Brief facts of the Case-This is a suit by the State of West Bengal against the Union of India for a declaration that Parliament is not competent to make a law authorising the Union Government to acquire land and rights in or over land, which are vested in a State, and that the Coal Bearing Areas (Acquisition and Development) Act (XX of 1957)-which hereinafter will be referred to as the Act-enacted by the Parliament, and particularly ss. 4 and 7 thereof, were ultra vires the legislative competance of Parliament, as also for an injunction restraining the defendant from proceeding under the provisions of these sections of the Act in respect of the coal bearing lands vested in the plaintiff. The Plaint is founded on the following allegations. The plaintiff is a State, specified in the First Schedule of the Constitution,, as forming part of India’ which is a Union of States. By virtue of Art. 294 of the Constitution, all property and assets in West Bengal, which were vested in His Majesty for the purposes of the Government of the Province of Bengal became vested in the State of West Bengal for the purpose of the State. The State of West Bengal, in exercise of its exclusive legislative powers, enacted the West Bengal Estates Acquisition Act, 1954 (W. B. 1 of 1954). By notification issued under the Act, as amended, all estates and rights of intermediaries and Ryots vested in the State for the purposes of Government, free from encumbrances, together with rights in the sub-soil, including mines and minerals. The Parliament enacted the impugned Act authorising the Union of India to acquire any land or any right in or over land, in any part of India. In exercise of its powers under the Act, the Union of India, by two notifications dated September 21, 1959 and January 8, 1960, has expressed its intention to prospect for coal lying within the lands which are vested in the plaintiff, as aforesaid. Disputes and differences have arisen between the plaintiff and the defendant as to the competence of Parliament to enact the Act and its power to acquire the property of the plaintiff, which is a sovereign authority.
Legal Issue- 1. Whether Parliament has legislative competence to enact a law for compulsory acquisition by the Union of land and other properties vested in or owned by the State as alleged in para 8 of the plaint ?
2. Whether the State of West Bengal is a sovereign authority as alleged in para 8 of the plaint ?
3. Whether assuming that the State of West Bengal is a sovereign authority, Parliament is entitled to enact a law for compulsory acquisition of its lands and properties ?
4. Whether the Act or any of its provisions are ultra vires the legislative competence of Parliament ?
5. Whether the plaintiff is entitled to any relief and if so, what relief ?
Observation- The Coal Bearing Areas (Acquisition and Development) Act, 1957, is not ultra vires the powers of Parliament and is valid. Under Entry 42 of List III of the Seventh Schedule to the Constitution, Parliament is competent to make a law for the acquisition for the property of a State.
The Constitution of India is not truly Federal in character. The basis of distribution of powers between the Union and States is that only those powers which are concerned with the regulation of local problems are vested in the States and the residue specially those which tend to maintain the economic industrial and commercial unity of the country are left to the Union. It is not correct to say that all sovereignty is vested in the States. Parliament which is competent to destroy a State cannot be held, on the theory of absolute sovereignty of the States, to be incompetent to acquire by legislation the property owned by the States.
From the fact that Art.294 vests the property in the States and that Art.298 empowers the States to transfer the property it does not follow that the property of the States cannot be acquired without a constitutional amendment, Article294 does not contain any prohibition against the transfer of property of the States and if the property is capable of being transferred by the State it is capable of being acquired.
Issue -1 in the affirmative.
Issue-2 not such as to disentitle the Union Parliament to exercise its legislative power under Entry 42 List III.
Issue-3 answer covered by answer on issue 2.
Issue-4in the negative.
Issue-5in the negative.
Conclusion-The Indian Constitution accepts the federal concept and distributes the sovereign powers between the co- ordinate constitutional entitles, namely, the Union and the States. This concept implies that one cannot encroach upon the governmental functions or instrumentalities of the other, unless the Constitution expressly provides for such interference. The legislative fields allotted to the units cover subjects for legislation and they do not deal with the relationship between the two co-ordinate units functioning in their allotted fields this is regulated by other provisions of the Constitution and there is no provision which enables one unit to take away the property of another except by agreement. The future stability of our vast country with its unity in diversity depends upon the strict adherence of the federal principle, which the fathers of our Constitution have so wisely and foresightedly incorporated therein. This Court has the constitutional power and the correlative duty-a difficult and delicate one to prevent encroachment, either overtly or covertly, by the Union of State field or vice-versa, and thus maintain the balance of federation. The present is a typical case where the Court should stop the Union from overstepping its boundary and trespassing into the State field. I would, therefore, hold that the impugned Act, in so far as it confers a power on the Union to acquire the lands owned by the State, including coal mines and coa bearing lands, is ultra vires.
Decision-By the above mentioned directions the appeal is dismissed, In view of the judgment of the majority, the suit stands dismissed with costs.