statutory levy under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (Section 9-A relating to dead rent). The liability to pay royalty does not arise purely out of the contractual conditions of a binding lease. The payment of royalty to the Government is a tax in view of List II Entry 50 being subject to any limitations imposed by Parliament by law in the context of List I Entry 54 read with Section 2 of the MMDR Act, 1957. Read more
[Mineral Area Development Authority v. Steel Authority of India, 2024 SCC OnLine SC 1796]
STATES’ POWER TO REGULATE INDUSTRY OF ‘INTOXICATING LIQUOR’
9-Judge Constitution Bench: Dr DY Chandrachud, CJI, Justice Hrishikesh Roy, Justice B.V Nagarathna, Justice Abhay S. Oka, Justice JB Pardiwala, Justice Manoj Misra, Justice Ujjal Bhuyan, Justice Satish Chandra Sharma and Justice Augustine George Masih
Issue: Scope of the power of the State Legislatures under Entry 8 and the meaning of the phrase “intoxicating liquor”; whether “intoxicating liquor” in Entry 8 only includes potable alcohol, such as alcoholic beverages or also includes alcohol which is used in the production of other products.
Decision: By a ratio of 8:1, the Bench held that, Entry 8 of List II of the Seventh Schedule to the Constitution is both an industry-based entry and a product-based entry. The words that follow the expression “that is to say” in the Entry are not exhaustive of its contents. It includes the regulation of everything from the raw materials to the consumption of ‘intoxicating liquor’ and that the Parliament cannot occupy the field of the entire industry merely by issuing a declaration under Entry 52 of List I.
The majority overruled 7-Judge Bench ruling in Synthetics and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109, wherein it was held that States cannot tax industrial alcohol. Read more
Dissent: B.V. Nagarathna, J., was the sole dissenting voice on several aspects of the majority decision. She held that: 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. She clarified that the IDRA which has been enacted by the Parliament by virtue of Entry 52 — List I has taken control of “Fermentation Industries” as a scheduled industry. Such “Fermentation Industries” would exclude “intoxicating liquors”. Parliament can occupy the field of the entire industry by merely issuing a declaration under Entry 52 — List I and the State Legislature’s competence under Entry 24 — List II is denuded to the field of the entire industry and specifically to the extent of the field covered by the law of Parliament under Entry 52 — List I. Read more
[State of UP v. Lalta Prasad Vaish, 2024 SCC OnLine SC 3029]
NOT ALL PRIVATE PROPERTIES ARE ‘MATERIAL RESOURCES OF COMMUNITY’
9-Judge Constitution Bench: CJI Dr. DY Chandrachud, Justice Hrishikesh Roy, Justice B.V. Nagarathna, Justice Sudhanshu Dhulia, Justice J.B. Pardiwala, Justice Manoj Misra, Justice Rajesh Bindal, Justice Satish Chandra Sharma and Justice Augustine George Masih
Issue: Whether private resources form part of the ‘material resource of the community’ under Article 39(b) of the Constitution?
Decision: By a ratio of 7:2 held that all the ‘private properties’ cannot form part of the ‘material resources of the community’ under Article 39(b) of the Constitution. The Court unanimously held that Article 31-C of the Constitution to the extent that it was upheld in Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225 remains in force.
“Article 39(b) is not a source of legislative power. The inclusion or exclusion of ‘privately-owned resources’ from the ambit of the provision does not impact the power of the legislature to enact laws to acquire such resources. The power to acquire private resources, in certain situations, continues to be traceable to other provisions in the Constitution, including the sovereign power of eminent domain.”
The majority view held that the view expressed by Justice Krishna Iyer in State of Karnataka v. Ranganatha Reddy (1977) 4 SCC 471 that – material resources of the community covered all resources, natural and man-made, publicly and privately owned and relied on by Justice Chinnappa Reddy in Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. (1983) 1 SCC 147 cannot be accepted. Read more
Dissent: Justice BV Nagarathana partially concurred with the majority on the aspect of Article 31-C, however, on the aspect of Article 39(b) she dissented opining that a private owned resource can be transformed and can indeed acquire a status of ‘material resource of the community’. The view taken in Sanjeev Coke (supra) was held to be correct by Justice Nagarathana. Read more
Justice Sudhanshu Dhulia agreed with the majority on the view taken on Article 31-C, however, he dissented from the majority view on aspect of Article 39(b).
