Minerva Mills Ltd. & Others v. Union of India & Others

 

Name of the case: Minerva Mills Ltd. & Others v. Union of India & Others (1980)

 

Court: Supreme court of India.

Bench(Judges): Justice Y.V. Chandrachud, Justice A.C. Gupta, Justice N.L. Untwalia, Justice P.S. Kailsam and Justice P.N. Bhagwati JJ. (5 Judges bench)

Petitioner: Minerva Mills Ltd. & Others.

Respondent: Union of India & Others.

Citation: AIR 1980 SC 1789, 1981 SCR (1) 206.

 

BRIEF FACTS:

1. Minerva Mills Ltd. (herein after referred to as the petitioner no. 1/ the Company) is a limited company dealing in textiles inKarnataka. The other petitioners are the shareholders in Minerva Mills.

2. August 20, 1970- The Central Government, in apprehension of the substantial fall in production of Minerva Mills, appointed a committee under section 15 of the Industries (Development & Regulation) Act, 1951 (herein after referred to as the IDR Act) to make an investigation of the affairs of Minerva Mills Ltd.

3. October 19, 1971- After the submission of the committee report, the Central Government passed order under section 18A of the 1951 Act that authorised the National Textile Corporation Ltd., to take over the management of the Mills on the ground of mismanagement of the company affairs. Hence, this undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974 (herein after referred t as the Nationalization Act).

4. Thereafter, the petitioners challenged this order before the High Court. The High Court, however, dismissed their petition.

5. The petitioners, therefore, filed a writ petition before the Hon’ble Supreme Court under article 32 of the Constitution of India, 1950.

6. They challenged the constitutionality and validity of the following;a. Sections 5(b), 19(3), 21 (read with 2nd schedule), 25 and 27, of the Sick Textile Undertakings (Nationalisation) Act, 1974 b. Order of the Central Government dated October 19, 1971 c. Sections 4 and 55 of the Constitution (Forty Second Amendment) Act, 1976; and d. The primacy given to the Directive Principals of State Policy over the fundamental Rights.

ISSUES RAISED:

1.Whether section 4 and section 55 of the 42nd Amendment Act 1976, are damaging basic structure of the constitution or not?

2.Whether DPSP (Part 4) is more important than Fundamental Rights (part 3) or not?

3. Whether Judicial Review is part of basic structure or not?

ARGUMENTS BY THE PETITIONER:

Parliament’s power of amending the constitution is limited and there are inherent limitations within the Constitution to limit the scope of amendment under article 368.

The scope of Article 368 is just to amend the constitution in a way such that there is no change in the basic structure of the Constitution.

Though the state is obligated by the Constitution that while making laws they have to compulsorily look into the Directive Principles of the State Policy[3] however, achievement of such DPSP’s is only through permissible means. The Parliament in order to achieve DPSP’s cannot override Fundamental Rights set out in Part III.

42nd Amendment under section 55 strips off the affected parties there right to legal remedy which is a basic essence of democracy. In a democratic state where laws such as mentioned u/s 55 of 42nd Amendment are made the democracy is sure to collapse.

Striking a harmonious balance between the provisions of Part III & Part IV is where justice lies and making one part subservient to another would only lead to chaos.

There would be no meaning to the democracy if the powers of an institution are to be made absolute by the Constitution. To run a smooth democracy there should be checks & balances upon each institution of the government.

There need not necessarily be violation of Part III for fulfilment of provisions of Part IV.

ARGUMENTS BY THE RESPONDENT:

If in course of achieving the DPSP’s there is unintentional injury to Fundamental rights then it cannot be said as violation of Basic Structure.

The directive principles itself are integral for the functioning of the nation therefore, achievement of these integral principles cannot be said as violation of Basic structure,

Further, if any harm is caused to the Part III provisions then it cannot be termed as violation of Basic structure.

The parliament, in order to achieve the hard to get goals mentioned under Part IV, must be supreme in its sphere & there should not be any sort of limitation upon it. Therefore, there should not be any implied or inherent limitations upon the amending power of Parliament.

This conflict between the hierarchy of provisions is an issue of academic interest therefore, the courts should remain aloof of such issues.

 

 

 

MAJOR FINDINGS OF THE COURT:

1.The court in the judgment dated July 31, 1980 by majority of 4:1 held the sections 4 and 55 of the 42nd (Amendment) Act 1986.

2.Further, the writ petition challenging the constitutionality of the Sections 5(b), 19(3), 21 (read with 2nd schedule), 25 and 27, of the Sick Textile Undertakings (Nationalisation) Act, 1974, was dismissed.

 

 

 

JUDGEMENT:

The court held that the newly introduced Clause 4&5 were actually inserted to bar the courts to entertain any challenge on the question of validity of the constitutional amendments. The court beautifully described the importance of Judicial Review in the following words…..Our Constitution is founded on a nice balance of power among the three wings of the state namely the Legislature, the Executive & the Judiciary. It is the function of the Judges nay their duty to pronounce upon the validity of laws. The court held Section 55 of the amendment act 1976 void since it firstly made challenge in court impossible &secondly it removes all the restrictions on the power of Parliament under Article 368. The court rightly interpreted the true object of these new clauses which was to throw away the limitations imposed by Kesavananda on Parliament.

The newly added clause 5 has the effect of even repealing the entire constitution and change it into a totalitarian constitution as per the political exigencies of the ruling political party & still it won’t be a ground for a challenge in the court because of the combined reading of Clause 4&5 of 42nd Amendment. Depriving the courts their power of judicial review is making Fundamental Rights a box of rhetoric dreams as they would never be granted and rights without remedies.

