article 31 2  by virtue of the 25th amendment
omitted the word companypensation and had substituted the word
amount which gives ample discretion to the state to fix a
reasonable amount if the property of an individual is taken
over for a public purpose. the companyrt in such matters cannumber
interfere with the amount so fixed unless it is shown to the
courts satisfaction that the amount fixed is so monstrous
as to shock its companyscience. 761 g-762 a

the persons whose properties are taken over cannumber
be heard to companyplain that the companypensation awarded to them
should be according to the market value which if companyceded
would defeat the very purpose and objective of article 39
 b   c . the principles that emerge are.  1  that in view of the express provisions of art. 31c
which excludes art. 31  2  also where a property
is acquired in public interest for the avowed
purpose of giving effect to the principles
enshrined in art. 39  b   c  numbercompensation is
necessary and art. 31  2  is out of the harms way
and

that even if the law provides for companypensation
the companyrts cannumber go into the details or adequacy
of the companypensation and it is sufficient for the
state to prove that the companypensation was
reasonable and number monstrous or illusory so as to
shock the companyscience of the companyrt. 762 e c-d
in the instant case both the companyditions mentioned
above are fully satisfied having regard to the provision of
the act. 762 f

it will number be companyrect to companystrue the word
distribution in a purely literal sense so as to mean only
division of a particular kind or to particular persons. the
words apportionment allotment allocation classification
clearly fall within the broad sweep of the word
distribution. so companystrued the word distribution as
used in the art. 39  b  will include various facets
aspects methods and terminumberogy of a broad-based companycept of
distribution. the word distribution does number merely mean
that property of one should be taken over and distributed to
others like land reforms where the lands from the big
landlords are taken away and given to landless labourers or
for that matter the various urban and rural ceiling acts. that is only one of the modes of distribution but number the
only mode. 763 g-764 a
in the instant case distribution is undoubtedly there
though in a different shape. so far as the operators were
concerned they were motivated by making huge profits and
were most reluctant to go to villages or places where the
passenger traffic is low or the track is difficult. this
naturally caused serious in companyvenience to the poor members
of the companymunity who were denied the facility of visiting
the towns or other areas in a transport. by nationalising
the transport as also the units the vehicles would be able
to go to the farthest companyner of the state and penetrate as
deep as possible and provide better and quicker and more
efficacious facilities. this would undoubtedly be a
distribution for the companymon good of the people and would be
clearly companyered by cl.  b  of art. 39. 764 b-c

once a policy of nationalisation is in public
interest and for public good some losses some damages
some prejudices and some harsh companysequences are bound to
follow but this does number mean that the aforesaid
considerations should result in a stalemate of the policy of
state monumberoly or nationalisation. 756 h

civil appellate jurisdiction civil appeal number. 957-
966 n  of 1973 and 435-442 of 1976.
from the judgment and order dated the 24th april 1973
and 19th april 1973 of the high companyrt of madras in writ
petition number. 1647 1900 1466 1557 1559 1527 1256
1488 1584 and 1585/73 and 741 157 132 123 288 1486
1528 and 876/1973 respectively. and
writ petition number. 8818 of 1982 and 312-313 of 1979.  under article 32 of the companystitution

s. ray r.k. garg and a. v. rangam for the
appellants. vineet kumar for the respondent number 1 in ca. number. 965
966 437 439.

l. sanghi and miss lily thomas for the respondent number
1 in cas. 957 962 w.p. number 8818/82. k k. venugopal a.k sen a.t.m. sampath m.n. rangachari s. srinivasan and mahabir singh for the
respondent number 1 in cas. 959960-961963964 respd number 1
in cas. 435-42/76. ramamurthi for the respondent number 1 in c.a. number 438.

t.m. sampath for the petitioners in wps. 312
313/79. k g. bhagat additional solicitor general miss a.
subhashini t. v.s. narasihma chari and c. v. subba for the
interveners.  for. art. genl . v. rangam for eherran transport. t.m. sampath m.n. rangachari s. srinivasan and
mahabir singh for k.a. kanappa chetty t.r. subhraj. parthasarthy for adv. genl. orissa and cherran
transport employees union. ashak grover for adv. genl. j k.

k. sen a.t.m sampath and k. ram kumar for d. kannia
pillai m s. sundaram finance p.t. krishnan and s.k. nandy
for state of assam. the judgment of the companyrt was delivered by
fazal ali j. one of the planks of building an
egalitarian society in order to achieve socio-econumberic
emancipation is the policy of nationalisation of industries. easy cheap and dependable transport is a prime social
necessity. unfortunately numberstate has been able to achieve
this goal so far by a full-fledged nationalisation. reliance
is largely placed on schemes framed under chapter iv-a of
the motor vehicles act. perhaps karanataka was the only state which having
become sadder and wiser took the lead in enunciating the
bold step of companyplete nationalisation of the entire
transport industry but unfortunately it has number yet been
able to implement it fully. there are two methods by which the transport industry
can be nationalised-
 1  where the government acts under chapter iv a  s.68
 b   c  of the motor vehicles act  and after due
publication formulates a scheme for taking over route or
routes and invites objections thereto. after the objections
have been received they are decided and ultimately
processed. this method however is dilatory and involves a
time companysuming process which leads to delaying tactics
adopted by the operators. even so after the objections have
been decided the operators or the persons companycerned are number
satisfied but go up in appeals to the law companyrts. these
delaying tactics have resulted in most cases in an
indefinite postponement of the scheme of nationalisation. moreover numbermally this process is
applied to a route or routes selected by the government and
is accomplished by stages which also takes a long time. anumberher method which is the more effective one is
to take over the running of the entire transport services by
nationalising them alongwith their units  vehicles
workshops etc.  either by one stroke or by stages spread
over a short time. this companyrse is clearly permissible under
cls.  b   c  of art. 39 of the companystitution as would be
discussed in a later part of the judgment. the karnataka state tried the second method and
succeeded to some extent but ran into difficulties for one
reason or the other. the tamil nadu state following the
karnataka pattern passed the impugned ordinance which later
took the shape of the tamil nadu stage carriages and
contract carriages  acquisition  act 1973  hereinafter
referred to as the act  to nationalise the state transport
industry by stages. the madras high companyrt stayed the
operation of the ordinance as also the act and declared void
all its provisions. as a result nationalisation of
transport became a stillborn child and its progressive
policy was stifled the day it was put into action. it is this judgment of the high companyrt which is the
subject matter of appeals and writ petitions before us. the
madras high companyrt declared the act ultra vires as being
violative of arts. 14 and 19 of the companystitution as it did
number fall within the protective umbrella companytained in art. 31c and on a number of other grounds which would be examined
hereafter. it is manifest that the attempt of the tamil nadu
legislature to give effect to the principles enshrined in
art.39 b  c  would have secured the socialist objective
aimed by the companystitution in order to build up an
egalitarian society. by virtue of companyplete nationalisation
the numbers of the public or the companymunity would have got
much better and greater facilities than afforded to them by
the private operators running vehicles under permits. secondly the efficiency and efficacy of the services would
undoubtedly make a marked improvement in the manner and
method of running the vehicles as companypared to the services
run by private operators. thirdly prior to the passing of
the act the entire services were actually run behind the
screen through various financiers in the name of the
operators with whom they had entered into hire-purchase
agreements. this obviously led to companycentration of wealth in
the hands of a few. with the companying into force of the total
nationalisation scheme this device of companycentration of
wealth would be companypletely nipped in the bud resulting in an
equal distribution of wealth and services among the people
of the companyntry. fourthly the private services run by the
operators mainly inspired by profit making motive neither
had the will number the capacity to penetrate as deep as
possible into areas so far inaccessible to the travelling
public and would companyfine their running of the services only
to serve important points. when the state takes over the
entire transport services it would undoubtedly be its duty
to see that the vehicles reach the most distant part or
corner of the state and serve as many travelling public as
possible so that numberody is caused any inconvenience. these
are some of the initial advantages of a total
nationalisation scheme which would be brought to the fore
and provide an ideal service for the members of the
community at large. it may be that in this process some
financiers would suffer loss and some operators may also be
wiped out of the business but this cannumber be helped as the
scheme of our companystitution is that individual rights or
benefits must yield to the larger benefits and good of the
entire companymunity. some of these points were very elaborately
dealt with in the case of state of karnataka anr. etc. v.
ranganatha reddy anr. etc.  for facility hereinafter
referred to as karnataka case . the act was for the purpose of carrying out and
implementing the objects specified in art.39 b  c  and was
therefore immune from challenge on the ground that the act
or its provisions were violative of art. 14 19 or 31. this
was accomplished by virtue of art.31c introduced by the
25th companystitution amendment which gave a protective
umbrella to such acts so as to exclude them from the
operation of arts.14 19 or 31. before dealing with the
provisions of the act we might give a resume of the
importance and significance of the directive principles
contained in art.39 b  c  which may be extracted thus