[Property Owners Assn. v. State of Maharashtra, 2024 SCC OnLine SC 3122]
THE CONUNDRUM AROUND AMU’S MINORITY STATUS
7-Judge Constitution Bench: Dr. DY Chandrachud, CJ., Justice Sanjiv Khanna, Justice Surya Kant, Justice JB Pardiwala, Justice Dipankar Datta, Justice Manoj Misra and Justice Satish Chandra Sharma
Issue: The Constitution Bench was hearing an appeal against Allahabad High Court’s Order in Naresh Agarwal (Dr.) v. Union of India, 2005 SCC OnLine All 1705, whereby, Aligarh Muslim University’s (‘AMU’) action of 50 percent seat reservation in postgraduate medical courses for Muslim candidates by claiming it to be a minority institution, was struck down and held that AMU cannot have an exclusive reservation because it is not a minority institution.
Decision: The Bench by a majority of 4: 3 overruled the Five-Judge Bench verdict in S. Azeez Basha v. Union of India, 1967 SCC OnLine SC 321, which held that an institution incorporated by a statute cannot claim to be a minority institution, hence AMU as created by an Act of Parliament, is not a minority institution so as to be covered under Article 30 of the Constitution of India.
The majority judgment penned by then Chief Justice of India Dr. DY Chandrachud opined that-
“Establishment of a university, whether as a minority institution or as a religion neutral institution of high standard, is a complex and mixed question of law and fact. The legislative intent behind the establishment of a university or an institution will have a significant role in determining the status of such an institution.”
Read more
[Aligarh Muslim University v. Naresh Agarwal, 2024 SCC OnLine SC 3213]
PARLIAMENTARY PRIVILEGE OF MPs, MLAs FOR CASTING VOTES AFTER TAKING BRIBES
7-Judge Constitution Bench: Dr. DY Chandrachud, CJI, Justice AS Bopanna, Justice MM Sundresh, Justice Pamidighantam Sri Narasimha, Justice JB Pardiwala, Justice Sanjay Kumar and Justice Manoj Misra
Issue: Would a legislator who receives a bribe to cast a vote in a certain direction or speak about certain issues be protected by parliamentary privilege?
Decision: The Bench overturned the 5-Judge Bench 1998 verdict in P.V. Narasimha Rao v. State (CBI/SPE), (1998) 4 SCC 626, wherein it was established that the Member of Parliaments (‘MP’) and Member of Legislative Assemblies (‘MLA’) enjoyed immunity if they cast vote in the House after taking bribe for it. The Bench refused to concur with the said majority opinion taken in P.V. Narasimha Rao (supra) and said that the phrase “in respect of” applies to the collective phrase “anything said or any vote given.” The words “in respect of” means arising out of or bearing a clear relation to. The Court added that this cannot be overbroad or be interpreted to mean anything which may have even a remote connection with the speech or vote given.
“Corruption and bribery of members of the legislature erode the foundation of Indian Parliamentary democracy. It is destructive of the aspirational and deliberative ideals of the Constitution and creates a polity which deprives citizens of a responsible, responsive and representative democracy.”
Read more
[Sita Soren v. Union of India, 2024 SCC OnLine SC 229]
SUB-CLASSIFICATION WITHIN RESERVED CATEGORIES
7-Judge Constitution Bench: Dr. DY Chandrachud, CJI, Justice B.R. Gavai, Justice Vikram Nath, Justice Bela M. Trivedi, Justice Pankaj Mithal, Justice Manoj Misra, and Justice Satish Chandra Sharma.
