Judges: Y.V. Chandrachud, C.J., A.C. Gupta, N.L. Untwalia, P.N. Bhagwati and P.S. Kailasam JJ.

Facts:

Petitioner No. 1, a limited company, owned a textile undertaking called Minerva Mills situated in the State of Karnataka. This undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974 (SICA), Petitioner Nos. 2 to 6 are shareholders of Petitioner No. 1, some of whom are also unsecured creditors and some secured creditors. Respondent 1 is the Union of India and Respondent 2 is the National Textile Corporation Limited in which Minerva Mills comes to be vested under Section 3(2) of the Nationalisation Act, 1974. Respondent 3 is a subsidiary of the 2nd respondent.

On August 20, 1970, the Central Government appointed a Committee to investigate the affairs of the Minerva Mills Ltd., as it was of the opinion that there had been or was likely to be substantial fall in the volume of production. The said Committee submitted its report, on the basis of which the Central Government passed an order dated October 19, 1971, authorising Respondent No. 2 to take over the management of the Minerva Mills Ltd. on the ground that its affairs were being managed in a manner highly detrimental to public interest.

Hence, the petitioners filed present petitioner and challenged constitutionality of Amendments under Article 368 through Sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976.

Issues:

(i) Whether the amendments introduced by Sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976 damage the basic structure of the Constitution by destroying any of its basic features or essential element? Whether the amendment made by Section 4 of the Constitution (42nd Amendment) Act, 1976 to Article 31C of the Constitution is valid?

(ii) Whether the directive principles of State policy contained in Part IV can have primacy over the fundamental rights conferred by Part III of the Constitution?

Law:

Constitution (42nd Amendment) Act, 1976 - Section 4 - Amended Article 31C of the Constitution by substituting the words and figures "all or any of the principles laid down in Part IV" for the words and figures "the principles specified in Clause (b) or Clause (c) of Article 39".

Constitution (42nd Amendment) Act, 1976 - Section 55 - Inserted clauses (4) and (5) in Article 368 which read thus: 

(4) No amendment of this Constitution (including the provisions of Part III) made or purporting to have been made under this article (whether before or after the commencement of Section 55 of the Constitution (Forty-second Amendment) Act, 1976) shall be called in question in any court on any ground.

(5) For the removal of doubts, it is hereby declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this article.

Constitution of India - Article 31C - Notwithstanding anything contained in Article 13, no law 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 conferred by Article 14, Article 19 of Article 31; and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy:

Provided that where such law is made by the Legislature of a State the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.

Constitution of India - Article 368 - Power of Parliament to amend the Constitution and procedure therefor.

Contentions:

Petitioner

(i) The amendment introduced by Section 4 of the 42nd Amendment destroys the harmony between Parts III and IV of the Constitution by making the fundamental rights conferred by Part III subservient to the directive principles of State Policy set out in Part IV of the Constitution.

(ii) It is impossible to envisage that a destruction of the fundamental freedoms guaranteed by Part III is necessary for achieving the object of some of the directive principles. What the Constituent Assembly had rejected by creating a harmonious balance between parts III and IV is brought back by the 42nd Amendment.

(iii) Constitution had made provision for the suspension of the right to enforce fundamental rights when an emergency is proclaimed by the President. Under the basic scheme of the Constitution, fundamental rights were to lose their supremacy only during the period that the proclamation of emergency is in operation. Section 4 of the 42nd Amendment has robbed the fundamental rights of their supremacy and made them subordinate to the directive principles of State policy as if there were a permanent emergency in operation.

(iv) Thus, apart from destroying one of the basic features of the Constitution, namely, the harmony between Parts III and IV, Section 4 of the 42nd Amendment denies to the people the blessings of a free democracy and lays the foundation for the creation of an authoritarian State.

Respondent

(ii) Preliminary objection: The issue that "whether the provisions of the Forty-second Amendment of the Constitution which deprived the Fundamental Rights of their Supremacy and, inter alia, made them subordinate to the directive principles of State Policy are ultra vires the amending power of Parliament?" is too wide and academic. Since, it is the settled practice of the court not to decide academic questions and since property rights claimed by the petitioners under Articles 19(1)(f) and 31 do not survive after the 44th Amendment, the court should not entertain any argument on the points raised by the petitioners.