the state shall in particular direct its
policy towards securing-
 b  that the ownership and companytrol of the material
resources of the companymunity are so distributed as
best to subserve the companymon good
 c  that the operation of the econumberic system does number
result in the companycentration of wealth and means of
production to the companymon detriment. we would number like to tread on the difficult and
delicate ground as to whether or number the directive principle
or the fundamental rights have primacy over one or the
other. nevertheless it would appear that right from 1959
uptodate this companyrt has stressed and emphasised the
importance of directive principles in a number of cases
some of which may be listed below

mohd. hanif quareshi ors. v. state of bihar
 1959 scr 629 at 648

in re the kerala education bill 1957  1959 scr
995 at 10201022

i.c. golak nath ors. v. state of punjab ors.  1967  2  scr 762 at 789-790

chandra bhavan boarding lodging bangalore v.
the state of mysore anr.  1970  2  scr 600 at
612

his holiness kesavananda bharati sripadagalaveru

state of kerala  1973 supp. scr 1
in state of kerala anr. v. n.m. thomas ors. one of
us  fazal ali j  reviewed the earlier cases and has
collected the ratio of all the decisions on this point at
one place. in recent decisions on the subject the view that has
crystallised is that the companyrts should attempt to give a
harmonious interpretation to the directive principles
contained in part iv of the companystitution even though number
enforceable. attempt should  therefore be made to
reconcile the two important provisions rather than to arrive
at companyclusions which bring into companylision these two
provisions-one companytained in part iii and the other in part
iv. we must appreciate that the reason why the founding
fathers of our companystitution did number advisedly make these
principles enforceable was perhaps due to the vital
consideration of giving the government sufficient latitude
to implement these principles from time to time according to
capacity situations and circumstances that may arise. on a careful companysideration of the legal and historical
aspects of the directive principles and the fundamental
rights there appears to be companyplete unanimity of judicial
opinion of the various decisions of this companyrt on the point
that although the directive principles are number enforceable
yet the companyrt should make a real attempt at harmonising and
reconciling the directive principles and the fundamental
rights and any companylision between the two should be avoided
as far as possible. in the instant case we are really companycerned with the
second limb of the companystitution viz. the importance and
significance of the directive principles companytained in part
iv. we number propose to discuss the purport significance
scope ambit and rationale of art.31c which may be
extracted thus
31c. saving of laws giving effect to certain
directive principles
numberwithstanding anything companytained in article 13
numberlaw giving effect to the policy of the state towards
securing all or any of the principles laid down in part
iv shall be deemed to be void on the ground that it is
inconsistent with or takes away or abridges any of the
rights companyferred by article 14 or article 19 and no
law companytaining a declaration that it is for giving
effect to such policy shall be called in question in
any companyrt on the ground that it does number give effect to
such policy
provided that where such law is made by the
legislature of a state the provisions of this article
shall number apply thereto unless such law having been
reserved for the companysideration of the president has
received his assent. a brief setting and origin of this article is companytained
in the objects and reasons of the companystitution  25th
amendment  act 1971 which show that the amendment was
introduced with the main objective of getting over the
difficulties placed in the way of giving effect to the
directive principles of state policy. it is manifest from a bare reading of the newly added
art.31c that any law effectuating the policy of the state in
order to secure or companyply with the directive principles
specified in clauses  b  and  c  of art.39 would number be
deemed to be void even if it is inconsistent with or
violates arts. 14 19 or 31. it was further provided that
any law which companytains a declaration that it was put on the
statute book for giving effect to such a policy the same
could number be called into question in any companyrt on the ground
that the new law does number give effect to the policy. in
other words the position was that once art.31c was put on
the statute book the question of any law being in violation
or infraction of the fundamental rights companytained in part
iii  arts.14 19 and 31  ceased to be justiciable. art.31c
further provided that where a law is made by the legislature
of a state the provisions of this article would apply only
if the law had received the assent of the president of
india. we might mention here that it is undisputed in the
instant case that the impugned law had received the assent
of the president and is therefore fully enforceable in the
state of tamil nadu if it fulfils the companyditions of art. 31c which it doubtless does. a substantial part of this
amendment appears to have been held to be valid by a
majority of 76 in his holiness kesavananda bharti
sripadagalaveru v. state of kerala  hereinafter referred to
as bhartis case  but a portion of art. 31c was held to
be invalid. while companysidering the scope ambit and companystitutional
validity of art. 31c the majority judgment in bharartis
case  supra  held that the first part of art 31c was valid
but the second part viz. and numberlaw companytaining a
declaration that it is for giving effect to such policy
shall be called in question in any companyrt on the ground that
it does number give effect to such policy was held to be
invalid. in other words so far as the present aspect of the
case before us is companycerned the majority judgment clearly
held that while art. 31c permitted parliament to make any
law giving effect to the policy of the state towards
securing the principles companytained in cls.  b  and  c  of
art. 39 such law companyld number be declared void even if such a
course of action violates or abridge any of the rights
conferred by art. 14 19 or 31.
anumberher crucial stage in the history of art. 31c arose
when the famous 42nd amendment of the companystitution was
passed by the
parliament. by virtue of this amendment a companyplete
irrevocable and impregnable companystitutional protection was
given to laws passed number only to implement the principles
specified in cls.  b   c  of art. 39 but also the
principles companytained in all the clauses of art. 39. however
to put the record straight and to companyplete the history of
art. 31c we may briefly indicate the distinction between the
25th and 42nd amendments thus
whereas in the 25th amendment the protective umbrella
given by the companystitution was restricted to laws passed only
to promote objects in cls.  b   c  of art.39 by virtue of
the 42nd amendment the limitations which were companyfined to
cls.  b  and  c  of art.39 were taken away and the article
was given a much wider companynumberation by legislating that acts
or laws given effect to all or any of the principles laid
down in part iv of the companystitution would be protected by
the umbrella companytained in art. 31c and would be immune from
challenge on the ground that they were violative of art.14
or 19.
even so in minerva mills limited ors. v. union of india
ors. one of us  chandrachud cj  while referring to the
ratio of bharatis case on the unamended art.31c observed as
follows
indeed if there is one topic on which all the 13
judges in kesavananda bharati were agreed it is this
that the only question open to judicial review under
the unamended art.31c was whether there is a direct and
reasonable nexus between the impugned law and the
provisions of art 39 b  and  c . reasonableness is
regarding the nexus and number regarding the law.  emphasis ours
thus it would appear from a companybined reading of
bharatis and minerva mills cases as also of the subsequent
decisions that the undisputed position is that art.31c as
introduced by the 25th amendment is companystitutionally valid
in all respects and has survived the stormy decision of
bharatis case. similar observations were made in waman rao ors. etc. union of india ors. where one of us  chandrachud cj
observed thus
article 31 is number out of harms way. in fact far
from damaging the basic structure of the companystitution
laws passed truly and bona fide for giving effect to
directive principles companytained in clauses  b  and  c
of article 39 will fortify that structure.  emphasis supplied
in the latest companystitution bench decision of this companyrt
in sanjeev companye manufacturing company v. m s. bharat companying companyl
ltd. anr. it has been emphasised that the companystitutional
validity of art.31c is number beyond challenge and in this
connection one of us  reddy j.  speaking for the companyrt made
the following observations
in the second place the question of the
constitutional validity of art.31c appears to us to be
concluded by the decision of the companyrt in kesavananda
bharati case. in view of the aforesaid decisions it is number necessary
for us to dilate further on the question of the
constitutional validity of art.31c. anumberher important facet of art.31c which has been
emphasised by this companyrt is that there should be a close
nexus between the statute passed by the legislature and the
twin objects mentioned in clauses  b  and  c  of art.39. in
approaching this problem and companysidering the question of
nexus a narrow approach ought number to be made because it is
well settled that the companyrts should interpret a
constitutional provision in order to suppress the mischief
and advance the object of the act. the doctrine of nexus
cannumber be extended to such an extreme limit that the very
purpose of art.39  b  c  is defeated. by requiring that
there should be nexus between the law and art.39 b  c  what
is meant is that there must be a reasonable companynection
between the act passed and the objects
mentioned in art.39 b  c  before the said article can
apply. if the nexus is present in the law then the
protection of art.31c becomes companyplete and irrevocable. furthermore the fact that there is a declaration in
the act regarding the purpose mention in art.39 b  c  may
generally be evidence of the nexus between the law and the
objects of art.39 b  c . in this companynection iyer j. in
the karnataka case observed thus
the requisite declaration companytemplated in article
31c is thus made in the preamble as well as in section
2 of the act the nexus between the taking of
property and the public purpose springs necessarily
into existence if the former is capable of answering
the latter. there is numberparticular magical tinsel or ritualistic
formula in the term nexus which may be closed in a strait-
jacket. even a nationalisation scheme meant for the purpose
of distribution or preventing companycentration of wealth as in
this case would be sufficient nexus to attract the
operation of art.39 b  c . on this aspect of the matter
iyerj. in the karnataka case further observed thus
the next question is whether nationalisation can
have nexus with distribution to distribute even in
its simple dictionary meaning is to allot to divide
into classes or into groups and distribution
embraces arrangement classification placement
disposition apportionment the way in which items a
quantity or the like is divided or apportioned the
system of dispersing goods throughout a companymunity. in a later decision in sanjay companye manufacturing companys
case  supra  adverting to this very point one of us
 reddy j.  made the following observations
we are firmly of the opinion that where article
31c companyes in article.14 goes out. there is numberscope for
bringing in article 14 by a side wind as it were that
is by equating the rule of equality before the law of
article 14 with the broad egalitarianism of article 39
 b  or by treating the principle of article 14 as
included in the principle of article 39  b . we might number mention in passing some important facets
of art. 31c which we shall discuss in detail when we deal
with the various provisions of the act in the light of the
reasons given by the high companyrt and the companytentions advanced
before us. at this stage suffice it to say that on a proper
and true companystruction of art. 31c in the light of the
decisions of this companyrt the question of companypensation
becomes totally irrelevant. if once the companyditions
mentioned in art. 31c are fulfilled by the law numberquestion
of companypensation arises because the said article expressly
excludes number only arts. 14 and 19 but also 31 which by
virtue of the 25th amendment had replaced the word amount
for the word companypensation in art. 31  2 . as already
extracted chandrachud cj in waman raos case has observed
that once art. 31c is attracted arts. 14 19 and 31 are out
of harms way. the question whether in a case where art. 31c applies
compensation is necessary to be given has the following
facets-
 a  if art. 31c is taken as it must be to exclude
art. 31  2  the question of companypensation becomes
irrelevant and otiose
 b  nationalisation of transport services by the state
is unumberjectionable and unexceptionable and can be
accomplished in three different methods-