Decision: The then CJI Dr. DY Chandrachud penned the judgment for himself and Justice Manoj Misra, to which B.R. Gavai, Vikram Nath, Pankaj Mithal, and Satish Chandra Sharma, JJ. agreed. However, they penned their separate opinions alongside their concurrence. By a majority of 6:1, it was held that sub-classification of Scheduled Castes among reserved categories is permissible for granting separate quotas for more backwards within the SC categories. The Majority opinion agreeing with CJI overruled the E.V. Chinnaiah v. State of A.P., (2005) 1 SCC 394, wherein, it was held that SCs cannot be further classified for the purpose of reservation because they constitute an internally homogenous class by virtue of their inclusion in the Presidential list and thus, as a class, groups within the SCs cannot be treated differently and any further classification and consequent preferential treatment were held to violate Article 14, as it would amount to a constitutionally proscribed ‘micro-classification’.
Dissent: Justice Bela M. Trivedi, the lone dissenter held that such sub-classification is not permissible.
“In absence of any executive or legislative powers, the States are not competent to divide/ sub-divide/ sub-classify/ regroup the castes, races or tribes from amongst the “SCs” nor could they give any preferential treatment by reserving a quota for a particular caste, race, tribe out of the quota reserved for the entire SCs…..any such action on the part of the State would not only tantamount to discrimination in reverse and violation of Article 14 but would also tantamount to tinkering with Article 341 of the Constitution.”
Read more
[State of Punjab v. Davinder Singh, 2024 SCC OnLine SC 1860]
CONSTITUTIONAL VALIDITY OF THE ELECTORAL BOND SCHEME
5-Judge Constitution Bench: Dr. DY Chandrachud, CJ., Justice Sanjiv Khanna, Justice BR Gavai, Justice JB Pardiwala, Justice Manoj Misra
Issue: The constitutional validity of the Electoral Bond Scheme which introduced anonymous financial contributions to political parties was challenged.
Decision: The Bench held that anonymous electoral bonds are violative of the right to information under Article 19(1)(a) of the Constitution. Thus, the electoral bonds scheme was struck down for being unconstitutional.
The information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner. Thus, it held that the electoral bond scheme and the impugned provisions to the extent that they infringe upon the right to information the voter by anonymising contributions through electoral bond are violative of Article 19(1)(a) of the Constitution.
Read more
[Assn. for Democratic Reforms (Electoral Bond Scheme) v. Union of India, (2024) 5 SCC 1]
UNILATERAL APPOINTMENT CLAUSES IN PUBLIC-PRIVATE CONTRACTS VIOLATIVE OF ARTICLE 14 OF CONSTITUTION
5-Judge Bench: Dr. DY Chandrachud, CJI, Justice Hrishikesh Roy, Justice JB Pardiwala, Justice PS Narasimha and Justice Manoj Misra
Issue: Whether a person who is ineligible to be appointed as arbitrator, can nominate an arbitrator?
Decision: The majority held that unilateral appointment clauses in public-private contracts are violative of Article 14 of the Constitution. Justice Manoj Misra and Justice Hrishikesh Roy and PS Narasimha delivered their separate judgments with concurrence with the majority on several points.
In majority penned by CJI Chandrachud, it was held that PSU’s are not prohibited from empanelling potential arbitrators, however, the other party cannot be mandated to select its arbitrator from the panel curated by PSUs.
“Unilateral appointment clauses in a public-private contract fail to provide the minimum level of integrity required in authorities performing quasi-judicial functions such as arbitral tribunals. Therefore, a unilateral appointment clause is against the principle of arbitration, that is, impartial resolution of disputes between parties. It also violates the nemo judex rule which constitutes the public policy of India in the context of arbitration.”
Read More
[Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML, 2024 SCC OnLine SC 3219]
ELIGIBILITY CRITERIA FOR GOVERNMENT JOBS CANNOT BE CHANGED MIDWAY
5-Judge Constitution Bench: Dr. DY Chandrachud, CJI., Justice Hrishikesh Roy, Justice PS Narasimha, Justice Pankaj Mithal and Justice Manoj Misra
Issue: Whether the criteria for appointment to a public post could be altered by the authorities concerned in the middle or after the process of selection has started?