(iii) Securing the implementation of directive principles by the elimination of obstructive legal procedures cannot ever be said to destroy or damage the basic features of the Constitution. Further, laws made for securing the objectives of Part IV would necessarily be in public interest and will fall within Article 19(5) of the Constitution, in so far as Clauses (d) and (e) of Article 19(1) are concerned. They would therefore be saved in any case. The history of the Constitution, particularly the incorporation of Articles 31(4) and 31(6) and the various amendments made by Articles 31A, 31B and the amended Article 31C, which were all upheld by this Court, establish the width of the amending power under Article 368. The impugned amendment therefore manifestly falls within the sweep of the amending power.

(iv) A law which fulfils the directive of Article 38 is incapable of abrogating fundamental freedoms or of damaging the basic structure of the Constitution inasmuch as that structure itself is founded on the principle of justice --social, economic and political. Article 38, which contains a directive principle, provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. A law which complies with Article 38 cannot conceivably abrogate the fundamental freedoms except certain economic rights and that too, for the purpose of minimising inequalities. A law which will abrogate fundamental freedoms will either bring about social injustice or economic injustice or political injustice. It will thereby contravene Article 38 rather than falling within it and will for that reason be outside the protection of Article 31C. In any event, each and every violation of Article 14 or Article 19 does not damage the basic structure of the Constitution.

(v) Judicial review is not totally excluded by the amended Article 31C because it will still be open to the Court to consider: (i) whether the impugned law has 'direct and reasonable nexus' with any of the directive principles; (ii) whether the provisions encroaching on fundamental rights are integrally connected with and essential for effectuating the directive principles or are at least ancillary thereto; (iii) whether the fundamental right encroached upon is an essential feature of the basic structure of the Constitution; and (iv) if so, whether the encroachment, in effect, abrogates that fundamental right.

Analysis:

Majority Decision

Preliminary objection

(i) It difficult to uphold the preliminary objection because, the question raised by the petitioners as regards the constitutionality of Sections 4 and 55 of the 42nd Amendment is not an academic or a hypothetical question. The 42nd Amendment is there for any one to see and by its Sections 4 and 55 Amendments have been made to Articles 31C and 368 of the Constitution. An order has been passed against the petitioners under Section 18A of the Industries (Development and Regulation) Act, 1951, by which the petitioners are aggrieved.

(ii) Besides, there are two other relevant considerations which must be taken into account while dealing with the preliminary objection. Firstly, there is no constitutional or statutory inhibition against the decision of questions before they actually arise for consideration. In view of the importance of the question raised and in view of the fact that the question has been raised in many a petition, it is expedient in the interest of Justice to settle the true position. Secondly, what needs to be considered is not an ordinary law which may or may not be passed. It is a constitutional amendment which has been brought into operation and which, of its own force, permits the violation of certain freedoms through laws passed for certain purposes. Thus, preliminary objection has been overruled.

Validity of Section 55 of Constitution (42nd Amendment) Act, 1976:

(i) The newly introduced Clause (5) of Article 368 demolishes the very pillars on which the preamble rests by empowering the Parliament to exercise its constituent power without any "limitation whatever". No constituent power can conceivably go higher than the sky-high power conferred by Clause (5), for it even empowers the Parliament to "repeal the provisions of this Constitution", that is to say, to abrogate the democracy and substitute for it a totally antithetical form of Government. That can most effectively be achieved, without calling a democracy by any other name, by a total denial of social, economic and political Justice to the people, by emasculating liberty of thought, expression, belief, faith and worship and by abjuring commitment to the magnificent ideal of a society of equals. The power to destroy is not a power to amend.

(ii) Since the Constitution had conferred a limited amending power on the Parliament, the Parliament cannot under the exercise of that limited power enlarge the same. Indeed, a limited amending power is one of the basic features of our Constitution and therefore, the limitations on that power cannot be destroyed. In other words, Parliament cannot, under Article 368 of Constitution, expand its amending power so as to acquire for itself the right to repeal or abrogate the Constitution or to destroy its basic and essential features.

(iii) Thus, Clause (5) of Article 368 transgresses the limitations on the amending power, it must be held to be unconstitutional.