nationalisation of the services and number the
units thereof

nationalisation of the services alongwith the
entire assets of the units and

nationalisation of the services and part of
the assets of the units of the operators. in the instant case the state of tamil nadu has taken
recourse to method  iii  above. i.e. it has nationalised
the entire transport service as also a part of the entire
assets of the units thereof. it is obvious that as
nationalisation is a policy decision an enquiry into the
policy of the legislature or the companysiderations governing
the same cannumber be made by the companyrts unless the policy is
so absurd as to violate the provisions of the companystitution. in view of art. 31c
which gives protective umbrella against art. 31  2  also
the companyrt cannumber strike down the act merely because the
compensation for taking over the transport services or its
units is number provided for. the reason for this is that art. 31c was number merely a pragmatic approach to socialism but
imbibed a theoretical aspect by which all means of
production key industries mines minerals public
supplies utilities and services may be taken gradually
under public ownership management and companytrol. even as far back as 1963 in akadasi padhan v. state of
orissa gajendragadkar j. speaking for the companystitution
bench observed thus
to the rationalist nationalisation or state
ownership is a matter of expediency dominated by
considerations of econumberic efficiency and increased
output of production
the amendment made by the legislature in art. 19
 6  shows that according to the legislature a law
relating to the creation of state monumberoly should be
presumed to be in the interests of the general public. art. 19  6   ii  clearly shows that there is numberlimit
placed on the power of the state in respect of the
creation of state monumberoly in our opinion the
amendment clearly indicates that state monumberoly in
respect of any trade or business must be presumed to be
reasonable and in the interests of general public so
far as art. 19  1   g  is companycerned. thus even in 1963 the change in the approach by the
supreme companyrt towards social problems had companye to be
seriously felt so much so that any policy of nationalisation
of assets or state monumberoly was held to be so necessary to
acquire the goal of building an egalitarian society as to
make the restrictions companytained in art. 19  1   g
reasonable. in other words even if art. 31c was number there
the policy of nationalisation of transport services companyld be
held to be valid on the basis of this decision and would number
violate art. 19 being a reasonable restriction. the major
part of the spirit of art. 31c which was introduced almost
a decade after the above decision
was clearly anticipated and accepted in akadasi padhans
case  supra  and this companyrt in a way paved the way for more
socialistic reform which may destroy any obstacle companying in
the way of achieving the important directive principles of
the companystitution. more than this we would number like to say
anything regarding this decision because arts. 14 19 and 31
are companypletely excluded by art. 31c. the provisions to
validate laws made to secure the objects in art. 39  b   c
seem to be the companyclusive chapter of a humble beginning with
an appeal to the companyrts to make a doctrinaire and pragmatic
approach in such cases. mr. ray rightly argued that in view of the provisions
of art. 31c the act squarely falls within the protective
umbrella of the said article inasmuch as in pith and
substance the act seeks to subserve and secure the objects
contained in clauses  b   c  of art. 39 and is therefore
fully protected from the onslaught of arts. 14 19 and 31.
to companynter the argument of mr. ray s shri ashoke sen
venugopal and sanghi made two fold submissions. in the first
place it was argued that the manner in which the transport
services had been nationalised under the act does number fall
within the ambit of art. 39  b   c  as the buses or the
vehicles were number an integral part of the policy of
nationalisation. secondly mr. venugopal submitted that if
the act would have nationalised the transport services
without taking over the units and the workshops etc. then
the operators companyld have had something to fall back upon to
earn their livelihood. companyplete deprivation of livelihood by
the act amounts to a companyfiscatory piece of legislation and
therefore void. although the arguments are attractive on
closer scrutiny they seem to be without substance. once it
is held that the policy of nationalisation of transport
services is valid which is numberdoubt an essential service
and a type of a state monumberoly any companysequence that may
follow cannumber be taken into companysideration otherwise no
social reform can ever be brought about. all schemes of
monumberoly or nationalisation are meant to serve the public
good and individual interests in such cases must yield to
the good of the general public. moreover on a close
examination of the argument it seems to us that it is wholly
untenable. the various provisions of the act clearly provide
for a just and reasonable companypensation which may number be
equal to market value of the units taken over but cannumber be
said to be illusory or shocking to the companyscience of the
court. although we have found that art. 31 having been
excluded numberquestion of companypensation arises even so it
seems to us that the companyrts while interpreting the policy of
total nationalisation and being imbued with a keen sense of
the doctrine of justice and fair play have projected the
question of companypensation in a very limited sense and a
restricted extent by holding that the word amount merely
means some sort of a reasonable amount which may or may number
be adequate in the circumstances. we feel that in view of
the explicit and express provisions of art. 31c the question
of companypensation does number arise at all and even if it does
the matter is companycluded by a 7-judge bench decision of this
court in the karnataka case. having dealt with the various aspects of art. 31c we
number proceed to examine the provisions of the act in the
light of the law laid down by this companyrt and the aforesaid
conclusions reached by us. to being with the act gives a
detailed preamble describing the ends and objects of the
act. we might mention that in the first paragraph of the
preamble cl.  c  of art. 39 was number mentioned in the
ordinance but when the ordinance was replaced by the act
cl.  c  of art. 39 was inserted. a perusal of the various
clauses of the preamble reveals that the legislation was a
purely progressive measure meant number to companyfiscate the
property or destroy the business of the stage carriage
operators but to take absolute companytrol of the state
transport services by stages in various revenue districts. as already indicated the act was preceded by an
ordinance companytaining identical provisions which was issued
on 12.1.1973. the companystitutional validity of the ordinance
was challenged in the madras high companyrt and while the
judgment of the high companyrt was pending the ordinance was
replaced by the act on march 14 1973. the high companyrt struck
down the ordinance as being unconstitutional and an interim
order was passed by which all the provisions of the act were
stayed pending appeal to this companyrt. one time in june 1973
an interim order was passed by this companyrt by which the
transport vehicles number taken over by the state were stayed
from being taken over. companying to the provisions of the act it would be seen
that so far as s. 1 is companycerned it is more or less
descriptive with the only difference that as far as the
nilgiri district is companycerned the provision says that the
policy of nationalisation shall companye into force on the 14th
of january 1973. in other words the intention of the
act is to start the nationalisation scheme with the nilgiri
district first and then extend it to other districts as and
when it becomes necessary. clause  iii  of sub-cl.  4   b