Decision: Recruitment process commences from the issuance of the advertisement calling for the applications and ends with filling up of vacancies; Eligibility criteria for inclusion in the select list cannot be altered midway, unless explicitly allowed by the prevailing rules or the original advertisement, provided it does not contradict those rules; If such change is permissible under the extant rules or advertisement, the change has to meet the standard of Articles 14 of the Constitution and must satisfy the test of non —arbitrariness. Read more
[Tej Prakash Pathak v. Rajasthan High Court, 2024 SCC OnLine SC 3184]
LMV LICENCE HOLDER
5-Judge Bench: Dr. DY Chandrachud, CJI, Justice Hrishikesh Roy, Justice PS Narasimha, Justice Pankaj Mithal, and Justice Manoj Misra
Issue: Whether a person holding a driving license for ‘light motor vehicle’ (LMV), could on the strength of that licence, be entitled to drive a ‘transport vehicle of light motor vehicle class’ having unladen weight not exceeding 7500 kg?
Decision: A driver holding a license for LMV for vehicles underweight 7500 kg is permitted to operate a transport vehicle without needing additional authorisation under Section 10(2)(e) of the MV Act. For licensing purposes, LMVs and transport vehicles are not completely distinct categories, as there is some overlap between the two. A driver holding an LMV license can, under certain conditions, operate light commercial transport vehicles.
NO AUTOMATIC VACATION OF STAY ORDER IN SIX MONTHS
5-Judge Constitution Bench: Dr. DY Chandrachud, CJ., Justice Abhay S, Oka, Justice JB Pardiwala, Justice Pankaj Mithal and Justice Manoj Misra
Issues: Whether, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can Court order automatic vacation of all interim orders of the High Courts of staying proceedings of civil and criminal cases on the expiry of a certain period?
Whether High Courts can be directed to decide pending cases in which interim orders of stay of proceedings has been granted on a day-to-day basis and within a fixed period?
Decision: The Bench reversed its own 2018 ruling of a 3-Judge Bench in Asian Resurfacing of Road Agency (P) Ltd. v. CBI, (2018) 16 SCC 299 and held that Constitutional Courts should not fix a timeline for disposal of cases pending in any court while exercising powers under Article 142. A direction that all the interim orders of stay of proceedings passed by every High Court automatically expire only by reason of lapse of time cannot be issued in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India.
“While exercising the jurisdiction under Article 142 of the Constitution of India, this Court can always issue procedural directions to the courts for streamlining procedural aspects and ironing out the creases in the procedural laws to ensure expeditious and timely disposal of cases. However, while doing so, this Court cannot affect the substantive rights of those litigants who are not parties to the case before it. The right to be heard before an adverse order is passed is not a matter of procedure but a substantive right.”
Read more
[High Court Bar Association, Allahabad v. State of UP, 2024 SCC OnLine SC 207]
CONSTITUTIONALITY OF SECTION 6A OF THE CITIZENSHIP ACT
5-Judge Constitution Bench: Dr. DY Chandrachud, CJI, Justice Surya Kant, Justice MM Sundresh, Justice JB Pardiwala and Justice Manoj Misra
Issue: The constitutional validity of Section 6-A of the Citizenship Act, 1955 was questioned.
Decision: By a majority of 4:1 the validity of Section 6A was upheld. Section 6A falls within the bounds of the Constitution and does not contravene the foundational principles of fraternity, nor does it infringe upon Articles 6 and 7, Article 9, Article 14, Article 21, Article 29, Article 326, or Article 355 of the Constitution of India. Furthermore, Section 6A does not clash with the IEAA or established principles of international law.
Dissent: Justice Pardiwala was the sole dissenter opining that Section 6A 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. However, Section 6A has acquired unconstitutionality with the efflux of time. The efflux of time has brought to light the element of manifest arbitrariness in the scheme of Section 6A(3) which fails to provide a temporal limit to its applicability. Read More
[Section 6A of the Citizenship Act 1955, In Re, 2024 SCC OnLine SC 2880]
Coram wise pending cases (Larger Bench and Constitutional Bench)1
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Civil |
Criminal |
Total |
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5 Judges |
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7 Judges |
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9 Judges |
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