(iv) The newly introduced Clause (4) of Article 368 must suffer the same fate as Clause (5) because the two Clauses are inter-linked. Clause (5) purports to remove all limitations on the amending power while Clause (4) deprives the courts of their power to call in question any amendment of the Constitution.

(v) If a constitutional amendment cannot be pronounced to be invalid even if it destroys the basic structure of the Constitution, a law passed in pursuance of such an amendment will be beyond the pale of judicial review because it will receive the protection of the constitutional amendment which the courts will be powerless to strike down.

Supremacy of Directive Principles over Fundamental Rights

(i) The significance of the perception that Parts III and IV together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution. Granville Austin's observation brings out the true position that Parts III and IV are like two wheels of a chariot, one no less important than the other. You snap one and the other will lose its efficacy. They are like a twin formula for achieving the social revolution, which is the ideal which the visionary founders of the Constitution set before themselves. In other words, the Indian Constitution is founded on the bedrock of the balance between Parts III and IV. To give absolute primacy to one over the other is to disturb the harmony of the Constitution. This harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the Constitution.

Validity of Section 4 Constitution (42nd Amendment) Act, 1976:

(i) Article 13(2) says that the State shall not make any law which takes away or abridges the rights conferred by Part III and any law made in contravention of that Clause shall to the extent of the contravention be void.

(ii) By the amendment introduced by Section 4 of the 42nd Amendment, Articles 14 and 19 of the Constitution stand abrogated at least in regard to the category of laws described in Article 31C of the Constitution. The consequence of the amendment is that even if a law is in total defiance of the mandate of Article 13 of the Constitution read with Articles 14 and 19 of the Constitution, its validity will not be open to question so long as its object is to secure a directive principle of State Policy.

(ii) The object and purpose of the amendment of Article 31C is really to save laws which cannot be saved under Article 19(2) to (6). Laws which fall under those provisions are in the nature of reasonable restrictions on the fundamental rights in public interest and therefore they abridge but do not abrogate the fundamental rights. It was in order to deal with laws which do not get the protection of Article 19(2) to (6) that Article 31C was amended to say that the provisions of Article 19, inter alia, cannot be invoked for voiding the laws of the description mentioned in Article 31C.

(iii) If Articles 14 and 19 are put out of operation in regard to the bulk of laws which the legislatures are empowered to pass, Article 32 will be drained of its life-blood.

(iv) Section 4 of the 42nd Amendment found an easy way to circumvent Article 32(4) by withdrawing totally the protection of Articles 14 and 19 in respect of a large category of laws, so that there will be no violation to complain of in regard to which redress can be sought under Article 32. The power to take away the protection of Article 14 is the power to discriminate without a valid basis for classification. By a long series of decisions this Court has held that Article 14 forbids class legislation but it does not forbid classification. The purpose of withdrawing the protection of Article 14, therefore, can only be to acquire the power to enact class legislation.

(v) Article 31C speaks of laws giving effect to the policy of the "State". Article 12 which governs the interpretation of Article 31C provides that the word "State" in Part III includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. Wide as the language of Article 31C is, the definition of the word "State" in Article 12 gives to Article 31C an operation of the widest amplitude. Even if a State Legislature passes a law for the purpose of giving effect to the policy by a local authority towards securing a directive principle, the law will enjoy immunity from the provisions of Articles 14 and 19. The State Legislatures are thus given an almost unfettered discretion to deprive the people of their civil liberties.

Justice P.N. Bhagwati (Dissenting)

(i) Section 55 of the Constitution (Forty-second Amendment) Act, 1976 which inserted Sub-sections (4) and (5) in Article 368 as unconstitutional and void on the ground that it damages the basic structure of the Constitution and goes beyond the amending power of Parliament.

(ii) So far as Section 4 of the Constitution (Forty-second Amendment) Act, 1976 is concerned, it does not damage or destroy the basic structure of the Constitution and is within the amending power of Parliament and I would therefore declare the amended Article Article 31C to be constitutional and valid.

Conclusion:

(i) Section 4 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it damages the basic or essential features of the Constitution and destroys its basic structure by a total exclusion of challenge to any law on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution, if the law is for giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV of the Constitution.

(ii) Section 55 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it removes all limitations on the power of the Parliament to amend the Constitution and confers power upon it to amend the Constitution, so as to damage or destroy its basic or essential features or it basic structure.