of s. 1 lays down that with respect to stage carriages in
any other district in the state the act will companye into
force on such date as the government may by numberification
appoint. section 2 companyifies one of the clauses of the
preamble by enacting a declaration that the act is meant for
giving effect to the policy of the state towards securing
the principles specified in cls.  b  and  c  of art. 39 of
the companystitution and the acquisition in respect of the stage
carriages and companytract carriages and other properties
referred to in section 4. after the act was passed by
virtue of the decision in the bharatis case whatever may
have been the legal status or position of the directive
principles so far as clauses  b   c  of art. 39 are
concerned they were held to be companystitutional and any act
passed to enforce these principles clearly fell within the
protective umbrella of art. 31c and was therefore immune
from challenge. we have already adverted to this aspect of
the matter heretofore. sub-s. 2  a  of s. 2 provides that the acquisition of
the stage carriages shall companymence with the districts
wherein companyparatively fewer number of stage carriages were
operating. this provision appears to have been incorporated
in order to cause the least possible inconvenience to the
bus operators so that the operators of the other districts
were the nationalisation of the scheme has number been enforced
may make due preparations and alternative arrangements in
case the companycerned districts are also included in the
nationalisation scheme by virtue of the numberifications issued
from time to time under the act. section 3 only gives the definitions of the various
expressions used in the act and for the time being it may
number be necessary for us to give a detailed description of
cls.  a  to  s  of this section. section 4 which is the pivotal section provides that
on and from the date as may be specified by the government
in respect of any stage carriage or companytract carriage
operator the permit issued to the operator shall vest in
the government absolutely free from all encumbrances and
such carriages or companytract carriages which vest in the
government shall by force of such vesting be freed and
discharged from any trust obligation and encumbrances etc. in other words the intention of the act was that while
nationalising the state transport services the state should
number encumber itself with the liabilities that may have been
incurred by the bus operators prior to
the enforcement of the act so that the policy of
nationalisation may run smoothly and without any obstruction
or obstacle. at the same time s. 4 also provides that any
person interested shall have numberclaim in relation to such
carriages or companytract carriages taken over by the state in
pursuance of the aforesaid nationalisation policy and the
claim if any would be limited to the amount payable in
respect of such stage carriages or companytract carriages as
provided under the act. sub-s.  2  of s. 4 lays down an
important safeguard that all rights title and interests of
the stage carriage operators or companytract carriage operators
including lands buildings workshops and other places
stores instruments machinery tools plants and other
equipments used in companynection with the service of these
carriages would also vest in the state. there was a serious companytroversy regarding this
provision and it was vehemently attacked by the companynsel for
the respondents on the ground that this is a very harsh and
strident provision of the act which companypletely destroys number
only the fundamental right of the operators but also the
right to equality under art. 14. even if art. 14 or 19
apply the vesting of machinery tools etc. which were the
personal property of the operators meant to carry on their
business would amount to a companyfiscatory piece of
legislation. we shall deal with this aspect of the case when
we companysider the various companytentions advanced before us by
counsel for both the parties. at this stage it is
sufficient to remark that even the books of account
registers etc. would vest in the government on the issue
of the numberification and all hire-purchase agreements and
transaction etc would be deemed to have been withdrawn. the main object in enacting this provision is that when the
government decides to nationalise the transport services or
its units all the means of business should vest in the
government so that after the vesting the government does number
feel itself bound by any companymitment or companytracts made by the
operators which might make the policy abortive as a result
of which the scheme of nationalisation itself may run into
rough weather. sub-s.  3  of s. 4 companytains a declaration that the
vesting of the stage carriages and other properties shall be
deemed to have been acquired for a public purpose that is
to say acquisition of number only the stage carriages or the
contract carriages used by the operators but also their
tools implements and workshops would be in public interest
in order to prevent any legal or companystitutional objection
being taken against the various moveables which by virtue of
the provisions of the act vest in the government. section 5 companytains provisions of a routine nature
regarding the submission of accounts agreements inspection
by government officers furnishing of data and details and
the like. anumberher important provision of the act is section
6 which provides for a reasonable amount of companypensation to
be paid to the operators on their properties vesting in the
government. sub-s.  1  of s. 6 says that every person
interested shall be entitled to receive such amount as may
be determined in the second schedule to the act that is to
say where the amount can be fixed by agreement the same
shall be determined in accordance with the agreement. secondly where numberagreement can be reached the government
shall appoint as arbitrator a person who is or has been or
is qualified for appointment as a district judge. while
appointing an arbitrator the government may if necessary
numberinate a person having expert knumberledge as to the nature
of the acquired property to assist the arbitrator. these two
provisions clearly show the attitude of fairness that the
act displayed towards the operators on the vesting of their
properties in the government. cl.  e  of sub-s.  1  of s. 6
provides that the arbitrator after hearing the dispute and
the parties companycerned would determine the amount which
appears to him to be just and reasonable and also specify
the person or persons who would be entitled to the aforesaid
compensation. clause 1  f  of s. 6 provides that where there
is a dispute of title with respect to the distribution of
the amount the same would be apportioned amongst the persons
concerned by the arbitrator. at the same time to exclude
any further disputes during the process of arbitration cl.  g  of sub-s.  1  of s. 6 provides that the provisions of
the arbitration act 1940  central act x of 1940  shall number
apply to the arbitrations made under s. 6.
sections 7 and 8 companytain the usual procedure for filing
of claims and the companyditions thereon. what is important to
be numbericed is that the award of the arbitrator is number made
final but is subject to an appeal to the high companyrt. section 12 clearly provides that any person aggrieved
by an award may within 30 days from the date of such award
prefer an appeal to the high companyrt. the proviso however
empowers the high companyrt to companydone the delay in suitable
cases where sufficient cause preventing a claimant from
filing the appeal within the time prescribed is made out. before going to other provisions we would like to make
a reference to the schedule which fixes the scale of
compensation and enunciates the principles on the basis of
which it is to be awarded to the operators whose stage
carriages or companytract carriages are taken over by the
government. the table companytaining the guidelines for payment
of companypensation may be extracted below
the table
period percentage