The court relying on Kesavananda opined that the power to amend under Art. 368 is not a power to destroy. In the above said decision the court clearly mentioned the scope of amendment under Article 368. The court answered about the extent of the word “Amendment”. The court found that the word “amend” in the provision of Article 368 stands for a restrictive connotation and could not ascribe to a fundamental change. To understand it simply; the parliament in order to pass a constitutionally valid amendment, the particular amendment is subject to the application of Basic Structure test and has to pass it.

The court also explained the relationship between the provisions of Part III & Part IV of the Constitution. The court said that the entire Indian Constitution rests upon the foundation of Part III & Part IV. To give absolute primacy to one over another will be shaking the foundation of the Constitution. Striking a harmonious balance between the provisions of Part III & Part IV is where justice lies and making one part subservient to another would only lead to chaos. The provisions of Part IV must be achieved but without abrogation of FR’s and anything which shakes this balance violates the essential balance of the Constitution. Therefore, the court in strict terms laid down that the balance between DPSP’s & FR’s is Basic Structure of the Constitution.

As regards to Section 4 of the amendment act 1976 which tried to separate Article 14 and 19 from Article 31 C this was held void as it destroyed the basic feature. The articles mentioned under Article 14 and 19 are essential elementary articles n modern democracies. Most of the recent laws are passed to satisfy the obligations of DPSP because of which Art. 14 & 19 have stood withdrawn. These rights are clearly without any doubt universal because of their presence in Universal Declaration of Human Rights. Therefore, restoring the judgment of Kesavananda on the point of Art. 31 C the court struck down Section 4 of the amendment act 1976.

Bhagwati J. agreed with the majority in striking down Section 55 of the amendment act since it made judicial review of the amendments impossible. In his view this exclusion of judicial review is indirectly enlarging the scope of Parliament’s amending capacity. Regarding Cl. 5 he wrote that it cannot remove any doubt which did not existed. However, the amendment in Article 31 C was held valid by him because he was of the opinion that the court should not on first hand hold any law made under it unconstitutional. In his opinion the courts should look into the pith of the law by following Doctrine of Pith& Substance. If the law is substantially connected to the provisions mentioned under DPSP’s then it would be a constitutional law and on the contrary if there is no nexus between the law and the DPSP’s it would be surely struck down.

Therefore, the court by 4:1 majority held sections 4 & 55 of the 42nd Constitutional (Amendment) Act, 1976 unconstitutional.

OBITER DICTA:

This landmark Judgment came on July 31, 1980. The judgment was divided into 4:1, Y.V. Chandrachud (then CJI) writing on behalf of himself and (A.C. Gupta, N.L. Untwalia, P.S. Kailsam JJ.) while Justice P.N. Bhagwati wrote the dissenting opinion. The majority struck down Section 55 & 4 of the 42nd Amendment as it was in violation of basic structure thereby upholding the Basic Structure doctrine laid down by Kesavananda Bharti. Bhagwati J. wrote the dissenting opinion in the sense that he agreed with the majority on the point of striking down section 55 however he dissented with the majority on the point of Section 4 of 42nd Amendment.

 

 

RATIO DECIDENDI:

Section 4 and 55 of the 42nd Amendment Act, 1976 were struck down and the reason given was, clause 4 under section 55 was damaging the basic structure and clause 5 barred the judicial review. As regards to Section 4 of the amendment act 1976 which tried to separate Article 14 and 19 from Article 31 C this was held void as it destroyed the basic feature. These rights are clearly without any doubt universal because of their presence in Universal Declaration of Human Rights. Therefore, restoring the judgment of Kesavananda on the point of Art. 31 C the court struck down Section 4 of the amendment act 1976.

CONCLUSION:

The doctrine of Basic Structure which was laid down in Kesavananda Bharti case, this judgemnet was another decision where the apex court applied this doctrine. Section 55 of the 42nd Amendment Act, 1976 was struck down with the judgement given unanimously. The debate which was going on since 1951 was finally ender after this judgement which was the most important point of this judgement. The debate on the point of limitation on parliament’s power in amending the constitution when it was held that the parliament cannot amend the basic structure of the constitution. Parliament had been indulging in proving it’s suprimacyover the democracy as well as the institutions, since the Golaknath decision, be it in a direct or indirect way. After the successive defeats in Golakanath, Kesavananda Bharti & Indira Nehru Gandhi the parliament desperately amended the Constitution and inserted a direct law claiming that there can be no limitation on Parliament’s power of amendment as well as there can be no challenge in courts of law on the amendments. This regressive and draconian law was passed by parliament in order to prove its supremacy.

The court was called upon to decide the constitutionality of such draconian law. The court without giving any other vague interpretations or fearing the mighty government upheld the epic Kesavananda decision. The court gave a unanimous decision that such amendment which restricts the challenge of amendments in the courts of law and which removes all restriction on the power of parliament are void and violative of Basic structure of the constitution. The court held that Judicial Review is something that they cannot take away eve with making law.

The court also explained the relationship between the provisions of Part III and Part IV and held that in process of achieving Part IV provisions there shall be no abrogation of Fundamental Rights. The court justifies this proposition on the basis that the foundation of constitution is the harmonious relation between Fundamental Rights & Directive Principles of the State Policy. Striking a harmonious balance between the provisions of Part III & Part IV is where justice lies and making one part subservient to another would only lead to chaos. The provisions of Part IV must be achieved but without abrogation of FR’s and anything which shakes this balance violates the essential balance of the Constitution. Therefore, the court in strict terms laid down that the balance between DPSP’s & FR’s is Basic Structure of the Constitution.

The court also reiterated Kesavananda’s ruling that the power of Parliament to amend the constitution under Art. 368 is of restrictive nature. The court relied on the description of Basic Structure by Hegde &Mukherjeajj. that only circumstantial features can be changed and basic features cannot be changed.