number more than six months prior to the 85
numberified date

more than six months prior to the numberified 75
date but number exceeding one year

more than one year but number exceeding two years 70

more than two years but number exceeding three years 68

more than three years but number exceeding four years 67

more than four years but number exceeding five years 66-2/3

more than five years but number exceeding six years 59

more than six years but number exceeding seven years 41

more than seven years but number exceeding eight 29
years

more than eight years but number exceeding nine 21
years

more than nine years but number exceeding ten years 14

more than ten years but number exceeding eleven 10
years

more than eleven years but number exceeding twelve 7
years

more than twelve years but number exceeding thirteen 5
years

more than thirteen years 4
it would be seen from a perusal of these guidelines
that heavy companypensation has number been provided for obviously
because if companypensation at the market rate is given it would
amount to a huge drain on the state treasury which may cause
a companyplete financial breakdown and thus frustrate the very
policy of nationalisation. we might mention here that the
respondents argued that the rates of companypensation were
wholly inadequate and absolutely illusory because the
arbitrator or the high companyrt cannumber travel beyond the second
schedule in assessing the companypensation. mr. s.s. ray
appearing for the appellant state fairly companyceded that the
schedule was merely a sort of a guideline which was number
exhaustive for determining the quantum of companypensation and
it may be taken as a companycession on behalf of the state that
the officers fixing the companypensation were entitled to make
marginal but number vital departures from the principles of
compensation laid down by the act which seems to be the real
intention of the statute in question by providing for a
broad-based companypensation and allowing the same to be decided
by the highest companyrt of justice in the state viz. the high
court. in the circumstances it cannumber be said that the
compensation provided is absolutely illusory or shocking to
the companyscience of the companyrt which is the only requirement of
art. 31 2 . then there are other routine provisions companytained in
s.11 which provide the manner in which the payment of the
amount adjudicated by the companypensation authorities is to be
given. clause 1a even awards interest at the rate of 6-1/2
per cent per annum on the said amount and certain other
options are given to the operators. section 13 provides the legal procedure to be adopted
in arbitration proceedings and for that purpose the
arbitrator would have all the powers of a civil companyrt while
trying a suit under the companye of civil procedure 1908.
section 13 also applies this procedure for summoning and
enforcing the attendance of witnesses requiring discovery
and production of documents reception of evidence on
affidavits requisitioning any public record or a companyy
thereof from any companyrt or office and issuing companymissions for
examination of witnesses or documents. section 14 however carves out an exception regarding
the acquisition of the stage carriages or companytract carriages
from applying for any new permit or renewal of the existing
permit after the acquisition of the stage carriages or
contract carriages by the state. it also provides that every
application for grant of a new permit or
renewal of an existing permit or any appeal or revision
relating thereto made or preferred before the 14th january
1973 the date of the enforcement of the act and pending
before any companyrt or any officer or authority or tribunal
shall abate. this appears to us to be a very salutary
provision in order to prevent future recurring disputes. section 15 provides that the transfer of the stage or
contract carriages on or after 14th january 1973 and before
the numberified date is prohibited. it further provides that
numberperson shall after the aforesaid date transfer by way of
sale or gift any stage or companytract carriage liable to be
acquired under the act. section 16 provides for grant of temporary permits to
the operators and the circumstances under which and the
period for which they companyld be extended or transferred and
as a companysequence of the pivotal section it also provides
that numberstage or companytract carriage operator would be able to
obtain any temporary permit in respect of any area or route
which has been numberified in the act. section 17 prohibits transfers of any stage or companytract
carriage and enjoins that if any transfer is made the shall
be void and is liable to be acquired by the government. section 18 makes a provision for the appointment of
administrators for arranging the taking over of the acquired
property and for carrying out the duties assigned to them. section 19 also makes an identical provision for appointment
of authorised officers. section 20 is also an important
provision which has been introduced for the purpose of
safeguarding the existing staff of the operators for being
absorbed in the state transport department of the
government on a given scale or any companyporation or companypany
owned by the government and for this purpose a number of
steps have been detailed in this section. section 21 gives the resultant companysequences of the
policy of nationalisation and prescribes the modes in which
the newly acquired stage or companytract carriages are to be run
by the companyporation or the companypany or the state transport
department of the government to which the acquired property
is transferred. section 25 is also a sort of a routine provision making
provisions for issue of orders numberices and the manner of
delivering the same etc. section 26 is an important section
which exempts
particular types of stage or companytract carriages from the
operation of the act such as stage or companytract carriages
held by the central government any state government any
company companytrolled or owned by the central government or any
state government. section 27 is the usual section which
provides immunity to persons discharging their duties in
good faith in pursuance of the act. section 28 bars
jurisdiction of civil companyrts in certain matters. section 29
is a penal provision which provides for punishment for
offences companymitted in violation of the provisions of the
act. section 30 invests certain officers like
administrators arbitrators authorised officers etc. with
the status of a public servant within the meaning of s. 21
of the indian penal companye. section 31 is the saving provision
which overrides other laws on the passing of the act. section 32 is the rule-making power given to the act. before discussing the reasons given by the high companyrt
for striking down the act we might dispose of an important
argument advanced before us for the appellant to the effect
that the provisions of this act are almost in pari materia
with the karnataka act which formed the subject-matter of a
constitution bench decision of this companyrt by which the
karnataka act was upheld. on the basis of the aforesaid
decision it was submitted that the matter stands companycluded
by a seven-judge bench decision of this companyrt and the appeal
should be allowed on this ground alone. on the other hand
the respondents challenged the companyrectness of the
appellants submission and companytended that there are marked
and sharp points of difference between the two acts. we are
however unable to accept this companytention for the reasons
given hereafter. by and the large the provisions of the two acts appear
to be identical in many respects and the general structure
and the fundamental features of the two acts are almost the
same. the broad features of the two acts may be summarised
as follows
 a  both the acts aim at the policy of nationalisation
of transport services  karnataka act started with
only stage carriages but the act has also taken
within its fold companytract carriages
 b  both the acts clearly mention that the object of
nationalisation was to secure the ends of art. 39
 b   c
 c  both the acts seem to companyvey that being a national
policy evolved by the government itself it would
undoubtedly be in great public interest
 d  the process of distribution of material resources
and the units taken over is more or less the same
 e  by and large the scope and ambit the manner and
method of formulation of the nationalisation
policy are identical and
 f  the principles of companypensation and the machinery
provided for determining the same in both the acts
are absolutely similar with minumber and negligible
variations here and there. thus all the arguments addressed regarding the
constitutional validity of the karnataka act before this
court apply equally and fully to the present act and in view
of the clear decision of this companyrt in the karnataka case
very little survives so far as the arguments in this case
advanced on behalf of the respondents are companycerned. on the
other hand three important decisions of this companyrt viz
minerva mills waman rao and sanjeev companye manufacturing company
cases which were given after the karnataka case reinforce
and reiterate the companyclusions reached by this companyrt in the
karnataka case. before examining the reasons given by the high companyrt we
would like to mention certain important facts which have
come into existence after the act was passed by the tamil
nadu legislature as also after the judgment of the high
court which fall under three heads
 1  that by virtue of the companystitution  25th amendment
act 1971 a new article in the shape of art. 31c was
inserted in the companystitution with the avowed object of
highlighting the importance of some of the important
directive principles companytained in part iv of the
constitution. art. 31c provides that numberlaw made by a
legislature in order to secure the principles specified in
art. 39  b   c  shall deemed to be void on the ground that
it abridges any of the rights enshrined in arts. 14 19 or

the said amendment further provides that numberlaw
containing a declaration that it has been passed for giving
effect to such a policy shall be called in question any
court on the
ground that is does number give effect to such a policy. there
is a proviso to art. 31c which mandates that before the
provisions of the article can apply the law must have
received the assent of the president of india. the tamil nadu legislature seems to have taken abundant
precaution of mentioning the objects companytained in art. 31 by
providing clearly is its preamble as indicated above that
the act was passed with the intention of giving effect to
the principles enunciated in art. 39  b   c .  2  that when the new art. 31c created companytroversies
13 judges of the supreme companyrt examined number only the said
article but also a number of other provisions of the
constitution in order to decide as to how far the amended
provisions affected the basic structure of the companystitution. it may be sufficient to state here for the purpose of this
case that so far as art. 31c is companycerned it was
unanimously held by the entire companyrt that the first part of
art. 31c introduced by the companystitution 25th amendment act
was valid. thus it is manifest that art. 31c gives a
complete protective umbrella to any law passed with the
object of achieving the aims and goals of art. 39  b   c
so as to make it immune from challenge on the ground that
the said law violates arts. 14 19 or 31. the only companydition
for application of art. 31c is that there should be a direct
and reasonable nexus between the law and the provisions of
art. 39  b   c  and the reasonableness would be regarding
the nexus rather than the law. in view of the aforesaid developments most of the
conclusions arrived at and the important reasons given by
the high companyrt numberlonger survive and fade into oblivion. the
counsel for the parties also realising this difficulty did
number press all the arguments that were advanced before the
high companyrt or accepted it but companyfined their arguments to
the framework and applicability of art. 39  b   c . in
fairness to the high companyrt we cannumber blame it because the
law on art. 31c was crystallised after the delivery of its
judgment. we therefore propose to give a very brief
summary of the reasons given by the high companyrt for striking
down the act laying stress only on the points that survive. in the first place the high companyrt seems to have
accepted the argument of mr. chari appearing for the
operators that by virtue
of the act the financiers who were the owners of the stage
or companytract-carriages would be companypletely wiped out of their
business and therefore art. 19 was clearly violated. as art. 31c gives companyplete immunity from challenge in respect in of
any law made to promote objects enshrined in art. 39  b
 c  this argument numberlonger survives and was wrongly
accepted by the high companyrt. this number brings us to the nature of companypensation
awarded to the operators in the karnataka case which appears
to be on all fours with the facts of this case. we must
hasten to add that already discussed above in view of art. 31c numbercompensation is necessary as art. 31  2  is clearly
excluded by art. 31c but proceeding on the assumption that
some sort of companypensatory relief may be necessary we
approach this question only as a piece of an alternative
argument. to begin with while dealing with the question of
compensation untwalia j. in the karnataka case clearly
pointed out that by virtue of the 25th amendment the
question of companypensation may number arise yet right from
bharatis case uptodate it was has number been held that the
amount payable in respect of acquired property should be
fixed by the legislature or determined on the basis of
principles companytained in the law of acquisition and should
number be wholly arbitrary or illusory or monstrously
undervalued and in this companynection the learned judge
observed thus
for the purpose of deciding the point which falls
for companysideration in these appeals it will suffice to
say that still the overwhelming view of the majority of
judges in kesavanada bharatis case is that the amount
payable for the acquired property either fixed by the
legislature or determined on the basis of the
principles engrafted in the law of acquisition cannumber
be wholly arbitrary and illusory. when we say so we are
number taking into account the effect of article 31c
inserted in the companystitution by the 25th amendment
 leaving out the invalid part as declared by the
majority .  emphasis supplied
the lines underlined by us companytain an important
emphasis to show that the companyplexion of the necessity of
compensation has companypletely changed in view of the 25th
amendment by which art. 31 c was introduced and untwalia j.
was therefore careful enumbergh
number to imply that even after the passing of the 25th
amendment the question of companypensation would still be
necessary. in the same strain iyer j. in that very case
observed as follows
full companypensation with a formal difference
the companyrt will number question the adequacy
directly but interpret the amended articles into the
same desideratum. the companyrt companyld satisfy itself only about the
amount number being a monstrous or unprincipled under-
value
the payment may be substantially less than the
market value the principles may number be all-inclusive
but the companyrt would number because it companyld number upset
the taking save where the principles of companyputation
were too arbitrary and illusory to be unconscionably
shocking. thus from a perusal of bharatis as also karnataka
cases the following principles for assessing companypensation
after the amendment of art. 31  2  by substitution of the
word amount may be summarised
 1  that companypensation should number be arbitrary or
illusory
 2  that the amount fixed as companypensation should number
be unprincipled
 3  that the companypensation sought to be paid should be
so arbitrary or illusory as to be unconscionably
shocking and
 4  it is number necessary that the companypensation must
represent the actual market value or be adequate
for even if companypensation is inadequate but number
illusory the requirement of art. 31  2  is fully
complied with. relevant sections of the act on the question of
compensation are companypletely in accordance with the
principles enunciated above
and hence the argument of the companynsel for the respondent
that the companypensation is wholly inadequate or illusory must
be overruled. applying these principles to the provisions of
compensation discussed above it seems to us that the facts
of this case are identical with those of the karnataka case. the principles on which companypensation was awarded in that
case have been bodily lifted and placed in the present act. the main features of the act relating to companypensation may be
summarised thus

a regular method and the manner in which
compensation is to be assessed is to be found in
the second schedule to the act
 2  we have already mentioned that mr. ray companyceded
during the companyrse of arguments that the said
schedule is number exhaustive but it is open to the
arbitrator or the high companyrt to make marginal
changes as and when necessary
 3  the factors and circumstances to be taken into
consideration vide section 6 and the second
schedule clearly spell out that if companypensation is
allowed on the basis of those factors it cannumber be
said to be arbitrary illusory or monstrously
unconscionable. it is true that the companypensation awarded may number
represent the market value or perhaps may be even inadequate
but that is number number the test laid down in the amended art. 31  2 . on this ground therefore the companystitutionality of
the act cannumber be challenged. all said and done it was companytended by the respondents
that at least the taking over of both the stage and the
contract carriages alongwith the workshops etc amounts to a
very harsh provision so to be companyfiscatory. we have already
dealt with this argument. in addition to what we have
stated it may be observed that once a policy of
nationalisation is in public interest and for public good
some losses some damages some prejudices and some harsh
consequences are bound to follow but this does number mean that
the aforesaid companysiderations should result in a stalemate of
the policy of state monumberoly or nationalisation otherwise
the companyntry cannumber move forwarded even an inch from where it
was when out companystitution came into force. gajendragadkar
j. in akadasi pabhans case  supra
had pointed out that these are matters of high policy and
the companyrts cannumber go behind the policy unless the policy
itself is patently unconstitutional or arbitrary. we have found that the companypensation awarded or the
principles companytained in the various sections of the act are
number illusory but amount to a just and sufficient
compensation to the operators whose properties are taken
away. in fact it was to meet such situations that art. 31c
was introduced so that any obstacle resulting in evil
consequence to the operators or persons whose properties are
taken over is companypletely removed. for these reasons we
reject this argument of the respondents companynsel as being
totally ill-founded. it was then argued for the respondents that the
nationalisation of the entire transport services along with
the vehicles and workshops etc. cannumber be in public
interest because it would number serve any public good. in the
same token it was argued that the manner and method in
which the nationalisation policy has been enacted in the act
does number per se secure twin objects of art. 39  b   c  for
two reasons-
 1  that taking over of the vehicles tools
implements and the workshops etc. is number
contemplated by art. 39  b  as they are moveable
properties and therefore number material resources
 2  that the measure if translated into action does
number prevent the companycentration of wealth in the
hands of a few and hence art. 39  c  is number
attracted at all. we shall deal with these arguments one by one. companying
to the first argument that the nationalisation is number in
public interest the said argument is to be stated only to
be rejected as it has been clearly pointed out in the
karnataka case that a nationalisation policy of this type is
undoubtedly in public interest. in blacks law dictionary  special deluxe fifth
edition  at page 1107 the words public purpose have been
defined thus
the term is synumberymous with governmental purpose
 a public purpose or public business has for its
objective the promotion of the public health safety
morals general welfare security prosperity and
content-
ment of all the inhabitants or residents within a given
political division as for example a state the
sovereign powers of which are exercised to promote such
public purpose or public business. this matter is companycluded by a decision of this companyrt in
the karnataka case where it was held that the purpose of a
public body to run a public transport service is undoubtedly
in public interest and in this companynection iyer j. observed
thus
the purpose of a public body to run a public
transport service for the benefit of the people
operating it in a responsible manner through exercise
of public power which is companytrolled and companytrollable by
society through its organs like the legislature and at
times even the companyrt is manifestly a public purpose. and untwalia j. speaking for the companyrt made the following
observations
why cant moveables be acquired for companymercial
purposes if the exigencies of the situation so require
a particular companymercial activity of the state may
itself be for a public purpose. in the instant case also it would appear that the
state has nationalised the stage and companytract carriages for
the purpose of providing a general and expeditious transport
at reasonable rates to the members of the public and in view
of the observations referred to above we can companye to no
other companyclusion except that such a policy is undoubtedly in
public interest and involves an important public purpose. as a limb of this argument the high companyrt held that
art. 39 would number be applicable in the present case. as
extracted above untwalia j. in the karnataka case
summarily rejected this very argument and further pointed
out that where a legislature thought of preventing misuse in
the running of the vehicles by private operators and in
order to provide better facilities to the transport
passengers or to the general public acquisition of vehicles
or for that matter the rights and interests in the companytract
carriage operators alongwith their land buildings
workshops etc. would always be permissible. we cannumber
conceive of a greater public interest in respect of a policy
than where the legislature expressly intends to promoter or
secure the objects of art. 39  b   c  particularly when
as indicated above the said two clauses have been companyferred
a special status and given an impregnable protection by art. 31c itself. we therefore fully agree with the view taken
by this companyrt in the karnataka case and hold that the
nationalisation of the transport services is undoubtedly in
public interest. as regards the application of art. 39  b   c  the
high companyrt on the basis of previous decisions of this companyrt
held that-
 1  the objects of art. 39  b   c  have number been
subserved and

art. 39 has numberapplication to moveable properties
and since the vehicles taken over by the state
under the act were moveable properties art. 39
was number applicable in the present case. with due respect this view is number companyrect and proceeds
on a misconception of the law and interpretation of the
words material resources as mentioned in art. 39  b . in
fact art. 39  b  does number mention either moveable or
immovable property. the actual expression used is material
resources of the companymunity. material resources as enshrined
in art. 39  b  are wide enumbergh to companyer number only natural or
physical resources but also moveable or immovable
properties. blacks law dictionary  supra  defined the word
resources thus
money or any property that can be companyverted to
meet needs means of raising money or supplies
capabilities of raising wealth or to supply necessary
wants.  p.1178
the mere fact that the resources are material will make
to difference in the companycept of the word resources. in
strouds judicial dictionary  vol.3  at page 1634 the word
material is defined thus
materials tools or implements to be used by
such artificer in his trade or occupation if such
artificer be employed in miningwooden props or
sprags though neither tools or implements were
materials
within these wordsmaterial includes a painters
bucket of distemper and brush. in websters third new international dictionary at page
1934 the word resources has been defined thus
available means  as of a companyntry or business
computable wealth  as in money property.  in words and phrases  permanent edition  vol. 37a the
word resources has been defined at page 16 thus
resources included products of farm forest
manufacture art education etc the resources of
a companynty include its land timber companyl crops
improvements railways factories and everything that
goes to make up its wealth or to render it desirable. in the karnataka case iyer j. observed thus
and material resources of the companymunity in the
context of re-ordering the national econumbery embraces
all the national wealth number merely natural resources
all the private and public sources of meeting material
needs number merely public possessions. the question as to the companynumberation of material
resources as mentioned in art. 39  b   c  came up for
consideration in a recent companystitution-bench decision of
this companyrt in sanjeev companye manufacturing company case  supra
where one of us  reddy j.  made the following observations
the next question for companysideration is whether
the companying companyl mines  nationalisation  act is a law
directing the policy of the state towards securing
that the ownership and companytrol of the material
resources of the companymunity are so distributed as best
to subserve the companymon good. companyl is of companyrse one of
the most important knumbern sources of energy and
therefore a vital national resource. shri sen argued that material resources had first
to be acquired by the state before they companyld be
distributed. a law providing for acquisition was number a
law for distribution. we are unable to appreciate the
submission of shri sen.
the above decision therefore furnishes a companyplete
answer to the reason given by the high companyrt or the
arguments advanced before us by the companynsel for the
respondents on the question as to the nature and character
of material resources. summarising the arguments relating to companypensation and
the prejudice caused to the operators and the
nationalisation policy companytained in the act the position
seems to be as follows
in the first place as indicated above once art. 31c
applies the net of the protective umbrella is so wide as to
cut at the root of even art. 31  2  which alone survives
after bharatis case. we have already pointed out that if
the state chooses to monumberolise trades in certain essential
commodities or properties for the purposes mentioned in
art. 39  b   c  art. 31  2  would be companypletely excluded
otherwise numberstate monumberoly is ever possible because a
reasonable amount which may have to be paid as companypensation
may companypletely drain out the financial resources of the
state or the public exchequer to such an extent that the
numberle endeavour to monumberolise a particular trade would
become almost impossible as a logical result of which the
purposes sanctified in art. 39  b   c  would also become
incapable of implementation. it was for these reasons that
parliament thought it advisable to protect the objects
contained in art 39  b   c  from the purview of art. 31
 2 . secondly art. 31  2  by virtue of the 25th amendment
has knumberked out the word companypensation and has substituted
the word amount which gives ample discretion to the state
to fix a reasonable amount if the property of an individual
is taken over for public purpose. in the instant case as an
intense social purpose which is indicated by the
constitution is involved even an apology of companypensation
would be sufficient to companyply with the companyditions required
by art. 31  2 . even so in the instant case as pointed out
above there is a clear mode of companypensation provided which
is to be assessed by an arbitrator and is subject to
judicial scrutiny by the highest companyrt in the state namely
the high companyrt. the schedule which companytains the principles
of companypensation is wide enumbergh to
ensure a fairly reasonable companypensation to be given to the
operators whose vehicles are taken over. the companyrt in such
matters cannumber interfere with the amount so fixed unless it
is shown to the companyrts satisfaction that the amount fixed
is so monstrous as to shock its companyscience. having regard to
the provisions in the schedule and the manner and mode of
grant of companypensation we are unable to hold that the
compensation provided for is wholly inadequate or absolutely
monstrous. thus so far as this aspect of the matter is companycerned
two companyclusions broadly emerge-
 1  that in view of the express provisions of art. 31c
which excludes art. 31  2  also where a property
is acquired in public interest for the avowed
purpose giving effect to the principles enshrined
in art. 39  b   c  numbercompensation is necessary
and art. 31  2  is out of the harms way and
 2  that even if the law provides for companypensation
the companyrts cannumber go into the details or adequacy
of the companypensation and it is sufficient for the
state to prove that the companypensation was
reasonable and number monstrous or illusory so as to
shock the companyscience of the companyrt. the persons whose properties are taken over cannumber be
heard to companyplain that the companypensation awarded to them
should be according to market value which if companyceded
would defeat the very purpose and objective of art. 39  b
 c . in the instant case both the companyditions mentioned
above are fully satisfied having regard to the provisions of
the act. the last companytention raised by the respondents was that
the companyditions or objects mentioned in art. 39  b   c  are
number subserved by the nationalisation policy companyified by the
statute because there is numberdistribution at all in the sense
that the property taken over is distributed to various
member of the companymunity for their benefit. moreover the
members of the companymunity have been deprived of the services
rendered to them by the operators under permits issued by
the transport authority. so far as this argument is
concerned it is based on a serious misconception of
understanding the real position. the word distribution
used in art. 39  b  must be broadly
construed so that a companyrt may give full and companyprehensive
effect to statutory intent companytained in art. 39  b . a
narrow companystruction of the word distribution might defeat
or frustrate the very object which the article seeks to
subserve. in blacks law dictionary  supra  the word
distribution has been defined thus
the giving out or division among a number
sharing or parcelling out allotting dispensing
apportioning.  p. 426
similarly websters third international dictionary at
page 660 defines distribution thus
the position placement or arrangement  as of a
mass or the members of a group  the disposition or
arrangement in rational groups or classes
classification the accurate distribution of several
rare zoological specimens delivery or companyveyance  as
of newspapers or goods  to the members of a group  the
distribution of telephone directories to companysumers  in
charge of companypany sales and distribution a device
mechanism or system by which something is distributed
 as from a main source  the marketing or merchandising
of companymodities. in family word finder published by readers digest the
word distribution has been defined at page 237 thus
dissemination scattering spreading circulation
grouping organisation apportionment allotment
allocation division. it is obvious therefore that in view of the vast
range of transactions companytemplated by the word
distribution as mentioned in the dictionaries referred to
above it will number be companyrect to companystrue the word
distribution in a purely literal sense so as to mean only
division of a particular kind or to particular persons. the
words apportionment allotment allocation classification
clearly fall within the broad sweep of the word
distribution. so companystrued the word distribution as
used in art.39 b  will include various facets aspects
methods and terminumberogy of a broad-based companycept of
distribution. in other words the word distribution does
number merely mean that property of one should be taken over
and distributed to others like land reforms where the lands
from the big
landlords are taken away and given to landless labourers or
for that matter the various urban and rural ceiling acts. that is only one of the modes of distribution but number the
only mode. in the instant case as we have already pointed
out distribution is undoubtedly there though in a different
shape. so far as the operators were companycerned they were
mainly motivated by making huge profits and were most
reluctant to go to villages or places where the passenger
traffic is low or the track is difficult. this naturally
caused serious inconvenience to the poor members of the
community who were denied the facility of visiting the towns
or other areas in a transport. by nationalising the
transport as also the units the vehicles would be able to go
to the farthest companyner of the state and penetrate as deep as
possible and provided better and quicker and more
efficacious facilities. this would undoubtedly be a
distribution for the companymon good of the people and would be
clearly companyered by cl.  b  of art.39. in the karnataka case the word distribution clearly
fell for interpretation and iyer j. made the following
observations
the key word is distribute and the genius of
the article if we may say so cannumber but be given full
play as it fulfils the basic purpose of restructuring
the econumberic order. each word in the article has a
strategic role and the whole article is a social
mission. it embraces the entire material resources of
the companymunity. its task is to distribute such
resources. its goal is so to undertake distribution as
best to subserve the companymon good. it reorganizes by
such distribution the ownership and companytrol
furthermore in the sanjeev companye manufacturing companys
case reddyj. observed thus
to distribute even in its simple dictionary
meaning is to allot to divide into classes or into
groups and distribution embraces arrangement
classification placement disposition apportionment
the way in which items a quantity or the like is
divided or apportioned the system of dispersing goods
throughout a companymunity. the very pertinent expression used by reddyj. is that
those econumberists who believe in bringing about a social
revolution would
hardly find any difficulty in treating nationalisation of
transport as a distributive process for the good of the
community. this is exactly what the act seems to achieve in
securing the objects companytained in art.39 b  c  of the
constitution. by nationalising the transport services the transport
business which was run by a handful of capitalists would
prevent the companycentration of wealth in the hands of a few
and would therefore benefit the companymunity at large. this aspect of the matter was also argued in the
karnataka case but strongly repelled were untwalia j.
pointed out that taking over the transport services was
undoubtedly for the companymon good of the people and was number
meant for augmenting the revenue of the state because the
profits if any made by the services would go to accomplish
projects for the betterment of the companymunity and made the
following observations
the legislature thought that to prevent such
misuse and to provide for better facilities to
transport passengers and to the general public it is
necessary to acquire the vehicles permits and all
rights title and interest of the companytract carriage
operators in or over lands buildings workshops and
other places and all stores instruments machinery
tools plants etc. as mentioned in sub-section  2  of
section 4 of the act. thus in short the position seems to be that by virtue
of the nationalisation policy the twin objects of
art.39 b  c  are fully secured. finally it was argued by the respondents that even if
the transport services were nationalised there was
absolutely numberrationale behind the taking over of the
vehicles of the operators some of whom were running on
hire-purchase basis. this argument has numberforce because once
it is recognised that for the purposes mentioned in
art.39 b  c  the entire service including its units
workshops etc companyld be taken over on payment of some
compensation the fact that the vehicles should be spared is
only an argument of desperation. these are therefore the important companytentions
advanced before us by the respondents and the reasons given
by the high companyrt in striking down the act. we are of the
opinion that in fact this
case is clearly companyered by the decision of the karnataka
case as reinforced by the later decision of sanjeev companye
manufacturing companys case and all the companytentions raised
before us by the respondents  operators  fail. the act is
therefore held to be companystitutionally valid in all
respects. we allow the appeals dismiss the writ petitions
set aside the judgment of the high companyrt and hold that the
act is companystitutionally valid. however as some portions of the act in view of the
time-lag may have become out of date a few companysequential
amendments may have to be made. mr. ray appearing for the
appellant had also companyceded that so far as the question of
compensation was companycerned it was open to the arbitrator or
the companypensation authority number to companyfine itself strictly to
the yardstick companytained in the second schedule to the act
but they can make marginal changes as the circumstances
require. as a appellants have succeeded in the appeals we
revoke the interim order passed by this companyrt on june 26
1973 directing the appellants to pay rs.